A new study by J.D. Powers and Associates found that self-directed investors' overall satisfaction with their investment firm has improved from 2011, but satisfaction with trading charges and fees has decreased for the second year in a row.

The J.D. Powers and Associates 2012 U.S. Self-Directed Investor Satisfaction Study measures customer satisfaction with investment firms based on their performance in account information, account offerings, information resources, interaction, problem resolution, and trading charges and fees.

Non-trading fees were the main source of dissatisfaction in this year’s survey. It found that satisfaction averages 723 (on a 1,000-point scale) when investors do not pay a non-trading charge, compared with 613 when they are aware of maintenance fees and 628 when they are aware of inactivity fees. Overall, satisfaction with trading charges and fees is 697, down from 703 in 2011.

Overall satisfaction with investment firms increased from 764 in 2011 to 768 in 2012, mostly due to increases in satisfaction with interaction, information resources and account offerings.

"Overall trading volume has dropped during the past couple of years, and similar to banks, investment firms are looking to compensate for lost revenue with fees," said David Lo, director of investment services at J.D. Power and Associates. "Contrary to what some believe, this is not necessarily a bad thing, providing that firms are showing value to their investors in terms of resources and tools and ensuring investors clearly understand how and why they're charged these fees."

The study also found that using tools and resources to aid in investment decisions is closely associated with higher levels of satisfaction and more frequent trading activity. Among moderately active traders (one to 35 trades per year) who used real-time quotes/alerts, overall satisfaction averaged 826 and the number of trades per year averaged 9.6. Satisfaction among moderately active traders who were not aware of the tool averaged 749, and the number of trades per year averaged 5.3.

"Providing the tools and resources that enable investors to make better decisions is really a win-win for the investors and investment firms," said Lo. "We see that overall satisfaction and loyalty are much higher and trading activity is higher as well."

The study also found that interest in mobile applications that would help them make trades on the go are gaining in popularity.

Charles Schwab & Co., Inc. ranked highest in self-directed investor satisfaction with a score of 801 and performed particularly well in account information, account offerings and information resources. Vanguard followed closely with a 799 and Scottrade scored 798.

The survey was based on responses from 3,733 investors who make investment decisions with the help of an investment advisor. The survey was conducted in February 2012.

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction.

Instant Insights /

Charles Schwab ranks highest in J.D. Powers customer satisfaction survey

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