As everyday Americans reduce their savings and investing relationships for the first time in over a decade, financial firms must work harder to maintain loyalty and trust among their customers.
That's the key insight from a new report by Hearts & Wallets, which found American households cut back the number of retail financial services firms they work with for the first time since 2013.
In a report titled "Industry Performance Metrics: Competitive Penetration, Share and Loyalty Measures as Consumers Consolidate," the market intelligence firm highlighted a drop in the percentage of households using four or more firms – from 25 percent in 2023 to 20 percent in 2024. Along with that was an 8 percent decline in total saving and investing relationships across all households, falling from 351 million in 2023 to 323 million in 2024.
"With intensifying competition for the $78 trillion controlled by the 131 million households in the US, it’s more important than ever to monitor consumer behavior and competitive buying patterns,” Laura Varas, CEO and founder of Hearts & Wallets, said in a statement revealing the findings.
The study noted a corresponding rise in the average share of wallet (SOW) per firm, which increased from 37 percent in 2023 to 39 percent in 2024, the first uptick in five years. Among households with $5 million or more in investable assets, SOW climbed 4 percentage points year over year, reaching 28 percent. These affluent households also reduced the number of firms they use, with only 17 percent working with six or more firms in 2024, down from 23 percent the prior year.
The report found a link between integration, the ability to serve households with both products and stores, and a firm's leadership position. In last year's leaderboard for household penetration, the report said Fidelity and JPMorgan Chase, both of which offer investment products and services, gained ground but didn't catch up to Merrill, which narrowly kept its lead. Looking at share of household assets, Fidelity led the way while Merrill and Schwab were tied for second place.
Given the trend of consumers consolidating their relationships, the report said customer loyalty and trust are emerging as crucial competitive differentiators. Edward Jones and Vanguard earned top marks for loyalty and high trust, according to the report. LPL and Fidelity also stood out for strong scores across those metrics.
“Robinhood is a good example of how primacy, loyalty and trust metrics can reveal important competitive data,” said Amber Katris, a subject matter expert at Hearts & Wallets. “Only 46 percent of Robinhood customers entrust the firm as one of their primary or secondary stores, below the industry average of 63 percent. Yet, among those who do, 54 percent are highly likely to invest more.”
Merrill's latest hires span Colorado to Louisiana, even as industry-wide recruiting data suggests the firm is losing almost as many advisors as it gains.
The $36 million buy allegedly hid inflated books and a $50 million diversion.
“An award citing emotional distress is very unusual,” an industry executive said.
New EBRI research found workers who participated in employer financial education reported higher confidence, literacy and financial satisfaction.
Beyond operational excellence, the winning advisors of the future are the ones who can reach across multiple disciplines without discarding specialist skills.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
