Financial Advice Boosts Customer Satisfaction. But It’s Got to Be Personalized

New research from J.D. Power finds that guidance and advice can increase satisfaction levels, but only if it's based on each individual customer's circumstances. Generic advice doesn't cut it anymore, in both digital channels and in-person financial wellness reviews.

Good news: Americans increasingly want to interact with their banks, face-to-face and via digital channels. The bad news: They hate one-size-fits-all content and communications.

So says the latest research from J.D. Power. According to Jennifer White, senior director, banking and payment intelligence, not every bank offers personalized guidance and advice, but those that go that extra mile have higher customer satisfaction scores. Her 2024 U.S. Retail Banking Advice Satisfaction Study found that while many customers want financial advice, only 42% overall recalled actually being given guidance and advice, suggesting that much of what’s offered is so generic that it doesn’t register.

But when they do receive something of substance, 76% of customers surveyed say they generally act on it.

According to White, there are two stages of customer interaction. “Guidance” provides information to help customers use the bank’s services and demonstrates their benefits. “Advice” is more specific and where much of the desired personalization usually begins.

“Advice helps you decide how to choose or use the most appropriate financial services option due to your unique circumstances, needs and goals,” according to White.

Today’s banking customer wants and needs both, White says, provided they match their needs at differing levels of financial literacy and financial health. Both factors, as well as age and gender, can affect how customers consume banking advice and guidance.

Evidence of failure to personalize guidance and advice can be seen in customers not acting on what they’ve been told. The study found, for example, that significantly more financially unhealthy customers didn’t act on what their banker said simply because of lack of money. J.D. Power argues that indicates that the recommendations didn’t consider these consumers’ actual circumstances.

Banking Wellness Reviews Should Be Like Medical Consultations

Many Americans feel unsure about their financial health, especially when inflation has knocked many financial plans to pieces.

“What they really want is to have a banker review their specific behaviors,” White says. “They want to review and set their financial goals and then look at their savings habits and spending habits and their debts.”

Getting into that level of detail “”makes the customer feel like their time has been well spent,” says White.

As shown in the chart in the next section, only one out of five customers served by major banks has had such a personal financial wellness review, but their satisfaction rises significantly when they have.

Read more: How Banks and Credit Unions Can Counter Bad Advice From ‘Finfluencers’

Face-to-Face Remains the Leading Format for Wellness Reviews

In-person meetings with a bank representative are the most common way of delivering a review, as shown below. Satisfaction with wellness reviews is highest with in-person reviews (746 out of 1,000) and lowest when conducted over a video call.

In-person wellness reviews drive best satisfaction scores

The preferred duration of such meetings varies, according to the research. People categorized as “financially healthy” prefer shorter reviews, running less than ten minutes. On the other hand, financially unhealthy customers tend to be most satisfied with reviews of more than 30 minutes.

Overall, people prefer to spend time on forward-looking matters, such as recommendations on how to reduce debt, rather than on recapping what they owe to whom.

However, “it’s often hard for the representative to demonstrate that they truly know the customer and are making recommendations based on specifics about them, rather than just generally pointing them to what account they should open,” says White.

Customers under 40 tend to seek out wellness reviews more often than older customers. As shown in the first chart, 37% of those sampled have had such reviews.

What consumers crave advice and guidance about

White says these younger consumers tend to be more open to receiving information from their banks through multiple channels because they feel they need it more often than older customers think they do. She says many younger consumers go through a rapid succession of lifestyle shifts — marriage, parenthood and more. They want help through these stages. The study also found that they are willing to get it more often than are older customers.

“That’s not to say that these needs are more important than retirement conversations, saving for college and other needs that occur in later life stages,” says White. “But the spread of those life events tends to be wider for the older customer.”

One result in the research is that while only 42% across the whole sample recall receiving guidance and advice from their bank, 60% of customers under 40 recall getting it.

White says banks considering adding wellness reviews to their branch lineups must weigh if their staffs can handle them. Many banks have had significant turnover in recent years and may lack sufficient experience. She says it may be necessary to take steps to empower branch employees to be able to provide personalized guidance and advice.

White adds that branch layouts may also need rethinking to accommodate increased emphasis on guidance and advice. Privacy is among the considerations to make a branch more conducive to consultation.

“How are you transforming your branches so they are welcoming to customers of all financial status, ages and other factors?” asks White.

Online tools for obtaining guidance and advice on savings, spending and borrowing have been around for some time and are used 25% of the time for wellness reviews. But the study found that many customers don’t know the tools exist. When they do know about them, usage is strong, the study found. Engagement with digital tools is strongest among younger customers.

White thinks awareness and usage will pick up in time. She notes that mobile check deposit was around for some time, but really took off among all customer segment during the pandemic. Time, or some combination of economic events, may drive an uptick in adoption of digital financial tools.

Read more:

Men and Women Have Differing Takes on Banker Input

Guidance and advice in all forms face differing receptions between men and women, the study found. Recall of retail banking advice, one of the study’s key measurements, differs broadly between men (47%) and women (39%).

White says the study, and other company research, found that women place less importance on guidance from their bank. Women are somewhat less likely to regard input from their bank as trustworthy. Many also prefer to obtain guidance when they want it, rather than having the institutions push out guidance via emails and other outreach on a regular basis.

The research also found that women are significantly more interested than men in the following topics:

  • Saving for a goal or large purchase.
  • Lower loan payments or consolidating debt. (White notes that women typically carry more student debt than do men.)
  • Quick tips and information to improve their financial situation, including how to stick to a budget.
  • Advice regarding wills, estate plans and trusts.
  • Ways to save for emergencies.

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