While investor trust overall in financial services is only slightly higher, there are many positive signs regarding actual client experiences. Reputational issues for the industry remain, but there are ways investment professionals are effectively building and maintaining trust with clients.
Among the key takeaways from the survey, we found that clients consistently rank trust as the biggest differentiator in hiring an investment firm. Trust also contributes to whether a client will refer others or expand the relationship with additional mandates. Underperformance is the primary reason clients leave an adviser; understanding client goals and fears are ways to build trust and weather uncertainty.
Investors of all ages and from all regions want more technology applied to investing, and trust in technology is generally high. The effective use of technology increases trust in a financial adviser or firm, and new blockchain technology holds the promise of creating more trust in the system. For advice, however, clients still place greater trust in human advisers while robo-advisers are the least trusted segment of the industry.
Credibility is composed of easily observed and highly valued factors such as track record, brand, credentials, and adherence to a code of conduct. Professionalism is more difficult to assess but is essential to trust. Professional competency, knowledge, and values are the key factors informing the perception of professionalism.