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Discount Brokerage Weekly Roundup – March 23, 2020

The most fundamental view of how the stock market works is a balance between supply and demand. As the past few weeks have now shown, there are clearly some places where there’s an oversupply and some places, like grocery stores and phone lines, where demand has surged. Even so, it’s important to remember, especially at the beginning of spring, that growth is a force that will happen and that life will find a way.

This edition of the Roundup will be shorter than usual, as the one big story that matters and is on everyone’s mind is COVID-19. In particular, we will highlight the responses to the COVID-19 crisis that different Canadian discount brokerages have posted to their websites and what interesting things have emerged as a result. Not departing too far from the norm, we’ve also corralled comments from DIY investors on Twitter and in the investor forums.

Canadian Discount Brokerages Provide COVID-19 Updates

It’s safe to say, almost everyone is impacted by COVID-19 and Canadian online discount brokerages are no exception.  Over the past two weeks, there have been a slew of updates from most of Canada’s discount brokerages informing their clients of how they are prepared to provide support during this extraordinary time.

The overall theme emerging from these various messages is that DIY investors looking to get in touch with their online brokerage should be prepared to wait.

Call volumes are up and so too are volumes on other channels, such as email.  The net impact is that systems are currently overwhelmed and investors will face delays. At a time when markets are facing unprecedented volatility and market circuit breakers are being tripped, systems are particularly vulnerable to being unable to support the flood of actions that normally would be quite low.

While many market observers, including those who advise passive investment strategies, are doing their best not to look at markets or even to sell off investments, there is only so much “loss” that investors are prepared to take in the face of a totally unprecedented event. There have been financial crises and recessions before, but nothing at the speed and scale at which COVID-19 is moving.

As such, this pandemic is testing the planning and resourcefulness of all online brokerages. In reviewing the different responses from Canadian discount brokerages, the messages that some chose to provide came from the parent bank, if they were bank-owned brokerages, whereas some came directly from the online brokerage themselves.

Here are some interesting and important highlights from the COVID-19 messages posted on Canadian discount brokerage websites:

BMO InvestorLine

BMO InvestorLine referenced the features and service options that can be accessed online, as well as their modified call centre hours. Although their message was focused primarily on service, they also pointed site visitors to the BMO parent page on COVID-19 which had more general information.

CIBC Investor’s Edge

At the time of publishing, the CIBC Investor’s Edge was displaying an alert for website visitors to expect higher than normal wait times on call centre channels. Also, they were encouraging individuals who wanted to open an account to consider doing so using their online account open feature.

Interactive Brokers

Though this message came from the head of Interactive Brokers (and thus not a message directly referencing to Interactive Brokers Canada), it nonetheless acknowledged the global nature of this online brokerage. The CEO’s message mentioned that Interactive Brokers has invested significantly in the robustness of their trading systems, and even in light of the heightened volatility, they are confident in their capacity to operate. Interestingly, they revealed that they have multiple fail-over options for running their organization remotely, should one of their trading operation centres go down.

National Bank Direct Brokerage

National Bank Direct Brokerage directed users on their website to an announcement from the parent brand which detailed a reduction in branch hours and, in some cases, temporary closure of branches to minimize in-person contact. There was also a link provided to a Facebook live video answering questions about the market volatility.

Qtrade Investor

Qtrade Investor reiterated their commitment to providing service to their clients and mentioned plans put in place to enable call centre staff to work remotely should it be necessary. In addition, they highlighted services that would be available for investors to access online and provided a couple of articles that helped to explain market volatility.

Questrade

Questrade’s message, like those from its peers, indicated the increased wait times on their client service channels. Importantly, they mentioned that they are allowing document drop-offs only at it their Toronto retail location and are encouraging customers to submit documentation online instead.

RBC Direct Investing

RBC Direct Investing’s COVID-19 message contained important information on their response plan, as well as some of the issues they are encountering. While they did specifically mention telephone wait times as an issue, they also directly referenced the fact that they have been fielding lots of interest for new account opens which have added to delays and wait times. Importantly for documents that need to be submitted to RBC Direct Investing by mail, they are still available to receive those documents.

Scotia iTRADE

The COVID-19 response statement on the Scotia iTRADE points visitors to the COVID-19 information section of their parent brand, Scotiabank. This landing page contains a substantial amount of information about the Coronavirus, as well as important personal financial tips and updates on what the bank is doing to mobilize. In the note from their CEO, it was also revealed that in the past week, delays to their system were, in part, the result of their call centres receiving close to 80,000 calls per day, with calls to mortgage and loan teams up 500 percent.

Expectedly, things work differently at different online brokerages, and just because statements do not appear on websites does not mean or imply that steps are not being taken or communicated to clients or stakeholders. The statements on COVID-19 responses ranged between very matter-of-fact and somewhat inspirational in tone. There were messages which, encouragingly, recognized the efforts of call centre and customer-facing staff who are working hard to service clients at this time, as well as to clients for their patience.

In spite of the different messages, there were two recurring themes: that Canadian online brokerages (and financial services providers) stand ready to help customers and that they believe we will get through this together. These are key messages to remember – even for those who may be stuck on hold for what seems like an eternity. Waiting in lines might be the new normal for some time and it is simply a reminder of the fact that as digital as things are with online trading, there is still a large part of this industry that is driven by and relies on people being there.

Discount Brokerage Tweets of the Week

 

From the Forums

Time and Time Again

On Reddit, users engaged in a lively discussion around a video on whether this market crash may or may not be different from those before. Redditors go back and forth on the narrative being constructed around this event in this post.

Ramping Up While Hunkering Down

In this post, Redditors discuss the merits and drawbacks of putting money saved by working from home and social distancing back into the stock market. Other users weigh in on how their plans for adjusting to ever-changing circumstances are going.

Into the Close

Another new week, and another start with Dow Futures hitting the “limit down.” There are currently no signs that trading will be any less volatile this week, as the largest economies in the US go into lockdown. Fortunately (or unfortunately), civil society and private industry have mobilized faster than many governments to make up for lost ground. Our hope is that all of our readers, their loved ones and the communities in which they call home stay calm, safe and healthy. Please remember to thank all of the front line workers – from hospitals to grocery stores – who are working so hard to keep us all afloat.


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