KPMG: Stakeholders Worldwide Changing Their Views on Investment Managers’ Performance

Lucas Gilmore, “Big 4″ observer
February 16, 2011 /

The recent cases of fraud involving investment managers have continually reshaped the financial industry, most notably the investment management sector following the credit crunch in 2008, KPMG finds in the latest update of its global survey.

It turns out that 77 percent of investors have more diminishing trust on investment managers than they have for politicians. Asked of their views on the performance of the regulators of investment management sector, 81 percent believe that the present turnout of events where government entities such as the securities and investments regulators continue to scrutinize investment managers “will remove opportunities for innovation going forward.”

The survey took place between February and March 2009, gathering the views of 288 stakeholders and investors from 29 countries regarding the performance of the investment management sector.

The report argues that “ large-scale change and mending relationships through improving communication and transparency within the industry” will help companies recover and the industry alike.

According to KPMG, the investment management sector has seen “a steep decline in markets, massive government intervention and major frauds” in the last 12 months, events which have eroded investors’ confidence on the services delivered by intermediaries and investment managers.

KPMG said investment managers failed to establish harmonious investor relationships.

“This is surprising, as, at its core, investment management is a client centric business,” KPMG added.

Additionally, KPMG said it has observed that information flow between investment managers and investors is often “convoluted” due to a stronger relationships between intermediaries and investors. Thus, it has advised investment managers to work more closely with intermediaries to gain clients.

 

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