December 21, 1995
TO: BROKER/DEALER ASSOCIATE MEMBERS No. 26-95
INDUSTRY STATISTICS COMMITTEE No. 32-95
MEMBERS - ONE PER COMPLEX No. 111-95
RESEARCH COMMITTEE No. 53-95
SALES FORCE MARKETING COMMITTEE No. 63-95
RE: Research on Shareholders' Use of Professional Financial
Advisers
______________________________________________________________________________
The Investment Company Institute has for many years undertaken a program of market research for the
benefit of its membership under the guidance of the Research Committee. In many instances this
research is financed by member dues; but from time to time projects are undertaken which benefit only a
segment of the membership and participating members are asked to bear the cost of that research. This
year the Institute is planning a participant-financed evaluation of accumulated data about professional
financial advisers and is pleased to invite your organization to participate.
Background
Since 1986, the sales force channel--which comprises full service brokerages, financial planners,
insurance companies, and bankers--has experienced a steady loss of market share to the direct market
channel, as depicted by Exhibit 1. This study will seek to identify some of the factors contributing to
this shift in market share by examining shareholdersG perceptions of investment advisers using data from
past ICI research. The study will compare the demographic, psychographic, and financial characteristics
of shareholder segments who expect to remain customers of the sales force channel with those who do
not. The study will also report whether sources of investment information and advice have had an
impact on shareholdersG use of investment advisers.
Benefits to Participating Companies
The results of the study will assist ICI members who use the adviser channel in understanding
shareholdersG perceptions of investment advisers and how these perceptions relate to the loss of market
share against the direct channel. The studyGs findings will also provide a basis for initiating actions to
strengthen customer relationships, to educate shareholders about the role of investment advisers, and to
customize promotional efforts in order to achieve healthy market share figures.
Scope of the Research
To date, very little survey data are available on investor perceptions of professional financial advisers and
the InstituteGs Research Department seeks to fill that information gap. The broad objective of this study
is to identify and summarize the demographic and financial characteristics of shareholders who use
professional financial advisers and the factors that motivated them to use this channel. Specific
objectives of the study will include:
` To identify the shareholder segments who are shifting away from purchasing mutual funds
from investment advisers.
` To identify the shareholder segments who expect to remain loyal to investment advisers.
` To outline the demographic, financial, and behavioral characteristics of these segments.
` To identify the perceptions shareholders associate with their investment advisers.
Participant Fees
Only companies that agree to participate in this study will receive the results of this study. The cost
of the research on ShareholdersG Use of Professional Financial Advisers will be shared by the
participants in proportion to their managed mutual fund assets in June 1995.
This research will be undertaken at ICI and will consist of a review of current ICI research on this topic.
It will not require that a new survey be undertaken. This impacts on the relatively low overall cost of the
undertaking and on the relatively short timetable for this research. Fees will be assessed when the study
is completed in March 1996.
The overall cost of the study includes the direct and indirect costs encountered by ICI. This cost will be
assigned to each participant on the basis of June 1995 assets under management according to the
following schedule.
Total Fund Assets June 1995 Participation Fee
Over $20 bil $2,250.00
$2 bil to 20 bil $1,750.00
$.25 bil to 2 bil $1,000.00
< $.25 bil $ 750.00
The research is expected to be completed in March 1996. ICI members wishing to participate must
indicate their support before January 26, 1996 by completing the attached form.
Responsibilities
Companies that agree to participate in the research on ShareholdersG Use of Professional Financial
Advisers will need to :
` Assign a manager to serve as a point of contact with ICI on this project;
` Agree that ICI members who do not participate in supporting this research will not receive
the final report; and
` Agree to pay the proportionate share of the cost of the study.
Action Requested
So that we may proceed with this project as quickly as possible, it is important that we hear from you
promptly as to your interest in participating in the research on ShareholdersG Use of Professional
Financial Advisers. Please return the attached form to the Institute
before January 26, 1996 via fax at 202/326-5924 or by mail to indicate whether or not your organization
will participate. Please contact me at 202/326-5912, if you have any questions regarding this important
industry project.
Sandra J. West
Director
Marketing & Policy Research
Attachment
INVESTMENT COMPANY INSTITUTE
1996 RESEARCH ON SHAREHOLDERSG VIEWS OF
PROFESSIONAL FINANCIAL ADVISERS
Participation Form
CHECK ONE:
[ ] The organization listed below agrees to participate in the 1996 Investment Company
Institute Study of ShareholdersG Views of Professional Financial Advisers. The
obligations are to 1) assign a manager to serve as a point of contact with ICI on this
project; 2) agree that the final report will be available only to those ICI members who
participate in this research; and 3) agree to pay the appropriate participate fee.
[ ] The organization listed below will not participate.
COMPLETE:
ORGANIZATION:
____________________________________________________
ADDRESS:
____________________________________________________
____________________________________________________
RESEARCH CONTACT:
____________________________________________________
TELEPHONE NUMBER:
____________________________________________________
____________________________________________________
Authorized Signature
____________________________________________________
Name
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PLEASE RETURN THIS FORM TO:
Sandra J. West
Director, Marketing & Policy Research
Investment Company Institute
1401 H Street, N.W., 12th Floor
Washington, D.C. 20005
Fax: (202) 326-5924
Phone: (202) 326-5912