Industry trust plummets below 2018 levels

The research, commissioned by the CFA Institute, surveyed more than 3,500 retail investors across 15 key developed economies including Australia, Canada, China, the US and UK. The Australian results revealed that 24 per cent of investors trust the financial services industry, compared with 31 per cent when the survey was last conducted in 2018.

The trust level among Australian investors was lower than those in the Canada, of which 51 per cent trusted the financial services industry; the US, where 43 per cent of investors trusted the industry; and the UK, where 33 per cent trusted the sector.

In addition, 37 per cent of Australian investors believed their adviser put their interests first, compared with 44 per cent of investors who thought this in 2018.

However, the results reflected increased confidence among investors who had an adviser, with 81 per cent of advised investors saying they believed they would profit from investing in capital markets, compared with 57 per cent of investors without an adviser.

Interestingly the majority of Australian respondents did not seem to be affected by the royal commission’s outcomes, with 66 per cent saying they did not plan to make any changes to the way they obtain advice following the inquiry.

However, a further 40 per cent of respondents said they believed the royal commission would lead to improved professional standards in the financial services sector.