Investor confidence in financial advisers has been shattered following international accounting scandals such as Enron and Worldcom, says a survey from Cavendish Asset Management.
Almost half the respondents said they had no faith in advisers, analysts or stockbrokers following the downfall of the US corporate giants.
When asked to respond to “the Enron/ Worldcom scandals show you cannot trust even professional people such as investment advisers, analysts or stockbrokers for investment advice,” 47 per cent said they agreed with the statement.
Younger investors are most concerned, with 59 per cent now refusing to trust advisers, while more experienced investors are more trusting with only 37 per cent of those aged 40 to 49 refusing to place their faith in advisers. In fact, 51 per cent of older investors believe professional investment advice is more important than ever.
Manager of the Cavendish opportunities fund Paul Mumford says: “Our research shows it is not just the market that is taking the hits. Investors' faith in those who provide professional financial advice is also starting to waiver. Stockmarkets can and do recover but investors' faith in those who advise on investment issues may be harder to restore.”