Singapore: Only 10 per cent of Singapore retail investors believe their investment adviser or firm always puts their interests first, compared to the global average of 35 per cent, a study commissioned by the CFA Institute has found.
This puts Singapore as the second lowest among 12 economies surveyed on this question; the lowest rating was found in Hong Kong at 7 per cent, report Agencies.
The survey finds that 47 per cent of Singapore retail investors "trust or completely trust" the financial services industry. This is higher than the global average trust level of 44 per cent, but it is the third lowest score in the Asia-Pacific.The lowest ratings are found in Australia at 31 per cent and Hong Kong at 35 per cent. The study, "The Next Generation of Trust: A Global Survey on the State of Investor Trust", is designed to help advisers understand the role that credibility and professionalism play in building trust in client relationships and in the industry overall.
Tan Lay Hoon, CFA Singapore deputy president and co-chair of the advocacy committee, said that the Trust Survey provides a roadmap for how the industry can increase its credibility and address investor concerns.
Maurice Teo, a member of CFA Singapore's advocacy committee, said that the survey is a wakeup call for the industry to "come together and build stronger confidence and trust" among investors. "We are surprised to see low trust levels within the financial services industry this year despite ongoing regulatory reforms since the global financial crisis." The survey involved 3,127 retail investors and 829 institutional investors from 12 economies, including Singapore, US, China, France, Australia, and Brazil. The study was conducted by Greenwich Associates in November and December last year. Retail investors were 25 or older with investible assets of at least US$100,000. Institutional investors were responsible for investment decisions at entities with at least US$50 million in assets under management.
The Singapore segment of the survey found three criteria for retail investors to build a trusted relationship with an investment adviser.
These comprise fees that reflect the value they get from the relationship (72 per cent); returns similar to or better than a target benchmark (71 per cent); and the employment of investment professionals with credentials from respected industry organisations (66 per cent).