Most Indian retail investors trust financial services sector

Mumbai: Most Indian retail investors trust the financial services industry, but less than half are satisfied with their financial advisers, according to a global survey.

The study by CFA Institute, the global association of investment professionals, shows that 71 per cent of Indian investors trust the financial services industry compared to 44 per cent globally and 49 per cent in the Asia Pacific region.

Also, 92 per cent of Indian investors still trust the system and capital markets, believing they have a fair opportunity to make profits. However, less than half (45 per cent) of Indian retail investors say their financial adviser always put investor needs first.

The survey also shows growing concern amongst Indian investors, who said they have already left or would consider leaving investment firms as a result of a data or confidentiality breach (41 per cent), underperformance (39 per cent) and lack of communication (37 per cent). About 81 per cent of Indian investors believe it is important that investment professionals have credentials from respected industry organisations.

Vidhu Shekhar, country head, India, CFA Institute, said, “Trust plays a vital role in the world of finance and has consistently been the greatest determinant in selecting a financial adviser. If one-third of global investors and less than half of Indian investors believe their adviser always puts investors’ interests first, it is a challenge to our industry to earn back their trust. With 87 per cent of Indian respondents under the age of 45 years, all advisers need to do is to demonstrate a strong commitment to ethics, expertise, and transparency.”

The survey revealed that investors in India rate the financial services industry higher than investors in all other surveyed markets, with 71 per cent investor trust. China is second with 70 per cent trust and Canada third with 51 per cent trust for the industry. Within Asia Pacific, Australia and Hong Kong respondents had the lowest trust for the industry at 31 per cent and 35 per cent, respectively.