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Discount Brokerage Weekly Roundup – May 30 2014

Another week, another record high. It looks like not that many folks chose to sell in May and go away after all. In spite of most NHL hockey players and seasonal investors starting to take it easy, Canadian discount brokerages were still keeping busy keeping one another on their toes.

In this week’s roundup we look at a couple of online brokerage deals that are hoping to get the attention of self-directed investors with some popular toys. Also, another Canadian online brokerage announced a feature enhancement that will help show investors the money (or lack thereof). As a quick pulse of where the Canadian online brokerage industry may be headed, we take a quick peek at a merger of two US discount brokerages. And finally, what would a weekly roundup be without some interesting thoughts from the Canadian investment forums?

An Apple a Day

Despite ponying up around $3 billion for a headphone (and streaming music) company, Apple still remains popular with consumers – which is something banks and now discount brokerages are capitalizing on.

Although Questrade was one of the first discount brokerages to offer up an iPad minis as an incentive to open an online trading account (and did so for a long time), it now seems that National Bank Direct Brokerage has also taken to a similar strategy.

Earlier this week, National Bank Direct Brokerage rolled out a new promotion offering iPad Minis for new clients who deposit at least $20,000. Interestingly, Questrade’s iPad Mini offer which had been taken down, looks to also have resurfaced. Questrade’s iPad mini offer requires a deposit of at least $100,000 and gives qualifying clients the choice of taking the iPad mini or $250 cash. Another curious point is that the value of the iPad Mini for the National Bank Direct Brokerage offer is listed as $319 whereas with Questrade it is being valued at $250.

Keeping it Realized

As commission pricing between major bank-owned online brokerages has come down, service, platform and features are the new battlegrounds to woo clients. Following their recent announcement about additional news data, earlier this week Scotia iTrade took another step towards improving customer experience by announcing the roll out of a realized gain & loss reporting feature. The new feature apparently allows clients to view their actual trading gains and losses as far back as January 2014.

Two Heads Are Better Than One

For many years, observers of the Canadian discount brokerage marketplace have observed the increasing competition for a very limited number of investors. While the fragmentation of the Canadian marketplace hasn’t really driven too much consolidation, the recent notable examples (e.g. optionsXpress Canada being acquired by Virtual Brokers) are far and few between.

In the US, however, the marketplace is also hypercompetitive and earlier this week, two Chicago-based online brokerages OptionsHouse LLC and tradeMONSTER Group Inc announced they would be joining forces. This merger comes just over 2 years after the merger of another pair of Chicago-based US brokerages – TradeKing and Zecco. While two points a trend does not make, it is nonetheless interesting to see smaller players combine to take on the incumbent brokerage houses. Whether it’s two smaller brokerages teaming up or a case of a bigger fish acquiring a smaller one, the signs from the US discount brokerages may be sending a signal of things to come here in Canada.

From the Forums

What are Friends For?

Several Canadian discount brokerages have referral programs set up where existing clients can receive a bonus (usually cash or free trades) for having someone they refer open an account. In this post from Red Flag Deals, the community chimes in on the BMO InvestorLine refer-a-friend offer which provides up to $300 for a referral.

Some Change Won’t Do You Good

Forced currency conversions are a thorn in the side of many self-directed investors, especially given where the Loonie has been for the past few months. With that in mind, when online brokerages do conduct a foreign currency conversion, there is just that much less of a portfolio left. In this post from Canadian Money Forum, users discuss RBC Direct Investing’s foreign exchange practices with a Tax Free Savings Account (TFSA).

That takes to the end of the week and the roundup. As a quick reminder, the Cambridge House Canadian Investor Conference is coming up this weekend for those in and around the Vancouver region. Registration is free ahead of the conference. For those suffering from a bit of hockey withdrawal take heart, the best disinfectant is sunshine – so hopefully you’ll have a chance to get out and enjoy some.

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Discount Brokerage Weekly Roundup – May 23, 2014

Even though there was a shortened work week after the Victoria Day holiday, neither the Canadian discount brokerages nor those in the SparxTrading camp wasted any time bouncing back into the action.

In this week’s roundup, we’ll reveal the big news about an exciting feature we’ve been working on. We weren’t the only ones with big news though, as pair of major online brokerages took to using the major news media as a selling tool in two different ways. Next on the menu was a new promotion by another popular online brokerage – this one aimed at younger online investors. Also, a usually quiet discount brokerage signed up with an interesting platform partner. Finally, we round out the roundup with some interesting opinions from the investor forums.

Beta be Good News

Earlier this week the long awaited update to the Canadian discount brokerage profiles rolled off the assembly line. We began the redesign by listening and researching how it is that Canadian self-directed investors were hunting for information on discount brokerages. The fruits of that research told us that Canadians were looking for a platform to learn about, share experiences on and connect to discount brokerages.

The beta versions of these pages, which are now open to the viewing public, are built around these ideas with features that make the task of researching a discount brokerage much simpler. We’ll save the deep-dive on all the new bells and whistles for a dedicated blog post, but for now, we encourage readers to take the new profiles for a spin. If there are any issues or suggested improvements, we’d love to hear them.

2014 will continue to bring some added improvements to the site in terms of function and form, so we look forward to an exciting next few months.

Desjardins Online Brokerage in the Spotlight

Earlier in the week, Desjardins Online Brokerage (aka Disnat) sponsored a special piece in the Financial Post. It was an interesting overview of the online brokerage, most notably because it was done in a Q&A style that had a particular focus on new or beginner investors.

Good Times

Scotia iTrade also announced earlier this week that they will be adding to their investor information stream by enabling iTrade clients to access content from the Financial Times. Scotia iTrade clients can now access to this information feature under the ‘investing ideas’ section. Two notable authors from the Financial Times that have syndicated content available are Gillian Tett and John Authers.

You Must Be At Least This Young

BMO InvestorLine launched a very interesting promotion at the tail end of last week that didn’t make it into last week’s roundup. Not to worry (unless you are another discount brokerage) though, as we put together a detailed look at their latest offer. For those of the TL;DR generation, the new promotion is aimed at online investors between the ages of 18 to 35, and is offering 35 free trades (good for up to 90 days) as well as waiving of the minimum $5,000 deposit. In addition, making at least 2 trades within 6 months waives the minimum balance fees for non-registered and registered accounts.

A Wize Move?

Canadian discount brokerage Jitneytrade announced this week that they are the preferred Canadian brokerage partner for a software platform known as WizeTrade. According to the release, Jitneytrade clients are now able to integrate the WizeTrade interface with Jitneytrade’s Desktop Pro platform to allow direct trading from the WizeTrade platform. Wizetrade is a charting/scanning platform that enables users to scan/trade currencies, equities, options and commodities.

From the Forums

Ungraceful Exit

One of the interesting scenarios that comes up is when it comes time to switch brokerages. Most brokerages impose a penalty for leaving, with some even putting an additional charge if users leave within a year of signing up. On the flip side, most brokerages getting a client have offers to pay transfer fees. Unfortunately, for investors such as the one in this Reddit post, the threshold to have those fees reimbursed was higher than the amount getting transferred. Nonetheless, check out what other readers had to offer in terms of advice.

One DRIP at a time

The dividend reinvestment plan (DRIP) is a popular strategy for building wealth by using dividend payments. How smoothly this process goes depends somewhat on whether an investor chooses to use this strategy inside or outside of a registered account. While possible outside of a registered account, there is a bit more work that’s required to ensure the transactions are properly accounted for. The following post from Canadian Money Forum highlights one user’s experience with setting up a DRIP in a non-registered account.

That’s a wrap for this shortened week. As a reminder, US Markets will be closed on Monday for the Memorial Day long weekend. It’s likely that Canadian markets will also trade more lightly because of the US market closures so whether it be on the weekend or in the trading lull on Monday, enjoy the following video pitching a novel approach to using solar power (cue the solar bull drool).

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Made for Millenials: BMO InvestorLine Launches New Offer at Younger Online Investors

In a world filled with TLDRs and endless opportunities to like, tweet, pin and share, finding the time or inclination to take on investing can be as much of a challenge as finding the money to do it with.   And yet, as part of growing trend among Canadian online brokerages, would be and actual younger online investors (between the ages of 18 and 35)  are increasingly being courted.

The latest promotion announced by BMO InvestorLine is aimed directly at the ‘millenials’ with the challenge to ‘procrastinate or prosper’.  While the offer itself is interesting, the campaign and context around it is equally fascinating.

What the Numbers Say

Starting first with the offer itself, BMO InvestorLine is ponying up 35 commission-free trades (trades good for use for up to 90 days), a free investing eBook and they are prepared to waive the minimum balance fees on both registered and non-registered accounts (with a catch) for clients until they reach the ripe old age of 36. Also, for good measure, BMO InvestorLine is waiving the $5,000 minimum deposit requirement when opening an account.

The catch for the fee waive is that clients have to place 2 or more commission-generating trades within 6 months. Thus, the waiving of one fee actually requires the generating of another. Within a 12 month period that amounts to $39.80 per year in commission costs vs paying $100 per year if a client doesn’t meet the minimum balance requirements.

A little bit of extra homework reveals that the the offer to waive fees on non-registered accounts is actually standard practice. As such, the unique benefits of this offer are in the waived minimum deposit requirement and that registered accounts (such as RRSP accounts)can have minimum balances waived. With this offer trading activity can lower the total cost of the account for balances under $25,000 – a threshold that many under 36 may not hit.

In addition to the offer itself, there is also a contest with a cash prize of $3500 that individuals who sign up for a non-registered account may be eligible for.

A Digital Generation

More and more Canadian online brokerages are expected to start courting this segment of online investors, with three important players (Questrade, RBC Direct Investing and Virtual Brokers) already actively providing services or products for younger investors.

The challenge, then, is for younger online investors and those thinking about investing to be able to get up to speed on what their options are and find the best option for their needs.

Interestingly, the power of the digital age creates both the problem and solution for younger investors.  On the one hand online brokerages can generate and distribute content much faster than ever before.  This means there is lots more fragmented information for self-directed investors to sift through.  On the other hand, the digital era has also spawned a number of tools such as our deals and promotions section as well as forums designed to make doing the homework on what options are out there much easier.

On the other side of the fence, the challenge to many online brokerages is to balance what they’ve learned about promotions and brand loyalty from baby boomers with the changing needs and preferences of the next generation of investors. And, although there may be more places to try and be seen, the biggest challenge will be staying relevant.

Can afford to procrastinate a bit

What it Boils Down to

Overall, then, the advantage of this offer appears to be for younger investors to be able to get up to 90 days in which to execute 35 trades commission-free, a free investing eBook from the Globe and Mail and a discount on the total cost of ownership of a non-registered account until the age of 36 or until the balance hits $25,000 (and stays there by their assessment date). The waived minimum deposit also makes this offer accessible.

While this latest offer from BMO InvestorLine may be worth considering, younger online investors will need to  critically evaluate the kinds of information being sent their way via promotions and advertisements (did anyone notice the image on the iPhone of the 12 million dollar portfolio?) by all brokerages in order to make a well-informed decision.

Finally, even though the technology and tools exist to get more information more quickly, there is still time to do homework and make a proper decision.  After all, for a younger investor, time is on their side.

Editors Note: The article has been updated to include information on the waived minimum deposit.

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Discount Brokerage Weekly Roundup – May 16, 2014

Keep Calm and Carey OnThe bears just can’t seem to catch a break this week. Even the Boston Bruins now know what it feels like to be on the wrong side of a hot Price. As a jumping off point to this week’s roundup, the intensity that comes with fierce rivalry is a reminder that discount brokerages & investors had better be prepared to play to win. Champions, challengers, currencies and commitment – this week we’ve got’em all.

In this week’s roundup, we take a look at a very interesting interview with one of the largest discount brokerages in North America. Next, we highlight how one of Canada’s independent brokerages looks like they’re trying something different within the deals & promotions arena. Following that, we pass along some important cautionary advice from a major Canadian securities regulator about virtual currencies. Finally, we end this pre-long weekend edition of the roundup with some interesting reading suggestions from the forums.

Online Trading According to Interactive Brokers

It’s one thing to compete as an investor, but it’s an entirely different thing to be able to be profitable at it.

This past week a very compelling interview of the CEO and founder of Interactive Brokers, Thomas Peterffy, was published by the Motley Fool. In that interview there were a number of interesting comments made by Peterffy regarding what it takes to compete in the discount brokerage industry and the commitment Interactive Brokers has taken to controlling costs through automation.

Among the many revealing statements was one regarding their business the core metrics they monitor: the number of new accounts, the amount of new assets and the margin loans. The fact that Interactive Brokers is geared towards “sophisticated” investors means that when they connect with their target client (or vice versa), trading activity is almost a given. Also revealing was the statement that Interactive Brokers doesn’t appear interested in growing their business by competing outside of their comfort zone (for now) – something bigger bank-owned brokerages may be content to know.

Welcome to the Jungle

Eat or be eaten is the law of the jungle. In the discount brokerage deals & promotions space, Questrade stands out amongst other brokerages because of the frequency with which it provides incentives for opening a trading account. This week was no exception as Questrade announced a promotion in which individuals who open an account (with a $5,000 deposit) and make at least one commissionable trade will receive a $50 Amazon gift card.

While other brokerages have, in recent memory, been willing to try something different (such as AirMiles), pairing a gift card from Amazon is an interesting move. The $50 mark is something that BMO InvestorLine is also pushing as part of their most recent promotional campaign (along with 50 free trades).

After a bit of quick math, because a commissionable trade (of between $4.95 – $9.95) is required to get the gift card, individuals are actually getting ~$40-45 for a deposit of $5,000.

Virtually Volatile

Although it hasn’t been making as many headlines as it was earlier in the year, Bitcoins have been getting a lot of interest from regulatory agencies all across the globe. As a cautionary tale to investors and those considering using Bitcoins, the British Columbia Securities Commission (BCSC) InvestRight posted this article on their blog regarding the popular digital currency.

From the Forums

The journey from novice to expert is something that every investor undertakes. Knowing where or how to begin is an ongoing challenge and so this week we chose to show both ends of the spectrum. From the humble beginnings to the world experts.

Old School Video

There’s nothing quite like kicking it back to the ‘old school’ way of investing to realize that much of what was true then is true now. It’s also quite a trip to see old film reel streamed from the web. Check out the video posted on our Facebook page.

Learning How to Invest

The personal finance section of Reddit once again provided some interesting conversation threads for self-directed investors. In this thread, a beginner investor in university looking to get started with investing reaches out to the reddit community to see how they went about learning how to invest.

Getting Schooled

The investing world has no shortage of personalities and opinions. One of the most interesting voices in the mix is Kyle Bass, who is rarely at a loss for words or a bearish outlook on Japan. This video comes courtesy of a post on Canadian Money Forum and certainly kicked up a storm of debate given that Canada has now gotten in his cross-hairs. Be warned though, there is quite a lot of material to follow along on.

That’s a wrap for this week’s roundup. Remember that Canadian markets will be closed on Monday for the Victoria Day long weekend but the US markets will still be alive and kicking. Have a safe & enjoyable weekend!

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Discount Brokerage Weekly Roundup – May 9, 2014

If there’s one fear that doesn’t seem to be present in the market, it appears to be a fear of heights. Once again markets are touching new highs and venturing into uncharted territory – but they weren’t the only ones.

In this edition of the roundup, we cover quite a bit of ground starting with a pair of “growth-oriented” investor conferences that took place in Vancouver. Next we check out a couple of recently launched discount brokerage promotions and contests. Following that we report on an interesting level of hiring activity by different brokerages. Finally we end with a selection of thoughts from other Canadian investors via the investor forums & message boards.

Growing Opportunities

This past week Vancouver played host to two interesting growth-themed conferences.

The first was the new medical-marijuana focused Green Rush conference. According to reports, it was surprisingly well attended for a new conference and it drew in those curious about the potential ‘pot-of-gold’ at the end of the medical marijuana rainbow. Whether or not investors will see the green in their portfolios at this point is still too early to tell, but the speculators were out sniffing around.

Another growth themed conference took place a short distance away – this one with a focus on small cap companies. The spring edition of the Vancouver Small Cap conference showcased several guest speakers along with small cap company presentations. As with conferences past, there were a number of interesting tips and perspectives on a segment of the market that is typically classified as ‘high risk’. Read our full review of the Vancouver Small Cap Conference for more information.

ETF Contest on the Horizon

Horizon’s Exchange Traded Funds (ETFs) in partnership with National Bank Direct Brokerage are once again running their Biggest Winner contest. The contest runs from market open on May 20th to market close on June 27, 2014.

This year the prizes consist of $500 cash weekly for the 6 week duration of the contest, a grand prize of $7500 at the end of the competition and a runner up prize of $2500. The grand prize will be awarded to the portfolio that has the highest account value at the end of the competition. The weekly prizes will be awarded to the individual with the highest percentage gain. For full details on the contest or to register, click here.

Cash is King

According to the following forum post via the Financial Wisdom Forum, BMO InvestorLine has another cash back promotion running (not advertised on the front-end of their website) geared towards investors depositing either $250,000-$499,999 or $500,000+. The promotion offers either $700 or $1500 cash back depending on the deposit size. Full details on the promotion are available here.

BMO InvestorLine was also busy this week announcing updates to its adviceDirect service. Specifically a number of additional updates were released that focus around personalized ETF buy and sell recommendations and an improved ability to personalize recommendations with sorting functions.

New Features Coming to Questrade

Another interesting nugget from the investor forums came from a Questrade representative posting on the RedFlagDeals forum. Specifically, the rep let readers know that bracket orders would soon be launched by Questrade as part of the new release of the IQ platform. Traders on advanced platforms such as TD Direct Investing’s ThinkOrSwim (aka the US Trading Platform) and Active Trader platforms, or Interactive Brokers’ TWS have been able to take advantage of bracket orders (aka conditional orders or One Cancels the Other orders).

Questrade bracket orders

With Questrade now providing the feature it will be an interesting selling point for their platform. There are other online brokerages (who unfortunately cannot be named at this point) who are also currently working on the implementation of bracket orders.

Hiring Spree

Two points a trend does not make. That said, there seems to have been a slightly greater than usual spike in the number of job postings coming from Canadian discount brokerages.

In a recent roundup we covered the launch of Questrade’s new careers twitter handle and in these past two weeks there have been a number of postings for sales reps and client reps.

While it is difficult to pin down exactly what is prompting the timing, hiring more staff to either service or “onboard”new clients is a sign that several brokerages are not sitting back when it comes to looking for new business.

Among the brokerages with recent hiring posts:

 From the Forums

Activity across the forums looks like it pulled back a bit – perhaps on account of the nicer weather pulling folks away from the screens and into the better weather. This week’s selection comes from the RedFlagDeals forum as well as from the Canadian personal finance section of Reddit.

Questrade vs Virtual Brokers – encore

Comparing the two low cost online brokerages is a popular source of discussion – here is yet another interesting thread comparing them both.

Keeping it Casual

As we pointed out last roundup, seeking out advice from Reddit can be a hit or miss proposition. Nonetheless a thread that crossed our radar (which can be found here) was from a user looking to find the best brokerage for a “casual investor”. The responses of users were interesting and it was also noteworthy to see that even on Reddit, folks are prone to having multiple brokerage accounts.

That does it for this week’s roundup. We wish all the moms of the bulls and bears out there a wonderful Mother’s Day. For those brave enough to be looking for a Mother’s Day themed investment or three, this interesting segment from CNBC might provide a few ideas other than flowers:

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Event Review – 2014 Small Cap Conference Vancouver – Spring Edition

View from Small Cap Conference VenueWhile many have heard the saying ‘money never sleeps’ apparently money is also willing to blow off a spectacular spring day in Vancouver. Such is the sacrifice that die-hard investors were prepared to make as they attended the spring edition of the 2014 Vancouver Small Cap Conference.

Following the Recipe

As with conferences past, this conference followed a familiar format. The dance card featured 3 guest speakers and 7 company presentations providing investors and attendees with tips and ideas on investing in the small cap space. In keeping with tradition, there was also a frenzied refreshment break (a great lesson on supply & demand) and the usual prize draw to conclude the evening.

While the structure of the event was familiar, what stood out this time around was that almost all of the speakers were actually able to keep their presentations to the allocated time. It sounds trivial, but it was a big factor in making the night run smoothly.

For those that want to access the slide presentations for the show, they will be made available here in the near future.

In Good Company

Another noteworthy feature about this year’s conference was the diversity of investing ideas put forward by the companies in attendance. Even though Vancouver is typically ‘mining focused’ when it comes to investment conferences, there was a surprising variety in the presenting companies at the conference.

Here is a sample of the kinds of sectors or areas in which the presenting small cap companies were active:

  • Oil & Natural Gas (Arsenal Energy Inc – AEI:TSX)
  • Communications Network Support (NTG Clarity Networks Inc – NCI:TSX-V)
  • Mobile App Development (Brisio Innovations Inc – BZI:CSE)
  • Advanced Materials Development (California Nanotechnologies Corp. – CNO:TSX-V)
  • Gold Exploration (Manado Gold Corp – MDO:TSX-V)
  • Biotechnology (Solarvest BioEnergy Inc – SVS:TSX-V)
  • Payment Processing (TIO Networks – TNC:TSX-V)

In addition to the company presentations, one of the big draws for the conference was to hear the guest speakers provide their tips and insights on investing in the small cap space as well as to hear some of their suggested picks.

The three guest speakers at the conference included:

  • Brent Todd – Investment Advisor at Canaccord Wealth Management
  • Ryan Irvine – President KeyStone Financial Publishing Corp
  • Fabrice Taylor – Publisher of President’s Club Investment Letter

Here is a quick highlight reel of what each had to say:

Brent Todd

As the lead-off speaker, Brent Todd provided an overview of some of the big winners picked from conferences past in an effort to drive home the point that investing in small caps can be a lucrative exercise if done right.

For many investors, the sting of the financial crisis was enough to keep them out of stocks and especially out of junior companies. For Todd, however, the primary focus of his strategy has been reward and then managing risk and junior companies offer an attractive landscape in which to discover portfolio changing opportunities. He then offered up 8 points to explain his perspective on small cap investing.

Among the most interesting of the points was his opinion that small and microcap companies are often more reasonably valued than large caps and that financial statements for smaller companies are typically easier to follow than for much larger companies.

Both of these points underscore the importance of being able to do the research on companies and to be able to assess value – something that professionals and retail investors need to do in order to invest intelligently. In closing he offered up a ‘pick’ on Titan Logix (TLA on the TSX-V) as an interesting name to watch.

Tweet from Fabrice TaylorFabrice Taylor

Financial journalist and publisher of the President’s Club Investment Newsletter, Fabrice Taylor gave a much higher level of the value of the market place and the role of investors and brokerages.

In a nutshell, Taylor’s presentation positioned retail investors as ‘zebras’ and professional traders/brokers as ‘lions’ with the take home message being: if you’re not a lion, you’re a zebra.

It was an interesting take on the classic struggle between the little guy and the big players in that Taylor stated if the “zebras” work together, they can certainly get the lions to think twice about attacking.

Animal metaphors aside, the message that stood out from his presentation was “you’re gonna make a lot of money if you’re right” which, as any investor knows is much easier said than done.

Ryan Irvine

As a value investor, Ryan Irvine has consistently provided a well-reasoned approach for highlighting the kinds of companies that make for interesting investment opportunities.

At this particular point in the markets, however, Irvine made it known he was finding it more difficult to find “good” opportunities – a signal that perhaps valuation levels are getting less attractive. Nonetheless his one ‘pick’ to watch was High Arctic Energy Services (HWO on the TSX).

With the caveats about the current market in mind, Irvine offered up 5 tips for investors interested in ‘growth’ stocks:

  1. Take a deep breath – certainly there’s lots of noise but learn how to filter news and noise
  2. Select fewer stocks rather than many – in other words, focus on quality rather than quantity
  3. Layer into positions – it’s hard to time things just right, so gradual accumulation is the way to go
  4. Create a watch list – let the trade come to you, just make sure you get notified when it does
  5. Remember to take profits – taking money off the table ensures you’re reaping rewards for your risk

The Bottom Line

Like its predecessors, this edition of the Small Cap Conference stuck to its tried and tested recipe. For those interested in small caps or even thinking about small caps, conferences such as this one provide a unique opportunity to see how seasoned veterans in this space approach what many view to be an incredibly risky set of companies. We look forward to catching the next edition when they are back in Vancouver in the fall and watching the performance of the picks in the meantime.

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Discount Brokerage Weekly Roundup – May 2, 2014

Dramatic playoff hockey, incredible playoff basketball, markets hitting new highs (again) and the new Star Wars cast announced. It looks like May is bringing more drama than it is flowers. As we round the corner into May, the drama among discount brokerages continues to unfold, albeit with less flare than the heart pounding finishes from both the Habs & Raptors.

In this week’s roundup we launch into May with a new set of deals and information on investor education events; we report in on the always interesting trading metrics and activity of investors stateside; we take a quick peek at another ranking of Canadian brokerages and we close off the week with some discount brokerage encounters for the far edge of the internet.

Let’s May-ke a Deal

Here in the SparxTrading camp, the beginning of the month signals a time for a new overview of discount brokerage deals and promotions. This month the deal landscape looked much the same as it did in April. With one new deal announced as we come into May, it appears that discount brokerages are digging in until June with their core offers. The only new deal to announce was from BMO InvestorLine. Click the following link to learn more about the discount brokerage deals for May 2014. And, if history is any indicator, there ‘may’ still be some deals coming down the wire.

Learning About Earning

On the educational front, it appears Canadian discount brokerages are upping the ante for their focus on providing education and support to clients looking to learn more about investing.

This past week TD Direct Investing held a 45 minute webinar covering its web-broker platform that reportedly had over 10,000 registrations (they didn’t mention how many actually logged in) – an enormous number for any kind of education focused event online or offline. TD Direct Investing has recently added webinars to their mix of educational offerings, scheduling the online events on the last Wednesday of every 2nd month (the next one will be June 25th 2014).

In addition to the brokerage-sponsored education events, investors will probably want to take note of the Small Cap Conference coming up in Vancouver next week and also the CambridgeHouse International Investor Conference in early June – both of which will offer some opportunities to learn more about investing. Check out our investor education events calendar for more details on what’s being offered where & when.

The More the Scarier

This past week, Interactive Brokers released their trading metrics for the month of April and depending on the frame of reference there is either reason for applause or reason to pause.

When compared to the same point last year, Interactive Brokers trading volumes look stunning – 20% higher Daily Average Revenue Trades (DARTs), margin loans 34% higher than last year and the number of customer accounts 16% higher. On a monthly basis, however, the gains are more modest for margin loans and customer accounts (2% improvement), and there was a 1% dip in DARTs. Additional coverage in this article from CNN also reconfirms the signals from other brokerages that retail investors are stepping back into the market.

Veterans of the market understand that having more investors in the market means a good run for a while but also the likelihood of getting close to a top. Interestingly the impact that the returning retail investor may have on the deals and promotions is that brokerages may not have to aggressively price promotions – choosing instead to focus on other features to attract and retain new customers.

Picking the Top Discount Brokerages for 2014

As part of their June issue, MoneySense teamed up with financial analysis firm Surviscor to provide their annual “Best Canadian Discount Brokerage” checkup. Author Dan Bortolotti walks through the Surviscor results while providing insights across different metrics like ease of use, banking integration, customer service, fees & commissions, reporting & record keeping and market intelligence.

Interestingly, the paradox of the ‘best discount brokerage’ shows up here in two ways.  First, there are so many ‘bests’ across different categories that it’s difficult to proclaim unequivocally that one brokerage is ultimately the best. What is ‘best’ for one investor may not be for another. Second, the data used to assess brokerages relies on history to infer quality about the present and/or future.  While that’s usually what anyone has to go on, it has been our observation when looking back at the historical analyses of the best discount brokerage rankings from years past (whether quarterly or semi-annually) who get’s crowned ‘the best’ changes quite often. In other words, pricing, features and service quality are constantly changing so titles such as ‘the best discount brokerage’ have a short shelf life in such a competitive space. Nonetheless, Bortolotti and Surviscor offered their ‘top picks’ overall as BMO InvestorLine and Scotia iTrade, with honorable mentions going to RBC Direct Investing and Qtrade Investor.

From the Forums

This week we thought we’d do something a bit different and venture out to the far reaches of the internet onto Reddit to find out what folks were saying about Canadian discount brokerages.

In this post from the Canadian personal finance section, readers chime in on BMO InvestorLine and how it stacks up to some of its competitors. As fair warning though, Reddit can be quit the wild arena for discussion and oddities so take the comments with a grain of salt.

That does it for this week’s roundup.  With a full dance card of thrilling events this weekend, good luck to the Habs & Raptors – May the Fourth be With You.

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Discount Brokerage Deals & Promotions – May 2014

[Updated: July 10, 2014]

While many in the markets might be thinking of  May as the time to head for the exits, it is interesting to see what is or isn’t being offered by Canadian discount brokerages in terms of deals and promotions. Heading into a new month, there were a few deals from April that were poised to officially expire, most notable among them the TD Direct Investing deal as well as the BMO InvestorLine 500/500 offer. Of the two brokerages, only the latter has put forward a new deal for the next 3 months – a signal that one of the bigger players is timing and structuring their offering around a typical slowdown in the activity level of account opens.

So, as we start May, it appears that most discount brokerage deals are in a bit of a holding pattern. There are still at least 12 promotions on the table from 6 brokerages so for those shopping around for an online trading account deal, there is a decent selection of offers to consider. And, with news about increased participation from retail investors back in the market, we expect brokerages to continue to compete for new clients with new offers in the not-too-distant future. As always, we’ll continue to monitor for new deals & promotions.

New Deals

Update May 20, 2014:

  • A helpful reader (thanks Pierre-Luc!) shared the news of another BMO offer aimed at higher account balances/deposits.  The “Select1500” promotion provides $700 cash back for deposits of at least $700 and $1500 for deposits of $500,000 or more. See table below for more info.

Update May 18, 2014:

  • Questrade is offering a promotion of a $50 gift card for clients who open and fund a new account with at least $5,000 and who make at least 1 commission generating trade.  This promotion appears to be short lived and expires at the end of June 2014. See the table below for more details
  • BMO InvestorLine launched a new promotion aimed at younger investors (between the ages of 18 and 35) with an offer of 35 free trades and the chance to enter a contest to win $3500.  Automatic entry to the contest is granted to those opening new non-registered accounts.  Included as part of the deal is an investing eBook from the Globe and Mail. See the table below for additional details and deadlines.

The one deal that is new for this month is an offer (the 50/50 promo) by BMO InvestorLine. For self-directed investors, this is an interesting one in that the commission credit ($50) and number of free trades (50) is lower than the deal that just ended but BMO InvestorLine is offering a year-long subscription (~$240 value) to GlobeInvestor as part of the sign-up offer. The total face value of the offer works out to be just shy of $788.

Strategically this offer could work for or against BMO InvestorLine. Several of the other bank-owned online brokerages advertise in the Globe and Mail so providing new clients with more access to the paid-only GlobeInvestor means putting those same clients into a channel where other advertisers will be looking to win them back over. In one plausible scenario, it could prompt other brokerages to launch some headline grabbing deals between now and July which would certainly get those newly opened accounts thinking hard about the deal they were offered. We’ll certainly be watching closely to see what unfolds from here though.

Extended Deals

At this time it looks like most of the deals that weren’t set to expire at the end of April have expiry dates past May.

Expired Deals

[Update: July 10, 2014]

  • Editor’s Note: A representative from BMO Investorline has contacted us directly to let us know that the terms for the Select1500 and Select700 offers are being updated and that this will only be offered to select existing clients.  As such we have removed this offer from the deals sections in which it appears.

The two big deals that expired at the end of April were the offers by TD Direct Investing and BMO InvestorLine respectively.  TD Direct Investing also had an account transfer offer that expired along with their commission-rebate offer.

Discount Brokerage Deals

Company Brief Description Minimum Deposit Amount Commission/Cash Offer Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitney and receive access to their preferred pricing package and a massive 45% discount on the Real Tick trading platform. n/a Discounted Commission Rates none For more details click here none
BMO InvestorLine For individuals between 18 and 35 who open a new qualifying account with BMO Investorline, they may be eligible to receive 35 commission-free trades, an eBook on investing and potentially waived account minimum fees. Use promo code “New” when signing up. Be sure to read the terms and conditions for more details on the offer. n/a 35 commission-free trades 90 days Youth Promotion October 31, 2014
Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc $1,000 $50 commission credit none none none
Open an account with Virtual Brokers with a deposit at least $1,000 and Virtual Brokers will offer 25 commission free trades which can be used for up to 1 year. Use promo code “FTR2” when signing up. This offer is open to new clients only. Be sure to read the terms and conditions for full details on this offer. $1,000 25 commission-free trades 365 days 25 free trades offer June 30, 2014
Refer a friend to Questrade and when they open an account you receive $100 and they receive $50. To receive this deal you must be an existing client with an equity account and refer a person that does not reside with you and who has not previously opened a Questrade account. $1,000 $50 commission credit (friend) $100 commission credit (referrer bonus) 60 days Refer a friend none
Open a new account (TFSA, Margin or RRSP) by July 1 2014 A) $1000 or B) $10,000 to receive either A)10 commission-free trades or B)100 commission-free trades. The promo code QT100 must be used at time of account opening. There are many conditions attached to this offer so be sure to read the details link for more information. A)$1,000 B)$10,000 A)10 free trades B)100 free trades 60 days 100 commission-free trades July 1, 2014
Open and fund a new account at Questrade with at least $5000 and place at least one commission generating trade, and Questrade will provide a gift card from worth $50. Use promo code BONUS50 when signing up. Be sure to read the full terms and conditions for more information. $5,000 $50 gift card from Amazon Receive gift card after placing 1 commission generating trade Amazon Gift Card Promo June 30, 2014
Disnat As part of their Stockscores tour, Disnat Direct is offering a “hat trick” promotion. Open a new account with at least $10,000 by June 15, 2014 and receive: $300 in commission credits, 3 months of trading at $5 commission per trade, 3 months of platform access to DDWeb/DDXtra and 1 year’s free subscription to TradeScores daily newsletter. Use the promo code “Hat Trick” when registering via phone. Read the terms and conditions for more details. $10,000 1) $300 commission credits 2) 3 months of $5/trade commission rate 3) 3 months platform access to DDWeb/DDXtra 4)1 year’s free subscription to TradeScores daily newsletter 1) 3 months Disnat Direct Hat Trick Promotion June 15, 2014
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTrade account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A)$10,000 B)$50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade June 30, 2014
Scotia iTrade Open and fund a new Scotia iTRADE account with at least $15,000 before June 30, 2014 and the commissions associated with your first 100 trades placed within 60 days of the date the account is activated and funded are free. Also, the new FlightDesk platform is being offered for free for 60 days. Use promo code HUN-SP. See details link for further terms and conditions. $15,000 100 commission-free trades ($999 value @ $9.99 commission rate) 60 days Scotia iTrade 100 free trades + FlightDesk June 30, 2014
Scotia iTrade Open a new account by June 29 & fund with: A) between $15,000-$99,99 B) $100,000-$499,999 or C)$500,000+ and receive either A)$50 cash back or 100 free trades B)$250 cash back or 250 trades or C)$500 cash back or 500 free trades. Also, Scotia iTrade is including 6 months free access to their FlightDesk trading platform. Use promo code: SPTRD14 for free trades and CSHSG for cash back. Be sure to read the terms & conditions on this deal. A)$15,000 – $99,999 B)$100,000 – $499,999 C)$500,000+ A)$50 or 100 free trades B)$250 or 250 free trades C)$500 or 500 free trades Cash Back: deposit by Feb 28/15 Commission Rebate: 90 days $500 Cash Back or 500 Free Trade promo June 29, 2014
BMO InvestorLine Open a new qualifying account or fund an existing qualifying account by July 31, 2014 with at least $50,000 and BMO InvestorLine will provide a $50 cash back offer, 50 commission-free trades and a 1 year subscription to GlobeInvestor. Use promo code BONUS to qualify when signing up. Be sure to read full deal terms and conditions. $50,000 $50 cash back 50 commission-free trades ($497.50 value) 1 year subscription to Globe Investor (~$228 value) Cash Back: Payout after 6 months Commission-Credits: 50 days Spring “New Investors” 50 50 Promotion July 31, 2014
Disnat Disnat is offering new & existing clients $300 in commission credits which can be used for up to 6 months. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1 800 268-8471 and mention promo code Disnat300. See details link for more info. $50,000 $300 commission credit 6 months Disnat $300 Commission Credit Promo August 29, 2014
Open and fund a new account with Questrade before May 30th 2014 and receive either A)$100 or B)$250 cash back for a deposit of either A)$50,000 or more or B)$100,000 or more. This offer is open to new and existing clients. Use promo code CASHBACK250 to qualify. Be sure to read the full terms and conditions associated with this offer. A)$50,000 B)$100,000 A)$100 cash back B)$250 cash back Payout occurs within 30 days of account funding Cash Back 250 Offer May 30th, 2014
BMO InvestorLine If you refer a new client to BMO InvestorLine and they open an account with a)$50,000 – $249,999 or b)$250,000+ the referrer and the referee will both receive cash. The new account must be opened with the referral code specific to the referrer. A) $50,000 – $249,000 B) $250,000+ A) You(referrer): $200; Your Friend(referee): $50 B) You(referrer): $300; Your Friend: $100 Payout occurs after 60 days (subject to conditions). Refer A Friend Terms & Conditions October 31, 2014

Transfer Fee Deals

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Scotia iTrade Tranfer $15,000 or more and Scotia iTrade may cover up to $150 of the transfer fee. $150 $15,000 $500 Cash Back or 500 Free Trade promo June 29, 2014
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Virtual Brokers will cover transfer fees from your transferring institution to a maximum of $150 per account. This offer is only applicable to accounts opened with at least $25,000 in equity before June 30, 2014 $150 $25,000 Transfer Fee Promo June 30, 2014
Transfer $25,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $25,000 Transfer Fee Rebate none
Qtrade Investor Qtrade Investor will reimburse your transfer fee up to $125 when transferring a balance of $25,000 or more. For reimbursement, please mail or fax a copy of your statement from the transferring institution that shows the transfer charge to Qtrade Investor at 604.484.2627 and indicate your Qtrade Investor account number. $125 $25,000 Transfer Fee Promo none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1 800 268-8471 and mention promo code Disnat300. See details link for more info. $150 $50,000 Disnat $300 Commission Credit Promo August 29, 2014