Few Americans who say they are investors know much about investing.[@@]
Researchers at the Securities Investor Protection Corp., Washington, and the Investor Protection Trust, Washington, make that argument in a report based on results of a telephone survey of 927 U.S. investors that was conducted in November.
Although 61% of survey participants understand that most stock brokers and financial planners receive commissions on product sales, only 36% of the participants said they had checked out the disciplinary backgrounds of their stockbrokers or financial planners.
Although 61% of the investors who had not checked out their advisors’ backgrounds said they failed to do so simply because they trusted the individuals in question, 9% said they had not checked out their advisors because the advisors had assured them that there was nothing to be concerned about, according to the survey report authors.
Only 8% of the participants understood that no agency or organization insures investors against investment portfolio fraud, and only 58% of the participants said they had ever read a prospectus.