Understanding Shareholders' Use of Information and Advisers (pdf)

INTEREST IN LEARNING MORE ABOUTMUTUAL FUNDSRespondents said they want to expand their understanding ofmutual fund investing. Almost three quarters indicated thatthey are very or somewhat interested in learning more aboutthis subject. Respondents who had and had not used anadviser were equally interested in improving their understandingof mutual funds (see Figure 25).Among respondents who had consulted an adviser, however,the desire to increase mutual fund knowledge varieddepending on the nature of the adviser/shareholder relationship.Desire to learn more about mutual funds was weakestamong respondents who effectively delegate all fund investmentdecisions to an adviser. Fifty-two percent of this groupexpressed minimal or no interest in improving their understandingof mutual funds. In contrast, only 27 percent ofrespondents who have a collaborative relationship with anadviser, and 20 percent of those who inform an adviser ofwhat to buy, provided these same answers (see Figure 55 inAppendix B).Respondents with a desire to learn more about mutualfunds were asked about their interest in three mutual fundtopics: how different types of funds perform under disparateeconomic conditions, how to select a fund with a level of riskwith which they would be comfortable, and how to distributefinancial assets among several mutual funds. These respondentswere generally most keen to improve their understandingof economic and market conditions that can affect funds,followed by how to select a mutual fund with a risk levelcompatible with their own risk tolerance. More respondentswho had not consulted an adviser were interested in learninghow different funds perform under different market conditionsthan were those who had used an adviser. The topic ofhow to select a fund with a level of risk that matches theinvestor’s own risk tolerance appealed more to respondentswith an adviser than without. Both adviser users and nonuserswere equally interested in learning how to distribute financialassets across several funds (Figure 26). Among respondentswith an adviser, those who have a collaborative relationshipwere by far the most interested in learning how to distributefinancial assets among several funds (see Figure 56 inAppendix B).REACHING INTERESTED SHAREHOLDERSRespondents interested in learning more about mutual fundswere asked to identify their source and format preferences forreceiving mutual fund educational materials. Investmentprofessionals and newspapers or magazines were the two mostFIGURE 26Mutual Fund Topics of Interest by Use of an Adviser 1(percent of respondents interested in learning more about mutual fund investing)Use of a Professional Financial AdviserAllRespondents Had Consulted Had Not ConsultedHow different funds perform under different 75 71 82*economic conditionsHow to select a fund with a level of risk with 72 76 68*which you are comfortableHow to distribute your financial assets among 57 59 57several mutual funds1Multiple responses included.Note: Number of respondents varies.*Respondents who had not consulted an adviser are statistically different from those who had at the 95 percent confidence level.30