Clients most satisfied at Ameriprise, Ed Jones, Merrill: Report

Consumer research firm Hearts & Wallets surveyed 5,900 people and found that most have no idea how they pay for financial services.

Ameriprise, Edward Jones and Merrill Lynch are the financial services firms that ranked highest in customer satisfaction, according to a report Thursday that reflects responses from nearly 6,000 U.S. investors.

Consumer research firm Hearts & Wallets asked people about how happy they were with various aspects of service and pricing at a wide range of financial services companies, including brokerages, banks, retirement plan providers and mutual fund firms. The report is based on a survey conducted last summer.

Respondents were asked to identify the companies that were their top three among places where they have assets. They rated those firms based on their wants, or what was most important to them in a financial services company, according to Hearts & Wallets. Those criteria included whether a company appeared to act in a customer’s best interest, the strength of its investment abilities and whether it had made the client money.

In addition to Ameriprise, Edward Jones, Merrill, the top-ranked providers for “unbiased” service were State Farm and USAA, according to the report. The other firm, aside from Ameriprise, Ed Jones and Merrill, that was ranked highly for having made clients money was T. Rowe Price.

That State Farm has made inroads in financial services beyond insurance shows that the space can be disrupted, said Laura Varas, CEO of Hearts & Wallets.

“Competitors can come out of left field at any point,” Varas said. “I expect that Walmart is going to make it onto this chart at some point.”

The research firm also asked people whether they knew how and what they pay for services, but the results weren’t good. Most people indicated they had little idea about how financial services firms make money, even though that factor is one of the top reasons for a client to say they trust a company, according to Hearts & Wallets. Twenty-nine percent of people said they thought they paid nothing for services — and in some cases that was true, although respondents did not necessarily understand that financial services firms made money from their accounts in ways other than direct fees.

“The big, shocking statistic is that three-quarters of customer relations are unclear about pricing,” Varas said.

Forty-four percent of clients were unsure about whether they paid providers through products, services or some combination. “This is higher among groups who are less welcome, more alienated, in the investing world,” including women, millennials, inexperienced investors and those with low levels of assets, Varas said.

Having fees be understandable and reasonable was the top concern among all groups of respondents, except for those with asset levels between $500,000 and $2 million. For that group, receiving unbiased service was most important, according to the report.

Over the past year, people placed more importance on access and communication at financial services firms, likely as a response to the pandemic, Varas said. Customers wanted better online account access, tools and mobile apps, according to the report. TD Bank and USAA received the highest scores for mobile apps.

People also gave more weight to their perceptions of companies’ competence and credibility.

Despite the importance that people said they placed on unbiased service, some companies that are not required to act in a fiduciary capacity still ranked highly in that category, Varas said. That is akin to working with a real estate agent who is representing a seller — they don’t necessarily act in the buyer’s best interest, but they also don’t have to sell a money pit, she said.

Being a fiduciary “is good — it’s just not a necessary condition,” Varas said.