It's been a tumultuous year of bank failures, interest-rate hikes and some cautious optimism in the equities market. And consumers have told us that customer trust and companies' financial soundness are the most important qualities in the financial firms they do business with.
The companies that have succeeded in winning customer trust top the ranks of Investor's Business Daily's fourth annual Most Trusted Financial Companies special report. IBD's sister company, MarketWatch, is co-branding the report for a second year.
Read our overview story, IBD's Fourth Annual Survey Of The Most Trusted Financial Companies.
The survey, conducted from May-July in partnership with TechnoMetrica Market Intelligence, ranks top financial companies across eight business categories.
- Auto insurance
- ETF/fund companies
- Home insurance
- Online brokers
- Credit card issuers
- Wealth management
- Life insurance
- Banking
The research covered seven areas of trust. Here are the trust attributes included in the 2023 survey:
- Financially sound/secure
- 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.)
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.
In May, 507 consumers participated in the Phase 1 survey. The respondents were drawn from visitors to IBD's Investors.com website and email invitations to IBD readers.
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.
Read Our Category Stories On The 2023 Most Trusted Financial Companies In Investing, Insurance, Credit Cards And Banking
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 customer trust index in Phase 2.
New Customer Trust Attribute This Year
This year we introduced a new attribute — financially sound/secure — in the Phase 1 mix.
Financially sound/secure received the highest weight in our study, topping our list of the most critical customer trust factors for a financial company. Quality of products/services took the second spot, followed by the commitment to protecting the privacy and security of personal data.
Ethical business practices and values came in the fourth position, followed by the company's service/treatment of customers.
In an inflationary environment, both fair prices/fees for products/services and company sensitivity to customer needs in the current economic and financial climate (inflation, stock market, etc.) passed Phase 1, taking the sixth and seventh positions, respectively.
Phase 2 of the survey was conducted in June and July. Using the seven customer 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 7,597 respondents, with 1,576 coming from the IBD website or email invitations, 2,041 from the WSJ Opinion Leaders Panel, and 3,980 from TechnoMetrica's network of panel partners.
For all categories, we required at least 125 respondents to rate a company for it to be included in our ranking.
This year, 79 companies met our minimum inclusion criterion in Phase 2. By business line, they included 13 auto insurers, 10 banks, nine credit card providers, eight ETF/fund companies, 11 home insurers, nine life insurance providers, nine online brokers and 10 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, wealth management, ETF/fund companies and online brokers are the most trusted by consumers this year. Auto insurers, life insurance companies and home insurance companies scored in the middle. Credit card companies and banks are the least trusted. (See all our 2023 Most Trusted Financial Companies content.)
Raghavan Mayur is president of TechnoMetrica Market Intelligence.
