Trades and grades
Taddingstone Consulting Group - Press Article
01-16-2000
By: Canadian Business Staff
The best and worst discount broker rated by criteria
When researching the discount brokers for this special issue, we didn't just walk up and kick the tires a couple of times. We stripped them right down and studied every nut and bolt. We took roughly $40,000 and opened accounts at 1 discounters. We made hundreds of phone calls, sent scores of e-mails and placed dozens of trades to help you learn which broker is right for you. We also received expert guidance from The Taddingstone Consulting Group Inc., a Toronto-based financial services consulting firm.
Cost We looked at how much each broker would charge in commission for the following three trades: (1) 100 shares of a $20 TSE-listed stock; (2) 500 shares of a $20 TSE-listed stock; and (3) 100 shares of a US$50 stock listed on the New York Stock Exchange. We then multiplied by eight, for a total of 24 trades, or two per month over a year. We assumed that 12 of the trades were placed over the Internet and the other 12 were placed in live conversation with a broker. Where a broker charges more for limit orders than market orders, we applied the higher fee to four of the trades.
Other costs We looked at: the purchase of one contract of $3 options, the purchase of a $2,500 front-end-load mutual fund, the annual administration fee for RRSP accounts and the fee for transferring your assets to another broker. Where a firm waives the front-end-load mutual fund fee only for customers with accounts of $15,000 or more, we took the average of two purchases: one by a customer with the necessary $15,000, one by a customer with less.
Online trading We looked at 13 criteria including ease of navigation, real-time updates, charting tools, news sources and whether 24/7 technical support was offered. We deducted points for persistent technical problems. Since most investors trade over the Internet, online service was given double the weight of the other five categories.
Telephone service This category has two parts. First, we asked the brokers if they offered automated touch-tone trading or voice-activated trading, or both, and tested how easy those services were to use. Then we graded them on the quality of service we received from their customer help lines. We called each broker several times and posed questions or problems, and compared their responses.
Mutual funds & products In preparing this year's ranking we focused on two product areas where discount brokers can add value for investors-mutual funds, and IPOs and new issues. For mutual funds, points were assigned based on fee structure, selection and availability of no-load funds. Brokers were graded on the quantity, quality and breadth of initial public offerings and new issues over the past eight months.
Response time Do the brokers quickly pick up the phone or leave you on hold listening to elevator music? We phoned each firm 11 times with a stopwatch in hand. We also sent four e-mails to each broker and timed how long it took them to respond. Finally, we phoned the brokers and asked them to mail an application package to us.
Research & extras In this category we looked for value-added services provided by discount brokers. Of particular importance was the availability of research, both online and offline. We considered how many physical branches each broker has (not including regular bank branches) and whether they have specialized customer support staff to deal with questions about mutual funds, options and fixed-income securities. Finally, we took into account the level of access to foreign markets each broker offers its clients.
A- TD Waterhouse
It was close this year, but TD Waterhouse came out on top, thanks to all the value-added extras-like branches from coast to coast, voice-activated trading and proprietary research. But it's on the expensive side, and that could haunt it in the future as other brokers improve their services. www.tdwaterhouse.ca 800/465-5463
B+ BMO InvestorLine
A lack of research kept InvestorLine from clinching first place this year. But in most other respects, it's as good as Waterhouse. BMO offers value: a Web site that's very easy to use and some of the cheapest online trades around. www.bmoinvestorline.com 800/387-7800
B+ Charles Schwab Canada
The haute couture of discount brokerages, it's got a straightforward, user-friendly Web site that Mr. Clean would approve of. But unless you've got $20,000 just sitting around, don't bother-that's what you need just to open an account. www.schwabcanada.com 888/597-9999
B E*Trade Canada
E*Trade's Web site is great, but even a little attention to other things, like answering the phone more quickly, would be nice. If you're looking for cheap mutual funds, though, come here. www.canada.etrade.com 888/872-3388
B Royal Bank Action Direct
Royal's discount broker is like a mule-it's dependable and hardworking, but nothing to get excited about. The Web site is simple to use and the reps know what they're talking about. Action Direct hovers at the high end when it comes to price. www.actiondirect.com 800/769-2583
C+ HSBC InvestDirect
A mediocre grade for a mediocre discount broker. HSBC's prices are good, and if you want to trade Hong Kong stocks online, this is the place to go. But its unimaginative Web site is falling behind the competition, and you have to pay for all but the most elementary research. www.hsbcinvestdirect.com 800/398-1180
C CIBC Investor's Edge
CIBC says it plans to change its Web offering. Good-because the current one is a mess. Investor's Edge did score well for its access to IPOs, and it gets bonus points for introducing voice-activated trading. www.investorsedge.cibc.com 800/567-3343
C- Scotia Discount Brokerage
Scotia has come a long way since its last-place finish in our 1999 ranking, but it still has to work on some things-like price. It may boast the cheapest minimum trade, but Scotia will ding you on everything else. www.sdbi.com 800/263-3430
C- National Bank Discount Brokerage
Trades are cheap, but National's online offering needs a complete overhaul. On the other hand, it's easy to get a knowledgeable rep on the phone. www.invesnet.com 800/363-3511
D- eNorthern
The baby on the block has a lot of growing up to do. ENorthern offers little in the way of research or extras. And though it calls itself an online broker, you can get an eNorthern rep on the phone faster than you can load the Web site. www.enorthern.com 888/829-7929
D- Sun Life Securities
Sun Life has an interesting business model: offer your customers nothing special and charge through the nose. We're not sure why anyone would want to trade with Sun Life. Maybe that's why its representatives pick up the phone so quickly. www.sunsecurities.com 800/835-0812
COST
A - BMO InvestorLine
A- HSBC InvestDirect
B E*Trade Canada
B eNorthern
B National Bank
B Discount Brokerage
C+ Scotia Discount Brokerage
C CIBC Investor+s Edge
C- TD Waterhouse
C Sun Life Securities
C Royal Bank Action Direct
D Charles Schwab Canada
When James Powell started looking for a discount broker two months ago, he had one thing in mind-price. His first choice was US-based Datek, with its ultracheap US$9.99 trades. But Powell, a retired teacher living in Markham, Ont., discovered that it's illegal to trade with Datek because it's not a registered securities dealer in Ontario. So he was stuck with the current lineup of Canadian discount brokers, many of which charge twice as much to execute a trade.
In the end, he settled on newcomer eNorthern and its $24 trades. With a modest five-figure portfolio, Powell is a no-frills kind of guy. And he finds that when he calls up eNorthern-which keeps costs down by having just six licensed stockbrokers-they answer the phone right away. "I think it's because right now they're very small," says Powell. "I hope it stays that way."
Many investors want to do more than just trade equities, however. So we created a hypothetical investor who makes two trades a month, has an RRSP account, tries her hand at options, and wants to buy a $2,500 front-end-load mutual fund. When she trades stocks, our fictitious investor doesn't limit herself to the Internet; she makes half her trades on the phone, through a representative.
The broker who gave our imaginary investor the best deal was Bank of Montreal InvestorLine. It charges about $1,069 annually for our collection of services and would have been even cheaper if it didn't charge extra for limit orders (which allow an investor to state the exact price at which she is willing to buy or sell a stock). InvestorLine's minimum commission for market orders over the Internet is $25.
The two discount brokers most Canadians associate with inexpensive trades, E*Trade Canada and eNorthern, came in third and fourth in this category. That's because their fees for broker-assisted trades are much higher than those charged for online trades. The broker with the cheapest minimum fees is actually Scotia Discount Brokerage, whose online commission schedule starts at $20. But its fees go up quickly as you trade larger numbers of shares.
At the other end of the cost spectrum sits Charles Schwab Canada, the Canadian arm of the world's largest discount brokerage. Schwab charges a whopping $261 more than BMO InvestorLine for our package of services. Then again, its customers must have $20,000 just to keep their accounts open, so they're less likely to squabble over commissions. Probably the worst value for the money is Sun Life Securities. It's almost as expensive as Schwab, but provides much less in the way of service.
Finally, we were curious whether anyone was listening to all the grumbling over high fees. Over the past year, some brokers-including TD Waterhouse, CIBC Investor's Edge and Sun Life-ditched their fees for buying front-end-load funds, and Waterhouse slashed the minimum fee it charges for orders placed through its voice-activated telephone trading service, TalkBroker, to $29.95 from $35. Schwab, on the other hand, actually hiked its minimum fees for electronic trades to $33 from $30. Our advice: if you're waiting for bargain-priced trades a la Datek in the US, don't hold your breath.
BY JASON KIRBY
--------------------------------------------------------------------------------
ONLINE TRADING
A TD Waterhouse
A- BMO InvestorLine, Charles Schwab Canada,
A- E*Trade Canada B Royal Bank Action Direct
C Scotia Discount Brokerage
D+ HSBC InvestDirec
D+ CIBC Investor's Edge
D eNorthern,
D Sun Life Securities
D- National Bank Discount Brokerage
Like medicine men pushing magical elixirs, discount brokers have touted the Internet as the cure for all your investing ills. No more heart-stopping shocks from your full-service broker when that monthly account statement arrives. Gone are the debilitating $200 commissions. Simply log on, trade, make money, then log off-and repeat as necessary. Some discounters live up to the hype and make buying stocks and mutual funds an absolute joy. The bad ones, on the other hand, should have a Health Canada warning slapped across their order screens.
Four discounters battled it out for top spot in the online trading category: E*Trade Canada, BMO InvestorLine, TD Waterhouse and Charles Schwab Canada. All four have revamped their sites since we ranked them last year, adding new features. E*Trade made its site much easier to navigate, and has added some research on small Canadian companies. The folks at Schwab put on their thinking caps and came up with an innovation we feel was too long in coming-real-time updates to account holdings. When you make a trade with Schwab, it shows up in your account information right away. (Other brokers update customer accounts overnight.) In fact, with a site so clean it's almost sterile, Schwab would have ranked higher if it offered 24/7 access to technical support.
BMO InvestorLine, meanwhile, became the first to offer fixed-income products on its site, with a handy "quick picks" option that finds bonds, T-bills and the like, depending on how much you're looking to spend. BMO also stands out because it automatically lists the purchase price of shares and how much you've made-or lost-right in the account holdings section. There's also an area to track the monthly and quarterly performance of your portfolio. And we really liked InvestorLine's charting tool, which (among other things) allows you to compare the progress of one stock to another going back to when Reagan was president.
TD Waterhouse made the first tier, mostly because of the ease of navigating the site-we could get just about anywhere with just two clicks of a mouse. We especially liked Waterhouse's new eServices feature, which stores and sends electronic copies of trade confirmations and statements to customers. Waterhouse has also come a long way since last year in providing online research, especially for mutual funds (for more on research, see page 55). And there's no skimping on real-time quotes-Waterhouse has links scattered throughout the site. We don't like that there's no apparent way to change the start-up screen, which is a list of "important messages" that won't seem all that important when the market is tanking.
Scotia Discount Brokerage gets extra marks (but not an A) for effort. Their online offering last year was abysmal. You had to download special software before you could trade, which was a hassle. And Macintosh users found it plain didn't work. Now Scotia Discount customers can trade on the Web like everyone else. Its new-and-improved Web site is comparable to those of other mid-ranked brokers we looked at. Scotia's drop-down menus make it easy to get around, but there's nothing in the way of research.
Other discounters must have figured that catching up to the leaders is the same as trying to out-drive Tiger Woods, because it sure looks like they've given up and gone home. We were surprised how many discounters did little to improve their online services over the past year. "They've been trying to solve problems, rather than enhance their offerings," suggests Keith Sjögren of The Taddingstone Consulting Group.
CIBC Investor's Edge offers a couple of new features, such as online access to IPOs. But its research selection is still limited, and the site remains gawky and cheesy. And they still haven't fixed a problem we complained about last year: if you accidentally get kicked out of the site, you can't log in again for 15 minutes. As for National Bank Discount Brokerage, well, its Web site was already outdated a year ago, and it's not much better now. Preserve it for posterity-maybe someday it will find a home in a museum. We had a hard time even getting real-time quotes, and error messages were often transmitted in French. Zut alors!
The newest offering is from the people at eNorthern, who made a point of telling Canadian Business that they're not a "discount broker" but an "online broker." Guys, semantics should be the last of your worries. Sure, they're just getting started, but it looks like eNorthern designers went wild splashing useless diversions, like a streaming quote ticker, on the start-up page. All the fluff cramps an already sluggish download. A word of warning to potential eNorthern customers planning to trade using a Macintosh computer-don't. When one of our orders failed because the confirmation page took so long to load, an eNorthern customer service rep offered some stunning advice: "Try shutting down and booting up again." Don't bother, it doesn't work.
BY JASON KIRBY
--------------------------------------------------------------------------------
TELEPHONE SERVICE
A- TD Waterhouse
B BMO InvestorLine,
B National Bank Discount Brokerage
B- Charles Schwab Canada
B- CIBC Investor's Edge
B- Royal Bank Action Direct
C+ HSBC InvestDirect
C Scotia Discount Brokerage
C E*Trade Canada
C- Sun Life Securities
D eNorthern
You've been stuck in traffic for an hour, and you can still see your house in the rearview mirror. Then you hear on the radio that your star company has issued a surprise profit warning. Internet trading doesn't do you much good now, does it? In the scramble to offer online services, many brokers have given their automated phone service the bum's rush. Well, guess what, folks: punching sell orders into your dashboard computer isn't going to happen anytime soon. And we don't feel you should have to pay through the nose, or wait on hold forever, to place a telephone order just because your PC isn't handy.
TD Waterhouse is tops in this category, thanks to its voice-activated TalkBroker service. Getting quotes or portfolio updates and placing orders is as easy as saying, "Buy WestJet Airlines." Most of the time, the computer understands what you're saying.
Other brokers offer automated phone trading, but they vary in user-friendliness. We liked E*Trade Canada's touch-tone trading line for its simplicity. CIBC Investor's Edge allows you to punch a few keys and get company news faxed to you within minutes. CIBC has brought in a voice-activated system, too, though they're still testing the trading function. On the other hand, we found using the touch-tone services at BMO InvestorLine and Scotia Discount Brokerage cumbersome. But as it turns out, the most expensive broker also offers the worst in automated phone service, which is nothing at all. This summer, Charles Schwab Canada did away with touch-tone trading. "We literally had a handful of clients that were wanting to use that," says Schwab president and CEO Paul Bates. (Schwab will be rolling out voice-activated trading sometime in 2001, he adds.)
Schwab also lost marks for not offering 24-hour customer support, but the broker redeemed itself in this category with its knowledgeable staff. Through dozens of calls, we tested customer-service representatives on their understanding of the market. For example, we played dumb and insisted on buying shares in Hutchison Whampoa Ltd., a huge Hong Kong-based conglomerate that, in the US, trades over-the-counter as an American Depositary Receipt (ADR). We also quizzed them with questions about bonds, which are complicated enough to make anyone's head spin.
Schwab did very well, answering the phone and giving us the information we wanted quickly and painlessly. So did BMO InvestorLine, whose fixed income specialist found the price of the bond we wanted faster than anyone else. Not surprisingly, HSBC aced the question about Hutchison, and even explained how to trade on the Hong Kong stock market. Most reps fumbled that question, especially one guy at TD Waterhouse. When we asked if the company trades on US markets as an ADR, he asked: "Is that the company symbol?" E*Trade's rep simply gave up: "I can't explain it." In the end, we were given three different symbols for Hutchison shares, but everyone said they could get them for us. If we had gone through with the trade, who knows what stock we would have ended up with.
BY JASON KIRBY
--------------------------------------------------------------------------------
MUTUAL FUNDS AND PRODUCTS
B+ TD Waterhouse,
B+ Charles Schwab Canada
B E*Trade Canada
B Royal Bank Action Direct
B CIBC Investor's Edge
B- BMO InvestorLine
B- HSBC InvestDirect
C- National Bank Discount Brokerage
C- eNorthern
C- Sun Life Securities
D+ Scotia Discount Brokerage
Which share offering would you like a piece of: Celestica Inc., the much-loved IT component maker, or Stroud Resources Ltd., a tiny mining outfit and suffering penny stock? Obviously, it's no contest. Trouble is, you need connections to get your hands on the sweetest deals. Like finding a great job or snagging a princely federal government grant, getting in on sought-after IPOs and secondary offerings often comes down to who you know.
Not surprisingly, Canada's 11 discount brokers offer widely different access to new shares. Bank-owned discount brokers, such as TD Waterhouse, CIBC Investor's Edge and Royal Bank Action Direct, still have the inside track. For instance, Royal, which offered those tantalizing Celestica shares in March, tendered 89 share offerings in the first eight months of 2000, compared with eNorthern's eight IPOs (which included that unappetizing Stroud deal early this year).
Why? The banks own full-service investment dealers, which underwrite the IPOs. The full-service dealers decide who gets a piece of the action, and sometimes they will give their affiliated discount brokerages dibs on the leftovers. TD Waterhouse sold 49 new issues, while E*Trade Canada, an independent discount brokerage, offered approximately 20, including many small technology plays. Worse yet, Sun Life Securities offered none. If Sun Life customers want access to an IPO, they must explicitly ask for a piece of the action; only then will Sun Life try to scrounge up a few shares. Sun Life says it intends to improve its access to IPOs, but don't hold your breath.
Signing up with a bank-owned brokerage won't guarantee surefire access to IPOs, however. Full-service operations would much rather reserve lucrative deals for their own clients, not discount customers. Case in point: only two discount brokers got allotments of the coveted 360networks inc. IPO in the spring, even though three Canadian bank dealers helped underwrite the offering. This awkward relationship between the full-service and discount operations might explain why BMO InvestorLine offered just 19 new issues.
While access to IPOs and new issues varies, the gap between discounters narrows when it comes to mutual funds. Every discount broker has beefed up its selection. (All offer at least 1,000 funds.) Royal Bank Action Direct leads the pack with more than 100 fund families to choose from. But selection isn't the only consideration. For the second year in a row, E*Trade deserves top marks for selection, mutual fund research and low minimum-purchase restrictions. Best of all, it doesn't charge any fees or commissions when buying or selling funds. The same goes for eNorthern-as long as you don't redeem funds for six months after purchase. TD Waterhouse has seen the light and dropped commissions on the purchase and sale of 1,215 funds.
Royal and CIBC will ding you with a $40 redemption charge, as will National and BMO on funds other than their own. At Sun Life, you'll pay $45 to redeem front-end-load funds. The worst offender is still Scotia. Not only does it require a minimum purchase of $2,500 (the minimum is $1,000 at many other discounters), but in some cases it charges when you buy a fund and when you sell it. It's a minimum of $50 to purchase funds from a live agent, $20 to buy funds over the Internet and $15 to redeem them (unless they're Scotia products). The bottom line: don't be wooed by selection, and watch out for hefty commissions-which could quickly empty your wallet.
BY KEITH KALAWSKY
--------------------------------------------------------------------------------
RESPONSE TIME
A Sun Life Securities
B+ Charles Schwab Canada
B TD Waterhouse,
B BMO InvestorLine
B Royal Bank Action Direct
B HSBC InvestDirect
B CIBC Investor's Edge
B- eNorthern
C+ Scotia Discount Brokerage
C+ National Bank Discount Brokerage
C- E*Trade Canada
When Alan Richter called up Royal Bank Action Direct last week to place an options order, a rep answered so fast that Richter figures the staff must be sitting around with nothing to do. "I had a mental image of brokerage reps covered in spider webs, with tumbleweeds blowing through their offices." About the only thing missing was the howling coyote. How far things have come. Back in February, it was normal for Richter to be on hold for an hour or more with Royal. For investors at any brokerage, getting a rep on the phone required Zen-like patience, and the ability to withstand an extended pan flute version of "You Light Up My Life."
Ask any discount broker now and they'll tell you they learned their lesson. Some brokers, such as TD Waterhouse, have gone wild hiring people to handle calls. Waterhouse has doubled its staff since February, to 1,200 trading reps, opened a new call centre in Markham, Ont., and is building two more in Edmonton and Ottawa. "Given what happened, we're planning to handle everything RRSP season throws at us," says senior vice-president Bruce Shewfelt. We'll see. Come next February, customer rage will be the true measure of whether discount brokers have improved their service. But what we can do in the non-RRSP season-which, let's face it, makes up the bulk of your trading year-is help you avoid the worst time-wasters.
And boy, did E*Trade Canada ever waste our time. They were bad last year, and by our stopwatch they're even worse this year. On average, E*Trade took more than two minutes to answer our phone calls-almost twice as long as their last-place performance in 1999. While other brokers hired new call centre staff, E*Trade's big improvement seems to be a grating recorded voice that blithely spits out the time while you wait on hold. (It's a good thing 90% of transactions by E*Trade clients are done over the Web.) The next worst times were National Bank Discount Brokerage with an average wait of 44 seconds and BMO InvestorLine at 25 seconds. Most of the discounters picked up the phone within about 10 seconds, but three brokers really won our hearts. Sun Life, Schwab and HSBC InvestDirect were taking our calls faster than we could push the start button on our stopwatch.
No wonder Richter is happy with Royal Bank Action Direct these days; the broker fared well in this category, in part because the reps were quick to respond to our e-mail queries. Royal was one of only four brokers who wrote back to us in less than an hour. Once again, E*Trade kept us waiting. More often than not, their responses came trickling in hours, if not days, after everyone else's. If they're not answering the phones or typing out e-mails, what the heck are they doing?
One of the first things we did was also the simplest: we called the brokers and asked them to mail us an application to open an account. It must be a rare request at TD Waterhouse, because the representative had to ask someone if it was possible: "I've never done this before." He learned fast, though, because the package arrived in three days-the same time clocked by BMO InvestorLine, Charles Schwab and Sun Life Securities. The rest trickled in over the next few days, except for the package from Scotia Discount Brokerage, which took a full two weeks. eNorthern warned us right up front that vultures would be picking at our bones before we'd get any mail from them-they only take online applications.
BY JASON KIRBY
--------------------------------------------------------------------------------
Honestly, if investing were only about making trades online, you could get by with any of the discount brokers in Canada. But the vast majority of do-it-yourself investors want more than just a Web site where they can swap stocks. That's why we looked for value-added perks that put some discount brokers way ahead of the pack.
The most important item in this category is research. It's a word discounters obviously interpret in different ways. Sun Life Securities, National Bank Discount Brokerage, Scotia Discount Brokerage and BMO InvestorLine seem to think research means letting customers throw darts at the stock pages. None of them offers much analysis to help their clients make informed decisions. In fact, Tom Flanagan, chief operating officer of BMO InvestorLine, isn't convinced that people are looking for extensive help from their brokers. "I think a lot of customers who come to us are fairly sophisticated anyway and do a lot of research on their own," says Flanagan.
That's not what the folks at Schwab believe. They offer a mother lode of free research, including Zacks, Pershing Investment Research and Analyst Centre. All three are useful sources of information on large-cap companies. The only problem is, they're primarily focused on US stocks, so it's hard to find information on small to midsize Canadian companies. Schwab and Royal Bank Action Direct get around that problem by also offering research from the Financial Post Data Group. And Schwab actually keeps two analysts on staff who write proprietary reports.
There's also some pretty good mutual fund research to choose from. Royal Bank Action Direct, E*Trade and TD Waterhouse have solid tools to help you cut through the mass of available funds. But Waterhouse goes further, offering analyst picks along with reports on their choices of the best funds by category.
On top of the free research, several brokers offer premium reports for sale through their sites. We bought a few to see how useful they are. The best stuff comes from TD Waterhouse, which actually sells TD's own analyst reports, complete with buy-sell recommendations. (For $21 a month, you get 10 analyst reports, plus a morning market newsletter.) From HSBC InvestDirect we bought a report on Nortel Networks Corp. for $10.50 that had everything you could ask for. We were less impressed with E*Trade's Inside Edge service. For $15 a month you get research from Yorkton Securities. But the latest report on Nortel is a year old.
Having research is great, but sometimes you just need to talk to an expert. No one makes it easier to do that face-to-face than TD Waterhouse, which has 40 branches across Canada. And when you've got those really obscure questions about bonds, options or mutual funds, only BMO InvestorLine, CIBC Investor's Edge, Royal Bank Action Direct and TD Waterhouse have representatives who specialize in all three areas.
It might seem like we're asking the brokers to give us the world, but we'd settle for access to international markets. Only five brokers (BMO InvestorLine, CIBC Investor's Edge, TD Waterhouse, National Bank Discount and HSBC InvestDirect) let clients trade stocks that are not listed on North American exchanges. In almost every case, you still have to phone a rep. The only exception is HSBC, which lets you play the Hong Kong stock market on the Web.
Finally, we think you should feel safe trading with your broker. The good news is, we didn't have to shell out big bucks to hire a pimply-faced hacker to break into the brokers' sites; the bad news is, we found gaping security holes by poking around on our own. Take E*Trade Canada. One morning we logged in, made a trade, then closed our Web browser window. Five hours later, we visited the Web site again-and found that we didn't even have to re-enter our password. Anyone using the same computer in the interim could have looked at all our stock holdings, balances and personal information. We got an even bigger shock when we placed a telephone trade through a broker at eNorthern. Usually, brokers will ask for some personal information (address, social insurance number, mother's maiden name-that sort of thing) to ensure callers are who they say they are. But eNorthern just asked for a name and account number before putting the trade through. Surprisingly, the same thing happened with TD Waterhouse when, according to a rep, the computer system crashed. He scribbled down our name and account number along with our trade instructions and said he would hand it to a trader. That was it. The trade went through-three hours later.
July 16, 2006 at 02:12 AM in Financial Services | Permalink
| Top of page
| Blog Home
