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Look Back / Look Ahead: Influencer Edition

Q&A With Glenn LaCoste of Surviscor

What is a big story for DIY investing in 2020 that caught your attention?

COVID-19 would be too easy of a response, but it did impact the effectiveness of all DIY investing firms with new, current, and former investors all showing up ready to play. For me, the biggest DIY investing story was the narrative around zero-commission trading and the “fake news” surrounding Wealthsimple’s discount brokerage offering.

The message of zero commissions through Wealthsimple Trade is true, but the narrative that it is a leading DIY investor platform for all Canadians is not, as the narrative has been created through paid advertising, media coverage, and ghostwriting to heighten its awareness. My favourite examples involve publications that claim they are a top-tier online brokerage firm, when they only offered a mobile application until mid-2020. To this day, the platform offers basic quotes, charting, and order entry capabilities.

A new or returning DIY investor should look beyond the $0 and partner with firms where one can learn about investing. You get what you paid for with Wealthsimple Trade. I covered the subject on BNN Bloomberg most recently in July 2020, as the producers love the zero-commissions story, but less and less about the merits of firms. Visit our media file to view the clip and others at Surviscor U – TV Coverage.

What are the trends that you noticed among Canadian online brokerages in 2020?

I would narrow down the trends in 2020 to firm attitudes rather than any specific feature and/or functionality, as the reality is that most firms offer the same product and services, and that did not change in 2020. What did change in 2020 was the inability of firms to respond to service requests, platform downtimes during market hours, and a general lack of accountability. The new excuses all involve the word “COVID,” which is a debatable theory, as the mature industry has been running digitally for over 20 years.

Many investors got into the markets for the first time (or came back after being on the sidelines) in 2020.

a. What features should they be looking out for from their online brokerage in 2021?

The new and returning investors should focus on service results, educational resources, and mobile-platform compatibility with the online platform.

b. What can online brokerages do to improve the experience for this group of investors in 2021 and beyond?

The discount brokerage, or online brokerage, community has been given a new lease on investing, and the firms should focus on educational resources and providing “more” versus “less.”

User experience is a hot topic with online brokerages. What are Canadian online brokerages getting right and what are they missing the mark on when it comes to interacting with their services?

User experience (UX) comes in many shapes and sizes, and most firms are concentrating development efforts on using UX marketing experts, who have little to no knowledge on what a stock is, which scares me to no end. DIY investing is unique and is not the same as buying something on Amazon, searching on Google, or watching TikTok videos.

The goal of many firms is to analyze investor usage patterns and then remove rarely used features, calling that a better user experience, while really the issue is not about users choosing not to use something but rather about users avoiding a poorly developed area of a platform. Leading firms provide custom usage options rather than taking away features and functionality.

Market data, which is quotes and market information, and basic order entry are areas where most firms are doing okay.

You also hear from online brokerages directly. What are one or two important topics that came up often with that group (especially in 2020)?

The main topics of 2020 were record-level trades and account openings, which typically get presented as a direct linkage to the firm’s efforts and achievements. The secondary topics were outages and service issues, which were mainly attributed to COVID. The truth is that most of the success was due to COVID, and, one could argue, the outages and service issues were due to poor executive-level planning.

You have covered online brokerages in Canada for a long time. How would you characterize their pace of change and innovation in 2020? Do you think things will accelerate in 2021? What might contribute to them changing?

The simple answer is there has been little pace of change for years, and 2020 was no different. A few firms launched new platforms, but these were platforms that were long overdue and simply enhanced the look and feel, which was a necessary start, for sure.

I do not see any accelerated launches in 2021, but I do feel that the increased profits from 2020, and subsequent 2021 profits, will lead to technology spends and more-targeted investor platforms to try to satisfy everyone.

Your online brokerage review is one of the most influential for online investors to consult as part of their research. Can you provide a comment on the strengths and limitations?

Thank you for the validation of our work. We pride ourselves on our knowledge, our history, and our background, but the strength of our influence is the unbiased, objective, and deep-dive results that speak to the true investor journey and experience of a complete DIY investor relationship.

I would love to say that we do not have limitations in our reviews, but the depth of our reviews considers all levels and types of investor experiences, which can make it difficult for a specific reader to narrow in on their personal persona and general needs. To combat that limitation and allow a more customized drilldown for investors, we offer a free tool called scorChoice (Invest with the Right Broker for You) that allows investors to prioritize needs in each major Surviscor category, to produce its own rankings using our in-depth research.

Glenn LaCoste, President and CEO, Surviscor

About Glenn LaCoste

Glenn LaCoste is the President and CEO of the Surviscor Group of Companies. He is considered a leading spokesperson and analyst in both the online and mobile banking and brokerage industries in Canada. Mr. LaCoste is an occasional television guest on the Business News Network (BNN), providing professional insight on banking and brokerage segments, and is often quoted in Canadian financial services articles. Mr. LaCoste also provides research support for MoneySense magazine’s annual discount brokerage awards.

Mr. LaCoste has over 30 years of experience in financial services and has been actively involved in Canadian scorecarding reviews since 2003. Mr. LaCoste had an initial 10-year career in the online brokerage industry and has spent the remainder in online website development, design, and strategic operational consulting. Mr. LaCoste has held executive positions at CT Securities and Datek Canada (formerly Ameritrade Canada), after starting his career at TD GreenLine.