Even the self-directed investor needs help sometimes.
Just look at the results of Investor's Business Daily's 2017 Best Of Online Brokers report if you want proof. It shows customer service as No. 5 in importance to investors out of 24 attributes. It seems the adage is true that the more things change, the more they stay the same.
Twenty years ago, online brokerage was a nascent industry. Charles Schwab (SCHW) was one of the pioneers, launching its service in 1996. The idea that middle-class investors could trade with frequency quickly caught fire, as Schwab reached the 2 million mark for online accounts within two years.
But while people settled into the idea of bypassing humans when doing stock trades — made much more palatable when it meant paying much less in commissions — they've always needed customer service. Even though the self-directed investor might not want the full-service treatment for strategy or stock selection, they still appreciate having a live human as a backstop. In the end, they want to know where to get answers.
In 2005, Schwab launched an ad campaign that often featured an individual investor contrasting what they wanted from their broker vs. what they were getting. The ads all ended with the tagline "Talk To Chuck."
Schwab's extending of that hand to the perplexed online investor, and understanding his or her needs, no doubt played a role in its earning the highest rating for customer service in IBD's online brokers report, a position it's held for five consecutive years. Also in the top three brokerages in customer service were Fidelity and Scottrade.
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Here's how the best broker survey worked: Each broker was given a Customer Experience Index based on survey responses. The index totaled the percentage of "excellent" and "very good" ratings and subtracted the total percentage of "fair" and "poor" ratings. In customer service, 85% responded that Schwab was either excellent or very good while only 4% rated it fair or poor, thus giving it the 81 score.
Clicking the "Contact Us" button on most websites is how to find out the ways in which a company is willing to field your questions. In the case of Schwab, your four options are by phone, email, live chat or visiting a local branch office.
At Schwab, speech recognition facilitates many account management inquiries and transactions through "Schwab by Phone" or even place trades through the Telebroker feature. If frustrated by the automation or requiring a little more finesse, saying "representative" gets you to a live person.
Fidelity adds a virtual assistant to the mix that uses search engine technology to field questions.
Scottrade boasts the most branches available for live visits, and also routes calls to local branches during business hours.
Just how important is customer service in an increasingly automated stock market? The IBD survey found the only categories ranking above it were the usual suspects: trade reliability, lower commissions and trading fees, site performance and equity trading tools.