[updated Oct.18] If you’re like the markets this past week, you’ve ‘bear’ly made it to Friday. For many investors and traders, a higher than usual dose of uncertainty made it a harrowing week. Of course, Canada’s discount brokerages know all too well about the specter of uncertainty as they are now trying to navigate a brave new world of low-commission pricing.
In this week’s discount brokerage round up, we take a look at the different directions brokerages are taking in this new landscape. First, we look at a pair of direct competitors adding features into their product mix. Next we scope out an emerging battle for investor attention as brokerages are going to new channels to capture attention. We then roll-out a new feature of the roundup – our “event horizon” which highlights upcoming investor education webinars and seminars. Finally, we cap off the week with some very instructive investor comments on the harsh realities of online trading.
Support and Resistance are Futile
The infamous mantra of Star Trek’s Borg came one step closer to becoming reality as the “robo-advisor” trend continues to gain momentum here in Canada.
National Bank Direct Brokerage recently launched their new “InvestCube” service and in doing so, they’ve taken direct aim at that large segment of investors who want intelligently diversified, low-fee ETF portfolios without the ongoing maintenance work of constant rebalancing.
While NBDB are not alone in this regard, they are casting their nets at a time when marketplace excitement over these kinds of services is heating up.
Briefly, InvestCube is being touted as a way to simplify DIY investing by combining expertly curated exchange-traded fund (ETF) portfolios with smart automatic rebalancing synched to allocation thresholds. Investors can choose from the following five portfolio categories:
With a catchy name and polished pitch, National Bank Direct Brokerage is hoping InvestCube has the curb appeal and sticker price to win over long-term investors who want to go it alone, but don’t necessarily have the time, or the desire, to analyse data.
Fees for the service range from 0.99% to 1.04%, depending on the portfolio selected, with no per trade commission costs. The minimum buy-in for this service is also $25,000, which means there is a clear segment of this ‘robo-advisor seeking’ group NBDB is looking to go after.
NBDB says InvestCube is currently available for all account types; including RRSP, TFSA, RESP, LIRA / LRSP, RRIF account cash margin account and InvestCube is available in all Canadian dollar denominated account types.
Party in the TFSA (…and RSP)
Desjardins Online Brokerage was also on our radar as they’ve recently added US dollar registered accounts (RRSP and TFSA) to their feature offering. Although this feature release has been in the works for some time, it comes on the heels of a recent announcement from TD Direct Investing highlighting the long awaited launch of USD registered accounts.
Foreign exchange fees have (and continue to be) a generous revenue generating function for brokerages but with several other brokerages already offering USD registered accounts (RRSP, TFSA and LIRA), Desjardins Online Brokerage is wisely closing the gap between themselves and their competitors on a long-sought after feature.
For Desjardins Online Brokerage’s competitors, things are less rosy. The impact of this latest feature release means that smaller players, who were among the first and most vocal champions of this account type (and the ones who rely on it the most to differentiate themselves from larger brokerages), will have to dig deep to come up with something that makes them seem to be truly ahead of the curve. Also, competitors (big and small) that don’t offer this particular feature have a very tough time convincing clients to continue to park all of their assets in one place.
May I Have Your Attention, Please?
While pricing and features are one way to get attention from investors, another way is to try and be more ‘interesting’. In today’s world, one way to do that is to turn to video.
Qtrade recently rolled out a platform product video demonstration, that we spotted on their website. While popcorn and soda won’t be required for this screening, the video features a palatable 210-second run through the platform. And Qtrade is not alone.
National Bank Direct Brokerage is also in the mix with some branding video content, all geared towards capturing the attention of Canadian self-directed investors. Other brokerages such as TD Direct Investing have gone even further into the “video” field by pushing and sponsoring their own content channel.
As today’s online investor is smarter, more knowledgeable and spends more time online, Canadian online brokerages are going to have to go beyond price in order to compete for and win their attention. If they don’t like what’s being said, today’s investors will simply change the channel or worse swipe left.
Event Horizon [New!]
Introducing the newest feature of the round up: the event horizon. This section highlights the self-directed investor education events and opportunities for the upcoming week. While many of the events are held by discount brokerages, there are other events included too. [note: TD Direct Investing holds many events however because of space limitations, we’ve selected a few we thought might be interesting to include. Also, events may reach capacity at which point registration may not be possible. Please ensure to check if space is available if you’re interested in attending.]
Oct. 21 (Tues)
- National Bank Direct Brokerage: Stop Orders: A Winning Solution Worth Knowing
- Scotia iTrade: Index Iron Condors – A Friend When There Is No Trend with Pro Market Advisors
- TD Direct Investing: Smart Money: Investing Like a Pension Fund
- TD Direct Investing – Options as an Income Strategy
Oct. 22 (Wed)
- Scotia iTrade: Options Trading and Volatility with Montreal Exchange
- TD Direct Investing – Portfolio Strategies
Oct. 23 (Thur)
- TD Direct Investing: Options Trading using Technical Analysis
- TD Direct Investing: Financial Repression – Where are interest rates heading? [Fr]
Oct. 24 (Fri)
- TD Direct Investing: Advanced Options
Oct. 25 (Sat)
- TD Direct Investing: Workshop – Getting Started with Options
From the Forums
Hello, is it cash you’re looking for?
With the exception of Lionel Ritchie, there’s probably nobody else that could charm their way out of a margin call from their broker – and even then those are slim odds. As one online investor found out from this comment on Questrade’s profile page, that when it comes to risk-management, it’s every trader (and brokerage) for him or herself.
For every shining star there has to be a lot of surrounding darkness. In the stock market, there are many companies that don’t make headlines for the good reasons and there are many more that fade into the darkness of being delisted. This post on the reddit personal finance Canada highlights some important points about which stocks can and can’t get past the velvet rope of TFSA eligibility.
That does it for another edition of the roundup. Wherever your adventures happen to boldly take you this weekend, hopefully fun follows at warp speed!