Seniors Say Short is Sweet with Investment Prospectuses

When it comes to reading, most affluent seniors don’t want to snuggle up with a lengthy description of their investments, a new survey suggests.

A little more than half of retirees and pre-retirees with $100,000 or more in investable assets read their fund prospectuses, and only about one-fifth “always” read them, according to a survey released by the Insured Retirement Institute (IRI).

The survey, conducted by Cogent Research, also found that nearly nine out of 10 respondents said they would be more likely to read their prospectus if it was provided in short summary form rather than full detail. The vast majority (86%) would prefer a shorter paper summary prospectus instead of the full detail, if details were available online or upon request.

Seniors put cost ahead of performance when ranking the information to include in a prospectus. Fees were listed as the most important piece of information to include (89%), followed by returns (76%), risks (63%), and tax advantages (61%).

Last year the Securities and Exchange Commission (SEC) implemented a rule requiring mutual funds to provide a summary prospectus (see “SEC To Require Mutual Fund Summaries”). IRI is advocating for the SEC to also require a summary prospectus for variable annuity products. “By reducing the length of the information and presenting it in a more consumer-friendly format, investors will have a better opportunity to become more informed about an insured retirement strategy,” said IRI President and CEO Cathy Weatherford, in a release of the survey results.

The findings are based on an online survey of 961 retirees and pre-retirees (within seven years of retirement) aged 55 and older with at least $100,000 in investable assets, including workplace plans but excluding real estate.

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Fidelity Institutional Centralizes Services to Advisers

Fidelity Investments has created a Client Experience organization within its institutional division in order to meet the “evolving demands” of independent advisers, broker/dealers, traders, and family offices.

The unit will be headed by Maggie Serravalli, reporting to Gerard J. McGraw, president of Fidelity Institutional. Most recently, Serravalli served as executive vice president, Client Experience, for Fidelity’s Operations and Services Group. In her new role she will continue to be responsible for the client management and client service teams of Fidelity’s brokerage business.

Fidelity said the Client Experience organization will work across each of Fidelity’s institutional businesses—Fidelity Institutional Wealth Services, National Financial, Fidelity Family Office Services, and Fidelity Capital Markets—to develop and implement service strategies to support institutional clients. The organization will help clients from the initial sales process to day-to-day service interactions and ongoing relationship management, the firm said.

The first step is to roll out new service teams for independent adviser clients of Fidelity Institutional Wealth Services. The teams comprise a client service manager and professionals focusing on key areas, including transfer of assets, new accounts, and money movement.

Fidelity said the new organization will make it easier for Fidelity clients to conduct business in multiple channels, from fee-based registered investment advisers (RIAs) to hybrid broker/dealers. After an initial pilot period, Fidelity said it is rolling out the model to its RIA clients throughout 2010.

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