City Road Communications

The Relationship Between Investor and Investment Provider

Trust_Exercise

Ask anyone what makes a good relationship and most responses will orbit around the principles of trust, transparency and open-communication. It is true that these form the foundation of any long-lasting relationship, be it a friendship or as part of a professional business network. The notion of trust is particularly prevalent for relationships formed within the finance and investment industry.

When confronted with a decision, particularly one involving money, it is part of the human psyche to levitate towards those individuals where a positive bond has already been formed. John Stuart Mill famously wrote about this as part of his thesis on social capital – arguing that trust is undeniably vital in the outcome of any economic transaction.

In our Psyche of the Investor research project, which is due to be released in two weeks’ time, we examine the importance of transparency and trust in the context of the investor and investment provider relationship. Based on a survey of over a thousand UK investors, this analysis is timely given that investors have an ever-expanding range of investment opportunities available to them – these extend from traditional assets in the form of stocks and bonds, to the direct financing of companies through P2P lending platforms and tax-efficient investment schemes.

Our research will reveal what investors are looking for when considering an investment provider, detailing the preferred methods of communication, and the reasons why investors would part ways with a company. A comprehensive understanding of the relationship between investors and an investment provider is fundamental in determining what type of communication strategy is the most effective. As we will demonstrate over our coming series of blogs, trust and transparency are key.