Banking, finance, and taxes

Chase Ranked Last in Investor Satisfaction Study

Paul Ausick

Published: May 19, 2016 10:40 am

Last Updated: January 13, 2020 7:50 am

Just as demand for full-service investment advisory firms has been growing, so to has demand for self-directed advisors. More interesting, perhaps, is the fact that the advisory firms are developing a hybrid model in which both types of firms are offering a middle-ground between the traditional full-service firms and self-directed validation or collaboration advisors.

According to a ranking of customer satisfaction with self-directed advisory firms published Thursday by J.D. Power, the company ranked at the bottom of its satisfaction index is Chase Investment Services, a branch of JPMorgan Chase & Co. (NYSE: JPM), with an index score of 740 out of a possible 1,000.

The J.D. Power 2016 U.S. Self-Directed Investor Study ranks privately held Scottrade and Charles Schwab Corp. (NYSE: SCHW) at the top of the list. with scores of 811 and 808, respectively.

Mike Foy, director of the wealth management practice at J.D. Power, said:

The convergence of self-directed and full service models produces both significant opportunities and threats to established firms in this space. A perfect storm of new technology, such as robo-advisors; new regulations, such as the Department of Labor’s (DOL) Fiduciary Standard; and demographic changes, such as the rise of the Millennial generation, is dramatically changing the value proposition traditional firms provide.

Self-directed firms are often focused on highly active traders who are critical because their transactions generate significant revenue, but these firms all have a large segment of less active clients who are looking for guidance and may currently lack the wealth or desire for a full service advisor. Technology makes it possible for self-directed firms to meet the needs of these clients and retain them as their wealth grows.

Among the notable results of the study:

• Investors crave a hybrid investment model.
• Millennials are helping fuel the rise of robots.
• Fiduciary standards rule is creating opportunity for investment firms.
• An onboarding process presents a critical “moment of truth.”
• Mobile usage drives satisfaction and increased trading.

The industry average index score was 775, with Vanguard (798), Fidelity Investments (796), E*Trade Financial (795), TD Ameritrade (793) and T. Rowe Price (791) all scoring above the average.

Firms scoring below the average included Capital One Investing (773), Merrill Edge (771), U.S. Bank (756), WellsTrade (752) and Chase.

USAA, which is open only to U.S. military personnel, retirees and their families, posted an index score of 800, putting it among the top tier of advisory firms.