This year’s J.D. Power & Associates’ Canadian discount brokerage rankings were recently announced. As with years past, the rankings and the underlying survey they’re based on, provided a unique window into the collective voice of Canadian self-directed investors and their perceptions of Canada’s online discount brokerages.
In the first of our multi-part special series on this year’s discount brokerage rankings, we take a look at the survey that produces the rankings, including how it measures investor satisfaction as well as some of the unique features of this year’s survey and results.
The next part of our series will drill down into the actual performance of Canada’s brokerages on this year’s ranking and what these results mean for the online brokerages as a whole as well as self-directed investors.
A Quick Recap of the 2014 Canadian Discount Brokerage Rankings
When it comes to the various Canadian discount brokerage rankings, the J.D. Power & Associates evaluation occupies a special niche. Unlike other rankings that focus on direct evaluation of features, the J.D. Power ranking of Canadian brokerages is unique because its is the based on the systematic organization of opinions, experiences and perceptions of discount brokerage clients – what they call the “voice of the customer”.
Between mid-May and mid-June of this year, the Investor Satisfaction Survey polled just over 2500 clients from a number of Canadian discount brokerages to find out just how satisfied (or dissatisfied) these investors were with their current online brokerage. In total, 7 Canadian discount brokerages ended up having sufficient data to participate in the rankings (compared to 11 last year), with an average investor satisfaction score of 736 (compared to an average of 724 last year).
The firms covered in this year’s ranking (along with their overall investor satisfaction score) are shown in the chart below.
While numbers help to make the assessment and ranking easier, the process behind how these numbers are generated is actually fairly complex. (For those who want a more detailed explanation of the survey and scoring system, click to read our overview on the J.D. Power Investor Satisfaction Survey here)
It is useful, however, to get a quick sense of how these numbers are derived to better understand what they mean.