Trying to reach your on-line broker by telephone? You may want to have a good book at hand.
Telephone waiting times have climbed drastically at many of the largest on-line firms. There is no easy way to quantify the problem, but even on-line executives admit that, in many cases, hold times are longer than in the past.
“The pace of growth is just so rapid that these guys are struggling to keep pace,” says Jaime Punishill, a senior analyst with Forrester Research Inc., a Cambridge, Mass., consulting firm. Punishill speaks from experience. On a recent Saturday, he spent an hour trying to reach Charles Schwab Corp.’s customer-service center by phone.
It took Ron Schulz more than a day to reach National Discount Brokers, a unit of National Discount Brokers Group Inc., in March after he had trouble getting some orders promptly executed. “I got the `please hold’ and the music,” says Schulz, a telephone repairman living in suburban Chicago. “Sometimes, it was `please hold,’ and the music would go away. I tried different options on customer service, to no avail.”
Schulz had a similar experience later in the month when he called NDB for an update. “I actually set down the phone and took a shower,” he says. “I came back and was still on hold.”
To be sure, many on-line investors are happy with their brokers’ service. And in times of market turmoil, even a full-service broker can be hard to reach. Phone volumes also pick up in the spring because of tax-related questions.
“We can obviously do better and will do better,” says Maurisa Sommerfield, Schwab executive vice president, retail client services.
“There’s no question there’s been a bit of a bottleneck in terms of (reaching) a live broker,” says National Discount Brokers Group Chairman Dennis Marino. “We’re trying our best to work through it.”
Marino and Sommerfield have plenty of company. In its most recent on-line brokerage survey, released in March, Gomez Advisors Inc. found phone-service problems at American Express Co., Charles Schwab, DLJdirect Inc., ETrade Group Inc., NDB and TD Waterhouse Group Inc. “It’s almost ironic that the human element can be construed as a challenge as opposed to technology,” says Daniel Burke, a senior analyst for Gomez, an electronic-commerce research firm in Lincoln, Mass.
Average hold times at Waterhouse have been as long as 35 to 40 minutes during peak periods, the firm says, with 20-minute to 25-minute average waits more common during times of heavy volume. Back in August, peak holding times averaged just five minutes, says Frank Petrilli, Waterhouse’s president. Schwab says average wait times increased to roughly four minutes in February from about 1.25 minutes in October, though it concedes some customers may have waited a half hour or more. “But we do feel that those situations are the exception, not the rule,” a spokesman adds. Indeed, the amount of time investors actually spend on hold can vary significantly.
Josh Ullrich, a sales representative living in Royal Oak, Mich., says he “could get a person inside of a minute” when he opened an account about seven months ago with DLJdirect, a unit of Donaldson, Lufkin & Jenrette Inc. But when he called DLJ in March, Ullrich made sure to turn on his speakerphone so he could answer e-mail and do research while he waited. Ullrich says he “actually talked to someone . . . after waiting for a total of 10 hours over three days.”
“I know our (trading and call) volumes are up, so I’m not surprised that hold times are longer,” says DLJdirect spokeswoman Linda Finnerty.
Long waits are often triggered by Web outages, which send investors scurrying to their phones to get orders filled and problems resolved. Marino blames some of NDB’s delays on a “hacker-like denial of service” that created havoc with the firm’s Web site in late February and had a “residual impact” in March.
But the recent deterioration in phone service also highlights how the growth in new accounts and trading volume can be both a blessing and a curse for on-line firms. American Express, for instance, began offering no-commission trades in November for investors who meet certain asset requirements. “We’re signing up every week the number of customers we thought we’d sign up in a month,” a spokesman says. “That’s (resulted in) wait times on our phone lines being longer than we’d like. We need more people to answer the phones, and we’re getting them.”
Other firms also are having trouble keeping up. “Has it grown faster than we thought it would grow?” asks Connie Dotson, chief service-quality officer for ETrade. “I think (the answer is) yes.”
Adding to the pressure, the type of investor who trades on-line is also changing. “There are the early adopters who don’t want to talk to people,” notes John Chapel, an executive vice president with TD Waterhouse Group. “If they call once a month, that would be a lot.”
Newer investors tend to require more hand-holding, Chapel notes.
On-line firms are using a combination of personnel and technology to trim waiting times. At Schwab, “hold times really have come down quite a bit” in mid-March since the firm activated its “flex force” of 750 employees who help a regular staff of about 4,000 phone representatives answer calls when hold times climb. As a more permanent solution, the firm is hiring about 300 phone reps per month. ETrade hopes to cut phone traffic by making it easier for customers to use its Web site and by allowing them to get questions answered automatically or via e-mail.
TD Waterhouse opened a new customer-service center in Chicago that can seat 700 employees in late February. In mid-March, it had about 150 employees. “We’re in a campaign to fill that space” in the next few months, Chapel says. Waterhouse also began allowing customers to request key tax information on-line–a big source of calls in the spring. Chapel says “hold times and wait times have crested and are on the decline.” DLJdirect recently added new features to its automated phone service that allow customers to request forms and get answers to timely questions about individual retirement accounts. NDB is doubling its customer-service and trade-execution staff as part of a planned move into new offices that will be completed early this summer.
Though on-line firms are hiring aggressively, customers won’t feel the impact immediately. Many of the 2,200 phone reps Schwab hired last year came on board in the fourth quarter and just started answering the phones in March. Schwab puts new phone reps through a four-month training program.
Investors themselves can take steps to cut the time they spend on hold. Sommerfield advises customers to use their broker’s automated phone service for such basic requests as new forms, checks, quotes and account balances. Good timing also helps. “If you’re not dealing with market-sensitive issues,” she says, “it’s better not to call at the market open, because that’s the busiest time of the day.”
