Practice Management

Schwab, Wells Fargo and Edward Jones praised for mobile apps

J.D. Power study found the three firms' apps scored high with customers

Dec 3, 2019 @ 2:17 pm

By Ryan W. Neal

Some wealth management firms are figuring out how to build apps that resonate with retail investors and the effort is paying off, according to a new study by J.D. Power.

Apps from Charles Schwab, Wells Fargo and Edward Jones all earned high marks from clients relative to the rest of the brokerage industry. The success of each brand's mobile app stems from catering to the specific needs of its client base, said Michael Foy, J.D. Power senior director of wealth and lending intelligence.

[More: J.D. Power survey: Employee advisers rank best brokerages]

For example, Schwab's clients tend to be younger, more tech-savvy and mostly self-directed investors. These clients gave the firm's app high ratings for its trading functionality, as well as being able to review portfolios, transfer funds and conduct research through the tool.

Edward Jones' simpler app was ranked high for ease of navigation and appearance by the firm's clients, who tend to be older and in a full-service advisory relationship, Mr. Foy said. Wells Fargo's app was praised for providing a single digital location for both investing and banking tasks.

Mr. Foy said mobile apps are going to be increasingly important going forward as firms look to expand the services they provide, capture greater wallet share and connect with the next generation of investors. More than three-quarters of millennials who rated their broker's app "outstanding" said they are likely to sign up for additional products and services from the firm, as opposed to 26% of investors with a low opinion of their firm's app.

[More: Top 10 financial advice firms ranked by investor satisfaction]

"With competition intensifying to gain share of wallet across the various financial needs of emerging affluent clients, the mobile experience is a critical factor influencing investor decisions about considering new products and services," Mr. Foy said in a statement.

Of all millennials, only 30% ranked their broker's app as outstanding. The wealth management industry at large trails other financial services. Credit cards, retail banks and insurance companies all received higher marks for their mobile apps. Average satisfaction with mobile apps from self-directed and full-service wealth management firms was the lowest across all industries that J.D. Power examined.

Apps from Morgan Stanley, TD Ameritrade and Vanguard received the lowest consumer satisfaction scores.

[More: High-net-worth investors not impressed by mobile wealth management apps]

One challenge is the complexity of the industry and the number of different activities investors expect of their firm, Mr. Foy said.

"It's challenging to create a simple, clean, and intuitive user interface while trying to cram in lots and lots of different functionality that's supported on their website," he told InvestmentNews.

Security is another problem area.

J.D. Power's research found perception of security to be the single biggest driver of satisfaction. And a third of customers said their firm's app misses the mark.

Advisory firms also can improve their apps by adding more personalized advice and insights, Mr. Foy said. Full-service firms have an opportunity that others do not, using apps to drive engagement between clients and advisers.

"Rather than thinking about mobile as just a way for providing access to information or basic customer service needs that allow people to bypass having to use the adviser … think of mobile as a way for advisers and clients to communicate," Mr. Foy said.

This can be through chat, secure document transfer, or scheduling a meeting.

"Use mobile to create another touchpoint," he said.

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