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Millennial retail investors — and particularly those aged 25 to 34 — are the most trusting of financial services, the study says. Image Credit: Dubai Media Office

Abu Dhabi: The UAE is among the top three countries where trust in financial services is at an all-time high, according to a survey.

India emerged as the leading market with the highest trust level of 87 per cent, and the UAE stood second at 78 per cent. China ranked third with 76 per cent.

The numbers were published in the CFA Institute’s ‘Enhancing Investors’ Trust – the 2022 CFA Institute Investor Trust Study’, which measured trust levels and explored the factors that drive trust in financial services among retail and institutional investors in 15 markets globally.

Strong market performance, fee compression, tech-enabled transparency, greater access to markets, and new personalised products were the five factors driving higher trust, the study said.

The study identifies increased use of technology as a major trust factor, simplifying investing by improving access to markets and information. Half of retail investors and more than 80 per cent of institutional investors say that increased use of technology has increased trust in their adviser or asset manager, respectively.

William Tohme, CFA, Senior Regional Head, Middle East and North Africa at ‎CFA Institute, said: “As one of the countries with the highest trust in financial services on a global level, the UAE’s path to a resilient and diversified economy has been marked with efforts to uphold the stability and integrity of the financial system. The surge in trust we are currently witnessing is a positive indicator.”

Millennials take the lead

The proportion of institutional investors with high or very high trust in financial services has risen to 86 per cent from 65 per cent in the prior survey. Among retail investors, trust levels are up to 60 per cent compared to previously 46 per cent earlier.

The study also said that millennial retail investors — and particularly those aged 25 to 34 — are the most trusting of financial services (72 per cent).

Access trumps human assistance

For the first time, most retail investors globally (56 per cent) envisage that in the next three years, access to technology platforms and tools through which they can execute their investment strategies will be more important than access to a human being for assistance. This reflects a steady shift in sentiment across 12 of 15 markets surveyed and resonates most loudly in India (90 per cent) and the United Arab Emirates (84 per cent).

Growing crypto exposure

Two-thirds of institutional investors say they are now invested in cryptocurrencies. Globally, 32 per cent of retail investors invest in cryptocurrencies, India leading with 67 per cent, followed by the UAE (66 per cent) and Brazil (58 per cent).

Increasing trust in AI

Globally, 84 per cent of institutional investors would invest in a fund that primarily uses artificial intelligence to select investment holdings, with a similar proportion (78 per cent) believing that use of AI in investment-decision-making will lead to better investor outcomes. A lesser proportion of retail investors (39 per cent) would consider AI-driven funds.