For Immediate Release: Monday 19 March 2001

FINANCIAL CONSUMERS WARMING TO  THE IDEA OF SHOPPING AROUND:
Results of AUTIF’s annual research into UK investors profile and behaviour

The results of AUTIF’s 2000 survey into the buying habits and attitudes of callers to its information service, show the growing recognition amongst investors of the need to look around before they buy. 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. Their investments are then spread across a number of funds and providers.

Executive Summary

• The main reason for participants finding out about unit trusts and OEICs is they want to make their savings grow.
• Investment funds are considered an attractive alternative to other types of investment because they give investors the chance to make more money than from a bank or building society deposit account.
• Management companies are chosen on the basis of their past performance record, but also from journalists’ recommendationsInvestors plan to keep their funds for an average of 7.5 years, down from last year.
• Callers are contacting more companies this year before making an investment. 20% of investors had contacted four or more fund providers.
• Investors own, on average, 5 investment funds, which are spread across 4 or 5 management companies. 25% of investors review fund performance on a weekly basis.
• Women’s interest in investment funds continues to rise.
• 41% of UTIS callers were women, compared to 34% in 1999.Callers would most like to see an indicator that reflected the ‘clarity of literature’ in the FSA’s comparative tables.
• Callers to the UTIS service would rather pay their adviser a fee than for the adviser to receive commission from the management company. But only 11% would be prepared to pay more than £50 per hour for advice and just 13% were willing to pay a flat fee of £100 or more.

Investments

• 58% of existing holders own an investment fund PEP and 55% own an equivalent ISA.
• 73% of participants in the survey invest a lump sum and 30% use the regular savings plan route.
• The average lump sum investment is estimated to be £4,770 and average monthly contribution is calculated to be £113.20.
• 65% of maxi-ISA investors plan to invest the full £7,000 whilst 36% of mini-ISA investors intend investing the maximum allowance this tax year.
• The average ISA investments are estimated to be £5,270 for the maxi and £1,810 for the mini component.

Information/Distribution

• The press is the most influential source of information when making the decision to purchase a unit trust or OEIC.
• 85% of callers read either money pages in newspapers or personal finance magazines.
• Internet access is above average for UTIS callers and member company websites are the most visited sites amongst participants.
• Investors prefer buying funds by post, rather than in a face to face situation or over the telephone and internet.
• Discount brokers are now a favourite channel for buying investment funds, although buying ‘direct from the fund management company’ is not far behind.
• 27% of participants buy investment funds through IFAs, but 34% of callers said IFAs had helped them in their decision to make a purchase.

Clare Arber, PR Manager and author of the report, said:

"People are becoming far more active in obtaining information from a range of companies and sources before committing themselves to an investment. With investors becoming increasingly more selective, management companies will have to keep on their toes, if they are to attract new investors and satisfy existing customers.

"Past performance is still an important factor in making investment decisions, but other considerations are coming to the fore. General fund information was found to be particularly useful, but the clarity of this literature is something that consumers would like to see emphasised."

For further information please contact:

Clare Arber, PR Manager, AUTIF - +44 (0)20 7831 0898
Anne McMeehan, Director of Communications, AUTIF - +44 (0)20 7831 0898

Notes to Editors:

This is the seventh successive year that AUTIF has commissioned the survey. It was carried out by Continental Research. 503 callers to AUTIF’s Unit Trust Information Service (UTIS) were interviewed by telephone in November 2000. The sample was selected at random.

Attachment

UTIS is the Association’s dedicated, 24-hour information line, handling all the public information booklets produced by AUTIF. Readers should call +44 (0)20 8207 1361 for the range of free, generic guides. Alternatively, full details are available from the AUTIF website.