Seniors on investment info: Keep it short

Apparently, seniors set aren't big readers — at least when it comes to information about their investments. Only about a fifth of all older consumers “always” read their prospectuses, according to new data from the Insured Retirement Institute. In an online survey by Cogent Research LLC of 961 retirees and pre-retirees 55 and older, with at least $100,000 in investible assets, fully 56% indicated that they read the prospectuses either “sometimes” or “always.” Twenty-one percent said they “always” read the prospectus. The documents, which can run hundreds of pages, are often packed with information on product features and investment options. But the surveyed investors said the top three pieces of information for them are fees, returns and risks. Tax advantages followed in fourth. Other fairly important bits of information, such as payout options and death benefits, came in sixth and ninth places, respectively. Not surprisingly, 86% of the surveyed individuals said they'd prefer a shorter paper summary prospectus instead of a novella — if the details were either available online or at their request. About nine out of 10 said they would be more likely to read the prospectus if it were abbreviated. Early last year, the Securities and Exchange Commission adopted rule changes to allow companies to run summary prospectuses for mutual funds. Meanwhile, the IRI has been behind a push to get the SEC to allow summary prospectuses for variable annuities. Mary Schapiro, SEC chairman, confirmed late last year that her staff was developing a VA summary prospectus.