Best & Worst Firms for Self-Directed Investors: J.D. Power, 2023

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Among self-directed investors — including those who fully manage their own portfolios and those who receive some guidance from a financial professional — just 22% understand how technology manages their investments, the J.D. Power 2023 U.S. Self-Directed Investor Satisfaction Study finds.

This gap “could pose challenges for firms trying to establish longer-term relationships with younger, do-it-yourself investors,” according to the firm, which released its latest survey results early Thursday.

“With most trading fees now eliminated and the core capabilities most consumers need being universally available, brokerage firms are challenged to demonstrate a value proposition that stands out from the crowd,” said Craig Martin, executive managing director and head of wealth and lending intelligence at J.D. Power, in a statement.

“Digital, or robo-advice, presents an ideal platform to provide value-added services that can help grow and develop higher value relationships over time,” Martin said. “But firms need to do a better job explaining how that digital advice works and articulating a clear value proposition for investors … [so they can] understand the value of the service they are receiving.”

Other key findings of the 2023 J.D. Power study are:

Nearly 80% of millennials and over 85% of Gen Z investors are open to digital advice. These figures have increased 5 percentage points and 3 percentage points, respectively, over the past three years as market conditions have become more volatile.
Human support is vital, especially for onboarding, answering  technical questions, resolving problems and providing greater transparency and trust in digital advice.

J.D. Power’s Self-Directed Investor Satisfaction Study, now in its 21st year, measures investor satisfaction using seven factors: trust, digital channels, the ability to manage wealth “how and when I want,” products and services, value for fees, people and problem resolution.

This year’s poll is based on responses from 5,165 investors who make their investment decisions without help from a full-service financial advisor dedicated to managing their portfolio. It was fielded from October 2022 through January 2023.

(Image: peshkov/Adobe Stock)

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