Consumers declared their votes of confidence in our nation's financial institutions this past year, buoyed by a bull market and fewer bank failures. And they told us that customer trust in a company's financial soundness and security, and the quality of its products and services, are the most important qualities in the firms they do business with.
The companies that have succeeded in winning customer trust top the ranks of Investor's Business Daily's fifth annual Most Trusted Financial Companies special report. IBD's sister company, MarketWatch, is co-branding the report for a third year.
Investor's Business Daily, with its research partner TechnoMetrica Market Intelligence, conducted the fifth annual survey of customer trust in financial companies. The survey ranks top financial companies across eight business categories.
- Wealth management
- ETF/fund companies
- Credit card issuers
- Online brokers
- Life insurance
- Banks
- Auto insurance
- Home insurance
The research covered eight areas of customer trust. Here are the trust attributes included in the 2024 survey:
- Financially sound and secure
- Quality of products and services
- Ethical business practices and values
- Privacy and security of personal data
- Customer service
- Prices
- Sensitivity to customer needs in the current economic and financial climate (inflation, stock market, etc.)
- Confidence in management
Customer Trust: Two-Phase Research
The study was conducted in two phases, with data collected via online surveys.
The goal of phase one was to identify the trust characteristics that are most important to consumers. Using the attributes identified in phase one, respondents in phase two evaluated financial companies they most often utilize in each of the eight business categories.
In May, 437 consumers participated in phase one of the survey. The respondents were drawn from visitors to IBD's Investors.com website and email invitations to IBD readers.
We started with nine trust attributes developed by IBD editors and TechnoMetrica. Using the MaxDiff research technique, we presented respondents with five randomly selected combinations of five trust attributes and asked them to choose the most important and the least important.
Based on the results of phase one, we narrowed the final list to eight attributes for evaluation in phase two. Phase one also gave us the weights of each attribute to calculate the overall trust index in phase one. Read our overview on IBD's 2024 list of the Most Trusted Financial Companies.
New Customer Trust Attribute This Year
This year, we introduced a new attribute, confidence in management, in the phase-one mix.
Financially sound/secure received the highest weight in our study, topping our list of a financial company's most critical trust factors. Quality of products/services took second place, followed by the commitment to protecting the privacy and security of personal data.
Ethical business practices and values came in fourth place, followed by the company's service and treatment of customers.
Read Our Category Stories On The 2024 Most Trusted Financial Companies In Investing, Insurance, Credit Cards And Banking.
In an inflationary environment, both fair prices and fees for products and services, and company sensitivity to customer needs in the current economic and financial climate, passed phase one, taking the sixth and seventh positions, respectively.
The new attribute, confidence in management, came last in importance for the customer trust rankings.
Phase two of the survey was conducted in June and July. Using the eight trust attributes arrived at in phase one, survey respondents evaluated the company they most often utilize in each of the eight business lines.
We used a five-point scale for each company attribute for evaluation (Very High, High, Moderate, Low, Very Low) for the question, "How would you rate your level of trust with the company on the following company attributes?"
The phase-two survey had 7,242 respondents, 1,605 of whom came from the IBD website or email invitations, 1,400 from the WSJ Opinion Leaders Panel, and 4,237 from TechnoMetrica's network of panel partners.
For all categories, we required at least 125 respondents to rate a company for the company to be included in our ranking.
This year, 74 companies met our minimum inclusion criterion in phase two. By business line, they included 12 auto insurers, 11 banks, 11 home insurers, 10 life insurance providers, nine wealth management firms, eight credit card providers, seven online brokers, and six ETF/fund companies.
Trust Score Computation
For each company, we calculated seven customer trust components based on the responses to the phase-two survey.
We computed the component scores by taking the difference between the percentage of respondents assigning a very high or high rating and the percentage who gave a low or very low rating. For example, if 40% rated a company's quality of products/services as Very High, 20% as High, 9% as Low, and 5% as Very Low, we calculated the trust component for quality (60% less 14%) as 46%.
We combined the eight component scores, using the weights from phase one, to arrive at each company's overall Trust Index rating. Based on IBD's Trust Index average for companies in each category, wealth management, ETF/fund companies and online brokers are the most trusted by consumers this year. Credit card issuers and life insurers scored in the middle. This year, banks rose slightly in the trust rankings, scoring higher than auto and home insurers.
See all our 2024 Most Trusted Financial Companies stories.
Raghavan Mayur is president of TechnoMetrica Market Intelligence.
