Financial Literacy Seminar Series

May 11, 2017

3:30 PM - 5:00 PM

 Seminar VI | The Knowledge Gap in Workplace Retirement Investing and the Role of Professional Advisors

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Jill Fisch

Perry Golkin Professor of Law and Co-Director, Institute for Law and Economics, Penn Law

FinLit Talks: Interviews with Financial Literacy Thought Leaders


George Washington University School of Business
Duquès Hall, Room 651
2201 G Street NW
(main entrance on 22nd Street between G and H Streets)

Bio: Jill Fisch

Jill E. Fisch is visiting Professor at Berkeley Law School and Perry Golkin Professor of Law and co-director of the Institute for Law and Economics at the University of Pennsylvania Law School where she teaches and writes on corporate law, corporate governance and securities regulation. Professor Fisch is the recipient of various awards including the Penn LLM Prize for Excellence in Teaching and the Robert A. Gorman Award for Excellence in Teaching. Her scholarship has appeared in a variety of publications including the Harvard Law Review, the Yale Law Journal, the Columbia Law Review, the University of Pennsylvania Law Review and the Texas Law Review. Recent research focuses on corporate governance, the shareholder voting process, and securities litigation. Professor Fisch is also involved in ongoing experimental work analyzing retail investor decision-making and the role of financial literacy.

Prior to joining Penn, Professor Fisch was the T.J. Maloney Professor of Business Law at Fordham Law School and Founding Director of the Fordham Corporate Law Center. She has served as a visiting professor at Harvard Law School, Columbia Law School and Georgetown University Law Center. She has lectured on corporate and securities law in China, Japan, Israel, Sweden, Norway, France, Germany and the United Kingdom.

Professor Fisch practiced law as a trial attorney with the United States Department of Justice, Criminal Division, and as an associate at the law firm of Cleary, Gottlieb, Steen & Hamilton. She is a member of the American Law Institute and a director of the European Corporate Governance Institute. She chaired the Committee on Corporation Law of the Association of the Bar of the City of New York and the sections on Securities Regulation and Business Associations of the Association of American Law Schools. She received her B.A. from Cornell University and her J.D. from Yale Law School.


The dramatic shift from traditional pension plans to participant-directed 401(k) plans has increased the obligation of individual investors to take responsibility for their own retirement planning. With this shift comes increasing evidence that investors are making poor investment decisions. This Article seeks to uncover the reasons for poor investment

This Article seeks to uncover the reasons for poor investment decisions. We use a simulated retirement investing task and a new financial literacy index to evaluate the role of financial literacy in retirement investment decisionmaking in a group of nonexpert participants. Our results suggest that individual employees often lack the skills necessary to support the current model of participant-directed investing. We show that less knowledgeable participants allocate too little money to equity, engage in naive diversification, fail to identify dominated funds, and are inattentive to fees. Over the duration of a retirement account, these mistakes can cost investors hundreds of thousands of dollars.

We then explore the capacity of professional advisors to mitigate this problem. Using the same study with a group of professional advisors, we document a predictable but nonetheless dramatic knowledge gap