Although overall investor satisfaction with Canadian discount brokerage firms increases year over year, closing the satisfaction gap with U.S. firms, large gaps in the investor experience remain, according to the J.D. Power and Associates 2012 Canadian Discount Brokerage Investor Satisfaction Study released Thursday.
Overall investor satisfaction with discount brokerage firms in Canada averages 700 (on a 1,000-point scale), an increase of 21 points from 679 in 2011. In comparison, investor satisfaction in the United States averages 768, according to the J.D. Power and Associates 2012 U.S. Self-Directed Investor Satisfaction Study. Further, satisfaction in the Canadian discount brokerage industry trails satisfaction in the Canadian full service brokerage industry by 20 points and in the retail banking industry by 53 points.
The study finds that the largest gaps in satisfaction between brokerage firms in Canada and the United States are with problem resolution (568 vs. 648, respectively); trading charges and fees (622 vs. 697, respectively); and interaction (752 vs. 817, respectively).
Among the best service practices that drive satisfaction with discount brokerage firms, Canada significantly trails the United States in contacting investors regarding products, services and seminars; website accessibility; and the usage of asset allocation and financial planning tools.
“At this point, the Canadian investor experience falls short, compared with what U.S.-based investors are getting,” says Lubo Li, senior director and financial services practice leader at J.D. Power and Associates in Canada.
“All major Canadian banks have a discount brokerage to service their investors’ diverse needs in one location. Failure to deliver services that their investors have come to expect, based on their banking and advisory services, may lead to an inconsistent experience, detract from the value of the corporate brand and, worst of all, result in higher levels of attrition and loss of assets under management,” says Li.
The study, now in its fourth 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 resolution.
Disnat ranks highest in discount brokerage investor satisfaction for a fourth consecutive year with a score of 768, and ranks among the highest-performing firms in all factors. Following in the rankings are BMO InvestorLine (720) and National Bank Direct Brokerage (719).
The 2012 Canadian Discount Brokerage Investor Satisfaction Study includes responses from nearly 2,900 investors who use investment services with discount brokerage firms in Canada. The study was fielded from June 2012 through July 2012.