Ten years after the financial crisis, the general public still doesn’t trust the financial services industry. Technology is starting to build credibility, though, as financial services and technology are blending more.
A recent CFA Institute Global Survey on the State of Investor Trust revealed that there is still a gap in confidence between the general population and financial institutions. President and CEO Paul Smith notes that the organization does see “encouraging trends” as technology plays a more integral role in the financial marketplace. Smith discusses:
“Just as we have seen polarization of trust across many industries, the investment industry must strive to relate effectively to individual investors and provide high service levels to them.”
The ‘trust’ studies begain in 2013 and the results at that time showed that “both investors and the general population had negative feelings about the financial services industry.” The end of 2017 marked a change in heart, though, as a growing number of investors, 44 percent, said they trusted financial services firms because technology adds a measure of credibility.
According to the study, technology is increasingly improving investor trust. Younger generations use financial technology and even a large percentage of the older generations are starting to see how the bridge between technology and finance provide insight for financial validity and empowerment.
Here is the breakdown in trust between the various generations:
More Trust | No Change in Trust | Less Trust | |
---|---|---|---|
Ages 25-34 | 70% | 22% | 8% |
Ages 35-44 | 54% | 36% | 10% |
Ages 45-54 | 33% | 64% | 3% |
Ages 55-64 | 26% | 73% | 1% |
Ages 65+ | 18% | 80% | 2% |
Data Source: CFA Institute, 2018.
Habits and preferences of certain generations of investors aren’t the only things better technology in financial services could impact. According to the survey, technology will also bring products and services to those who aren’t invested in markets—a group that still largely has a negative view of the industry.
The survey also showed that 65 percent of investors who work with a financial advisor said their primary financial advisor was their most trusted source. Participants who did not have a financial advisor stated that online research was their most trusted source.
A combination of expert financial advice, online research and technology is ideal for investors to have a financial professional’s advice as well as a general knowledge about investments and the financial marketplace. Find a financial advisor today to help secure a positive financial future.
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