Lack of Research Limits Adviser Use of Closed-End Funds

Aberdeen Asset Management surveyed financial advisers and found that more than 75% would like more information on closed-end funds.  

The online survey conducted last month by Harris Interactive polled more than 800 financial advisers across wirehouses, regional brokerage firms, independent wealth management shops, and other investment advice providers. Aberdeen is reporting that a lack of research and poor information were the two main reasons advisers gave as to why their use of closed-end funds is limited.

However, nearly all financial advisers (99%) who recommend closed-end funds report these investment vehicles are suitable for a broad array of client portfolios, particularly for individual retirement accounts (89%), post-retiree income generating purposes (80%), and general savings or investment accounts (80%).

Other survey results include:

  • 67% of advisers who recommend closed-end funds say that they would like to receive more information about closed-end funds
  • 62% cite that third-party research rating occasionally influence their recommendations
  • 61% state that expanded research coverage of closed-end funds would increase their recommendations
  • 44% of advisers who recommend closed-end funds surveyed feel that the information they receive is inadequate
  • 24% who recommend closed-end funds have more than $100 million in assets under management
  • 53% who do not recommend closed-end funds do not do so because they feel there is a lack of research on or knowledge about closed-end funds