Consumers like these wealth apps best, J.D. Power says

On the surface, there isn't much difference, but results people get from planning services can vary wildly.

Big banks are beating their competitors when it comes to customer satisfaction with wealth management and planning apps, according to a report Tuesday from J.D. Power.

Overall, full-service wealth management clients are happiest with the mobile apps and websites at Citi, J.P. Morgan Private Client Advisors, Fidelity, U.S. Bank, and Wells Fargo Advisors.

But those firms aren’t ahead by much, and that might say a lot about the innovation — or lack thereof — in wealth management fintech.

Among firms J.P. Power examined in a survey of more than 6,000 financial services customers, the highest rating among full-service apps and sites went to Citi, at 798 out of 1,000, and the lowest was for Vanguard, at 741. For self-directed client sites and apps, the highest rating was for J.P. Morgan Wealth Management, at 754, and the lowest was at Merrill Edge, at 705.

“There is some level of statistical significance of a couple of brands’ performance … but in general, it’s tight competition,” said Craig Martin, executive managing director and global head of wealth and lending intelligence at J.D. Power. “There is not a huge differentiation between brands.”

That’s based on consumers’ perceptions of the services they use — and that mostly has to do with the speed, responsiveness, and aesthetics of sites, Martin said. There are bigger differences behind the scenes, but people are likely not aware of those, as they visit sites or use apps for planning sparingly, he noted.

Even so, companies need to have the basic needs of those who use apps and sites nailed — if people can’t intuitively navigate them, they’re not going to be happy, he said. While some, mostly banks that have spent years refining sophisticated consumer-facing apps, are providing “holistic” planning features, that isn’t necessarily the norm, Martin said.

Soon, people will rely more on sites and apps that speak to them — those that relate to customers’ lives, he said.

The findings have some takeaways for financial advisors.

“They need to spend more time working with their customers on how they engage digitally,” Martin said.

“It’s a critical thing. Right now, the bulk of clients are boomers and late Gen X … But soon, a lot of clients are going to be heavily digitally inclined,” he said. “Advisors need to get comfortable with that engagement model.”

BEHIND THE CURTAIN

It’s all but a given that in 2023, apps should be sleek and user-friendly. But not all of the experiences out there are the same, said Laura Varas, CEO of consumer research firm Hearts & Wallets.

Varas has evaluated 67 different digital sources of financial advice, and the results they yield for the same inputs vary wildly. In one case, for a hypothetical couple, 35 different basic-level apps and sites provided recommended retirement income ranging from $27,000 to $333,000 a year, with an average of $150,000, she said.

“So many online tools give very strange outputs and very strange advice,” she said. “The kind of variance in recommendations that households get when they’re using [different] online tools is ghastly.”

For mid-level service apps and online planning tools, the average recommended retirement income drops to $82,000, and the range in numbers is much more reasonable, Varas said.

Going beyond that, a full-service planning tool, which can include access to a human advisor, yields a range of $73,000 to $231,000, at an average of $134,000, according to Hearts & Wallets data.

The point, Varas said, is that “you cannot evaluate customer experience without a customer,” meaning that apps and sites that appear nice on the surface, with pleasing aesthetics, do not necessarily translate to clients being well served.

“You can only see the quality of advice when you’re behind the login,” she said.

According to the firm’s surveys and focus groups, 43% of U.S. households use online planning tools or apps, up from 21% that did so in 2010.

Across all of the services out there, about half of people who say planning tools are important also indicated they are happy with them, Varas said. That rate is 54% among households that receive financial advice, compared with 49% that don’t, she said.

Seeing JPMorgan Chase’s apps and sites get a good rating makes sense, as its retirement calculator “is one of the best in the industry,” she said. However, Citi has one of the lowest scores in Hearts & Wallets’ dataset, showing 38% of customers who value planning tools saying they were satisfied.