49% OF CONSUMERS SAY CORPORATE SCANDALS HAVE LOWERED CONFIDENCE IN STOCKS, BUT FEW RECALL NEWS COVERAGE OF INDIVIDUAL FINANCIAL SERVICES COMPANIES

In Knowledge Networks survey, one-third agree that stock market is still best long-term investment option

Menlo Park, CA; March 25, 2004: In a just-released Knowledge Networks survey, 49% of consumers nationwide say that recent corporate scandals have made them less confident about investing in the stock market. But recollection of news stories about specific financial services firms is below 10% in nearly all cases; and 37% of respondents agree with the statement, "Stocks are still the best investment... for the long term."

The survey was conducted in January 2004 on the Knowledge Networks nationwide panel—the only online consumer panel based on a projectable sample. Exactly 1,400 interviews were completed.

Sixteen percent (16%) of respondents say they agree "strongly" with the statement, "Recent corporate scandals have made me much less confident about investing in stocks," and another 34% agree "somewhat." One in three (36%) say they neither agree nor disagree, and 14% disagree to some extent.

But when KN probed for awareness of news stories about 28 major financial services firms, 10% or fewer of respondents reported seeing coverage of these companies. Those who did remember stories were generally split on whether the coverage left a positive or negative impression.

Awareness of advertising for these same firms was higher overall—and dramatically so in some cases. Financial services companies generating the strongest levels of ad recall were Citibank (52%), Merrill Lynch (46%), and Charles Schwab (46%); as expected, positive impressions far outweighed negatives for ads in nearly all cases.

When it comes to deciding where to invest, consumers are just as likely to rely on the media and word of mouth as on investment professionals. The top sources of guidance are family (28%), newspapers (27%), friends (25%), financial planners (24%), and the Internet (23%). Stockbrokers were cited by 19%; mutual funds advisors, 18%.

Consumers' lack of confidence in the stock market can be attributed only partly to the events of September 11 th. While 22% agree to some degree with the statement "I used to think the stock market was the best place to invest, but I've changed my mind since 9/11," 27% disagree, and 49% are ambivalent.

Knowledge Networks delivers quality you can use—superior methodologies, design, and analysis that give you an edge when it comes to making business decisions. KN's unmatched consumer research resources include the only projectable Web-based consumer panel. The company leverages its expertise in brands, media, advertising, and analytics to provide insights that speak directly to clients' most important marketing issues. In addition, Knowledge Networks has built a substantial practice in government and academic research, an area notable for its rigorous methodology standards.