Investors are more willing to retain their assets with banks because they have a stronger relationship with them than with other financial firms, according to industry analysts. While net flows into mutual funds dropped nearly 45% in 2001, net flows of funds sold by banks through outside distributors decreased only 14%, according to a study by Kenneth Kehrer Associates, a consulting firm in Princeton, N.J.

Investors' devotion to banks may come as something of a surprise. Banks have had a difficult time growing as a mutual fund distribution channel, accounting for only 9% of mutual fund sales in 2000, according to Cerulli Associates, a mutual fund research and consulting firm based in Boston.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.