Each year the Edelman trust barometer asks individuals how much they trust various industries to “do the right thing.” In 2015, only 54% trusted the financial services industry, making it one of the lowest rated industries.
In the CFA Institute & Edelman Investor Trust Study investors said the most important attribute of an investment manager is that they can be trusted to act in the investor’s best interest. This response was more popular than the next answer of “ability to achieve high returns” by a two-to-one margin.
While market levels have recovered since the global financial crisis, trust in markets has lagged. This indicates a fundamental disconnect, but at the same time it offers an opportunity for those who can respond proactively. A CFA Institute-sponsored study by the Economist Intelligence Unit called “A Crisis of Culture” surveyed financial services executives who almost unanimously agreed (91%) that “aspiring to a set of globally recognized standards would make the industry more resilient.”
As CFA charterholders and investment professionals, we must take immediate steps to help restore investor trust. Start by pledging your support of the Statement of Investor Rights.
NEXT: Restoring Investor Trust