Overall Satisfaction with Self-Directed Investment Firms Increases, despite a Continued Decline in Satisfaction with Trading Charges and Fees

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Charles Schwab & Co., Inc. Ranks Highest in Self-Directed Investor Satisfaction



WESTLAKE VILLAGE, Calif.: 14 June 2012 — Although self-directed investors' overall satisfaction with their investment firm has improved from 2011, satisfaction with trading charges and fees has decreased for a second consecutive year, according to the J.D. Power and Associates 2012 U.S. Self-Directed Investor Satisfaction StudySM released today.

The study, now in its 11th year, measures customer satisfaction with investment firms based on performance in six factors: account information; account offerings; information resources; interaction; problem resolution; and trading charges and fees.

Non-trading fees continue to be the primary contributor to dissatisfaction. The study finds 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.

However, overall satisfaction with investment firms has increased to 768 in 2012, compared with 764 in 2011. The increase is 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 finds 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 use real-time quotes/alerts, overall satisfaction averages 826 and the number of trades per year averages 9.6. Satisfaction among moderately active traders who are not aware of the tool averages 749, and the number of trades per year averages 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."

Research conducted by J.D. Power's Consumer Insight and Strategy Group  to track social media activity finds that investors, as well as potential investors, are particularly interested in the availability of mobile platforms and apps that allow them to access account information or makes trades on the go.
 
"While adoption is still relatively low, we see a lot of positive interest with mobile platforms in social media," said Lo. "In many respects, social media can be viewed as a leading indicator of the importance of mobile platforms in the near future."

2012 Self-Directed Investor Satisfaction Rankings

Charles Schwab & Co., Inc. ranks highest in self-directed investor satisfaction with a score of 801 and performs particularly well in account information, account offerings and information resources. Vanguard follows in the rankings with a score of 799, followed closely by Scottrade at 798.

The 2012 U.S. Self-Directed Investor Satisfaction Study is based on responses from 3,733 investors who make all of their investment decisions without the counsel of an investment advisor. The study was fielded in February 2012.

About J.D. Power and Associates

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.  The company's quality and satisfaction measurements are based on responses from millions of consumers annually.  For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

McGraw-Hill announced on September 12, 2011, its intention to separate into two public companies: McGraw-Hill Financial, a leading provider of content and analytics to global financial markets, and McGraw-Hill Education, a leading education company focused on digital learning and education services worldwide. McGraw-Hill Financial's leading brands include Standard & Poor's Ratings Services, S&P Capital IQ, S&P Indices, Platts energy information services and J.D. Power and Associates. With sales of $6.2 billion in 2011, the Corporation has approximately 23,000 employees across more than 280 offices in 40 countries. Additional information is available at http://www.mcgraw-hill.com/.

Media Relations Contacts:

Jeff Perlman; Brandware Public Relations; Woodland Hills, Calif.; (818) 598-1115; jperlman@brandwarepr.com
Syvetril Perryman; Westlake Village, Calif.; (805) 418-8103; media.relations@jdpa.com

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No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate

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