The study examines the dimensions that shape perceptions of trust in investment managers, as well as the actions that help build trust. It encompasses the opinions of institutional and retail investors in the United States, United Kingdom, Hong Kong, Canada and Australia on the state of trust in the investment management community.

1. CFA Institute & Edelman
Investor Trust Study
2013

2. 2
Methodology
AUDIENCE HOW MANY ACCURACY WHEN HOW
Retail & Institutional
Investors in the
US, UK, Hong
Kong, Canada &
Australia
n = 2,104 Total
n = 1,604 Retail
n= 500 Institutional
Margin of Error at the
95% Confidence
Level
= ±2.1%, Total
= ±2.5%, Retail
= ±4.4%, Institutional
Data Collected
June 7-25, 2013
Online Survey
RESEARCH OBJECTIVE:
To better understand the dimensions that shape investor perceptions of trust in investment managers,
as well as the actions that help to build trust.

3. 3
Executive Summary
The State of Trust in the Investment Industry: Trust is fragile
Overall, trust in the Investment Management industry is fragile, with half of investors trusting investment
managers to do what’s right. Investors are more optimistic about the capital markets, but if trust in the
industry is not bolstered, we risk damage to the capital markets as an essential societal purpose.
Trust in Practitioners & Firms: Looking beyond numbers toward aligned interests
In todays landscape, investors are looking for more than performance and financial gains – they care
about their firms’ and investment managers’ behavior. Trust that investment managers will act in their
clients’ best interest is what really matters in hiring decisions.
A Path Forward: Taking action
Investment managers should always have an eye toward performance and fees, but they are now
considered the baseline. Investment managers must address the concerns of investors by
demonstrating commitment to ethics and aligned interests in order to build trust in the industry and
capital markets at large.

4. 4
THE STATE OF TRUST IN
THE INVESTMENT
INDUSTRY:
TRUST IS FRAGILE

5. 5
18% 16% 20%
23% 27%
16%
6%
27%
FINANCIAL SERVICES
Shown: % Trust and %Trust Great Deal
Trust great deal
52% 50%
61%
51%
65%
45%
33%
69%
Investors are more apt than the general
population to trust the financial services
industry to do what is right, but trust is still
fragile
Q10. Please indicate how much you trust businesses in each of the following industries to do what is right. Please use a 9-point scale where one means that you “do not trust them
at all” and nine means that you “trust them a great deal” [Top 2 Box, Trust Great Deal; Top 4 Box, Trust]
RegionInstitutionalRetailTotal
46%
52% 50%
61%
General
Population
Total
Investors
Retail Institutional
FINANCIAL SERVICES
Shown: % Trust
• According to Edelman Trust Barometer, more
informed people tend to trust more, yet total
investors are only slightly more likely than the
general public to trust the financial services industry.
• Not surprisingly, institutional investors, who are
arguably most informed, trust the industry more so
than retail investors
• Even among investors, the financial services
industry is less trusted than other industries such
technology, automotive and food & beverage.

6. 6
Just half of investors trust investment
management firms to do what is right, with low
intensity
Q22. Now thinking about specific sectors within the financial services industry, please indicate how much you trust businesses in each of the following sectors to do what is right.
Again, please use the same 9-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal”. [Top 2 Box, Trust Great Deal;
Top 4 Box, Trust]
15% 13% 18%
21% 23%
13% 7%
21%
INVESTMENT MANAGEMENT FIRMS
Shown: % Trust and %Trust Great Deal
Trust great deal
Retail
51%53%
61% 63%
44%
39%
68%
Total Institutional Region
54%

7. 7
Q26. To what extent do you agree or disagree with the following statement? “I have fair opportunity to profit by investing in capital markets.”
19% 18%
29% 24% 25% 18% 18% 18%
“I have fair opportunity to profit by investing in capital markets.”
Shown: % Agree and % Strongly Agree
Somewhat…
77% 81% 81% 70% 69% 74%73%
Total Retail
71%
Institutional Region
Yet, more than seven in ten investors agree they
have fair opportunity to profit by investing in
capital markets
However, just one in four investors strongly agrees with this
statement

8. 8
To date, investment management professionals
and their firms have been most effective in
enhancing investors’ trust in capital markets
Q27-31. How effective has each of the following been in enhancing your trust in the capital markets? Use a nine-point scale where one means “not
at all effective” and nine means “extremely effective.” [Top 4 Box, Effective]
55%
41%
38%
38%
35%
52%
39%
36%
35%
32%
63%
49%
45%
47%
43%
Investment management professionals that I deal with
Investment management firms
Regulators/legislators in my country
Investment industry associations
Regulators globally
Past Effectiveness
Shown: % Effective
Total
Retail
Institutional

9. 9
In the coming year, investors believe regulators
can do the most to enhance their trust in capital
markets
• Overall, 52% of investors feel
regulators, either globally or
locally, have the most impact on
enhancing trust.
• Interestingly, the 2013 Edelman Trust
Barometer cited low trust in
government: just 14% trust the
government to make ethical decisions.
Q32. Which of the following can do the MOST in the coming year to enhance your trust in the capital markets?
28%
13%
34%
18%
8%
Investment management professionals that I deal with
Investment management firms
Regulators/legislators in my country
Regulators globally
Investment industry associations
Total
Regulators:
52%

10. 10
TRUST IN INDIVIDUAL
PRACTIONERS & FIRMS:
LOOKING BEYOND THE
NUMBERS TOWARD ALIGNED
INTERESTS

11. 11
Investors rank the attribute “trusted to act in my
best interest” as most important when making a
decision to hire an investment manager
• “Trust to act in my best interest” was cited twice as much as “ability to achieve high
returns.”
• Delivering consistent returns and low fees were traditionally considered most important
in hiring an investment manager, but now these are table stakes.
Q33. Please rank each of the following attributes in order of their importance when making a decision to hire an asset or investment manager
where “1” is “most important” and “6” is “least important.” [Top Box, Most important]
35%
17% 17%
15%
8% 7%
Trusted to act in my
best interest
Ability to achieve high
returns
Commitment to ethical
conduct
Recommended by
someone I trust
Compliance with
industry best practices
Amount/structure of
fees
Shown: % Most Important

12. 12
A PATH FORWARD:
TAKING ACTION

13. 13
53%
52%
51%
48%
47%
33%
20%
18%
9%
ATTRIBUTES
Shown: % Very Important
Behavior-related attributes are more important
than performance- related attributes when
building investors’ trust in investment managers
Q34-43. How important is each of the following attributes to building your trust in an asset or investment manager? Please use a 9-point scale
where one means that attribute is “not at all important to building your trust” and a nine means it is “extremely important to building your
trust” in an asset or investment manager. [Top 2 Box, Very important]
Has transparent and open business practices
Takes responsible actions to address an issue or a crisis
Has ethical business practices
Delivers consistent financial returns to investors
Offers high quality products or services
Has highly-regarded and widely admired top leadership
Creates programs that positively impact the local community
in which the company operates
Is an innovator of new products, services or ideas
Communicates frequently and honestly on the state of its
business

14. 14
53%
51%
50%
48%
48%
47%
46%
43%
43%
41%
40%
38%
31%
29%
27%
24%
17%
13%
ACTIONS
Shown: % Very Important
Similarly, actions related to behavior are the
most important to building investors’ trust in
investment managers
Q44-61. How important is each of the following actions to building your trust in an asset or investment manager? Please use a 9-point scale where
one means that action is “not at all important to building your trust” and a nine means it is “extremely important to building your trust” in
an asset or investment manager. [Top 2 Box, Very important]
Is transparent about both successes and failures
Clearly discloses unavoidable conflicts of interest
Complies with voluntary codes of ethics
Reports in simple metrics and language that I understand
Maintains independence and objectivity
Has strong past performance
Has fee structures that align with my interests
Offers insights on risk management
Has staff with expert credentials
Complies with global investment performance standards
Reports on more than just returns
Has no regulatory sanctions
Shows evidence of engagement with companies in the portfolio
Communicates with me more than they need to
Has low portfolio turnover
Has a strong presence in the industry
Has a strong presence in traditional/print and trade media
Has a strong presence in social media channels

15. Investment managers should
always have an eye towards
performance and fees, but they
are now considered the
baseline.
Investment managers must
address the concerns of
investors by demonstrating
commitment to ethics and
aligned interests in order to
build trust in the industry and
capital markets at large.