May 13, 2009

ICI: Communication is Key to Restoring Investor Confidence

Investors' faith in the fund industry has been damaged severely, but is not beyond repair, a panel of fund leaders told a breakout session at ICI's 51st Annual General Membership Meeting.

Amidst the current economic crisis, studies show that the most common emotion felt by investors is anger, followed by pessimism and helplessness, said Merrillyn Kosier, Executive Vice President of Ariel Investments, LLC. But "if companies take a proactive approach, confidence can be rebuilt," she said. "Investors have experienced anger and denial, but now they're poised and ready to invest again."

A study by OppenheimerFunds, Inc. found that Americans would cut back on spending now, work longer, and take on more risk rather than cut back on their retirement lifestyle, noted Sean Keller, Vice President of Strategic Marketing.

"Investors want control, but they also want help," said Sandra Motusesky, Senior Product Manager of TD Ameritrade. "Foster a collaborative relationship. It's very important for companies not to be silent. People assume the worst from what they hear in headlines if you're not out there communicating."

Timothy Stephens, Vice President of Market Insights at Fidelity Investments, further added that it's important to "show engagement, and look across the industry to see what's effective. Listen to the customers."

Click here for the 2009 ICI GMM Highlights

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