J.D. Power Reports: After an Increase in Trading among Canadian Investors Using Discount Brokerage Firms, Overall Satisfaction Increases for a Third Consecutive Year
TORONTO, Sep. 23, 2013, 2013 (Canada NewsWire via COMTEX) --
National Bank Direct Brokerage Ranks Highest in Investor Satisfaction
With Discount Brokerage Firms in Canada
-- Overall investor satisfaction with discount brokerage firms in
Canada increases to 724, up 24 points from 2012.
-- Overall satisfaction is 48 points higher when mobile access is
offered to investors for trading and setting and managing
-- Forty-four per cent of highly satisfied investors plan to
increase the amount of their investments with their discount
Investors in Canada are conducting more
trades and increasing the amount of their investments as overall
satisfaction with discount brokerage firms improves, according to the
J.D. Power 2013 Canadian Discount Brokerage Investor Satisfaction Study(SM) released today.
A transition has been occurring in the Canadian investment market year
over year, as the percentage of investors with only discount brokerage
accounts has increased to 33 per cent in 2013 from 21 per cent in 2012.
Among investors with discount brokerage accounts, the percentage of
moderately active traders—those who make between one and 12 trades per
year—has increased to 58 per cent in 2013 from 46 per cent in 2012,
while the amount of their investable assets has increased to a median
of $141,191, up from $133,665.
With more active trading, overall investor satisfaction with discount
brokerage firms in Canada increases for a third consecutive year and is
724 (on a 1,000-point scale) in 2013, up 24 points from 2012 and 45
points since 2011. In comparison, self-directed investor satisfaction
in the United States averages 752, down from 768 in 2012, according to
the J.D. Power 2013 U.S. Self-Directed Investor Satisfaction Study.(SM)
"More investors are making trades in Canada, and they appear to be
recognizing the value their discount brokerage firm is able to
provide," said Craig Martin, director of investment services at J.D.
Power. "As markets rise, investors want to be a part of the growth. The
effectiveness of discount brokerage firms in educating their investors
regarding the available opportunities, and in turn increasing their
confidence in investing, is paying dividends. Conversely, in the United
States, overall satisfaction with self-directed brokerage firms has
declined despite the market's improvement, as investing attitudes and
behaviors have not yet shifted among a substantial portion of the
The study, now in its fifth year, measures investor satisfaction with
their primary discount brokerage firm across six key factors (in order
of importance): interaction; trading charges and fees; account
information; account offerings; information resources; and problem
Interaction is crucial to overall investor satisfaction, which raises
the importance of brokerage firms' websites. The website's appearance,
ease of use, clarity of information and speed of executing a trade are
critical to investors who are managing their own investments. That
said, interaction satisfaction is largely dependent on the type
investor. Satisfaction with discount brokerage websites is highest
among active traders—those who make more than 12 trades per
year—partially due to more frequent use of their firm's website and the
focus that many sites place on trading. Less active traders often are
looking for guidance and information rather than trading tools so they
find themselves struggling to locate their desired information.
"Brokerage firms need to make sure their website meets the key needs of
the different types of investors they serve," said Martin. "Investors
who make a lot of trades need and value different capabilities and
options than do less-active investors. Treating all investors the same
is likely to result in dissatisfying a large proportion of them."
The study finds that overall satisfaction is 48 points higher when
mobile access is offered to investors for trading and setting and
managing alerts. While investors value online tools, phone interaction
continues to be an important part of the experience. More than one-half
(52 per cent) of investors have called to talk to a representative
about their account, ask a question or perform other tasks in the past
12 months, with 26 per cent making trades over the phone.
"A key element of an outstanding investor experience, which also creates
loyalty, is effectively communicating in a way that ensures investors
are aware of the resources available and how those resources add value
to the investing experience," said Lubo Li, senior director of the
financial services practice at J.D. Power, Toronto. "In a business
where word of mouth is the best advertising, loyal investors are
critical to the long-term success of brokerage firms."
The study finds that 71 per cent of highly satisfied investors (overall
satisfaction scores of 900 and above) say they "definitely will" stay
with their primary discount brokerage firm for at least the next year
and 44 per cent plan to increase the amount they invest, while only 43
per cent of satisfied investors (overall satisfaction of 700 to 899)
say they "definitely will" stay with their firm and 33 per cent plan to
increase their investments. Additionally, 71 per cent of highly
satisfied investors say they "definitely will" recommend their
brokerage firm to family and friends, compared with just 30 per cent of
"It may be an obvious point, but an investor's wealth is likely to grow
over time, so today's investors who make a few trades will likely be
active investors of the future. The average tenure for investors is 11
years, making it clear that waiting until investors become active
investors or have accumulated substantial wealth before ensuring a
great experience is a risky proposition," said Li.
Discount Brokerage Investment Firm Rankings
National Bank Direct Brokerage ranks highest in discount brokerage
investor satisfaction with a score of 757, and performs particularly
well in the interaction, account information and account offerings
factors. Following in the rankings are Disnat (750); BMO InvestorLine
(742); and TD Direct Investing (734).
J.D. Power offers the following tips to investors selecting a discount
-- Leverage the tools and resources, such as educational seminars,
available from your investment firm to help you research,
analyze and invest more prudently.
-- Make sure your investment firm knows your preferred method of
contactâ??e.g., email, phone or mailâ??so you will
receive all communications in a timely manner.
-- Consider increasing the interaction with your investment firm's
local investment centre, which is an excellent resource for
The 2013 Canadian Discount Brokerage Investor Satisfaction Study
includes responses from more than 3,000 investors who use investment
services with discount brokerage firms in Canada. The study was fielded
from May through June 2013.
Investor Satisfaction Index JDPower.com Power Circle
Ranking Index Ratingsâ?¢
(Based on a 1,000-point scale) score For Consumers
National Bank Direct Brokerage 757 5
Disnat 750 4
BMO InvestorLine 742 4
TD Direct Investing 734 4
Industry Average 724 3
Qtrade Investor 722 3
CIBC Investor's Edge 720 3
HSBC InvestDirect 717 3
RBC Direct Investing 709 2
ScotiaMcLeod Direct Investing 707 2
Questrade 695 2
Scotia iTRADE 693 2
Included in the study but not ranked due to small sample size are
Credential Direct and Virtual Brokers.
Power Circle Ratings Legend:
5 - Among the best
4 - Better than most
3 - About average
2 - The rest
About J.D. Power
J.D. Power is a global marketing information services company providing
performance improvement, social media and customer satisfaction
insights and solutions. The company's quality and satisfaction
measurements are based on responses from millions of consumers
annually. Headquartered in Westlake Village, Calif., J.D. Power has
offices in North/South America, Europe and Asia Pacific. For more
information on car reviews and ratings, car insurance, health
insurance, cell phone ratings, and more, please visit JDPower.com. J.D.
Power is a business unit of McGraw Hill Financial.
About McGraw Hill Financial
McGraw Hill Financial (NYSE: MHFI) is a leading financial intelligence
company providing the global capital and commodity markets with
independent benchmarks, credit ratings, portfolio and enterprise risk
solutions, and analytics. The Company's iconic brands include:Standard
& Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices,
Platts,CRISIL,J.D. Power, andMcGraw Hill Construction. The Company
has approximately 17,000 employees in 27 countries. Additional
information is available atwww.mhfi.com.
No advertising or other promotional use can be made of the information
in this release without the express prior written consent of J.D.
SOURCE J.D. Power and Associates
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SOURCE: J.D. Power and Associates
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