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Consumer faith in financial institutions—including banks, mutual fund companies and retirement plan providers—has been low for years. But according to a new study, the level of trust has plunged lately.
While 13% of survey respondents in 2015 had faith in their financial institutions, a new survey from the non-profit National Association of Retirement Plan Participants found, only 8% said the same in 2016.
The decline shows that trust in the financial services industries has been linked to peoples' lack of confidence in their own ability to make smart decisions about money. "The decision to save requires courage and trust: courage in oneself and trust that financial institutions have our best interests at heart," said NARPP co-founder and president Laurie Rowley in a news release.
Additionally, only 9% of the 5,000 respondents said they trust their financial advisors, while 24% believe that their employer has their best interests at heart. To improve those levels, the NARPP developed a financial courage index to measure the factors that affect an individual's bravery and address the issues that influence financial engagement and savings.
"We should all be taking more action and saving more, but we are actually losing ground here," Rowley said.
The non-profit also ranked the most trusted retirement plan providers, as rated by their customers. Bank of America/Merrill Lynch took home the top honors, followed by Wells Fargo and Charles Schwab.
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Considering how poorly the industry fares as a whole in terms of customer trust, however, perhaps we should view the "winners" named above as the least untrustworthy rather than "most trusted."
Financial institutions have consistently been the recipient some of the lowest levels of consumer trust. Since 2012, public relations firm Edelman has ranked the financial services industry as the sector with the lowest levels of consumer trust in its annual reports.