investor attitudes study presented to: prepared by: october 2006 © copyright 2006. opinion research...
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Investor Attitudes StudyInvestor Attitudes Study
Presented to:
Prepared by:
October 2006
© Copyright 2006. Opinion Research Corporation. All rights reserved. Founded 1938
Conducted for the NYSE GroupConducted for the NYSE Group
Founded 19382
Methodology
Conducted from March 16 – 22, 2006
579 interviews completed online
– Investors represented a mix by:
Gender
Age
Value of investments
Number of trades in past 12 months
Type of financial institutions used
Investment style (rating on 10-point scale; conservative to aggressive)
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Key topic areas included in the survey:
Understanding of the stock registration process
Recall of last account opening process and actions concerning the provision of investor contact information
Actions taken when proxy statements received
Proxy voting behaviors and attitudes
Attitudes toward OBO / NOBO issues
Understanding of OBO / NOBO issues
Reaction toward a fee for maintaining OBO status
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Key Findings
There is a great deal of confusion about the security registration and proxy voting process
– Almost two-thirds of investors believe stocks are either registered in their name or said they weren’t sure how they were registered
– Only one in four are aware that if they don’t vote their proxy, their shares are voted by the brokerage firm in accordance with the wishes of the Board of Directors
Few investors recall being asked if they wished their name to be provided to publicly traded companies as part of the account opening process
NOBO status is clearly preferred by investors
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Detailed Findings
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Stock Registration Process and Information Dissemination Preferences
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Stock Registration
23%
5%
41%
7%
24%
Always your name – you have no choice
Your name – if you choose it to be this way
Not really sure
Always the name of your brokerage firm – you have no choice
The name of your brokerage firm – if you choose it to be this way
In Whose Name is Stock Registered?
Investors are generally unaware of details surrounding the stock registration process . . .
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Stock Registration. . . and the information that publicly traded companies receive.
Publicly Traded Companies Receive...
40%
5%
9%
15%
31%
0% 10% 20% 30% 40% 50%
Publicly traded companies automatically receive the names & addresses of all individuals purchasing their stock at part of the normal stock transaction process
Publicly traded companies receive the names & addresses of the institution in whose name the
stock is registered
Publicly traded companies receive the names & addresses of individuals purchasing their stock
ONLY
Publicly traded companies can receive the names of all individual investors who purchased their stock
ONLY by applying
I'm not really sure which of these is the most accurate
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Remember Being Asked to Provide Contact Information to Company
53%
27%
20%
No, was not asked or given form to indicate
choice
Don’t know
Yes, was asked or given form to indicate choice
Half don’t remember if they were asked whether they wanted their contact information provided to companies whose stock they purchased.
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21%
79%
Decision on Whether to Provide Contact Information
Did not provide contact
information
Decision to Provide Information or Not
Why Not Privacy concerns (38%) Avoid solicitations (25%) Security/fraud issues (8%)
WhyWant to receive information/keep up to
date/informed (24%)Thought it was a good idea (11%)Gives me more control/ownership (9%)Being upfront/have nothing to hide/no reason
not to provide it (8%)For proxy voting (8%)
Those who were asked their choice overwhelmingly opted to provide their contact information.
53%
27%
20%
No, was not asked or given form to indicate
choice
Don’t know
Yes, was asked or given form to indicate choice
Provided contact
information
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Receiving Guidance on Decision
The small proportion who remember being given a choice were not given any advice about how to answer the question.
53%
27%
20%
No, was not asked or given
form to indicate choice
Don’t know
Yes, was asked or given form to
indicate choice
29%
71%
Yes
Were You Provided Guidance?
Guidance Given Provide contact information (61%) Do not provide contact information (15%) Don’t know (24%)
No
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Choice If Had Been AskedBy more than a 2-1 margin, those who were not asked their preference would have provided their contact information if they had been asked.
53%
27%
20%
No, was not asked or given form to indicate
choice
Can’t remember
Yes, was asked or given form to
indicate choice
29%
71%
Would not have provided contact
information
Would have provided contact
information
Choice if Had Been Asked(Among ‘No’/Can’t Remember)
Privacy concerns single biggest issue (46%)
Want to receive information single biggest reason (25%)
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Choice If Had Been Asked
Did not provide the information OR would not
have if had been asked
Did provide the information OR would have if had been asked
In total, nearly three in four investors either provided their contact information or would have if they had been asked their preference.
27% 73%
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Proxy Voting
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12%
30%
43%
15%
Proxy Voting
Open selected proxy statements and read
through some or most of the content
Open selected proxy statements from a few companies and read some or most of the
content
Open every statement but read little to none of the
content
Open every statement and
read it thoroughly
Open all the statements and
read through some or most of
the content
Throw them out without reading or opening them
Proxy statements are read to various degrees. Most investors vote at least part of the time.
What do you do when you receive them? Do you vote?
Never vote/Don’t recall receiving proxy
statements
Rarely vote
Always vote
Sometimes vote and sometimes not
7%
3% 44%
19%
10%
17%
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Who Votes?
Age is the biggest determinant of the likelihood to cast a proxy vote.
Always/Sometimes Always Sometimes
Total 73% 43% 30%
Men 79% 52% 27%
Women 66% 33% 33%
18-34 61% 24% 37%
35-54 70% 37% 33%
55+ 85% 64% 21%
<$300,000 invested 67% 36% 31%
$300,000+ invested 83% 56% 27%
<20 trades a year 73% 41% 32%
20+ trades a year 76% 53% 23%
Do you vote? Who votes?
12%
30%
43%
15%
Never vote/Don’t recall receiving
proxy statements
Rarely vote
Always vote
Sometimes vote and sometimes not
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Is Proxy Voting Important or Not?
8%
4%
4%
7%
8%
8%
16%
10%
31%
4%
0% 10% 20% 30% 40%
How important is it to you personally?
Most investors say proxy voting is important to them.
57%
27%
16%
10(Very Important to Me)
1(Not at All Important to Me)
6
7
8
9
4
5
2
3
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33%30%
10%
27%
What Happens If You Don’t Vote?
I’m not sure
Your shares are voted by your brokerage firm based
on their preference
Your shares aren’t voted
Your shares are voted automatically by your brokerage firm in accordance with the Board of Directors’ or the company’s recommendations
Few investors know what actually happens if they don’t send in their proxy vote.
In Whose Name is Stock Registered?
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OBO/NOBO Preference
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Importance of Companies Informing You Directly
Importance of Being Informed Directly
More than half of investors say it is important to them that they be informed directly, not via a third party, about matters deemed important to shareholders.
54%
31%
14%
8%
3%
3%
7%
9%
12%
14%
10%
30%
3%
0% 10% 20% 30% 40%
10(Very Important to Me)
1(Not at All Important to Me)
6
7
8
9
4
5
2
3
54%Total
47%
61%
65%
49%
46%
49%
58%
% Rating an 8-10
Moderate/conservative investment style
35-54
18-34
Aggressive investment style
55+
Women
Men
54%Total
47%
61%
65%
49%
46%
49%
58%
% Rating an 8-10
Moderate/conservative investment style
35-54
18-34
Aggressive investment style
55+
Women
Men
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64%
36%
OBO/NOBO Preference
Intensity of NOBO Opinion
33% top 2 box 50% top 3 box
Intensity of OBO Opinion 37% top 2 box 55% top 3 box
There are no significant differences
in opinion by any subgroup.
Nearly half (44%) aren’t sure whether most of their accounts are OBO or NOBO; 37% think most are NOBO,
while 18% think most are OBO.
Given a comprehensive explanation of the difference between OBO and NOBO status, by nearly a 2-1 margin investors choose NOBO status. Those who pick OBO and NOBO are about equally strong in their opinions.
OBO
NOBO
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OBO Preference Shrinks when Price Tag Is Attached
Initial Choice $25 Annual Fee $50 Annual Fee
Preference for OBO status collapses when there is a $25 or $50 price tag to maintain it.
NOBO64%
OBO36%
NOBO86%
OBO14%
NOBO95%
OBO5%
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Summary
There is a great deal of confusion about the security registration and proxy voting process.
– Investor education is likely required to fully address the issue
Few investors recall being asked if they wished their name to be provided to publicly traded companies as part of the account opening process.
– The account opening event involves many activities. OBO/NOBO status issues do not standout as part of the process. This may also need to be addressed.
NOBO status is clearly preferred by investors.
– Most investors express a clear preference for knowledge. This should be considered in decisions made.
Investor Attitudes StudyInvestor Attitudes Study
Presented to:
Prepared by:
October 2006
© Copyright 2006. Opinion Research Corporation. All rights reserved. Founded 1938
Conducted for the NYSE GroupConducted for the NYSE Group