Table of Contents
Scope and Themes
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- What you need to know
- Data sources
- Consumer survey data
- Advertising Creative
- Abbreviations and terms
- Terms
- Companies mentioned in this report:
Executive Summary
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- Industry overview
- The economy is better and investors are coming back
- ETFs are growing in popularity, posing challenges to the mutual fund industry
- The government is becoming involved
- The Baby Boomers are retiring and need income distribution plans
- Competition is driving companies to be more creative in attracting accounts
Insights and Opportunities
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- Key points
- Green investment products are becoming increasingly attractive
- Hispanics could be the next big 401(k) market
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- Figure 1: Percentage of industry workforce, by race/Hispanic origin, 2006
- Figure 2: 401(k) participation, by race/Hispanic origin, spring 2009
Inspire Insights
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- The Millennials are different
- Rebuilding Trust
- Over-optioned Consumers
Market Size and Forecast
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- Key points
- Assets in funds continue to rise
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- Figure 3: Total net assets, by type of fund (billions of $, year-end 1995-2008)
Competitive Context
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- Key points
- Consolidation is more prevalent than ever
- New regulations will make 529 plans more competitive across state lines
- The ETF business has grown and is of increasing interest to advisors
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- Figure 4: RIA plans for investing, by vehicle, September 2009
- Why are ETFs becoming popular?
Segment Performance
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- Key points
- ETFs
- Largest ETF providers
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- Figure 5: Ten largest ETF providers by assets, January 2009, January 2010
- Figure 6: ETF/ETN categories by assets, January 2009 and January 2010
- It’s about pricing
- Retirement products
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- Figure 7: Retirement assets, by product, 2000-08 (trillions $, percentage of total)
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- Figure 8: Households’ willingness to take risks, 2008-09
- 401(k)s
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- Figure 9: 401(k) account balances (a) among 401(k) participants, 2003 through2008
- The match is coming back….
- But it will not be quite the same
- New regulations on the horizon
- ETFs in 401(k)s
- IRAs
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- Figure 10: IRA assets, by product, 1990-2Q 2009
- The Obama administration’s support
- Retirement income products
- Mutual funds
- Size of the mutual fund market
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- Figure 11: Percentage of U.S. households owning mutual funds, 2000-09
- Figure 12: Millions of individual U.S. investors owning mutual funds, 2000-09
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- Figure 13: Breakdown of U.S. mutual fund assets, year-end 2008
- Figure 14: U.S. mutual fund market, 2000-08
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- Figure 15: Inflows to retail money market funds, 1998-2008
- Figure 16: Inflows to institutional money market funds, 1998-2008
- Figure 17: Total assets of U.S. mutual fund industry by investment category, year-end 2000-year-end 2008
- Number of mutual funds
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- Figure 18: DC plan sponsors initiating and terminating plans, 2000 through 2008
- Figure 19: Number of funds in U.S. mutual fund industry, by fund type, year-end 2000 through 2008
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- Figure 20: Number of mutual funds opened and liquidated, 2000 through 2008
- Trends in mutual fund investment
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- Figure 21: Total net assets of mutual funds, Dec 2008-Dec 2009
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- Figure 22: Net new cash flow of long-term funds, 2008-Dec 2009
- Trends in mutual fund fees and expenses
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- Figure 23: Fees and expenses on stock funds, percentage of total investment dollars, 2000-08
- Figure 24: Fees and expenses on bond funds, percentage of total investment dollars, 2000-08
- Reasons for the decline in fees and expenses
- 529 plans
- Lower fees
- Asset growth
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- Figure 25: Projected asset growth of college savings, 2008-14
- 529 enhancements
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- Figure 26: Expected enhancements to 529 plans, January 2010
- Challenges to 529 growth
- Proposed regulatory changes to 529s
- Hedge funds
- 2009 was a better than expected year
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- Figure 27: Hedge fund sector performance returns, 2008-09
- Size of hedge fund market
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- Figure 28: Estimated assets under management, ($ billion) as of June 2008
- Number of hedge funds
- Funds harder to start up
- Transparency and risk management have increased in importance
- The future of the hedge fund industry
- Proposed hedge fund legislation
Retail Investment Trends
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- Key points
- 401(k) investing habits stayed stable in 2008…
- … but the tide might be turning
- Green investing is big business
- HNWIs are especially interested
- Americans in general believe that opportunities to help the environment will revive the economy
- Contrary to the myth, green investing can pay
Market Drivers
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- Key points
- Some people are feeling better but some aren’t
- Unemployment remains a challenge
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- Figure 29: Unemployment rate, 2000-10
- Inflation
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- Figure 30: Percentage changes in CPI for All Urban Consumers (CPI-U): U.S. city, average; seasonally adjusted changes from preceding month, June 2009-December 2009
- The U.S. population is growing older
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- Figure 31: U.S. population projections 2000-50
Leading Companies
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- Key point
- Charles Schwab and Vanguard have surpassed Fidelity in mutual fund market share
Innovation and Innovators
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- Key points
- BlackRock
- Lord Abbett
- MetLife/Fidelity
- TDAmeritrade
- Morgan Stanley Smith Barney
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- Figure 32: Morgan Stanley Smith Barney’s Wealth Advisor Focus Opportunities, September 2009
- Goldman Sachs
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- Figure 33: Goldman Sachs, company overview brochure, October 2009
- Putnam
Advertising and Promotion
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- Key points
- Overview
- Email vs. direct mail
- Pricing is paramount
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- Figure 34: Vanguard Lower Fee ad, August 2009
- Convenient investing through technology
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- Figure 35: E*Trade, May, 2009
- Companies are still using image advertising to (re)build trust
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- Figure 36: Franklin Templeton Funds, May 2009
- Figure 37: Wells Fargo, October 2009
- Non-investment financial product companies are advertising, too
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- Figure 38: Marketwatch.com, May 2009
- Innovative incentives
- TDAmeritrade
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- Figure 39: TD Ameritrade email ad, October 2009
- UPromise
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- Figure 40: UPromise email ad, June 2009
- ING Direct
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- Figure 41: ING Direct email ad, May 2009
- IRAs
- ING Direct
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- Figure 42: ING Direct email ad, December 2009
- Fidelity
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- Figure 43: Fidelity direct mail ad, November 2009
- ETFs
- State Street Global Advisors
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- Figure 44: SSgA direct mail ad, December 2009
- Figure 45: SSgA informational email, November 2009
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- Figure 46: SSgA email ad, October 2009
- Charles Schwab
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- Figure 47: Charles Schwab Television ad, November 2010
- 529 plans
- Fidelity
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- Figure 48: Fidelity email ad, May 2009
- Charles Schwab
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- Figure 49: Charles Schwab email/newsletter ad, May 2009
- BlackRock
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- Figure 50: Blackrock email ad, December 2009
- Direct mail
- Advisors Asset Management
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- Figure 51: Advisors Asset Management newsletter, December 2009
The Consumer
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- Key points
- Investments outside of savings account
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- Figure 52: Have investments outside a savings account, by gender, December 2009
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- Figure 53: Have investments outside a savings account, by race/ethnicity, December 2009
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- Figure 54: Have investments outside a savings account, by level of education, December 2009
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- Figure 55: Have investments outside a savings account, by household income, December 2009
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- Figure 56: Have investments outside a savings account, by gender and household income, December 2009
- Size of portfolio
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- Figure 57: Size of portfolio, by age, December 2009
- Product ownership
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- Figure 58: Product ownership, by gender, December 2009
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- Figure 59: Product ownership, by age, December 2009
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- Figure 60: Product ownership, by household income, December 2009
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- Figure 61: Product ownership, by gender and household income, December 2009
- Portfolio changes in the 2009
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- Figure 62: Decrease in investment exposure by product, by gender, December 2009
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- Figure 63: Change in investment strategy in last year, by gender, December 2009
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- Figure 64: Change in investment strategy in last year, by age, December 2009
- Interest in financial topics and investment decision-making
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- Figure 65: Interest in financial topics and investment decision-making, by gender, December 2009
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- Figure 66: Interest in financial topics and investment decision-making, by age, December 2009
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- Figure 67: Interest in financial topics and investment decision-making, by gender and age, December 2009
Cluster Analysis
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- Key points
- Seekers
- Independents
- Tycoons
- Cluster characteristics
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- Figure 68: Investment product trend clusters, December 2009
- Figure 69: Total value of investment portfolio, by investment product trend clusters, December 2009
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- Figure 70: Types of investments previously or currently owned, by investment product trend clusters, December 2009
- Figure 71: Types of investments previously owned, by investment product trend clusters, December 2009
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- Figure 72: Types of investments never owned, by investment product trend clusters, December 2009
- Figure 73: Attitudes towards investing, by investment product trend clusters, December 2009
- Cluster demographics
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- Figure 74: Investment product trend clusters, by gender, December 2009
- Figure 75: Investment product trend clusters, by age group, December 2009
- Figure 76: Investment product trend clusters, by income group, December 2009
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- Figure 77: Investment product trend clusters, by race, December 2009
- Figure 78: Investment product trend clusters, by Hispanic origin, December 2009
- Cluster methodology
Appendix: Simmons Cohort Analysis
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- Key points
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- Figure 79: Trends in product ownership, June 2002-June 2009
- Figure 80: Trends in product ownership, by product, June 2002-June 2009
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- Figure 81: Average value of investment portfolio, June 2002-June 2009
- Figure 82: Type of investment products owned, by gender, Spring 2009
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- Figure 83: Have mutual fund/brokerage accounts with selected companies, by age, spring 2009
- Figure 84: Have primary mutual fund/brokerage accounts with selected companies, by age, spring 2009
Appendix: Trade Associations
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