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Wealthsimple Trade saw its account volume grow nine-fold in 2020 and then double again in the first quarter of this year.Jesse Johnston/The Canadian Press

Canada’s online brokers have dramatically scaled up their services to try to avoid getting caught off-guard again by sudden spikes in trading activity that left many do-it-yourself investors in limbo.

From beefing up server and database capacity to hiring more staff and automating certain services, brokerages say they’re better prepared for what’s expected to be a new era of highly active DIY investing.

“Investments in scaling and capacity enable growth … that’s been a big insight for us and an investment that’s really paid off,” said Robyn Ross, head of Wealthsimple Trade, which saw its account volume grow nine-fold in 2020 and then double again in the first quarter of this year.

Huge increases were seen across the sector: Total online brokerage accounts increased by 2.9 million reaching 10.6 million for the 12 months ended March 31, with more than half the increase occurring in the first quarter of this year, according to Toronto-based Investor Economics, a unit of ISS Market Intelligence. That compared with an increase of two million accounts over the three-year period ended Dec. 31, 2019.

The surge started with the pandemic lockdowns in March, 2020, when market volatility led to a rapid rise in online brokerage activity – everything from new investor applications to requests to buy and sell investments as well as to transfer money in and out from other investment firm accounts. Activity spiked again in early 2021 amid the “meme” stock frenzy driven by the social-media inspired trading of names such as GameStop Corp. and AMC Entertainment Holdings Inc .

The sharp increase in activity led to platform outages at some firms, leaving clients unable to access their accounts. The breakdowns led the Investment Industry Organization of Canada to announce earlier this year that it will look into whether service levels and interrupted access to investments “would become an explicit investor protection issue.”

Complaints have stabilized as the industry made improvements over the past year, including on phone wait times: Investment industry consulting firm Dalbar Inc. reports that it took an average of 14 minutes to get through to a broker’s call centre in mid-May, down from 92 minutes in January. Half the firms surveyed answered calls in under five minutes, reflecting the beefing up in staffing at brokerages across the country.

The DIY trading momentum is expected to continue, especially with the addition of more zero-commission trading options in Canada.

When volumes increased in March, 2020, Ms. Ross of Wealthsimple Trade said her firm prioritized clients that had already signed up for the service launched in March, 2019, “so we could deliver a stable and reliable trading platform.” Others were put on a waitlist until the company could get enough resources to handle new clients on the platform. On average, new clients waited less than a week, Ms. Ross said.

The company also added more staff, first by pulling in people from other divisions to help with the increased volumes, and then hiring more people to the Wealthsimple Trade division, long term. Then the meme stock frenzy hit at the end of last year: “We thought we were very prepared for anything,” Ms. Ross said, “but no one was expecting that level of growth. I think we came in on the best footing we could have and we really worked to scale up quickly.”

TD Direct Investing has added about 35 per cent more licensed advisers to its team since March, 2020, to help DIY investors and improve its technology, including its mobile app services for investors amid a huge shift to smartphone users since the pandemic began.

“We’re at a place now where the majority of our customer transactions are being done through a mobile device ... right from account opening to actual trades,” said Raymond Chun, president of TD Direct Investing.

The brokerage also added more self-serve options, such as enabling online purchases of guaranteed investment certificates. In the past, investors would have to call in to open a GIC account.

TD has also bolstered its educational tools on the site to help the many new investors get more information on DIY trading and the markets. Mr. Chun said TD continues investment in increasing its platform capabilities to prepare for what’s expected to be a steadily growing number of online users in the coming years.

“Our goal is to get to a place where customers can do all their activities self-serve, and it’s really their option to call in, but everything can be done through a self-serving capability,” he said.

The number of new accounts has increased by 125 per cent at BMO InvestorLine since the start of the pandemic, according to David McGann, the brokerage’s head of strategy.

Over the past 18 months, BMO InvestorLine has upgraded some of its systems, including boosting its online platform capacity by 50 per cent, introducing a call-back feature on its phone lines so investors don’t need to remain on hold while waiting to speak to an adviser, and improving its password reset services to make it easier to do online. The brokerage had also increased its headcount by 50 per cent since the start of the pandemic.

“We believe we’re in a much stronger position as we head into the next investing season,” Mr. McGann said. “While we might not see the same kind of elevated peak levels as we saw in December, January and February, the whole category has definitely hit an inflection point, where it’s lifted off … And we’re confident that we’re well-positioned to weather what’s ahead.”

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