Finance - HL 229 (1)

Helpful miscellaneous articles regarding our retirement plan and planning.  Like you, I review my retirement nestegg and plan from time to time.  Recently, I went though some continued education for some credentials I maintain and it occurred to me that we all could use a review about these issues.  So with your help, we will share and post articles and info that may be helpful and of interest to many of you in this section.

 

Best Full-Service Investment Firms Ranked by Investors: J.D. Power — 2014

Satisfaction levels are up at some firms, but there's a clear satisfaction gap between investors under 35 and older ones

Full-Service Investment Firm Rankings: 2014
Overall investor satisfaction with full-service investment firms continues to rise, according to the J.D. Power 2014 U.S. Full Service Investor Satisfaction Study, released early Thursday. However, there’s a clear satisfaction gap between young investors (35 years and younger) and older investors, the group notes.
The industry average rose to a satisfaction score of 807 (out of 1,000) from 789 in 2013. But the four wirehouses all fell below the average score this year.
Last year’s bull market certainly made lots of investors happy. “In our model, we see that portfolio performance tied to only about 20% of overall satisfaction,” said Craig Martin, director of investment services at J.D. Power, in an interview with ThinkAdvisor. Advisors play a very significant role in influencing the level of satisfaction that investors experience, Martin says.
This dynamic may be hurting the wirehouses, Martin says, since their advisors may be delivering inconsistent service across all investors. (The study polled 4,400 investors who work with advisors nationwide.)
“They have some amazing advisors with … high levels of investor satisfaction and loyal relationships versus others with inconsistency relative to the top performers,” he explained.

Related

Best Full-Service Investment Firms Ranked by Investors: J.D. Power—2013

The satisfaction scores of some BDs is “lower than might be expected based on reported performance alone,” according to J.D....
While they have come up a little bit in their scores, several — Bank of America/Merrill Lynch (BAC), Morgan Stanley/Smith Barney (MS) and Wells Fargo/Wachovia (WFC) — are “recovering from what went on in ’08-’09 with mergers and other factors that took a toll on the customer side of the business.”
That’s meant that investment firms like Fidelity, Edward Jones and Raymond James (RJF) have stood out.
“The firms that have above-average performance have clear corporate cultures, well-established ways in how they interact with clients and more standardized approaches,” Martin explained. “For example, they may be very consistent in what investors get from a financial advisor … in terms of key performance indicators tied to developing a detailed financial plan, as well as more online and tech support to facilitate this effort.”
Consistency in communications, plan reviews, risk discussions and execution is important, he adds.
“This is definitely showing up in our data, especially clear communication around what’s behind a client’s investment performance and the amount of interaction,” Martin noted. “It’s not a question of whether or not it’s done weekly, but how you (as an advisor) are regularly facilitating info-sharing that meets customer needs.”
For instance, the higher-performing investment firms have websites that are effective in putting a financial plan together online that investors can revisit. These are features of the firms’ business model, Martin says.

Demographic Drift

Investors age 18 to 35 are less satisfied with the full-service investment firms, 791, than older investors, 827.

Among young investors, less than half (or 44%) “strongly agree” that their advisors have a good understanding of their investment goals, while 71% of retirement investors (65 and up) believe their advisors grasp their objectives.  Also, only 39% of young investors “strongly agree” that their reps make efforts to ensure they understand where their investments are made and why, compared with 66% of retirement investors. 

The use of social media and technology come into play, Martin says, in how investors interact with their advisors and firms. “In many ways, we see the importance of social media and mobile [communications] in terms of the advisors’ capability to work with investors in the manner they wish to do so,” he explained.

If Facebook, Twitter and LinkedIn are used “to share information and insights and to provide investors and updates, they fill the void when advisors and investors are not on the phone or meeting face to face,” Martin adds.

“This can be helpful—particularly with younger investors—and when engaging in general with clients,” he concluded.

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(As with any of these informative articles, anyone who needs someone to talk to about

this very subject contact me and I can direct you to a knowledgeable advisor).

 


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