The investment management industry must employ a 'back-to-basics' approach when it comes to client relationships in order to rebuild trust with investors, says KPMG.

A combination of improved communication and education, increased knowledge sharing and a strengthening of corporate governance and risk management transparency are recommendations made in KPMG's report, Renewing the promise: Time to mend relationships in investment management.

Better communication, KPMG said, holds the key to success in these relationships. Financial intermediaries, client-facing advisors in particular, are seen as being untrustworthy and lacking knowledge. 77 per cent of investors said intermediaries were less trustworthy than politicians, and 58 per cent of institutional investors believe these intermediaries should be provided with better product training to help them regain client trust. 75 per cent of investment managers themselves agreed with this conclusion.

"At this time of market turbulence and broken trust, the investment management industry should adapt and change to re-engage investors," commented Tom Brown, partner and EMA region of investment management at KPMG in the UK.

"Open communication amongst all market participants is particularly critical, and investment managers and intermediaries must forge collaborative, knowledge-based partnerships, focused solely on the client. Only by implementing a joined-up approach, supported by better corporate governance and risk management, can the needs of the investor truly be met."

The report was conducted across 29 countries and 288 senior executives from the global fund and investment management community.

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