*Today's Ottawa Citizen Newspaper*
online glitches
Computers overwhelmed by volume
Pauline Tam
The Ottawa Citizen
For the past two days, Dean Parlee has logged on the Internet,
expecting to get an investment update from his online broker. And
for the past two days, his discount brokerage firm has failed him.
According to Mr. Parlee, the technical blunders have been many.
Sometimes, he can't access his account. Other times, he gets an
incorrect balance.
Lately, says the TD Waterhouse client, he can't even seem to make
a trade. +It's getting progressively worse everyday.+
Like many irate discount brokerage clients, Mr. Parlee was lured to
trade-it-yourself firms by the promise of instant access to the stock
markets. Instead, the popularity of discount brokerages has made
investors like Mr. Parlee slaves to their phones, and victims of
unreliable service and computer foulups.
+They're selling a false sense of security to people who think they
have immediate access to the stock exchange,+ he fumes.
Out of frustration, Mr. Parlee drove from his Kanata home to TD
Waterhouse's downtown offices earlier this week to demand
answers. +I talked to four or five traders, and they told me that their
(computer) servers were down.+
TD Waterhouse staff deny their computers suffered any technical
breakdowns this week. But they admit the rush to meet the
leap-year deadline for RRSPs has affected online trades.
+Our servers did slow down because of volume,+ says Ottawa
branch manager Doug Patterson. +We recognize that there are
logistical problems because of the huge volumes of trades that we
do, and we're really trying to do everything we can to catch up.+
To address the computer bugs, the brokerage expects to boost its
capacity to handle online trades by installing extra servers within
the next three weeks, says David Sypher, vice-president of direct
channels.
Internet trading makes up an estimated two-thirds of the
brokerage's business while trading by phone and in-person
transactions make up the rest, says Mr. Sypher.
While such trading delays are not unique to TD Waterhouse, it's
small consolation for James Harris, an Ottawa investor and TD
client who trades by phone.
When he found himself waiting 40 minutes to make a trade
yesterday morning, all the while watching the price of his stock
slide, he finally dropped the phone and ran from his Centretown
home to the TD Waterhouse office a few blocks away to place his
order in person. +I couldn't take it any more,+ says Mr. Harris.
Gerald Polowin, another TD Waterhouse client who trades by
phone, says he's fed up with the brokerage's voice-activated
trading system that forces him to wait up to an hour sometimes
before he can place his order.
+I don't talk to a human being. I talk to a machine that gives me
various codes for if I want to buy or sell.+
Sometimes, he says, the prices quoted for the stock are wrong.
Other times, the automated system will simply not process his
trade.
Mr. Polowin was especially frustrated one afternoon as he watched
his Corel Corp. stock climb steadily. By the time he was finally able
to sell his shares, the stock was down $20 from the day's high.
So with all his complaints, why does Mr. Polowin continue to use
TD Waterhouse?
+It's easy for someone to say, 'Well, why don't you switch?' But it's
not that easy. First of all, when you open a new account, you can't
trade for a few days. Second, you have to transfer all of your paper,
namely your shares, which takes time. I could be missing out on
some good deals in that time.+
According to Mr. Patterson, the brokerage has been trying to keep
up with customer demand by hiring more staff. Since last fall, he
says, the firm has doubled its staff across the country to about
1,000. That's despite the fact that within the industry, there is a
shortage of trained securities professionals, Mr. Patterson adds.
+It's still not enough but we care and we will catch up because we
don't want our customers to wait. But if they have to wait, it's
because there's nothing we can do at this time.+