Broker-Dealers

J.D. Power: Satisfaction with investment firms up

Investor satisfaction with large investment firms continues to inch higher since plummeting in 2009, and the firms with…

Investor satisfaction with large investment firms continues to inch higher since plummeting in 2009, and the firms with the top scores have clients who are very happy with their financial advisers and investment performance, a new survey has found.

Average investor satisfaction rose 14 points to 789 in this year’s study, compared with last year’s, according to the 11th annual J.D. Power & Associates survey of the 15 largest full-service investment firms.

In 2009, the same satisfaction score, which is based on a 1,000-point scale, dropped 45 points to 731, from its 2008 score of 776.

The average has risen slowly since 2009.

Firms that scored above the industry average this year included RBC Wealth Management, Fidelity Investments, Edward Jones, Charles Schwab & Co. Inc., Raymond James Financial Inc., Wells Fargo Advisors and UBS Financial Services Inc. Those scoring below the industry average: LPL Financial LLC, Merrill Lynch Wealth Management, Ameriprise Financial Inc., Northwestern Mutual, Morgan Stanley Wealth Management, Chase Investment Services, Citigroup Inc. and Axa Advisors LLC.

Investors from the firms with lower scores said that they aren’t clear about the financial plans that their advisers have developed for them and aren’t sure about the value that they receive from the adviser and the firm, said Craig Martin, director of investment services at J.D. Power.

FEE TRANSPARENCY

Firms with the highest scores have clients who are very satisfied with their investment performance and with their individual advisers, he said.

These investors said that they will be bringing more money to the firm. Investors also said that transparency about portfolio performance and fees is essential.

“Firms that are able to create a better experience for investors and make it a collaborative relationship have more-satisfied investors,” Mr. Martin said.

The firms with the highest scores also contacted investors more than 12 times over the year, compared with six to eight times a year from the lower-scoring firms, the survey found.

In addition to receiving more contact, the most satisfied investors thought that they had a written financial plan that they understand, Mr. Martin said.

RBC returned to the top position this year, a spot that it also held in 2011, after falling last year to eighth.

RBC scored better this year on the ease of contacting advisers and the timeliness of responding to problems, Mr. Martin said.

While investment firm satisfaction numbers may be headed up, overall, the financial services industry remains the least trusted sector worldwide, surveys have shown.