- Users’ satisfaction with wealth management apps trails that for firms’ other apps like credit card, retail banking, and insurance, a J.D. Power study found.
- Michael Foy, the senior director of wealth and lending intelligence at J.D. Power, said in a statement that the “stakes are incredibly high” for wealth management firms, pointing to rising competition.
- The customer survey company ranked Charles Schwab and Wells Fargo’s apps dedicated to wealth management highest as far as customers’ happiness; TD Ameritrade and Vanguard’s came in last.
- Venture capital funding has been pouring into digital wealth management and stock trading startups, while established firms are touting their wealth-tech suites.
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But customers are less satisfied with wealth apps than with other consumer-facing tech that banks provide, according to a new survey.
Users’ satisfaction with apps provided by their brokerage firms trails that for credit card, retail banking, and insurance apps, according to a J.D. Power study. That comes even as competition from upstart digital wealth and stock-trading tools mounts, particularly those geared at the lower tier of wealth-management clients.
The customer survey company ranked Charles Schwab and Wells Fargo‘s apps dedicated to wealth management highest as far as customers’ happiness; TD Ameritrade and Vanguard‘s apps came in last of the 14 listed firms.
Even the most white-glove institutions like UBS and JPMorgan have built out cheaper or commission-free wealth management tools in recent years amid competition from digital entrants offering financial advice and stock-trading.
And apps’ user experience could soon become a high-stakes way to set firms apart as the major brokerage apps — Charles Schwab, TD Ameritrade, E-Trade, and Fidelity among them — moved to eliminate online trading commissions two months ago. That in turn has opened wealth management as the next big frontier for fee pressure, analysts have said.
“The stakes are incredibly high for wealth management firms to deliver an exceptional mobile experience,” Michael Foy, the senior director of wealth and lending intelligence at J.D. Power, said in a statement.
Clients’ overall satisfaction score for wealth management mobile apps, according to J.D. Power’s 1,000-point scale, came in at 846, trailing scores of 872 and 853 for credit card and retail banking apps, respectively. Scores and rankings were not based on firms’ stock-trading capabilities, but on wealth management specifically.
The firm drew on responses from 2,892 customers between July and August who use full-service (a firm that offers a human financial adviser) and self-directed (a digital robo-adviser) wealth management apps.
In its ranking, J.D. Power considered elements like apps’ range of services — which the company deemed most important in assessing customers’ happiness — and how easy it is to navigate the app itself.
Half of customers the company surveyed said their apps are not personalized to address their needs despite offering a whole host of features; scores rose for apps whose users perceive their personal information as being “very secure.”
And that customers’ relative happiness with their wealth management mobile apps have fallen behind their other everyday services also highlights a disconnect between overall satisfaction with quality and the hundreds of millions in capital pouring into the space.
We recently reported that funding for wealth management technology rebounded during the third quarter, according to data from the industry data provider CB Insights.
Global wealth-tech funding nearly doubled to $761 million from $422.7 million in the prior quarter; stock-trading app Robinhood‘s $323 million Series E round in July led by DST Global as the largest wealth-tech deal for that quarter.
Meanwhile financial advisers say robo advice is the most “over-hyped” technology in their industry, according to a recent survey of some 2,500 advisers surveyed by the firm Greenwich Associates, as low-cost robo and hybrid advice platforms have proliferated in recent years.