For Canada’s discount brokerages, fall not only means a busier season with investors, but for many of them it is also the time of year they either dread or cheer. The stretch of time between September and January is typically when a number of Canadian discount brokerage rankings get published – something that could be known as “rankings season.”
Just before the end of September, one of the biggest of the ranking companies, J.D. Power & Associates, officially announced their 2013 Canadian Discount Brokerage Rankings. This year’s winner, National Bank Direct Brokerage, finally managed to grab first place by narrowly edging out the reigning winner for the past four years, Disnat who came in second and BMO InvestorLine who placed third.
In the first of a two-part series on the 2013 J.D. Power & Associates discount brokerage rankings, I’ll take an in-depth look at this year’s award winner, how they managed to land in first and what the ripple effect of their win might mean for self-directed investors as well as the Canadian discount brokerage industry as a whole. The second part in the series will drill down into the numbers from this year to see what they reveal about the sentiment of investor satisfaction with discount brokerages and how it has shifted relative to prior years.
For those of you interested in learning more about the awards are produced, check out the special series on the JD Power & Associates Canadian discount brokerage rankings.
How “The Best” Was Won
Getting to number 1 has been a story of persistence for National Bank Direct Brokerage (NBDB). Over the past 5 years, NBDB has consistently scored among the top three Canadian discount brokerages in terms of investor satisfaction yet first place was always elusive. This year, however, NBDB scored 757 (out of 1000) and narrowly managed to edge out the reigning winner Disnat (who scored 750) by 7 points. While the margin is small, a victory is still a victory.
For NBDB the win is a sign that they continue to hit the right notes with their clients in terms of providing an experience clients feel is satisfying – the metric the ‘investor satisfaction’ survey is designed to measure. As is explained in the special series on the discount brokerage rankings, what goes into measuring “investor satisfaction” might help account for why NBDB was able edge out Disnat this year. Fortunately, the President of National Bank Direct Brokerage, Nancy Paquet, helped to provide some background into what might have contributed to her firm’s win this year. As a bonus, she also shared her views on the Canadian discount brokerage industry and provided a glimpse into how this industry continues to meet the challenges of innovation demanded by clients and competitors.