Some good news and some bad news can be found in J.D. Power’s 2022 U.S. Full-Service Investor Satisfaction Study, released Thursday.
The full-service wealth management industry has significantly improved in investor satisfaction with digital offerings and engagement in digital channels after several years of focus on technology investments, according to the study.
The industry continues to seriously lag, however, on delivering comprehensive advice based on a deep understanding of individual clients’ needs.
Only 14% of investors evaluated in the study said they receive such advice from their primary financial advisor, which J.D. Power says includes making recommendations in a client’s best interest, understanding clients’ goals and needs and generating a documented financial plan.
“Firms have rightly increased their investment in client-facing technology in recent years, and we see that beginning to pay off in terms of higher engagement and satisfaction with digital channels,” Mike Foy, senior director of wealth intelligence at J.D. Power, said in a statement.
“However, we don’t see similar progress being made with truly delivering on comprehensive advice. Very few investors — even those with high net worth — are getting an optimum level of value from their advisors.”
That does not mean that advisors who do not consistently provide comprehensive advice are experiencing high attrition, Foy said, in part because many clients do not know what comprehensive advice looks like.
“But those advisors who do deliver it receive significantly more referrals and are far better positioned to continue to grow their practices.”
The J.D. Power study measures overall investor satisfaction with full-service investment firms in seven factors (in order of importance): trust, people, products and services, value for fees, ability to manage wealth how and when I want, problem resolution and digital channels.
The new study was fielded from November through January among 4,396 investors who work directly with a dedicated financial advisor or team of advisors.
According to the study, 51% of full-service investors said their advisor provides comprehensive advice that addresses all their wealth management needs. But investors have low expectations, as only 26% of that group experience a level of comprehensive advice as defined by J.D. Power criteria.
Among the minority of full-service investors whose advisors are providing comprehensive advice, 76% said they “definitely will not” switch investment firms in the next year.
Investor satisfaction with digital channels showed the biggest year-over-year improvement of any single factor in the study, rising 26 points (on a 1,000-point scale).
Sixty-three percent of survey participants reported that they use their wealth management firm’s website at least once a month, and 40% use the mobile app each month.
Among all age groups, investors expressed the highest satisfaction when they experience a mix of live human and digital interaction.
Baby boomers showed a clear preference for advice and planning that is handled by a live person. Millennials prefer digital channels, but reported greater overall engagement and satisfaction when exposed to both live and digital channels.
See the gallery for the wealth management firms that ranked above and below the industry average for overall customer satisfaction.