Retail investors trust big advisory firms less than they did four years ago and are questioning the value of the advice they receive, according to a report from Cerulli Associates, based on multiple surveys it conducted with 7,000 retail investors from June 2011 to July 2012.

The report, which covers $22.4 trillion in retail owned assets and splits that universe into three groups: advisor intermediated, with $13.9 trillion, direct to investor, with $4.2 trillion and other intermediated channels with $4.3 trillion.

On Wall Street, Financial Planning and Bank Investment Consultant were given a sneak peek at the survey, and this week we'll be bringing you the key findings. Today: What trends are most affecting the market for mutual funds?

Traditional mutual funds may have recovered the ground they lost in the market turmoil of 2008, but even so, investors are not convinced that active management gives the best bang for their buck.

Last year, investors withdrew a net $72 billion from mutual funds, but that pullback represented a calmer attitude than they took a year earlier, when they yanked out $267 billion, which followed a year when they pulled $143 billion out of mutual funds.

But this sharp rebuke can't be chalked up to jitters about the choppy markets alone. Investors were not in total bunker mode in 2011; they sent a net $112 billion into exchange-traded funds.

The trend is not simply about the rabid growth of ETFs. Investors have also come to favor passive index-tracking fare within mutual funds. Of the largest 25 equity mutual funds by assets and net flows, six were Vanguard products, raking in $11.7 billion in net cash flows in the first quarter of this year. The other 19 funds lost more than $15 billion in the same period, according to Cerulli.

And investors weren't the only skeptics. The tide of academia is now pushing against active management.

"This is both a huge challenge and a huge opportunity for traditional asset managers," said Scott Smith, an analyst at Cerulli. "The opportunity here is to help advisors redefine their portfolio construction and find places where they can add value and really get beyond modern portfolio theory or standard diversification," he said. "No one's quite satisfied, but they don't know what it is they're looking for."

Smith said the recent strong interest in a wide variety of alternative investments, both in terms of the structure of the instrument and the strategy. But most of the changes up to now have been incremental, with most advisors adding just a 5% to 10% allocation to alternatives to most clients' portfolios. And even within alternatives, there is no one favored product.

"Advisors have yet to find a new solution. They're just looking to make their old solutions a bit better," he said.

In the future, Cerulli expects the list of top asset gathering funds to be largely the domain of low-cost providers with core offerings, while active managers try to provide clients with alpha by using other asset classes.