Nearly all (96%) of Wall Street senior executives at financial services firms believe that the public’s negative perception of their firms was invited by the firms’ actions. That is the conclusion of a recent survey of senior executives at large and mid-size financial services firms (the Makovsky Wall Street Reputation Study). The survey respondents included chief marketing officers, vice presidents, directors and managers at those firms.
Other significant findings include the fact that nearly two-thirds of the respondents said their firm’s own conduct had the biggest impact on Wall Street’s reputation in the past year.
Wall Street’s reputation crisis, market volatility, the flash crash, and the MF Global scandal, among others, have flattened investor confidence. Many investors are simply not comfortable investing in the market, and have remained on the sidelines.
Another stain on Wall Street’s reputation is the persistence of obscenely high bonuses that signals a “business as usual” attitude. While Main Street suffers, Wall Street executives are doing just fine. Executive compensation is seen as a problem by 81% of respondents. Shareholders must feel even more strongly. Was it an issue in Vikram Pandit’s abrupt resignation from Citigroup?
In addition, there is reportedly great concern in the industry about recruiting. New prospects may be asking themselves: Should I be working for this company? Is this company providing value or is it just a speculative venture with other people’s money for the benefit of senior executives?
As for the industry’s “too much regulation” argument, 77% of respondents say they are counting on regulation to help them rebuild their reputations. Maybe it is really just window dressing and watered-down regulation that they really want, but that is a far cry from the industry’s public position that Wall Street is over-regulated.
Page Perry is an Atlanta-based law firm with over 170 years of collective experience maintaining integrity in the investment markets and protecting investor rights.