New Study Shows Investors Question Performance Data From Advisors and 401(k) Plan Providers
DOL Fiduciary Rule Implications: Groundbreaking Report on the
One in Three Investors Not Confident Reporting of Performance is Unbiased
Offers Financial Firms Roadmap for Investment Reporting; Outlines Information and Benchmarks Investors Want Most
In its report, The
“Real transparency isn’t simply throwing more data at investors. It’s about providing investors with relevant, reliable and straightforward information about investment performance and progress toward goals, with an understanding of how they prioritize that information,” said
A key finding of the study is that some investors perceive an inherent conflict of interest with investment advisors as the source of performance reports. This was the case across the discretionary advice spectrum, from automated robo advisory platforms to full service wealth management, and regardless of a fiduciary standard or not. A nagging question on investors’ minds is whether disclosures and the presentation of performance measures change depending on results and if third-party validation would show a different outcome.
“Through the eyes of some investors, a performance report crafted by an advisor or firm overseeing the investments is like a school report card written by the student,” added Thompson. “Confidence not only in the data and how it is presented but also who it comes from affects investor behavior and is a perception financial firms will want to address.”
Validity of investment performance is one of the reporting attributes investors in the study ranked as a high priority. The study also analyzes the relative importance and breadth of other key attributes important to investors, including:
- Fee disclosures
- Readability and simplicity of information
- Return metrics compared to appropriate target benchmarks
- Construct of relevant benchmarks according to risk and time horizon against investable alternatives
- Impact of performance on investor goals and objectives
- Returns compared to other advisors/firms
- Returns compared to investors with similar goals and objectives
- Risk and behavior scenarios and expectations
The
The report is the first in a series to explore reporting based on investor priorities, risk factors, by type of firm/ channel and service level from self-directed to robo to full-service.
The complete
Methodology
The “State of Investor Trust & Transparency” study was derived from the
About
View source version on businesswire.com: http://www.businesswire.com/news/home/20170622005589/en/
For
[email protected]
Source:
ReedGroup Announces Unified Canadian Absence Management Services
Aflac CEO to Present at Harvard Business School
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News