Potential clients' top question for advisers: What's in your wallet?

Retail investors who are considering hiring a financial professional find the most useful and relevant information in their decision-making to be about fees, professional background, disciplinary history and possible conflicts of interest, according to a government study on financial literacy in the U.S. The Securities and Exchange Commission report, which was mandated by the Dodd-Frank financial reforms, concludes that noninstitutional investors lack basic financial literacy and said that investors want to know if an adviser stands to profit from the sale of certain products or would earn more for selling one product over another. When considering whether to invest in a particular product, Americans seek out fee information, investment objectives, performance, strategy and specific risk details about the investment, according to the SEC staff report, which was released Thursday. The best ways to make retail investors understand this information is to present disclosures about products visually, using bullets, charts, and graphs, and to explain possible conflicts or fee details using examples, the report said. “The study provides important data and insights that will assist the commission in its ongoing efforts to help retail investors make informed investing decisions,” said Mary Schapiro, chairman of the SEC, when the report was issued. The study included research from online surveys, focus groups, public comments and a Library of Congress review of financial literacy studies. Experts say the public's general lack of understanding of markets — as well as of mortgages and debt in general —contributed to the financial crisis of 2008.