Canada investor satisfaction with discount brokers lags U.S.

Thu Sep 20, 2012 9:56am EDT
 
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By Andrea Hopkins

TORONTO (Reuters) - Investor satisfaction with discount brokerages in Canada rose in 2012, but is still well behind U.S. levels, in part because stiff competition in the United States has driven better service, a survey showed on Thursday.

Overall investor happiness with discount brokerage firms in Canada rose 21 points from last year to 700 on a 1,000-point scale. That compares with U.S. investor satisfaction of 768, according to a survey by J.D. Power and Associates.

"In the United States, competition has driven trade commissions much lower, forcing high-performing firms to compete in the value they provide their investors in terms of tools and resources," Lubo Li, senior director of the financial services practice at J.D. Power and Associates, said in a statement.

"At this point, the Canadian investor experience falls short, compared with what U.S.-based investors are getting."

In addition, satisfaction in the Canadian discount brokerage industry trails satisfaction in the Canadian full-service brokerage industry by 20 points and the retail banking industry by 53 points, the marketing information services company said.

The biggest gaps in satisfaction between Canadian and U.S. investors using discount brokerages were in problem resolution, trading charges and fees, and interaction.

Only 19 percent of Canadian investors said they "strongly agree" that they feel loyal to their investment firm, compared with 28 percent of U.S. investors. Just 23 percent said they "definitely will" recommend their firm, compared with 36 percent of U.S. investors.

Disnat, the discount brokerage of Desjardins Securities, ranked highest in investor satisfaction among discount brokerage firms in Canada, followed by Bank of Montreal BMO.TO's BMO InvestorLine and National Bank of Canada (NA.TO: Quote)'s National Bank Direct Brokerage.

The rankings of individual firms, based on a 1,000 point scale, are below: