The Investment Company Institute took a look at the rate of mutual fund ownership by clients who use financial advisors. The numbers are big (to say the least) and makes the case for keeping 12b-1 fees right where they are. Results for 2007 include:
- The majority of household mutual fund assets were held through professional financial advisors. At year-end 2007, 56 percent of household mutual fund assets were held through professional financial advisors. Twenty-four percent of household mutual fund assets were held through defined contribution plans, and 14 percent directly with mutual fund companies. The remaining six percent were held through discount brokers and mutual fund supermarkets.
- Most households that owned mutual funds outside DC retirement plans held funds through a professional financial advisor. More than three-quarters of mutual fund-owning households owned funds outside DC retirement plans. Eighty percent of those households owned funds purchased through a professional financial advisor. Reliance on advisors was similar across demographic and financial characteristics of households.
- Full-service brokers and independent financial planners were the most commonly used professional financial advisors. Fifty-five percent of households that owned mutual funds outside DC plans owned funds purchased through a full-service broker, and nearly half owned funds purchased through an independent financial planner. About half of households owning funds outside DC plans used two or more types of advisors.
- The majority of households that owned mutual funds through a professional financial advisor found that advisor through a referral. Sixty-two percent of mutual fund-owning households with an ongoing relationship with a professional financial advisor found that advisor through a referral from a friend, family member, or business associate. Only nine percent already knew their advisors.
