Does Customer Service Matter When Choosing a Discount Brokerage?
For many consumers, customer service isn’t important until it is needed. In the era of online brokerages, however, there are still numerous encounters self-directed investors have with discount brokerage customer service agents.
For example, many Canadian discount brokerages still require paper forms to be submitted for account openings and closings and the combination of complex products with hard to navigate websites means that interacting with customer service is almost inevitable. Pragmatic reasons aside, many consumers also value having access to a real person and being treated as a customer rather than just an account.
As the discount brokerage space continues to become more competitive on price, the importance of customer service quality is likely to become more important which is great news for consumers.
Where to Find Information on Customer Service at Canadian Discount Brokerages?
With so many opinions online, finding objective information on what customer service is like at a particular Canadian discount brokerage is not easy.
One reason impartial information is so difficult to come by is because there simply aren’t a lot of firms directly measuring it. For consumers, this means having to piece together a fragmented picture from several different sources, including from forum posts and user comments. Our Canadian investor forums section provides a list of the most popular forums where investors typically ask and answer questions about personal experiences with discount brokerages.
Another reason discount brokerage customer service quality information isn’t readily available is because investors primarily focus on price rather than customer service when deciding between discount brokerages. While paying more isn’t a guarantee of better service, providing quality live agent service isn’t cheap either. Sometimes the lower cost of deeply discounted brokerages comes at the expense of service.
Given how challenging it can be to find impartial information on customer service at discount brokerages, the Dalbar award and evaluation that it is based upon, are actually quite well suited to providing these types of insights for consumers. Unfortunately for consumers, this data has not been very easy to access.
For many years, Dalbar has only provided the general public with the name of either the company that ranked highest in their evaluation or the top three companies in the evaluation. According to Dalbar this was done to “celebrate” the accomplishments of those who performed above the industry average. As a component of this series, however, SparxTrading.com was able to obtain data from Dalbar (see part 2 of the review) that shows where each discount brokerage performed relative to the industry average.
In the next part of this series, we take a detailed look at Dalbar’s evaluations, how they are conducted and what the findings mean for Canadian self-directed investors as well as for discount brokerages.