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
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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
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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%
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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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