Survey: Wealthy Households Avoid Mutual Funds

But Spectrem found that wealthy households now have only 6% of their investable assets in ordinary retail mutual funds, down from 11% two years ago.

Many financial advisors have been encouraging wealthy and even moderately affluent investors to move out of mutual funds. Advisors say owning managed accounts gives the investors who can afford them more control over investment strategy and protection against receiving taxable distributions. Wealthy households’ massive shift away from mutual funds “raises some troubling questions about the continued status of mutual fund holdings in the portfolios of U.S. investors,” says Catherine McBreen, Spectrem’s managing director.