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Trust in brokers has dropped by 7% over the last year according to a survey of more than 1000 Australians.
The survey, carried out last month by financial services specialist agency Yell, also showed that trust in mortgage providers fell by 5%.
Overall, the banks recorded the biggest yearly drop in consumer trust for the entire industry, falling 8%. Trust in financial advisers fell by 6%.
Yell’s annual State of Financial Marketing 2018 report, in conjunction with Ipsos, asked consumers to rank the extent to which they trusted seven financial services sectors, with the findings revealed at the Mumbrella Finance Marketing Summit this week.
Despite the large drop, banks only slipped one position to third in the overall trust index, while financial advisers fell from third to fifth position.
Superannuation providers remain the most trusted industry sector despite a decline of 5% year-on-year.
Insurers were the only sector to record an increase in trust, up 4.6% compared to the previous 12 months
Nigel Roberts, founding partner at Yell said, “This year’s results showed an acceleration in the gradual erosion of consumer trust that’s still not being recognised by the industry as a whole.
“The question is whether there will be a significant commercial impact as new entrants emerge who don’t carry the stigma of some of the established players.
“We’ve seen the big four shifting away from wealth services ahead of and during the Royal Commission maybe in anticipation of any potential findings but the question is, will it be enough to protect them from the emergence of neo-banks and other viable alternatives in Australia?"
As in 2017, credit card providers were the least trusted on the index falling an additional 3% from 2017.
Roberts added: “The challenge for all of financial services and especially the banking sector, is to halt the slide in trust or face real consequences.
“This can be achieved, but will involve much greater empathy and delivering solutions that truly meet customer needs, rather than meeting sales targets.
“The shift away from pushing product requires more than just having a view on the vast quantities of data currently being collected, it needs a human centred approach as well.”
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