Retail investors more sceptical about the finance sector: study

The industry’s trusting plunged 11 points to 36% this year.

Singapore’s retail investors are less trustful of the financial industry this year than two years ago, according to a study by the CFA Institute.

The financial industry’s trust rating plunged to 36%, 11 points lower than 47% recorded in 2018. The Lion City recorded the biggest drop amongst the 15 countries surveyed.

Only one in five (19%) of retail investors said their financial advisers are transparent when it comes to the impact of market events, compared to 46% in Asia Pacific and 47% globally. Singapore retail investors are also the least optimistic about the general transparency of their financial advisers (17%), compared to 50% in APAC and 53% globally.

To make matters worse, only 25% of retail investors feel that their investment firms would be very well or well-prepared to manage their portfolios during a financial crisis, down from 41% in 2018. More investors value access to technology (54%) than to humans (46%), but advice remains the domain of humans, with 49% saying that they trust recommendations from humans more so than a robo-adviser.

In addition, seven in 10 respondents are confident that state-sponsored financial benefits for old age will pay out as promised, but only one in two (52%) trust that their investments will provide enough wealth so that they will not need to work past their desired retirement age.

Two in three (66%) ranked retirement as their top investment goal this year, compared to 57% in 2018.