Edward Jones Tops J.D. Power Financial Adviser Survey as RBC Ranks Second

Edward Jones, the St. Louis-based company with more than 12,000 financial advisers, won the highest ranking in a survey of full-service investment firms for the second consecutive year, according to J.D. Power and Associates.

Edward Jones earned a score of 794 on a 1,000-point scale, up from 784 in 2009, with strong marks for its investment advisers and performance, according to the survey. The average score was 769.

While overall satisfaction with investment firms has improved from last year, scores for being customer-focused declined, said J.D. Power, a Westlake Village, California-based marketing-services company.

“During the past year, most investors have enjoyed positive short-term gains in their portfolio as a result of the market recovery,” David Lo, director of investment services at J.D. Power, said in a statement. “This has not translated into an improvement in investor sentiment toward their firm” as an increasing number of investors said they believe their company is driven by profits, rather than customer satisfaction.

The 2010 U.S. Full Service Investor Satisfaction Study measured companies using seven criteria including investment performance, account information, website, offerings and fees. The study is based on responses in May from almost 4,500 investors who have a brokerage account and use a financial adviser for some or all of their investment decisions, according to J.D. Power, a unit of New York-based McGraw Hill Cos.

RBC Wealth

RBC Wealth Management, a unit of Toronto-based Royal Bank of Canada, was ranked second with a score of 793, edging out last year’s second-place holder, LPL Financial Corp. in Boston, which came in third. RBC scored well in the investment adviser and account information categories, the survey said.

Charles Schwab Corp., based in San Francisco, slipped to fourth from third and Raymond James Financial Inc., based in St. Petersburg, Florida, rounded out the top five.

The lowest-ranked firm was Chase Investment Services Corp., a unit of New York-based JPMorgan Chase & Co., with a score of 739. Merrill Lynch & Co./Banc of America Investment Services, Inc., a unit of Charlotte, North Carolina-based Bank of America Corp., was next to last after taking the bottom spot in the 2009 survey.

“We monitor client satisfaction vigorously and our current surveys show very high satisfaction with their financial advisers and the firm,” Matt Card, a Bank of America spokesman, said in an e-mail.

Thomas Kelly, a spokesman for JPMorgan, declined to comment.

More Assets

Higher customer satisfaction translates to more assets for brokers, according to J.D. Power. The survey estimated an average increase in assets under management of $125,216 from each investor who gives the firm a score of 900 or above, compared with a loss of $5,929 from those who rank their firms below 700.

In the financial overhaul legislation passed by Congress last week, the Securities and Exchange Commission was charged with looking at whether a fiduciary standard of legal responsibility should apply to both investment advisers, who usually charge a fee to give unbiased, personalized analysis to clients based on assets under management, and broker-dealers, who earn fees by executing trades and are paid commissions based on the products they sell. A fiduciary standard means putting clients’ interest first when acting as advisers.

To contact the reporter on this story: Rick Levinson at rlevinson2@bloomberg.net.

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