Best Full-Service Wealth Management Firms Ranked by Investors — J.D. Power, 2023
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Last year, the S&P 500 finished down nearly 20%. Unfortunately for firms in the wealth management industry, investor ratings of the services they provided in 2022 also fell. In fact, they were down 17 points (on a 1,000-point scale) from 2021, according to the J.D. Power 2023 U.S. Full-Service Investor Satisfaction Study — released Tuesday.
“Advisor satisfaction continues to track overall market performance, and this points to a systemic problem in our industry: advisor value propositions grounded in investment performance,” according to Tom Rieman, head of wealth solutions at J.D. Power.
“Advisors cannot control the ebbs and flows of the market, but the good ones help their clients plan for their best futures and deliver value in the form of comprehensive advice that should shine through in all market conditions,” Rieman explained.
Here are some of the other key findings of J.D. Power’s 2023 study:
The fact that investors’ satisfaction with advisors tracks market performance shows that advisors need to do more when it comes to “delivering on their core value proposition.”
Just 11% of advisors deliver the comprehensive advice clients want vs. 42% providing transactional advice (42%) and 47% giving goals-based advice; comprehensive advice includes personalized guidance to address all financial and wealth management needs; demonstrates an intimate understanding of lifestyles and goals; puts clients’ best interests first; has a financial plan; ensures fees are understood; and is integral to clients’ lives.
Most full-service wealth management clients, 57%, say they have a financial plan; however, only 56% of these clients state that they receive comprehensive advice; also, 32% of these clients feel their advisors do not makes recommendations that their best interests; and 29% do not feel their advisor understands their financial goals and needs.
When it comes to millennial and Gen Z clients, 27% say they “definitely will” or “probably will” switch firms, and 49% are working with a secondary investment firm.
The U.S. Full-Service Investor Satisfaction Study, now in its 21st year, looks at client satisfaction with full-service investment firms in terms of: trust, people, products and services, value for fees, the ability to manage wealth “how and when I want,” problem resolution, and digital channels.
The research is based on responses from nearly 6,170 investors who work directly with a dedicated financial advisor or team of advisors. Investors were polled from October 2022 through January 2023.
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