There is a new demand for DIY investors. They no longer want to do it themselves.
J.D. Power's annual survey of independent investors shows that satisfaction among DIY investors has remained flat over the past three years, despite average stock market returns in the double digits last year. It was done. The study, released on April 4 and based on data collected from January 2023 to January 2024, shows a dramatic change in customer satisfaction rankings for brokers. TD Ameritrade has moved to the top, pushing last year's leader Vanguard into third place. Charles Schwab took second place, replacing T. Rowe Price, who dropped to 11th place.
This result shows that the coveted younger generation of DIY investors now wants more personalized service. Major brokerages have struggled with this service, as they have built systems that offer a hands-off, commission-free approach to green investors.
“Private brokerages are rethinking their role in their customers' lives and providing clear and quantifiable support, especially to younger investors,” Craig Martin, executive managing director and head of assets and financing at J.D. Power, said in a statement. We need to start providing value.” “That personal connection is really missing in many companies right now.”
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Part of the problem is that even though young investors are taking advantage of the bull market and growing into wealth, brokers are having a hard time moving them into more costly individual services. .
Andrew Altfest, Founder of Altfest Personal Wealth Management and CEO of FP Alpha “We are looking for more individualized support.” “Large companies are trying to serve different needs of different people;[but] There was no way to actually provide advice at scale. ”
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Martin told Financial Planning that most do-it-yourself investors choose this route because of the cost of personalized services from large brokerages.
“The choice to use a DIY investment firm is often the result of consumers believing they cannot afford the more personalized human experience that an advisor provides,” he said. “Consumers value getting help and guidance, but for some, working with a professional is not something they can afford.”
J.D. Power also surveyed self-directed investors who “occasionally” seek guidance from companies. The results showed that they seemed to be more satisfied than his DIY investors, with satisfaction levels in 2024 being 15 points higher than in 2023.
However, these investors' customer satisfaction with their brokerage firms has changed slightly this year. Fidelity maintained its No. 1 spot from last year, but Charles Schwab edged out E-Trade for No. 2.
In its 2024 study, JD Power spoke to 9,875 investors who made decisions without seeking a full-service intermediary. The research firm rated self-directed investors' satisfaction with their investment firms based on seven factors (in order of importance): trust, digital channels, the ability to manage their assets whenever and however they want, products and services, and value. We measured performance based on “price, people, and problem solving'' and provided a score out of 1,000. His overall DIY investor satisfaction in 2024 was up just one point from 2023, totaling 708 points, and remained flat through 2021.
Scroll down the slideshow to see the 2024 JD Power Investor Satisfaction Rankings for both DIY investors and those looking for guidance.