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Mutual Funds Remain Popular Among Planners

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April 23, 2003 — Mutual funds remain the investment of choice for most financial planners who provide comprehensive services, according to a study by fund tracker Financial Research Corp.

The survey of members of the Financial Planning Association also found that planners have “widespread and substantial interest” in investment products like separately managed accounts and exchange-traded funds, FRC said. Exchange-traded funds trade like stocks.

Of the 653 planners who completed the survey, 92% said they use mutual funds, excluding funds in wrap accounts. The planners said they hold 46% of client assets in funds, which is “substantially” more than the average allocation for other investment products.

The study also found that many planners are increasingly allocating the bulk of portfolios — perhaps 40%-60% — to mutual funds and exchange-traded funds, and complementing this “core” portion with one or more separately managed accounts or specialty mutual funds, FRC said.

“Mutual funds certainly aren’t shriveling up and dying,” said D. Christopher Brown, an FRC consultant who wrote the study. “When you consider that mutual funds have been a familiar way of investing for the last 15 to 20 years, clients have a high degree of comfort with funds, which makes it easy for advisors to use them to implement planning strategies.”


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