Edward Jones ousted Raymond James as the highest-ranking investment firm in J.D. Power & Associates' annual U.S. Full Service Investor Satisfaction Study.

Now in its seventh year, the study polled nearly 4,500 investors to gauge their attitudes about 14 full-service investment firms. Edward Jones scored 784 out of a possible 1,000 points, followed by LPL with 773 point and Charles Schwab with 771 points overall. Raymond James, which scored the highest in 2008’s ranking at 831 points, came in fourth this year with 758 points. The industry average is 731 points.

J.D. Power based investor happiness on six factors: relationship with their financial advisor, convenience, investment performance, account offerings, account statements and fees. “Top-performing firms that have consistently sustained high levels of investor satisfaction during the past three years have been among the few to grow or maintain their average assets under management per investor,” says David Lo, director of investment services at J.D. Power in Westlake Village, Calif.

An investor’s relationship with their advisor accounted for 30% of overall happiness with their firms, up from 28% in 2008. Investment performance actually declined in importance, accounting for just 15% of overall satisfaction, vs. 24% in 2008. “That makes sense because investment performance is a relative measure, while expectations are driven by the advisor,” Lo says.

The study suggests that advisors might need to improve communication with their clients as a result. In 2009, 20% of investors said that they had not been contacted enough to review their investment performance, up from 15% in 2008, Lo says. Advisors contact clients an average 2.2 times per year, about the same as last year, but rising investor anxiety means advisors have to pick up the pace to meet client concerns, he says.

J.D. Power and Associates 
     2009 U.S. Full Service Investor Satisfaction Study 
          Customer Satisfaction Index Ranking 
            (Based on a 1,000 point scale) 
Edward Jones:                   784 
LPL Financial Services:         773 
Charles Schwab & Co.:           771 
Raymond James:                  758 
Ameriprise Financial:           754 
UBS Financial Services:         750 
Smith Barney:                   736 
Chase Investment Services:      733 
INDUSTRY AVERAGE:               731 
Morgan Stanley:                 722 
Fidelity Investments:           721 
Wachovia Securities:            721 
Wells Fargo Investments:        708 
Merrill Lynch:                  707 
Banc of America:                700