Survey Results
Secretary of State Todd Rokita conducted the Indiana Investment Literacy Survey in January 2006.
More than 1,000 Hoosier families took part in the statewide survey, which was paid for by money received by the state from a multi-billion-dollar, national legal settlement with unscrupulous brokers, investment houses and stock market investment companies.
Key findings of the survey include:
- Most Indiana adults (80 percent) have some level of investment experience and are current investors. Among the 20 percent of adults who have no prior investment experience, 36 percent say they plan to invest in the future.
- 401(k)s, IRAs and stock market investments account for the majority of investments. These instruments are held by 40 to 53 percent of adults. Variable life insurance and annuities have much lower ownership ranging from 9 to 23 percent.
- " Investment experience varies widely by demographic segment from the standpoints of overall ownership and the type of investment owned. Investment ownership generally increases with income and education level. Men are more likely to be investors, particularly in equities and 401(k) programs. Caucasians are more likely to own investments than African-Americans and people of Hispanic origin.
- Most investors (73 percent) cite retirement and saving for the future as their reasons for investing. Making more money and preserving capital/enhancing current income are distant second and third reasons (20 percent and 15 percent respectively).
- Recommendations from professionals (36 percent) and friends/acquaintances (24 percent) play an important role for most investors' decision-making. Only 32 percent of investors rely solely on their own research.
- Nearly two-thirds (64 percent) of Indiana adults who own investments have Investment Knowledge Scores of "not knowledgeable" or "somewhat knowledgeable." Scores of this level reflect a need for investment information and fundamental education in principles of investing.
- Experience with each of three types of fraud ranges from 5 to 20 percent of total adults. Identity theft is most prevalent followed by consumer fraud at 12 percent and investment fraud at 5 percent. (Only 5 percent of adults report experience with investment fraud, yet 17 percent report experiencing offers for investing which they believed to be fraudulent.)
- Expectation of future fraudulent experiences is approximately double the level of actual occurrences. Thirty-five percent of adults think they could become a victim of identity theft; 22 percent are concerned with product misrepresentation, and 14 percent think it is likely they could be cheated in an investment they make.
- Most Indiana adults do not know which state offices are responsible for different types of fraud and for regulating the investment industry.
- The majority believe an appropriate role of government is consumer protection from fraud and investment scams. They suggest more active monitoring of investment marketing, faster prosecution, and sponsorship of consumer education as productive roles for government.
