Fund Management
Fund Management Is Unfairly Mistrusted In UK - Has Big Challenge To Win Back Confidence - PwC

The fund management industry has been hit by an indiscriminate collapse of trust in banking and investment and inspires less confidence among the public than the police or UK health service.
The fund management industry in the UK has been hit by an
indiscriminate collapse of trust in financial services and
inspires less confidence among the public than the police or UK
health service, despite both latter sectors being hit by
scandals, a new survey shows.
The asset management sector, which arguably played little or no
role in the financial crisis, appears to be the least trusted of
all financial services segments, according to a PricewaterhouseCoopers
report, How financial services lost its mojo – and how to
regain it.
The report is based on analysis of a survey of over 2,000 people
across the UK.
Only 12 per cent of people trust fund managers and only 5 per
cent trust them more than a year ago; some 28 per cent trust
financial advisors and 6 per cent trust them more than a year
ago.
“The need for asset managers to engage directly with their
customers and to raise the level of understanding in the
relevance of their products is essential if the asset and fund
management industry is to have the continued relevance and
importance in the 21st century as it has held in the past,”
Mark Pugh, UK asset management leader at PwC, said of the
report’s findings.
The loss of trust in financial services, including wealth
management, has been a theme ever since the 2008 financial crisis
and there have been countless comments, speeches and conferences
to draw attention to the issue and how to fix it. This
publication understands that one problem is that so many members
of the public simply cannot or will not discriminate between
those services directly linked to the crisis - such as the
mortgage-backed securities sector and central banks - and those
further afar from it, such as asset managers and insurance.
The low trust in fund manager firms contrasts with the 53 per
cent of respondents who said they trusted the police and 79 per
cent who said they trusted nurses in the UK’s state-run National
Health Service. At first glance this appears unjustified: both
the police and NHS have been hit by scandals in recent years
concerning issues such as alleged involvement of some police
officers in the phone-hacking scandal that led to calls for
tighter regulation of the media; in the NHS, there have been
notorious episodes such as the saga of poor treatment and high
mortality rates in the Mid-Staffordshire region of the UK, for
example.
The PwC also said that although almost one in two people (49 per
cent) said regulation of the financial services sector has been
strengthened in the wake of the crisis, a greater proportion (57
per cent) do not believe the reforms that have been implemented
are sufficient to ensure that history will not repeat itself.
The survey suggests that consumers’ lack of trust is affecting
all financial services sectors, not just banking, reflecting a
generalised malaise across the industry. Fewer than one in three
consumers now trust their bank, while for other types of
financial services company, ratings are even lower. The fact that
certain types of institution have been at the forefront of
industry issues in recent years has not prevented other
organisations, such as fund managers, from suffering reputational
damage.
The asset management industry’s traditional response to concern
about consumer mistrust has been to stress goals such as greater
transparency. However, the survey suggests the impact of further
work of this type might be relatively limited, at least in
isolation. Though greater transparency is the single improvement
most likely to rebuild consumer trust in financial services, even
here fewer than one in two people (46 per cent) would be
impressed by such changes.