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Online investing grows; customer satisfaction doesn't

While online investing in Canada grows and companies continue to add new products and services to their sites, the online investing experience appears to be remaining static.

Industry reports estimate that the value of do-it-yourself investment assets in Canada is now about $200-billion, and more and more on-line investors are dropping their relationships with brokers or financial advisers and taking greater control of their investments.

However, some recent studies of the Canadian online banking and brokerage industries indicate the customer online experience is not improving in spite of efforts by firms to improve the quantity and quality of their tools and resources.

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The studies found that most sites lack visual appeal as well as design sophistication and support resources once customers enter the transactional areas of the sites.

"From year to year, the overall online experience remains the same at the majority of firms as new industry products emerge and are introduced into current, outdated sites," says Glenn Lacoste, President of Surviscor, the firm which analyses and ranks Canadian online services offered to retail or professional users. "Companies continue to introduce new things but they are not changing the dynamics of the site to make them more user friendly. "

"Adding functionality simply increases the size of the pile," adds Mr. Lacoste. "Redesigning the sites to improve access and use of information is a must."

Managing Your Portfolio

Many online brokerages are making an effort to try and meet demand from customers for tools that will help them manage their portfolios over the long term.

A recent poll by RBC found that the majority of Canadian self-directed investors are using their online brokerage account for long-term investment goals such as saving for retirement or a child's education. Only 11 per cent reported that they use their online accounts for short-term profit.

As well, the poll found that the more diversified a portfolio is, the more likely investors are to say it has performed well. In spite of that, however, only 19 per cent of online investors believe their portfolios are well diversified.

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"We discovered through conversations with clients that the greatest demand is for portfolio management tools that help investors build and monitor their long-term investment strategies," says Jason Storsley, CEO of RBC Direct Investing.

To that end, RBC has recently introduced a number of tools that help investors define their short- and long-term goals, analyse their asset mix and rebalance their portfolios, and evaluate their historical rate of return and compare performance against various indices and standard risk-profile benchmark returns.

"It's important to periodically re-evaluate your investment strategy and overall portfolio, and one of our new tools helps investors determine whether their portfolio is well diversified and has the appropriate asset mix to meet their stated investment objectives," Mr. Storsley says.

Last year, Canadian online brokerages added a number of improved features and products to their sites, such as additional resource sources, security and privacy measures, expanded modelling tools to include equity and ETF portfolios, and the introduction of practice accounts by RBC and Scotiabank that allow users to practice with play money before actually trading with the real thing.

"We hear so many things about the industry flying in terms of new functionality and features, but is it?" Mr. Lacoste asks. "We don't think so. The landscape is so competitive right now that any new feature a firm can offer is only a differentiator for a short period of time. Better designed sites should be the differentiators, along with price."

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