Over three quarters of investors trust politicians more than financial advisers

OVER three quarters of investors believe financial intermediaries, such as client-facing advisers, are less trustworthy than politicians, according to a survey.

Intermediaries are perceived as being untrustworthy and lacking knowledge, perhaps as a result of poor education by investment managers on complex products and risk management practices, according to the KPMG/Datamonitor study.

“It is little wonder that investors, faced with the realities of plummeting stock markets and portfolios, have questioned the integrity of the investment management industry,” said William David Seymour, partner and global head of investment management at KPMG.

To combat the breakdown of trust, 58 per cent of institutional investors said that investment managers should provide financial intermediaries with better product training, a sentiment felt by 75 per cent of investment managers themselves.

The respondents also said improved lines of communication should flow from investment managers to intermediaries and to regulators, as they will play a fundamental role in repairing the trust that has been broken.