Online Brokerage Firms Struggle to Build Loyalty among Pandemic-Era Investors

The honeymoon may be coming to an end for the tens of millions of new do-it-yourself (DIY) investors who flocked to do-it-yourself retail brokerage firms during the past few years. According to the J.D. Power 2022 U.S. Self-Directed Investor Satisfaction Study,^SM released today, pandemic-era investors who have opened accounts during the past three years are experiencing significantly more problems with their accounts and lower levels of customer satisfaction, resulting in brand loyalty scores that are less than half those of more tenured clients.

“Pandemic-era investors who entered the financial markets during a real gold rush period of heightened expectations, significant disruption and extreme volatility represent a unique set of challenges for retail brokerage firms,” said Michael Foy, senior director and head of wealth intelligence at J.D. Power. “First, they constitute a huge segment, which has accounted for about 25 million new accounts since 2020. They also tend to be younger, less financially secure and more apt to experience problems that are not currently being addressed effectively by their brokerage firms. Right now, most firms are missing the mark when it comes to delivering the level of tailored customer experience that will help them convert this next generation of investors into loyal and profitable clients.”

Read the full press release for key findings and brand rankings >