2010 Edelman Financial Services U.S. Trust Barometer

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U.S. Financial Services Trust Barometer

2010


The Edelman Trust Barometer in retrospect 2001

Rising Influence of NGOs

2002

Fall of the celebrity CEO

2003

Earned media more credible than advertising

2004

U.S. companies in Europe suffer trust discount

2005

Trust shifts from “authorities” to peers

2006

“A person like me” emerges as credible spokesperson

2007

Business more trusted than government and media

2008

Young influencers have more trust in business

2009

Business must partner with government to regain trust

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In the U.S., business performance across industries and trust continue hand in hand. S&P 500 Average vs. U.S. Trust in Business

1800

U.S. Trust in business in general

1600

Enron, the dot-com bust and September 11

1400 1200

S&P 500: Dec 2001 – Dec 2009

1000 800 600 400

2010 Trust Barometer - A9. [Business in general TRACKING] I am going to read you a list of institutions. For each one, please tell me how much you TRUST that institution to do what is right. Please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL". (Top 4 Box, Trust)

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Extending the Edelman Trust Barometer to U.S. financial services Global 2010 Trust Barometer

U.S. Financial Services Trust Barometer

10th annual studyy

First in in-depth depth focus on financial services

4,875 informed publics ages 25-64 in 22 countries on five continents

500 U.S. informed publics ages 25-64

500 U U.S. S iinformed f d publics bli (100 ages 25-34 and 400 ages 35-64)

25-minute telephone survey conducted between Sept. 29 – Dec. 6, 2009

99 respondents ages 25-34

401 respondents ages 35 -64

10-minute telephone survey conducted between Oct. 13 – Nov. 8, 2009

Informed Publics: – College-educated – Top 25 percent of household income by age – Report significant media consumption and engagement in business news and public policy

4

4


U.S. Financial Services Trust Barometer

Customer Engagement g g Is The Key y Variable

5


For all industries, corporate reputation is now based on trust and transparency as much as leadership and share share-price price performance. performance 82%

Has transparent and honest business practices

80%

Is a company I can trust

79%

Offers high quality products or services

74%

Communicates frequently and honestly on the state of its business

71%

Treats employees well

63%

Is a good corporate citizen

59%

Prices its brands fairly and competitively

48%

Is an innovator of new products, services or ideas Has highly-regarded and widely admired top leadership

45%

Delivers consistent financial returns to investors

45%

2010 Trust Barometer: B63.-72. How important are each of the following factors to the overall reputation of the company? Please use a nine-point scale where one means that factor is “not at all important” and nine means it is “extremely important” to overall reputation. (Top 2 Box, Very/ Extremely Important) Informed Publics ages 25-64 in the U.S. 6


Among all industries in the U.S., financial returns moves to last pplace amongg company p y reputation p factors. U.S. – 2006

U.S. – 2010

Quality products and services Attentiveness to customer needs

47%

Strong financial performance

38%

A well-known brand

37%

Good employee relations

23%

Dialogue w/ stakeholders

23%

79% 75% 72%

Good corporate citizen

64%

Prices fairly

33%

Visible CEO

83%

Treats employees well

35%

Socially responsible

83%

High quality products or services Communicates frequently

42%

Fair pricing

Employee/ CEO blogs

Transparent and honest practices ti Company I can trust

53%

Innovator Top leadership Financial returns

12%

2006 Trust Barometer – When you think of companies that you trust, how much, if at all has each of the following attributes contributed to your trust? Please you a 9point scale where one means it “has not contributed at all” and 9 means it “has contributed a great deal.” (Top 2 box ) Informed Publics ages 35-64 in the U.S. 2010 Trust Barometer - B63.-72. How important are each of the following factors to the overall reputation of the company? Please use a nine-point scale where one means that factor is “not at all important” and nine means it is “extremely important” to overall reputation. (Top 2 Box) Informed Publics ages 35-64 in the US 7

58% 48% 47% 45%


For U.S. financial-services companies, Quality of Communications and Customer Service rank with Price and Performance as reputation drivers. U.S. Informed Publics: Importance of Reputation Factors 75%

Communicates frequently and honestly

72%

Has investment products that deliver consistent returns to investors

Prices its products fairly and competitively

70%

Has customer service available by Web or phone for help or advice

70% 50%

Has a Web site that makes financial transactions easy Has a Web site that is informative about investing and provides information on the financial markets

47% 46%

Has highly-regarded and widely admired top leadership

43%

Has highly-regarded local advisors

Has ways to connect with customers via social networking sites

3%

How important are each of the following factors to the overall reputation of a financial company? Please use a nine-point scale where one means that you “Not at all important" and nine means “Extremely Important.� (Top 2 Box) Informed publics ages 25-64 8


Younger people especially value communications’ quality and Web sites. Importance of reputation factors by age group 35-64

25-34

Communicates frequently and honestly

74% 81%

Has investment products that deliver consistent returns to investors*

70%

Prices its products fairly and competitively

80%

68% 74%

Has customer service available by Web or phone for help or advice*

66%

Has a Web site that makes financial transactions easy*

47%

Has highly-regarded and widely admired top leadership

80%

60%

45% 47%

Has a Web site that is informative about investing and provides information on the financial markets*

44%

Has highly-regarded local advisors

40%

55%

43%

3% 4%

Has ways to connect with customers via social networking sites

* Significantly higher How important are each of the following factors to the overall reputation of a financial company? Please use a nine-point scale where one means that you “Not at all important" and nine means “Extremely Important.” (Top 2 Box) Informed publics ages 25-34 & 35-64 9


Broker/advisor is the most trusted source to provide accurate information on investments, investing or the markets, followed by friends or family; CEOs least trusted. U.S. Informed Publics: Trust in Financial Sources

68%

Broker/advisor

61%

Friends or family

55%

Portfolio manager

44%

Corporate communications

33%

Host of a cable television show on investing

32%

CEO or other senior executives of a financial services company

For each one, please tell me how much you TRUST that source to provide accurate information on investments, investing or the markets. Please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.� (Top 4 Box) Informed publics ages 25-64 10


Younger people trust friends and family and corporate communications significantly more than others as sources of financial information. Trust in financial sources by age group 35-64

25-34

Broker/advisor

66%

Friends or family*

57%

Portfolio manager

53% 59%

Corporate communications*

40%

g Host of a cable television show on investing

33%

CEO or other senior executives of a financial services company

30%

75%

73%

56%

((Same for both age g groups) g p )

39%

* Significantly higher trust For each one, please tell me how much you TRUST that source to provide accurate information on investments, investing or the markets. Please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.� (Top 4 Box) Informed publics ages 25-34 & 35-64 11


Expertise and peer conversations drive credibility of information sources; younger informed publics find all information sources more credible. 35-64 in US

25-34 in US

Stock or industry analyst reports

46%

Articles in newspapers

49%

26%

News coverage on the radio

43%

27%

Television news coverage

36%

20%

Conversations with your friends and peers

25%

35% 35%

Corporate communications such as press releases, reports,…

21%

A company's own Web site

19% 9%

43% 31%

20%

Online search engines e.g. Google news, YouTube

37%

23% 19%

Social networking sites (such as Myspace or Facebook)

9%

Blogs

9%

31%

17% 16%

2010 Trust Barometer: E84-97. [Now I’m going to read you a list of places where you might get information about a company. Please tell me how credible you believe each one of them is as a source of information about the company—is it extremely credible, very credible, somewhat credible, or not credible at all? (Top 2 box, very + extremely credible) Informed Publics ages 25-34 and 35-64 in 22 countries 12

Digital D

F content Free t t sources such h as Wikipedia Wiki di or webb portals t l

45%

Corporate

Conversations with company employees

57%

Trraditional

Articles in business magazines

Corporate or product advertising

62%

44%


Business TV news, family and friends and local newspapers are most widely used sources of information about financial information. % Who use each source at least monthly for financial information 35-64

25-34

Business television news

88%

Conversations with friends or peers*

83% 91%

Print/ online version of local newspapers

81%

Broker/advisor

54%

Radio news such as Bloomberg or NPR

56%

Print/ online version of the Wall Street Journal

54%

Print/ online version of investment/personal financial publications

47%

Investment or personal finance Web sites

47%

Investment/Personal finance blogs

T i Twitter

84%

64% 61%

Print/ online version of business publications

Facebook*

91%

64%

66% 56%

52% 48%

27% 35% 9%

22%

5% 10%

* Significantly higher trust

For each please tell me how often do you read, watch or visit these media sources in a typical month to get information about investments, investing, or the financial markets. Do you get information daily, weekly, biweekly, monthly or never for‌.? (At least once a month) Informed publics ages 25-34 and 35-64 13


Implications for financial-services marketers and communicators •

In uncertain times, communications and customer service count • Less uncertain than performance, supports price • Implications for resource allocations, marketing programs

Don t rely solely on CEO as spokesperson; use brokers Don’t brokers, advisors advisors, portfolio managers

Educate brokers and advisors to ensure realityy meets perception p p

Activate customer advocates and ambassadors

Pursue younger consumers •

Less costly to pursue, more trusting in your communications

Use all arro arrows s in the comm communications nications q quiver i er 14


U.S. Financial Services Trust Barometer

Trust Continues at Historically y Low Levels

15


In the U.S., Banks and Insurance remain the least trusted industries. 2009

2010 72%

Technology

81% 56%

F d Food

64% 60% 62%

Biotech 47%

Retail

61% 53% 57%

CPG manufacturers 39%

Energy

50% 41%

Health care industry

50% 32%

Automotive

45% 39%

Pharmaceuticals

45% 35%

Entertainment

41% 36% 33%

Banks Media companies Insurance

27% 32% 29% 32%

2010 Trust Barometer: A26-38. [TRACKING] Now I would like to focus on your trust in different industry sectors. Please tell me how much you TRUST businesses in each of the following industries to do what is right. Again, please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.� (Top 4 Box) Informed publics ages 25-64 in the U.S. 16


Since 2007, trust in Banks drops to near-last from third in the U.S. Trust in Banks Informed Publics ages 35-64 2007 2010

100% 90% 80%

85% 75%

- 39

83% 77%

68%

70% 60%

56% 51%

58%

- 16

- 20

51%

50%

45%

43%

42%

41%

40%

- 17 34%

29%

30%

29% 27%

27% 21% 17%

20% 10% 0%

China

India

Brazil

Japan

Russia

US

Italy

France

A26-38. [TRACKING] Now I would like to focus on your trust in different industry sectors. Please tell me how much you TRUST businesses in each of the following industries to do what is right. Again, please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.” (Top 4 Box) Informed publics ages 35-64 – Top ten countries by GDP 17

UK

Germany


Trust has not been repaired but recovery has begun among younger publics.

U.S. Trust in Banks

U.S. Trust in Insurance

Informed Publics ages 25-34

Informed Publics ages 25-34

I f Informed d Publics P bli ages 35-64 35 64

I f Informed d Publics P bli ages 35-64 35 64

90%

90% 80% 70%

80%

78% 69%

70%

60%

60%

50%

50%

47% 36%

40%

53% 49%

40%

39% 31%

30%

30%

29%

20%

30% 24%

20%

2008

2009

2010

2008

2009

2010 Trust Barometer: A26-38. [TRACKING] Now I would like to focus on your trust in different industry sectors. Please tell me how much you TRUST businesses in each of the following industries to do what is right. Again, 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 4 Box) Informed Publics ages 25-64 and 35-64 in the US 18

2010


Community/regional banks are the most trusted financial institutions in the U.S. U.S. Informed Publics: Trust in Financial Institutions

79%

Community/regional banks

59%

Mutual fund companies

52%

Life insurance companies

47%

Property/casualty insurance companies

46%

Large national banks Large,

41%

Brokerage firms

32%

Investment banks

Private equity firms

29%

Now I would like to focus on your trust in different financial institutions. Please tell me how much you TRUST businesses in each of the following financial institutions to do what is right. Please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.� (Top 4 Box) Informed publics ages 25-64 19


Younger informed publics have significantly higher trust in all financial institutions. Trust in financial institutions by age group 35-64

25-34

Community/ regional banks

77%

Mutual fund companies

57%

Life insurance companies* p

49%

Property/casualty insurance companies*

44%

Large, national banks*

Investment banks*

Private equity firms*

38%

29%

26%

65%

62%

57%

43%

Brokerage firms*

83%

56%

50%

41%

38%

* Si Significantly ifi tl hi higher h ttrustt Now I would like to focus on your trust in different financial institutions. Please tell me how much you TRUST businesses in each of the following financial institutions to do what is right. Please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.� (Top 4 Box) Informed publics ages 25-34 & 35-64 20


U.S. Financial Services Trust Barometer

Great Majority j y Want Public/Private Solutions

21


Nine-of-10 informed publics believe problems exist in the financial-services industry.

Do you believe there are problems in the financial services industry that need to b addressed? be dd d?

Opinions of regulation of financial institutions Should Sh ld be b regulated less, 8%

Don't D ' know, 1%

No, 7% Current regulation is sufficient, 28% Yes, 93%

Informed Publics ages 25-64 22

Should be regulated more, 63%


Two-thirds believe all entities should work together to solve those problems.

Which entity do you think should be MOST responsible for addressing the problems facing the financial services industry?

100% (base = responded “yes� to problems within the industry)

90% 80% 70%

67% Younger informed publics (17%) are significantly more likely to believe Financial Service Companies are most responsible for addressing the problems

60% 50% 40% 30%

21% 20%

9%

10%

2%

0% All should work together

Government regulatory g agencies

Informed Publics ages 25-64 23

Financial services companies

Congress


Summary

Commit to transparency in communications and to excellence in customer service.

Understand the power of the younger demographic.

Unlock the value of your most important p assets: • Brokers • Advisors

Partner with regulatory g y agencies to find solutions.

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