Vanguard, famed for its low-cost investment products, just broke out of the pack in a consumer satisfaction survey. But not in a good way.
The mutual fund firm with more than $5.3 trillion in assets under management suffered the largest annual point decline among internet investment providers in an American Customer Satisfaction Index report. The Malvern, Pennsylvania-based company’s score dropped to 79 out of 100, down three points from last year and knocking it out of first place. The new leader is Edward Jones, which scored an 80.
Vanguard, which doesn’t have brick-and-mortar branches, has had some high-profile glitches in the past year. On Oct. 10, when the S&P 500 had its worst decline in nine months, some customers were unable to access Vanguard’s website. The fund giant’s score of 79 matches the overall rating for its sector, and that of Fidelity Investments.
“Digital is awesome when it works, but if it doesn’t, it’s human nature to react even more strongly in a negative fashion,” said David VanAmburg, managing director at the ACSI. “Vanguard got low marks for customer service. It just wasn’t seen as a strong point for them.”
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A Vanguard spokeswoman said the firm is “investing considerably in improving our customer service and experience.” Along with enhancements to online security and its mobile app over the years, “in early November we completed a major systems upgrade to improve the resiliency and performance of our websites,” she said.
The ACSI report, which focused on the financial and insurance sectors, also showed that banks are closing in on credit unions after trailing in customer satisfaction for a decade. The two industries had the same average score of 81, with credit union scores dropping by 1.2% from a year earlier. As bank digital offerings evolve and mobile banking takes off, the personal touch credit unions historically provided may not be as important, VanAmburg said.
Wells Fargo, which has been grappling with a string of consumer scandals, was the lowest-ranked national bank with a score of 74, while JPMorgan Chase was first with an 80, according to the report.
The ASCI Finance and Insurance Report 2018 is based on interviews with 25,555 customers, chosen at random and surveyed between Oct. 2, 2017, and Sept. 26, 2018.
