UBS jumped from a tie for third last year up to the top spot in the just-released U.S. Full-Service Investor Satisfaction Study from J.D. Power.
UBS ranks highest in the study among large wealth management firms with an overall investor satisfaction score of 777 on a 1,000-point scale. Vanguard, ranked 11th last year, moved all the way up to second (759), while Charles Schwab (10th last year) and Northwestern Mutual (12th last year) now tie for third with a score of 753.
Morgan Stanley and Stifel tied for fifth (752) in the 2022 rankings while Fidelity (748), Merrill (747) and Ameriprise finished seventh through ninth. Rounding out the top 10 was Edward Jones (746), which fell all the way from the top spot in last year’s rankings when it had a score of 770.
Notably, the industry average score was 744, as seen in the chart shown below. The U.S. Full-Service Investor Satisfaction Study, now in its 20th year, 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.
To lead it to the overall No. 1 ranking, UBS also ranked first in the categories of trust, people, products and services, ability to manage wealth how and when I want, and problem resolution. UBS calls itself “the largest truly global wealth manager,” and a leading personal and corporate bank in Switzerland. UBS provides financial advice and solutions to wealthy, institutional and corporate clients worldwide.
The J.D. Power study is based on responses from 4,396 investors who work directly with a dedicated financial advisor or team of advisors. It was fielded from November 2021 through January 2022.
Industry loses focus on comprehensive advice
Despite several years of increasing focus on technology investments, J.D. Power’s study found the wealth management industry continues to make little or no progress on its core value proposition: delivering comprehensive advice based on a deep understanding of individual clients.
Just 14% of investors evaluated in the study receive the level of comprehensive advice from their primary financial advisor as defined by J.D. Power criteria, which include making recommendations in a client’s best interest; understanding their goals and needs; and having 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,” said Mike Foy, senior director of wealth intelligence at J.D. Power. “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. However, advisors who aren’t consistently providing comprehensive advice may not be experiencing high attrition, in part because many clients simply don’t 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.”
Key findings
Following are some key findings of the 2022 study:
- Low investor expectations: Although 51% of full-service investors strongly agree that their advisor provides them with comprehensive advice that addresses all their wealth management needs, just 26% of that group experience a level of comprehensive advice as defined by J.D. Power criteria.
- Assessing the effect of comprehensive advice: Among the minority of full-service investors who are receiving comprehensive advice from their advisors, 76% say they “definitely will not” switch investment firms in the next year. Among the same group, the Net Promoter Score—which measures client advocacy and predicts business growth—is 93.
- Digital engagement improves: Investor satisfaction with digital channels sees the largest year-over-year improvement of any single factor in the study, rising 26 points (on a 1,000-point scale). Nearly two-thirds (63%) of clients use their wealth management firm’s website at least once a month and 40% use the mobile app each month.
- Blending digital and human interactions is optimal for young and old: Among all age groups, satisfaction is highest when investors experience a mix of live human and digital interaction. Boomers show a clear preference for advice and planning that is handled by a live person, while Millennials prefer digital channels overall, but show greater overall engagement and satisfaction when both live and digital channels are used.
SEE ALSO:
• Top 10 Full-Service Investment Firms: J.D. Power Rankings
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
