Banks are the least trusted to deliver good investment returns, according to new research.
The poll, carried out by YouGov on behalf of IG Group, asked investors to state whether they are ‘confident’ or ‘not confident’ when it comes to trusting various third parties to invest on their behalf and deliver good returns. Banks were viewed the least favourably, with 58% of those polled saying they were ‘not confident’.
The second least trusted group was robo-advisers (48%), followed by pension providers (45%), independent financial advisers (35%) and investment managers (34%).
Index funds and ETFs were the most trusted, with just 28% selecting the ‘not confident’ option. This is perhaps indicative of the fact that when buying a passive fund investors know they are going to get exactly what it says on the tin – index-like performance, for better or worse, minus the fund fees.
The findings come at a time when various banks have been making a comeback to portfolio management and are once again marketing their investment propositions directly to consumers. Various banks pulled back in the aftermath of the financial crisis, after landing themselves in hot water; some were fined for providing unsuitable investment advice, while others handed over millions in compensation for mis-selling investment products.
Ian Peacock, chief client officer at IG Group, says: "While robo-advice and online investment portfolio propositions have made it easier for people to invest, we must do more to build trust amongst consumers so that such products can deliver for them over the long term."
This article first appeared on our sister website Money Observer.