Investors Want Transparency, Ethics

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    Investors are expecting higher levels of transparency than ever before, holding their investment managers to the highest ethical standards, says a study from CFA Institute. ‘From Trust to Loyalty: A Global Survey of What Investors Want’ shows the biggest gaps between investor expectations and what they receive relate to fees and performance. Clients want fees that are structured to align their interests, are well disclosed, and fairly reflect the value they are getting from their investment firms. “The bar for investment management professionals has never been higher,” says Paul Smith, president and CEO of CFA Institute. “Retail and institutional investors, as always, crave strong performance, however, both groups also demand enhanced communication and guidance from their money managers. Building trust requires truly demonstrating your commitment to clients’ well-being, not empty performance promises or tick-the-box compliance exercises.” The study shows that while trust has increased, investors remain concerned about ethics, transparency, and performance. Both retail and institutional investors share the view that financial professionals are falling short on issues of fees, transparency, and performance. Among retail investors, the most important actions from an investment firm are that it “fully discloses fees and other costs” and “has reliable security measures.” These even surpass protecting their portfolio from losses.