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Just 25 Fund Families Holding $15.7 Trillion In Investor Assets, Report Found
The wealth of U.S. investors is being managed by fewer and fewer fund families, a Morningstar report found. The top 25 fund families manage 82% of all investor assets in U.S. funds, equating to $15.7 trillion.
What’s even more alarming is that this number is continuing to grow. Just six months ago, that number was 81%, a year ago it was 79%.
The Department of Labor is expected to release its revised best-interest rules in the coming weeks and the financial services industry should be pleased, said Joshua Waldeser, partner at Drinker Biddle & Reath.
Revised rules are needed after an appeals court tossed out the DOL fiduciary rule one year ago. However, part of the rule had already taken effect, which left a vacuum for regulators to address.
Motivation is high to craft rules that harmonize as much as possible across the financial services' landscape, Waldbeser told a LIMRA audience during a Thursday webinar. In particular, harmonize with the Securities and Exchange Commission's Regulation Best Interest.
"I would be surprised if we got to Thanksgiving without something from the DOL," Waldbeser said. "I think it is in a sense being fast tracked."
In last fall's calendar, the DOL targeted September 2019 for release of the new rules. That changed to December 2019 when this spring's calendar came out.
Citing "good, credible rumors," Waldbeser said the DOL is likely to return to rules set out in the 1975 "five-part test" to determine whether financial advice to plans and participants meets a fiduciary standard.
According to a recent survey, 57% of U.S. adults purposely avoid talking about personal finances with their friends. Conducted by eMoney Advisor (eMoney), a leading provider of financial planning software, the results confirm the majority of Americans do not feel comfortable discussing money and rarely seek professional help to manage their finances, which can ultimately perpetuate poor spending and saving habits.
The findings show Americans pay close attention to their money, with 47% reviewing their personal finances daily, but talking about it is difficult. Nearly half (43%) report feeling stressed, embarrassed or confused when talking about their personal finances, and 20% never talk about money with other people.
When asked to identify which personal finance topics respondents were least comfortable discussing, more than one third (34%) said their bank account balance, followed by:
Credit card debt (18%)
Retirement savings (9%)
Investment choices (9%)
Student loans (8%)