Press Releases

Release Date: May 9, 2007

Contact:
Travis Larson (202) 216-2057 tlarson@sifma.org

 

Poll: Investors Value Choice

FPA Lawsuit Could Limit Consumer Options

WASHINGTON, D.C., May 9, 2007 – A survey of investors found that they value choice most of all when it comes to investing.  These very choices would likely be dramatically limited if the Securities and Exchange Commission decides not to ask for a rehearing of FPA vs. SEC.

“These results make clear that consumers prefer to have a range of investment choices instead of being forced into cookie-cutter accounts with a single type of investment professional,” said Marc Lackritz, president and CEO of SIFMA.  “Even when given the option of increased consumer protections – which the FPA claims would be the result of court-mandated fiduciary responsibility – a majority of investors reject that possibility if it limits their investment alternatives and raises their costs.”

The survey found investors prefer:

o       Choice of fee structure. Investors across the board (82%) agree that they should be able to choose how to pay for services related to their account -- either through transaction fees or annual fees.

o       Choice over standardized rules.  When asked to choose between having a range of account choices with a variety of rules or limited account choices with standardized rules, investors who use brokerage firms are strongly on the side of choice (69%) as are investors without brokerage accounts (63%).  Many industry watchers predict that if the FPA ruling is not overturned, industry rules will become more standardized and the types of accounts available to consumers will be limited.

o       Choice over customer protection.  When asked to weigh two different environments, “higher fees, fewer types of investment accounts and more customer protection” against “a range of fee choices and more types of accounts with different customer protections,” 72% of investors who use brokers and 69% of investors who do not use brokers say they prefer the second scenario, again emphasizing the importance of choice.

The survey also found investors trust their brokers.  Nearly nine out of ten (89%) investors who have a relationship with a professional in a brokerage firm trust that individual to provide advice appropriate to their personal needs.

The telephone poll of 483 investors was conducted from May 3-5 by Artemis Strategy Group and commissioned by the Securities Industry and Financial Markets Association (SIFMA). Investors are defined as those financial decision makers whose households have any investments in stocks, bonds or mutual funds, either directly or through an employer’s retirement plan like a 401(k) or a 403(b).  The average statistical error for a sample of around 500 respondents is +/- 4.5%.

 

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The Securities Industry and Financial Markets Association brings together the shared interests of more than 650 securities firms, banks and asset managers. SIFMA's mission is to promote policies and practices that work to expand and perfect markets, foster the development of new products and services and create efficiencies for member firms, while preserving and enhancing the public's trust and confidence in the markets and the industry. SIFMA works to represent its members’ interests locally and globally. It has offices in New York, Washington D.C., and London and its associated firm, the Asia Securities Industry and Financial Markets Association, is based in Hong Kong.