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Investment managers’ integrity valued over performance
Investors rate managers integrity and behavioural attributes more than an ability to provide consistent out-performance when making decisions about investment managers, according to the 2013 CFA Institute/Edelman Investor Trust Study.
Just over half (53 per cent) of respondents said they trust investment management companies to do what is right - a median drawn from 51 per cent of retail investors and 61 per cent of institutional investors.
Following governments’ attempts to right the wrongs of the financial crisis, over half (52 per cent) said national and global regulators had the best chance to effect change and enhance trust, compared to 28 per cent for investment management professionals and 13 per cent for investment managers.
However, only 14 per cent of respondents trust governments to make ethical decisions - and investment management professionals were deemed to have been the most effective in enhancing trust thus far.
The top three attributes investors said built trust in an investment manager relate to integrity: transparent and open business practices; responsible actions to address issues or crises; and ethical business practices. These ranked higher than consistent financial returns and high-quality products and services.
'Trusted to act in my best interest’ topped (35 per cent) the list of attributes respondents equated with a hiring decision, well ahead of the ability to achieve high returns and a commitment to ethical conduct (both 17 per cent).
CFA Institute/Edelman said investment managers needed to be transparent, demonstrate integrity and communicate early and often in the bid to win over investors.
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TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
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2
Global X GlobalX FANG+ ETF
37.15 3 y p.a(%)
3
GAM LSA Private Shares AU I
33.96 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.68 3 y p.a(%)
5
Plato Global Alpha A
28.73 3 y p.a(%)
