Do-it-yourself investors have jumped back into the market in 2013.
According to J.D. Power and Associates’ fifth annual discount brokerage investor satisfaction study, 86% of British Columbian investors with a discount brokerage account made at least one investment trade in the past year, up from 67% in 2012.
The bulk of the increase came from clients who made between one and 12 trades. About 60% of B.C. investors surveyed fell in this category, up from 42% in 2012.
The proportion of investors who made more than a dozen trades rose only slightly to 26% from 25% last year. Only 14% were inactive with their account in the past year, compared with 34% in 2012.
Craig Martin, J.D. Power’s director of financial services, said the upward trend of the Canadian market and the relatively low volatility compared with what was experienced in 2008 and 2009 has led to more investors getting back into the market.
In addition, more investors are confident about trading on their own. About a third of investors in B.C. only trade using their online accounts versus using a full-service investment broker. That’s up from 21% in 2012.
“There is a big shift in folks taking the plunge and getting into the marketplace and feeling empowered to do it on their own,” Martin said.
“Many are starting to question the value proposition of a full-service investment firm, or their relationship with one, especially among people who do a limited number of trades.”
With increased online activity, B.C. investors have become more satisfied with their chosen brokers.
Overall, there was a 5% increase in satisfaction by B.C. investors with their discount brokerage firms compared with last year’s survey.
“If we look at the different components of the experience, we see across-the-board improvement,” said Martin. “If you’re using the account, you’re seeing the value of it, the relationship grows. That seems to be showing up in the experiences of customers.”
Brokers shouldn’t rest on their laurels, however. While the discount brokerage service is fairly uniform for national providers, B.C. investors were still the least satisfied in the country with their online brokers. They were polar opposites from investors in Quebec, who were the most satisfied with their discount trading services.
