October 2014: Automated Phone Systems

The Internet revolutionized the retail brokerage industry by allowing individual investors to manage their accounts at any time. For clients who are not on their smartphones 24/7, however, an automated phone system is another useful option that offers round-the-clock account access. Touchtone systems offer clients privacy when using the system in public places, and automated phone systems also allow firms to service client requests without having to maintain a large staff of live representatives. In this Broker Monitor Report, we look at the current Automated Phone Systems available from Broker Monitor firms.

More specifically, this report focuses on the following:

  • How does the phone system verify the client’s identity, and how secure is the system?
  • How simple is it for clients to move from menu to menu?
  • What phone system functions (such as trading, quote accessibility, etc.) are available?

The majority of brokers in our coverage group (66%) offer an automated phone system. Among the brokers that offer a phone system, the majority (66%) offer clients the option of using either voice recognition or touchtone. Three firms only use touchtone, and one firm’s phone system only uses voice recognition. Among the eight brokers that offer both voice recognition and touchtone, one firm provides two separate phone systems with different numbers (one for voice-recognition and the other for touchtone-only). Clients can choose between the two before they call; however, once in the system, clients have the option to switch from touchtone to voice recognition by pressing “*55.” The other seven firms offer clients the option of using either touchtone or voice recognition during the call. Furthermore, several firms allow clients to switch to only touchtone by either pressing a key or speaking a response, or they can set touchtone as a default option.

Additional key findings include:

  • The majority of firms (83%) allow clients to access account holding details on their automated phone systems.
  • The majority of brokers that we reviewed (83%) allow clients to look up stock, ETF, options and mutual funds quotes within their automated phone system.
  • About 40% of firms allow money transfers through their phone systems, with several firms also supporting check writing and other cash management activities.