Academics have long concluded that retail fund investors are dumb. Most investors favor actively managed funds, and on average the funds are losers. In a typical study, researchers look at a group of 200 or so funds and find that two-thirds trail the benchmarks over long periods. But a new study by Morningstar suggests that the academics may not give a true picture of how the typical retail investor actually fares. The problem is that most active funds are tiny. While many of the small funds may lag, they only hurt a limited number of investors. Many giant funds — from companies such as T. Rowe Price and American Funds — have outperformed the benchmarks. To get a true picture of how typical investors actually fared, you have to determine what the average dollar returned. When you weight the results by assets, the track record of active funds looks better. It turns out that retail investors tend to gravitate to low-cost funds with strong performance. For more details, see an upcoming article scheduled for our January print edition and our Website in early January.

Introducing Wealth Management Research Initiative

Registered Rep. and WealthManagement.com just completed one of the broadest and most comprehensive studies (1,500+ respondents) on advisors' use of, and firm policy on, social media — especially as it relates to prospecting, marketing, and communication. The study looks at all channels (RIA, wirehouse, IBD, insurance, etc.), age, sex, etc. Highlights: Half of advisors use social media for business purposes. Social media is most often used for networking with other professionals, keeping up with industry news, and client prospecting. Wirehouse advisors are less likely than those from other channels to use social media for business purposes. Advisors from regional firms have an average understanding of FINRA regulations and are concerned with what kind of opinions they can post. Independent advisors are most likely to know 100 percent of their Facebook and LinkedIn contacts. Lack of regulatory clarity and compliance/paperwork keep RIAs from using social media. Advisors from bank brokerages are least likely to use social media for business purposes. And advisors from insurance firms are also most likely to have landed clients as a result of social media efforts. For more information on our study, please contact william.oconor@penton.com.

Registered Rep. Has Gone App-nutty.

Financial advisors on the go can now download RegisteredRep.com via their iPhones and iPads; just go to the Apple app store to download for free. In addition, the RegisteredRep.com app is also available on the Android Marketplace and the Blackberry App World.

Introducing WealthManagement.com

WealthManagement.com is the premier new online community and marketing platform that allows you to profile your company's products and services to highly-targeted wealth management professionals. Highlight your company's news, events, white papers, videos and contact information — all in one place — and update your information 24/7. And because we'll promote your resources via all Registered Rep. and Trusts & Estates digital and print channels that reach in excess of 5,000 firms and over 200,000 wealth professionals, it's a highly efficient way to fortify your existing marketing programs with the critical decision makers you're trying to reach. For more, see RegisteredRep.com or hit WealthManagement.com directly.

We thank you for your support. Drop us a line with your comments: 249 W. 17th St., New York, N.Y. 10011-5300. Or email us: dgeracioti@rrmag.com. Publisher Rich Santos can be reached at rich.santos@penton.com.