Investors find financial products confusing: Survey

Investors have spoken and advisers should take note: They're overwhelmed by the number of investment choices and find many to be overly complex. A February survey of 934 adults by MFS Investment Management found that a third feel inundated by investment choices and 40% think financial products are too complicated.   For example, more than 60% of the respondents found a product described as a mutual fund that protects against rising inflation “extremely appealing.” However, when asked about “absolute return funds,” only 14% found them appealing.   “The industry has a lot of capabilities that we didn't have before, and by that very nature, some of the investments are complicated,” said William Finnegan, senior managing director of global retail marketing for MFS. On the positive side, at least investors are acknowledging their need for more advice. A quarter of those surveyed said their need for financial advice has increased in the past 12 months. And the younger the investors, the more likely they are to need more information. About 34% of those 31 to 45, so-called Generation X, said their need for advice grew in the past year. And about 45% of those younger than 31, known as Generation Y, acknowledged a greater need for guidance. About 81% of respondents said they expect their adviser to keep them up-to-date about innovative investment products, and advisers can help by simplifying the new concepts and explaining clearly how a product solves a problem and achieves a financial goal, Mr. Finnegan said. But be warned: Over a third of the surveyed investors — even more among younger people — believe the information they find on the Internet about investments is just as good as what they would get from a financial adviser.