While financial services firms increasingly focus on the needs of high-net-worth individuals, those in the mass affluent channel are still looking for professional help, and some financial services companies are getting kudos from do-it-yourself and otherwise self-directed investors for responsiveness to their needs.
According to marketing information company J.D. Power, Vanguard ranks highest in customer satisfaction among both self-directed and do-it-yourself investors, according to Power’s “2018 U.S. Self-Directed Investor Satisfaction Study.”
Self-directed investors (those with no primary advisor who have at least some contact with an advisor) gave Vanguard a score of 830 out of 1,000 points, while E*Trade scored 817 and Charles Schwab scored 812. Meanwhile, investors gave Vanguard a score of 802, while giving Schwab 800 and Chase Bank 783.
Mike Foy, the senior director of J.D. Power’s Wealth Management Practice, said in a statement that financial services firms often use call centers when dealing with mass affluent investors. Customer happiness with companies usually depends on how proactive a firm is. The call centers often offer “infrequent, reactive communication that fails to address an investor’s personal needs and goals,” Foy said.
“While firms cannot expect to deliver the level of personalized attention investors would receive from a higher-cost dedicated financial advisor, they can close the gap between the two, in part by effectively using technology to empower more frequent and meaningful human interaction,” Foy said.
Satisfaction among investors seeking guidance, who received no contact from an advisor, rated their satisfaction as a 758 on the 1,000 point scale. When an advisor made a reactive customer contact, the satisfaction rate jumped to 810. But the largest increase in satisfaction came when an advisor initiated contact with a customer proactively, which won the advisor a score of 850.
Investors that had only investment-focused discussions with an advisor, covering such topics as performance, asset allocation and market trends, rated their customer satisfaction at 799 out of 1,000 points. The study noted that investors whose discussions included multiple client topics, such as their personal needs, goals and life changes, scored an 878 in their satisfaction.
The study also looked at customers’ use of mobile technology to access their financial information. While mobile usage is growing, it’s not being fully used. Mobile earns less customer approval than online tools, however. DIY clients interacting with investment firms through mobile technology gave it a score 51 points lower than their satisfaction with online tools and advice-seeking investors gave it a score 45 points lower.
Mobile usage is popular among millennials, with 70 percent of all those self-directed investors using mobile for their investment activity.
The 2018 study was conducted in December 2017 and is based on responses from 5,504 investors who made investment decisions without consulting a personal financial advisor.