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The man in charge of stopping securities fraud in Utah says one reason it is so difficult is shown by a new survey: Four of every five U.S. investors are "financially illiterate."

"This data suggest that millions of investors, particularly women and older investors, are `sitting ducks' for investment fraud and abuse," said Mark Griffin, director of the Securities Division of the Utah Department of Commerce.He is also a trustee of the Investor Protection Trust - which had the new survey conducted by Princeton Survey Research Associates - and he released its findings at the National Press Club on Tuesday.

"These are not encouraging findings for a society that is moving increasingly to a `self-serve' approach to personal finance," he said.

Among results from the survey of 1,001 Americans who reported they have investments ranging from retirement plans to bonds, stocks and mutual funds are:

- Sixty-two percent mistakenly believe that a "no-load" mutual fund involves no sales charges or other fees. While they may not involve an upfront sales commission, all mutual funds impose management and other fees.

- Only 51 percent understand that the purpose of diversification in investing is to reduce risk.

- Only 55 percent understand that the Securities Investor Protection Corp. does not protect stock investments if the stock market goes down. It provides protection for losses up to $500,000 only in cases such as theft, fire and fraud.

- Only 39 percent know that when interest rates go up, the prices of bonds usually go down.

- Two-thirds of investors have never prepared a specific financial plan either on their own or with the help of a professional. Such plans are a "fundamental cornerstone" of handling money and preparing for the future, Griffin said.

- Eighty-eight percent of those investors who have received advice from a financial professional have never looked into their back-ground.

"Investors need to understand that if we don't understand what's going on with our investments and we rely blindly on the advice of strangers, we're opening ourselves up to investment fraud and abuse," Griffin said.

He recommends that before investing with strangers, investors should call their state securities agency and check their background and qualifications.

Griffin said the overall survey results show only 18 percent of U.S. investors are truly literate about financial matters.

He added that almost half of older investors fell into the least financially literate category - and are the least likely to understand that most brokers and planners are paid on a commission rather than the returns they achieve for investors.

Griffin said the gray cloud depicted by the new survey does have a silver lining. It showed that 70 percent of investors now realize the Federal Deposit Insurance Corp. (which protects bank deposits) does not protect mutual funds sold by banks and similar institutions.

Another survey two years ago then showed that only 18 percent of investors knew that.

"What we've witnessed in the past two years in this particular area is a major turnaround in investor knowledge," Griffin said. "When investor education efforts are concentrated on a specific problem area, we can move that needle in the right direction."

Griffin said the Investor Protection Trust - founded in 1993 as part of a multi-state settlement to resolve misconduct charges against Salomon Brothers - is distributing brochures, videos, ads and other materials to help educate investors.