The study, now in its seventh year, measures investor satisfaction with their primary discount brokerage firm across six factors : interaction; account information; trading charges and fees; product offerings; information resources; and problem resolution. Scores are calculated on a 1,000-point scale. Overall satisfaction with discount brokerage firms is 729 this year, a seven-point decline from 2014.

Satisfaction is 848 when investors are contacted at least twice by their firm about products and services, when they use at least one financial planning and one tracking/monitoring tool, and are aware of such educational resources as seminars/webinars. When none of these are met, satisfaction is only 645. For investors seeking more guidance and support, but who do not want a traditional full-service advisor, a "robo" advisor may therefore be a good fit, JD Power said.

Robo advisors provide automated portfolio management services, including periodic re-balancing, at a relatively low cost based on assets. While many firms offer such tools today, there is still limited awareness of this capability among investors, JD Power said. While only 22 per cent of respondents are aware of such an offering, over half said they would be interested if their firm provided it, and interest climbs to 67 per cent among Gen Y/Z investors.

“Robo-advisors have created a lot of buzz in the industry and could really take hold, especially with Gen Y/Z investors, if firms can get the pricing right and effectively communicate the value to those investors looking for guidance but not interested in or willing to pay for a full service advisor,” said Mike Foy, director of the wealth management practice at JD Power. “It could also help take some market share from full service providers over time, especially as investors begin to get more insight into their account fees and portfolio performance as key milestones for the CRM2 regulatory mandate approach.”

In other findings, only 35 per cent of investors said they “completely” understand their fees, down from 42 per cent in 2014, JD Power said. Satisfaction is significantly higher among investors whose firm has provided an explanation of fees than among those whose firm did not . Similarly, the relative importance of commissions and fees as a driver of satisfaction has decreased, as the average cost per trade has declined for a third consecutive year , the firm added. Differences in pricing have also dropped significantly in recent years, with the gap between reported fees for the highest and lowest performing firms in the study declining by nearly 50 per cent since 2012.

The study is based on responses from over 2,700 investors who use investment services with discount brokerage firms in Canada.