A roundup of some of the more unusual items that crossed our desk recently.
By Cyril Tuohy
Call it the satisfaction inequality gap: The older the investors, the more likely they will be satisfied with their full-service investment company. For younger investors, the opposite is likely to be true, according to a new survey by J.D. Power and Associates.
Among investors under the age of 35, less than half (44 percent) said they “strongly agree” that their advisor has a good understanding of their investment goals, the survey found.
In addition, only 39 percent of young investors “strongly agree” that their advisor takes the time to explain to them where the investments are and why.
By contrast, 71 percent of retirement investors said they “strongly agree” that their advisor has a good understanding of their investment goals, according to the J.D. Power 2014 U.S. Full Service Investor Satisfaction Study.
Since advisors focus more attention on older, affluent investors, advisors tend to be more comfortable with this investor group, said Craig Martin, director of investment services at J.D. Power.
“They are comfortable with this group and their preferences, but when they interact with younger investors they have challenges connecting,” Martin said in a news release. “They often try to use the same approach that has been successful with their older clients, but it often misses the mark.”
The study, conducted in January and February, is based on responses from more than 4,400 investors who use advisors to make investment decisions.
Investor satisfaction with full-service investment firms is measured using seven criteria: the relationship with the advisor, investment performance, account information, account offerings, commissions and fees, website, and problem resolution.
The telephone remains the most popular way for advisors to get in touch with clients, but younger investors are more open to other communications channels such as email and social media, the survey found.
Older investors are satisfied with eight to 11 points of contact over a given period before satisfaction begins to wane, while satisfaction among younger investors peaks at three or four contact points, the survey also found.
Fees and expenses continue to be a sore point for many investors.
Among the 43 percent of investors who said they understand their investment firm’s fee structures, satisfaction with commissions and fees average 750 points on a scale of 1,000 points, the J.D. Power survey found.
Among the 46 percent of investors who only “partially” understand their fees, the satisfaction score tumbled to 619, and young investors have the lowest rate of satisfaction when it comes to advisors explaining fees, the survey also found.
Companies ranked by the highest overall investor satisfaction were Fidelity Investments, Edward Jones, Charles Schwab & Co., Raymond James Financial and Ameriprise Financial, the survey also found.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at email@example.com.
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