JD Power Notes Fees Are Becoming a Top Focus for Do-it-yourself Investors in Canada

Wealthsimple ranks highest in investor satisfaction

TORONTO – Strong capital market performance and reduced trading fees are driving higher satisfaction among do-it-yourself (DIY) investors in Canada. According to the JD Power 2024 Canada Self-Directed Investor Satisfaction Study,^SM According to the survey released today, overall satisfaction with self-managed brokers rises to 631 (on a 1,000-point scale), a significant 33 points higher than in 2023.

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The increase in overall satisfaction this year is largely due to younger investors, particularly Generation Y¹ and partly also Generation Z, whose scores increase by an average of 71 and 24 points respectively. While Generation X’s scores also increased by 21 points year-over-year, this generation group still has the lowest scores on average.

“The ranking draws a very clear line between companies where low fees and no fees are perceived as significantly more satisfactory,” he says Craig Martin, Executive Managing Director and Head of Wealth and Lending Intelligence at JD Power. “In 2024, low fees became the top reason new customers choose a company, followed by personal recommendations. This has replaced the most common answer in previous years: previous experience/relationship with the company. This poses a potential threat to businesses where existing relationships with the organization are the main attraction for new customers, and could have wider implications for where customers choose to obtain wealth management services.”

Below are other key findings from the 2024 study:

Unclear fees damage trust: Making clients understand brokerage fees remains a necessary element as the proportion of investors who say they fully understand the fee structure drops to 52% from 59% in 2023. Customer ratings of the trust dimension are 89 points lower (on a 1,000-point scale). say they don’t fully understand the fees.
Younger investors continue to choose fintechs: Pure DIY brokerage firms continue to attract the younger demographic, with 66% of these firms’ clients being Generation Y or younger, while the Big 5’s client mix is the exact opposite: 66% are Generation X or older. This represents a growing risk for major banks as the Generation Y and younger segment make up an increasing share of DIY investors.
Test the water: Almost a quarter (24%) of self-managed investors confirmed that they have another brokerage account with another company. Two-thirds (67%) of these investors said their other self-directed account performed about the same or better than their primary DIY account. Those who said their second account performed better are almost twice as likely to say they will reduce the amount they invest with their current company in the coming year.

Study ranking

Wealth simple With a score of 718, it ranks highest among self-managed investor companies. Desjardins online brokerage (Disnat) (714) takes second place and Questrade (661) is in third place.

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The Canada Self-Directed Investor Satisfaction Study, now 16^Th year, assesses the key drivers of satisfaction and business performance among true do-it-yourself investors (those who do not interact with financial advisors). The study measures satisfaction based on seven factors (in order of importance): trust; digital channels; Ability to manage assets how and when I want; products and services; equivalent of fees; People; and problem solving.

The study is based on responses from 2,416 investors who make all their investment decisions without the guidance of a financial advisor. The study was conducted from October 2023 to January 2024.

For more information about the Canadian Self-Directed Investor Satisfaction Study, visitVisit https://www.jdpower.com/business/wealth-management-platform.

See the online press release at http://www.jdpower.com/pr-id/2024039.

About JD Power

JD Power is a global leader in consumer insights, advisory services, and data and analytics. A pioneer in using big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been providing incisive industry insights on customer interactions with brands and products for more than 55 years. The world’s leading companies across major industries rely on JD Power to execute their customer-centric strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business.

About JD Power and Advertising/Promotion Rules: www.jdpower.com/business/about-us/press-release-info

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¹ JD Power defines generational groups as pre-boomers (born before 1946); Boomers (1946-1964); Generation X (1965–1976); Generation Y (1977–1994); and Gen Z (1995–2006). Millennials (1982-1994) are a subgroup of Generation Y.