Posted on

Look Back / Look Ahead: A Review of Canadian Online Brokerages in 2021 & Preview of 2022

If there’s one thing that all self-directed investors have in common, it’s that they pay attention to trends. This year, we officially crossed the 10-year mark at Sparx Trading, and if there’s one thing that we can speak to after a decade’s worth of data and analysis, it’s being able to spot trends in the Canadian online brokerage industry. 

Taking stock (pun intended) of the past year and a half, it’s fair to say that we’re living through events unlike anything we’ve ever witnessed before. And yet, one of the most striking features of the Canadian online brokerage industry, even in the face of such dramatic events, is the ability of the Canadian market to sustain firms that move at paradoxically different speeds when it comes to innovation. That world, however, is about to change. 

In this fifth iteration of the Look Back / Look Ahead magazine, it’s abundantly clear that the Canadian self-directed investing industry sits at the cusp of a major transformation. 

From the launch of commission-free trading by National Bank Direct Brokerage, to a structural shift in demographics of investors who entered the online trading world, 2021 was a year that online brokerage executives told us challenged them to establish a new normal when it comes to delivering outstanding experiences for Canadian self-directed investors. 

Drastic change was also prevalent at SparxTrading.com this year. Our choice to completely overhaul our website and lean into refining our brand identity appears to be in line with where leaders in the industry are as well. And we, too, have some incredibly ambitious projects slated for the next year that we can’t wait to share more about, especially the launch of Sparx Trading Pro.

After 10 years of consistently producing content on the Canadian online brokerage landscape, it’s remarkable to reflect on the breadth of audience that we serve. 

Analysts, journalists, executives, enthusiasts, and investors turn to Sparx Trading for in-depth insights and newsworthy developments, as well as puns, gifs, and fun artwork. In today’s parlance, we’ve helped to democratize online investing by providing industry-grade content and insights to all. Today, investors have more technology, platforms, products, providers, and pricing options than they have ever had before, which means our place in the DIY investor ecosystem is even more important today than it was a decade ago when we first launched. 

On behalf of the exceptionally talented Sparx team, I would like to thank our loyal readers, supporters, and, especially, the online brokerage community for 10 years of wonderful memories, and for keeping things interesting. 

Where the next 10 years takes us all, we’re not sure. But we’re excited all the same, especially if where we’re going next won’t need roads. See you in the future!

Click below to learn more about what each individual online brokerage had to say about 2021 and what’s coming up in 2022:

Posted on Leave a comment

Look Back / Look Ahead: Qtrade Investor Q&A

What can beginner investors expect from your firm?

New investors can access an award-winning online investing platform, robust mobile-trading capabilities and unrivalled customer service. Qtrade Investor has consistently been ranked among the top online brokerages across all major rankings, including The Globe and Mail, Surviscor and MoneySense. We have achieved 22 first-place wins for best online brokerage over the past 15 years, and eight first-place awards in customer service experience over the past five years.

We empower beginner investors with online resources and innovative tools that help them invest with confidence. Just launched in 2020, Portfolio Simulator™ lets clients test investment scenarios in a simulator mode, to explore ideas and fine-tune their investment strategy, while Portfolio Score™ provides a second opinion on their portfolio, helping investors understand their diversification and risk exposure and grading the selected securities across five key dimensions. If a beginner investor is looking to build an ETF portfolio, with just a short series of questions, Portfolio Creator™ generates a portfolio, customized to their investing preferences, that will help them maximize risk-adjusted returns.

Posted on

Sparx Trading Featured on ETF Market Insights to Discuss Online Brokerage Account Considerations

Sparx Trading Co-Founder Hamish Khamisa was recently a guest on ETF Market Insights, a weekly webinar for Canadian self-directed investors hosted by Danielle Neziol from BMO ETFs. 

In this special edition of ETF Market Insights, “Spring Into ETF Investing,” Hamish joined guest host, Saijal Patel from Strictly Money, and fellow guest, Ellen Roseman from Canadian Money Saver, to discuss what to consider before opening an online brokerage account, the differences between robo advisors and DIY investing, and more! 

Here’s an overview of this episode of ETF Market Insights, “Getting Started with ETF Investing – Opening an Account and Making your First Trade”:

42:25 – Yes You Can!

43:25 – Introductions

44:00 – Choosing a Direct Broker

47:30 – Fees

50:25 – Educational Resources

53:40 – Robo Advisors

55:45 – Changing your Direct Broker

59:40 – Comparing Direct Brokers

1:03:09 – RRSPs & TFSAs

1:07:50 – Using ETFs

1:10:50 – ETF Key Information

1:12:41 – Outro


Watch the episode here.

Posted on

Sparx Trading Featured on Strictly Money to Discuss Self-Directed Investing

Strictly Money host Saijal Patel and Sparx Trading Co-Founder Hamish Khamisa.

Sparx Trading Co-Founder Hamish Khamisa was recently a guest on Strictly Money, a segment of The News Forum that discusses the financial issues affecting Canadians today. In this episode, host Saijal Patel interviewed Hamish about his thoughts on various topics related to self-directed investing, including online brokerage fees, current trends, and more!

Here’s an overview of what Saijal and Hamish discuss in this episode of Strictly Money:

00:00 – Introduction

00:35 – What self-directed investors should consider before opening an account

01:15 – Thoughts on platforms moving away from charging commissions

02:20 – Minimum balance fees and how big they are

03:05 – How foreign exchange fees work

03:50 – What inactive charge fees are and accounts they affect

04:45 – What is a transfer fee, and how it works

05:50 – Screener tools and their value

06:50 – Are self-directed platforms for everyone?

07:20 – Evaluating value of robo-advisors

08:10 – How self-directed investment platforms may evolve and stay competitive

09:05 – Trading on mobile and potential trends 

09:40 – Security and online brokerages

About Hamish Khamisa:

Hamish Khamisa is the Co-Founder of SparxTrading.com, a website built to provide transparent and trustworthy information about the world of self-directed investing. Since 2011, Sparx Trading has helped investors in the industry stay up to date on the latest features, services, and trends offered by online brokerages. In addition to leading Sparx Trading, Hamish is the President and Chief Digital Officer of Sparx Publishing Group, a BC-based digital marketing agency with a mission to create and amplify content that helps make the world better

Posted on

Online Brokerage Promotions – June 2022

With summer just around the corner, it looks like stock markets won’t be the only ones seeing red. Weeks of volatility and sell-offs have been difficult for all but the most seasoned self-directed investors to stomach.

For DIY investors, the news isn’t all bad though. The pullback in stock markets typically means that online brokerages will need to work harder to encourage online investors to open an online trading account, and that means potentially bigger or more attractive incentives. 

Although there aren’t any new deals that have launched at the start of the month, leading into June there have been several noteworthy developments in the online brokerage deals and promotions section

By far, the biggest development last month was the launch of commission-free trading on stocks and ETFs at CIBC Investor’s Edge. This is huge news for younger investors, as well as for competing online brokerages across the board. As the first of the big five bank-owned online brokerages to offer full commission-free trading, it seems like CIBC’s peers will have to consider adjusting their commission rates or young investor offerings. 

Fortunately for RBC Direct Investing, their 100 commission-free trade offer is both large enough and long enough in duration to weather this price move by CIBC Investor’s Edge. Perhaps it was fortuitous timing that RBC chose to extend their offer at the beginning of last month, and with this move from CIBC Investor’s Edge, they may consider extending it even further. 

There’s no question that the list of commission-free online trading options is growing. TD Direct Investing, via their Easy Trade app, offers 50 commission-free stock trades per year, and National Bank Direct Brokerage and Desjardins Online Brokerage each offer full commission-free trading to investors of all ages. Of course, there’s still Wealthsimple Trade in the mix too.  

Against that backdrop, the launch last month by Qtrade Direct Investing of a 50 commission-free trade offer does provide something to online investors looking for a deal when opening an online account, but clearly, the stakes have been raised. 

The reality for Canadian online brokerages is that there are only a few months left to make plans for the next RRSP season, and with all the action happening in markets right now, for better or worse, online investors are checking their accounts and wondering if they’re getting great value. It’s one thing to sell a stock into a storm and another to incur a commission charge on a loss. 

Expired Deals

Wealthsimple Trade’s “free stock” promotion expired on May 31st. This popular promotion has been a windfall for the zero-commission broker, mirroring the performance of US online brokerage, Robinhood, who has a similar (but actually a free stock) program in place. 

Another important expired deal was from National Bank Direct Brokerage. Their recent promotional discount on margin rates seemed especially well-timed given the discussion on rising interest rates that is dominating the news cycle right now. It was the first “discount” on margin interest rates we’ve seen in some time, so given the current interest rate environment and volatility in markets, it could make this offer especially attractive to very active or sophisticated investors. 

Extended Deals

Nothing new to report on this month as far as deal extensions are concerned. The RBC Direct Investing commission-free trade offer is worth watching as it was extended into this month.

New Deals

No new deals activity to report at the start of the month. 

Posted on

Online Brokerage Promotions – May 2022

*Updated May 17* No Jedi mind tricks here; there is literally not much to see in the deals and promotions category for May. Deals have gone dark for the moment with most offers that were launched for RRSP season formally closing out or receding into “YMMV” territory, where they’re offered on a case-by-case basis to select individuals.

While the pullback in deals and promotions is not uncommon at the start of May, what is unusual this time is that stock markets are tanking, interest rates are rising, and many first-time investors that made up a huge portion of the momentum in online account openings are going to be returning back to the office, and, thus, not able to pay attention to market fluctuations the same way they did at the beginning of the pandemic.

Adding to the mix of challenges, more options for DIY investors to choose from are coming to market (including more commission-free online brokerages) and a prevailing narrative among online brokerage rankings that the industry seems to have stagnated in terms of innovation.

In short, Canadian online brokerages are going to be facing exceptionally challenging terrain when it comes to new client acquisition and growth.

If only there was a way that they could attract the attention of online investors without having to lower their fees to zero or compromise their service experience. *Ahem* deals.

As we approach summer, there is only one Canadian online brokerage (so far) that is getting in front of the “rising interest rates” environment by leaning into an interest-themed promotion: National Bank Direct Brokerage (NBDB). If there’s one online broker that other Canadian brokerages probably don’t want to have grabbing more spotlight right now, it is NBDB – a bank-owned online brokerage offering zero-commission trading.

If only there was a way that online brokerages could also play defense without having to resort to an all-out price war. *Ahem* deals.

With the uncertainty around markets likely steering older online investors away from jumping into the market and competing priorities for younger investors interfering with getting started in the market despite declining prices, this is likely to set the stage for Canadian online brokerages to consider using more promotional activity (or bigger offers) to attract attention while simultaneously offering up some measure of defense against new entrants and ambitious existing players.

Although the deals activity is dark at the moment, there’s definitely a disturbance in the Force that could provide some very compelling deals in the near future. Stay tuned.

Expired Deals

Two important offers formally expired at the end of April.

The first was Qtrade Direct Investing’s cash back promotion. This Qtrade promo was historic in several respects, as it marked one of the rare times that an online brokerage actually revised an existing promotional offer upwards during RRSP season. Another important first was that this tiered promotion was one in which Qtrade matched or led some of the highest offers that were available, making Qtrade’s offer one of the most competitive across the board (not something we typically see).

Also sunset (for now?), the RBC Direct Investing 100 commission-free trade promo. This was one of the most ambitious commission-free trade offers yet from RBC Direct Investing, as it gave clients up to two years to use 100 commission-free trades.

Extended Deals

*Updated May 6 – Like a good comeback plot from the Star Wars franchise, it looks like there’s a new episode to celebrate for the RBC Direct Investing commission-free trade promotion. The same 100 commission-free trade offer is now available until the end of June (albeit with an updated promo code). As reported earlier, RBC Direct Investing’s commission-free promotion provides clients with 100 commission-free trades which can be used for up to two years.*

No deal extensions to report on just yet.

New Deals

*And just like that, it looks like deals action is heating up faster than Ontario weather. Hope you have AC for this deals update. Two big online brokerage names, CIBC Investor’s Edge and Qtrade Direct Investing have dropped new commission-free trading offers – and at least one of these is a game changer.

Commission-free trading just took a big step forward with CIBC announcing they’re going to offer commission-free trading for younger investors (aged 18-24) – a move from a bank-owned brokerage that will undoubtedly challenge other Canadian online brokerages to act decisively on commission-free trading (of some kind). The offer is linked to having a CIBC Smart Account (for banking) and it offers free trading for Canadian and US stock and ETF trades. To boot, they’ve also waived annual account fees for registered accounts. Oh, to be young in 2022.

For those over the age of 24 (and those younger than that too), there’s another promotion to be excited about. Qtrade Direct Investing has launched a new commission-free trading promotion that offers 50 commission-free trades which are good for up to a year. This offer is live until the end of August.*

No new online brokerage promotions to start the month; however, we’re monitoring chatter on possible commission-free trade offers that are in the works. Check back soon or follow along on Twitter for more updates when they happen.  

Posted on

Online Brokerage Weekly Roundup – April 20, 2022

The budget and rate hikes have generated a lot of “interest” lately. Interestingly (see what I did there), the link between the discussion on frothy real estate and self-directed investing is a lot closer than you think, especially for one bank owned online brokerage.

In this edition of the Roundup, we review a fascinating set of data points to emerge around bank-owned brokerage Scotia iTRADE and explore what this remarkably quiet online brokerage is working on this year, as well as what peer firms and self-directed investors can learn from iTRADE’s recent activities. Also in the Roundup, an exciting upcoming webinar about getting into self-directed investing (featuring an expert panel that includes Sparx!). We close out this edition with a very timely selection of investor forum posts talking about iTRADE.

Whatcha Say Scotia iTRADE? A Deep Dive into Emerging Developments

We often spend time in the Roundup profiling Canadian online brokerages that are actively talking about new features. There are times, however, when it is warranted to pay attention to who is not speaking up about what they’re doing – especially when they are a bank-owned online brokerage.

Earlier this year, we published the latest edition of our Look Back / Look Ahead series, which offered leaders at Canadian online brokerages the opportunity to directly communicate what they’re working on to self-directed investors and industry enthusiasts alike. There was no charge to participate and all online brokerages in Canada were invited to submit a recap of what they were working on and what self-directed investors could look forward to in the year ahead.

Among the group of online brokerages that we did not receive a direct update about, Scotia iTRADE stands out as an interesting case, especially considering recent remarks from a pair of important conferences, notably the National Bank Financial Services Conference and the Scotiabank Annual General Meeting (AGM). Despite not receiving a direct update in the Look Back / Look Ahead, comments from these conferences have provided some clues as to what this online brokerage is focusing on for 2022, as well as their strategy when it comes to competing in the current online brokerage marketplace.

DI-Why Investors?

Often, communications by financial services firms are vetted and polished through numerous steps before they get released into the real world. Occasionally, however, things slip through the cracks. Recently, we were able to get a bit of a hot take on the world of self-directed investing, in particular, of younger investors from Scotiabank.

The comment, which came from Scotiabank’s Group Head, Canadian Banking, Dan Rees, was as follows:

So, younger individuals who don’t want to take advice and want to go DIY on their own. Generally speaking, those don’t work out that well, right? That said, we also know that we have sophisticated investors who do want to run their own money as part of managing their overall portfolio, so they may have a relationship with a portfolio manager and run 15% on their own, in our case in an iTRADE account. And we want to support both of those positions.

There’s a lot to unpack from that statement; however, the focus for Scotiabank, it seems, is on servicing sophisticated clients (read: high net worth) with advice-related products rather than the self-directed investing products. Since younger investors don’t typically fall into that category, these remarks imply that resources will be prioritized for sophisticated self-directed investors rather than entry point ones. This is especially interesting considering several peer bank-owned online brokerages are paying much more attention to supporting new retail investors.

As if to make very clear where Scotia is directing their attention, the image on the Scotia iTRADE homepage also skews directly towards “homeowners” rather than those whom would not have a mortgage (or own their own home).

Mr. Rees’s comments seem to explain a lot when it comes to the curious silence and muted online presence that Scotia iTRADE has had for several years now.

Whereas previously Scotia iTRADE was active on social media and in promotions, investor education, and platform enhancements, these seem to have all been dialed back considerably. But based on some comments at another conference, that might soon change – at least when it comes to technology.

The other interesting place where Scotiabank talked openly about Scotia iTRADE recently was at the Scotiabank AGM early in April. Normally, an AGM is not really the forum to air grievances about the online brokerage experience. So, it was both surprising and telling to see that the first question raised at the Scotiabank AGM came from a Scotia iTRADE client (and Scotiabank shareholder) Robert Wells. And this time, the “official response” sounded a lot more official.

Mr. Wells’ question was as follows:

Scotia iTRADE charges me $270 to enter and exit a $500 options trade and competitor banks only charge $40 for the same trade and it is disconcerting for a shareholder to feel compelled to transfer my brokerage account to another bank that charges almost 1% less for margin loans, far less on fees and commissions and provides far better customer service. Does Scotiabank management have an estimate of how many other customers are transferring their accounts to no or low commission banks? And, does Scotiabank management have a strategy to remain competitive in this new era of low fee brokerages?

The response from Senior Vice President Client Solutions and Direct Investing, Erin Griffiths:

At Scotiabank we strive to deliver a consistent high-quality experience across our platform and at Scotia iTRADE specifically we review our fee schedules regularly to ensure they are competitive in the Canadian marketplace, that they are compliant with the local regulatory framework, and also that they are delivering value to our clients.

For the option trading specifically, we charge $1.25 per contract which is consistent with many of our peers and we also offer free trading through the Scotiabank Ultimate Banking package as well as through over 100 different exchange traded funds that we have on our platform.

With regards to value, we’ve invested significantly and continued to invest significantly in our people and our platform. We have increased our contact centre staffing by 32% over the past year, and we continue to invest also in our technology, modernizing the online experience for our clients; launching a new mobile application later this summer and a new active trading platform later this year in addition to many other things.

And then finally with regards to the question around transfer out activity, we regularly monitor that on a monthly basis, and we are very pleased to see that consistently we have more clients who transfer into iTRADE as their platform of choice over transferring out, and that has allowed us to continue to increase our market share and assets relative to our peers and add shareholder value.    

There’s a lot of information provided in both the question and the response; however, it is clear that just because Scotia iTRADE doesn’t talk much about what they’re working on, it doesn’t stop people – including shareholders – from wondering what they’re doing, especially in this ultra-competitive segment (see the From the Forums section below for more examples of this). It’s also clear that things are being worked on at Scotia iTRADE, just not being telegraphed well to broader stakeholders.

Customer Sad-is-fact-ion

What shines through loud and clear from the question by Mr. Wells is the dissatisfaction with commission pricing, margin fees, as well as customer service.

Any regular reader of the Roundup will know that Scotia iTRADE has struggled with meeting customer service needs over the past few years. So although it is a surprise to see a question about service levels surface at an AGM, it is certainly not a surprise to hear this being an issue that clients of Scotia iTRADE experience. Of course, what “better customer service” means exactly is up for debate, but there are at least three different ranking firms that paint a consistent picture of Scotia iTRADE falling short when it comes to delighting clients.

Last year, for example, DALBAR Canada, which regularly reviews phone and chat service at Canadian online brokerages, found Scotia iTRADE had an average phone wait time of 179 minutes – the longest average phone wait time of all brokerages surveyed. And although their survey was taken at a time when volumes were actually higher than normal in 2021, it speaks to the responsiveness and preparedness of call centres to handle the needs of clients that end up having to call in.

Surviscor, another firm which analyzes the Canadian online brokerage marketplace, found that Scotia iTRADE averaged 64 hours to respond to service inquiries by email, according to the latest Surviscor ratings of iTRADE. Despite the service experience, however, the overall ranking for Scotia iTRADE was still reasonably high according to Surviscor, which indicates that there are compelling features available to support DIY investors.

Finally, J.D. Power’s Self-Directed Investor Satisfaction Study, which measures the “voice of customer” perspective, found that Scotia iTRADE ranked last among Canadian online brokerages in terms of satisfaction, scoring 576 out of a possible 1,000 point scale.

In response to the service shortfall pointed out by Mr. Wells, Scotia’s official position appears to define the issue, in part, as a resource constraint at the contact centre level, an indirect admission that “wait times” are likely a driver of dissatisfaction with the service experience.

Of course, without providing specifics as to the headcount providing support and how many customers it is providing support to, it is difficult to know how big of a difference, in absolute terms, 32% more resources translates into. Earlier this month, for example, users of the iTRADE platform reported having to wait hours to contact customer service at iTRADE over a technical glitch. In contrast, at least one peer firm, BMO InvestorLine, has been exceptionally transparent about reporting wait times, which now are reported in minutes (or even seconds). Clearly, for Scotia iTRADE there’s a lot more work to be done with call centre wait times to get them to a competitive level.

Active Lifestyles

If there is one point that jumps out about Mr. Wells’ specific question, it is related to the investment products and services being discussed. Specifically, options trading and margin lending. Both of these are hallmarks of active and/or sophisticated investors – precisely the kind of online investor that almost every online brokerage considers to be of the highest value.  

As such, it is particularly damaging that a client with this profile is coming forward with this kind of service experience. It is a fair assumption that Mr. Wells is not alone, and as such, shareholders and potentially high value clients may view these comments as a red flag.

What we did learn from the response to Mr. Wells’ question, however, is that Scotia iTRADE is planning to launch a new mobile app this summer, as well as another active trading platform coming later this year. A quick look at the Scotia iTRADE mobile app rankings for the iPhone (1.3 stars out of 5) and for the iTRADE Android app (1.4 stars out of 5) show that a new mobile app experience is long overdue and the expectations for things to improve substantially are high. No pressure.

The reality for Scotia iTRADE is that despite new technology being a welcomed change, launching a new online trading platform (let alone two) will be a big lift requiring solid execution from multiple teams. Based on the roll outs from other online brokerages of new platforms, it will likely take time and lots (and lots) of communication with clients to avoid a flood of calls to the customer service channel and confusion that typically accompanies a major update. And whenever there is confusion or delay, the most active investors – aka some of the most sophisticated ones – are the loudest to speak up about things going wrong. Again, no pressure.

Retention Please

Finally, another revealing data point relates to client growth (aka turnover or “churn”).

As a shareholder, part of Mr. Wells’ concerns focused on customer attrition. Rightly so, because Scotiabank, like any other business, requires either more revenue per customer or more customers to grow. Ms. Griffiths pointed out in her response, however, that numbers on client turnover are reviewed monthly and that Scotia iTRADE continues to attract more clients than it is losing.

Without the benefit of specific numbers, it is hard to quantify that increase, and, importantly, over what time frame. Regular readers of the Roundup know that we track customer growth (or contraction) trends at US online brokerages fairly closely. Unlike the publicly traded US online brokerages, Canadian online brokerages do not report this information in any regulatory filing, so while some online brokerages cite strength in account openings or the number of clients, there is no objective way to validate that information nor is there associated information that goes along with that data. Specifically, there is no data associated with the number of clients that would indicate the value of those clients either in terms of average assets or trading activity – metrics that as a shareholder would directly enable to gauge if Scotia iTRADE is attracting (and retaining) the right mix of clients.

Uncomfortable Questions

The paradox of Scotia iTRADE is that despite having a strong feature set and value proposition (now) for self-directed investors, there is little in the way of regular awareness campaigns or creative approaches to engage with self-directed investors to let them know about these features.  

Scotia iTRADE now has over 100 commission-free ETFs (up from 49 last year), strong ranking scores from Surviscor, and average scores from Globe and Mail, as well as a powerful set of research and insight tools.

That said, without telegraphing what they’re working on to a broader audience or keeping pace with what peer firms such as BMO InvestorLine, RBC Direct Investing and TD Direct Investing are clearly working towards in content development – let alone firms like National Bank Direct Brokerage in pricing – it appears that not only are Mr. Wells’ concerns well founded, but they will also continue to lead to more uncomfortable questions.

Now that Scotia iTRADE doesn’t have a channel of its own to steer that discussion, it only leaves shareholders, clients,m and other DIY investors who still know about this online brokerage to wonder aloud what happened to Scotia iTRADE?

Spring is in the Airwaves

Spring is the season of change and that is exactly the theme of an upcoming webinar where yours truly will be appearing on a panel discussion opening an online trading account.

The Spring into ETF Investing series, presented by BMO Exchange Traded Funds as part of their ETF Market Insights, will be broadcast on April 29 and May 6 and will feature guests from the world of capital markets and personal finance discussing a variety of topics related to ETFs and wealth management.

Tune in on April 29 (or catch the replay on YouTube) for two episodes, one episode on generating monthly income using ETFs and the second on opening an online trading account. Viewers can either register for the webinar in advance or watch the session live on YouTube.

From the Forums

Ready for Change

If you thought we’re the only ones talking about Scotia iTRADE, guess again. In this post on reddit, one very frustrated Scotia iTRADE user asks for more information on when changes will be coming to their platform.

Flow of Funds

Yet another post about Scotia iTRADE, but this time some good news. This helpful redditor posted links to new commission-free ETFs offered by Scotia iTRADE. The new list of ETFs that are commission basically doubles the number previously available, with just over 100 ETFs now available to trade commission-free.

Into the Close

What a wild ride it’s been. The combination of a short week but no shortage of stock market activities courtesy of earnings means that even more fun was packed into fewer days. Between Elon Musk on Twitter and budget buzz still going strong, Easter eggs are still rolling in.

Posted on

Look Back / Look Ahead 2021-2022: RBC Direct Investing Q&A

Q&A with RBC Direct Investing. Lori Darlington, President & CEO.

What can beginner investors expect from your firm? 
Beginner investors may be new to investing, or new to our platform. We’ll continue to deliver a great start for both groups through our digital onboarding journeys to get them up and running. Plus, we are increasingly using video to explain key financial literacy concepts in our Investing Academy.

What can active investors expect from your firm?
Our new Trading Dashboard was designed for active traders. Feedback has been positive, and we’ll be looking to better support clients in unlocking the full value of this powerful new dashboard.

What online investing trends do you expect to matter to self-directed investors?
Investors will continue to look to their online brokerage to access in-depth third party research and analysis to help ensure the investing decisions they make are right for them. We also see clients increasingly “crowd source” their investment ideas on social media and through their personal networks. Our Community, a secure online forum, fosters this exchange of ideas. Self-serve capabilities are important as well, and we want the end-to-end experience to be best in class! 

What does user experience mean at your firm?
We support every step of the client journey from account opening, to funding, trading, and monitoring a portfolio. Every client is unique, so we’re providing a more personalized experience through Watchlists with real-time streaming quotes, “alerts,” and the option to toggle between previous day or intraday view of holdings. 

What sets your firm apart from your peers?
We believe RBC Direct Investing stands apart on the things that matter: a broad product shelf, third-party research, and a full range of account types, most with automatic Canadian & US dollar sides. With access to three digital platforms (online, mobile, and the new Trading Dashboard), free real-time streaming quotes2 for all clients and live agents when they need us, we feel we deliver great value. As we have for over 30 years, we’ll continue to listen to clients to build a superior client experience.


1 Real-time quotes are available automatically to all clients for exchange listed stocks, ETFs and most over-the-counter (OTC) securities without completion of exchange agreements. Real-time quotes for options and grey market OTC securities on detailed quote and order entry pages are also available upon accepting the terms and conditions of all exchange agreements on the RBC Direct Investing online investing site. Real-time quotes for options and grey market OTC securities are available to Active Traders and Royal Circle clients across the site upon accepting the terms and conditions of all exchange agreements on the RBC Direct Investing online investing site

2 Real-time streaming quotes are available automatically to all clients for exchange listed equities, ETFs and most over-the-counter (OTC) securities. Real-time streaming quotes for options and grey market OTC securities are available to Active Traders and Royal Circle clients upon accepting the terms and conditions of all exchange agreements on the RBC Direct Investing online investing site.

This Q&A was featured in the Look Back / Look Ahead magazine.

Posted on

Look Back / Look Ahead 2021-2022: Qtrade Direct Investing Q&A

Q&A with Qtrade Direct Investing. Christine Zalzal, SVP, Head of Qtrade Direct Investing and VirtualWealth.

What can beginner investors expect from your firm?
As a new investor with Qtrade Direct Investing, you’ll quickly feel empowered to pursue your investing goals while you gain experience. Qtrade is an award-winning online investing service with robust mobile trading capabilities and unrivaled client service. Reviews from The Globe and Mail, MoneySense, and Surviscor have consistently ranked Qtrade among the best, including 23 first-place awards for Best Online Brokerage over the past 16 years, and eight first-place awards for customer service experience over the past six years.

As a Qtrader, you have access to a wealth of resources and innovative tools to help you invest with confidence. For example, Portfolio Simulator™ lets you test investment scenarios in a simulator mode, so you can explore ideas and fine-tune your investment strategy. Portfolio Score™ provides a second opinion on your portfolio, grading it on five key dimensions, including performance, diversification, and risk exposure.

If you’re looking to build an ETF portfolio, you’ll have access to over 100 commission-free ETFs, which are free to buy and sell. You can also get help building your own ETF portfolio with Portfolio Creator™. After answering a short series of questions, it generates a sample portfolio, customized to your investing preferences, that will help you maximize risk-adjusted returns.

And along your investor journey you can always get answers to your questions through our FAQs and self-help tools, including “Guide Me” tutorials, which help you quickly learn how to use different features of the platform.

What can active investors expect from your firm?
Qtrade Direct Investing offers the Investor Plus program, an enhanced service for active traders or investors with larger portfolios. Investor Plus features include discounted trading fees, no fees on US dollar registered accounts, and reduced margin borrowing rates. As an active trader, you’ll benefit from a reliable, stable trading platform, mobile trading capabilities, and expert client support. In addition, Qtrade will soon roll out expanded trading capabilities, which include advanced order types, like contingent orders and multi-leg options.

What online investing trends do you expect to matter to self-directed investors?
Omni-channel experiences. Do-it-yourself investors want to be empowered with well- designed online brokerage experiences on all versions of the trading platform, and for the platform to be accessible on different devices.

What does user experience mean at your firm?
At Qtrade Direct Investing, we’re genuinely obsessed with enhancing Qtraders’ experience and building investor confidence – it’s at the heart of everything we do. We’re committed to continuous innovation to improve the investor experience.

What sets your firm apart from your peers?
It’s the relentless determination to empower you with the best investor experience, so you can build and manage your portfolio with confidence. Our mantra is: “We’re a confidence-building machine.” We strive to deliver more value in a comprehensive service than any other choice.

This Q&A was featured in the Look Back / Look Ahead magazine.


In The Globe and Mail’s 2021 online brokerage review, personal finance columnist Rob Carrick said: “Any broker can fill an order to buy stocks, exchange-traded funds, mutual funds, bonds and more. Qtrade helps you build a well-constructed portfolio and then monitor it to ensure it continues to work for you. Qtrade,” he continued, “may be the king of steady year-by-year improvement.”

And in the 2021 ranking of online brokers by MoneySense, Glenn LaCoste of Surviscor said, “Qtrade Direct Investing is a UX leader given its breadth of data, which is both easy to locate and to use.”

Reviews like these are gratifying because it means we’re succeeding in building a service that provides investors with value and the confidence to pursue their goals.

Please note: Online brokerage services are offered through Qtrade Direct Investing, a division of Credential Qtrade Securities Inc. Qtrade and Qtrade Direct Investing are trade names and trademarks of Aviso Wealth.

Posted on

Online Brokerage Weekly Roundup – April 10, 2022

Change is certainly life’s only constant. And even though, historically, change has been relatively slow to take effect among Canadian online brokerages, when it does show up, the effects tend to endure. As we steer into the season of change, it seems like both the pace and breadth of change are starting to accelerate, with some remarkable developments.

In this (we’ll call it “toddler time-distorted”) edition of the Roundup, we look at an unusual pattern emerging in the deals and promotions activity at Canadian online brokerages and what it could signal for promotions going forward. Next, we highlight a new look that one online brokerage is sporting for spring, and whether it is dressed in what the cool kids are into these days. Finally, we’ll wrap up with some timely topics self-directed investors are chatting about online.

It’s Reining in Deals

And now for something completely different. At least from this month’s deals and promotions activity.

Usually around the start of each month we go through the latest deals and promotions to see what new offers have shown up and whether there are any interesting developments in the ongoing race to garner attention (and assets) from self-directed investors. This month, however, there was a signal of continued unusual activity among the Canadian online brokers that suggests there are some interesting changes coming to the way in which online brokerages create and launch promotions.

Of course, “change” is a relative term, so, before diving into what seems to be evolving with online brokerage deals and promotions, it’s useful to get a sense of what is “typical.”

Although many online investors now know that Canadian online brokerages offer deals and promotions, especially during RRSP season, that hasn’t always been the case. There was a time many years ago that most Canadian online brokerages were reluctant to use promotions and incentives to attract in new self-directed investors. Interestingly, as commission prices began to drop in a meaningful way, roughly around 2014, so too, it seemed did the resistance to trying out using offers to encourage new users to try out a brokerage.

At that time, one of the most active Canadian online brokerages when it came to special offers or promotions was Questrade – who aside from much lower commission prices than their peers – was a constant name to watch because they ran so many promotional offers. The kinds of promotions they ran ranged from various commission-free trade offers to promotions featuring a free iPad.

It was not long after other online brokerages lowered their commission prices, that one of the first big shifts in the deals and promotions activity took place: Questrade stopped offering so many promotions.

Instead of offering so many different promotions, Questrade decided to consolidate their offers and focus their promotional offers on their affiliate program and referral bonuses (and later launching TV ads). Many of the same promotions, such as their five free trades or first month free, are still available today. Regardless of the season – including RRSP season – Questrade’s strategy was still the same when it came to promotions. Namely, stick to their core offers.

It’s difficult to characterize just how significant of a shift that was at the time; however, by the time Questrade did ramp down, other online brokerages, notably BMO InvestorLine, had picked up the practice of regular promotions outside of RRSP season. In fact, since that time, BMO InvestorLine has effectively carried the torch for launching “new promotions” just about every season.

So, if there was one online brokerage in Canada that we did not expect to see a break in promotional cadence, it was BMO InvestorLine. And yet, this month that is exactly what’s taken place.

To be fair, BMO InvestorLine hitting pause on deals is not without precedent. That said, the last time they did so was near the start of the pandemic, when BMO InvestorLine’s unprecedented investor interest overwhelmed systems.

This time, however, there isn’t a rush of investors flooding the systems of BMO InvestorLine with new applicants, which begs the question, what would cause BMO InvestorLine to pause offering an already live tiered cash back promotion at a time when major rivals still have open offers?

It’s difficult to know exactly why, however, it seems that shuttering an active deal is likely the result of something abrupt instead of something planned, especially given the timing being so close to the launch of their latest cash back promotion.

Perhaps the economics of a tiered cash back offer simply don’t work for BMO InvestorLine, or perhaps the costs of running a campaign to acquire new clients exceeded the benefit those clients would bring. The latter point is one of the drivers behind online brokerages typically choosing to launch promotions during RRSP season instead of during the whole year. When online investors are “in market” for a new online brokerage or seeking to park new assets in an account, as is the case during RRSP season, online brokerages want to be as visible as possible.

That said, instead of stopping promotions outside of RRSP season, one of the strategies BMO InvestorLine has employed in the past was to raise the deposit threshold at which an individual investor could qualify for a promotion. Thus, instead of requiring a minimum deposit of $15,000, BMO InvestorLine could raise the minimum deposit to $50,000 so that only those individuals who bring the kind of value BMO is seeking qualify for incentives.

So, though speculative, if costs of a program suddenly get put under the microscope to the point that they lead to a decision to cut loose a promotion in midstream, then a good candidate reason why would be a “cost cutting” program. And for that to take place at BMO InvestorLine, a bank-owned brokerage, that is very interesting timing indeed. If, after all of the years of running this program, something fundamentally has changed (or is about to) for promotions-led acquisition, it does beg the question as to what BMO is encountering now that makes the math for promotions untenable at this time.

Though the online promotion of the deal is now gone, self-directed investors interested in the cash back promotion at BMO InvestorLine may be able to access the offer via customer service touch points (e.g. in branch) on a case by case basis. When a client is of sufficiently high value (what that value is, we don’t yet know), then they might be offered a cash back incentive.

The latest move by BMO InvestorLine to shutter an active offer is a step change for an online brokerage that has almost consistently leaned into “always on” promotions and bears a resemblance to the structural shift in promotional strategy that Questrade undertook many years ago. Unlike that decision, however, BMO InvestorLine does not have the same magnitude of affiliate channels nor social media community support that Questrade had when it decided to shift its promotions strategy.

Instead of being a leader among Canadian bank-owned online brokerages when it comes to promotional activity, it seems BMO InvestorLine is more content to run with the pack. With no other big bank-owned online brokerages currently offering cash back promotions right now, all attention for self-directed investors looking for a cash back deal on a new trading account is being directed to Qtrade Direct Investing.

The bigger consequence to bowing out of the post RRSP season promotions race may not be felt for some time but will almost certainly resurface again next RRSP season. One of the biggest benefits of an always on campaign is to continuously attract attention of investors and to be among the list of names those investors consider when the need for a solution arises. In this case, BMO stepping back simply opens the door to another lesser known or not historically active name to fill that void.

An alternate view is that online brokers may also be more willing to be agile when it comes to promotional activity. A case in point is the current cash back promotion from Qtrade Direct Investing.

Qtrade did something highly unusual at the beginning of this year by revising upward the amount they were willing to offer to new clients. They did not “set it and forget it” with the deal that launched last year but rather saw that their offer was not nearly as competitive as their peers and adjusted accordingly.

The fact that BMO InvestorLine was the only big bank-owned online brokerage in market with a cash back promotion perhaps made them realize they were overspending to acquire new clients. That they were willing to do so mid-campaign is maybe a sign of different kind of structural change: online brokerages are becoming nimbler.

This year alone we’ve seen Qtrade Direct Investing change deal amounts, BMO InvestorLine effectively shut down an already live deal, and RBC Direct Investing move around the expiry date on an unprecedented commission-free trade offer. If there was ever a case for expecting the unexpected, Canadian online brokerages seem to have made it their theme for 2022.

CI Direct Trading Sporting a New Look

Spring seems like the opportune moment for new beginnings. This month, CI Direct Trading, the brand formerly known as Virtual Brokers, officially rolled out their new public-facing website. Gone is the familiar combination of red, black and white, and instead, the new website reflects the last stage in the integration of Virtual Brokers with the CI Financial common look and feel.

While a “new” website isn’t necessarily a big step change, building a new online brokerage website in an ultra-competitive environment does present an opportunity to intentionally lean into the brand identity. Secondarily, for seasoned observers, it offers a glimpse into where the priorities are for a particular provider.

In the case of the new CI Direct Trading website, there are a number of interesting observations to comment on; however, the biggest theme that jumps out is integration.

Unlike Virtual Brokers, which was effectively a standalone online brokerage, CI Direct Trading’s new site was intended to fold the online brokerage into the CI Financial ecosystem. And, at first blush, it appears they’ve done so – perhaps too well.

In fact, in the drive to create a common look and feel between brands, the point at which CI Direct Trading starts and where CI Direct Investing stops is very blurry.

Navigating between the CI Direct Investing and CI Direct Trading is so seamless that as a user, you wouldn’t know where you are unless you look at the logo on the page, and even then, you’d have to really pay attention to the small text under the word “direct” in the logo. Recall that one of the principles of user-centred design is to answer a simple question: am I in the right place? On the new CI Direct Trading website, the answer for DIY investors in particular is unclear.

On a more nuanced note, the decision to use the names “CI Direct Investing” and “CI Direct Trading” is confusing because almost no other online brokerage in Canada uses the term “Direct Trading” in their names. Three big names in the “Direct Investing” space jump out, for example:

  • Qtrade Direct Investing
  • RBC Direct Investing
  • TD Direct Investing

Virtual Brokers used to be a direct competitor to these particular providers; however, CI Direct Investing (rather than Direct Trading) seems like it would be the place where a user would look to find a service similar to Qtrade Direct Investing, TD Direct Investing or RBC Direct Investing. Except, they would be incorrect. CI Direct Investing is more akin to a roboadvisor solution, not a DIY one.

Although it seems like semantics, in reality, the “DIY investor” industry has been undergoing its own identity crisis for the past decade. Ten years ago, the entire space was almost uniformly calling themselves “discount brokerages,” then it shifted to “online brokerages,” and now they are positioning themselves as “direct investing” solutions providers.

Why this matters so much is because when it comes to being found online, something that is exceptionally important in a hypercompetitive environment, individual investors are going to search based on what they know and think is the term they need to use in order to access the category of service providers. When the category shifts, so too does the audience searching for it.

Another interesting theme is that the new website leans heavily into the “less is more” look. There are fewer options and less text as well as clear headings so that there is less information to have to parse through on the front page. From a visual perspective, there is also a heavy presence of mobile screens, a decision that undoubtedly is intended to relate to a generation of “mobile first” traders.

In a tinge of irony, the screenshots of the CI Direct Trading iPhone app show the symbol of a well-known Canadian bank (TD) instead of using the opportunity to have the publicly-traded CI Financial ticker (CIX) on there.

Even in the app store, the Virtual Brokers legacy association is still visible too, a reminder that all brand touch points need to be considered in the rebrand process. Of greater consequence, however, is that the legacy star ratings for the app experience are likely to impact user impressions on the brand. With a 2.5 star rating on the Apple App Store for CI Direct Trading, there is much work to be done to improve the perception of the mobile app as being an enjoyable way to engage with the service, especially with the mobile-first crowd.

When Virtual Brokers was acquired by CI Financial in 2017, it was unclear what direction the popular online brokerage would go in. Fast forward to today, it is now clearer that the successor to VB, CI Direct Trading is offering many of the same features and pricing as Virtual Brokers but is wrapping itself into the CI Financial ecosystem.

It has been a relatively quiet four years since the integration was first announced but now it seems the real work will begin for CI Direct Trading to be able to tell its story to online investors (traders?) and establish its niche in a very crowded field.

If the new design is a signal they’re looking to court a younger generation of investors, simplifying the website is a step in the right direction. Clearly, though, there is much work to be done in the seasons ahead to evoke the same kind of emotion, curiosity, and enthusiasm that their direct competitors have already managed to successfully achieve.

From the Forums

Transferrable Skills

Moving day is always a chore. When it comes to moving mutual funds, however, it’s a problem that needs more than pizza to solve. One reddit user reaches out to the community of investors in this post for some guidance on how to navigate transferring away from Manulife and into a popular online broker.

Under the Influencer

A big theme among online brokerages heading into this year has been investor education. An interesting discussion emerged in this reddit post about seeking out “education” on investing and trading from a relatively well-known Canadian personal finance influencer.

Into the Close

That’s a wrap on another edition of the Roundup. If news among the online brokerage space is anything like the weather in April, it’s going to be a mixed bag of activity throughout the month. For the loyal readers that have managed to make it this far, we’re also going to be sharing more updates in the weeks ahead on the new special SparxTrading Pro and other tools we’ve been working on, so be sure to tune in for sunnier news coming around the corner. Until then, keep your powder and yourselves dry, you never know what might come up as an interesting buy.

Posted on

Look Back / Look Ahead 2021-2022: National Bank Direct Brokerage Q&A

Q&A with National Bank Direct Brokerage. Claude-Frédéric Robert, President.

What can beginner investors expect from your firm? 
At National Bank Direct Brokerage, young and new investors are cared for and guided from the very beginning of their experience. As with all our customers, they will pay zero commissions on stocks and ETFs, and if they are under 30 years old, there are no annual administration fees.  

We support beginner investors with an enhanced ETF Centre, an easy-to-use filter tool, and ETF research reports from Morningstar and National Bank Financial. NBDB offers the necessary tools to trade, but we also offer the educational component to get started.

We have tailored webinars ideal for beginners, a YouTube channel where we publish instructional and educational videos, and several other tools that allow new investors to gain confidence and make informed decisions.  

What can active investors expect from your firm? 
Active investors benefit from the best pricing with zero-commission on stocks and ETFs, and they can trade options at $1.25 a contract (min $6.25) with access to our high-performance transactional Market-Q tool. We are also working on providing pre- and aftermarket trading online for 2022.

What does user experience mean at your firm? 
At NBDB, we value customer experience. That is why we routinely send surveys to our customers to better understand their needs. This valuable information is then used to guide our decision-making, whether it be for tools, services, or any other aspect of our business. We are customer focused, and that is why our customers’ opinions are considered daily.

What sets your firm apart from your peers?
NBDB has become a disruptive force within our industry. We may not be the biggest direct brokerage in Canada, but we are always looking to distinguish ourselves from our peers by being the first to offer zero commissions that benefit every investor, and offering innovative tools like OptionsPlay and services like our Fully Paid Securities Lending, which are not offered by the competition.

This Q&A was featured in the Look Back / Look Ahead magazine.

Posted on

Online Brokerage Promotions – April 2022

For the past two years, adapting to drastic changes has been part of a “new normal.” So, perhaps it shouldn’t be a total surprise at this point that something unusual (dare we say unprecedented?) is taking place with online brokerage deals and promotions in the month of April.

Although in more “normal” times we would expect to see a drop off in the number and size of promotions for online investors after the RRSP contribution deadline (at the beginning of March), last month we noted that there actually offers being extended – or so we thought.

April, however, brought with it not just rain, but reining in of promotion deadlines or of offers altogether.

Starting first with what was supposed to happen. Scotia iTRADE’s big RSP-season push closed out with their cash back / commission-free trade promotion wrapping up at the beginning of April, as intended. As of the time of publication, there has been no new offer to replace the outgoing one; however, Scotia iTRADE still offers a welcome bonus of 10 commission-free equity trades in the first year (and 5 commission-free trades each year) to holders of a Scotiabank Ultimate banking package. Curiously, this is not advertised in the promotions section of the Scotia iTRADE website, but rather only on the banking side.

On the other side of the deals ledger, March saw the launch of a new deal from National Bank Direct Brokerage that was unlike any other offer that is currently available. National Bank Direct Brokerage is offering a discount on margin interest rates for four months, a clever way to attract active traders with larger balances into the firm.

So, while things seemed to even out, there were a couple of noteworthy moves by bank-owned online brokerages RBC Direct Investing and BMO InvestorLine that suggest some important changes across the summer.

The first important update is that RBC Direct Investing officially extended their 100 commission-free trade offer for another month, with the new expiry date set for the end of April. While that would normally be a positive, last month we noted a published deal page by RBC Direct Investing that showed that same promotion expiring in November, not April.

Finally, the biggest question mark to arise during the deals and promotions scan starting the month is the disappearance of the BMO InvestorLine cash back offer. This is an important development on a number of levels because it marks a significant departure from the historical activity of BMO InvestorLine in terms of having an “always on” offer for self-directed investors interested in opening an online trading account.

At the time of publication, the cash back offer, which launched only in the beginning of March and was scheduled to expire at the end of May, is no longer visible on the BMO InvestorLine page. That said, the offer may be available to certain clients in branch which means the offer is a “YMMV” (your mileage may vary) situation.

With the elimination of the public BMO InvestorLine cash back offer and Scotia iTRADE’s cash back promotion officially concluded, Qtrade Direct Investing is the lone online brokerage with a mass market cash back promotion. Historically speaking, it’s unusual territory for Qtrade to be the last deal standing. However, earlier this year Qtrade also signaled a shift in posture towards promotional offers by upping the dollar amounts available for their cash back deal despite the deal already being live.

Clearly this year has become the year of quick pivots when it comes to deals and promotions. Given the backdrop of competition for new clients as well as the pressure to lower cost of services, online brokerages are exploring different ways to drive new business without engaging in an arms race for customers longer than needed. That said, it seems online brokerages are starting to get more agile and responsive to market conditions, so it will be interesting to see how things unfold from May to September. If there’s a pullback from bigger players, it might just be the window of opportunity for smaller brokerages to gain a foothold ahead of next year’s RRSP season.

Expired Deals

Scotia iTRADE’s combined cash back or commission-free trade promotion officially ended on April 1st. This offer gave customers the choice between cash back or commission-free trades, and deposit tiers ranged from $5,000 to $1M+.

Also expired (sort of) – the BMO InvestorLine cash back promotion. Though technically it may be accessible by contacting customer service or in branch it is no longer being advertised. This was a hasty exit for the deal which launched in March and was scheduled to expire at the end of May. No word yet on whether there will be a replacement.

Extended Deals

RBC Direct Investing is back in this category, clarifying an earlier reported extension. So technically this extension is more of a revision, but, nonetheless, the official word is RBC Direct Investing’s RRSP season promotion has been extended for one more month and now expires at the end of April. This promotion offers 100 commission-free trades which clients can use over two years.

New Deals

There are no new deals to report at the start of the month. Last month we saw the addition of a new offer by National Bank Direct Brokerage join the deals pool. That new promotion lasts until the end of May.