The Securities and Exchange Commission hoped that a new disclosure document it created would help consumers understand what kind of advisors they are working with—whether it’s a broker, an RIA or a dually registered rep. But then the agency did a survey of would-be customers and found the four-page document left them confused.

The RAND Corporation performed an online survey of 1,800 investors and followed up with qualitative, in-depth interviews administered by independent research firms. The results show that investors want critical information about the fees an investment professional will charge them and the types of conflicts of interests that may be costing them more money. However, they don’t believe they’re getting those specific insights from the SEC’s proposed disclosure form (called “Form CRS,” for “Customer Relationship Summary.”)

Getting this disclosure form right is a critical task for the SEC, which knows how confused investors are. “Based on my discussions with many retail investors over the last several months, it is clear to me that too many retail investors are not aware of the material aspects of their relationships with their investment professionals,” said SEC Chairman Jay Clayton in a statement announcing the results of the survey.

The CRS form is the communication bridge to consumers in the agency’s Regulation Best Interest package, proposed in April and ostensibly designed to protect and enlighten investors by better helping them understand who they’re working with and how much it costs. While investment advisors are fiduciaries, brokers are not, and dually registered or hybrid advisors—who account for some 90 percent of the industry—can turn their fiduciary obligations on and off without notice to the investor, depending on whether they’re offering advice or making a product sale.

The survey findings are troublesome.

“When you dig into the findings of the qualitative interviews, it is clear that investors struggled to understand, and often misunderstood, the information disclosed,” said Barbara Roper, director of investor protection at the Consumer Federation of America and a member of the SEC’s own investor advisory committee.

Many of the respondents didn’t understand what the word “fiduciary” meant and believed the term “best interest” either should give them complete comfort or otherwise it wouldn’t be an accurate description of services, given the industry conflicts.

Said one survey participant: “I just find it hard to believe that if there's conflicting interest, that someone is actually going to act in my best interest and place my interest [above theirs]. … I mean because this is a business.”

Some participants felt that both the “Brokerage Account” and “Advisory Account” columns in the relationship summary were essentially conveying the same message, which means that the important distinctions between the professionals were lost on the reader.

Many investors wanted more specific information about the fees they will pay to an investment professional, something the SEC’s proposal does not require of the industry.

RAND researchers fielded the survey through the American Life Panel, a nationally representative panel of more than 6,000 participants who are regularly interviewed over the internet. About 90% of respondents on the panel said they would click hyperlinks to get additional information on fees if they were provided. Said one survey respondent: “You know, if you’re price comparing, if you’re on Amazon … you’re going to be looking at the specific price you’re paying.”

Knut Rostad, president of the Institute for the Fiduciary Standard, said investors are overwhelmed by the number of various types of fees and how financial reps are paid.

Indeed, there are numerous instances in the survey findings where investors’ liking a section of the summary did not correspond to understanding what it would mean. Almost half of survey respondents found the “Our Obligations to You” legal section of the summary to be “just right” in terms of ease in understanding, while less than one-third of investors named it an important section and 23 percent said it was very difficult to understand.

“If the commission is going to make good use of this research—and there’s a lot of valuable information here—they will need to focus on the actual evidence of investor understanding, or lack thereof, and not just pat themselves on the back because investors appear to ‘like’ the documents,” Roper said.

“The clear implication of the research is that the SEC still has a lot of work to do if it wants to rely on disclosure to dispel investor confusion and support informed decision-making,” she added.

The SEC has given interested parties until December 7 to comment on the new survey findings.