Investment

Canadians unsatisfied with DIY investing options: survey

Published

1 year ago

May 16, 2023

Despite a rise in do-it-yourself investing, most Canadian investors appear to be unsatisfied with the options in the market. (Getty Images)

Despite a rise in do-it-yourself investing, most Canadian investors appear to be unsatisfied with the options in the market.

According to J.D. Power’s 2023 Self-Directed Investor Satisfaction Study, overall satisfaction with DIY investing options in Canada came in at an average of 598 out of 1,000 points, with three of the eight companies scoring above that average. While that overall score was a five point increase from last year, the study found that “the experience is a drag on customer loyalty and advocacy for most brands.”

The study also found that Canadians are less likely to recommend DIY investing services than other banking services to friends and family, with the average net promoter score (NPS) – an industry measurement that reflects customer loyalty and willingness to recommend a brand – coming in at 7 out of 100. That’s less than the average satisfaction score for full-service investing (31 out of 100), credit cards (28 out of 100) and banking (23 out of 100).

Craig Martin, head of wealth and lending intelligence at J.D. Power, said the study shows that many customers are having experiences that are “ambivalent or negative” about brands offering DIY investing services, including major Canadian banks.

“The numbers are very low,” Martin said in an interview.

“Consumers are almost begrudgingly having this relationship with brands. It’s not creating the experience that really stands out in a way that they would come back.”

The report found that 40 per cent of the 2,243 Canadian investors surveyed said they have had a less-than-seamless experience with their investing brokerages, pushing customers to shop around for investing options. Still, the top reason why Canadians switch firms is the high cost of fees, with 30 per cent citing it as the main reason consumers ditch existing firms. Poor service was cited by 13 per cent of respondents.

The three brokerages that topped J.D. Power’s ranking in terms of customer service each provide zero-fee trading. Desjardins Online Brokerage came in the top spot with a score of 692, followed by National Bank Direct Brokerage (645) and Questrade (626). RBC Direct was the only of Canada’s five largest bank brands that scored above the industry average with a score of 601.

In fact, the J.D. Power survey said the low NPS score was prevalent among Canada’s largest five banks, while pure DIY companies had an average NPS score four to five times higher than the banks.

“Many DIY investors in Canada initially turn to their banks for their investing needs because of the perceived ease of adding on to their existing relationship,” Martin said.

“However, a lot of these customers are having an experience that leaves them ambivalent or negative about the brand… This less-than-optimal experience greatly increases the odds of customers being open to starting a relationship with another provider, especially if there is an obvious benefit like reduced or no fees.”

In order for companies to succeed in customer satisfaction and retention, Martin says companies need to provide seamless digital capabilities, as well as educational tools that will allow DIY investors feel more confident in their choices.

“The companies that are going to start demonstrating real value and importance in people’s lives beyond just the product, those are the ones that are going to win over customers,” Martin said.

The J.D. Power study is based on responses from 2,243 investors between Oct. 2022 and January 2023. The report measured satisfaction in seven categories, including trust; digital channels; ability to manage wealth how and when I want; products and services; value for fees; people; and problem resolution.

Here is the ranking of self-directed investor companies in terms of overall customer satisfaction, along with the scores out of 1,000. The industry average was 598. The companies included in the study were selected based on market share.

Desjardins Online Brokerage (692)
National Bank Direct Brokerage (645)
Questrade (626)
RBC Direct (601)
CIBC Investor’s Edge (587)
TD Direct (586)
Scotia iTrade (584)
BMO InvestorLine (581)

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

3 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

3 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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