Website Reliability Issues, Lack of Human Support Pose Challenges for Self-Directed Wealth Management Firms, J.D

Website Reliability Issues, Lack of Human Support Pose Challenges for Self-Directed Wealth Management Firms, J.D. Power Finds

Vanguard and Charles Schwab Rank Highest in Respective Segments

TROY, Mich.: 9 April 2020 — Amid historic market volatility and heightened investor demand for access to their investment accounts, wealth management firms are facing an important moment of truth. According to the J.D. Power 2020 U.S. Self-Directed Investor Satisfaction Study,SM released today, websites are the biggest source of investor problems, which materially affect customer loyalty and satisfaction.

“In the past several weeks, a number of wealth management firms have experienced high-profile website service outages, which have been driven by extreme market volatility and high volume, and that will have a negative effect on customer loyalty and satisfaction,” said Michael Foy, senior director of wealth & lending intelligence at J.D. Power. “Do-it-yourself investors experiencing at least one website outage over the past 12 months are twice as likely as other investors to say they will leave their current firm. When these types of problems occur, human support channels are essential to restoring loyalty. This is critically important for firms right now as they contend with operational challenges in both digital and call center channels, and investors are rattled by COVID-19 and economic uncertainty.”

Following are key findings of the 2020 study:

• Customer experience becomes more critical as trading fees disappear: The recent industry-wide shift to eliminate trading fees has created a level playing field in which customer experience is the key differentiator for self-directed wealth management firms. With approximately 42% of investors saying that they are planning to make changes to their investment portfolios as a result of the COVID-19 pandemic, getting that customer experience right in a period of heightened stress will be critical.

• Website issues are frequent and damaging: Websites are the biggest source of problems for self- directed investors, and are responsible for 33% of all reported issues in the past two years. Among do-it-yourself (DIY) investors, those who experienced at least one website outage during the past 12 months are twice as likely to say they either “definitely will” or “probably will” leave their current firm in the next year.

• Human support critical for problem solving: When problems do occur, more than three-fourths (79%) of self-directed investors turn to human support channels to solve the problem. Overall satisfaction among those who work with a human to solve a problem is 21 points higher (on a 1,000-point scale) than among those who use self-service digital channels.

• Website, human and mobile interaction are all important: Overall satisfaction scores are lowest when self-directed investors either have no interaction (706) or mobile-only interaction (751) with their firm. These scores are highest when investors use a combination of web, mobile and human interaction (809), underscoring the importance of providing strong multi-channel experiences.

The U.S. Self-Directed Investor Satisfaction Study, now in its 18th year, evaluates key satisfaction drivers and firm performance among both investors seeking guidance (i.e., those who don’t have a dedicated

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financial advisor but do have access to interact with a registered investment professional) and true DIY investors (those who do not interact with professional advisors).

Study Rankings

Vanguard (820) ranks highest in self-directed investor satisfaction among investors seeking guidance. Charles Schwab (819) ranks second.

Charles Schwab (817) ranks highest in self-directed investor satisfaction among DIY investors. Vanguard (800) ranks second and Fidelity (790) ranks third.

The U.S. Self-Directed Investor Satisfaction Study measures self-directed investors’ satisfaction with their investment firm based on performance in several factors. The Seeking Guidance segment includes eight factors (in order of importance): firm interaction; account information; commissions and fees; financial advisor; information resources; investment performance; product offerings; and problem resolution. The DIY segment includes seven factors (in order of importance): firm interaction; account information; commissions and fees; product offerings; information resources; investment performance; and problem resolution.

The 2020 study is based on responses from 5,511 investors who make all their investment decisions without the counsel of a full-service dedicated financial advisor. The study was fielded from November 2019 through January 2020.

For more information about the 2019 U.S. Self-Directed Investor Satisfaction Study, visit https://www.jdpower.com/business/resource/us-self-directed-investor-satisfaction-study.

To view the online press release, please visit http://www.jdpower.com/pr-id/2020039.

J.D. Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable J.D. Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, J.D. Power has offices serving North America, Asia Pacific and Europe.

Media Relations Contacts Geno Effler, J.D. Power; Costa Mesa, Calif.; 714-621-6224; [email protected] John Roderick; Huntington, NY.; 631-584-2200; [email protected]

# # # NOTE: Two charts follow.

Year / Project / Study Name J.D. Power 2020 U.S. Self-Directed Investor Satisfaction StudySM Overall Satisfaction Index Ranking (Based on a 1,000-point scale) Seeking Guidance

Vanguard 820

Charles Schwab 819

Segment Average 801

Fidelity 800

T. Rowe Price 796

TD Ameritrade 796

E*TRADE 787

Chase 772

Wells Fargo 758

Merrill Edge 754

USAA^ 839

Note: ^Brand is not rank eligible because it does not meet study award criteria. Source: J.D. Power 2020 U.S. Self-Directed Investor Satisfaction StudySM Charts and graphs extracted from this press release for use by the media must be accompanied by a statement identifying J.D. Power as the publisher and the study from which it originated as the source. Rankings are based on numerical scores, and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power survey results without the express prior written consent of J.D. Power.

Year / Project / Study Name J.D. Power 2020 U.S. Self-Directed Investor Satisfaction StudySM Overall Satisfaction Index Ranking (Based on a 1,000-point scale) Do-It-Yourself (DIY)

Charles Schwab 817

Vanguard 800

Fidelity 790

Segment Average 786

Merrill Edge 778

TD Ameritrade 778

E*TRADE 776

You Invest by J.P. Morgan 773

T. Rowe Price 769

WellsTrade 732

USAA^ 831