Survey reveals institutionals' faith in investment management
GLOBAL – Institutional investors have expressed their continuing faith in investment management, with 61% of respondents to an investor trust study saying they remained confident in the industry.
However, according to a survey by the CFA Institute of more than 2,000 retail and institutional investors worldwide, investors generally have little trust in the investment profession.
Institutional investors would appear to be more forgiving, with 61% saying they considered investment managers to be trustworthy. By comparison, only 51% of retail investors felt the same.
While the results highlight a general lack of trust among investors worldwide, the CFA Institute said pessimism did not extend to the capital markets, as nearly three-in-four investors were optimistic about their ability to earn a fair return there.
John Rogers, president and chief executive at the CFA Institute, said trust would be "absolutely critical" for the future of finance.
"Investors believe the professionals they work with have been the most effective in earning their trust," he said.
"This represents a significant opportunity for investment professionals and firms to actively build a culture where ethical practices are valued as highly as investment performance."
Fifty-five percent of respondents said investment managers they worked with had been the most effective in enhancing their trust in the capital markets, while only 41% said investment firms were the deciding factor in building trust.
The role of regulators did not seem to contribute much to the level of confidence in capital markets, with just 38% of investors saying national regulators helped build trust and 35% welcoming efforts made by global regulators.
However, 52% also pointed to national and global regulators as having the greatest opportunity to effect change and enhance trust moving forward.
The investors surveyed also stressed that behaviour-related attributes such as transparent and open business practices, responsible actions to address an issue or crisis and ethical business practices were more important for building trust than performance-related attributes such as delivering consistent financial returns and offering high-quality products or services.