IFAs come out top in poll of public trust in financial sector

IFAs come out top in poll of public trust in financial sector
Added 28 January 2011 by Dan Judge

IFAs and brokers are the most trusted figures in finance, according to an academic study.

The research, conducted by the Financial Services Research Forum, based at Nottingham University Business School, found independent advisers were more trusted than banks, building societies, insurance companies, investment firms and credit card providers.

The conclusion was based on data collected by polling and market research company YouGov, which questioned more than 2,000 consumers in an online study. Respondents were asked to score out of 100 their level of trust in different financial services companies.

Scores above 50 indicated increasing trust, while those below 50 reflected a growing lack of trust and 50 was neutral.

Despite IFAs receiving the highest scores, at an average of less than 65, the figure has fallen in the past nine months. In the third quarter of 2009 it was above 75, meaning faith in advisers has dropped since then.

Unsurprisingly, banks received the lowest score. According to the forum, their score has “struggled” to rise above 55 in the past 12 months and in the latest round of findings stood at 35.

Only advisers/brokers and building societies had scores above 50 at the end of the third quarter of 2010.

Broadly, there was a widespread lack of faith in financial companies, according to the research, with some consumers stating they only put their trust – and their money – in the hands of financial services firms because they had no choice.

Forum director Professor Nigel Waite said the report illustrated the difficulty the financial sector faces in rebuilding trust with the consumer.

He added: “The overall conclusion has to be that consumers are moderately trusting of their own financial institutions but tend not to trust financial institutions in general.

“As has usually been the case since we first developed the Trust Index in 2003, the brokers/advisers category continues to stand out as the most trusted.

“This perhaps reflects that consumers recognise the greater and more explicit responsibility such institutions have to work in their clients’ best interests.”