Limitations
While the data and analysis of the customer service quality at Canadian discount brokerages appears to be reliable, one of the biggest drawbacks of the Dalbar evaluations is that only the winner and/or top candidates are typically reported. Other evaluations of discount brokerages, such as J.D. Power’s Investor Satisfaction Survey or the Globe and Mail Discount Brokerage Rankings report the results of the entire sector, as well as their method of determining the best discount brokerage.
Because the results are not more widely published, the Dalbar award, while clearly well earned, does not allow for consumers to contextualize how much better or worse the winner of the award performed relative to its peers. As such, even though the award is widely advertised alongside discount brokerages such as RBC Direct Investing and HSBC Invest Direct, many self-directed investors may simply be unaware of what it took to earn the top spot.
When asked whether or not Dalbar would be publishing additional information regarding the results of their evaluations, they stated that it is something they are considering, however, there is no firm commitment or timeframe around it happening.
Conclusion
Even in the “self-serve” online brokerage world, interactions with a discount brokerage’s customer service still play an important role in the process of getting questions answered and requests handled for many self-directed investors. Often it is these instances that form lasting impressions on consumers and the ones they are sure to pass along to others when asked about their personal experiences with a particular discount brokerage.
The Dalbar Direct Brokerage Service Award is a unique assessment within the landscape of discount brokerage rankings and evaluations. Its focus, while much narrower than the other awards, is probably its greatest strength because it is able to provide a much more detailed understanding of the interface between client and provider.
For self-directed investors who place a premium on service experience, the Dalbar award (and/or evaluation score) is worth considering as part of an evaluation of a potential service provider. Even for those that may not put a high level of importance on customer service, it is still nice to know who out there is working harder to treat their clients as people.