Savvy Investors Love This Brokerage Firm Most

Among retail brokerage firms, perhaps no company has a better reputation than Vanguard. The firm added more luster to its crown by sweeping the J.D. Power 2021 U.S. Self-Directed Investor Satisfaction Study.

Vanguard finished first for self-directed investor satisfaction among both investors seeking guidance and in those who prefer a do-it-yourself approach.

The 2021 study is based on responses from nearly 5,000 investors who make investment decisions without consulting a full-service dedicated financial adviser.

This year’s study was redesigned from those of previous years, and measured self-directed investor satisfaction with investment firms based on performance in seven areas in the following order of importance:

• Trust
• Digital channels
• The ability to manage wealth how and when I want
• Products and services
• Value for fees
• People
• Problem resolution

For those seeking at least some guidance, the top providers are:

1. Vanguard
2. T. Rowe Price
3. Charles Schwab

For those who prefer a DIY approach, the top providers are:

1. Vanguard
2. Charles Schwab
3. T. Rowe Price

Last year, investors opened more than 10 million new brokerage accounts. However, that level of demand caused retail brokerage firms to struggle with delivering a top-flight customer experience.

The number of customer complaints about retail brokerage firms doubled during the past year. Top problems included website issues, processing and trade execution failures, and account statement errors.

In a press release, Michael Foy, senior director and head of wealth intelligence at J.D. Power, says:

“The significant influx of new investors — and increased trading volumes and overall engagement from clients — clearly put a strain on the system and a spotlight on some of the most critical areas that firms need to address if they want to continue to attract and retain self-service investors. With virtually every firm now offering free trading and new investors showing lower levels of brand loyalty, firms that get the customer satisfaction formula right have a chance to set themselves apart from the competition.”

The study also found that Robinhood — the online retail brokerage at the heart of the GameStop stock frenzy earlier this year — gained more new accounts from DIY investors than any other retail brokerage included in J.D. Power’s 2021 study. But Robinhood has not built a solid level of trust with investors.

J.D. Power found the firm scored poorly on trust, people and problem resolution.

Is DIY investing right for you?

Managing your own investments isn’t rocket science, as Money Talks News founder Stacy Johnson explains in “Ask Stacy: Do I Need a Financial Adviser, or Can I Manage My Money Myself?”

Educating yourself enough to handle your own portfolio does require some homework, though. If you’re unwilling or unable to do some reading and research, you might be better off seeking some aid from a fiduciary financial adviser or financial planner.

Fiduciaries are obligated to put your best interest before their own. You can find vetted fiduciaries in your area for free through Money Talks News partners SmartAsset and Wealthramp.

For more-detailed advice on selecting the right pro, check out “How to Find the Right Financial Adviser.”