Track record matters, so does performance presentation

"Track record," remarked one participant when asked how they would choose a robo-advisory platform. The other participants of a CFA Society Singapore focus group discussion on trust levels concurred. For the other retail investors who were not comfortable with the use of artificial intelligence to select risk assets, they expressed similar sentiments when deciding on which traditional funds to invest in.

The focus group discussions on trust levels in the financial sector took place via Zoom in June. At the sessions, some retail investors in Singapore said they would also like to examine historical performance over a few economic cycles instead of being presented data for the last few years.

Although historical performance is no guarantee of future returns, retail investors do wish to compare performance records among competing funds and robo-advisory platforms. Hence, it is important for financial professionals to adopt established best practices to ensure consistency and transparency in reporting performance. This empowers investors to make fair and meaningful comparison between asset managers.