The British public has set out what financial services firms need to do to regain public trust – and top of the wish list is cutting out the jargon, ending fat cat bonuses and owning up when they get things wrong.
Research from Octopus Investments reveals the extent of the public’s broken trust with financial services companies. Only one in five people (20%) said they trust the financial firms they deal with. Almost twice as many (38%) do not trust financial firms while a further 32 per cent were indifferent. The findings come at a crucial time, with millions of people facing the biggest and most exciting changes to the pensions system for a century.
With consumer mistrust in financial companies still running high, and particularly strong among the over-55 age group (43%), Octopus asked a nationally representative sample of more than 2,000 adults what financial services firms need to do in order to regain their trust. While one in five people (21%) could think of nothing that would restore their faith in financial firms, the rest spelled out a number of specific actions that would help them trust companies more.
The most common request from consumers is that financial organisations be more honest when they make a mistake (35%). This view was most prevalent in the East of England (45%) and among 45-54 year-olds (41%).
More than a third of respondents want financial firms to talk in ‘plain English’ and to stop using complicated and unnecessary wording that can make saving and investing seem even more bewildering.
[if !supportLists]3. [endif]Stop the big bonuses: Perhaps a hangover from the global financial crisis, when many were outraged by the large payouts given to troubled banks, 30% of adults said a key to rebuilding trust in financial services companies would be to put an end to exorbitant bonuses for senior executives.
One in five people (20%) want financial services companies to provide more helpful information that explains all their investment options. This comes in a week when hundreds of thousands of savers have found themselves unable to book free guidance on forthcoming pensions changes.
In addition to having access to information – and that communications are in plain English – 14% of people surveyed would welcome organisations putting them in touch with a financial adviser. The research also suggests that financial advisers have a key role to play in rebuilding consumer trust in financial services. Individuals that use a financial adviser are significantly more likely to trust the broader financial services industry (44%) than those that go it alone and make their own financial decisions (25%).
Simon Rogerson, CEO of Octopus Investments, says: "The millions of people that benefit from the Government’s radical pensions shake-up are not going to turn into financial experts overnight. With so many options to consider, the financial services industry has a vital role to play to help people make the right decisions at the right time. No one will be surprised that our research shows trust in financial services remains at rock bottom. It is only going to improve if financial firms start setting a more positive example, and they need to start now. At such a critical time for the consumer, we as an industry all have to prove our value.
“The weeks ahead are a great opportunity for investment firms to get to work rebuilding consumer trust. We think it’s time for change in this industry, and we are determined to set the benchmark in terms of putting the customer first and helping them to think differently about financial services.”