JERSEY CITY, N.J., — Pershing LLC, a BNY Mellon company, announced today the availability of the findings of a new survey conducted in conjunction with BondWave LLC which assesses registered representatives and registered investment advisors’ (RIAs) understanding of fixed income investment options and explores their investing habits.

The 2010 Fixed Income Allocation Survey, executed by Finadium LLC, uncovers surprising trends in usage and attitudes of fixed income among registered representatives and RIAs. The findings underscore the need for additional education and support, especially as wirehouse representatives increasingly move towards independence. Participants overwhelmingly indicated a preference for pooled and passive fixed income investments, with only a small percentage of participants indicating they trade actively with the goal of generating outsized returns. Virtually all participants indicated maintaining a fixed income asset allocation for clients.

The survey results are based on feedback from 152 participants, of which 43% were registered representatives, 31% RIAs and 14% dually registered or hybrid advisors, compiled from 134 Web surveys and 18 telephone interviews.

Highlights from the survey include:

• Participants reported that nearly 35% of their clients’ assets are allocated to fixed income and the primary reasons for their investment in fixed income products are income (37%), portfolio diversification (33%) and principal preservation (28%).
• Participants cited individual security selection (58%) as the most challenging aspect of investing in individual bonds, followed by ongoing monitoring of existing investments and securities (50%), which include evaluating ratings and credit outlook data.
• The vast majority (85%) of participants surveyed used separately managed accounts or pooled investment vehicles like mutual funds, ETFs, and unit investment trusts to address fixed income allocation. However, the survey revealed that between 20% and 41% of the participants were unaware of the fees that these various investment vehicles charged.
• Only 3% of the participants surveyed actively trade in an attempt to generate outsized returns.
• When selecting a fixed income trading partner, 85% of participants indicated that they are primarily looking for breadth of inventory and want to have quick and easy access to fixed income product experts at the trading firm.
• Those who utilized individual bonds in their clients’ portfolios felt that although the investing process is not always simple, they were closer to the investing process and had a stronger relationship with their clients.

“Registered representatives and RIAs spend considerable effort in the fixed-income decision-making process with limited time and tools,” said Craig Messinger, managing director of Pershing Trading Services. “Providing registered representatives and RIA customers with a better understanding of fixed income investment options and strategies, along with the technology, tools and product choices, will help them broaden their suite of investment solutions to better serve their clients.”

“The survey findings, when considered in context with today’s market, demographic, regulatory and economic factors underscores that a “one size fits all” approach to fixed income investing may not serve advisors or their clients well in the months and years ahead,” said Patrick Woelfel, BondWave’s senior vice president of Business Development. “It may be that some advisors need to move out of their comfort zone and broaden their set of fixed income investment solutions.”

BondWave LLC (BondWave) is a registered investment advisor and provider of an innovative fixed income solution. BondWave’s Program Portfolios® service is designed to provide advisors with an independent, unbiased and scalable approach to individual bond investing. BondWave’s innovative solution enables advisors to retain assets and maintain control of the entire investment process, using model-based investment strategies to construct a unique portfolio for each client. BondWave provides turn-key services for bond pricing transparency, portfolio monitoring, electronic alerts and reporting. For more information on this efficient and cost-effective service visit www.bondwave.com.

Pershing LLC (member FINRA/NYSE/SIPC) is a leading global provider of financial business solutions to more than 1,150 institutional and retail financial organizations and independent registered investment advisors who collectively represent approximately five million active investors. Located in 20 offices worldwide, Pershing and its affiliates are committed to delivering dependable operational support, robust trading services, flexible technology, an expansive array of investment solutions, practice management support and service excellence. Pershing is a member of every major U.S. securities exchange and its international affiliates are members of the Deutsche Börse, the Irish Stock Exchange and the London Stock Exchange. Pershing LLC is a BNY Mellon company. Additional information is available at www.pershing.com.

BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $22.4 trillion in assets under custody and administration, $1.1 trillion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.5 trillion per day. Additional information is available at www.bnymellon.com.