Canada’s Self-Directed Investment Firms at Risk of Losing Millennials, J.D. Power Finds

Desjardins Ranks Highest Among Self-Directed
Investment Firms

TORONTO–(BUSINESS WIRE)–While overall investor satisfaction with self-directed investment firms
in Canada increased slightly in 2019, financial institutions should not
rest on their laurels. According to the J.D. Power 2019 Canada
Self-Directed Investor Satisfaction Study,^SM more than
one-fourth (27%) of Millennial¹ investors are considering
switching providers in the next 12 months.

When it comes to interactions with their financial institution,
Millennials are more likely than older investors to rely on mobile
technology to engage with investment firms, and to use mobile much
differently than older investors. While Boomers favor tablets,
Millennials rely on their phones for a wide range of transactions that
go well beyond trading and checking account balances.

“Many investment firms are missing the mark with younger investors when
it comes to digital, especially in the mobile experience category,” said Michael
Foy, Senior Director of Wealth & Lending Intelligence at J.D. Power.
“Millennials are expecting a seamless digital experience, regardless of
the platform. The expectation of young investors is to have a mobile
experience that offers full functionality to do anything they can on the
website, whether that means executing trades, transferring funds,
reviewing their portfolio, or even using tools. Financial institutions
that want to build loyalty with this critical segment need to improve
the customer experience to reflect investors’ priorities and
expectations.”

Following are key findings of the 2019 study:

• Overall satisfaction increases slightly, despite challenging
  markets: Overall satisfaction is 726 in 2019, up slightly from 723
  in 2018. The survey was fielded in late 2018 when stock markets were
  closing the year in negative territory and volatility was high,
  driving down satisfaction with investment performance by 37 points
  year-over-year, and providing significant headwinds for firms to
  overcome.
• Millennials and mobile: Millennial investors are less engaged
  with providers on the web as more activity shifts towards mobile.
  Millennials averaged just 20 online interactions over the past 12
  months vs. 35 interactions among Boomers. Among those using the mobile
  channel, 80% of Millennials who execute trades use their phone for the
  transaction vs. just 47% of Boomers. Still, just 30% of Millennials
  and 29% of overall investors indicate they completely understood what
  mobile features and services were available to them, representing a
  big opportunity for firms to drive greater engagement.
• Fee understanding improves, but millennials lag: A key driver
  of satisfaction is understanding of fees, which has increased
  considerably since 2015, perhaps in part due to CRM2-mandated
  disclosures. In 2015, just 34% of self-directed investors in Canada
  indicated they “completely” understood fees vs. 50% in 2019.
  Satisfaction with fees is 157 points higher among those who completely
  understand vs. those with only partial or no understanding. However,
  there is a significant gap in complete understanding between
  Millennials (34%) and Boomers (58%) that likely accounts for lower fee
  satisfaction among Millennials.
• Millennials are aggressive investors, more diverse and more educated:
  Millennial investors are more likely to be more aggressive with their
  investments; likely to be female; more likely to have a college
  degree; less likely to be white; and less likely to be married.
  Investment firms’ efforts to capture individual client circumstances
  and preferences to personalize the experience becomes more essential
  as clients become more diverse and expectations increase based on the
  personalization that they experience in other industries.

The 2019 Canada Self-Directed Investor Satisfaction Study, now in its 11^th
year, evaluates key satisfaction drivers and firm performance for true
self-directed investors, those who do not interact with professional
advisors.

Study Rankings
Desjardins ranks highest in
self-directed investor satisfaction with a score of 753. CIBC
Investor’s Edge (745) ranks second, Questrade (740) ranks
third and BMO InvestorLine (732) ranks fourth. Desjardins most
recently ranked highest in 2017 and had been top-ranked several times
previously under the Disnat brand.

The 2019 Canada Self-Directed Investor Satisfaction Study measures
self-directed investors’ satisfaction with their investment firm based
on performance in seven factors (in order of importance): interaction;
account information; commissions and fees; product offerings;
information resources; investment performance; and problem resolution.

The 2019 study is based on responses from 1,744 investors who make all
their investment decisions without the counsel of a personal financial
advisor. The study was fielded from November 2018 through January 2019.

For more information about the 2019 Canada Self-Directed Investor
Satisfaction Study, visit

https://canada.jdpower.com/resource/canada-self-directed-investor-satisfaction-study.

See the online press release at http://www.jdpower.com/pr-id/2019086.

J.D. Power is a global leader in consumer insights, advisory
services and data and analytics. These capabilities enable J.D. Power to
help its clients drive customer satisfaction, growth and profitability.
Established in 1968, J.D. Power has offices serving North America, South
America, Asia Pacific and Europe.

About J.D. Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

¹ J.D. Power defines generational groups as Pre-Boomers (born
before 1946); Boomers (1946-1964); Gen X (1965-1976); Gen Y (1977-1994);
and Gen Z (1995-2004). Millennials (1982-1994) are a subset of Gen Y.

NOTE: One chart follows.

Source: J.D. Power 2019 Canada Self-Directed Investor Satisfaction
Study^SM
Charts and graphs extracted from
this press release for use by the media must be accompanied by a
statement identifying J.D. Power as the publisher and the study from
which it originated as the source. Rankings are based on numerical
scores, and not necessarily on statistical significance. No advertising
or other promotional use can be made of the information in this release
or J.D. Power survey results without the express prior written consent
of J.D. Power.

Contacts

Gal Wilder, Cohn & Wolfe; 647-259-3261; [email protected]
Sandy
Caetano, Cohn & Wolfe; 647-259-3288: [email protected]
Geno
Effler, J.D. Power; Costa Mesa, Calif.; 714-621-6224; [email protected]