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opinion

If the rise of digital investing comes at the cost of decent service by telephone, then the online brokerage sector may be set to lose a lot of clients.

Digital investing means using technology to create a low-cost, easily accessible way to build portfolios with stocks, exchange-traded funds and other securities. Online brokers are deep into digital investing through their apps for smartphones and their websites, but they also stand ready to serve clients by phone.

At least, that’s what they say. In 2020, demand for talking to a live agent swamped the capabilities of some firms to provide timely service. I hear that all the time from investors by e-mail and through social media, and it seems to me that the No. 1 complaint in 2020 was long waits in a queue to speak to a live representative at an online brokerage.

In fairness to brokers, they were slammed in 2020. Demand to open accounts and invest was stoked by a massive stock-market surge and an economic lockdown that kept people at home and ready to trade stocks for amusement as well as financial reasons.

The lesson of 2020 in the online brokerage world is that no matter how much technology is brought to bear in DIY investing, clients need to speak to live agents from time to time. This is particularly true for retired investors, who may need to discuss withdrawals from their registered retirement income funds.

Complaints arriving in my e-mail in basket lately have included several about the bank-owned firms, but TD Direct Investing has been named most often. TD is easily the largest player in the brokerage business, but it has clearly had issues keeping up with client demand to speak to its live reps.

Neil Brennan, a TD Direct client in Cambridge, Ont., wrote about trying to make a withdrawal from a registered retirement savings plan and finding he was unable to do so online. He enquired at a TD branch and was told to contact TD Direct Investing by phone.

“The problem is they are not picking up the calls,” Mr. Brennan wrote in his e-mail. “Today was my third phone attempt ... they disconnected the call after a one-hour-and-53-minute wait time, saying there were high call volumes and I should try again. I am hoping you can share this with other do-it-yourself investors so they can avoid situations like mine.”

Robert Stephens of Westport, Ont., said he found it impossible to get through to TD over the past few months. “A week ago I had a problem on my RRIF account,” he wrote. “I spent hours on the phone over several days and could not get through and finally had to contact my local TD bank to see if I could talk to somebody that way. It worked, but it was very painful.”

A TD Direct spokesman said in an e-mailed statement that trading volumes in November and December were double the level of the same period last year. Also, the duration of calls has been lengthened by the number of people seeking to open online investing accounts.

“We apologize for the wait times clients may have experienced – this is not the high quality of experience we strive to provide,” the TD Direct spokesman said.

Among the steps taken to improve response times at TD are a doubling of hiring for teams that deal with clients, a quicker process for training new recruits and new technology to manage more calls without people being disconnected at busy times.

To minimize the wait time for talking to a live rep, TD Direct suggested contacting the firm through its mobile phone app. In doing so, you expedite things by having your identity automatically verified. On a landline, you must go through an additional step to do this. TD also suggests setting up voice-print authentication, which authenticates your identity through the sound of your voice.

As part of the research I do for the annual Globe and Mail online brokerage ranking, I submit a questionnaire to each firm. One of the questions for the 2021 ranking (to be published Jan. 29) asked for the year-to-date average wait time for customers calling in to speak to a representative.

A quick preview shows a range of five to 24 minutes, which leaves room for long waits at busy times and short waits in some cases. One broker didn’t offer a hard number, but did acknowledge issues for clients trying to call in. “Wait times have varied considerably over the course of this unprecedented year,” RBC Direct Investing said in its questionnaire. “We recognize that we have not always met our client expectations or our own.”

With our aging demographic, providing a decent level of phone service in all market conditions is a must. It’s not a mere hassle when it takes two hours or more to make contact with your online broker to set up an RRIF withdrawal. Call it a failure of customer service.

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