Investing

Merrill Lynch and Wells Fargo Last Again in Broker Survey

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The lowest-ranked investment firms in the latest survey of self-directed investors are the same firms that were the lowest ranked a year ago. Merrill Edge from Bank of America Corp.’s (NYSE: BAC) Merrill Lynch group and Wells Trade, the online brokerage service of Wells Fargo & Co. (NYSE: WFC), which scored 743 and 742, respectively, were the low scorers again this year. In 2014 Wells Trade scored 726 and Merrill Edge scored 722.

J.D. Power fielded its 14th Self-Directed Investor Satisfaction Study in January and February of this year and released the results Thursday morning. The survey included more than 3,700 investors who make all their personal investment decisions without the counsel of a personal investment adviser. The average index score of the 10 firms included in the study was 763 out of a possible total of 1,000 points, and the average score was flat with the 2014 total.

While almost two-thirds of self-directed investors are happy with broker accounts that include just low-cost trades, fast and reliable trade execution, and access to market research, more than a third of investors are also looking for guidance from their brokers. Companies that provide that guidance get higher satisfaction scores from self-directed investors, according to a recent survey of investors.

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The top scoring firm this year is Charles Schwab & Co. Inc. (NYSE: SCHW) with a score of 801 out of 1,000 possible points. Schwab displaced Scottrade, which led the ranking last year with a score of 813 but dropped to fifth place in 2015 with a score of 783.

Vanguard ranked second again this year with a score of 794 (last year’s score was 805). Other brokerages that scored above the average were Fidelity Investments (791), T. Rowe Price Group Inc. (NASDAQ: TROW) (784), Scottrade, TD Ameritrade Holding Corp. (NYSE: AMTD) (783) and E*Trade Financial Corp. (NASDAQ: ETFC) (779).

Sharebuild from Capital One Finance Corp. (NYSE: COF) scored 756, just below the industry average.

J.D. Power’s director of the wealth management practice said:

Self-directed investors may not be looking to delegate managing their money to an advisor, but they do value access to guidance when they are ready for it, whether that means a financial planning tool they can use on their tablet, a webinar about saving for their children’s education or an actual human being who serves as a sounding board for ideas by phone or in a local branch. Firms need to make sure that their clients understand what’s available to them and how the overall value proposition relates to what they pay. In most cases, clients are getting a lot more value from their firm than just the ability to trade.

J.D. Power noted that the companies that maintain a guidance-based relationship with their clients achieve a sharply higher satisfaction score (828) than firms that do not foster such a relationship (656).

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