After several years of focus on technology investments, investor satisfaction with digital offerings and engagement with digital channels has improvedsignificantly for the full-service wealth management industry.
In contrast, 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, according to J.D. Power’s 2022 U.S. Full-Service Investor Satisfaction Study.
The study found that just 14% of investors evaluated receive the level of comprehensive advice from their primary financial advisor as defined by the firm’s 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,” says Mike Foy, senior director of wealth intelligence at J.D. Power.
However, Foy adds that they don’t see similar progress being made with 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,” he notes.
Key findings of the 2022 study include:
- Low investor expectations: While slightly more than half (51%) of full-service investors strongly agree that their advisor provides them with comprehensive advice that addresses all their wealth management needs, only about a quarter (26%) of that group experience a level of comprehensive advice as defined by J.D. 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—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. Baby Boomers 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, the study notes.
Study Rankings
According to the study’s findings, UBS ranks highest in overall investor satisfaction with a score of 777, followed by Vanguard (759), which jumped from the 11th spot from last year’s study. Charles Schwab (753) and Northwestern Mutual (753) rank third in a tie. Morgan Stanley (752) and Stifel (752) also tied for fourth. They were followed by Fidelity (748), Merrill (747), Ameriprise (746) and Edward Jones (746). The industry average was 744.
Now in its 20th year, the study 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, which was fielded from November 2021 through January 2022, is based on responses from 4,396 investors who work directly with a dedicated financial advisor or team of advisors.
