J.D. Power and Associates Ranks Customer Satisfaction with Online Investment Firms

So, who is the best is online customer service when it comes to financial services like stock trading? According to a new J.D. Power and Associates Report, Charles Schwab & Co., Inc. is the top-rated, followed closely by Vanguard and Scottrade.

The study, J.D. Power and Associates' 2012 U.S. Self-Directed Investor Satisfaction Study (SM), measures customer satisfaction with investment firms based on performance in six factors: account information; account offerings; information resources; interaction; problem resolution; and trading charges and fees. This is the 11th year the research firm has produced the report.

While the news was good for the top-rated three firms, the industry as a whole apparently has some work to do. Satisfaction with trading charges and fees has decreased for the second consecutive year, indicating that customers are not so happy with price hikes put in place by online trading firms. Overall satisfaction with investment firms has increased, however, to 768 aggregate points in 2012, compared with 764 in 2011. According to J.D. Power, the increase is due to increases in satisfaction with interaction, information resources and account offerings.

“Overall trading volume has dropped during the past couple of years, and similar to banks, investment firms are looking to compensate for lost revenue with fees,” said David Lo, director of investment services at J.D. Power and Associates, in a press release .“Contrary to what some believe, this is not necessarily a bad thing, providing that firms are showing value to their investors in terms of resources and tools and ensuring investors clearly understand how and why they're charged these fees,” he said.

In addition, the study found that using tools and resources to aid in investment decisions is closely associated with higher levels of satisfaction and more frequent trading activity. Among moderately active traders (one to 35 trades per year) who use real-time quotes/alerts, overall satisfaction averages 826 and the number of trades per year averages 9.6. Satisfaction among moderately active traders who are not aware of the tool averages 749, and the number of trades per year averages 5.3.