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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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Morningstar survey: "you're not a financial professional? Oh, then go away."

I got an electronic survey from Morningstar in my inbox this morning:
We are continually looking for ways to improve Morningstar.com. To help us do that, please complete this online survey by Friday, August 16th. The survey should take about 25 to 30 minutes to complete, and is completely confidential. Your insight and feedback are very important to us. Thank you for your help!
Being agreeable, I began working my way through it. I was 11% done, according to the built-in monitor, when I reached a question on the order of "are you an investment advisor or other financial services professional?" When I clicked "no," I was suddenly 100% done.

That's pretty consistent with the results of Nina Eisenman's survey of fund companies about their websites: the vast majority say that financial planners are their audience, and the rest of us are well to peer in as long as we don't get in the way. That makes excellent business sense, but the occasional reminders are still a bit jarring.

As ever,

David

Comments

  • I'm sorry David. I don't know why we still believe M* and the like actually have the interests of individual investors in mind or actually care about what they think. The other day I was thinking why suddenly Tom Marsico is in Videos on M* after such a long time. I can't help but wonder there is a marketing arrangement and Tom Marsico really needs some "good press". M* didn't have him on the videos to help any investor. It was only to help the fund manager.

    What is more jarring to me, to use your words, is when we will finally realize, "clients" whether of M* or Goldman Sachs are "lemmings" and this view is endorsed by the collective interpretation of the financial industry of "capitalism". Or dare I say "objectivism", because that's what I think this is. The view that "what is good for ME is good for others".

    As "clients", all we should expect and receive are services for the money we pay and then WE decide whether what we receive is good, bad and use as we deem fit. I don't need to see M* rating to tell me a fund is "good". i can see it easily based on criteria important to ME. M* criteria were not invented to help me. They were invented to help fund industry market their wares. The "Great Owl Rating" is for ME. And let me tell you, this is going to eat into M* revenues big time.

    I never opt-in for "help us improve our software" notices from Firefox and Microsoft either because the cynical old bastard I have been developing into over the years, I just KNOW nothing about it is actually going to benefit ME in any way, but will ONLY benefit Firefox or Microsoft. Let's be like them. Ask "WTF is there in it for me" for once.
  • Local library has done away with Morningstar. Due to lack of dollars or readers. Maybe both?!
    FWIW, Derf
  • I got the email, with similar results (though I thought that the question that kicked me out was whether I was working with an advisor).

    On the other side of the ledger, I have nothing but praise for T. Rowe Price. I have twice (over the past two decades) participated in focus groups for them. The first one was to help them redesign their website. What they ultimately came out with was, IMHO, a disaster - too many overlays, pop ups, etc. The kindest thing I can say about it is that it was better than Vanguard's at the time. But it did reflect some of the feedback they were getting, and I had the sense that they did take the comments from retail, individual, end users seriously.

    The second was a longer term discussion group, where they poked (suggested conversations) about a variety of topics (not all strictly investment or even finacial-oriented); they encouraged us to add our own discussions; they also sought specific feedback on a particular aspect of their website. They showed it to us as a work in progress, and demonstrated how they incorporated some of our ideas. To the very last person who commented on their process, each of us felt respected, listened-to, and appreciated.

    I have always felt that TRP was a good money management company. But these experiences did more than anything else to convince me that they are one of the "good guys". There really are some out there.
  • I would say Vanguard and TRP are IT when it comes to actually caring about investors as opposed to acting like they do. If their websites suck I will take that in stride.
  • The user and all related content has been deleted.
  • Reply to @Maurice: "You can trust them"

    I'll be darned! You DO have a sense of humor after all!!
  • I'd only be surprised if anyone here is actually surprised. Sometimes this industry is flat-out disgusting
  • edited August 2013
    The kind of nonsense David described above is why I do not engage in any more surveys to gauge customer satisfaction. I called TRP once and was told that my input would be considered, but even though it made perfect sense, it would only be just one item that would be looked at---and possibly ignored--- by the ones who periodically revamp the look of the website. It was ignored. Crap.
  • edited August 2013
    Reply to @Old_Joe: I am not sure if Maurice is joking. He could be saying his dentist was the 5th one. Problem not with toothpaste. Problem with Dentist.

    Same way as M* is "always right". I periodically lookup how WWWFX is doing. One fund what was vilified by M* no end. It always seems to be doing well within its peer group. Needless to say, as M* always does, it simply stopped commenting on it. They figure no one will remember. Sad thing is they are mostly right about that part.
  • David,

    Perhaps they are trying to be more useful for Financial advisors etc. or perhaps they have collected enough feedback from average Joe user.

  • Watch it with that "average Joe" stuff!!:-(
  • Reply to @Old_Joe: LOL. @Old_Joe is above average!
  • To David:
    At least you weren't kicked out at 50% done, etc. I occasionally participate in remunerated surveys in my profession and find they collect a lot of data before they expell me. Obviously, I only start one now when I have little else to do, and it's infrequent. In this data age, almost anything you enter can be tabulated and used. (I'm hoping for one directed at left-handed, red-haired hermaphrodites - oops, too much info)
  • edited August 2013
    Here's another example of the bias toward advisors over shareholders. Presumably, advisors can help increase AUM, more than existing shareholders.

    It's the perpetually late-to-publication quarterly update page at AQR Funds:

    image

    Note the little locked icons denoting adivsor resources only info. Can you believe?

    Honestly, I've sat through presentations marked "advisor use only...not for release to public" only to see the very same charts show-up elsewhere on-line during one interview or commentary or another.

    I'll chalk it to the falsehood of perceived elitism through exclusion. Practiced all-around us, of course, but I'm discovering this business perpetuates it like an elixir.
  • Reply to @Charles: At base, they can count. One retail investor is worth $10,000 in AUM and one financial planner is worth $1,000,000 (or $10M or $30M). Are they trying to game the advisors by making them think they're getting the real inside poop while the hoi polloi have to settle for ads? Maybe.

    Fund investing is a game for a group that marketers call "the mass affluent," about 10% of the population representing income percentiles 89 - 98. They have enough money to invest to be interesting to financial services firms ($50k - $250k) but not enough to demand individualized attention. The folks in percentile 99 - 99.5 are rich but not ridiculously so. Doctors, lawyers, successful small business owners - incomes in the $300 - 400k range and investments a bit north of $1M. Hard-working folks, well-educated who still have reason to worry about their future. On whole, worth some considerable personal attention. You don't really get into the Northern Trust crowd until you're above 99.8 where net worth is well over $5M.

    Fund companies need the mass affluent and have concluded, rightly I suspect, that the most efficient way to reach them is through planners and other advisors.

    I don't at all object to Morningstar doing specialized surveys of such professionals; it makes fine business sense. I'm mostly irked at the shoddy representation at the outset of the survey. I run Augustana's Institutional Review Board, the folks charged to guaranteeing the safety of human research subjects (including those being variously surveyed) and the first rule of protection is informed consent. From the first sentence on, researchers must be open about what exactly they're asking about and how the information's going to be used. If you decide that folks don't need to be told what you're going to do and why until the research is partway complete, your research is DOA.

    From our perspective, Morningstar had an ethical obligation to disclose what they were up to so you could make an informed choice about whether to participate. They didn't.

    As ever,

    David
  • I no longer fill out ANY surveys because at the end they will always ask for more personal information than I am willing to give. The world will have to stagger along without my data (which they already have anyhow).

  • FWIW, I also got the survey request. I went through the entire questionnaire, but it became obvious that the questions were targeted to advisors like me. It revealed to me that M* is attempting to find out if ADVISORS actually use Morningstar.com, and what they like or do not like about it. Since we pay big bucks for Morningstar Office software, I visit M*.com only infrequently. Perhaps they are trying to find out if they need to tailor the web site exclusively for retail investors? I do not know.

    This kind of survey is done rather frequently in my industry, and I often get part-way in and then get a message that they have already fillde up their quota of people like me. They use questions like specific job description, assets under management, age group, etc. Rest assured whomever hired the survey company has certain target markets in mind.

    Must admit I am surprised that M* did not disclose right up front that the survey was for advisors only. Pretty tactless, it seems to me.
  • Reply to @Charles: There could be a less sinister explanation. There are pretty strict laws about what information can be conveyed to investors and in what form. Standardized reporting periods, prospectus accompanying sales literature, etc. I suspect that a lot of this goes out the window when communicating with someone who is not an investor (such as an advisor).

    The easiest way to comply is not to make the information available to investors. And when money managers do solicit investors directly, they put in the extra work to package it according to regulation, and pass it by their lawyers.

    Or ...
  • Reply to @msf: Thanks, let's hope you're right.
  • Reply to @msf: Isn't selective disclosure also unlawful. So, why mutual funds themselves should be exempt from this requirement.
  • Reply to @Investor: Did a quick search and came up with: " Regulation FD ... prohibits selective disclosure, but ... Regulation FD specifically exempts open end mutual funds"

    https://www.law.columbia.edu/center_program/corp_gov/corp_govwrit

    Here's Reg FD. See, in the Definitions section, the definition of Issuer (§ 243.101(b)). It explicitly excludes investment companies (mutual funds), except that closed-end funds are covered by the regulation.

    So selective disclosure by (open ended) funds is not illegal. Why? Good lobbying?
  • Reply to @msf: It is probably Mutual Fund industry lobbying effort that got the exclusion inserted there.
  • edited August 2013
    Reply to @Charles: AQR has long indicated that advisors are their intended audience, ever since they changed the minimum early on after they started offering funds (although the minimum varies, it is listed at $1M)

    Pretty much what David said.

    I'm not particularly bothered by late quarterly reports. Rarely do managers ever go into detail about the how/why of mistakes and quarterly reports rarely seem to offer THAT much detail/insight.
  • Reply to @Charles: As some others have eluded to it likely is not at all sinister intentions. I know that there are very specific things that FINRA/SEC do not allow (or require costly extra filings) to disclose to non-registered individuals. I too think that the rules are BS but it's more of an issue to direct at regulators if you are angry about then the fund company. I find it ridiculous to the degree that regulators suppress information and free speech in the name of "protection".
  • edited August 2013
    Reply to @WallStreetRanter, Investor, Scott, msf, David. Very good points made. Enlightening stuff, thanks again.
  • Reply to @scott: On perpetually late quarterlies, it bothers me.

    Maybe I'd feel different if I were investing in a hedge fund. But maybe not. In any case, if you give the expectation of providing quarterlies, I think it's important to be timely. Else, make them semi-annual, or annual. Whatever the period, not following through reflects poorly on management.

    As for the details in letters, presentations, interviews and quarterlies...I'm certainly looking for it. Trying to see through window dressing. Earnestly noting things that worked, things that didn't. Changes in strategies. Allocation shifts.

    I think several managers provide this kind of detail, no? Seems to me that the folks at Whitebox, for example, put themselves out there.
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