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Investment advisers rarely get to enjoy a moment of moral superiority, so their smugness about the continuing customer service problems at online brokers is understandable.

Investors have been complaining for months about long waits to speak to a live representative on the phone, and about temporary website outages. A response from advisers you’ll have seen if you follow this issue on social media: You get what you pay for.

DIY investors are cheapskates, this narrative goes. They didn’t want to pay for service, and now they’re suffering the consequences. Let’s set the record straight on this: These investors pay for service and are entitled to get it without spending hours on hold or frantically clicking on websites that won’t respond. What DIY investors have chosen to forego is advice, often because they tried it in the past and found it was just a sales pitch for overpriced investments.

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Online brokerage commissions are just below $10 at most, and as low as a couple of bucks or even free using the Wealthsimple Trade app. But that’s far from the only way DIY investors pay their brokers. Cash balances in client accounts are lent out by brokers for margin trading – the interest on these loans, often set at prime plus 1.5 percentage points, generates revenue. Brokers also make money by converting Canadian dollars into U.S. dollars for clients, and vice versa.

Many brokers also receive compensation for routing orders for U.S. stocks to various market players – this is called payment for order flow. Also, brokers make money with a wide range of fees that apply when you have a small balance, ask for paper statements or transfer money to other firms.

Investor stress levels are so high lately that do-it-yourselfers are turning on each other. I’ve been asked over and over why anyone would want to call an online broker. In many cases, these phone calls are about doing transactions or services that cannot be performed online. Clients with registered retirement income funds must often call to take care of details.

Broker phone lines are also bogged down these days by newcomers to online investing who are full of questions. Some are about how to trade securities and others are related to the long, often frustrating process of transferring assets and cash from one place to another. At some point, almost all online brokerage clients are going to need to speak to a human.

The real story of the service problem at online brokers has two parts: Demand to trade stocks has skyrocketed in an unprecedented way in the pandemic, and brokers have been too slow to ramp up capacity on their websites and in their call centres. Blaming DIY investors for being cheap or clueless is an unhelpful distraction.

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