Why Has Trust Been Compromised?

Felix Thomson

Content Executive

The Financial Services Forum

Frances Green of Harris Interactive believes that establishing a trustworthy brand can overcome consumers’ general scepticism of financial services companies and products.
Trust in Financial Institutions is eroding. The major force is undoubtedly the events that have occurred in the financial services sector. Scandals, such as Enron and Marsh McLennan, tend to be background noise.
More significant than these high profile cases is the constant stream of malpractice or just bad practice amongst financial services companies. It is this general disregard for consumers that has the most direct influence on their lives. The list of fiascos is long and includes pension, endowment and precipice bond misselling, the collapse of Equitable Life, along with every day practices such as varying interest rates on savingsproducts without direct notification to the customer. Against this background, there has been a change in consumer need as a result of shifts in the socioeconomic environment. These shifts include the gradual reduction in the role of pensions by the State and employers, leaving individuals to manage their own retirement savings. Another is ‘empty nesters’ who a generation ago could save money towards retirement, having to fund their children through education and beyond by helping them to ‘get a foot’ on the housing ladder.
As a result of these socio economic shifts, a set of challenges has been thrown down to today’s consumers.
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