Despite regulatory efforts to improve fee transparency, investors persistently underweight fees and overweight past performance. We employ webcam-based eye-tracking technology in a large-scale online experiment to investigate how manipulating the visual saliency of fees shapes investment decisions. Participants allocated $100 between pairs of equity funds differing in fees and historical returns, with treatments enhancing fee prominence through larger font sizes or strategic screen placement (top/left). We find that increasing fee saliency reduces time-to-first-fixation (TTFF) on past performance graphs by 47–75% and significantly increases dwell time on fees by 3–5.8%. These shifts in visual attention are associated with an 11.2% greater allocation to lower-fee funds in treatment groups compared to the control, with effects magnified for fund pairs exhibiting larger fee differentials. Our results demonstrate that interface design choices—such as prioritizing fee visibility over performance graphics—can meaningfully reduce biases in investor decision-making. By identifying the precise mechanisms of attention through which saliency interventions influence choices, we advance the saliency literature in behavioral finance and provide actionable insights for regulators and platforms aiming to improve fee transparency.

Read the entire article here: https://ssrn.com/abstract=5290238 or http://dx.doi.org/10.2139/ssrn.5290238.