Articles Tagged with Interfere With Financial Advising

Study finds investors are more willing to invest in what they understand

Imagine going somewhere people are supposed to help you, where you’re assured you will be in good hands. Imagine arriving there and realizing everyone speaks a language that’s completely foreign to you. According to a study conducted by Invesco Ltd. in partnership with a firm specializing in language strategy, this hypothetical situation may be similar to how investors feel when meeting with brokers about alternative investments. Brokerage firms have created billions in proprietary products to sell to Main Street. Now, they need a good marketing company to convince the average retail investor that this is what they want to invest in.

The yearlong study, titled The Power of Alternatives, found that certain buzzwords that are generally accepted in the industry, such as “alternative investments” and “derivatives,” may overwhelm investors and turn them off to potentially beneficial investments. According to the Wall Street Journal, only 23 percent of investors would prefer to invest in “liquid alternatives,” while 77 percent chose “alternative mutual funds that are bought and sold like any other fund,” despite the fact that both options mean the same thing.