Why Finance is The Least Trusted Industry
Financial institutions have consistently been the recipient of some of the lowest levels of consumer trust. According to a study done by the National Association of Retirement Plan Participants (NARPP) in 2016, there was a sharp plunge in trust levels for financial institutions including banks, retirement plan providers and mutual fund companies. From 13% in 2015 down to 8% in 2016, this decline shows that trust in the financial services industry 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.
This association developed what is called the financial courage index to analyze and measure the actual factors that make up the individual’s capability and address the issues that influence financial engagement.
WHY IS TRUST AT A DECLINE?
Research shows that the average working individual feels financially unwell. With the median age of 23 years and an average family income of P22, 000 monthly — this is easy to understand.
People know they need financial instruments and are aware of the importance of saving although financial institution’s intimidating image allows for little confidence in their own ability to navigate through the market.
To begin, adopting a language that is simple and easy to understand is paramount to trust and engagement. This includes transparency in fees — no fine print and hidden charges.
In the survey, there was a 15- point drop in general financial knowledge on investing and saving resulting to unsteady decision- making.
Second, finance is a deeply personal activity. It affects their families, safety, and legacy. By providing people with information that is in their best interest, financial institutions will find an influx of eager individuals waiting to build their wealth.
BUILDING A CULTURE OF INVESTING
Surprisingly, there are over 200 banks with microfinance operations since 2001. Making the Philippines one of the first countries to advocate financial inclusion, according to another study by the Bangko Sentral ng Pilipinas (BSP).
There is a great need to boost financial inclusion and wellness as Filipinos are living longer and face the risk of outliving their assets. True financial sophistication lies in the development of a consumer to a saver then a saver to an investor. This is why Philam Asset Management, Inc. (PAMI), Philam Life, Inc.’s mutual fund providing subsidiary, launched its new minimum initial and additional investment amounts last Sept. 14, 2017, giving millions of Filipinos the opportunity to begin their financial journey with just P1,000 as an initial investment and P500 for their subsequent investments evergreen.
PAMI also builds credibility through its recently awarded funds from the Philippine Investment Funds Association (PIFA) namely: Philam Dollar Bond Fund, Inc. 2nd Place: 1-Year Return Bond Fund Category — Foreign Currency Denominated, Philam Dollar Bond Fund, Inc. 1st Place: 3-Year Return Bond Fund Category — Foreign Currency Denominated, Philam Dollar Bond Fund, Inc. 3rd Place: 10-Year Return Bond Fund Category - Foreign Currency Denominated, Philam Bond Fund, Inc. 3rd Place: 10-Year Return Bond Fund Category — Peso Denominated, PAMI Horizon Fund, Inc. 3rd Place: 3-Year Return Balanced Fund Category — Peso Denominated, PAMI Horizon Fund, Inc. 2nd Place: 10-Year Return Balanced Fund Category — Peso Denominated and finally Philam Fund, Inc. 1st Place: 10-Year Return Balanced Fund Category — Peso Denominated.
As well as regional recognition from the Asset Triple A Awards as the Top Investment House (Asian Currency) for the Philippines — 4th place for 2016 and 2015 and 3rd place for 2014.
“We believe in people-centered campaigns,” said Michelle Villanueva, Head of Products and Marketing for PAMI. “Our fund managers are more than able to provide excellent fund performances and we are now able to distribute that to the people who need it. We have the opportunity to fulfil our company’s purpose by empowering Filipinos financially.”
Trust and the efforts underlying it drives loyalty. This is not denying that technology, brand, and service matter. But these can often be fairly similar across the board from the average individual’s point of view.
A company with a real purpose and one that goes above and beyond the needs of the people is the real game changer. With new investment opportunities like PAMI’s latest offering, we are one step closer to building a culture of investing.
For more information on how to start investing with Philam Asset Management, Inc. (PAMI) contact (+632) 817-PAMI (7264) or visit their website at www.philamfunds.com.