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Category: Wealth ManagementUnited States

  • 2022 U.S. Full-Service Investor Satisfaction Study

    Amid Tech Push, Wealth Management Industry Loses Focus on Comprehensive Advice, JD Power Finds

    2022-04-13

    crescent.seward

    After several years of increasing focus on technology investments, the full-service wealth management industry significantly improves in investor satisfaction with digital offerings and engagement with digital channels. However, according to the JD Power 2022 U.S. Full-Service Investor Satisfaction Study,SM released today, the industry continues to make little or no progress on its core value proposition: delivering comprehensive advice based on a deep understanding of individual clients. Just 14% of investors evaluated in the study receive the level of comprehensive advice from their primary financial advisor as defined by JD Power criteria, which include making recommendations in a client’s best interest; understanding their goals and needs; and having a documented financial plan.

    “Firms have rightly increased their investment in client-facing technology in recent years, and we see that beginning to pay off in terms of higher engagement and satisfaction with digital channels,” said Mike Foy, senior director of wealth intelligence at JD Power. “However, we don’t see similar progress being made with truly delivering on comprehensive advice. Very few investors—even those with high net worth—are getting an optimum level of value from their advisors. However, advisors who aren’t consistently providing comprehensive advice may not be experiencing high attrition, in part because many clients simply don’t know what comprehensive advice looks like. But those advisors who do deliver it receive significantly more referrals and are far better positioned to continue to grow their practices.”

    Following are some key findings of the 2022 study:

    • Low investor expectations: Although 51% of full-service investors strongly agree that their advisor provides them with comprehensive advice that addresses all their wealth management needs, just 26% of that group experience a level of comprehensive advice as defined by JD Power criteria.
    • Assessing the effect of comprehensive advice: Among the minority of full-service investors who are receiving comprehensive advice from their advisors, 76% say they “definitely will not” switch investment firms in the next year. Among the same group, the Net Promoter Score®[1]—which measures client advocacy and predicts business growth—is 93.
    • Digital engagement improves: Investor satisfaction with digital channels sees the largest year-over-year improvement of any single factor in the study, rising 26 points (on a 1,000-point scale). Nearly two-thirds (63%) of clients use their wealth management firm’s website at least once a month and 40% use the mobile app each month.
    • Blending digital and human interactions is optimal for young and old: Among all age groups, satisfaction is highest when investors experience a mix of live human and digital interaction. Boomers[2] show a clear preference for advice and planning that is handled by a live person, while Millennials prefer digital channels overall, but show greater overall engagement and satisfaction when both live and digital channels are used.

    Study Ranking

    UBS ranks highest in overall investor satisfaction with a score of 777. Vanguard (759) ranks second, while Charles Schwab (753) and Northwestern Mutual (753) rank third in a tie.

    The U.S. Full-Service Investor Satisfaction Study, now in its 20th year, measures overall investor satisfaction with full-service investment firms in seven factors (in order of importance): trust; people; products and services; value for fees; ability to manage wealth how and when I want; problem resolution; and digital channels.

    The study is based on responses from 4,396 investors who work directly with a dedicated financial advisor or team of advisors. The study was fielded from November 2021 through January 2022.

    For more information about the U.S. Full-Service Investor Satisfaction Study, visit
    https://www.jdpower.com/business/wealth-management/full-service-investor-satisfaction-study.

    About JD Power
    JD Power     is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

    JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

    Media Relations Contacts
    Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
    John Roderick; East Coast; 631-584-2200; [email protected]

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

    [1] Net Promoter,® Net Promoter System,® Net Promoter Score,® NPS,® and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

    [2] JD Power defines generational groups as Pre-Boomers (born before 1946); Boomers (1946-1964); Gen X (1965-1976); Gen Y (1977-1994); and Gen Z (1995-2004). Millennials (1982-1994) are a subset of Gen Y.

     

  • 2021 U.S. Wealth Management Mobile App Satisfaction Study

    Wealth Management App User Experience Improves but Still Lags Other Industries, JD Power Finds

    2021-11-22

    jillian.breska

    Wealth management firms have invested heavily in upgrading their apps, with 75% making feature enhancements in the past year, up from 44% a year ago. However, according to the JD Power 2021 U.S. Wealth Management Mobile App Satisfaction Study,SM released today, while these efforts are paying off in terms of greater utilization, improved engagement and higher overall customer satisfaction scores, wealth management still lags other industries when it comes to the overall app user experience.

    “The pace of customer adoption of mobile has accelerated dramatically across virtually every industry, and that’s both an opportunity and a challenge for wealth management firms,” said Michael Foy, senior director of wealth intelligence at JD Power. “Clearly, the investment that firms have put behind their digital strategies is having a positive effect on app user experience and overall utilization rates, but that same thing is happening everywhere, and some industries are just moving faster. Wealth management firms have some unique challenges because of legacy back-end technology and the sheer complexity and range of services they need to provide. But there are unique opportunities to leverage an app to deliver relevant educational content and facilitate communication with advisors.”

    Following are key findings of the 2021 study:

    • Customer satisfaction and usage surges: Overall customer satisfaction with wealth management mobile apps this year is 858 (on a 1,000-point scale), up nine points from a year ago. Major drivers of this increase are speed, range of services offered and overall appearance. The number of customers using their wealth apps daily has increased four percentage points year over year and the number using them multiple times per day has increased three percentage points.
    • Wealth app customer satisfaction lags other financial apps: Despite increased customer satisfaction, overall customer satisfaction with wealth apps trails average app satisfaction scores in JD Power studies in the banking (860), credit card (867) and insurance (877) industries. While wealth management firms are spending big on updates, with 31% introducing major feature updates this year, that number jumps to 33% for credit card apps and 50% for banking apps.
    • Seamless advisor interaction via app creates opportunity: A key differentiator for wealth management apps vs. those of other industries is direct line connectivity to human advisors. Still, just 44% of wealth app users who work with an advisor say they communicate with them via the app, which is unchanged from 2020.
    • App-based investor education can improve: While firms are very proficient at providing apps with market-related news and information, many fall short on delivering personalized content and guidance. Just more than half (51%) of customers strongly agree that their wealth app provides tailored insights and content and just 47% say it is very easy to research investment options on their wealth app.

    “Customer expectations for a seamless multi-channel experience are rising rapidly in line with significant investment and innovation for nearly every customer touch point across every industry,” said Amit Aggarwal, senior director of digital solutions at JD Power. “The key for wealth management firms to level up in this competitive environment is to heavily lean into their unique value propositions, making it easy and intuitive for investors to move seamlessly between the app and other digital or human channels, while delivering personalized guidance and important information along the way.”

    The 2021 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; appearance; and speed of screens loading. The study is based on responses from 3,025 full-service and self-directed investors and was fielded in July-August 2021.

    Study Ranking

    U.S. Bancorp Investments ranks highest in overall customer satisfaction with wealth management apps, with a score of 884. Chase Mobile (876) ranks second and Merrill Edge (870) ranks third.

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

    About JD Power
    JD Power     is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

    JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

    Media Relations Contacts
    Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
    John Roderick; East Coast; 631-584-2200; [email protected]

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

     

     

  • 2020 U.S. Wealth Management Mobile App Satisfaction Study

    Wealth Management App Use Surges among Investors But Satisfaction Lags, JD Power Finds

    2020-11-19

    jillian.breska

    Wealth management mobile apps have emerged as a go-to resource for investors during the COVID-19 pandemic, but despite substantial growth in app utilization, customer satisfaction lags other industries and firms have failed to leverage the potential of these digital tools to drive greater interaction with advisors. According to the JD Power 2020 U.S. Wealth Management Mobile App Satisfaction StudySM, released today, customer satisfaction with wealth mobile apps lags those provided by other consumer financial institutions such as credit card companies, retail banks and insurance companies, as few wealth management apps provide the level of advisor interaction customers are seeking.

    “This is such a critical moment in the digital transformation of wealth management, and firms have a tremendous opportunity to leverage their mobile apps as a powerful communications conduit between investors and advisors,” said Michael Foy, senior director of wealth & lending intelligence at

    JD Power. “But most wealth app offerings are missing the mark. It’s notable that more than one-third of investors who work with an advisor say they’ve increased their wealth app usage during the pandemic, which is more than double the rate among investors in the do-it-yourself segment. Advisors and their firms need to recognize that the mobile app is not a threat to the advisor’s value—it is an opportunity to increase engagement by meeting investors where they are.”

    Following are key findings of the 2020 study:

    • Wealth management app use climbs during pandemic: Across both do-it-yourself (DIY)1 and advised investors, 33% say they’ve used their wealth management firm’s mobile app more frequently during the COVID-19 pandemic. Among those with advisors, 36% say usage has increased vs. 17% among DIY investors. Younger investors have led the trend, with 45% of Millennial2 investors and 30% of Gen X investors saying they have used wealth apps more frequently this year.
    • Wealth app customer satisfaction lags other financial apps: Despite increased utilization, the overall satisfaction score for wealth apps is 849 (on a 1,000-point scale), which is lower than the overall satisfaction score for apps utilized in other segments of the financial services industry, such as credit card (865), insurance (864) and banking (852).
    • Missed advisor engagement opportunity: During the height of the COVID-19 pandemic (May and June 2020), 31% of investors said they had no recent advisor contact. Among those who did communicate with advisors, just 2% said communication occurred via mobile app or secure messaging. Advisor contact via the app is low industry-wide, as only 35% of profiled wealth apps offer chat functionality and just 41% support secure messaging, despite both being frequently requested features by users.
    • Advisor interaction via app drives customer satisfaction: Providing mobile features that support advisor engagement not only affects satisfaction with the app itself, but also affects overall investor satisfaction and loyalty to their wealth management firm. According to the JD Power 2020 U.S. Full-Service Investor Satisfaction Study,SM overall satisfaction among full-service investors who interact with their advisors via the wealth management firm’s mobile app is 40 points higher than among those who do not.

    “No industry is immune to the consumer shift toward mobile apps, as usage continues to increase across the board,” said Amit Aggarwal, senior director of digital solutions at JD Power. “Wealth management firms need to recognize that the app is increasingly becoming their front door. Accordingly, they need to spend the time making sure that this channel is addressing customer needs, easy to navigate and seamlessly integrated into all facets of their business.”

    The 2020 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; appearance; and speed of screens loading. The study is based on responses from 2,724 full-service and self-directed wealth management firm customers and was fielded in July-August 2020.

    Study Ranking

    Chase ranks highest in overall customer satisfaction with wealth management apps, with a score of 877. Wells Fargo (869) ranks second, while E*TRADE (858) and U.S. Bank (858) rank third in a tie.

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

    JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

    JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

    Media Relations Contacts
    Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
    John Roderick; East Coast; 631-584-2200; [email protected]

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

    1JD Power defines DIY investors as those who have no advisor interaction with the primary investment firm.

    2JD Power defines generational groups as Pre-Boomers (born before 1946); Boomers (1946-1964); Gen X (1965-1976); Gen Y (1977-1994); and Gen Z (1995-2004). Millennials (1982-1994) are a subset of Gen Y.

     

  • 2020 U.S. Financial Advisor Satisfaction Study

    Investment in Technology Key to Winning War for Financial Advisor Talent, JD Power Finds

    2020-07-07

    jillian.breska

    TROY, Mich.: 7 July 2020 — Wealth management firms have been making huge investments in new advisor workstation technologies designed to coalesce market data, client information, account servicing tools and AI-powered analytics into a single interface. According to the JD Power 2020 U.S. Financial Advisor Satisfaction Study,SM released today, the successful execution of that investment will be key to firms’ ability to attract and retain advisor talent.

    “Advisor reliance on technology to manage all aspects of their practice has been growing for many years, but it has been accelerated considerably during the COVID-19 pandemic,” said Mike Foy, senior director of wealth and lending intelligence at JD Power. “While firms are investing heavily, many have been missing the mark on delivering technologies that truly meet advisor needs. In fact, just 48% of advisors say the core technology their firm currently provides is ‘very valuable.’ That needs to change if firms want to win the talent war.”

    Following are some key findings of the 2020 study:

    • Improvements in technology key differentiator for advisors: Whether advisors perceive their firm’s technology is improving has become the most significant indicator of advisor satisfaction among both employee and independent advisors.
    • Disconnect between reliance on technology and value of technology: Most advisors (92%) say they currently rely on core planning, portfolio allocation, portfolio management and customer relationship management technologies provided by their firm. However, just 48% of advisors say that technology is “very valuable.”
    • Predictive analytics show promise: Predictive analytics tools, such as AI-driven technologies to predict client needs or identify at-risk clients, still have relatively low levels of adoption among advisors. However, when they are used, they have a powerful positive effect on advisor satisfaction. Just 9% of advisors currently use AI tools, for example, but advisor satisfaction with technology is 95 points higher (on a 1,000-point scale) when they use AI tools and find them valuable than when they rely only on basic planning tools.
    • Integration matters: As the number of advisor tools and technologies continues to expand, the importance of integration becomes more critical for usability. Currently, just 21% of advisors in both the employee and independent channels say their platform is “completely integrated” with features such as single sign-on, data-synching and workflow. Those platforms with complete integration score significantly higher on technology satisfaction vs. those that don’t have it (276-point increase among employees and 193-point increase among independents).

    Study Rankings

    Among employee advisors, Edward Jones ranks highest in overall satisfaction with a score of 920. Raymond James & Associates (867) ranks second and Ameriprise (743) ranks third.

    Among independent advisors, Commonwealth Financial ranks highest in overall satisfaction with a score of 942. Cambridge (866) ranks second and Raymond James Financial Services (850) ranks third.

    The U.S. Financial Advisor Satisfaction Study was redesigned for 2020. The study now measures satisfaction among both employee advisors (those who are employed by an investment services firm) and independent advisors (those who are affiliated with a broker-dealer but operate independently) based on six key factors (in alphabetical order): compensation; leadership and culture; operational support; products and marketing; professional development; and technology.

    The study is based on responses from 3,262 employee and independent financial advisors and was fielded from January through April 2020.

    For more information about the U.S. Financial Advisor Satisfaction Study, visit https://www.jdpower.com/business/resource/us-financial-advisor-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]

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

     

  • 2020 U.S. Retirement Plan Participant Satisfaction Study

    Retirement Plan Providers Failing to Deliver Needed Guidance Amid Heightened Volatility and Complexity, JD Power Finds

    2020-06-18

    jillian.breska

    TROY, Mich.: 18 June 2020 — There has never been a more challenging time to invest for retirement. A combination of unprecedented market volatility and complex new rules involving contributions, withdrawals and tax implications have exposed a need for increased guidance and advice on the part of retirement plan providers. Additionally, with record job losses in recent months, much of the money accumulated in these plans may potentially be lost if participants choose another provider for a rollover. According to the JD Power 2020 U.S. Retirement Plan Participant Satisfaction Study,SM released today, few providers are successfully addressing this growing need.

    “The COVID-19 pandemic struck the U.S. right in the middle of the fielding period for this study, and it is crystal clear in our data that, as market turmoil increased, investor sentiment and economic outlook declined sharply,” said Mike Foy, senior director of wealth management intelligence at JD Power. “This left many retirement plan participants searching for answers and guidance that was simply not provided by their provider. At this critical time, plan providers are largely failing to provide the guidance needed by participants to make smart decisions to help them prepare for retirement.”

    Following are some key findings of the 2020 study:

    • Retirement investors not receiving advice: Just 27% of retirement plan participants say they have accessed professional financial advice related to their plan, and 29% are either unaware of whether such advice is available or perceive that it is not available to them.
    • Low engagement with providers erodes satisfaction: Nearly one-fourth (22%) of retirement plan participants say they’ve had no interaction with their provider during the past 12 months. This is a problem for providers because frequency of interaction is directly correlated to participant satisfaction. Overall satisfaction scores increase 44 points (on a 1,000-point scale) when participants say they’ve had one to four interactions per year with their retirement plan provider. Satisfaction scores increase by 99 points when participants engage 21 or more times per year with their retirement plan provider.
    • Investor satisfaction linked to roll-in and rollover retention: Increased levels of unemployment and employment turnover will drive a surge in roll-in and rollover decisions during the coming weeks and months. Among participants who say they are “delighted” with their retirement plan provider, 51% say they “definitely will” retain assets in their current plan. That percentage falls to just 12% when participants who say they are “indifferent” with their plan and to 7% among those who are “dissatisfied.”
    • Personalized digital communication can help, but few plans delivering: Proactive, personalized digital communications can have a positive effect on participant satisfaction. For example, communication satisfaction scores are 70 points higher when participants receive a personal communication via their retirement plan provider’s mobile app than when they receive a traditional email. However, just 15% of retirement plan participants indicate having received this type of digital communication.

    “It’s impossible to overstate the financial implications for firms that get the participant satisfaction formula right during this make-or-break moment,” Foy added. “Historically, some plan providers have been focused only on the plan sponsor and, while that is changing somewhat, firms need to be laser focused on participants as well.”

    Study Rankings

    In the large plan segment, Bank of America and Charles Schwab rank highest in a tie, each with a score of 801. Principal Financial Group (789) ranks third.

    In the medium plan segment, Bank of America ranks highest with a score of 827. Charles Schwab (825) ranks second and OneAmerica (800) ranks third.

    In the small plan segment, Fidelity Investments ranks highest with a score of 797. AIG Retirement Services (787) ranks second and Nationwide (782) ranks third.

    The U.S. Retirement Plan Participant Satisfaction Study, now in its third year, evaluates participant satisfaction with providers of group retirement plans, such as 401(k)s, based on six factors: interaction across live and digital channels; investment and service offerings; fees and expenses; plan features; information resources; and communications. Plan providers are ranked in three categories based on their overall mix of business in terms of average plan size. The study is based on responses of 10,159 retirement plan participants and was fielded in February-March 2020.

    For more information about the U.S. Retirement Plan Participant Satisfaction Study, visit https://www.jdpower.com/business/resource/us-group-retirement-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]

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

     

  • 2020 U.S. Full-Service Investor Satisfaction Study

    Full-Service Wealth Management Firms Reached Record Levels of Customer Satisfaction Prior to Market Upheaval

    2020-04-22

    TROY, Mich.: 26 March 2020 — Full-service wealth management firms are entering the coronavirus-fueled market rout from a position of strength when it comes to their existing client relationships. According to the JD Power 2020 U.S. Full-Service Investor Satisfaction Study,SM released today, investor satisfaction with full-service firms has reached an all-time high, moving upward in lockstep with the performance of the S&P 500 Index during the past year. However, periods of extreme market volatility—like that of the past several weeks—have historically been a drag on investor satisfaction.

    “Wealth managers are seeing increasing client satisfaction scores, but they’ve also been helped by a strong stock market,” said Mike Foy, senior director of wealth intelligence at JD Power. “Obviously, the market performance side of the equation has changed significantly due to coronavirus. Our research shows that brands that have developed high-trust relationships with clients will not only be able to retain higher loyalty through more difficult times but will also be significantly less likely to see clients decrease investment as a result of disappointing performance.”

    Following are some of the key findings of the 2020 study:

    • Advisors head into market crisis riding wave of record high investor satisfaction: Overall investor satisfaction with full-service wealth management firms this year is 850 (on a 1,000-point scale), up 15 points from 2019 and the highest level ever recorded in the study’s 18-year history. The biggest single driver of the increase is satisfaction with investment performance.
       
    • Digital contact more important than ever: Financial advisor use of digital channels for client contact is directly correlated with increased investment. In fact, advisors who use frequent digital communications (four or more touch points) such as email/text/online/video are 50% more likely to see increased investment from clients vs. when no digital contact is initiated.
       
    • Trust is the great equalizer: High-trust brands enjoy higher satisfaction, loyalty and greater referrals from clients even when problems or difficult markets inevitably arrive. Key drivers of brand trust include taking responsibility for mistakes and resolving them effectively; providing useful guidance; fulfilling service expectations; and putting the interest of clients first.
       
    • ESG (environmental, social & governance) gets real: More than three-fourths (76%) of investors who rate their firm a 9 or 10 for commitment to social causes say they “definitely will” recommend their investment firm to friends and family. Among investors rating their firm at 6 or below for social causes, only 32% say they “definitely will” recommend their firm.
       
    • Millennial women choose female advisors: Millennial women are nearly 2.5 times more likely than older women to work with a female advisor than with a male advisor, suggesting such clients are seeking out female advisors to a degree that previous generations of women have not. Since only 15%-20% of all financial advisors are women, it underscores the importance of bringing more female advisor talent into the industry to meet this growing need. Firms that become known as organizations where females can thrive as advisors will have a big competitive advantage in the future.

    Study Rankings

    RBC (873) ranks highest in overall investor satisfaction, followed by Fidelity (865) and Edward Jones (860).

    The U.S. Full-Service Investor Satisfaction Study, now in its 18th year, measures overall investor satisfaction with full-service investment firms in eight factors (in order of importance): financial advisor; account information; investment performance; firm interaction; product offerings; commission and fees; information resources; and problem resolution.

    The study is based on responses from 4,532 investors who make some or all of their investment decisions with a financial advisor. The study was fielded from November 2019 through January 2020.

    For more information about the U.S. Full-Service Investor Satisfaction Study, visit https://www.jdpower.com/business/resource/us-full-service-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 U.S. Financial Advisor Satisfaction Study

    Technology, Social Media Critical to Bridging Financial Advisor Age Gap, JD Power Finds

    2019-07-08

    jdp-root

    COSTA MESA, Calif.: 9 July 2019 — The wealth management industry is facing a generational crisis. The average age of financial advisors is about 55, and approximately one-fifth of advisors are 65 or older. As these advisors move into retirement, tomorrow’s leading firms will be those that effectively attract, develop and retain new advisor talent.

    Advisors under the age of 40 account for only 11% of the financial advisor population, and the support they want to help them develop a successful practice looks very different from that of the previous generation. According to the JD Power 2019 U.S. Financial Advisor Satisfaction Study,SM released today, this first generation of financial advisor “digital natives” expects technology to play a more important role in that support, and they are much less satisfied than older advisors with the technology support they currently get from their brokerage firm.

    “The 9-to-5, office-based culture, with its coffee for closers and gong-ringing ceremonies to celebrate new sales is gone,” said Mike Foy, Senior Director of the Wealth and Lending Intelligence at JD Power. “In its place, the new generation of mobile financial advisors is interacting with clients and prospects via a range of digital channels including social media, text, chat and video. Wealth management firms that embrace these technologies and train and empower advisors to use them effectively will ultimately win the war for talent, but very few are delivering the solutions that younger advisors demand.

    “When it comes to technology, younger advisors score their firm low on reliability, relevance and responsiveness of support,“ Foy added. “This group has high expectations and firms will need to raise the bar to meet them going forward.”

    Following are some key findings of the 2019 study:

    • Mobile tools need work: About one-fourth (26%) of employee financial advisors under 40 either aren’t aware of or don’t use smartphone-friendly tools, and 49% don’t use tablet-friendly tools. Among those who don’t use firm-provided mobile tools, younger financial advisors are more than twice as likely to cite a lack of integration with other tools as a reason.
    • Social media drives business—but many advisors still can’t take advantage: Social media use by advisors continues to be a sticking point for the industry, with 42% of employee advisors under age 40 reporting that their firm does not allow them to use social media to communicate with clients or prospects, despite the fact that 64% of advisors in that age group who have used social media say that it has helped them strengthen client relationships and 47% say it has directly helped them win new business. 
    • High-functioning tech drives advisor loyalty and advocacy: Among employee advisors under 40 who are highly satisfied with their firm’s technology (900+ satisfaction score on a 1,000-point basis), 82% say they “definitely will” remain with their firm and 76% say they “definitely will” recommend their firm to other advisors.  Among those dissatisfied with technology (<800 satisfaction), just 33% say they “definitely will” remain and 29% “definitely will” recommend.

    Study Rankings

    Among employee advisors, Edward Jones ranks highest in overall satisfaction with a score of 926. Raymond James & Associates (864) ranks second and Stifel, Nicolaus & Company (848) ranks third.

    Among independent advisors, Commonwealth Financial ranks highest in overall satisfaction with a score of 960. Cambridge (873) ranks second and Raymond James Financial Services (869) ranks third.

    The study measures satisfaction among both employee advisors (those who are employed by an investment services firm) and independent advisors (those who are affiliated with a broker-dealer but operate independently) based on seven key factors (in alphabetical order): client support; compensation; firm leadership; operational support; problem resolution; professional development; and technology support.

    The study is based on responses from 3,571 employee and independent financial advisors and was fielded from January through May 2019.

    For more information about the U.S. Financial Advisor Satisfaction Study, visit https://www.jdpower.com/business/resource/us-financial-advisor-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, 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. Retirement Plan Participant Satisfaction Study

    JD Power Finds Crisis of Confidence among Investors Saving for Retirement

    2019-05-22

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    COSTA MESA, Calif.: 23 May 2019 — There is a crisis of confidence among U.S. retirement plan participants. According to the JD Power 2019 U.S. Retirement Plan Participant Satisfaction Study,SM released today, just 17% of plan participants say they feel “very confident” in their retirement preparedness. That number falls to 15% among Boomers1, who are currently entering retirement at a rate of roughly 10,000 per day2. To build that confidence, many retirement plan providers need to rethink their approach when it comes to both digital tools and human advisors.

    “Understanding the drivers of confidence is critical for retirement plan providers because it’s directly linked to roll-in and rollover decisions,” said Mike Foy, Senior Director of Wealth Management Intelligence at JD Power. “Put simply, when retirement plan participants feel confident about their retirement, they are much more likely to bring assets to their primary plan from other sources, and to keep those assets with the provider after leaving their current job. To build that confidence, providers need to deliver an effective combination of high-quality human interaction, useful online tools and thoughtfully designed digital self-service options.”

    Following are some key findings of the 2019 study:

    • Building confidence can pay off: Overall satisfaction with retirement plan providers is nearly 220 points higher (on a 1,000-point scale) when plan participants are “very confident” in a majority of the 11 areas related to retirement measured in the study vs. those who are “not confident at all” in at least one area. The percentage of participants who say they “definitely will” keep assets with their provider (either in the plan or a rollover) after leaving their job (46%) and have rolled in assets to their primary firm (47%) is highest when participants identify as “very confident” in a majority of areas.
       
    • More robust mobile engagement is critical: Most retirement plan participants use a combination of website, mobile and phone channels to interact with their plan providers, but when awareness and/or usage of mobile capabilities are limited, providers are missing an opportunity to both increase participant satisfaction and reduce dependency on more expensive service channels. Satisfaction increases dramatically among participants who actively use the mobile channel, not only for reviewing information but for transaction and communication.
       
    • Retirement plan providers must deliver a great digital experience but can’t ignore human interaction: Retirement plan participants have the highest levels of overall satisfaction (877) and confidence in a majority of areas (46%) when they are actively engaged with their retirement plan provider across multiple channels, including online retirement tools, digital self-service options and professional advisors.

    Study Rankings

    Charles Schwab ranks highest in group retirement plan satisfaction in the large plan segment, with a score of 821. Nationwide (811) ranks second and Bank of America (809) ranks third.

    In the medium plan segment, Bank of America ranks highest, with a score of 836. Fidelity Investments (814) ranks second and Nationwide (813) ranks third.

    In the small plan segment, Fidelity Investmentsranks highest, with a score of 790. Nationwide (789) ranks second and John Hancock Retirement Plan Services (745) ranks third.

    The U.S. Retirement Plan Participant Satisfaction Study, now in its second year, evaluates participant satisfaction with providers of group retirement plans, such as 401(k)s, based on six factors: interaction across live and digital channels; investment and service offerings; fees and expenses; plan features; information resources; and communications. Plan providers are ranked in three categories based on their overall mix of business in terms of average plan size. The study is based on responses of 8,332 retirement plan participants and was fielded in February-March 2019.

    For more information about the U.S. Retirement Plan Participant Satisfaction Study, visit https://www.jdpower.com/business/resource/us-group-retirement-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, 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

    1JD Power defines generational groups as Pre-Boomers (born before 1946); Boomers (1946-1964); Gen X (1965-1976); Gen Y (1977-1994); and Gen Z (1995-2004). Millennials (1982-1994) are a subset of Gen Y.

    2Source: Benefits Pro, Jan. 8, 2019, “The Baby Boomer Generation is Starting to Retire – And No One is Prepared,” https://www.benefitspro.com/2019/01/08/the-baby-boomer-generation-is-starting-to-retire-a/?slreturn=20190417135157

     

     

  • 2019 U.S. Self-Directed Investor Satisfaction Study

    Growing Ranks of Millennials Create Challenges for Self-Directed Investment Firms, JD Power Finds

    2019-04-03

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    COSTA MESA, Calif.: 4 April 2019 — While the full force of the great wealth transfer has not yet rained its bounty upon Millennials,1 the growing ranks of these younger self-directed investors will transform the customer experience that firms must deliver to build client loyalty and retain relationships over time. According to the JD Power 2019 U.S. Self-Directed Investor Satisfaction Study,SM released today, Millennial investors are currently notably less satisfied, less loyal and less trusting when it comes to their investment brokerages than are investors in older generational groups.

    “What separates Millennial investors from previous generations is not just greater mobile usage; they’re actually approaching investing in a fundamentally different way,” said Michael Foy, Senior Director of Wealth & Lending Intelligence at JD Power. “For example, they are much more oriented to setting and working toward investment goals, and much less likely to believe that they can outperform markets with individual stock picking. The customer experience that firms deliver needs to reflect this evolution in priorities to build loyalty with this critical segment.”

    Following are key findings of the 2019 study:

    • Millennials less satisfied, less loyal and less trusting: Millennials have significantly lower levels of overall satisfaction with their investment firm than do Boomers. Among DIY2 investors, 11.3% of Millennials either “probably will” or “definitely will” switch investment firms during the next 12 months, vs. just 6.3% of Boomers. In the Seeking Guidance3 segment, 22.1% of Millennials vs. just 6% of Boomers responded similarly. Millennials in both segments also provide lower ratings for brand trust as well as in likelihood to refer their firm to others.
       
    • Millennials more goal-oriented and embrace passive investing: Perhaps counterintuitively, Millennials are more likely to have investment goals than are Boomers (83% vs. 74%, respectively) and are more likely to embrace Exchange-Traded Funds and other passive instruments over individual stock selection. Even among DIYs, just 34% of Millennials vs. 50% of Boomers indicate they try to beat the market by making their own decisions on individual securities.
       
    • Millennials want advice and guidance: Millennials have a strong interest in financial guidance, including seeking advice via digital means. Among Seeking Guidance investors, more than half (61%) of Millennials indicate interest in digital advice vs. just 28% of Boomers. Even among DIY investors, 51% of Millennials express interest vs. 23% of Boomers.
       
    • Millennials more diverse and more educated: Across both segments, Millennial investors are significantly more likely to be female; more likely to have a college degree; less likely to be white; and less likely to be married. Firms’ ability to capture individual client circumstances and preferences to personalize the experience becomes more essential as clients become more diverse and expectations increase based on the personalization that they experience in other industries.

    The U.S. Self-Directed Investor Satisfaction Study, now in its 17th year, evaluates key satisfaction drivers and firm performance for both those seeking guidance (i.e., investors 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

    Fidelity (807) ranks highest in self-directed investor satisfaction among investors seeking guidance. Vanguard (806) ranks second and Charles Schwab (804) ranks third.

    Charles Schwab (805)ranks highest in self-directed investor satisfaction among DIY investors. Vanguard (800) ranks second and Merrill Edge (770) ranks third.

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

    The 2019 study is based on responses from 5,418 investors who make all their investment decisions without the counsel of a personal financial advisor. The study was fielded from November 2018 through January 2019.

    For more information about the 2019 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, 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

    1JD Power defines generational groups as Pre-Boomers (born before 1946); Boomers (1946-1964); Gen X (1965-1976); Gen Y (1977-1994); and Gen Z (1995-2004). Millennials (1982-1994) are a subset of Gen Y.

    2JD Power defines DIY investors as those who have no advisor interaction with the primary investment firm.

    3JD Power defines Seeking Guidance investors as those who do not have a personal advisor but who are able to access advice from a financial professional at their firm.

     

  • 2019 U.S. Full Service Investor Satisfaction Study

    Volatile Markets Strain Investor Satisfaction and Increase Flight Risk, JD Power Finds

    2019-03-13

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    COSTA MESA, Calif.: 14 March 2019 — Findings from the JD Power 2019 U.S. Full Service Investor Satisfaction StudySM provide compelling data about investors’ increasingly negative perceptions of their investment performance, which affects their future investment intentions and, ultimately, firms’ overall performance. The study was conducted in December 2018 when market volatility was at a four-year high and many investors were experiencing the worst returns since the financial crisis. Not surprisingly, investor satisfaction suffered, but amidst that struggle, important insights about what separates the best advisors in any market have emerged.

    “In recent years, investor satisfaction with full-service advisors and wealth management firms had been buoyed by the prolonged bull market, but with challenging markets returning investors are increasingly reexamining the value of their advisor relationships,” said Mike Foy, Senior Director of Wealth Intelligence at JD Power. “What we have found is that it’s not enough just to maintain frequent communication with clients; advisors also need to effectively explain and manage expectations around performance. It can be a difficult conversation when clients are losing money, but advisors who fail to have those hard conversations are putting at risk both their future growth opportunities, resulting in reduced client referrals and, in more extreme situations, losing their current clients either to other advisors or to alternative service models.”

    Following are some of the key findings of the 2019 study:

    • Increased investor flight risk: Among investors whose advisor explained their 2018 investment performance, more than half (53%) indicate they “definitely will” recommend their advisor vs. 24% among those who did not receive an explanation of their performance. Additionally, while only 10% of the former group “definitely will” or “probably will” consider switching firms over the next year, that percentage doubles to 20% among the latter group.
       
    • Performance declines affect high net worth satisfaction and loyalty: Since 2018, overall satisfaction with investment performance has declined 46 points (on a 1,000-point scale), but among high net worth investors (those with $1 million or more in investable assets), the decline is 66 points. Wealthier investors not only have more to lose when markets decline, but also this group tends to be older, so they have a shorter time horizon for when the assets are needed, which can amplify the perceived effect.
       
    • Boomers have increasing concerns about financial well-being: Three-fourths (75%) of Boomers and Pre-Boomers[1] indicate they are the same or worse off than last year, up from 58% in 2018. This change in sentiment can affect the bottom line, as the percentage of investors who “definitely will” recommend their primary firm drops from 64% among those who say they’re “better off” to 49% among those who say they’re “about the same” and 41% among those who say they’re “worse off.”
       
    • The missing digital link: Given the critical importance of effective communication across channels, it is vital that firms upgrade investors’ perceptions of their mobile capabilities. Mobile continues to be the channel with the lowest satisfaction among full-service investors across all generational segments, trailing both online/web and phone, and is especially low among Boomers (671) when compared with Gen X (787) and Millennials (853).   

    Study Rankings

    Edward Jones(853) ranks highest in overall investor satisfaction, followed by RBC Wealth Management(848) and Advisor Group(846).

    The U.S. Full Service Investor Satisfaction Study, now in its 17th year, measures overall investor satisfaction with full-service investment firms in eight factors (in order of importance): financial advisor; account information; investment performance; firm interaction; product offerings; commissions and fees; information resources; and problem resolution.

    The study is based on responses from 4,629 investors who make some or all of their investment decisions with a financial advisor, and was fielded from November 2018 through January 2019.

    For more information about the U.S. Full Service Investor Satisfaction Study, visit https://www.jdpower.com/business/resource/us-full-service-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, 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

    [1] JD Power defines the generational groups as Pre-Boomers (born before 1946); Boomers (1946-1964); Gen X (1965-1976); Gen Y (1977-1994); and Gen Z (1995-2004).