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Discount Brokerage Weekly Roundup – May 15, 2015


When it comes to DIY investing – or any investing, emotion is a lever best-not pulled. For discount brokerages, however, being boring doesn’t get attention and not getting attention means being left out.

In this long weekend edition of the roundup, we’re excited to add a new feature into the mix. First, we take a look at the latest attempts by discount brokerages to get attention, then highlight an upcoming learning event. Next, we roll out something new that will shine a light on something lots of people want to know about Canadian discount brokerages. Following our surprise new piece we’ll take a look at the upcoming investor education events and close out with the investor chatter from the forums and very cool video for the rocketeer enthusiasts.

A better toaster

What happens to an industry where it’s tough to tell one provider apart from another? Toss in a toaster.

Odd as it may sound, toasters and financial services go way back. The idea of tossing in a free toaster to attract new bank clients was popular hook in the 1950’s and, while the idea of attaching an incentive to draw in new business is not new, it’s interesting to see what discount brokerages and banks are doing in 2015.

This past week, promotional juggernaut Questrade launched their latest deal of advertising an Apple Watch to individuals signing up for an account and depositing at least $100,000. For those keeping score at home, this brings the consecutive mentions of the Apple Watch in the weekly roundup to three and the number of deals Questrade runs to more than everybody else.

Of course, digging deeper into the fine print, it appears the offer is actually not for an Apple watch, but rather for an Apple Store gift card worth $500.00. A quick check of the Apple store found the following models of Apple watches:

  • Apple Watch Sport (ranges between $449 and $519 +tax)
  • Apple Watch (ranges between $699 and $1459 +tax)
  • Apple Watch Edition (ranges between $13,000 and $22,000 +tax)

Thus, the clever marketers at Questrade have managed to grab headlines and attention with an item that ranges in price between $449 and $22,000, but really refers to the most basic (but still cool) model of the Apple Watch Sport.

Questrade has largely gone unchallenged by other Canadian online brokerages in offering up Apple products as incentives for new account openings. Recall that Questrade has run with the iPad mini promotion multiple times over the past two years.

In the financial services market, and in the online discount brokerage segment in particular, this is one of those moments where someone has done their marketing homework on “differentiation” and the “halo effect”. So what has Questrade done to make themselves stand out?

The answer is just about everything, and it seems to be working.

Did we notice? (Yep); are we talking about it here (earned media: check), are other DIY investors are talking about it on forums and social media? (more earned media: check) and of course co-branding an online brokerage alongside a brand like Apple with their most buzzworthy product right now probably doesn’t hurt either.

Relative to the other Canadian discount brokerages, Questrade appears to be putting on a little bit of a marketing clinic online. Although the tactics aren’t necessarily new, they are nonetheless effective in attracting attention and, importantly, appealing to emotion.

For DIY investors, especially those looking for online trading accounts for the first time, there is only going to be more marketing coming their way. Competition between brokerages in Canada is fierce and if one brokerage is doing something right, others are sure to follow suit. Where could it end? A look at the Chinese banking sector’s approach is a window into how extreme this incentive game gets with iPhone 6s and Mercedes’ being offered.

It’s important, therefore, to see past the incentives and to reign in the emotion. The most important component of picking a service provider is whether they are a good fit. A good set of questions to always keep asking are:

  1. Do they do what you need them to do?
  2. How well do they do it?
  3. How much are they charging for it?

Through the marketing efforts, all businesses (big and small) hope that a promotion or deal can change how you value their offering. That’s simply a business reality for buyers and sellers.

That said, most folks probably need another screen to look at as much as they need another toaster. The art of marketing, however, is more about want rather than need. And, it is exactly why DIY investors should know what they need before they get something they don’t want.

Options Education Day Returns to Vancouver

If you happen to be in Vancouver at the end of May and are interested in learning about options, the Options Education Day tour is coming to town once again.

The topics on the agenda for this session include:

  • Options fundamentals
  • Four ways to hedge against risk
  • Managing the effects of volatility
  • Understanding put-call parity
  • The road ahead: What’s next for Canadian investors?

A number of discount brokerages will also be on hand as sponsors for this event including:

This event typically sells out ahead of the session so be sure to RSVP early to avoid disappointment. The cost for the day-long session is $45 and includes breakfast, lunch and training materials. Click the following link for more information on Options Education Day Vancouver.

Discount Brokerage Tweets of the Week

As part of our ongoing effort to bring together the fuller picture of what’s going on in and around the Canadian discount brokerage landscape, we are excited to (re)release the discount brokerage tweets of the week.

The format of the tweets of the week has changed somewhat from its earlier incarnation. Instead of featuring what online brokerages themselves are saying, we’ve included the conversations, comments and perspectives of both DIY investors and the brokerages who are on Twitter. The brokerages may be on Twitter directly or as part of their parent company’s customer service team. Several of the bank owned brokerages, in particular TD Direct Investing, RBC Direct Investing, BMO InvestorLine and CIBC Investor’s Edge, handle incoming tweets via their parent bank Twitter accounts.

In this first week, it was interesting to see that brokerages big and small encounter issues with account opening and delays getting things up and running. Of course, what’s equally informative is how fast and how helpful client service teams are on Twitter. This week there are tweets about or to the following discount brokerages:

  • BMO InvestorLine
  • Credential Direct
  • Questrade
  • RBC Direct Investing
  • Scotia iTrade
  • TD Direct Investing

Noticeably absent from the list this week was Virtual Brokers, who’ve been quiet on Twitter since early April.

So, as another first we’ve brought to the Canadian discount brokerage space, here are the curated discount brokerage tweets of the week. #Enjoy!

Event Horizon

May 19

NBDB – Take Advantage of Margin Accounts – [Fr]

Scotia iTRADE – How And When To Use The MACD with Pro Market Adivsors

May 20

TD Direct Investing – Technical Analysis – Advanced Indicators

TD Direct Investing – Introduction to Technical Analysis

TD Direct Investing – Introduction to Investing in Options

TD Direct Investing – Market Outlook

Scotia iTRADE – Getting Started With ETFs with iShares

May 21

TD Direct Investing – Introduction to Fixed Income

Scotia iTRADE – Short Selling with AJ Monte

TD Direct Investing – Introduction to Fundamental Analysis

May 22

Scotia iTRADE – Trading Psychology Part 1 with Stefanie Kammerman

From the Forums

Getting the Party Started Right

Opening an online trading account is still a somewhat involved process. In this post from reddit’s Personal Finance Canada section, one user asks about the initial funding requirements for a Questrade account. Fortunately both the community and a Questrade rep provide a detailed answer.


With many parties slated to take place this Victoria Day weekend, there’s the fun part and then there’s what happens after the party’s over. For most there’s some cleanup involved. In this post, again from reddit’s Personal Finance Canada section, when the party was over for one stock in an investors portfolio there were still two laggard shares left in their account. Check out how the community explained the process of getting rid of them.

Discount on the Potato

It seems fitting heading into a long weekend that the infamous ‘take it easy’ approach of the Canadian couch potato portfolio strategy came up this past week. Specifically, in the RedFlagDeals investing forum, one user asked about whether the couch potato portfolio is something that can be used with Virtual Brokers.

The Closing Bell

That does it for this edition of the weekly roundup. A quick reminder that Canadian markets will be closed on Monday for Victoria Day and will reopen for Tuesday. Here’s some spectacular footage of some awesome technology to propel you into the weekend – cue the rocketman! Have a safe and enjoyable holiday weekend.