According to the study, investors are more satisfied when they have a clear understanding of the costs and fees charged by their investment firm. Satisfaction averages 821 among investors who receive an explanation of their fee structure and report they completely understand it. In contrast, satisfaction averages only 682 among investors who received no explanation of their fee structure.
A new J.D. Power and Associates study reveals that, in spite of the current financial crisis, trading activity among self-directed investors has increased. Further, as this activity increases, access to investment information and financial tools is becoming increasingly important to investor satisfaction.
“While self-directed investors make trading decisions on their own, they still rely on their investment firm to provide information and tools that assist them in making those decisions,” said David Lo, director of investment services at J.D. Power and Associates. “Price and trade execution are no longer strong differentiators among firms, as various institutions offer essentially free trades and investors have come to expect flawless trade execution. Providing compelling investment tools and information, as well as a superior interaction experience, is the best opportunity for firms to set themselves apart.”
The 2009 Self-Directed Investor Satisfaction Study finds that overall satisfaction increases as self-directed investors use additional resources and tools provided by their investment firm, such as financial planning services, online stock tools and educational seminars or webcasts. Satisfaction averages 761 on a 1,000-point scale among investors who use just one resource, compared with 699 among investors who don’t use any available resources. Satisfaction continues to increase as investors use additional resources, and averages 836 among those investors who use all three types of resources offered by their firm.
The 2009 Self-Directed Investor Satisfaction Study measures customer satisfaction with investment firms based on performance in six factors:
“There’s a great deal of distrust among consumers as a result of the financial collapse, so they’re seeking transparency from their firms more than ever before,” said Lo. “As firms across the financial services industry impose fees as a means to drive revenue, it’s absolutely critical to be upfront and clearly communicate these fees to lessen the negative impact on satisfaction. In turn, higher levels of satisfaction can lead to improved loyalty and advocacy rates.”
2009 Self-Directed Investor Satisfaction Study
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