Financial firms have themselves to blame for the lack of public trust in the industry, according to the latest CFA Institute Global Market Sentiment Survey.

For the second year in a row, the CFA Institute, headquartered in Charlottesville, Va. surveyed its members around the world on topics ranging from expectations for global equity markets to the regulatory environment.

The survey found that over half of the respondents outside of Canada (56%) believed that the lack of an ethical culture within financial firms was the biggest factor contributing to the current distrust of the financial industry. In Canada that number was slightly higher at 58%.

The problem, says Margaret Franklin, president and CEO, Kinsale Private Wealth in Toronto and past chairwoman, CFA Institute Board of Governors, is that the current regulatory environment places the onus on investors to figure out the responsibilities of their financial professional and what information needs to be disclosed and what it all means. This response to the current problem of public trust and financial literacy, says Franklin, is not enough to face the complex issues of today’s markets.

Rebuilding trust may be difficult to accomplish, however, because of the current structure of financial businesses, says Franklin. “[The problem is] not that you have all of these evil leaders at the top and it works its way through the system,” she says. “The business model [of financial firms] is an enormous challenge to actually foster integrity and trust.”

As well, attempts to improve the situation could take five to ten years to realize, says Matt Orsagh, director, capital markets policy, CFA Institute in New York, because it means changing the culture of the financial services industry.

According to the survey participants, one way to regain the public’s trust is through the improved enforcement of existing laws and regulations. Of the CFA members surveyed in Canada, 27% felt this was one of the best ways to improve investor trust and market integrity. Globally, 24% of CFA members agreed with their Canadian counterparts.

The survey was sent out to 115,796 CFA members worldwide with a 6% response rate. In Canada the survey was sent out to 14,092 Canadian members and 839 or 6% responded.