As an industry that is so intrinsically linked to confidence and sentiment, public opinion is a hugely important, and often intangible, factor in how financial services operates and performs. It’s been a troubling few months for many Canadian institutions, but despite the recent controversy surrounding banks and advisors, recent research suggests that most Canadians still believe in the country’s banking system.
In a recent survey of Canadians 18+ years of age, researchers measured and tracked trust in leaders, industries and information sources. The banks achieved a trust rating of 39%, which ranked seven out of 21 industries and ahead of life and health insurance companies, energy firms, I.T. and online retailers.
“It’s neither the top or bottom of the class; the banks have room for improvement,” says Bruce MacLellan, CEO of Environics Communications, who conducted the study. “Canadians have a love-hate relationship with the banks. They love the stability and security of our banking system and the fact that no Canadian bank has ever collapsed, but are still lukewarm on other aspects. They probably have times when they wish there was more customer alternatives and increased competitiveness.”
MacLellan believes that advisors and firms can use research to observe how trust is built and then figure out a strategy for communicating their most attractive strengths and features. Canadians are shown to have higher levels of trust in entities that invest in their community, create jobs, have open and accessible leadership and are Canadian owned.
“The banks have a great Canadian heritage to their brands so an advisor at a bank would want to play up that they are Canadian owned,” MacLellan says. “Whereas, if an advisor is with a smaller organization, they could play up to the fact that Canadians trust smaller and medium sized enterprises more than large ones.”
The study also found that new Canadians have higher levels of trust in the financial services sector. While the average trust rating is 39%, it is 52% with newcomers. The banks have done well in welcoming new Canadians and it’s a demographic that advisors should consider when devising strategies on how to attract new clients.
One burgeoning sector that clients have been asking questions about finished bottom of the list with a trust rating of 13%: marijuana producers. Although that lack of trust hasn’t inhibited Canadian weed producers’ stock prices from soaring, MacLellan does believe the findings to be of significance. “Investors should consider the public reputation of the marijuana industry when deciding whether or not to invest,” he says. “An industry with very little public trust does not have a lot of influence when they go to call on government.”
“Politicians are going to look at who has trust and influence with the electorate and the marijuana manufacturers’ low trust rating would suggest they won’t have a influence to use to their benefit when they are lobbying government.”
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