Trust Report: Brands and Client Interest Align

The FCS partnered with CFA Institute on a presentation and panel discussion on research from CFA Institute entitled “The Next Generation of Trust.” The study emanated from a global survey of retail and institutional investors on the state of investor trust.

Ten years after the Global Financial Crisis, many industry observers are looking back, assessing what transpired and wondering what has truly changed in the financial services industry. Lasting damage occurred on many fronts, not the least of which was a serious erosion of trust.

According to Robert Stammers, CFA and Director of Investor Engagement for CFA Institute, research shows that trust is on the rise around the globe. He attributed this trend to rising levels of professionalism in the industry. Raising trust remains an ongoing challenge, but a commitment to professionalism and regularly acting in clients’ best interests represents a proven pathway to higher trust levels, Stammers said.

Individual investors surveyed said that their trust in advisers is mainly driven by priorities of: full disclosure of fees, disclosure and management of conflicts of interest, and generating returns better than a benchmark. The two most important attributes for institutions when hiring an asset manager are: trust to act in the client’s best interest and ability to achieve high returns.

Stammers noted that while the use of technological tools continues to rise, increased trust cannot be achieved solely via more sophisticated technological offerings. Yet technology can be an important component for raising trust. Many investors said they rely on humans for advice but see technology as a complementary tool. Smart use of technology indeed increases trust when combined with a human touch.

Brand is increasingly seen as a proxy for trust, and thus more investment management firms should be investing in their brands with a message beyond performance. Younger investors, particularly Millennials, value brands more so than Baby Boomers.

About three-quarters of retail investors and institutional investors say it is important that the firm they work with employs investment professionals with credentials from respected industry organizations – an indicator of trustworthiness.

A panel discussed followed Stammers’ presentation, featuring Gerri Walsh, President of the FINRA Investor Education Foundation, and Judy Brennan, Managing Director, Reputation Management, at Ogilvy.

Walsh, who termed herself a “recovering lawyer,” noted that firms often rely on lengthy and confusing disclosure documents to communicate with clients about their approach to doing business. Yet she noted a very small part of these disclosures are actually required by regulators and that most of the verbiage comes from a firm’s lawyers in order to protect the firm, not the client.

Brennan said that while many financial services brands have been rehabilitated, others continue to lag and have a long road ahead to regain trust. Trust may be on the rise in aggregate, she said, but some firms will still struggle until they successfully clean up their legacy issues.

“The Next Generation of Trust” event took place at the Penn Club in New York. Ogilvy was the Platinum Partner. Presenting Sponsors were: Bloomberg Media, CNBC, and The Financial Times. The Economist Group was a partner sponsor.

For more details on the study, visit


reported by Matthew Hickerson, Director of Executive Communications at CFA Institute