By Leah Golob | Thursday September 14, 2017

There’s a growing desire among these investors for a combination of full-service advice and self-service tools, J.D. Power report finds.

Robo-advisor adoption among Canadian self-directed investors is down, according to J.D. Power's 2017 Canadian Self-Directed Investor Satisfaction Study released on Thursday.

Specifically, J.D. Power's survey, which measures satisfaction among investors who use self-service platforms primarily, reveals that robo-advisor usage among these investors has declined to just 19% in 2017 from 24% in 2016.

That said, of those who use robo-advisors, 55% of millennials and 48% of older investors still consider their robo-advisor as good as or better than their primary self-directed provider. This may be a threat if robo-advisor awareness improves, the report says, as "robo options are well positioned to fill [an] unmet need for guidance."

Still, self-directed investors surveyed said they don't want to go at it entirely alone when it comes to their investments. Yet, firms haven't yet stepped up with hybrid solutions that combine bespoke advice with self-service tools, the report says.

The study reveals that 50% of self-directed investors either have a secondary full-service account or intend to open one within the next 12 months. Among millennials, that number is even higher, at 60%. In contrast, only 28% of all investors say they have little interest in opening a full-service account.

"With about half of investors whose primary account is self directed — indicating a current or imminent need for full-service advice — self-service brokerages have significant assets at risk of attrition if they're not able to meet this need," says Mike Foy, senior director of the wealth management practice at J.D. Power, in a statement.

"The trend is even more pronounced among millennials, who are clearly looking for self-service with benefits models that allows them to manage their accounts, but also receive advice from professionals when they need it," he adds. "Firms that can get that balance right — and offer it at a competitive price — have a huge opportunity to fulfil an unmet need."

Another notable trend is that the use of and demand for mobile among self-directed investors is rising. Specifically, mobile trading now accounts for 63% of overall trades among investors who incorporate mobile services when investing, making it the primary trading channel for these self-directed investors. This is up significantly from 2015, when only 48% of self-directed investors utilized mobile trading.

Firms that cater to mobile investor interactions, such as reviewing performance and conducting research, witness higher levels of satisfaction among users, the report adds.

Finally, the report includes a ranking of 11 Canadian self-directed investment platforms based on six key areas: interaction; account information; information resources; trading charges and fees; product offerings; and problem resolution.

Investors were most pleased with Lévis, Que-based Desjardins Online Brokerage, followed by Vancouver-based Qtrade Investor and Toronto-based BMO InvestorLine. Toronto-based Questrade was the only firm to receive a below-average rating.

The study gathered responses from 2,609 investors who invest primarily with self-directed investment platform providers in Canada. The surveys were conducted between May and June. Rankings for all investment platforms can be found in the firm's news release.