In Practice June 17, 2009

1 in 4 Americans Want to Give Financial Firm or Broker the Boot

A survey by Charles Schwab found that 25% of investors in the U.S. are considering changing financial services firms or brokers in the next year based on their overall frustrations with their current situation.
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An overwhelming majority of respondents (90%) said they are frustrated about the money they lost in the past year, and 76% said they are only somewhat confident in the guidance they receive from professionals, according to a news release of the results.

Only slightly more than half (55%) of respondents said they trust their current firm, and just a third (36%) think their firm is more stable than other firms.

The survey found a top reason for investors to leave their current firm is “the financial stability of my firm being in question,”cited by 48% of respondents. In addition, cost and investment performance were cited by many as reasons they would consider leaving their firm (47% and 42%, respectively).

At the same time, Charles Schwab said many investors were wary of change, and when asked for reasons why they would stay with their current firm, responses included:

  • “I might lose money if I make a switch.”(26%)
  • “I don’t know of any better options.”(25%)
  • “It’s time-consuming to make a switch.”(22%)

When asked what they would like to be different about their financial firm or broker in the next year, the top responses related to the cost of working with them (34%), the quality of advice (32%), and the frequency of proactive contact (29%).

“With one in four Americans ready to make the move, investors are seeking a genuine partner they can trust to help them plan for the long-term,”said Andy Gill, senior vice president at Charles Schwab, in the release. “They are understandably frustrated by the last year and have responded by expecting more from the experts they turn to for guidance.”

 

Proactive Stance

 

However, investors are not just playing the blame game—they show interest in improving their financial situation. Fifty-one percent of those surveyed now review their finances at least once a day, compared to 27% prior to fall 2008. When asked what they are likely to do differently in the next year, the top responses were:

  • “Pay closer attention to how much money I have invested or saved.”46%)
  • “Set stricter budgets for myself or my household.” (45%)
  • “Pay closer attention to the state of the market.” (38%)
  • “Reevaluate my financial firms or providers more often.” (23%)

The Charles Schwab Make the Move Survey surveyed 500 respondents in the U.S. and was conducted by Kelton Research between June 4 and June 8, using an online survey.

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