Positive market returns and improvements to the professionalism of the industry have helped Australia to improve trust in the financial services sector, according to the CFA Institute.
In the institute’s fifth survey, trust in Australian financial services had risen from 21% two years ago, shortly after the Hayne Royal Commission, to 45% this year.
In a webinar, CFA commentators said various factors had led to improvement including the boosted professionalism and regulatory actions.
Maria Wilton, non-executive director at the CFA Institute, said: “It is not surprising we have seen an increase in trust because we have been raising professional standards in the industry. We have seen a lot of advisers leave the industry because of the increasing education standards required so the level of quality has increased.
“We’ve also seen the unwinding of conflicted business models so a lot of vertically-integrated business models have unravelled and we’ve seen increasing regulation and more visible regulatory oversight.”
She also said the time the survey was done, which was between October and November 2021, was a positive time for market returns which would have fed into clients’ trust.
However, Rebecca Fender, head of strategy and governance at the CFA Institute, pointed out that 45% was still low relative to other countries.
“We can be quite cynical and not necessarily believe what people are telling us. The financial services industry and superannuation is a political issue which becomes highly politically-charged and that has the risk of undermining trust in the industry.”
Regarding advisers, 58% of Australians with an adviser trusted financial services compared to 39% of those without.
Maria commented: “I’m disappointed we have made our system so complex that we need to have financial advice to navigate it and to get the best financial outcome.
“There’s an opportunity for the industry that we haven’t seized because there has been so much change and we’ve been grappling with regulatory change that maybe we’ve dropped the ball around product development and embracing robo-advice.”
