The sharp downturn in equity markets this year and allegations of corporate malfeasance have weakened investors’ opinions of the U.S. securities industry to the lowest level since the Securities Industry Association began its annual survey in 1995.

While 55% responded that they have “very favorable” or “somewhat favorable” opinions of the securities industry, this is down from 2001 (62%) and 2000 (63%). “Very favorable” ratings dropped from 22% in 2001 to just 9% this year. Although investors’ satisfaction with their broker is at its lowest level since SIA’s survey began, 85% said they are “very” or “somewhat satisfied” with their broker’s services. The percentage who said they are “very satisfied” has fallen to 45% this year, down from 59% in 2001 and 67% in 2000.

When asked to volunteer issues about investing in the stock market that concerned them, top on investors’ lists of concerns were: “volatility/fear of losing money/retirement losses” (46%); “honesty/trust/ethics of firms or companies” (20%); and, the “state of the economy/recession” (5%). When asked to name their concerns from a list of specific issues, respondents most frequently mentioned “accounting fraud” (65%), “fear of losing money” (49%), and the “state of the economy” (44%).

When asked to name the “main issue” facing the industry, 41% volunteered “dishonesty,” a sharp increase from the 8% (in 2001) and 9% (in 2000) who previously gave this response.

Only one in five investors who had brokers said they were either “extremely” or “very” satisfied with the performance of their investments held with their broker. This is about half the level (41%) in 2001 and less than one third the level (65%) in 2000.

Fewer investors gave brokers high marks for the regularity of information they receive about their account’s performance. Those investors who felt that the fees and commissions charged were reasonable dropped from 79% in 2001 to 66% this year, and 64% felt that their broker was doing an “excellent” or “good” job in keeping their best interests at heart (79% in 2001).

The sample group that Harris Interactive interviewed consisted of investors who were age 18 or older with household incomes of US$50,000 and above and financial assets (excluding a home) of US$100,000 or more. Approximately 1,500 surveys were completed, using random digit dialing. The sampling error is plus or minus 2.5%.