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Discount Brokerage Weekly Roundup – November 1, 2013

For many banks and discount brokerages, the start of November is not just the beginning of a new month but also a new fiscal year.  Going into the feverish sprint that is typical of a year-end means that attention was probably turned to getting the year wrapped up.  It also might help to explain why things were relatively quiet across the Canadian discount brokerage space this past week.

Quiet as discount brokerages were, Canadian investors have some interesting discount brokerage related news to look forward to this November. This month a pair of brokerage rankings are expected to be released – something that always generates quite a bit of buzz. Additionally, a pair of interesting articles on the discount brokerage industry provide contrasting perspectives on whether online investing will continue to grow or if it has peaked. Finally, the Canadian investor forums had some thoughtful and spirited perspectives on DIY investing for beginners and for more seasoned investors.

More Best Online Brokerages on the Horizon

Globe and Mail discount brokerage rankings are just around the corner and are sure to make waves when they are released.  This year’s selection should be interesting to watch as the previous year’s winner, Virtual Brokers, has had to digest taking over OptionsXpress Canada clients shortly after they were named ‘best online brokerage’ by the Globe and Mail last year.  To get up to speed on how Globe and Mail rankings are performed and previous results, click here.

In addition to the Globe and Mail rankings, the Morningstar Awards will be held on November 27th in Toronto and one of the categories up for grabs will be “Best Discount Brokerage”.   This award is ‘submission based’ meaning that a $1,000 fee is required to be considered as a contender.   Discount brokerages that wish to compete for the ‘best discount brokerage’ award will be assessed on a number of criteria including:

  1. Website
  2. Breadth of investments available
  3. Customer service
  4. Online tools/resources
  5. Costs

The jury for the selection of this year’s best online brokerage winner will include:

  • Jonathan Chevreau, Editor of Money Sense Magazine
  • Glenn A. Lacoste, President of Surviscor
  • Paul K. Bates, Assistant Professor of Leadership, McMaster Divinity College

For more information on the best online brokerage award from Morningstar, click here.

Questrade Chooses Fee Over Free

With the introduction of new data fees, Questrade clients may want to think twice before springing for their next cup of coffee.  It appears that Questrade is adding in another fee starting this November. Going forward, Questrade will be charging $1.99 per month for streaming quotes for NASDAQ’s basic data feed. Snap quotes will still be free however, so users can access quotes by hitting refresh.  For more information, check out Questrade’s blog post here.  Of course, one question that has been brewing – where are Questrader’s finding coffee for $1.99?

Online Investors Waning or Still Going Strong?

A pair of interesting articles shed two different perspectives on the retail investor in the US.  In the first piece, there is some noteworthy data that shows the scale of the retail investor shift away from traditional financial intermediaries (brokers) and into more direct or self-serve style investment portfolio tools and services. While the numbers are staggering, there still appears to be the belief that traditional brokers will face more and more competition from direct brokerages as tools from the latter better serve and support clients to manage their own investments.   Of course, the next article goes on to point out that much of the growth and adoption of online investing appears to have taken place.  The argument in the second article uses US discount brokerages (such as TD Ameritrade and Etrade) and their account growth/trading data as proxies to suggest that for now there appears to be no big rush for investors to jump into equities.

From the Forums

Starting out as a new investor can be an intimidating exercise.  In this post on the investing forum, one self-described investing newbie discovered one of the basic rules of the stock market: that it is that everyone has an opinion.

Of course, every now and then the forums also turn up some interesting topics for seasoned/advanced investors too.  As this post shows, differing opinions are at the heart of what makes a market and it is interesting to see how different investors ‘rationalize’ their choices for one asset/investment over another.

That’s a wrap for this week. Have a great weekend and don’t forget to set your clocks back one hour (or you might just show up very early for market open!).

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