CFA Institute, the global association of investment professionals, has published Enhancing Investors’ Trust – the 2022 CFA Institute Investor Trust Study, the fifth in its biennial series, which measures trust levels and explores the factors that drive trust in financial services among retail and institutional investors in 15 markets globally. The study reveals that trust in financial services has reached an all-time high.
The study reveals five factors driving higher trust in financial services: strong market performance, fee compression, tech-enabled transparency, greater access to markets, and new personalised products. The study identifies increased use of technology as a major trust factor, simplifying investing by improving access to markets and information. Half of retail investors and more than four-fifths of institutional investors say that increased use of technology has increased trust in their adviser or asset manager, respectively.
The study also finds that personalisation is additive to trust, and advisers who understand their clients personally, or provide investment products that align with clients’ personal values and beliefs, can deliver the most value.
Rebecca Fender, CFA, Head of Strategy & Governance for Research, Advocacy and Standards at
CFA Institute, and lead author of the Trust Study, comments: “The highs we’re now seeing in investor trust are certainly cause for optimism, but the challenge is sustaining trust even during periods of volatility. Our ongoing examination of the dynamics required to build and maintain investor trust reveals what investors need from their advisors and managers through the highs and lows of market cycles. Technology, the alignment of values, and personal connections are all coming through as key determinants in a resilient trust dynamic.
“The under-44s, and particularly millennials, are leading the way in their use of technology and in their desire for personalised products. This investor cohort has relatively high trust in robo-advice, digital apps, and digital nudges such as alerts about new investment opportunities, and they are using online platforms to execute their investment strategies. They are also eager to use investment products that allow them to invest in line with their personal values, including sustainability and ESG preferences. Climate change and clean energy are the top ESG priorities for retail investors, while institutions are focusing on data protection and privacy, and sustainable supply chain management.”
