Tips on Using Rankings in Research
Rankings such as these are important reputation building tools for discount brokerages and viewed as such, those who place first in a category will often use this achievement as part of their marketing strategy. For example, this past year (2012) Virtual Brokers placed first overall (and as such “the best discount broker” overall) however BMO InvestorLine, who came in third overall, reported themselves to be “the top bank-owned” online brokerage. While both are true, the claims sound confusingly similar and thus for consumers, it is important to look closely at rankings that companies use as part of their marketing.
Another tip for consumers using the Globe and Mail discount broker rankings for their research is to understand that their own research may provide different results. The survey items that go into the rankings are partially explained but not to the point where individuals can see exactly how or why scores came to be. The way it stands now, the results of the Globe and Mail discount brokerage rankings reflect the experiences and opinion of a particular individual and the experiences/opinions of others are likely to vary.
Summary
Looking back across the past eleven Globe and Mail Canadian discount brokerage rankings has provided some interesting perspectives on the Canadian discount brokerage industry as well as on the rankings themselves.
The Globe and Mail’s rankings reflect what the author of the rankings, Rob Carrick, believes to be important components for mainstream do-it-yourself investors to consider when researching discount brokerages. As a reflection of what’s current in the discount brokerage industry and what mainstream investors are talking about, the rankings offer a great deal of value. Importantly, though, it is difficult to generalize his opinion and experiences to that of the wider investing public and it is difficult to compare the ranking scores across time, which are two important limitations.
That said, Rob Carrick is particularly experienced in covering the Canadian discount brokerage sector and as such, provides an informed opinion of what investors can expect to encounter when comparing discount brokerages. If or when an investor is considering a discount brokerage, the Globe and Mail rankings can provide investors with important insights into the products and services being offered by Canadian discount brokerages while the follow-up articles associated with the rankings can add additional context to the data in the rankings themselves.