Fee Ignorance Is Widespread Among Investors: FINRA

The findings are from the FINRA Investor Education Foundation’s recently released survey of investors in the U.S. The survey is a component of the foundation’s 2021 National Financial Capability Study, which surveyed some 2,800 U.S. adults with investments outside of retirement accounts between July and December 2021.

The FINRA Foundation noted that further analyses suggest that it is unclear to investors what types of fees they pay for their non-retirement accounts. For example, 47% of mutual fund owners reported paying mutual fund fees or expenses, while 38% appeared to be unaware that they pay these fees, and 15% did not know.

Among respondents who provided an estimate of their annual fees (including those who said “no fees” but excluding those who answered “Don’t know”), 65% were confident that their estimate was correct.

Investors’ opinions were mixed regarding the adequacy of investment industry disclosures, including about fees. Forty-nine percent perceived them as sufficient, but 27% disagreed, and 24% did not know.

A majority of respondents indicated that they believed the purpose of disclosures was to protect both investors and institutions managing investments.