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    Key points

    It looks like football players aren’t the only ones trying to score big this weekend. Burgers, fries and Candadian discount brokerages are also in the mix. With the frenzy of offers rounding out January, we’re heading into February with over 22 deals and promotions for anyone looking to open up an online trading account. That’s […]

    It looks like football players aren’t the only ones trying to score big this weekend. Burgers, fries and Candadian discount brokerages are also in the mix. With the frenzy of offers rounding out January, we’re heading into February with over 22 deals and promotions for anyone looking to open up an online trading account. That’s plenty to chew on.

    In this week’s roundup we take a look at the issues that got people talking this week – that’s about brokerages not burgers. First we take a look at two different measurements of client service and try to make sense of why they’ve obtained two completely different results. Following that, we’ll take a look at one independent brokerage’s bold voyage into a place they haven’t really been before: online investor education. Finally, with deals & promotions clearly on the minds of investors, we’ve collected an assortment of forum posts for specific online brokerage deals.

    Defining Customer Service

    As much as online trading doesn’t require directly dealing with a brokerage’s staff, there are a handful of times when it is unavoidable or even required. In spite of technological advances around them, many brokerages don’t have a live chat or don’t rely on that function when it comes to sensitive account information and/or trading instructions.

    In last week’s roundup we mentioned that financial service analysis firm, Dalbar, announced the results of their annual evaluation of telephone client service at Canada’s online brokerages. In it both HSBC InvestDirect and RBC Direct Investing earned the “Winner’s Circle” designation for meeting the standard for high quality telephone client service (for our in depth look at the latest results, click here).

    This past week another financial service firm, Surviscor, announced their results of an email based evaluation. According to Surviscor’s evaluation, Credential Direct earned a “platinum” designation with a response time of under two hours and Qtrade and Scotia iTrade were awarded “gold” (which reflects an email response time of between two and four hours).

    While fast email response may be of interest, what was far more interesting was that both the Dalbar rankings and Surviscor rankings yielded completely different results when it comes to ‘customer service’.  In Dalbar’s evaluation, RBC Direct Investing and HSBC Invest Direct scored the highest of the evaluated brokerages. Conversely in the Surviscor rankings, HSBC Invest Direct placed 9th whereas RBC Direct Investing tied for last place.

    For DIY investors, this is undoubtedly a confusing situation. Factor in the headlines and spin doctoring and you have an especially tough time figuring out what these results really reflect.

    Take the following examples from recent news releases:

    • “Qtrade Investor takes gold for customer service” (from the news release here)
    • “Credential Direct Named Top Brokerage Firm for Customer Service in Canada” (news release here)
    • “HSBC InvestDirect and RBC Direct Investing both emerged as premier providers in customer service in 2014” (from the news release here)

    Then there are the numbers themselves. Although Dalbar only reported the average and the range between highest and lowest (which was 13 percentage points) scores on client service, when compared with the range between Surviscor’s highest and lowest scores (a difference of 83 percentage points) the disparity is hard to ignore.

    From the outside, it is puzzling how firms capable of implementing highly sophisticated trading platforms and rank highly on client service on telephones can’t seem to figure out prompt email or vice versa.

    The lesson when looking at any of the rankings of online brokerages continues to be that consumers need to be vigilant when it comes to understanding exactly what is being measured and how those measurements are being made. Clearly, in this case, ‘customer service’ isn’t a standard unit of measure the way ‘commission pricing’ may be. Unfortunately, headlines and press releases (and evidently source materials) can yield conflicting definitions of quality customer service.

    Event Review

    This past week Virtual Brokers held an educational webinar aimed at beginner investors. The session, presented by personal finance author Gail Bebee, was the first in a two-part series and featured an overview of the basics of investing. Given that it was just under an hour long, this presentation did not go into extensive detail on any one topic but instead looked at several topics relevant to investing generally.

    Included in the discussion was a breakdown of the different asset classes individuals can invest in; a quick comparison of mutual funds versus ETFs and how to start planning to invest. Bebee spent a bit of time discussing ETFs in particular and highlighted the benefits and potential risks/costs. This webinar was recorded and may be made available for viewing in the near future on VB’s website.

    Part two of this presentation will look take a deeper look at how to build a portfolio. For more information on when this session is planned, check our investor education events section.

    This upcoming week will feature a number of investor education events. We’ll be updating the events calendar shortly so check back soon for details on February’s selection of investor education opportunities.

    From the Forums

    The record volume of deals & promotions from Canadian brokerages did not go unnoticed by investors on the popular deals forum Below is a list of links related to discussions of deals at each respective discount brokerage:

    • BMO InvestorLine: This deal mentioned by one forum user is actually a special targeted offer. Nonetheless the bonus is for an extra $100 on top of the advertised $300 cash back RSP promotion.
    • Questrade: With so many offers on the go from Questrade, users may have a tough time deciding between free trades, cash back or even an iPad mini. Click here to read what forum users had to say.
    • RBC Direct Investing: With a year to use 20 free trades, RBC DI has got some forum users talking. While not their best offer to date, it is one of the few with such a long expiry date. Click here to read the discussion.
    • TD Direct Investing: This thread discusses the current 200 free trade offer by TDDI.

    That does it for this week’s roundup. Heading into the weekend here are a couple of miracle stories to keep you entertained. For those who don’t believe in zombies or that cats don’t have 9 lives, here’s a cat that will make you rethink that.

    And finally for the football fans and video gamers. For those that didn’t think they’d see Marshawn Lynch play nice with media ahead of the Super Bowl, it seems like maybe you’re in for a bit of a shock on this fun video.

    Go Seahawks!