There's not a year that goes by without investors having to lean on their wealth management companies and online brokers to guide them through turbulent times. And the past year was no exception.
No doubt, there were plenty of fears keeping 401(k) savers, active traders and retirees up at night: Sticky inflation. The highest borrowing costs in two decades. A market rally led by just seven megacap stocks while the so-called "other 493" languished. Not to mention two wars overseas and political uncertainty at home heading into the November presidential election.
These are times when wealth management firms can stand out from the crowd and remind anxious investors that their money is safe. And that they've got their back. Making a difference can be as simple as fielding a customer call 30 seconds after the phone rings. Or reiterating that the financial plan in place is built to last. Or rolling out new products to serve pressing customer needs like generating more income or turning a 401(k) account balance into a guaranteed income stream for life.
It's also about going the extra mile to help a client with a complex problem, such as figuring out how best to take a required minimum distribution (RMD) on an inherited IRA.
Fidelity Tops Most Trusted Survey For Investing
When it comes to trust in the online broker and wealth management world, Fidelity Investments earns high marks in IBD's 2024 Most Trusted Financial Companies survey. The Boston-based firm earned the No. 1 rating in all three investing categories of ETF/fund companies, online brokers and wealth management.
Schwab Bank, part of Charles Schwab Corp., earned the No. 1 overall spot in IBD's fifth annual survey with the highest IBD Trust Index score out of the financial firms included in the survey. Schwab topped the banking category, and took second place in the three investing categories.
Our 2024 list of the 30 Most Trusted Financial Companies draws on a customer survey rating financial companies on the trust attributes most important to consumers.
For IBD's list of the Most Trusted Financial Companies in 2024, we asked more than 7,000 survey participants about how they judged the financial soundness of the financial companies they do business with.
The survey was conducted from May to July by IBD's polling partner, TechnoMetrica Market Intelligence.
There were again eight categories of companies in this year's survey: wealth managers, banks, credit cards, ETF/fund companies and online brokers, plus auto, home and life insurers.
This year we saw how customer trust in the financial companies they partner with rose in importance. Our survey respondents told us how much they value the best products and services, and that a company's customer service and ethics earn their trust. Other qualities were important to them, too.
Read The Full Most Trusted Financial Companies 2024 Special Report
4 Most Trusted ETF/Fund Companies
| Company | Overall rating | Soundness | Quality | Privacy | Ethics | Customer service | Prices | Sensitivity to customer needs | Confidence in mgt. |
|---|---|---|---|---|---|---|---|---|---|
| Fidelity Investments | 85.1 | 91.5 | 87 | 84.1 | 84 | 85.9 | 78.3 | 79.3 | 83.6 |
| Charles Schwab | 84.2 | 88.4 | 84.5 | 84.6 | 84.6 | 83.2 | 80.5 | 80.8 | 81.5 |
| Vanguard | 83.4 | 90.5 | 85.9 | 84.3 | 83.9 | 75.1 | 84.3 | 73.5 | 80.3 |
| JPMorgan Funds | 79.1 | 81.3 | 83.3 | 81.7 | 78.7 | 76.6 | 69.6 | 74.7 | 81.2 |
Fidelity offers $0 commissions on all stock and ETF trades. The company earned top marks from customers on customer service and the quality and range of its investment products It also was lauded as being sensitive to customers' emotions and fears related to volatile financial markets.
The investment giant, which was managing $14.1 trillion at the end of June, stresses that its mission is to strengthen the financial well-being of its 51.5 million customers. This commitment includes educating its customers in all things financial via webinars, access to its trading strategy desk associates, and Viewpoint articles that give customers insights into market conditions, investment strategies, retirement and personal finance.
"Whether they're a self-directed investor or are working with our team of advisors, we are committed to providing a best-in-class experience," said Bob Mascialino, head of brokerage at Fidelity.
Of the companies that qualified in the online broker category, Fidelity earned the top rating of 84.6. Schwab's online brokerage score was 82.8. In the wealth management category, Fidelity scored 86.7 and Schwab, 82.7.
4 Most Trusted Online Brokers
| Company | Overall rating | Soundness | Quality | Privacy | Ethics | Customer service | Prices | Sensitivity to customer needs | Confidence in mgt. |
|---|---|---|---|---|---|---|---|---|---|
| Fidelity | 84.6 | 89.9 | 84.7 | 84.9 | 83.2 | 84.2 | 81.2 | 79.2 | 84.2 |
| Charles Schwab | 82.8 | 86.8 | 81.6 | 86 | 83.6 | 81.7 | 80.5 | 75.1 | 80.4 |
| Vanguard Brokerage | 81.4 | 91.1 | 81.2 | 84.8 | 80.4 | 74.4 | 80.5 | 70.1 | 77.6 |
| Interactive Brokers | 73.6 | 78.9 | 73.8 | 77 | 72.6 | 67.4 | 72.1 | 70.4 | 70.4 |
One Fidelity customer backs up the company's goal of offering first-class wealth management service.
John Manley, 64, a writer and editor from North Bergen, N.J., has been a Fidelity customer for more than 30 years. His business ties to Fidelity date to before the internet. Back then, Manley opened mutual funds and funded his account using snail mail or by visiting a Fidelity brick-and-mortar branch. The customer service he's received from Fidelity since the get-go has been "top rate," he says.
"I've not had a single problem with them in over 30 years," said Manley.
"I've never had any sense that Fidelity was anything but top shelf," said Manley.
Manley recalls how Fidelity reps went the extra mile a few years back to assist his wife in rolling over an inherited IRA from her mom and helping devise a tax-friendly distribution plan over the required five-year period. His wife wasn't getting any help from her mom's IRA provider. Fidelity stepped in to help solve the problem.
"There was a lot of uncertainty regarding the process, how to do it, and how to take distributions over the required time frame," Manley recalled. "This wasn't one of those situations with a cookie-cutter kind of answer. There were certain things that had to be figured out, and she was able to get somebody at Fidelity who could answer her questions. And everything got resolved to my wife's satisfaction."
4 Most Trusted Wealth Management Companies
| Company | Overall rating | Soundness | Quality | Privacy | Ethics | Customer service | Prices | Sensitivity to customer needs | Confidence in mgt. |
|---|---|---|---|---|---|---|---|---|---|
| Fidelity Wealth Management | 86.7 | 93.3 | 88.7 | 88.5 | 84.6 | 86.7 | 78.1 | 81.1 | 83.5 |
| Schwab Private Client | 82.7 | 87.6 | 82.5 | 86.2 | 81.2 | 82.9 | 77.9 | 76.2 | 80 |
| Vanguard | 80.8 | 90 | 82.8 | 83.6 | 78.8 | 73.2 | 79.9 | 69.8 | 76.1 |
| Morgan Stanley Wealth Management | 79.9 | 92.2 | 78.1 | 84.7 | 78.5 | 83.5 | 61.3 | 68.8 | 78.1 |
Fidelity built its reputation as a mutual fund company with a focus on stellar stock picking. Today, it serves investors ranging from newbies to active traders to workers saving for retirement in 401(k) plans.
Account holders can do business with Fidelity on a mobile phone app, laptop, by phone, or in person at one of more than 200 investment center branches.
Connecting with customers is on the rise at Fidelity, driven by digitization. In the second quarter, 26.4 million customers engaged with Fidelity digitally, up 15% from a year ago, the company says. Social media interactions were up 68% to 776,000.
"We're laser-focused on continuing to improve our customer experience, which means meeting our customers where they are in an increasingly digital world," said Rich Compson, head of wealth solutions at Fidelity. "We're also focused on providing a highly personalized experience as demand for customization grows."
New ETFs Use Options-Based Equity Strategies
And with a growing number of folks in or near retirement looking for a way to participate in the stock market but with downside protection, Fidelity has rolled out a few new ETFs that use options-based equity strategies. One example is Fidelity Dynamic Buffered ETF, which enables investors to participate in some, but not all, of a stock market index's gain, in exchange for capping their downside at a predetermined percentage loss.
Read Our Category Stories On The 2024 Most Trusted Financial Companies In Investing, Insurance, Credit Cards And Banking.
Meeting Customer Needs For Wealth Management Advice
Fidelity is also working hard to fill the growing demand for financial advice. Customer planning interactions in the first half of 2024 hit 5.5 million, up 10% from a year ago, the company says.
"Our approach includes helping families effectively manage their wealth across generations," said Compson. "For each interaction, we try to fully consider the human experiences behind the financial moments (in people's lives)."
Fidelity's goal is to make sure customers stick to their long-term financial plan, says Compson. It's not shy about doing some hand-holding when markets turn rocky. Fidelity builds financial plans that can survive volatility; it runs rigorous market scenarios or stress tests to ensure a plan is suitable for a customer's risk tolerance and time horizon.
Schwab Eyes The Customer's Point Of View
The Charles Schwab online brokerage and advisory service also gets high marks from its customer base. The importance of trust is not lost on Schwab executives.
"Our clients put trust in us to keep their money and their financial futures safe," said Rick Wurster, president of parent company Charles Schwab Corp. "Trust is critical to building these lifetime relationships with clients."
Wurster says the firm earns their clients' trust by approaching everything they do through the lens of the client.
Kenny Cymbalisty, 71, from southern New Jersey, manages his own horse farm and bird sanctuary and has been a Schwab client since 1981. He said he appreciates Schwab for not pushing risky investments. "They are conservative managers who try to steer you towards safe and steady growth stocks versus looking for something that's going to explode," Cymbalisty said.
And Schwab is always there to assist if there's something he needs. "I'm always able to grab hold of somebody at their various locations throughout the country to answer my questions," said Cymbalisty. "If I have a trading question on how some strategy may work, there's someone who can explain it for me."
Technical Expertise Supports Wealth Management
Schwab, which had $9.4 trillion under management at the end of June, was also impacted by the trading platform outage in early August, when market volatility hit its highest level since the early days of the pandemic. The company has already taken steps to reduce the odds of technical difficulties impacting customers' ability to trade in the future.
"We have added a substantial amount of additional storage capacity to cover (heavy trading) volumes," said Wurster. "We are completing a root cause analysis and will continue to enhance our systems accordingly."
Schwab is known for its low fees, zero account minimums, deep menu of investment options, and its advanced research and investment screening tools. Education is a key perk for Schwab customers, too. "Our emphasis on investor education has never been more important than it is today," said Wurster.
New investment offerings — such as being able to buy slices of stocks or invest in thematic portfolios — also make it easier for investors to gain exposure to stocks or trends they're interested in.
Schwab is also leaning into advice-giving, as client needs demand. Two-thirds (64%) of affluent investors are willing to pay for advice, according to data from financial research firm Cerulli Associates.
"A growing number of clients are seeking a greater awareness of guidance in their financial life," said Wurster. "We are focused on offering a full spectrum of wealth, advice and investment solutions, along with specialized expertise at every stage of the investing journey for both our retail and advisor clients."
