Distribution Model



Trust significance grows

Because trust is perceived as difficult to measure, most firms connect it weakly to value. But it is tremendously important because trust carries so much potential to extend relationships and to discourage product switching. It has the potential to play a much bigger part in the industry of the future, particularly if technology is used effectively in the mix.


  • The central issue is how trust might evolve in the context of transformational technology. In a future in which investment firms offer personal, simple, and speedy propositions, can they also achieve trusted engagement? Although technology can create faster, deeper trust in ownership and transactions, it can also be used to the client’s detriment and on its own is insufficient to create long-term trust and value.
  • Trust as an asset is a subtle challenge, because increasing knowledge of client preferences and biases can be exploited by investment firms that are motivated by sales more than client outcomes. Another possible “miss” is automated communications that are “too intimate” and violate customers’ privacy expectations. The manipulation of personal feelings by companies and political factions is a particular phenomenon of our time, and social media is a significant contributor.
  • In The Next Generation of Trust (CFA Institute 2018), 68% of institutional investors and 40% of retail investors said that the increased use of technology has led them to trust their asset managers/adviser more. Only 7% of retail investors, however, reported that they would trust recommendations of a robo-adviser over those of a human adviser.
  • Younger generations place a higher premium on customization than expense when defining luxury, and they are the most eager to receive the best investment engagement opportunities compared with other age groups.
  • Trust rises with professionalism and is a key element in the scenario. An investment firm’s professionalism can be seen as being supported by the organizational purpose as captured in its mission and culture; employing more purposeful professionals; technology support; alignment with regulatory principles; and interaction with professional bodies such as CFA Institute.