Adviser Satisfaction Dips Amid Big Market Drop

In 2022, investor satisfaction with full-service investment advisers fell 17 points on a 1,000-point scale. 

Investor satisfaction with full-service investment advisers fell by 1.7 percentage points in 2022 from 2021, according to the J.D. Power 2023 U.S. Full-Service Investor Satisfaction Study.

In 2022, the S&P 500 finished down nearly 20%, the worst year for Wall Street since 2008. The correlation between market performance and investor satisfaction poses a real challenge to the wealth management industry, said Tom Rieman, head of wealth solutions at J.D. Power.

“Adviser satisfaction continues to track overall market performance, and this points to a systemic problem in our industry: adviser value propositions grounded in investment performance,” said Rieman in a statement. “Advisers cannot control the ebbs and flows of the market, but the good ones help their clients plan for their best futures and deliver value in the form of comprehensive advice that should shine through in all market conditions.”

Overall investor satisfaction with full-service investment advisers in 2022 was 727 on a 1,000-point scale, down 17 points (2.3% of the previous total) from the year before. The figure was at 850 in 2020 and 776 in 2008. Adviser satisfaction tracking market performance indicates few advisers are delivering on their core value proposition, according to J.D. Power experts.

Currently only 11% of advisers offer comprehensive advice, namely personalized guidance on all financial and wealth management needs. In contrast, 42% of advisers deliver transactional advice, and 47% offer goals-based advice.

Among the 57% of full-service wealth management clients who reported having a financial plan, only 56% said they received comprehensive advice. Furthermore, only 32% of people expressed that their adviser made recommendations in their best interest. Twenty-nine percent of respondents did not feel that their adviser understood their financial goals.

Millennials and those in Generation Z were most likely to switch firms in the next 12 months and were most likely to work with a secondary investment firm, according to the study. Of these younger investors, 27% stated they “definitely will” or “probably will” switch firms, while 49% said they are working with a secondary investment firm.

J.D. Power found that in overall investor satisfaction, Charles Schwab ranked highest with a score of 752, followed by UBS at 741 and Fidelity with 740.

Conducted from October 2022 through January 2023, the study drew responses from 6,168 investors who work directly with a dedicated financial adviser or team of advisers.