For traders who had grown ‘complacent’ over the lack of market volatility in 2014, the adage of ‘be careful what you wish for’ seems a bit prescient. Whether it was the unexpected move on the Swiss Franc, squashed rumours of a Blackberry buyout, Bombardier grounding their Learjet program or the continued fallout from tanking oil prices, volatility is back with a vengeance.
Canadian discount brokerages, on the other hand, are dealing with a different kind of volatility. In their case, it’s trying to figure out how to win at the RSP game. In this week’s roundup we take a look at the ever growing list of deals/promotions streaming in from Canadian brokerages, earnings highlights from US online brokerages, a preview of the upcoming investor education events and finally the topics that got DIY investors chatting.
Like Shakira’s hips, data doesn’t lie (see chart). We are heading squarely into the storm of TFSA and RRSP season and brokerages big and small are pulling out all the stops to try and woo self-directed investors into picking an online trading account. As a result, January’s deals and promotions have been piling up faster than an Ottawa snow bank.
This past week another three offers were added into the discount brokerage deals & promotions mix, taking the current total to 21 offers. Questrade added yet another to their promotional pool and Virtual Brokers has finally stepped into the promotions space as has Qtrade. All three of these offers are directly targeted to getting the attention of investors looking for a registered account. While the seasonality of the deals certainly factors in, we also think that from this point forward, the competitive landscape for registered accounts has changed. Among the many reasons why things are different, the biggest threat to the non bank-owned brokerages is that Interactive Brokers Canada has started to offer both RSP and TFSA registered accounts. Stay atop all of the deals action by checking our deals and promotions section through January and February. We think there still may be some additional offers yet to launch that could cause quite the stir.
One App to Manage Them All
With mobile technology becoming a mainstay of everyday life (apparently ‘millennials’ check their mobile phones an average of 43 times per day), online brokerages are increasingly turning their attention to ensuring their platforms work on the go. BMO InvestorLine is one of the latest bank-owned online brokerages to be pushing their integrated banking and mobile trading app, releasing this announcement this past week. Not too long ago, however, brokerages such as Qtrade and Scotia iTrade also made improvements to their tablet trading experience. Even though BMO InvestorLine had officially rolled out the app in 2014, in the heated battle to highlight something other than commission pricing, look for more brokerages to showcase the features they think set them apart from their peers.
All About the Benjamins
One of the largest online brokerages in the US, Charles Schwab, reported their quarterly earnings today. They are an interesting model to look at as they moved their business away from being primarily a discount brokerage and more towards providing ‘full service’ and advice. This model is not unlike the approach taken by Questrade, which, if Schwab is any indicator, may help add value to the company during periods of low interest rates and somewhat muted trading activity. Schwab took in $1.5 billion in earnings for the quarter ending December 31 which is up 9% over the previous quarter. The key metric of Daily Average Revenue Trades (DARTs) was up 17% compared to the previous quarter and the average revenue per trade came in at $12.04. Another big name in the discount brokerage space, Interactive Brokers, releases their earnings next week so it should be interesting to see if the volatility late in the year translated into increased trading commission activity.
A quartet of educational events are on tap for you next week, enjoy. Jan. 20 (Tues) Scotia iTRADE – Introduction to Puts with Pro Market Advisors Jan. 20 (Tues) NBDB – Managing Risk While Investing in Stock Jan. 21 (Wed) Scotia iTRADE – Fixed Income Strategies Using ETFs with iShares Jan. 22 (Thur) Scotia iTRADE – Trading The Gap with AJ Monte
From the Forums
Fee the burn
At the start of a new year, the focus on dropping a few pounds is on the mind of many. While getting active can have health benefits, in the online trading account world, inactivity gets dinged with a fee. Perhaps online brokerages are on to something. Check out this post from RedFlagDeals’ investing forum for one individual’s query on when exactly RBC Direct Investing’s kicks in
With RRSPs and TFSAs still a hot button issue for this and next month, we’re still tracking the storm that is the launch of Interactive Brokers’ registered accounts. Here is yet another post from a RedFlagDeals.com investing thread on the launch of IB registered accounts and what that might mean cost wise for folks with multiple accounts.
That’s a wrap for this week’s roundup. For those lucky enough to be taking in the Vancouver ‘winter’ hope to see you at the Vancouver Resource Investment Conference this weekend! And for those who aren’t, here’s a multimillion dollar version of the ‘fireplace log’ to give you warm thoughts (and to take your mind off some portfolio explosions that may have happened) courtesy of Elon Musk and co.