Swamped TD cuts brokerage ads
KAREN HOWLETT
Financial Services Reporter
Saturday, March 25, 2000
Crushing demand for its discount brokerage services has prompted Toronto-Dominion Bank to dramatically scale back its advertising campaign for the operation and beef up capacity.
John See, vice-chairman of TD Waterhouse Group Inc., confirmed yesterday that the bank has stopped running ads for the discount brokerage on television and in most print media until it can handle existing customers' trading requests.
"There's no sense going out there and heavily marketing your services if you're having difficulty servicing to an acceptable degree your existing clientele," Mr. See said in an interview. "That's just good business sense."
TD Waterhouse will continue to run half-page ads in national newspapers, but the content will focus on the service problems and what the brokerage is doing to alleviate them, Mr. See added.
To that end, TD Bank yesterday unveiled plans to more than double its discount brokerage arm's call centre capacity. A new call centre will open in Markham, Ont., in July and a second one will open in Edmonton in September. The bank will also expand operations at the brokerage arm's six call centres across the country. The firm, which has 1,100 sales representatives, plans to hire another 500 to work in the new call centres.
Virtually every major Canadian chartered bank has come under fire for not being able to handle the volume of business going through their discount brokerage arms. TD Bank, owner of Canada's biggest discount brokerage, has taken the brunt of the criticism, especially for continuing to run ads inviting prospective clients to open trading accounts when it cannot handle existing business volumes.
Bank executives have said they were unprepared for the explosive growth in the discount brokerage sector. Trading volumes have tripled in recent months as thousands of individual investors jumped into the stock market.
TD Waterhouse manages $50-billion in assets on behalf of 750,000 clients in Canada, giving it the lion's share of a market estimated at between $70-billion and $80-billion in assets. It has come under criticism from many unhappy customers for not responding sooner to rising demand by adding to its capacity and staff levels.
"These things don't happen overnight," Mr. See said. "They've been on the drawing board for some time."
But Action Direct, Royal Bank of Canada's discount brokerage, decided back in December to expand capacity. The brokerage is in the process of tripling the size of its Vancouver call centre and will open a new call centre in Calgary in July. |
