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Full-Service Wealth Management Firms Reached Record Levels of Customer Satisfaction Prior to Market Upheaval, J.D. Power Finds

[March 26, 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 J.D. 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.

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J.D. Power 2020 U.S. Full-Service Investor Satisfaction Study (Graphic: Business Wire)

“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 J.D. 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 8-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.

To view the online press release, please visit http://www.jdpower.com/pr-id/2020028.

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20200326005004/en/

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