Understanding Shareholders' Use of Information and Advisers (pdf)

Like Do-It-Yourself Shareholders, Adviser-PartnershipShareholders generally required risk and return informationbefore deciding on their most recent fund purchase. Of thethree groups, Adviser-Partnership Shareholders were the mostvigilant in monitoring their mutual fund investments:the median number of items regularly tracked by this groupwas six.Ninety-seven percent of Adviser-Partnership Shareholderssaid they had consulted with a professional financial adviserbefore making investment decisions. Of the Adviser-Partnership Shareholders who had consulted an adviser, morethan half said their primary financial adviser was a full-servicebroker, and almost one third said the adviser was a financialplanner. Adviser-Partnership Shareholders indicated theytypically meet with their adviser every other month and accept90 percent of the adviser’s fund purchase recommendations.More than 90 percent of adviser-using Adviser-PartnershipShareholders described the relationship they have with theiradviser as one in which they select a fund investment froma list of funds recommended by their adviser, the most of allsegments. And compared with other segments, adviser-usingAdviser-Partnership Shareholders were most satisfied withadviser services. Eighty-seven percent rated the value of servicethey received from their adviser as excellent or very good, 12percent rated it good, and only 1 percent rated it marginal orpoor.Compared with other shareholders, Adviser-PartnershipShareholders tended to be older and have higher incomes.At the time of the survey, the typical Adviser-PartnershipShareholder was 52 years old, had a household income of$73,000 and household financial assets of $80,000. Morethan 90 percent of Adviser-Partnership Shareholders said theywould be interested in learning more about mutual funds,particularly how different funds perform under differenteconomic conditions and how to select a fund with a risk levelthat is comfortable for the investor. Adviser-PartnershipShareholders said they would prefer to receive mutual fundeducational materials from a professional financial adviser,followed by a newspaper or magazine. This segment ofrespondents would prefer to receive educational materialsin a brochure or through a one-on-one discussion with aprofessional financial adviser.PASSIVE SHAREHOLDERSPassive Shareholders represented 38 percent of survey participants.Passive Shareholders said they do not enjoy investingand indicated they typically spend only an hour per month oninvestment matters. Three quarters of Passive Shareholderslisted a sales-force purchase method as their primary mutualfund channel.Passive Shareholders typically had 32 percent of theirhousehold financial assets, or $19,000, invested in mutualfunds at the time of the survey. In contrast to other segments,the Passive Shareholder segment comprised more shareholdersnew to mutual fund investing. Passive Shareholders boughttheir first mutual fund a median of six years before the date ofFIGURE 34Use of Professional Financial Advisers by PassiveShareholders(percent of respondents)Had notconsulted29Number of respondents = 37771HadconsultedFIGURE 35Passive Shareholders’ Interest in Learning MoreAbout Investing in Mutual Funds(percent of respondents)Not veryinterested2715Not at allinterestedSomewhatinterested3919VeryinterestedNumber of respondents = 37736