SIA's Annual Survey Shows Rise in Investor Confidence

Securities industry reforms are making a significant impression on investor perceptions, and their desire for more information and education creates an important opportunity for Merrill Lynch financial advisors.

These are key findings of the Securities Industry Association's 10th annual investor survey, released today at the SIA annual meeting. Nearly 60% of investors — up 12 points from last year — are confident that the reforms made by the securities industry will benefit them. And 64% of investors have a favorable opinion of the securities industry as a whole, up nine points from last year. That ties the highest rating in the survey's 10-year history.

Additionally, an overwhelming majority of 90% of investors with brokerage accounts are satisfied with the service they receive. This is on par with 2003 results and higher that those reported in 2002.

"After suffering dramatically with the collapse of the technology market bubble in 2001, investor confidence has been steadily on the rise," said EVP James Gorman, president, Global Private Client, and an SIA director. "Investors say they are hungry to learn how to make better decisions, and generally are less than satisfied with their advisors' abilities to address their financial needs in total. This presents an important competitive opportunity for Merrill Lynch and our financial advisors, whose business model is built around personal relationships and comprehensive advice, products and services."

Only 5% of investors say they know everything needed to make good investment decisions, while 37% say they know "most" of what is needed, according to the survey. Fully 84% believe the securities industry should be doing more to educate the public about how to make good investments, according to the survey. Nearly 60% do not believe that their financial advisors are doing either an excellent or good job in "helping me manage all of my financial asset needs."

Gorman said that while investors consider themselves "neutral to slightly bullish" in their market outlook, their expectation for returns, while tempered since the days of the dot.com mania, may still be too aggressive. According to the survey, investors are expecting a 12.8% investment return this year, and a 14.1% return in 2005.

For more details on the survey, go to http://www.sia.com.