Introduction
In the first part of our special series on discount brokerage rankings and reviews, we take a look at one of the most popular consumer research organizations, J.D. Power and Associates, and their annual survey of self-directed investors’ impressions of Canadian discount brokerages known as the Investor Satisfaction survey. The results from this survey form the basis for the highly coveted J.D. Power and Associates award for the Canadian discount brokerage industry. As such, both consumers and the discount brokers pay close attention to the results of these surveys.
For consumers trying to choose between the many options in the discount brokerage market, using reviews and data from actual customers is a popular strategy to help make a decision. With several ratings systems now being provided to self-directed investors, there seems to be some confusing and potentially conflicting messages being communicated about different discount brokerages. Not all reviews are created equally, however, nor do they measure identical features, which is why sometimes the results can seem confusing.
To help demystify the ratings and to give Canadian self-directed investors a better understanding of J.D. Power’s rankings, we’ve taken a look at the following four questions:
- Who is J.D. Power and Associates?
- What does the Investor Satisfaction survey measure?
- How is Investor Satisfaction measured?
- What does this survey and its ratings mean for consumers?
1. Who is J.D. Power and Associates?
J.D. Power and Associates is a professional consumer research firm. They are among the most widely recognized names in marketing research and have a solid reputation for conducting thorough research on the experiences of consumers with brands or products. Although they are well-known for their work in the auto sector, J.D. Power and Associates (J.D. Power) also conducts surveys across a number of different sectors, including the banking and financial services sectors. Of particular interest to Canadians looking for a discount brokerage, J.D. Power has been conducting surveys of investor satisfaction with Canadian discount brokerages since 2009. Over that period of time, they have surveyed over 11,500 clients of Canadian discount brokerages asking them about various components of their experience with discount brokerage account providers. J.D. Power makes their money by selling the detailed results and analysis of their research to major brands so that these brands can better understand the needs and experiences of their customers and, in theory, work to improve those experiences.