Knut Rostad, president of the Institute for the Fiduciary Standard, hosted a conference call Thursday to discuss research conducted by American Enterprise Institute and Labaton Sucharow about Americans' attitudes toward Wall Street and financial professionals.
On the call were Kevin Carroll, managing director and associate general counsel for Securities Industry and Financial Markets Association (SIFMA); Karlyn Bowman, senior fellow at American Enterprise Institute; and Jordan Thomas, partner at Labaton Sucharow.
"Fiduciary duties buttress investor trust, the central pillar on which financial trust exists," Rostad said. He referred to data from Harris Interactive that found in 2012, the firms with the best reputations among consumers among the 60 most visible companies were Amazon, Apple, Disney and Google while Goldman Sachs, AIG and Bank of America held positions in the bottom five.
Rostad referred to another survey by Makovsky + Co that found 96% of marketing officials at leading financial firms invite negative opinion through their own action or inaction.
"Confidence in the amorphous entity known as Wall Street remains relatively low," Carroll said. "Five years since the crisis, financial firms hold much more capital in terms of quality and quantity. Our industry has long advocated financial reform, including many regulations in the Dodd-Frank Act. We embrace the view that reform alone is not enough to restore trust. Our industry must redouble efforts to demonstrate actions to enhance trust. Without effort, the good intentions of a rule will be lost."
Carroll listed three strategies that the financial services industry need to enact to regain consumers' trust.
- Expend greater energy on policies that put client interests first
- Inform regulatory reform that promotes responsibility
- Establish enhanced risk management effort to keep the financial system running smoothly
Carroll referred to AEI's research, which found consumers recognize that Wall Street is important and makes a contribution to the economy.
"Wall Street is necessary, but what's hardened so much is the view that is has a different set of values than most people," Bowman said. "Wall Street is far removed from most Americans." The AEI paper refers to research from Aspen Institute that found in 2012, 79% of consumers said Wall Street did not share the same values as most Americans. After the financial crash, Harris Interactive found that only a quarter of respondents agreed that people on Wall street are as moral as most Americans.
