Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Portfolio > Asset Managers

Why Such Distrust?

Your article was successfully shared with the contacts you provided.

Financial services continues to be the least trusted industry globally, according to the 2014 Edelman Trust Barometer. The least trusted group in the financial services sector are financial advisors and asset managers.

The problem, according to Federal Reserve Bank of New York President William Dudley, is “the culture of the [Wall Street] firms.” According to a recent report, he warned that if the industry doesn’t begin reforming itself, regulators will step in (See “NY Fed’s Dudley, CFAs: Industry Has a Big Trust Problem. Are Advisors the Solution?” Jan. 20).

Lack of an ethical culture is the main reason for public lack of trust, agreed nearly two-thirds (63%) of portfolio managers, analysts, advisors, market consultants and C-level executives polled in the CFA Institute’s latest Global Market Sentiment Survey. Tellingly, only 28% of these professionals had a positive opinion themselves of market integrity.

The two remedies most likely to build trust, according to the survey respondents, are to better align compensation with investors’ objectives and establish a corporate policy of zero tolerance for ethical breaches.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.