Do You Trust Your Broker?

Customer satisfaction is dropping, but consumers aren’t sure where else to turn


Reading the daily financial news about bailouts and scandals makes it difficult to know where to get accurate and unbiased financial advice. A recent survey found that investors are unlikely to trust financial information from any source.

Only about half (54 percent) of investors who own stock value the advice of financial experts and professionals when making investment decisions, according to a Zogby International survey of 1,077 U.S. stock owners. Investors also frequently tune in to the opinions of family, friends, and colleagues (35 percent), information found on financial news web sites (32 percent), and the financial print media (14 percent). Only 11 percent of investors said they found financial information obtained from company announcements worthwhile in helping to make profitable investment decisions, ranked only slightly above online financial communities (10 percent) and blogs (3 percent).

Online brokerages, which offer the valuable perk of not having to wait in long teller lines or spend time on hold in call center queues, didn’t fair much better. Customer satisfaction with the online brokerage industry fell more than 6 percent since last year and is at its lowest point since 2002, according to a separate e-commerce report released this week by the University of Michigan and ForeSee Results, an Ann Arbor, Mich. firm that measures customer satisfaction on the Web. “The convenience of managing your investments online doesn’t mean much when you see your portfolio take such huge hits,” says Larry Freed, president and CEO of ForeSee Results.

Brokers, for their part, report that they are stepping up their customer service efforts. Some 92 percent of brokers say they are spending an average of 36 percent more time giving investment advice to their clients compared to a year ago, according to a Fidelity Investments survey of 1,200 brokers and advisors. Interestingly, while customer satisfaction with brokers is dropping, the brokers reported they are almost equally as satisfied with their careers as they were last year. On a scale of one to ten, brokers rated their job satisfaction as a 6.9, on average, down only marginally from last year’s 7.3. The largest driver of broker satisfaction cited in the survey was their compensation package.

Tell us, do you trust your broker?