Slideshow Clients give top marks to Charles Schwab, Edward Jones; Wells tumbles

Published
  • March 29 2018, 7:00am EDT

Charles Schwab won top marks from clients for the third consecutive year in J.D. Power’s annual study of full-service firms. Overall, investor satisfaction hit a record high for the second consecutive year. Indeed, only Wells Fargo Advisors, which fell towards the bottom of the rankings, saw its ratings fall from the previous year.

J.D. Power, which released its study this week, gives the greatest weight on its 1,000-point scale to clients’ views of their financial advisors. But what shapes those perceptions?

Mike Foy, senior director of J.D. Power’s wealth management unit, does not attribute the 15-year record score of 839 points entirely to the strong gains in the stock market over the past year. (J.D. Power quizzed 4,419 clients in December before the the volatility seen in recent weeks.)

Even with those market tailwinds, investment performance was the third most important factor of eight overall. The higher ratings also reflect better client experiences as technology allows for full-service advice and self-directed tools, Foy says.

“The lines between those two groups have become very blurry,” Foy says. “You increasingly have more and more folks who are looking for some combination of advice but also the tools to do some things themselves. We included questions about aspects of the experience that we’ve historically only asked self-directed investors.”

The new elements include measures of online and mobile experience and access to research, in addition to existing categories like product offerings, commissions and fees. Schwab has always received positive scores on products and low prices, but the firm scored the best in the new metrics, Foy says.

Schwab offers many different types of services across its business lines with well-integrated access points for clients, says Tim Welsh, CEO of consulting firm Nexus Strategy. With Fidelity and TD Ameritrade boasting similar appeal, the J.D. Power ranking looms large in Schwab’s marketing, he notes.

“In a sea of homogeny where everyone’s the same, any time you can differentiate yourself with a third-party award, you’re going to do it,” Welsh says. “It’s a great differentiator.”

Other firms also achieved positive results in the annual survey. Edward Jones maintained its high position in the rankings, while RBC Wealth Management, Stifel Financial and Northwestern Mutual made significant gains on the strength of their advisor-client relationship ratings, Foy says.

On the other hand, Wells Fargo sank to the bottom of every measure of brand image, he notes. Revelations involving unauthorized bank accounts, insurance and mortgage practices appear to have taken a toll even before a new probe into possible sales misconduct in the wealth management unit.

Fidelity’s position in the rankings also fell, although the firm’s overall score went up. Since the survey measures direct retail clients of firms’ advisors rather than custodial clients, the results display how Schwab has improved its full-service advice over the past several years, Foy says.

“Fidelity has a lot of the same strengths that Schwab has, in terms of the legacy as a discount brokerage. They have a strong digital platform, they do well around fees,” Foy says. “Schwab has made a bit more progress in terms of improving the quality of that financial advisor experience.”

To see how firms measured up in last year’s study, click here. For the results of the 2018 survey, click through the slideshow.

18. Advisor Group

2018 ranking: 18
2018 score (on 1,000-point scale): 800
*J.D. Power only reports results for firms with at least 100 clients taking the survey. Advisor Group did not have a large enough sample to make the 2017 rankings.

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17. Citigroup

2018 ranking: 17
2017 ranking: 15
2018 score (on 1,000-point scale): 811
2017 score: 805
2018 vs. 2017: +6

16. Wells Fargo Advisors

2018 ranking: 16
2017 ranking: 7
2018 score (on 1,000-point scale): 814
2017 score: 824
2018 vs. 2017: -10

15. Morgan Stanley

2018 ranking: 15
2017 ranking: 16
2018 score (on 1,000-point scale): 821
2017 score: 801
2018 vs. 2017: +20

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13. (tie) PNC Wealth Management

2018 ranking: 13
2017 ranking: 12
2018 score (on 1,000-point scale): 824
2017 score: 810
2018 vs. 2017: +14

13. (tie) AXA Advisors

2018 ranking: 13
2017 ranking: 20
2018 score (on 1,000-point scale): 824
2017 score: 772
2018 vs. 2017: +52

12. Ameriprise

2018 ranking: 12
2017 ranking: 10
2018 score (on 1,000-point scale): 828
2017 score: 817
2018 vs. 2017: +11

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11. JPMorgan Chase

2018 ranking: 11
2017 ranking: 14
2018 score (on 1,000-point scale): 838
2017 score: 807
2018 vs. 2017: +31

Average score

2018 score (on 1,000-point scale): 839
2017 score: 819
2018 vs. 2017: +20
Average change (across all firms): +28
Largest increase: Northwestern Mutual (+61)
Largest decrease: Wells Fargo Advisors (-10)

10. Northwestern Mutual

2018 ranking: 10
2017 ranking: 19
2018 score (on 1,000-point scale): 839
2017 score: 778
2018 vs. 2017: +61

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9. Raymond James

2018 ranking: 9
2017 ranking: 8
2018 score (on 1,000-point scale): 842
2017 score: 819
2018 vs. 2017: +23

6. (tie) UBS Wealth Management Americas

2018 ranking: 6
2017 ranking: 5
2018 score (on 1,000-point scale): 851
2017 score: 827
2018 vs. 2017: +24

6. (tie) LPL Financial

2018 ranking: 6
2017 ranking: 13
2018 score (on 1,000-point scale): 851
2017 score: 809
2018 vs. 2017: +42

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6. (tie) Fidelity Investments

2018 ranking: 6
2017 ranking: 2
2018 score (on 1,000-point scale): 851
2017 score: 835
2018 vs. 2017: +16

5. Merrill Lynch

2018 ranking: 5
2017 ranking: 9
2018 score (on 1,000-point scale): 852
2017 score: 818
2018 vs. 2017: +34

4. RBC Wealth Management

2018 ranking: 4
2017 ranking: 11
2018 score (on 1,000-point scale): 863
2017 score: 814
2018 vs. 2017: +49

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3. Stifel Financial

2018 ranking: 3
2017 ranking: 6
2018 score (on 1,000-point scale): 865
2017 score: 826
2018 vs. 2017: +39

2. Edward Jones

2018 ranking: 2
2017 ranking: 3
2018 score (on 1,000-point scale): 866
2017 score: 833
2018 vs. 2017: +33

1. Charles Schwab

2018 ranking: 1
2017 ranking: 1
2018 score (on 1,000-point scale): 867
2017 score: 838
2018 vs. 2017: +29