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Clients Using Apps to Reach Advisors Happier Than Other Investors: J.D. Power

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Wealth management mobile app use has come on strong during the coronavirus pandemic, but customers are less satisfied with these apps than they are with ones provided by other financial institutions, according to a study released Tuesday by J.D. Power.

At the same time, advisor contact via apps is low across the industry, J.D. Power said, noting that only 35% of profiled wealth apps offer chat functionality and just 41% support secure messaging, two features frequently requested by users.

Yet advisor interaction with clients via apps drives higher investor satisfaction, according to the study. Overall satisfaction among full-service investors who interact with their advisors via the wealth management firm’s mobile app is 40 points higher than among those who do not.

“No industry is immune to the consumer shift toward mobile apps, as usage continues to increase across the board,” Amit Aggarwal, senior director of digital solutions at J.D. Power, said in the statement.

Apps are increasingly becoming wealth management firms’ front door, Aggarwal explained: “Accordingly, they need to spend the time making sure that this channel is addressing customer needs, easy to navigate and seamlessly integrated into all facets of their business.”

The study’s results are based on a survey fielded in July and August among 2,724 full-service and self-directed wealth management firm clients.

More App Usage

According to survey responses, 33% of both advised investors and do-it-yourselfers have used their wealth management firm’s mobile app more frequently during the pandemic.

Among respondents with advisors, 36% say their usage has increased, compared with 17% DIY investors. Forty-five percent of millennial investors and 30% of Gen Xers state they have used wealth apps more frequently this year.

At the same time, investors’ overall satisfaction score for wealth apps is 849 on a 1,000-point scale, lower than the overall satisfaction score for apps used in other segments of the financial services industry — for instance, 865 for credit card apps, 864 for insurance and 852 for banking.

Chase rankd highest in overall customer satisfaction with wealth management apps, scoring 877. Wells Fargo ranks second with a score of 869, and E-Trade and U.S. Bank tie for third with 858.

“This is such a critical moment in the digital transformation of wealth management, and firms have a tremendous opportunity to leverage their mobile apps as a powerful communications conduit between investors and advisors,” J.D. Power’s senior director of wealth and lending intelligence Michael Foy said in a statement.

Still, most wealth management apps are missing the mark, Foy said. Thirty-one percent of investors surveyed reported that during May and June, when the pandemic was surging, they had no recent advisor contact.

Among those who had communicated with advisors, just 2% said this was via mobile app or secure messaging.

“Advisors and their firms need to recognize that the mobile app is not a threat to the advisor’s value — it is an opportunity to increase engagement by meeting investors where they are,” Foy said.

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