Consumer confidence in brokers, banks and insurance companies was strong in the past year, bolstered by a galloping bull market and fewer bank failures. Customers also showed more trust in financial companies as lenders adapted to a higher level of interest rates compared with the dim days of the Covid-19 pandemic.
But which companies do consumers and investors trust with their hard-earned money? And if you're shopping for financial services, what do you need to know? Investor's Business Daily's Most Trusted Financial Companies special report aims to provide crucial information on trust, based on IBD's fifth annual survey of the companies' own customers.
Consumers can see in this report how financial firms measure up to customer 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 customer survey that rated financial companies on the trust attributes most important to consumers. Our sister company MarketWatch is co-branding the report for a third year. Read the complete list of IBD's 30 Most Trusted Financial Companies for 2024.
Financial Companies' Soundness Is Critical
Although there has been only one bank failure in 2024 as of September — compared to five in 2023 — customers resoundingly declared financial soundness and security to be the most important attribute of the companies they trust. Quality of products and services offered was a close second.
For IBD's list of the Most Trusted Financial Companies in 2024, we asked more than 7,000 survey participants about how they judged 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.
There were again eight categories of companies in this year's survey: wealth managers, banks, credit cards, ETF/fund companies, online brokers, plus auto, home and life insurers.
This year we saw how customer trust in the financial companies they partner with rose in importance. Our 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.
Financial Companies Vie For Eight Trust Attributes
Our survey covered eight areas of trust. The attributes for the 2024 IBD Most Trusted Financial Companies survey were financial soundness, quality of products and services, ethical business practices, privacy and security, customer service, prices, sensitivity to customer needs, and confidence in company management.
This year we asked about a new attribute — confidence in management — in 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.
Read Our Category Stories On The 2024 Most Trusted Financial Companies In Investing, Insurance, Credit Cards And Banking.
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/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. (See details of our 2024 methodology.)
In Fidelity And Schwab We Trust
When it comes to trust in online brokers, wealth managers and ETF/fund companies, Fidelity earns very high marks this year. The Boston-based firm earned the No. 1 rating in all three of these categories.
Rival Charles Schwab, via its Schwab Bank division, earned the No. 1 overall spot in IBD's fifth annual survey. It had the highest IBD Trust Index score out of the 74 financial firms included in the survey. It was the first time a banking group topped the overall trust index. Schwab was runner-up to Fidelity in the brokerage and wealth management categories.
Banks Battle Back In Trust
Seeing a bank — Schwab Bank — at the top of the most-trusted financial companies list was new this year. For the first four years of this survey, banks as a group were at the bottom for trust in business categories.
But in this fifth survey, the group jumped up two spots, while auto and home insurance companies sank.
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.
Insurers Feel The Heat
The past year hasn't been great for insurance companies, and customers have signaled they're feeling the pain, too. More frequent and severe weather catastrophes increased insured losses about 70% above the 10-year average, reeling from wildfires, droughts and floods. And home insurers just had their worst underwriting result this century.
Inflation has driven up home repair and rebuilding costs. Auto insurers also report increasing medical bills and fatality rates for vehicle accidents. Tighter underwriting standards have led some insurers to stop writing new policies in certain high-risk states, IBD contributor Morey Stettner writes in our story on the most trusted insurance companies in our 2024 survey.
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.
Customer Trust: Ranking Changes in 2024
Joining Schwab Bank and Fidelity Wealth Management at the top of this year's ranking, USAA nabbed an impressive three of the top five spots on the overall trust list. USAA 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 insurance
- Fidelity Investments, fund companies
- American Express, credit cards
- Fidelity, online broker
- Charles Schwab, fund companies
We grew our respondent pool for the Most Trusted Financial Companies in 2024. In phase two, 1,605 respondents came from the IBD website or email invitations. Some 1,068 were from the WSJ Opinion Leaders Panel. An additional 4,237 came from TechnoMetrica's network of panel partners.
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. (Read all our 2024 Most Trusted Financial Companies content.)
