U.S. Financial Services Trust Barometer

2010

The Edelman Trust Barometer in retrospect

Rising Influence of NGOs2001

Fall of the celebrity CEO2002

Earned media more credible than advertising2003

U.S. companies in Europe suffer trust discount2004

Trust shifts from “authorities” to peers2005

“A person like me” emerges as credible spokesperson2006

Business more trusted than government and media2007

Young influencers have more trust in business2008

Business must partner with government to regain trust2009

2

In the U.S., business performance across industries and trust continue hand in hand.

S&P 500 Average vs. U.S. Trust in Business

1400

1600

1800U.S. Trust in business in general

Enron, the dot-com bust and September 11

800

1000

1200

1400and September 11

S&P 500: Dec 2001 – Dec 2009

200

400

600

800

0

200

01/1

2/…

01/0

3/…

01/0

6/…

01/0

9/…

01/1

2/…

01/0

3/…

01/0

6/…

01/0

9/…

01/1

2/…

01/0

3/…

01/0

6/…

01/0

9/…

01/1

2/…

01/0

3/…

01/0

6/…

01/0

9/…

01/1

2/…

01/0

3/…

01/0

6/…

01/0

9/…

01/1

2/…

01/0

3/…

01/0

6/…

01/0

9/…

01/1

2/…

01/0

3/…

01/0

6/…

01/0

9/…

01/1

2/…

01/0

3/…

01/0

6/…

01/0

9/…

01/1

2/…

2010 Trust Barometer - A9. [Business in general TRACKING] I am going to read you a list of institutions. For each one, please tell me how much you TRUST that institution to do what is right. Please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL". (Top 4 Box, Trust)

3

Extending the Edelman Trust Barometer to U.S. financial services

• 10th annual study • First in-depth focus on financial services

Global 2010 Trust Barometer U.S. Financial Services Trust Barometer

y

• 4,875 informed publics ages 25-64 in 22 countries on five continents

500 U S i f d bli

First in depth focus on financial services

• 500 U.S. informed publics ages 25-64– 99 respondents ages 25-34 – 401 respondents ages 35 -64• 500 U.S. informed publics

(100 ages 25-34 and 400 ages 35-64)

• 25-minute telephone survey conducted between Sept. 29 – Dec. 6, 2009

401 respondents ages 35 -64

• 10-minute telephone survey conducted between Oct. 13 – Nov. 8, 2009between Sept. 29 Dec. 6, 2009

Informed Publics:– College-educated– Top 25 percent of household income by age– Report significant media consumption and engagement in business news and public policy

44

U.S. Financial Services Trust Barometer

Customer Engagement Is The Key Variableg g y

5

For all industries, corporate reputation is now based on trust and transparency as much as leadership and share-price performanceand transparency as much as leadership and share price performance.

82%Has transparent and honest business practices

74%

79%

80%

Communicates frequently and honestly on the state of its business

Offers high quality products or services

Is a company I can trust

63%

71%

74%

Is a good corporate citizen

Treats employees well

Communicates frequently and honestly on the state of its business

48%

59%

Is an innovator of new products, services or ideas

Prices its brands fairly and competitively

45%

45%

Delivers consistent financial returns to investors

Has highly-regarded and widely admired top leadership

2010 Trust Barometer: B63.-72. How important are each of the following factors to the overall reputation of the company? Please use a nine-point scalewhere one means that factor is “not at all important” and nine means it is “extremely important” to overall reputation. (Top 2 Box, Very/ Extremely Important) Informed Publics ages 25-64 in the U.S.

6

Among all industries in the U.S., financial returns moves to last place among company reputation factors.p g p y p

53%Quality products and services

U.S. – 2006

83%Transparent and honest

ti

U.S. – 2010

42%

47%

53%

Strong financial performance

Attentiveness to customer needs

Quality products and services

79%

83%

83%

High quality products or services

Company I can trustpractices

35%

37%

38%

Good employee relations

A well-known brand

Fair pricing

64%

72%

75%

Good corporate citizen

Treats employees well

Communicates frequently

23%

33%

35%

Visible CEO

Socially responsible

Good employee relations

48%

58%

64%

Innovator

Prices fairly

12%

23%

Employee/ CEO blogs

Dialogue w/ stakeholders

45%

47%

Financial returns

Top leadership

2006 Trust Barometer – When you think of companies that you trust, how much, if at all has each of the following attributes contributed to your trust? Please you a 9-point scale where one means it “has not contributed at all” and 9 means it “has contributed a great deal.” (Top 2 box ) Informed Publics ages 35-64 in the U.S.2010 Trust Barometer - B63.-72. How important are each of the following factors to the overall reputation of the company? Please use a nine-point scale where one means that factor is “not at all important” and nine means it is “extremely important” to overall reputation. (Top 2 Box) Informed Publics ages 35-64 in the US

7

For U.S. financial-services companies, Quality of Communications and Customer Service rank with Price and Performance as reputation drivers.

75%Communicates frequently and honestly

U.S. Informed Publics: Importance of Reputation Factors

70%

72%

Prices its products fairly and competitively

Has investment products that deliver consistent returns to investors

50%

70%

Has a Web site that makes financial transactions easy

Has customer service available by Web or phone for help or advice

46%

47%

Has highly-regarded and widely admired top leadership

Has a Web site that is informative about investing and provides information on the financial markets

3%

43%

Has ways to connect with customers via social networking sites

Has highly-regarded local advisors

How important are each of the following factors to the overall reputation of a financial company? Please use a nine-point scale where one means that you “Not at all important" and nine means “Extremely Important.” (Top 2 Box) Informed publics ages 25-64

8

Younger people especially value communications’ quality and Web sites.

74%Communicates frequently and honestly

35-64 25-34

81%

Importance of reputation factors by age group

68%

70%

Prices its products fairly and competitively

Has investment products that deliver consistent returns to investors* 80%

74%

47%

66%

Has a Web site that makes financial transactions easy*

Has customer service available by Web or phone for help or advice* 80%

60%

44%

45%

Has a Web site that is informative about investing and provides information on the financial markets*

Has highly-regarded and widely admired top leadership 47%

55%

3%

40%

Has ways to connect with customers via social networking sites

Has highly-regarded local advisors

4%

43%

How important are each of the following factors to the overall reputation of a financial company? Please use a nine-point scale where one means that you “Not at all important" and nine means “Extremely Important.” (Top 2 Box) Informed publics ages 25-34 & 35-64

9

* Significantly higher

Broker/advisor is the most trusted source to provide accurate information on investments, investing or the markets, followed by friends or family; CEOs least trusted.

68%Broker/advisor

U.S. Informed Publics: Trust in Financial Sources

61%Friends or family

55%Portfolio manager

33%

44%

Host of a cable television show on investing

Corporate communications

32%CEO or other senior executives of a financial services company

For each one, please tell me how much you TRUST that source to provide accurate information on investments, investing or the markets. Please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.” (Top 4 Box) Informed publics ages 25-64

10

Younger people trust friends and family and corporate communications significantly more than others as sources of financial information.

66%Broker/advisor

35-64 25-34

75%

Trust in financial sources by age group

57%Friends or family* 73%

53%Portfolio manager 59%

33%

40%

Host of a cable television show on investing

Corporate communications* 56%

(Same for both age groups)

30%CEO or other senior executives of a financial services company

g

39%

( g g p )

For each one, please tell me how much you TRUST that source to provide accurate information on investments, investing or the markets. Please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.” (Top 4 Box) Informed publics ages 25-34 & 35-64

11

* Significantly higher trust

Expertise and peer conversations drive credibility of information sources;younger informed publics find all information sources more credible.

46%

44%

Articles in business magazines

Stock or industry analyst reports

35-64 in US 25-34 in US

Tr

62%

57%

20%

27%

26%

Television news coverage

News coverage on the radio

Articles in newspapers

raditional

49%

43%

36%

21%

35%

25%

Corporate communications such as press releases, reports, …

Conversations with company employees

Conversations with your friends and peers

Corpo43%

35%

45%

19%

23%

9%

19%

F t t h Wiki di b t l

Online search engines e.g. Google news, YouTube

Corporate or product advertising

A company's own Web site

rateD

31%

20%

37%

31%

9%

9%

19%

Blogs

Social networking sites (such as Myspace or Facebook)

Free content sources such as Wikipedia or web portals

Digital

31%

17%

16%

2010 Trust Barometer: E84-97. [Now I’m going to read you a list of places where you might get information about a company. Please tell me how credible you believe each one of them is as a source of information about the company—is it extremely credible, verycredible, somewhat credible, or not credible at all? (Top 2 box, very + extremely credible) Informed Publics ages 25-34 and 35-64 in 22 countries

12

Business TV news, family and friends and local newspapers are most widely used sources of information about financial information.

88%Business television news

35-64 25-34

% Who use each source at least monthly for financial information

91%

54%

81%

83%

Broker/advisor

Print/ online version of local newspapers

Conversations with friends or peers*

64%

84%

91%

56%

61%

54%

Print/ online version of business publications

Radio news such as Bloomberg or NPR

Broker/advisor 64%

66%

64%

47%

47%

54%

Investment or personal finance Web sites

Print/ online version of investment/personal financial publications

Print/ online version of the Wall Street Journal

48%

56%

52%

9%

27%

T i

Facebook*

Investment/Personal finance blogs

22%

35%

For each please tell me how often do you read, watch or visit these media sources in a typical month to get information about investments, investing, or the financial markets. Do you get information daily, weekly, biweekly, monthly or never for….? (At least once a month) Informed publics ages 25-34 and 35-64

13

5%Twitter 10% * Significantly higher trust

Implications for financial-services marketers and communicators

• In uncertain times, communications and customer service count

• Less uncertain than performance, supports priceLess uncertain than performance, supports price

• Implications for resource allocations, marketing programs

• Don’t rely solely on CEO as spokesperson; use brokers advisors• Don t rely solely on CEO as spokesperson; use brokers, advisors, portfolio managers

• Educate brokers and advisors to ensure reality meets perceptiony p p

• Activate customer advocates and ambassadors

• Pursue younger consumersPursue younger consumers

• Less costly to pursue, more trusting in your communications

Use all arro s in the comm nications q i er• Use all arrows in the communications quiver

14

U.S. Financial Services Trust Barometer

Trust Continues at Historically Low Levelsy

15

In the U.S., Banks and Insurance remain the least trusted industries.

81%56%

72%

F dTechnology

2009 2010

61%

62%

64%

53%

47%

60%

56%

CPG manufacturersRetail

BiotechFood

45%

50%

50%

57%

32%

41%

39%

AutomotiveHealth care industry

EnergyCPG manufacturers

33%

41%

45%

45%

36%

35%

39%

Banks Entertainment

PharmaceuticalsAutomotive

32%

32%

33%

29%

27%

Insurance Media companies

2010 Trust Barometer: A26-38. [TRACKING] Now I would like to focus on your trust in different industry sectors. Please tell me how much you TRUST businesses in each of the following industries to do what is right. Again, please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.” (Top 4 Box) Informed publics ages 25-64 in the U.S.

16

Since 2007, trust in Banks drops to near-last from third in the U.S.

Trust in BanksInformed Publics ages 35-64

100%2007 2010

75% 77%

68%

85% 83%

70%

80%

90%- 39

56% 58%

45% 43% 41%

51% 51%

42%50%

60%

70%

- 16

- 17

- 20

29%34%

29% 27% 27%21%

17%20%

30%

40%

0%

10%

China India Brazil Japan Russia US Italy France UK Germany

A26-38. [TRACKING] Now I would like to focus on your trust in different industry sectors. Please tell me how much you TRUST businesses in each of the following industries to do what is right. Again, please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.” (Top 4 Box) Informed publics ages 35-64 – Top ten countries by GDP

17

Trust has not been repaired but recovery has begun among younger publics.

Informed Publics ages 25-34I f d P bli 35 64

U.S. Trust in BanksInformed Publics ages 25-34I f d P bli 35 64

U.S. Trust in Insurance

78%80%

90%Informed Publics ages 35-64

80%

90%Informed Publics ages 35-64

69%

60%

70%

53%

60%

70%

36%47%

30%

40%

50%53%

39%

49%

31%30%30%

40%

50%

29%

20%

30%

2008 2009 2010

24%

30%

20%

30%

2008 2009 2010

2010 Trust Barometer: A26-38. [TRACKING] Now I would like to focus on your trust in different industry sectors. Please tell me how much you TRUST businesses in each of the following industries to do what is right. Again, please use a 9-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL". (Top 4 Box) Informed Publics ages 25-64 and 35-64 in theUS

18

Community/regional banks are the most trusted financial institutions in the U.S.

79%Community/regional banks

U.S. Informed Publics: Trust in Financial Institutions

52%

59%

Life insurance companies

Mutual fund companies

46%

47%

Large national banks

Property/casualty insurance companies

41%

46%

Brokerage firms

Large, national banks

29%

32%

Private equity firms

Investment banks

Now I would like to focus on your trust in different financial institutions. Please tell me how much you TRUST businesses in each of the following financial institutions to do what is right. Please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.” (Top 4 Box) Informed publics ages 25-64

19

Younger informed publics have significantly higher trust in all financial institutions.

77%Community/ regional banks

35-64 25-34

83%

Trust in financial institutions by age group

49%

57%

Life insurance companies*

Mutual fund companies 65%

62%

44%

49%

Property/casualty insurance companies*

p

57%

62%

38%

43%

Brokerage firms*

Large, national banks*

50%

56%

26%

29%

Private equity firms*

Investment banks*

38%

41%

* Si ifi tl hi h t t

Now I would like to focus on your trust in different financial institutions. Please tell me how much you TRUST businesses in each of the following financial institutions to do what is right. Please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.” (Top 4 Box) Informed publics ages 25-34 & 35-64

20

* Significantly higher trust

U.S. Financial Services Trust Barometer

Great Majority Want Public/Private Solutionsj y

21

Nine-of-10 informed publics believe problems exist in the financial-services industry.

Do you believe there are problems in the financial services industry that need to

b dd d? Sh ld b D '

Opinions of regulation of financial institutions

No, 7%

be addressed? Should be regulated less, 8%

Don't know, 1%

7%

Should be

Current regulation

is

Yes, 93%

regulated more, 63%

is sufficient,

28%

Informed Publics ages 25-6422

Two-thirds believe all entities should work together to solve those problems.

Which entity do you think should be MOST responsible for addressing the problems facing the financial services industry?

90%

100%

(base = responded “yes” to problems within the industry)

67%

50%

60%

70%

80%

Younger informed publics (17%) are significantly more likely to believe Financial Service Companies are

most responsible for addressing the

21%20%

30%

40%

50% most responsible for addressing the problems

9%2%

0%

10%

20%

All should work together Government regulatory agencies

Financial services companies Congress

Informed Publics ages 25-64

g

23

Summary

Commit to transparency incommunications and to excellence in customer

Understand the power of the younger demographic.excellence in customer

service. younger demographic.

Unlock the value of your most important assets: Partner with regulatory p

• Brokers• Advisors

g yagencies to find solutions.

24