CFA Institute/Edelman Study: Only Half of Investors Trust Investment Firms to Do What is Right

cfa-logoTrust in investment firms remains fragile; investors optimistic about capital markets • Ethical behavior and transparency more important to investors than performance

New York, 14 August 2013


Investors worldwide have little trust in the investment profession and believe there is much that can be done to restore trust, according to the CFA Institute/Edelman Investor Trust Study. The study reveals that just 53 percent of investors in the U.S., U.K., Hong Kong, Canada and Australia trust investment firms to do what is right. Retail investors are less trusting of the industry (51 percent) than their institutional counterparts (61 percent), and investors in the U.S. (44 percent) and UK (39 percent) are less trusting than those in Hong Kong (68 percent).

This lack of trust in the investment industry does not translate to the capital markets; nearly three-in-four investors report they are optimistic about their ability to earn a fair return in capital markets. Yet intensity of that confidence is low, as just 19 percent of investors “strongly agree” that they have a fair opportunity.

“This survey sends a clear message. Trust is absolutely critical to the future of finance, and it is up to all of us to help shape a more trustworthy financial system,” said John Rogers, CFA, president and CEO of CFA Institute. “Investors believe the professionals they work with have been the most effective in earning their trust. This represents a significant opportunity for investment professionals and firms to actively build a culture where ethical practices are valued as highly as investment performance.”

Responsibility for Building Trust Lies with the Individual
Just over half of investors (55 percent) note that investment managers they work with have been the most effective in enhancing their trust in the capital markets – more than investment firms (41 percent), national regulators (38 percent) or global regulators (35 percent). Looking to the future, investors do expect government to help build trust in capital markets. Fifty-two percent point to national and global regulators as having the greatest opportunity to effect change and enhance trust moving forward, far more than individual investment management professionals (28 percent) and investment management firms (13 percent).

“When people lost trust in business during the financial crisis, they turned to government. And when they lost trust in government, they turned to individuals,” said Ben Boyd, global chair of Edelman’s Corporate practice. “Through our thirteen years of studying trust through the Edelman Trust Barometer, we have increasingly seen an emphasis placed on individuals to behave in ways that build trust and protect reputation. As this study shows, this holds true for the investment management industry as well.”

Taking Action to Rebuild Trust
The study also reveals that putting investors’ interests first is critical. Investors report that trusting an investment manager to act in their best interest is the single most important factor in making a hiring decision. Achieving high returns was cited only half as often, and fee amounts/structure only a fifth as much.

Investors also indicate that behavior-related attributes – including transparent and open business practices, responsible actions to address an issue or crisis and ethical business practices – are more important to trust-building than performance-related attributes such as delivering consistent financial returns and offering high quality products or services.

“By focusing only on performance-centric standards, the industry is missing opportunities to build trust,” said Kurt Schacht, CFA, managing director, Standards and Financial Market Integrity at CFA Institute. “Investors indicate in this study that they want a culture shift – a renewed focus on ethical behavior. Individual investment managers must be transparent, demonstrate integrity, and communicate clearly to strengthen client relationships and preserve trust in the industry and the markets at large.”


The CFA Institute/Edelman Investor Trust Study polled 2,104 retail and institutional investors in North America, Europe, Asia and Australia. Importantly, the study focused on asset owners only (not intermediaries) with 1,604 retail and 500 institutional investors included. It was conducted online from June 7 to June 25, 2013 and produced by Edelman Berland, a global, full-service market research firm.


CFA Institute

CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion for ethical behavior in investment markets and a respected source of knowledge in the global financial community. The end goal: to create an environment where investors’ interests come first, markets function at their best, and economies grow. CFA Institute has more than 113,000 members in 140 countries and territories, including 102,000 CFA charterholders, and 137 member societies. For more information, visit




Edelman is the world’s largest public relations firm, with 67 offices and more than 4,800 employees worldwide, as well as affiliates in more than 30 cities. Edelman was named Advertising Age’s top-ranked PR firm of the decade in 2009 and one of its “A-List Agencies” in both 2010 and 2011; Adweek’s “2011 PR Agency of the Year;” PRWeek’s“2011 Large PR Agency of the Year;” and The Holmes Report’s “2011 Global Agency of the Year” and its 2012 “Digital Agency of the Year.” Edelman was named one of the “Best Places to Work” by Advertising Age in 2010 and 2012 and among Glassdoor’s top 10 “Best Places to Work” in 2011 and 2012. Edelman owns specialty firms Edelman Berland (research), Blue (advertising), BioScience Communications (medical communications), and agencies Edelman Significa (Brazil), and Pegasus (China). Visit for more information.