Advisers Number One Source for Mutual Funds outside of Retirement Plans

ICI explained professional advisers may include full-service brokers, discount brokers, independent advisers, financial planners, mutual fund company representatives, advisers at a bank, insurance agents, accountants, and lawyers. Its research found 47% of investors who owned funds outside employer-sponsored retirement plans owned funds solely through advisers, while another 33% owned funds purchased from advisers, fund companies directly, or discount brokers. Eleven percent solely owned funds purchased directly from fund companies or discount brokers. 

Half of all mutual fund shareholders indicated they had ongoing relationships with financial advisers, and between June 2008 and May 2009, nearly all shareholders with advisers had contact with their advisers. Seventy-five percent of shareholders who reported using an adviser indicated that both they and their advisers initiated contact during this time period, while another 13% reported contact initiated only by the shareholder, and 7% reported contact initiated only by their adviser. 

Those who own funds outside DC retirement plans typically hold mutual funds in their investment portfolios for several years, ICI found. On average, mutual fund accounts held outside retirement plans at work have been open for five years, and shareholders on average have had a relationship with the fund company offering the fund(s) for eight years.

Characteristics of Mutual Fund Investors 

In 2009, an estimated 87 million individual investors owned mutual funds and held 84% of total mutual fund assets at year-end, according to the 2010 Investment Company Fact Book released by the Investment Company Institute (ICI). In total, 50.4 million households, or 43% of all U.S. households, owned funds.  

Among households owning mutual funds, the median amount invested in mutual funds was $80,000, ICI found.  

Seventy-six percent of individuals heading households that owned mutual funds were married or living with a partner, and 47% were college graduates. Seventy-four percent of these individuals worked full- or part-time. 

Of all mutual fund-owning households, 67% were headed by individuals between the ages of 35 and 64, the group considered to be in their peak earning and saving years, the report said. Seventeen percent of mutual fund-owning households were headed by individuals younger than 35, and 16% were headed by individuals 65 or older.  

Eighteen percent of all individuals heading households owning mutual funds were members of the Silent or Greatest Generation (born between 1904 and 1945); 44% were members of the Baby Boom generation (born between 1946 and 1964); 25% were members of Generation X (born between 1965 and 1976); and 13% were members of Generation Y (born between 1977 and 2001). The median age of individuals heading households owning mutual funds in 2009 was 50. 

Nearly one-quarter of mutual fund-owning households had household incomes of less than $50,000; 21% had household incomes between $50,000 and $74,999; 19% had incomes between $75,000 and $99,999; and the remaining 36% had incomes of $100,000 or more. The median household income of mutual fund–owning households in 2009 was $80,000. 

Nonfinancial businesses, financial institutions, nonprofit organizations, and other institutional investors held 15% of mutual fund assets at year-end 2009. 

The 2010 Investment Company Fact Book is here.