The EY report found that Hong Kong’s financial industry in general starts from an overall position of relative strength among the Hong Kong public, with 81% of survey respondents stating that they trust or highly trust the industry.
However, it also concluded that there are many areas for improvement.
Hong Kong’s asset management sector achieved a low score on familiarity (33%) in a survey of the “informed public”, although respondents nevertheless expressed higher levels of trust (38%).
Moreover, the sector is not seen to transparently communicate its fee structures (23%), and is seen relatively weaker than the financial industry as a whole in disclosing its corporate performance.
The conclusion bears out findings from a Morningstar study last April, which highlighted embedded — and often undisclosed — fees and costs inherent in Hong Kong asset managers’ fund distribution models.
“There is still a need for more transparent communication of their fee structures, as well as a refocus on innovation to catch up with the wider [global] industry,” according to Gary Hwa, EY Asia-Pacific financial services regional managing partner and EY global financial services markets executive chair.
EY’s report called “Trust in Financial Services in Hong Kong”, was based on a survey of 372 members of the “informed public” in July to understand the extent of consumer trust in the financial sector, and to identify how the industry can improve trust levels.
The sample was defined as people who are university graduates, from the top 25% household income, and who follow business news.
The report analysed Hong Kong’s financial services across four key measures of trust: ability, dependability, integrity, and purpose.
On the positive side, respondents agreed that asset managers can achieve their promised financial objectives alongside providing valuable advice on their services, compared with the wider industry.
“The sector has a relatively differentiated position in being able to provide valuable advice (33%) and helping people in meeting their financial goals (32%),” according to the report.
But, firms “should seek to communicate beyond their core constituency to improve overall trust equity in the sector,” it concluded.
Wider financial industry
The industry’s overall positive perception is driven by its “ability”, reflecting competency in its products and services, and to some extent its “dependability” in keeping its business promises.
However, its performance weakened in the “integrity” pillar which highlights a need for providing more transparent information on its transactions, and in “purpose”, which indicate that it needs to do more to demonstrate a positive impact for society, according to the report.
Among the other sectors, the report found that banks are held in high regard for delivering a stable business performance, with 56% of respondents expressed high trust. But, they are not seen as innovative, despite their recent efforts and advancements in mobile and digital services.
Meanwhile, virtual services providers are perceived favourably for innovation, but they fail to convince the public about their business performance (23%) and are viewed to have a transactional-based image, with only 25% believing they build long-term relationships.
In contrast, insurers are considered to have an advantageous position because of their long-term relationships with customers. However, only 25% of respondents believe that they offer valuable advice, highlighting the need for more personalised advice services and product offerings, according to EY.
Trust Scorecard: Asset Management Services Providers
