In the midst of tough economic conditions, Investor's Business Daily has completed its third annual survey of customer trust in financial companies.
The survey, conducted in partnership with TechnoMetrica Market Intelligence, ranks top financial companies across eight business categories.
This year our research covered seven areas of trust, two more than last year's survey. And our survey for 2022 is being co-branded with our sister company, MarketWatch.
Here are the trust attributes we polled for in the 2022 survey:
- Quality of products/services.
- Ethical business practices and values.
- Privacy and security of personal data.
- Customer service
- Prices
- Sensitivity to customer needs in the current economic and financial climate (inflation, stock market, etc.).
- Innovation of processes/offerings.
Companies in the survey were compared to all others to create the overall list of the 25 Most Trusted Financial Companies. They also were ranked in the following eight business categories, in which their scores are compared to their competitors:
- Auto insurance
- ETF/fund companies
- Home insurance
- Online brokers
- Credit card issuers
- Wealth management
- Life insurance
- Banking
Customer Trust: Two Phase Research
The study was conducted in two phases, with data collected via online surveys.
The goal of Phase 1 was to identify the trust characteristics that are most important to consumers. Using the attributes identified in Phase 1, respondents in Phase 2 evaluated financial companies they most often utilize in each of the eight business categories.
- See The Top 25 List Of the IBD Most Trusted Financial Companies
- Read Our Overview Of The 2022 Most Trusted Financial Companies Special Report
- See Our Breakout Stories On Investing, Insurance, Credit Cards and Banking
- Visit The Most Trusted Financial Companies content page here
From early June to early July, 691 consumers participated in the Phase 1 survey. The respondents were drawn from visitors to IBD's Investors.com website and the Wall Street Journal's Opinion Leaders Panel.
We started with 12 trust attributes developed by IBD editors and TechnoMetrica. Using the MaxDiff research technique, we presented respondents with five randomly selected combinations of five trust attributes and asked them to choose the most important and the least important.
Based on the Phase 1 results, we narrowed the final list to seven attributes for evaluation in Phase 2. Phase 1 also gave us the weights of each attribute to calculate the overall trust index in Phase 2.
Quality of products/services received the highest weight in our study, topping our list of the most critical trust factors for a financial company. Ethical business practices and values took the second spot, followed by the commitment to protecting the privacy and security of personal data.
The company's service/treatment of customers came in fourth, followed by fair prices/fees for products or services in the fifth spot.
This year, two new attributes made the cut: the company's sensitivity to customer needs in the current economic and financial climate (inflation, stock market, etc.) and innovation of processes/offerings. The sensitivity attribute ranked sixth, and innovation ranked seventh.
Clearly, respondents want the companies they do business with to acknowledge this year's difficult economy and choppy investment market and to innovate in their product lines.
Phase 2 of the survey was conducted from July 7 to July 21. Using the seven trust attributes arrived at in Phase 1, respondents evaluated the company they most often utilize in each of the eight business lines.
We used a five-point scale for each company attribute for evaluation (Very High, High, Moderate, Low, Very Low) for the question, "How would you rate your level of trust with the company on the following company attributes?"
The Phase 2 survey had 6,520 respondents, with 762 coming from the IBD website or email invitations, 1,694 from the WSJ Opinion Leaders Panel, and 4,064 from TechnoMetrica's network of panel partners.
Except for the wealth management and ETF/fund categories, in which we required at least 100 respondents, we needed at least 125 respondents to rate a company for it to be included in our ranking.
This year, 85 companies met our minimum inclusion criterion in Phase 2. By business line, they included 12 auto insurers, nine banks, 10 credit card providers, 11 ETF/fund companies, 12 home insurers, 10 life insurance providers, nine online brokers and 12 wealth management firms.
Trust Score Computation
For each company, we calculated seven trust components based on the responses to the Phase 2 survey.
We computed the component scores by taking the difference between the percentage of respondents assigning a very high or high rating and the percentage who gave a low or very low rating. For example, if 40% rated a company's quality of products/services as Very High, 20% High, 9% Low, and 5% Very Low, we calculated the trust component for quality (60% less 14%) as 46%.
We combined the seven component scores, using the weights from Phase 1, to arrive at each company's overall Trust Index rating.
Based on IBD's Trust Index average for companies in each category, ETF/fund companies, online brokers and auto insurers are the most trusted by consumers this year. Home insurers, life insurance companies and credit card companies score in the middle, followed by wealth managers. Banks are the least trusted. Besides the list of the top 25 Most Trusted Financial Companies, we recognize the three with the highest Trust Index in each business line as Most Trusted in the category.
Raghavan Mayur is president of TechnoMetrica Market Intelligence.
