USAA Tops with Self-Directed Investors

July 1, 2011

This article is included in these additional categories:

Analytics, Automated & MarTech | Brand Metrics | Data-driven | Financial Services | Uncategorized

jdpower-investor-july-2011.JPGUSAA ranks highest in self-directed investor satisfaction with a score of 831 out of 1,000 and performs particularly well in account offerings, information resources, account information and interaction, according to the J.D. Power and Associates 2011 US Self-Directed Investor Satisfaction Study. Scottrade follows in the rankings with a score of 804, performing particularly well in trading charges and fees.

Charles Schwab & Co. closely follows Scottrade with a score of 803. The industry average is 764. The study measures customer satisfaction with investment firms based on performance in six factors: interaction; account information; trading charges and fees; account offerings; information resources; and problem resolution.

Lack of Info Drives Down Fee Satisfaction

The study finds that satisfaction with trading charges and fees averages 703 on a 1,000-point scale in 2011, a decrease of 30 points from 733 in 2010. This decline is largely driven by a lack of understanding of trading charges and fees; just 36% of investors say they “completely” understand their commission and fee structure, a 31% decline from 52% in 2010. Similarly, 48% of investors say they have had their non-trading charges explained to them, 26% less than 65% in 2010.

Financial Planning Tools Boost Satisfaction

The study also finds that self-directed firms may differentiate themselves by delivering value to investors through the account offerings and information resources provided. For instance, 71% of investors say that they are not aware of or do not use at least one financial planning tool. When this key practice is missing, overall satisfaction declines by 66 points, on average.

“There are opportunities for firms to deepen their relationship with self-directed investors by ensuring they’re aware of the value the firm adds through the tools and resources provided,” said David Lo, director of investment services at J.D. Power and Associates. “In fact, even among self-directed investors with similarly high levels of satisfaction, investors who are aware of and use at least one of their firm’s tracking and monitoring or financial planning tools are more likely to recommend their firm, compared with those who aren’t aware of or don’t use the tools.”

RBC Wealth Management Impresses Full-Service Investors

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 another study fielded by J.D. Power & Associates in March 2011. This score significantly beat the industry average of 772.

About the Data: The 2011 US Self-Directed Investor Satisfaction Study is based on responses from 4,274 investors who make all of their investment decisions without the counsel of an investment advisor. The study was fielded by J.D. Power and Associates in March 2011 and is the source of the enclosed chart.

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