Online trading

Do-It-Yourself Investors Express Their Frustration With Online Trading Platforms

April was the cruelest month for Wall Street, as stocks plunged day after day and wiped out much of the huge gains made over the previous two years. Unsurprisingly, many investors are not very happy.

But JD Power reports that self-directed investors using online trading platforms might be the least satisfied of all. He reports that investors who opened accounts for the first time early in the pandemic reported “significantly more problems” with their accounts and lower levels of customer satisfaction.

Robinhood attracted a legion of new investors in 2020 who traded stock tips on forums like Reddit and drove up the price of battered stocks like AMC and Gamestop. But fortunes began to change at the end of 2021. When it announced its first quarter results last week, Robinhood said revenue was down and there were fewer active users.

Bob, from Port Jefferson Station, NY, is a Robinhood user who expresses his frustration with the platform’s system.

“They’ll take your money and ask for nothing but your bank account, but when you try to buy stocks or withdraw your money, they’ll demand all kinds of verification and proof, including photo ID. government,” Bob wrote in a ConsumerAffairs magazine.

“Increased expectations”

“Pandemic-era investors who entered financial markets during a true gold rush period characterized by heightened expectations, significant disruption and extreme volatility present a unique set of challenges for brokerage firms. detail,” said Michael Foy, senior director and head of wealth intelligence at JD Power.

A wave of retail investors entered the market in mid-2020. They opened around 25 million new accounts and helped push stock prices higher after a huge drop at the start of the pandemic.

Foy said these new investors tend to be young, less financially secure, and more likely to encounter issues that are currently not effectively addressed by their brokerage firms.

“Right now, most companies are missing the mark when it comes to delivering the level of tailored customer experience that will help them convert this next generation of investors into loyal, profitable customers,” said Foy said.

Satisfied investors

But not all self-directed investors are unhappy. Sheila, of Hattiesburg, Mississippi, says she’s a long-time trader who uses TD Ameritrade and is satisfied enough to give the company a 5-star rating from ConsumerAffairs.

“The website is user-friendly,” she told us. “Support is always immediate, no matter how they are contacted. The agents are competent and friendly. The exchanges couldn’t go any easier.

In the JD Power survey, T.Rowe Price has the most satisfied users. Vanguard ranks second and Charles Schwab ranks third.