RBC Wealth Management led all US full-service investment firms in customer satisfaction with an Investment Satisfaction Index ranking of 814 on a 1,000-point scale in 2011, according to a study fielded by J.D. Power & Associates in March 2011. This score significantly beat the industry average of 772.
RBC Performs Well in Providing Info
RBC Wealth Management performs particularly well in investment advisor and account information. Charles Schwab & Co. follows with a score of 805, performing particularly well in account offerings and website. Fidelity Investments ranks third with a score of 796. The study measures overall investor satisfaction with full service investment firms in seven factors (in order of importance): investment advisor; investment performance; account information; account offerings; commissions and fees; website; and problem resolution.
Investors Communicate Online
The study finds that usage of online communication channels has increased compared with previous years. For example, 59% of full service investors have visited their firm’s website in the past 12 months, up 13% from 52% in 2009. And 51% of full service investors have exchanged an email with their advisor in 2011, a figure 2.7 times greater than 19% in 2008.
Oldest Investors Visit Firm Site Most
In addition, among investors who visit their firm’s website, those older than 64 years average more than 35 visits to their firm’s website per year. In comparison, investors younger than 45 years average 12 visits per year and investors between the ages of 45 and 64 average 23 visits per year. Reviewing documents posted by an advisor and reviewing tax information are among the most common tasks performed by investors visiting their firm’s website.
Most Investors Don’t Know Difference between Suitability, Fiduciary Standards
The study finds that 85% of full service investors either have not heard of or do not understand the difference between a suitability standard (where advisors are required to make investments they deem suitable for their clients) and a fiduciary standard (where advisors are required to act in the best interests of their clients and disclose all conflicts of interest).
Among those full service investors who are currently in a fiduciary relationship, 57% state that this increases their comfort level with their advisor, while 42% state that it decreases their comfort level.
Clear Communication Key Best Practice
J.D. Power identifies the following key best practices of client service (in order of importance):
- Clearly communicating reasons for investment performance.
- Clearly explaining how fees are charged.
- Proactive advisor contact regarding new products and services or accounts four times in the past 12 months.
- Returning client calls/inquiries within the same business day.
- Reviewing or developing a strategic plan within the past 12 months.
- Providing a written financial plan.
- Discussing risk tolerance changes and incorporating into plan where appropriate in the past 12 months.
Gallup: Future Retirees Look to Investments
Investors who have yet to retire look to retirement accounts, such as 401(k), IRA, and Keogh accounts (74%), and stocks or stock market mutual fund investments (40%) as major funding sources when they retire, according to the March 2011 Wells Fargo/Gallup Investor and Retirement Optimism Index survey. Social Security ranks sixth at 28%.
About the Data: The 2011 US Full Service Investor Satisfaction Study is based on responses from more than 4,200 investors who make some or all of their investment decisions with an investment advisor. The study, published by J.D. Power & Associates, was fielded in March 2011 and is the source of the enclosed chart.