Some Affluent Fund Investors Consider Reducing Positions

January 23, 2004 ( - More than 3 million affluent households may be considering reducing their mutual fund positions due to the recent mutual fund scandals.

Overall, about three out of 10 affluent households feel that scandals are pervasive in the industry, while another third are undecided. Of the 18 million households in the US defined as affluent – households with $250,000 or more in investable assets or $150,000 or more in household income – only 17% of the households polled by Phoenix Marketing International either already have or plan to reduce their mutual fund holdings due to the scandal.

This 17% though, a number Phoenix estimates to represent 3.1 million households, could have a significant impact, since the average affluent household has about $230,000 invested in the mutual fund market. 

The silver lining can be found in the advisor market says David Thompson, Vice President of the affluent practice at Phoenix .   When comparing the profiles of affluent households that are very concerned about the impact of the scandals versus those who are less concerned, a common thread emerges.  “That thread is the advisor,” says Thompson.   “Those who are less concerned about the scandals are over twice as likely as their more concerned counterparts to have a professional investment advisor.” 

These “less concerned” households are much more likely to have a financial plan, and are more confident about the outlook of the market overall.  Most strikingly, only 11% of these “less concerned” investors say they have or will reduce their mutual fund positions due to the scandals, versus two-thirds of investors who are more concerned about this issue.

Additional information is available by contacting David Thompson at (860) 651-8400.