Beyond Portfolio Management – What do Investors Really Want?

When the market is doing well, satisfaction among full service investors is high.

This is evident by examining the correlation between satisfaction in the Investment Performance factor during the past 7 years and trends in the S&P 500 index during the same period. At a minimum, investors expect their financial advisor to provide the most effective guidance with respect to the performance of their portfolio.

Index and Investment Performance

Analysis at the investor level shows that among the majority of investors, Investment Performance satisfaction aligns with the relative returns reported for their portfolio. In other words, approximately 60% of investors combined fall into the high portfolio performance/high Investment Performance satisfaction quadrant or low portfolio performance/low Investment Performance satisfaction quadrant, as shown in the following figure.

Portfolio Performance

However, investment performance alone isn’t the driver of performance satisfaction among some investors. A significant proportion of investors do not follow the script and fall into the high portfolio performance/low Investment Performance and low portfolio performance/high Investment Performance quadrants (approximately 40% combined). The large number of investors in these quadrants raises the question, what can firms and advisors do to enhance investors’ perceptions of their portfolio performance?

CONTINUE READING

For more information about our J.D. Power & Associates 2013 Full Service Investor Satisfaction Study, please contact: Holly Zagresky at: (248) 680-6319 or email her at holly_zagresky@jdpa.com.

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