Forty-six percent of investors said they trusted financial services companies less in 2010, according to the second annual Edelman “Trust in U.S. Financial Services Survey.”
Of these investors, 57% said financial services companies “acted in a greedy manner,” and 18% said the “industry itself has made the problems worse.” The survey was conducted among investors with household incomes of at least $50,000 and at least $10,000 of investable assets.
Half of the respondents said they need help managing their money more effectively, assuming they can find a firm they trust and respect, and 60% are uncertain of the value that large financial services firms can provide in managing their money.
Asked what is most important in the overall reputation of a financial services company, 91% pointed to “honest communication,” 84% cited “open and transparent business practices,” 75% said “fair and competitive prices,” 74% wanted “available customer services,” and 62% pointed to a “website with easy financial transactions.”
Only 49% of respondents said they trust financial institutions in general, with community and regional banks scoring the highest (67%), followed by mutual fund companies (55%).
“The way people perceive companies has changed significantly since the pre-crisis era, and the reputations of financial services companies in the U.S. have been some of the hardest hit,” said Matthew J. Harrington, chief executive officer of Edelman U.S. “The decline in trust in these institutions—even as the financial markets were recovering—underscores the long road back they must travel to re-earn the lost trust.”
Jeff Zilka, general manager of financial communications at Edelman, added: “While content-rich websites and fast and responsive customer service are, no doubt, important, they are ‘table stakes’ to investors. What consumers are hungering for—and what financial services companies must deliver if they are to restore their customers’ trust—is honest communication and the reality of open and transparent business practices.”