New Study Shows Investors Question Performance Data From Advisors and 401(k) Plan Providers

DOL Fiduciary Rule Implications: Groundbreaking Report on the State of Investor Trust & Transparency Identifies Gaps in Investment Reporting

One in Three Investors Not Confident Reporting of Performance is Unbiased

Offers Financial Firms Roadmap for Investment Reporting; Outlines Information and Benchmarks Investors Want Most

RHINEBECK, N.Y.--()--Four in 10 investors (41%) either aren’t provided, or don’t know if they are provided, with core information about investment performance from their investment advisor, 401(k) plan provider and other financial firms, according to groundbreaking new research by the financial research firm Phoenix Marketing International. Moreover, more than one in three investors (35%) aren’t entirely confident the information they receive is accurate and reliable.

In its report, The State of Investor Trust &Transparency, Phoenix takes an in-depth look at the breadth and importance of investment information currently provided to investors and how well the financial services industry is using performance reporting to reinforce trust and confidence. A nationwide survey of 2,626 individual investors reveals significant gaps in reporting effectiveness, despite an explosion of technology enhancements that give investors robust information and online access to consolidated and customizable views of portfolios holdings.

“Real transparency isn’t simply throwing more data at investors. It’s about providing investors with relevant, reliable and straightforward information about investment performance and progress toward goals, with an understanding of how they prioritize that information,” said David Thompson, managing director, Financial Services Affluent Practice, at Phoenix Marketing International. “At its core, the relationship between investors and investment advisors is based on trust. Transparent reporting may be the best tool advisors have to earn that trust, differentiate themselves and demonstrate their value.”

A key finding of the study is that some investors perceive an inherent conflict of interest with investment advisors as the source of performance reports. This was the case across the discretionary advice spectrum, from automated robo advisory platforms to full service wealth management, and regardless of a fiduciary standard or not. A nagging question on investors’ minds is whether disclosures and the presentation of performance measures change depending on results and if third-party validation would show a different outcome.

“Through the eyes of some investors, a performance report crafted by an advisor or firm overseeing the investments is like a school report card written by the student,” added Thompson. “Confidence not only in the data and how it is presented but also who it comes from affects investor behavior and is a perception financial firms will want to address.”

Validity of investment performance is one of the reporting attributes investors in the study ranked as a high priority. The study also analyzes the relative importance and breadth of other key attributes important to investors, including:

  • Fee disclosures
  • Readability and simplicity of information
  • Return metrics compared to appropriate target benchmarks
  • Construct of relevant benchmarks according to risk and time horizon against investable alternatives
  • Impact of performance on investor goals and objectives
  • Returns compared to other advisors/firms
  • Returns compared to investors with similar goals and objectives
  • Risk and behavior scenarios and expectations

The State of Investor Trust & Transparency presents an analysis of performance metric priorities and presentation sequence that serves as a clear roadmap for financial firms not only to construct more effective performance reports, but also to identify opportunities where they can differentiate themselves and increase market share among distinct investor segments.

The report is the first in a series to explore reporting based on investor priorities, risk factors, by type of firm/ channel and service level from self-directed to robo to full-service.

The complete State of Investor Trust & Transparency study, including detailed analyses of the findings and recommendations for advisors and other financial professionals, can be purchased here. The link to an infographic with key findings is


The “State of Investor Trust & Transparency” study was derived from the Phoenix Wealth & Affluent Monitor investor tracking program. Online questionnaires were completed by 2,626 respondents with a minimum of $100k+ in investable assets. Interviews were conducted in October and December, 2016. All data were weighted to by age, income and investable assets to reflect the true distribution of affluent households nationally.

About Phoenix Marketing International

Phoenix Marketing International is a global marketing services firm, headquartered in Rhinebeck, New York, with 11 offices in the U.S. and Europe. Since 1999, the firm has provided companies across diverse industries with competitive insights on attitudes and behaviors, with a focus on customer experience, communications and brand/product innovation through extensive research experience in the automotive, financial services, healthcare, converged technology and media, restaurant and travel/leisure sectors. For more information, visit Follow Phoenix on Twitter @phoenixmktg.


For Phoenix Marketing International
Loretta A. Healy, 781-210-5014


For Phoenix Marketing International
Loretta A. Healy, 781-210-5014