The most popular online brokerage for DIY investors

Competition can make everyone better, and that’s certainly true in the discount brokerage space. The latest J.D. Power report found steady improvement across all trading platforms, but it found big differences in how investors use them.

According to J.D. Power’s latest Canadian self-directed investor satisfaction study, investors are fairly content with all of the trading platforms available to them. On a 1,000-point satisfaction scale, the gap between the top- and lowest-ranked firms was just 33 points this year.

Desjardins Online Brokerage is J.D. Power’s top performer this year, which reclaims the top spot for the first time in three years. The online brokerage scored top marks in three of the five areas measured by the market research company, including interaction, information resources and product offering.

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When it comes to customer service, MoneySense is in full agreement. In our own Best Online Brokerages ranking, released earlier this year we recognized Desjardins as one of the best for customer service, with the shortest wait times when it comes to responding to emails.

The runner up on J.D. Power’s ranking is a non-bank brokerage that appears to have made major strides in the past year. Qtrade Investor secured the second spot that ranking, ahead of BMO InvestorLine. (Qtrade was MoneySense’s top brokerage overall for 2017.)

It’s helpful to understand how people are using each platform. There may not be major differences in satisfaction rates between brokerages, but there is a big difference in how investors use each platform. For instance, Questrate is the most popular online brokerage for do-it-yourself investors. Almost 90% of Questrade users are self-directed, DIY investors.

In contrast, just 54% of Qtrade investors identify themselves as this way. Instead, about a quarter of the Qtrade Investor users are looking for the firm to help validate their decisions, while another 22% see it as a collaborator and actively seek out guidance and advice from the firm.

Investment style by firm

If you’re thinking about switching brokerages, or are just starting out, you may want to pay more attention to how well they handle trades on the go. J.D. Power’s report suggests this is becoming a more important area for investors. The trend is most pronounced in the past year, with 63% of respondents saying they now favour mobile trading platforms, up from 59% in 2016.

Robo-advisor usage

One in five of those surveyed by J.D. Power have used a robo advisor. Millennials are most likely to turn to the automated portfolio management service, although their view of what they see has been mixed so far. Just under half of Millennials had a low opinion of using the robo services versus a self-directed platform.

Satisfaction rating of robo-advice platforms vs. self-directed firm ratings