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Investors More Satisfied With Advisors, But Skeptical of Firms


Edward Jones and RBC Wealth Management are tops in investor satisfaction, according to the latest J.D. Power and Associates survey. Overall, investors were more satisfied with their investment advisors, but increasingly feel like investment firms are more interested in profits than customer service.

Investors are far more satisfied with their full-service investment firms this year than they were a year ago, according to the latest survey by J.D. Power and Associates. Increasingly, however, investors feel like investment companies are more interested in profits than customer service.

The J.D. Power and Associates 2010 U.S. Full Service Investor Satisfaction Study measures investor satisfaction based on seven factors: investment advisor; investment performance; account information; account offerings; commissions and fees; company website; and problem resolution.

Overall investor satisfaction averaged 769 on a 1,000-point scale this year, up sharply from an average of 731 a year ago. An improved relationship with their financial advisors and better investment performance helped to boost satisfaction levels, the study found. But that generally positive perception didn’t necessarily carry over to the investment firms. Investors who were asked to measure whether investment companies were more customer-driven or profit-driven indicated investment firms cared more about their own bottom lines.

"During the past year, most investors have enjoyed positive short-term gains in their portfolio as a result of the market recovery, but this has not translated into an improvement in investor sentiment toward their firm," said David Lo, director of investment services at J.D. Power and Associates, in a statement.

Who ranked highest in customer satisfaction? Edward Jones was awarded that titled for a second year running with a score of 794, getting high marks for satisfaction with its advisors and investment performance. RBC Wealth Management came in a very close second (793), with high scores for advisor and account information. LPL Financial came in third (791).

Here’s how other firms fared: Charles Schwab & Co. Inc. (786); Raymond James (778); Ameriprise Financial (776); Fidelity Investments, UBS Financial Services and Wells Fargo Advisors/Wachovia Securities (tied at 759); Morgan Stanley Smith Barney (753); Merrill Lynch/Banc of America Investment Services (747); and Chase Investment Services/WaMu Investments (739).

According to the study, Citigroup and Oppenheimer Funds weren’t ranked due to a small sample size. In all, the study, conducted in May 2010, surveyed 4,460 investors who make some or all of their investment decisions with an investment advisor.

To improve overall satisfaction, J.D. Power recommends investors set the following expectations of their investment firms and advisors and ensure those expectations are being met:

• Clear communication regarding reasons for investment performance;

• Development of a documented investment strategy, reflecting investment objectives and risk tolerances;

• Annual review of the investment strategy and revisiting objectives and risk tolerances;

• Clear explanation of fees and commissions;

• Regular contact regarding new product or service offerings;

• Account statements that include a competitive benchmark comparison.

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