Discount brokers are now the favourite channel for buying investment funds, according to Autif's 200...
Discount brokers are now the favourite channel for buying investment funds, according to Autif's 2000 survey into the buying habits and attitudes of callers to its information service.
The survey, carried out by Continental Research, showed that from the total sample of 500 randomly selected callers, 42% said they would purchase their investment funds from a discount broker, 38% choose to buy direct from the fund manager and 27% of investors bought investment funds though an IFA.
In 1999 only 4% of the total sample said they would use a discount firm. Clare Arber, PR manager at Autif, said the main reason for the jump in popularity is the amount of press coverage these companies now have.
Arber added: "There has been a significant increase in articles about discount brokers and we are also seeing people feeling more confident about making their own decisions. Existing holders and those with a better understanding of investment funds were confident enough to use a broker. Men were most likely to buy in this way, whereas women prefer to go direct to the fund management company."
The survey also showed a growing recognition among investors of the need to look around before they buy. Arber said: "Potential investors are not buying the first product on offer but are contacting more management companies and obtaining information from a variety of different sources before making a decision."
Some 72% of existing and potential investors said that articles in the press had helped them decide, while 66% of callers rated unit trust and Oeic literature as an important factor, up from 60% last year.
Past performance was seen as the most important factor in choosing a company, as it was in 1999, with callers rating it four times more important than charges.
Press attention was the second most quoted reason for selecting a particular company, chosen by 31% of participants, double that of last year.
On average, investors questioned owned five investment funds spread across four or five management groups. The retention period for these funds was 7.5 years, down from 10 years and above in 1999.
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