Decision Paralysis: The Rise to One Million Investment Choices
By 2031, there could be one million managed investment products. As the number of investment choices grows, investors are suffering from decision paralysis.
We partnered with Morningstar to show the rise in investment products over time, and how financial advisors can help.
Investment Product Growth Over Time
There were just over 30,000 managed investment products in 2002, but the choices grew rapidly in the years that followed. As of June 30, 2023, there were more than 742,000 products available.
Year
Number of Managed Investment Products
2002
31,470
2003
66,225
2004
96,050
2005
133,967
2006
175,001
2007
221,417
2008
276,115
2009
299,882
2010
332,693
2011
371,224
2012
411,414
2013
450,744
2014
496,460
2015
539,013
2016
573,999
2017
615,025
2018
647,483
2019
665,622
2020
688,700
2021
713,635
2022
735,474
2023
742,715
2024P
790,018
2025P
818,789
2026P
848,608
2027P
879,512
2028P
911,542
2029P
944,739
2030P
979,144
2031P
1,014,802
Source: Morningstar, 2023 data is as of June 30. Managed products include closed end funds, collective investment trusts, exchange traded funds, global restricted funds, hedge funds, insurance product funds, models, open-end funds, separate accounts, UK LP subaccounts, VA subaccounts, and VL subaccounts.
In terms of the different product types, open-ended mutual funds are the most common. However, ETFs have seen the highest growth rate over the last two decades.
Growth rates for all managed products in total were the highest in the early 2000s, but the number of products has continued to grow in recent years. The projection of one million products by 2031 assumes the compound annual growth rate of 3.64% from 2017 to 2022 continues into the future.
Enjoying this content? Dive into more insights in the Voice of the Investor Report:
Overcoming Decision Paralysis
People have access to more investment products and more advice than previous generations, but this doesn’t necessarily translate to more knowledge. Instead, this can lead to confusion and decision paralysis. In fact, 26% of people say they are uncomfortable making investment decisions, primarily due to a lack of knowledge.
Notably, investors don’t view advisors as being significantly more valuable than other information sources.
Source
% Who Find Source Very/Extremely Valuable
Professional advisor
57%
Investment or trading platform/website
55%
Accountant or tax advisor
53%
Business news e.g. Wall Street Journal
50%
Financial websites e.g. Yahoo Finance
49%
Source: Morningstar’s 2023 Voice of the Investor Study. The study is based on 2,003 U.S. adults who were not currently employed as a financial advisor.
However, the perceived value of advisors increases substantially once an investor begins working with one.
Status of Advisor Relationship
% Who Find Advisor Very/Extremely Valuable
Do not work with an advisor (n=1,142)
31%
Work with an advisor (n=861)
90%
To help combat decision paralysis, advisors can provide actionable insights and curate options for investors. Want to learn more about today’s investors and their unique needs?
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
