A financial provider thrives on the reputation it has among its wealthy customers. But a firm’s reputation is not based on just one service or attribute.
In Spectrem’s recent research study Asset Allocation, Portfolios and Primary Providers, wealthy investors were asked which financial provider they prefer for a variety of investment topics. With an eye toward the future, investors were asked about providers with a visible social media presence and those who have innovative products and services.
Let’s begin by discussing familiarity among Millionaires, those with a net worth between $1 million and $5 million. Bank of America was deemed the company most investors were familiar with, followed by Fidelity, Charles Schwab, Wells Fargo and JP Morgan Chase. (Investors were asked about 29 different financial providers)
The Spectrem study segments investors by age, noting that many of the “most familiar” companies are less familiar among younger investors. For instance, Bank of America is familiar to 86 percent of investors over the age of 65 but only 74 percent of investors 35 and younger.
The order of significance changes when Millionaires were asked about the financial providers that have a visible social media presence. Charles Schwab takes the top spot in that category, followed by fidelity, Wells Fargo, Bank of America and Citi. JP Morgan Chase, which ranked fifth among all providers for familiarity, ranked eighth for visible social media presence.
The question that must come up in the corporate offices of these providers is whether a visible social media presence will eventually affect one’s familiarity with investors?
The investing industry continues to undergo great change due to the continuing effort to find new ways to invest funds. With innovation in mind, Vanguard got the No. 1 nod for providing innovative products and services (despite not making the top list for familiarity), followed by Fidelity, Charles Swab, TD Ameritrade and T. Rowe Price.
Familiarity does not necessarily breed a continuing or growing relationship. Despite not appearing on the top of the list for familiarity, Vanguard was the No. 1 choice among Millionaire investors when asked “Which provider are you likely to increase your usage of?” Fidelity, Charles Schwab, Wells Fargo and TD Ameritrade were the other companies investors were looking to get more involved with going forward.
Bank of America, the provider listed first among most familiar companies, ranked 13th among companies investors plan to increase usage of.
The study also ranked providers based on expertise in managing money, the companies with the most talented advisors and staff, and the company’s trustworthiness and transparency.
The investors are also segmented by advisor-dependency and occupation, and it is the occupation segment that shows the greatest difference in familiarity and reputation of providers. Business Owners, for instance, are often far more familiar with a larger variety of providers, and pay more attention to their innovation and social media presence than do Professionals (doctors and lawyers), Managers or Senior Corporate Executives.