Approximately 71% of respondents either lack trust or are uncertain as to whether to trust the fund industry, and only 34% believe that the fund industry takes responsibility for investors’ financial well-being. Perceived lack of value and transparency for the fund fees they pay were cited as dissatisfiers as well as the belief that risks relative to investment returns and potential tax implications are not clearly articulated.
According to iShares CEO Lee Kranefuss, the survey shows that investors believe that the fund industry is falling short in meeting their needs, at a time of great economic uncertainty and market volatility.
The survey, “Measuring Affluent and High Net Worth Investor Expectations of the Investment and Financial Community,” was conducted by independent market research firm Cogent Research. Cogent measured the attitudes and expectations of investors toward a wide range of issues including level of trust and satisfaction with the fund industry. The survey also assessed attitudes towards financial advisors and the media as well as personal investment expertise.
The WSJ cited the survey in their article Mutual Funds Give Some Investors Pause Now and also included observations from one our favorite authors Louis Lowenstein. “The real problem with mutual-fund companies is the way they manage money,” he says. “Their primary emphasis is on gathering assets, not managing those assets well.”