Fifty-six percent of investors holding assets outside retirement accounts are using a financial professional such as an adviser or broker, according to a new report by the FINRA Investor Education Foundation. The main reasons respondents said they turn to financial professionals are improving investment performance (81%), avoiding losses (78%) and learning about investments (63%). But despite these trends, survey results indicated that knowledge of investment concepts is low, particularly among women.

“On a 10-question investor literacy quiz, on average, men answered 4.9 questions correctly compared to 3.8 for women,” explains FINRA Foundation President Gerri Walsh. “Interestingly, both genders got the same number of questions wrong: 3.4. But women were significantly more likely to say they did not know the answer to a question compared to men, perhaps pointing to differences in investor confidence by gender.” 

Overall, only 10% of respondents who took the investor literacy quiz could answer eight or more questions correctly. The majority (56%) were able to answer fewer than half of the questions correctly.  

Through a series of follow-up questions, the study also offered insight into investors’ perceptions. Seventy-percent of respondents said they believe the fees they pay for investment accounts are reasonable.

Notably, 43% of investors using a financial professional are worried that sales incentives present a conflict of interest.

Furthermore, the study also pointed out generational differences in investing preferences. Thirty-eight percent of investors between the ages of 18 and 34 have used robo-advisers, compared to only 4% for those ages 55 and over. Moreover, only 22% of those aged 55 or older knew what crowdfunding was. Fifty-eight percent of those between the ages of 18 and 34 were aware of this concept.

A greater percentage (61%) of younger investors between the ages of 18 and 34 is worried about being victimized by investment fraud, compared to 28% of those ages 55 and older. 

In addition, the survey offered insight into asset allocations among investors. Seventy-four percent of households surveyed reported owning individual stocks and 64% reported owning mutual funds. Individual bonds are held by 35% of the population and annuities by 33%. Twenty-two percent reported holding investments in exchange-traded funds (ETFs). The rate was even lower for REITS, options, private placements, or structured notes (15%), and commodities or futures (12%).

These findings were taken from the Investors in the United States 2016 report. The survey is a new component of the FINRA Foundation’s National Financial Capability Study, which the company defines as one of the largest and most comprehensive financial capability studies in the country.

The survey’s full data set, methodology and related questionnaire are available at USFinancialCapability.org.