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moneysense.ca, 21/05/09
Survey on Canadian Online Discount Brokers
Elissar Toufaily, a Ph. D. student at the University of Quebec à Montréal (UQAM) is conducting research on the impact of website features on customer loyalty to online brokers. She is requesting that investors help her with the research by completing a simple questionnaire (the survey is also available in French) that would provide data on perception of online broker website characteristics. The survey is anonymous and confidential. Investors who take the survey are eligible to enter into a draw offering two prizes of $500 each and no association can be made between entries to the contest and responses to the survey.
I took the survey and found that it does not ask for any specific financial information and takes about 10 minutes to complete. Elissar is willing to share her findings with us when her study is complete.
moneysense.ca, 21/05/09
Hi CC! Thanks for the heads up on the survey! Will you be posting the final results when it’s complete? Inquiring minds (like me) want to know how my brokerage compares with others.
I’m generally quite satisfied with BMO Investorline in terms of the interface and their customer service. My only real criticism of BMO Investorline is their fixed income products offerings (which is based on whatever Nesbitt Burns has in inventory). Also, they don’t disclose their fees on the offerings, either – their fees are baked into the take-it-or-leave it price of the offering (it’s not a bid / ask commodity). So, more transparency in their fees on the fixed income products side would be nice.
At some financial trade shows, I had the opportunity to meet the owners / operators of CNQ, one of our lesser known stock exchanges. I was trying to convey to them that their stock exchange is completely a “me too” product, they’re only competing on price and they will never get very far. I said they should let the TSX & Venture Exchange (and now Alpha) have all of the equities and let Montreal have all of the derivatives. I strongly suggested that they should make their exchange into a nice transparent debt market… Wouldn’t it be nice to be able to have a bid / ask trading market for government and corporate bonds, coupons, T-Bills, money market and other forms of debt in Canada? This is a huge untapped market because the total value of the debt market in Canada outweighs the equity market something like 10:1 when BNN last talked about the statistics…
It’s not very clear, IMO. “Website”, does that mean their public website, trading platform (webbased) or account management site. As you know Questrade has no less than 3 websites for each customer. I’ve emailed the student.
I was on page 1, click next, back to page 1 again (14%)
Fill it, Next….then page 4 (57%), Next again, back to page 1 (14%)
I give up trying to do the survey
@Jerry: That’s surprising. I took the survey this morning and it went smoothly. Thanks for trying anyway. I’ll let Elissar know.
@Jon.: I think “website” refers to all the sites associated with the discount broker account. To my knowledge, only Questrade has three websites for each customer but I’ll let Elissar chime in.
@Phil: Yes, Elissar promised to share the results with us once her other obligations are complete (thesis, papers etc.). That’s the quid pro quo I got for publishing this post
While on the topic of fixed income, how is BMO InvestorLine website for GICs. RBC Direct Investing offers online access to GICs – you can search and see a list of GICs currently on offer, the terms etc. but at TD Waterhouse you’ll have to call to get information on GICs. I wonder if BMO InvestorLine is suitable for a GIC account.
@CC. BMO Investorline is wonderful for GICs. They of course offer BMO’s GICs under the brand name AAT (Advisor’s Advantage Trust), but they also offer those of the competition, including the likes of TD Mortgage, Equitable, Home Capital Group, Canadian Western Bank, etc. Usually the non-AAT GICs have higher rates, but not as many of them offer a cashable option – in fact, I think the only non-BMO issuer which has a cashable option available to me is TD Mortgage in Investorline’s offerings.
These days GIC returns look rather ugly. In order to get a 3% return, I have to go way out to a 5-yr term. There is of course more risk to go to corporate bonds, but it is still possible to buy relatively short term (<5 yrs) debt from the Big 5 banks for around 4% (I recently bought some CIBC called bonds for 2013 at 4.05%).
To date, I still haven’t been adventurous enough to buy any corporates outside of the Big 5 banks. But if I were to do so, Transcanada Pipelines, BCE and Loblaws are offering relatively good value (compared to Government of Canada or the Provincials) on the debt market these days. The spread between the Big 5 banks and the Government bonds really aren’t that large (1% or less), which means that most investors think the Big Banks are nearly as good as government debt.
As you can probably surmise from my comments, inside my RSP account, I’m HUGE into bonds and GICs. I just love ‘em for my RSP account. I just wish there was more disclosure on how Investorline is raking me over the coals for in terms of fees…
@CC. Oops, I just noticed that I didn’t really answer your question. All GICs can be both bought and redeemed (if you buy the cashable option) online from the web interface. They give comparisons of all of the interest rates on the same page that makes it easy to compare between the various issuers, so you can look at them all on the same menu before you choose whose to buy.
Jerry Hung, I am sorry for the inconvenience. I was introducing some of your interesting comments in the survey, maybe at the same time you were answering. You can try again, you won’t have any problem for sure. thank you for your patience.
@Jon, it’s very important what you are saying. Like Candadiancapitalist said, it’s the assessment of the ENTIRE online presence with the broker.. it’s all the experience that is evaluated.. Your comment by email has been introduced to the survey.
@Phil and all those who are sending me emails to ask me if I will publish the results. Of course, like I promised CanadianCapitalist, a report of the results will be published on this blog.. It will be interesting to know how investors evaluate their online brokers and what is the root of investor loyalty (brand, prices, realtime cotes, etcc)
Thank you everybody for your help.. please continue to complete this survey.
Elissar
Please note that the more I have repondents who complete the questionnaire, the greater is the likelihood to obtain reliable and valid results, to compare between pure dotcom brokers with brick and click brokers.
All your feedbacks are also welcomed to enhance the survey!
Elissar
A pleasant survey if I may say so. I can finally express the practical aspect of a certain firm which also has horrible service.
Can’t wait to read the results? how many years?
PS: Just because I also went to UQAM, the English name of the institution (to my recollection) is not “at Mtl” but remains “à Mtl”. ;-p
@Nicolas: We don’t want to run afoul of the language police
I’ve updated the post to reflect the correct spelling. I think I can guess which firm you are referring to. I have some experience with them as well!
@Nicolas Thank you very much Nicolas for your participation.
Hopefully that after finishing tha data-gathering, data cleansing, and all these things, I can work like 2 to 3 months to analyse, synthesize and publish some primary comparative results.
In one day, we had almost like 20% of the rate of response necesserary.. Please continue to complete this survey.
Thank you CanadianCapitalist
[...] Survey on Canadian Online Discount Brokers [...]
Many Thanks Divident Guy for the mention!
Lower service charges might tempt you but there are some other things which you should consider before selecting your discount broker. Check out the advantages, they will charge you lower service cost and they never force you to buy any particular product. There are some disadvantage also such as, they will never advice you for any product, they are unable to give you quality customer service. There are some other things like commission rate,etc. For more details on discount broker refer http://www.prime-targeting.com/things-you-should-look-for-in-your-discount-broker/