Less than a third of Australians trust the financial services industry

The CFA Institute has conducted a global survey on trust in financial services: The Next Generation of Trust: A Global Survey on the State of Investor Trust. The survey found that Australians are much less trusting of the financial services industry than people in other countries.

The survey found that only 31% of Australian investors completely trust the financial services industry, compared to 44% of global investors. Nearly half (49%) of Asia Pacific respondents completely trust the financial services industry, including Hong Kong (35%), Singapore (47%), and China (70%) and India (71%), which were the two highest rated markets globally.

Australians were also found to be less likely to work with a financial adviser than people in other markets. Trust was ranked as the highest factor in deciding on a financial adviser for Australians. Almost 70% selected “trusted” or “recommended by someone I trust” as the key factor. This compares with only 9% who cited high returns as a reason for choosing an adviser. Despite this, 58% of people said that underperformance would cause them to consider leaving an adviser.

On a worrying note, the survey asked people how likely they thought it was that there would be another financial crisis in the next 3 years – a remarkable 77% rated it as likely. With 27% of those people rating it as highly or extremely likely.

The main reasons given for expecting another financial crisis were a housing bubble/mortgage crisis and national/global politics.

Source: CFA Institute

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