Survey after survey has shown that the public does not trust the financial services industry; it was, in fact, the least trusted industry in a recent Edelman survey. But perhaps they were looking at the wrong industries, or maybe investors just don’t trust your firm. A new survey by John Hancock shows that investors, with assets of $200,000 or more, trust their financial advisor more than their primary doctor, accountant, contractor/handyman, boss and real estate agent.
According to the John Hancock Trust Survey, 84 percent of the 1,005 respondents said they “trust strongly” their advisor, while 79 percent strongly trust their doctor, and 74 percent strongly trust their accountant. Clear explanations of investment recommendations and being knowledgeable and timely about products and trends were the the top reasons why investors trusted their advisors, both at 54 percent. Other factors affecting trust were disclosure on how the advisor is compensated (51 percent) and quickly answering questions (49 percent).
Meanwhile, factors that cause investors to lose trust in their advisor included being difficult to contact or unresponsive, giving bad investment advice (no, really?), and lacking a personalized approach. But of course, these things go without saying.
The results were pretty surprising to me, no offense, given that CPAs are known for the trusted relationships with their clients. Not that advisors aren’t, but that is something CPAs pride themselves on and why many get squeamish when considering a partnership with an FA, so I’ve heard. That said, the two were pretty close on the trust barometer; there was a bigger trust gap between advisors and respondents' boss and last real estate agent.
I wonder how advisors would stack up against other professionals, such as therapists, dentists, bankers, or their children's teachers.
Are folks becoming more trusting of financial services professionals, or could this study be an outlier? Are clients’ investment portfolios performing better, despite the volatility? Or are advisors just getting better at navigating the volatility and being more tactical?