By MarketWatch

Consumers have cast their votes for the financial services companies they trust the most, showing that their confidence in brokers, banks and insurance companies was solid in the past year – thanks to a strong bull market and fewer bank failures.

Who can consumers and investors trust in this environment? Investor’s Business Daily and MarketWatch’s Most Trusted Financial Companies special report aims to help them decide, based on our annual survey of the companies’ own customers.

This report lets customers see how financial companies measure up to their expectations on safety, service and quality products. And how those firms measure up against each other.

Our 2024 list of the 30 Most Trusted Financial Companies draws on a survey in which thousands of people rated financial companies on the trust attributes most important to consumers.

There has been only one bank failure so far in 2024, compared to five in the previous year. But consumers told us clearly that financial soundness and security remains the most important attribute of the companies they trust. Quality of products and services offered was a close second.

Customers also showed more trust in financial companies in general as lenders adapted to a higher level of interest rates compared with the dim days of the Covid-19 pandemic.

For the IBD and MarketWatch list of the Most Trusted Financial Companies in 2024, we asked more than 7,000 survey participants for their opinion of the financial soundness of the financial companies they do business with. The survey was conducted from May to July by IBD’s polling partner, TechnoMetrica Market Intelligence.

The eight categories of companies in this year’s survey were wealth managers, banks, credit cards, ETF/fund companies, online brokers, plus auto, home and life insurers.

This year, survey respondents told us how much they value the best products and services, and that a company’s customer service and ethics earn their trust. Other qualities were important to them, too.

Our survey covered eight areas of trust. The attributes for the 2024 Most Trusted Financial Companies survey were:

Financial soundnessQuality of products and servicesEthical business practicesPrivacy and securityCustomer servicePricesSensitivity to customer needsConfidence in company management

There was one new attribute in the 2024 survey – confidence in management – added to the first phase of the survey, conducted in May. The purpose of that phase is to identify the trust characteristics, or attributes, that are most important to consumers.

Financially sound/secure received the highest weight (18%) in our study, topping our list of the most critical trust factors for financial companies. Quality of products and services took the second spot, followed by the commitment to protecting the privacy and security of personal data.

More than 90% of the survey respondents said trust was “very important” in their relationships with financial firms.

The second phase of the survey was conducted in June and July. Using the eight trust attributes arrived at in phase one, respondents evaluated the company they most often utilize in each of the eight business lines.

When it comes to trust in online brokers, wealth managers and ETF/fund companies, two familiar names earned the highest marks.

Boston-based Fidelity took the No. 1 rating in all three of these investing categories.

Rival Charles Schwab (SCHW), via its Schwab Bank division, earned the No. 1 overall spot with the highest IBD Trust Index score out of the 74 financial firms included in the survey. It was the first time a bank made it to the top of the overall trust index. Schwab was runner-up to Fidelity in the brokerage and wealth management categories.

For the first time in the five years the survey has been conducted, a bank – Schwab Bank – topped the overall list of the 30 most-trusted financial companies. In prior years, banks as a group were at the bottom for trust in business categories. For 2024, the group jumped up two spots, while auto and home insurance companies sank.

In the current survey, banks as a category had an average trust index rating of 73 (out of 100). Auto insurers and home insurers were close behind, each scoring 72.

Amid a year of costly natural disasters, rising premiums and declining homeowners coverage, our survey respondents were less thrilled with the insurers as a group this year. But they showed their loyalty to one insurance company in particular, pushing it into the highest ranks.

Joining Schwab Bank and Fidelity Wealth Management at the top of this year’s ranking was USAA, which provides insurance and banking products to members of the military, veterans and their families. USAA scored three of the top five spots on the overall trust list. The financial services firm took second place overall for its auto insurance business, third for credit cards, and fifth for home insurance.

Rounding out the top 10 on our most-trusted list:

Northwestern Mutual, life insuranceFidelity Investments, fund companiesAmerican Express, credit cardsFidelity, online brokerCharles Schwab, fund companies

Financial services firms have faced both internal and external challenges garnering the trust of their customers. Those that focus on the attributes in the 2024 IBD Most Trusted Financial Companies survey, especially financial soundness and quality products, should be recognized for their successes.

(All of our 2024 Most Trusted Financial Companies content can be found here.)

Source: IBD/TechnoMetrica phase two poll, June-July 2024, with 7,242 respondents.

-MarketWatch

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09-21-24 0855ET

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