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Portfolio > Mutual Funds

Mutual funds top products used by advisors

By Warren S. Hersch

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Mutual funds, common stock, exchange-traded funds and variable annuities are advisors’ most commonly used investment products, according to a new report.

Advisors Perspective Inc., Boston, Mass., arrives at this conclusion in a survey of the demographics and practice management priorities of financial advisors. Completed in December, the survey polled 300,000 Advisor Perspectives newsletter readers who are registered representatives, investment advisors, financial planners and other financial professionals.

The survey finds that solid majorities of advisors recommend mutual funds (77 percent), common stock (61 percent), ETFs (57 percent, excluding gold and commodities) and variable annuities (56 percent) in client engagements.

Fewer advisors incorporate into clients’ financial plans individual bonds (52 percent), real estate (50 percent), preferred stock (39 percent), fixed annuities (37 percent), gold (37 percent) or multi-assets like target date funds (35 percent).

Most of the advisors surveyed, the report adds, cater to the mass affluent (61 percent). Fewer advisors serve the high net worth (16 percent), 401(k) plans 15 percent), defined benefit plans (five percent) or foundations/endowments (three percent).

Echoing a survey released today by technology provider Blueleaf, the survey also discloses that nearly three in ten advisors (28 percent) manage between $10 million and $50 million in assets. Less than one in five financial professionals oversee $100 million to $1 billion (18 percent), $50-$100 million (16 percent), $1-10 million (14 percent) or more than $1 billion in assets (three percent).

An additional one fifth of the survey respondents (21 percent) manage less than $1 million in assets, the report states.

When questioned about their most critical business challenges, more than a quarter of advisors cite acquiring new clients (26 percent) and meeting regulatory/compliance requirements (26 percent). One in ten also flag using technology effectively (10 percent) and meeting clients’ investment return goals (11 percent).

Turning to their most critical educational priorities, close to one-third of the survey respondents identify estate planning or philanthropy (31 percent) and hedging strategies (30 percent). More than one in five also indicates tax planning (26 percent), strategic/tactical asset allocation (22 percent) and retirement income planning (21 percent).

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