"In our opinion, the financial services industry, especially traditional Wall Street brokerage firms, has made investing too complex, opaque, and inflexible, all of which we believe create roadblocks for engagement," says executive vice president and co-head of Schwab Investor Services John Clendening. Traditional American values were held fast by the group surveyed, with 88% saying it is important for parents to be active in their children's education and schools, 74% said hard work is what makes this country great, and 67% reported conducting their own research on health concerns, as well as seeing a doctor. This segment of the population feels they take "personal ownership in their lives" and when using the services of a professional like a home contractor, doctor or accountant, just 4% prefer to let the professional make the decisions without their involvement.
But for many of these well-to-do Americans, the investment process is just not a hands-on priority. Of the 39% who expressed little desire to be engaged with the investment process, three-quarters (76%) say they take charge in their lives and wouldn't have it any other way, yet just one-third (33%) think it's very important to be engaged with investing. 94% call themselves planners, but only 38% actually have a financial plan.
Comparing the life behavior (within the past year) with the investing behavior (within the past six months) of this less-engaged in investments group revealed:
- 78% conduct research before making major purchases, but only 50% have asked their financial advisor for the reasons behind their investment recommendations.
- 84% examine the ingredients in food before purchasing, yet only 16% examine investment fees in detail with their advisor.
- 65% have called a company with a question regarding a bill, but just 12% have reviewed how fees and commissions impact the returns of their investments.
- 64% have called a phone, cable or other service provider to ask for better service or lower rates, yet only 8% have had a detailed conversation about how their investment professional is compensated. The survey interviewed 1,000 Americans ages 25-75 with $250,000 or more in investable assets who said they were "highly engaged in their lives."