Just 37% of retail investors believe their financial adviser always acts in their best interests, leading CFA Societies Australia to call for a strengthening of the best interest duty.
A global investor survey, conducted at the back end of last year by the CFA Institute, shows Australia rank sixth out of 15 major markets when it comes to trust in financial services - just 24% of Aussie investors say they trust the industry. This is down 31% in 2018.
The average across all markets surveyed is 47%.
About 75% of investors believe their adviser is legally obligated to act in their best interests, however just 37% actually believe they do. This has dropped from 44% in 2018.
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That said; there appears little risk of advisers losing their clients to robo-advice, with 81% of investors trusting advice from a human over that of a robo-adviser (6%). This is higher than the global average, which sits at 73%.
In part, this is down to a lack of trust in the security of personal information on online platforms, with more than one-third of investors saying they are less willing to hand over personal information online than they were three years ago.
And, investors still believe advisers add value, with 81% of advised investors believing they have an opportunity to profit by investing in capital markets, while just 57% of those without an adviser said the same.
The study also found that the findings of the Royal Commission and the associated press coverage did not change investors' minds as to where and how they will seek advice. Further, 40% of investors believe professional standards will improve as a direct result of the Royal Commission.
"With interest rates at low or negative levels in many places in the world, finding new opportunities to invest will be important to investors meeting their financial objectives, and those with an adviser are better equipped to consider these options," CFA Societies Australia chief executive Lisa Carroll said.
"Nearly two-thirds of retail investors with an adviser are interested in accessing new investment products, compared with only about one-third of retail investors without an adviser."
Although there is a lack of trust in the system, most Australian retail investors still believe they have a fair opportunity to profit by investing in the capital markets, Carroll said.
"CFA Societies Australia continues to promote the importance of access to quality financial advice, particularly in times of market turbulence. We advocate for and support the continuing professionalisation of the industry, including a clear best interest duty and independence of advice."