USAA, a financial institution and insurance provider serving military service people and their families, topped the latest J.D. Power & Associates' survey of self-directed investors' satisfaction while Merrill Edge, Bank of America Merrill Lynch's consumer brokerage unit, checked in last.

The survey showed a significant decline -- down to 703 points from 733 points in 2010 -- in overall satisfaction among the 4,274 responding investors who make all their investment decisions without the help of a financial advisor. 

But study leader David Lo, director of J.D. Power’s wealth management services practice, said the biggest issue for investors this year was either not understanding or being caught by surprise by the trading charges and non-trade-related fees charged by their brokers.

Only 36% of responders said that they “completely understood” their brokerage’s commission and fee structure, way down from 52% in 2010.  Only 48% of respondents said that non-trade-related charges had been explained to them in advance, compared to 65% who said this was done for them last year.

Lo said it was “not surprising” that more investors expressed dismay over both such charges and a lack of transparency about them. “It has become pretty common over the past few years for financial services firms to add fees to compensate for lost revenue and for added regulatory costs,” he said.

The survey rates firms on a scale of zero to 1,000 points. Lo said that the difference between USAA’s top rating of 831 and Merrill Edge’s 691 was “significant.”

Don Vechiarelo, a spokesman for Bank of America, said, “Merrill Edge is committed to offering investors clarity, transparency and an exceptional customer experience."

"Merrill Edge continually monitors customer satisfaction and we continue to build on our service quality to develop deeper banking and investing relationships with our customers," he added.

The industry average score was 764, which happened to be the score attained by Fidelity Investments. E*Trade Financial checked in a smidge lower at 763.

Commenting on its top-ranked spot in the survey, Art Garcia, director of investment product management at USAA, noted that unlike many of its competitors, USAA’s investment platform “does not have any account inactivity fee, doesn’t have an annual maintenance fee and has no minimum balance fee.” 

But he added, “We think it is both that we are competitive on fees and commissions and that we are excellent at explaining our costs and fees to our clients. We don’t like any surprises.”

J.D. Power’s Lo said that the survey’s results suggest that there is an opportunity for brokerages to improve their client relationships and their business by simply addressing the transparency issue. 

“Nobody likes to get hit with fees and charges, but we found that people were less upset with the charges themselves than they were with being surprised by charges. If you’re suddenly hit with a $15 maintenance fee that you weren’t clearly told about you’ll be angry,” he said. “It’s mostly about ineffective communication.”