4. What do the survey results and ratings mean for consumers?
For consumers, accessing accurate and reliable information on financial products is vital to making informed choices. When looking at customer experiences with discount brokerages, it’s important to ask where those opinions are coming from and how they are reported. The results of the J.D. Power investor satisfaction survey are a reflection of consumer opinions and experiences of actual account holders with discount brokerages. So, for example, when a particular company such as Disnat ranks “highest in investor satisfaction” (as they have for the past four years) according to J.D. Power and Associates, this claim actually means that holders of Disnat accounts rated their experience with Disnat higher than holders of accounts at other discount brokerages – a phrase much trickier to fit into advertisements.
As with any survey or ranking, it is important to understand what is being measured and how it is being measured in order to know how to interpret the survey results properly. In the case of the J.D. Power and Associates investor satisfaction survey, self-directed investors’ experiences, opinions and perceptions of a discount brokerage are being measured. Self-directed investors are, however, a diverse bunch which means that the investor satisfaction survey reflects the answers of all kinds of investors, not necessarily the ones that best match your interests or needs.
Perceptions are also challenging to measure, quantify and report accurately. Reporting of numerical scores, averages or categories of ranking can convey a sense of certainty that readers need to be cautious about. When evaluating the investor satisfaction survey scoring systems, an important question to ask is “how important is one extra point?” In the case of either a numerical score or a Power Circle, the answer can mean a big difference.
Conclusion
For Canadian consumers, the J.D. Power and Associates Investor Satisfaction survey is unique in that it offers a free, reliable and impartial glimpse at how fellow self-directed investors experience a discount brokerage product. If you’re reading this article online, chances are you are also part of a large portion of online shoppers that do their research online by using reviews. The bottom line for self-directed investors is that while good decisions start with good research, ultimately the real test of your satisfaction with a product will be when you actually own it.
Read the second part of our series here.