METHODOLOGY

THE STOCKBROKER OF THE YEAR survey is conducted by Intellidex, a specialist financial capital markets research house.

This is the 11th year we have assessed SA’s retail stockbrokers. This year 15 firms participated, with 6,540 of their clients completing an online client survey, representing a substantial sample of the market. The high number of client votes entrenches the credibility of the survey findings.

The structure and approach of the project has been informed by our experience, built up over past years, as well as feedback from the stockbroking community and stockbroking clients. Overall, we aim to blend qualitative client feedback with data provided by the firms and Intellidex analysts’ judgment where necessary.

The awards recognise firms in two main categories: the Top Online Broker and the Top Advice-Based Broker. This division recognises the two main types of stockbroker and similar financial service providers that operate in the market and the types of services in which clients are interested.

These two awards are complemented by an overall award, the Top Stockbroker of the Year. There is also an award based purely on client feedback, the People’s Choice award, and we recognise the top brokers in the categories contracts for difference (CFDs), tax-free savings accounts and the most-improved broker. We provide assessments of which firms cater best for specific client segments, and specify which firms excel in different categories, such as value for money and range of instruments available. Each of these has a different calculation methodology, which we explain below.

Finally, there is an award to recognise individual excellence — the Top Relationship Manager of the Year. The winner is determined by client nominations and their ratings of quality of service/advice (ranked from excellent to very poor). We only consider advisers who are nominated at least 20 times. The firms we cover come in two types: registered stockbrokers and registered financial services providers (FSPs) that offer stockbroking-like services. Registered stockbrokers tend to be older firms focused on personal relationships with clients, while FSPs tend to be more execution focused. Only registered stockbrokers are allowed to call themselves “stockbrokers” in terms of legislation, though it has become common usage to refer to everyone who supplies stockbroking-like services as stockbrokers. Because our priority is to provide a useful service to members of the public, for whom the difference is often irrelevant, we incorporate both registered stockbrokers and FSPs in our survey.

The research follows three legs. First, a comprehensive questionnaire is sent to stockbrokers, asking for details of their products, pricing and market positioning. Second, a mystery shopping and desktop research exercise is undertaken by Intellidex analysts to verify information provided and assess transparency and responsiveness. Finally, a major online survey is undertaken of retail stockbroking clients. Clients rank their brokers on numerous factors, and these scores determine the important People’s Choice Award and feed into the other scoring categories where relevant. The Top Advice-Based Broker and Online Broker scores reflect a combination of Intellidex’s views and client feedback. For the Top AdviceBased Broker, the client input consists of ratings for advice on investment decisions, quality of fundamental research, buy and sell recommendations, macroeconomic analysis, quality and service levels of telephone-based trading, advice on corporate actions and value for money. For the Top Online Broker, client input includes service with IT queries, help with understanding the trading platform, ease of use of the online trading platform, satisfaction levels with the platform and app, and access to data.

The Top Overall Broker award is informed both by client input and by an Intellidex assessment. The assessment takes into account: cost of trading, a mystery shopping exercise (which looks at responsiveness and transparency), available instruments and trading tools, and client support and education tools. The client input is a consolidation of the client input used for the Online and Advice-Based categories. Then we provide an assessment of brokers that are suitable for different client types. The People’s Choice award is based on client feedback about 16 factors. Clients rank their satisfaction levels with brokers on specific services and products, value for money, overall satisfaction levels and their likelihood of recommending the broker to family or friends. The top tax-free savings account provider is determined solely from client feedback. Clients who have opened an account with their broker rate the broker on costs, ease of opening the account, range of products and service levels.

The top CFD provider is also determined from a mix of client feedback and an Intellidex assessment of the trading costs, credit riskiness of the provider, and appropriateness of online services for CFDs. Client opinion on CFD research is also considered. Better scores for risk are given for firms where the counterparty for CFDs is clear and has a large balance sheet. Small or obscure balance sheets receive lower scores.

The methodology will continue to evolve in order to stay abreast of industry changes and as we receive further feedback.

“We aim to blend qualitative client feedback with data provided by the firms and Intellidex analysts’ judgment