Readability of Korean-Language advertising disclosures moderates knowledge effects

Purpose: Government policy mandates information disclosure in financial communications to protect consumer welfare. Unfortunately, low readability can hamper information disclosures’ meaningful benefits to financial decision making. Thus, this experiment tests the product evaluation and decision satisfaction of Korean consumers with less or more subjective knowledge and with or without personal finance education. Design/methodology/approach: A between-subjects experiment examined responses of a nationally representative sample of 400 Korean consumers toward a Korean-language credit card advertisement. Findings: Financial knowledge improves financial product evaluation and decision satisfaction. More readable disclosures improved evaluation and satisfaction among less knowledgeable consumers. Less readable disclosures did not. Consumers without financial education exhibited lower evaluations and decision satisfaction regardless of readability. More knowledgeable consumers and those with financial education performed equally well regardless of disclosure readability. Practical implications: Financial service providers seeking more accurate evaluations and better decision satisfaction among their customers should use easier-to-read disclosures when targeting consumers with less prior financial knowledge. Social implications: One-size-fits-all financial communications are unlikely to achieve public policy or consumer well-being goals. Government-mandated information should be complemented by augmenting financial knowledge and providing personal finance training. Originality/value: Although almost a quarter of the world’s population lives in East Asia, this is the first examination of readability in disclosures written in East Asian characters rather than a Western alphabet. Previous readability research on Asian-originating financial disclosures has been conducted on English-language texts. This study extends knowledge of readability effects to growing East Asian markets.