While Robinhood led in new accounts, it struggled to build trust, J.D. Power noted. “Robinhood, the easy-to-use, mobile-friendly online brokerage that found itself at the center of the GameStop stock frenzy in January and February of this year, claimed 27% of all new do-it-yourself account openings, more than any other firm in this year’s study. While its market share has grown, its strength in digital channels and value for fees was offset by poor performance on trust, people and problem resolution,” according to the report.
“With virtually every firm now offering free trading and new investors showing lower levels of brand loyalty, firms that get the customer satisfaction formula right have a chance to set themselves apart from the competition,” Foy added.
Firms that meet clients’ holistic financial needs get the best ratings. “Overall customer satisfaction is highest when investors use four or more products with a wealth management firm, which can include services such as investment accounts, banking relationships and mortgages,” J.D. Power said.
Among do-it-yourself investors, satisfaction scores are 103 points higher when investors use four or more products than when they use just one. Among investors seeking guidance, that customer satisfaction differential is 76 points. Besides increasing satisfaction, deepening the client relationship is more critical than ever for firms needing to generate revenue in a free-trading environment.
Investor education remains a top influencer of customer satisfaction, but brokerages are not delivering, J.D. Power said. “Overall customer satisfaction scores are 148 points higher (on a 1,000-point scale) among do-it-yourself investors and 155 points higher among those seeking guidance when they strongly agree that their brokerage firm provides useful guidance or advice. Despite this significant boost to customer satisfaction, fewer than half of self-directed investors say their firm provides useful guidance or advice,” according to the firm.
Frequent glitches in what should be seamless customer experiences sap customer satisfaction, the company found. Both overall customer loyalty and customer advocacy have increased significantly among investors who do not experience problems such as those reported most frequently: websites, processing and/or trade execution and account statements, the survey found.