20th Annual Conference

Canadian Investors’ Perceptions of Mutual Funds and

the Mutual Fund Industry

2

Overview

Confidence in Mutual Funds Meeting Financial Goals

Comfort with Understanding of Mutual Fund Investing

Method of Purchasing Mutual Funds and Information Sources Consulted

The Advisor Relationship, Fees & Suitability

Point of Sale Information

The Mutual Fund Investment Decision

Staying Informed

Dealing with Problems

3

Methodology

Actual Interviews

#

Weighted Interviews

#

Marginof Error

%

Atlantic Canada 301 60 ±5.6%

Quebec 302 228 ±5.6%

Ontario 458 528 ±4.6%

Manitoba/Saskatchewan

202 84 ±6.9%

Alberta 302 144 ±5.6%

British Columbia 300 156 ±5.7%

TOTAL 1865 1200 ±2.2%

4

Confidence in Mutual Funds Meeting Financial Goals

5

Confidence in Investment Products Meeting Financial Goals

Q4-8: Using a 10 point scale, where 1 means ‘not at all confident’ and 10 means ‘completely confident’; overall, how confident are you that each of the following investment products would help you meet your household’s financial goals? How about: (RANDOMIZE AND READ) (June 2006, n=1865)

3% 22% 29% 27% 12% 8%

6% 26% 31% 21% 8% 7%

7% 32% 32% 17% 6%5%

6% 48% 31% 10%2%2%

19% 51% 18% 7%3%4%

0% 20% 40% 60% 80% 100%

Very confident(10)

Confident(7-9)

Somewhatconfident(5-6)

Not veryconfident(2-4)

Not at allconfident(1)

Don't know/Refused

Real estate investments, incl. your primary residence

Mutual funds

GICs and other term deposits

Bonds, incl. Canada Savings Bonds

Stocks

Mean

7.4

6.5

5.9

5.5

4.8

TotalConfident

88%

85%

71%

63%

54%

6

Comfort With Understanding of Mutual Fund Investing

7

Investors’ Comfort with Their Understanding of the Mutual Funds They Own

Q2B: And using a scale from 1 to 10 where 1 means you are ‘not at all comfortable’ and 10 means you are ‘very comfortable’, how comfortable are you with your understanding of the mutual funds you own? (RECORD ONE ONLY) (June 2006, n=1865)

DK/Ref.1%

Somewhat Comfortable

(5-6) 30%

Comfortable (7-9) 45%

Not At All Comfortable

(1) 3%

Very Comfortable

(10) 8%Not Very Comfortable

(2-4) 13%

Total Comfortable: 83%Mean: 6.4

8

Methods of Purchasing Mutual Funds and Information

Sources Consulted

9

Methods of Purchasing Mutual Funds

Q18: For the next few questions I would like you think about the last time you invested in a mutual fund. When buying those mutual funds did you: (READ AND RECORD ONE ONLY) (June 2006, n=1865)

Purchase Them From Someone Who Provided You With Advice

And Guidance

Purchase Them Online Or From An Individual Who Just Took

Your Mutual Fund Order

Don’t Know

Refused

10

Sources Consulted When Last Purchased Mutual Funds

Q23-26:Still thinking back to the last time you invested in a mutual fund, did you consult the following sources: (RANDOMIZE AND READ. RECORD YES/NO FOR EACH) (June 2006)

21% 77% 1%

32% 66% 1%

60% 38% 2%

94% 5%1%

0% 20% 40% 60% 80% 100%

NoYes Don't know/Ref.

Your advisor, meaning the person you purchased the mutual fund from

(n=1596)

Printed information from the mutual fund company

(n=1865)

Your friends, family and colleagues(n=1865)

The mutual fund company’s website(n=1865)

11

The Advisor Relationship,Fees & Suitability

12

Satisfaction with Advice ProvidedBy Advisor

1%

25%

60%

2%

10%

0%

20%

40%

60%

80%

CompletelySatisfied (10)

Satisfied (7-9)

SomewhatSatisfied (5-6)

Not VerySatisfied (2-4)

Not At AllSatisfied (1)

Q45: I would now like to ask you about your relationship with your financial advisor - meaning the advisor who you buy your mutual funds from. Using a scale from 1 to 10 where 1 means ‘not at all satisfied’ and 10 means ‘completely satisfied’, how satisfied are you with the advice provided by your financial advisor? (RECORD ONE ONLY) (June 2006, n=1596)

Mean: 8.0

13

Q47-48 Has your advisor ever: (RANDOMIZE AND READ. RECORD YES/NO FOR EACH)(June 2006, n=1596)

94% 5%1%

94% 5%1%

0% 20% 40% 60% 80% 100%

NoYes Don't know/Ref.

Had a discussion with you about the amount of investment risk

you are comfortable with

Had a discussion with you about your overall investment objectives

and goals

Whether Advisor Has Ever Discussed Investment Objectives and

Risk Tolerance

14

Q46 & 49: Has your advisor ever: (RANDOMIZE AND READ. RECORD YES/NO FOR EACH)(June 2006, n=1596)

55% 42% 3%

77% 20% 4%

0% 20% 40% 60% 80% 100%

NoYes Don't know/Ref.

Asked you to complete a questionnaire to identify your risk

tolerance and overall financial objectives

Had a discussion with you about how he/she is compensated

Whether Advisor Has Ever Administered Questionnaire and Discussed

Compensation

15

Comfort with Fees & Understandingof Fees

Q50-51: Overall, using a scale from 1 to 10 where 1 is ‘not at all comfortable’ and 10 is ‘very comfortable’ how comfortable are you with: (RECORD ONE ONLY FOR EACH) (June 2006, n=1586)

12% 44% 26% 10%4% 4%

13% 44% 27% 9%3%4%

0% 20% 40% 60% 80% 100%

Very comfortable(10)

Comfortable(7-9)

Somewhat comfortable(5-6)

Not very comfortable(2-4)

Not at all comfortable(1)

Don't know/Refused

Any fees that you pay for your mutual funds

Your understanding of any fees that you pay for your

mutual funds

Mean

6.8

6.7

TotalComfortable

84%

82%

16

Point of Sale Information

17

Comfort with Information to Make Informed Investing Decision

Not Too Comfortable

4%

Somewhat Comfortable

45%

DK/Ref.2%

Very Comfortable

46%

Not At All Comfortable

2%

Q19: Still thinking back to the last time you invested in a mutual fund, prior to making this last investment, did you feel very comfortable, somewhat comfortable, not too comfortable or not at all comfortable that you had the right information to make an informed decision? (RECORD ONE ONLY) (June 2006, n=1865)

Total Comfortable: 91%

18

Information Considered When Last Purchased Mutual Funds

Q27,Q28, Q30, Q32, Q37: Still thinking back to the last time you invested in a mutual fund, and using a 10 point scale where 1 means you “did not consider it at all” and 10 means you “considered it in depth”, to what extent did you consider each of the following pieces of information? How about: (RANDOMIZE AND READ. RECORD ONE FOR EACH) (June 2006, n=1865 - *n=1596)

6% 21% 23% 14% 25% 11%

7% 23% 22% 23% 20% 5%

8% 25% 27% 16% 18% 6%

8% 31% 26% 15% 16% 4%

9% 32% 24% 14% 16% 4%

10% 41% 26% 9% 10%5%

12% 40% 25% 11% 10%3%

17% 44% 21% 7% 8%4%

19% 47% 20% 6%5%2%

20% 58% 16% 2%3%2%

0% 20% 40% 60% 80% 100%

Did not consider at all (1)

Did not reallyconsider (2-4)

Considereda bit (5-6)

Consideredin depth (10)

Consideredsomewhat (7-9)

Don't know/Refused

Your advisor’s opinion

The risks associated withinvesting in the fund

The fund’s past performance comparedto other funds in its category

Information about the companyoffering the fund

The companies, holdings orsectors the fund invests in

The price per share

Information about the mutual fundcompany’s portfolio manager

The fee the mutual fund companyreceives for managing the fund

Fees your advisor receives for you investment in the fund

The fund’s rating from a service likeMorningstar or Globe Fund

Mean

7.7

7.1

6.9

6.3

6.3

5.5

5.5

5.2

4.7

4.6

TotalConsidered

94%

86%

82%

77%

77%

65%

65%

60%

52%

50%

19

Whether Advisor Discussed Fees/Compensation When Last Purchased

Mutual Funds

Q21-22: (ASK IF PURCHASED MUTUAL FUNDS FROM SOMEONE WHO PROVIDED ADVICE/GUIDANCE AT Q18) And still thinking back to the last time you invested in a mutual fund did the person you purchased it from discuss the following issues with you? How about: (RANDOMIZE AND READ LIST) (June 2006, n=1596)

53% 42% 5%

69% 25% 6%

0% 20% 40% 60% 80% 100%

NoYes Don't know/Ref.

Whether or not you will be charged a sales commission when you buy or sell the mutual fund - also called “front-end

load” and “back-end load” fees

How the person you bought them from would be compensated for your purchase

of that fund

20

Whether Advisor Discussed Suitability When Last Purchased Mutual Funds

Q20: (ASK IF PURCHASED MUTUAL FUNDS FROM SOMEONE WHO PROVIDED ADVICE/GUIDANCE AT Q18) And still thinking back to the last time you invested in a mutual fund did the person you purchased it from discuss the following issues with you? How about: How well suited that mutual fund is for reaching your investment objectives (RANDOMIZE AND READ LIST) (June 2006, n=1596)

No7%

Yes90%

Don't Know2%

21

The Mutual Fund Investment Decision

22

Importance of Issues in Decision to Invest in Mutual Funds

Q10-16 Are each of the following issues very important, somewhat important, not too important, or not at all important in your decision of whether or not to invest in mutual funds? How about: (RANDOMIZE AND READ LIST) (June 2006, n=1865)

38% 38% 12% 6%6%

38% 43% 11% 7%1%

40% 41% 11% 5%2%

43% 43% 8%4%2%

43% 46% 6%3%2%

56% 33% 7%3%1%

0% 20% 40% 60% 80% 100%

Very important

SomewhatImportant

Not at allimportant

Don't know/Refused

The management of mutual funds by professional investors

That mutual funds are an effectiveway to diversify and manage risk

The easy access mutual funds provide to a wide range

of investments

The ease of moving investmentswithin a family of mutual funds

The ability to buy mutual fundswith small amounts of money

The amount of regulation inthe mutual fund industry

Not tooimportant

TotalImportant

89%

89%

86%

81%

81%

76%

23

Staying Informed

24

Methods Used to Stay Informed About Mutual Fund Investments

Q40-42: There are different ways to stay informed about your mutual fund investments. Overall, do you always, sometimes, rarely or never read any of the following information? If you didn’t receive this information, please let me know. (DO NOT RANDOMIZE AND READ) (June 2006, n=1865)

37% 37% 23% 1%1%

43% 31% 24% 3%1%

80% 15% 5%1%

0% 20% 40% 60% 80% 100%

Your account statement which you receive monthly or quarterly, and that shows the

current value of your personal mutual fund holdings

The annual reports sent out by the mutual fund company. These are descriptive

reports prepared by the mutual fund that you receive once or twice a year,

separately from your account statement

The prospectus sent out by the mutual fund company - this is a written document prepared by the mutual fund company that you receive either at the time of purchase

or shortly after purchasing a mutual fund

Yes, Always

Yes, Sometimes

Yes,Rarely/Never

Did not receivethat info

Don’t Know/Refused

25

Amount of Information Received About Mutual Funds They Invest In

Q3: Overall, do you feel that you receive (ROTATE TOO MUCH AND NOT ENOUGH) too much, not enough or the right amount of information about the mutual funds you invest in? (RECORD ONE ONLY) (June 2006, n=1865)

Right Amount

77%

Too Much 7%DK/Ref.

1%Not Enough

15%

26

Whether Information Received from Mutual Fund Companies Answers Questions

DK/Ref.4%

Some 20%

Most 51%

None 2% All

17%A Few

6%

Q43: Overall do you feel the information you receive from mutual fund companies answers all, most, some, a few or none of your questions about your mutual fund investments? (RECORD ONE ONLY) (June 2006, n=1865)

27

Preferred Format For Annual Report

DK/Ref.2%

Detailed Annual Report

12%

Both5%

Two Page Summary Document

80%

Q44: Mutual fund companies send out annual report documents to their investors at the same time each year. These reports outline issues such as the fund’s investment objectives and summarize the investments the fund has made over the year. Would you prefer to receive a (RANDOMIZE DETAILED AND 2 PAGE SUMMARY) detailed annual report that tends to be about 50 or more pages or a two page summary annual report? (RECORD ONE ONLY) (June 2006, n=1865)

28

Dealing with Problems

29

Experienced Problems with Investments

Q52: Have you ever experienced any problems with your investments, other than normal market fluctuations? (RECORD ONE ONLY) (June 2006, n=1865)

No90%

Refused1%

Don’t Know

1%

Yes8%

30

First Step Taken to Resolve Problems with Investments

Speak To Advisor’s Superiors

Contact The Mutual Fund Company

Contact Advisor/Banker/Financial Planner - Insisted

Move Investments To Another Advisor

Sell/Take Money Out/Cancel/Close Account

Take Action/Research/Review/Do It Myself

Other

Nothing

Don’t Know/Refused

Q53: If you were to experience a problem with your investments in the future, what would be the first thing you would do to resolve the issue? (IF RESPONSE IS CONTACT ADVISOR/BANKER/FINANCIAL PLANNER DO NOT ALLOW RESPONSE – PROMPT “What would you do next” )(June 2006, n=1865)

31

Next Step Taken to Resolve Problems with Investments

Move Investments To Another Advisor

Contact The Mutual Fund Company

Speak To Advisor’s Superiors

Sell/Take Money Out/Cancel/Close Account

Contact A Regulatory Body (General)

Contact Lawyer/Police/Take Legal Actions

Other

Nothing

Don’t Know/Refused

Q54: And if it wasn’t resolved after that, what other steps would you take to resolve the issue? PROBE: And what would you do next? (DO NOT READ OR PROBE WITH LIST. RECORD ALL THAT APPLY) (June 2006, n=1865)

20th Annual Conference

Canadian Investors’ Perceptions of Mutual Funds and

the Mutual Fund Industry