Trust in investment more valuable than ever

CFA Institute, the global association of investment management professionals, released the fourth edition of its trust survey, Earning Investors’ Trust: How the Desire for Information, Innovation, and Influence is Shaping Client Relationships.

The survey measured the opinions of more than 4,000 retail and institutional investors in 15 markets globally, including 500 UK retail investors and 50 UK institutional investors. In this report, CFA Institute analyses the dimensions of trust at the system, industry and firm level and finds that investors seek more information, innovation, and influence in their interactions with the investment management industry.

The two significant components of trust are credibility and professionalism, and the study supplies eight action steps organizations and professionals can take to build trust. These can be used as tools for businesses and improve outcomes for investors.

“This time of heightened market volatility sets up a very different path for those who will succeed in meeting their investment goals and those who will not. Fear and panic can obscure sound investment decision-making,” said Margaret Franklin, CFA, President, and CEO of CFA Institute. “In this climate, the need for trust in institutions and in the advisers who act on behalf of investors, as well as the financial system in which they operate, becomes starkly apparent.”

 UK Highlights

• Trust in the financial services industry in the UK is low at 33%, compared to 46% globally
• UK investors’ confidence in advisers’ ability to manage through a crisis is decreasing, at 42% in 2020 compared with half in 2018, and is lower than the global average of 49%
• Personalized investment products are becoming more of a priority for UK investors, with 75% having an interest in this area (a 23% increase on 2018)
• UK investors continue to derive trust in human interactions with advisers, with 77% trusting advice from humans over robo-advisers (compared to a 73% global average). UK investors are less likely (30%) than the global average (36%) to consider using AI to make investments