Sunday, February 21, 2016

Institutional investor are not satisfied - CFA Institute survey


The CFA Institute survey "From Trust to Loyalty" provides an interesting perspective on the level of important in key investment issues versus the level of satisfaction by institutional investors. The results clearly shows there is a big difference between the two. Satisfaction levels by investors are at least 20% less than the importance of the issue 

Now matching importance with satisfaction is not precise or easy to measure but the survey sends a clear signal that money managers are not doing a good job at providing trust levels that investors find satisfactory. The survey shows that trust of money managers by retail investor  is slightly higher than the last survey in 2013, but the level is barely above 50%. It is a sobering thought that managers who investors give their money to are not their most trusted service provider. The survey also shows that only 41% of institutional investors will recommend an investment firm they work with to other investors. The survey goes not to say that while underperformance is the most likely reason to leave a manager lack of communication and responsiveness is also in the top 5. Investors do not live on performance alone.

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