A new survey by InvestingNerd, an online personal investing site, has revealed some alarming facts about investors lack of knowledge concerning online brokerage accounts, stock trading and 401(k) fees.
Some key findings include:
- Americans Dont Know What Kind of Account to Trade Stock With: Four in five Americans (81.4%) incorrectly identified the type of account to open in order to trade stock online: a brokerage account.
- Americans Severely Underestimate Their Total 401(k) Fees: Nine in 10 Americans (92.6%) underestimated the 401(k) fees the average household will pay over a lifetime by several thousand dollars. The real average totals over $150,000 per household.Investors Say Price Matters, Then Ignore Prices: Although half of current online investors (50.3%) cited low prices and fees as the most important factor to them in choosing an online broker, but only one in 10 current online investors (11%) actually followed their own advice by comparing costs across accounts.
- Investors Are Paying Too Much for Trade Execution: Though most respondents (82.9%) said they would not pay extra to have trade execution speed reduced by 1 second, the fact is that many already do without realizing it.
The survey polled a nationally representative sample of 869 American adults from February 9 - 12, 2013.