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Category: Wealth Management

  • 2020 U.S. Self-Directed Investor Satisfaction Study

    Website Reliability Issues, Lack of Human Support Pose Challenges for Self-Directed Wealth Management Firms

    2020-04-22

    TROY, Mich.: 9 April 2020 — Amid historic market volatility and heightened investor demand for access to their investment accounts, wealth management firms are facing an important moment of truth. According to the JD Power 2020 U.S. Self-Directed Investor Satisfaction Study,SM released today, websites are the biggest source of investor problems, which materially affect customer loyalty and satisfaction.

    “In the past several weeks, a number of wealth management firms have experienced high-profile website service outages, which have been driven by extreme market volatility and high volume, and that will have a negative effect on customer loyalty and satisfaction,” said Michael Foy, senior director of wealth & lending intelligence at JD Power. “Do-it-yourself investors experiencing at least one website outage over the past 12 months are twice as likely as other investors to say they will leave their current firm. When these types of problems occur, human support channels are essential to restoring loyalty. This is critically important for firms right now as they contend with operational challenges in both digital and call center channels, and investors are rattled by COVID-19 and economic uncertainty.”

    Following are key findings of the 2020 study:

    • Customer experience becomes more critical as trading fees disappear: The recent industry-wide shift to eliminate trading fees has created a level playing field in which customer experience is the key differentiator for self-directed wealth management firms. With approximately 42% of investors saying that they are planning to make changes to their investment portfolios as a result of the COVID-19 pandemic, getting that customer experience right in a period of heightened stress will be critical.
       
    • Website issues are frequent and damaging: Websites are the biggest source of problems for self-directed investors, and are responsible for 33% of all reported issues in the past two years. Among do-it-yourself (DIY) investors, those who experienced at least one website outage during the past 12 months are twice as likely to say they either “definitely will” or “probably will” leave their current firm in the next year.
       
    • Human support critical for problem solving: When problems do occur, more than three-fourths (79%) of self-directed investors turn to human support channels to solve the problem. Overall satisfaction among those who work with a human to solve a problem is 21 points higher (on a 1,000-point scale) than among those who use self-service digital channels.
       
    • Website, human and mobile interaction are all important: Overall satisfaction scores are lowest when self-directed investors either have no interaction (706) or mobile-only interaction (751) with their firm. These scores are highest when investors use a combination of web, mobile and human interaction (809), underscoring the importance of providing strong multi-channel experiences.

    The U.S. Self-Directed Investor Satisfaction Study, now in its 18th year, evaluates key satisfaction drivers and firm performance among both investors seeking guidance (i.e., those who don’t have a dedicated financial advisor but do have access to interact with a registered investment professional) and true DIY investors (those who do not interact with professional advisors).

    Study Rankings

    Vanguard (820) ranks highest in self-directed investor satisfaction among investors seeking guidance. Charles Schwab (819) ranks second.

    Charles Schwab (817) ranks highest in self-directed investor satisfaction among DIY investors. Vanguard (800) ranks second and Fidelity (790) ranks third.

    The U.S. Self-Directed Investor Satisfaction Study measures self-directed investors’ satisfaction with their investment firm based on performance in several factors. The Seeking Guidance segment includes eight factors (in order of importance): firm interaction; account information; commissions and fees; financial advisor; information resources; investment performance; product offerings; and problem resolution. The DIY segment includes seven factors (in order of importance): firm interaction; account information; commissions and fees; product offerings; information resources; investment performance; and problem resolution. 

    The 2020 study is based on responses from 5,511 investors who make all their investment decisions without the counsel of a full-service dedicated financial advisor. The study was fielded from November 2019 through January 2020.

    For more information about the 2020 U.S. Self-Directed Investor Satisfaction Study, visit https://www.jdpower.com/business/resource/us-self-directed-investor-satisfaction-study. 

    JD Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable JD Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, JD Power has offices serving North America, Asia Pacific and Europe.

    Media Relations Contacts
    Geno Effler, JD Power; Costa Mesa, Calif.; 714-621-6224; [email protected]
    John Roderick; Huntington, NY.; 631-584-2200; [email protected]

     

  • 2019 Advisor Digital Engagement Study

    Digital Engagement Drives Asset Manager Firm Selection by Advisors, JD Power Finds

    2019-11-20

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    COSTA MESA, Calif. 21 Nov. 2019 — Against a backdrop of shrinking fees, rising costs and thinning ranks of wholesalers, digital communication has become the most effective way for asset managers to connect with and influence the investment decisions of financial advisors. According to the JD Power 2019 Advisor Digital Engagement Study,SM released today, financial advisors who report high levels of digital engagement with a specific asset management firm are significantly more likely to increase their investment with that firm.

    The Advisor Digital Engagement Study is a new syndicated benchmarking study that evaluates how financial advisors digitally interact with asset management firms and how that digital experience affects their brand impressions and future intentions to invest client assets with those firms. Digital engagement is evaluated across multiple channels including email, mobile apps, podcasts, social media, webinars and websites.

    “For asset management firms to be successful—or in some cases even survive—they’re going to need to deliver engaging, differentiated digital content through the right channels that helps advisors do their job better and grow their practice,” said Mike Foy, Director of Wealth and Lending Intelligence at JD Power. “As firms continue to shift more resources to digital, they need to be very strategic about how to deploy those resources to drive ROI. It’s not necessarily about replacing wholesalers with technology, but rather how to blend the two in a way that leverages the strengths of each.”

    Following are some key findings of the inaugural study:

    • Digital engagement drives investment: Advisors who have consistent digital interactions with asset management firms are more likely to invest client assets with those firms. Specifically, 66% of advisors who indicate high levels of digital engagement with an asset manager—meaning they have used two or more digital channels within the past two weeks—say they are very likely to increase their investment with that asset manager. By contrast, only 37% of advisors citing low levels of digital engagement with asset managers say they are very likely to increase investment with those firms.
       
    • Excepting email, advisor digital engagement is low across channels: More than half (56%) of advisors are engaged via email with brands they use, but utilization of all other digital channels trails significantly, with an average of just 42% of advisors accessing the website; 25% viewing a webinar; 8% listening to a brand’s podcast; 6% following the brand on social media; and 4% having downloaded an app. Advisors who use these digital channels are looking for more than just access to product and market information; they’re also seeking practice management and business building ideas and content they can share with clients. Firms need to provide multiple reasons for advisors to further engage with them digitally and become a preferred resource.
       
    • Digital leaders jump ahead of the pack: Digital leaders, many of which are among the industry’s largest players, are far outpacing most firms in the industry in engaging advisors through digital channels—and they threaten to take even more market share away from smaller rivals. American Funds leads the industry in digital engagement, with 51% of financial advisors indicating they have high levels of digital engagement with the brand. JP Morgan follows with 31% of advisors citing high levels of digital engagement. BlackRock and Franklin Templeton each achieve high digital engagement among 25% of advisors.

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    The JD Power 2019 Advisor Digital Engagement Study is based on responses from 1,631 financial advisors and was fielded from June through August 2019. 

    For more information about the JD Power 2019 Advisor Digital Engagement Study, visit
    https://www.jdpower.com/business/resource/advisor-digital-engagement-study.

    JD Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable JD Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, JD Power has offices serving North America, South America, Asia Pacific and Europe.

    Media Relations Contacts
    Geno Effler, JD Power; Costa Mesa, Calif.; 714-621-6224; [email protected]
    John Roderick; St. James, N.Y.; 631-584-2200; [email protected]

    About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info
     

     

  • 2019 U.S. Wealth Management Mobile App Satisfaction Study

    Wealth Management Apps Underperform Other Consumer Financial Apps, JD Power Finds

    2019-12-02

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    COSTA MESA, Calif. 3 Dec. 2019 — Investors are not impressed with the mobile apps their brokerage firms are providing. According to the JD Power 2019 U.S. Wealth Management Mobile App Satisfaction StudySM Volume 2, released today, customer satisfaction with wealth mobile apps significantly lags those provided by other consumer financial companies, including credit cards, retail banks and insurance. When wealth management firms do get the app formula right, however, clients are more likely to stay with and purchase additional products and services from those firms.

    “The stakes are incredibly high for wealth management firms to deliver an exceptional mobile experience,” said Michael Foy, Senior Director of Wealth & Lending Intelligence at JD Power. “With competition intensifying to gain share of wallet across the various financial needs of emerging affluent clients, the mobile experience is a critical factor influencing investor decisions about considering new products and services.” 

    Following are key findings of the study:

    • Wealth management apps are behind: The average overall customer satisfaction score for wealth management mobile apps is 846 (on a 1,000-point scale). That trails overall satisfaction with credit card apps (872) and retail banking apps (853).
       
    • Security, simplicity and personalization are critical but inconsistent: Overall satisfaction improves by 43 points when customers perceive their personal information on an app is very secure, but one-third of customers say their firm misses the mark. Only half of customers say that the app provides personalized advice and insights, indicating that, while the app may offer a lot of features and functionality, the experience is often not being tailored to reflect their unique needs and objectives.
       
    • Millennials1 most likely to be influenced by the app experience: Among Millennials who say the overall mobile app experience is “outstanding,” 77% strongly agreed they are likely to sign up for additional products and services, vs. just 26% of those with lower satisfaction. Unfortunately, just 30% of Millennials rate their app as outstanding.
       
    • Communication is vital but challenging: Nearly half (49%) of wealth management mobile app users indicate that the ability to send and receive secure messages is the most important communication tool provided by the app. However, 36% of customers do not find this feature very easy to use.

    “Increasingly, we’re seeing a common set of best practices emerge among consumer financial apps that resonate most with customers,” said Amit Aggarwal, Senior Director of Digital Solutions at JD Power. “Ultimately, you need both intuitive design and an appropriate feature set in order to meet customer expectations. Banks and credit card companies have been raising the bar by doing just that. Meanwhile, personalization is emerging as a powerful mechanism to help strike this balance.

    The 2019 U.S. Wealth Management Mobile App Satisfaction Study evaluates customer satisfaction with wealth management mobile apps based on five factors (in order of importance): range of services; clarity of information; ease of navigating app; appearance; and speed of screens loading. The study is based on responses from 2,892 full-service and self-directed wealth management firm customers. The study was fielded in July-August 2019.

    Wealth Management App Rankings

    Charles Schwab & Co., Inc., and Wells Fargo rank highest in a tie in overall customer satisfaction with wealth management apps, each with a score of 865. Edward Jones ranks third with a score of 864.

    For more information about the JD Power U.S. Wealth Management Mobile App Satisfaction Study, visit
    https://www.jdpower.com/business/resource/us-wealth-mobile-app-study. 

    JD Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable JD Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, JD Power has offices serving North America, South America, Asia Pacific and Europe.

    Media Relations Contacts
    Geno Effler, JD Power; Costa Mesa, Calif.; 714-621-6224; [email protected]
    John Roderick; St. James, N.Y.; 631-584-2200; [email protected]

    About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info