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Discount Brokerage Weekly Roundup – July 31, 2015

Regardless of where you happen to be in Canada, it’s clear that the dog days of summer are here. The heat outside, however, pales in comparison to the heat felt by Canadian online brokerages to compete with one another.

With it being so close to the beginning of a new month, this edition of the roundup puts a heavy focus on just how competition is impacting the race to win over new clients with a deep dive on a newly launched promotion from one major online brokerage. Following that we take a look at a tactical move by another online brokerage to continue pushing into investor education and then review one discount brokerage’s strategy of taking advantage of low interest rates (while they’re still available). Finally we take a look at the discount brokerage tweets of the week and close out with a pair of fascinating conversations from the investor forums.

Let’s Make a Better Deal

As July winds down, the discount brokerage deals and promotions activity saw a slight uptick from two brokerages – BMO InvestorLine and Virtual Brokers.

Starting first with the latter, Virtual Brokers has decided to revive the deal that had technically expired at the end of June and extend it through to the end of August. The offer is for 25 commission-free trades that are good for use for up to one year.

At the other end of the deposit spectrum is the offer from BMO InvestorLine. In keeping with their nautical themed campaign imagery, BMO InvestorLine’s latest cash-back offer is a shot across the bow at the two other discount brokerages currently jockeying for clients with deposits of at least $100,000: Scotia iTrade and Questrade.

There’s a lot about BMO InvestorLine’s latest cash-back promotion that clearly signals they’re actively courting clients who have larger deposits/assets. First, the minimum deposit to qualify for this promotion is $100,000. The only other brokerage with an offer exclusively geared towards this deposit level is Questrade with their Apple Watch promo. That said, one of Scotia iTrade’s current cash-back promotions also has minimum qualifying tiers that match BMO InvestorLine’s almost exactly for deposits at or above $100,000. For that reason and because Scotia iTrade is a bank-owned brokerage, it is likely that the offer from BMO InvestorLine is going to compete with Scotia iTrade’s cash back offering rather than the Apple Watch .

With that in mind, comparing the BMO InvestorLine deal to the Scotia iTrade deal reveals that each discount brokerage seems to be trying to win particular segments of the marketplace (see table below).

While both are offering $1,000 cash back for deposits of $1 million or more, it appears that Scotia iTrade is offering a greater cash back offering at the $100,000 – $249,999 tier than BMO InvestorLine but at deposits between $250,000 and $999,999, BMO InvestorLine looks to be outbidding Scotia iTrade.

Cash Back Amount
Minimum Deposit Amount Scotia iTRADE BMO InvestorLine
$15,000 $50
$50,000 $100
$100,000 $250 $200
$250,000 $350 $500
$500,000 $500 $750
$1,000,000 $1,000 $1,000

Curiously, both bank-owned brokerages seem to have created an incentive structure with diminishing returns. That is, the more that an individual deposits in absolute terms, the less the individual investor actually gets back in proportional terms. Here is a graph that compares the relationship between deposit size to cash back. As the graph clearly shows, the more an individual deposits, the lower the percentage cash-back they receive.

It begs the question as to why the incentive structure was built this way, especially if brokerages want to attract deposits (in industry lingo – to increase their share of wallet). Usually consumers are given extra incentive to purchase at volume, not less. Under the current structure of these offers, DIY investors have greater financial incentive to move their business across several brokerages instead of consolidating assets at one in order to maximize their return. Here’s how.

Within the current promotions being offered, if an individual wants to maximize their incentive, and they had the assets (and desire) to do so, opening an account with Scotia iTrade AND BMO InvestorLine would net them more than opening an account with just one.

For example, individuals with $200,000 or more in assets who open an account at only one of these brokerages would net $250 (at Scotia iTrade) or $200 (at BMO InvestorLine). If, however, they split that deposit into two $100,000 deposits at each of BMO InvestorLine and Scotia iTrade, they would receive $450. For those keeping score, that’s 0.225% on $200,000 instead of either 0.13% (Scotia iTrade) or 0.1% (BMO InvestorLine).

For those looking to have their $1 million dollars go further, the following table shows that settling for $1,000 cash back at one brokerage is leaving serious money on the table.

Hypothetically, splitting the $1 million deposit across the following current cash back deals (from BMO InvestorLine, National Bank Direct Brokerage, Questrade AND Scotia iTrade simultaneously) would actually only require $900,000 and net $1650 back resulting in a return of 0.18% (in aggregate) as opposed to the 0.1% from either of the top tier offers from Scotia iTrade or BMO InvestorLine.

Discount Brokerage Deposit Amount Cash Back Rate of Return
Scotia iTRADE $500,000 $750.00 0.15%
BMO InvestorLine $250,000 $350.00 0.14%
NBDB $50,000 $300.00 0.60%
Questrade $100,000 $250.00 0.25%
Total $900,000 $1,650.00 0.18%

While dealing with multiple providers/brokerages might be an inconvenience for some, others look at spreading assets across multiple providers as a risk management strategy and as a way to get access to exclusive features each brokerage offers. There’s also nothing preventing consolidating those accounts at a particular brokerage in the future for additional benefit (once the mandatory balance holding period is complete).

Of course, moving accounts around to get incentives isn’t necessarily as lucrative as certain fixed income low-risk strategies. That said, for those in the market for a discount brokerage and who don’t mind being more transient, shuffling between providers can actually work out to being more lucrative than parking in one place.

Most discount brokerages will not be thrilled about clients constantly turning over however the fix seems somewhat straightforward – value the clients with higher deposits equal to or greater (on a proportionate basis) than smaller deposits.

Exploring Options

With exciting initiatives planned for this fall (more on that as we draw closer to September) Desjardins Online Brokerage is once again playing the investor education card to reach out to DIY investors.

In their latest offer, Desjardins Online Brokerage has teamed up with investor education firm Learn to Trade Global to offer discounted options education training. The team at Learn to Trade Global may be familiar to anyone attending the options education seminars from the Montreal Exchange (including options education day) as both Jason Ayres and Patrick Ceresna conduct seminars on behalf the exchange.

In this latest offering from Desjardins Online Brokerage, individuals who are clients (or become clients) of Desjardins Online Brokerage receive a heavily discounted (90% off) price for options education training. For $99 individuals are eligible to receive 3 months access to a number of educational materials related to options investing as well as model portfolios and trading ideas. In addition there are six live online “strategy labs” that clients can access live or watch archived versions of.

A strong focus on investor education has paid off in years past for Desjardins Online Brokerage especially in their partnership with Tyler Bollhorn from Stockscores. With this latest venture with Learn to Trade Global, it should be an interesting proposition for DIY investors looking for a structured approach to learning more about options trading from two very recognizable figures in this space.

Questrade Refinancing Debt

While low interest rates have been a headwind to the online brokerages in many respects, one Canadian online brokerage has taken the opportunity to refinance some of their higher interest debt to presumably better terms.

In an article published earlier this week in the Globe and Mail (for subscribers only), it was reported that Questrade had raised $10 million dollars at an annual interest rate of 10% and has recently repaid the original lender, Crown Capital Partners. According to the article Questrade’s CEO, Edward Kholodenko mentioned that the loan has been mostly refinanced to more favourable terms.

Questrade, however, is no stranger when it comes to accessing capital at rather hefty interest rates. Additional research on some publicly listed entities that have provided capital to Questrade reveal that Questrade has financed several million dollars at rates as high as 16%.

Given that Questrade is a private corporation, it is difficult to get a specific and transparent understanding of its financials. That said, some indirect indicators, such as these financing figures, their continued aggressive expansion into wealth management, their low client acquisition costs and building out service capacity in their online brokerage segment means that Questrade continues to push forward in becoming a contender in the Canadian wealth management industry, regardless of the short-term cost.

Discount Brokerage Tweets of the Week

This week’s tweets show once again how Twitter is increasingly becoming a medium on which individual investors are addressing customer service issues with Canadian discount brokerages. Questrade and Scotia iTrade were on the hot seat for a number of reasons whereas many of the other brokerages were largely inactive or not mentioned at all.

From the Forums

We Interrupt This Program

In this interesting thread about TD Direct Investing’s maintenance schedule, several users from the Financial Wisdom Forum voice their collective discontent with not being able to get online when they feel they should be able to, especially when looking at overseas markets.

Too Good To Be Free?

While many DIY investors are enjoying the benefits of fierce competition between online brokerages, there comes the point where it becomes natural to wonder how or if companies can afford to make money – especially when giving things away for free. In this post, one reddit user wonders aloud whether Questrade’s free ETF purchases are too good to be true.

Into the Close

That’s a wrap for this week’s roundup. After all that data it’ll be great to kick back and indulge in some regression of the non-spreadsheet variety. Have a great weekend and here’s a brief reminder of what we’re missing while beating the heat!

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Discount Brokerage Weekly Roundup – July 24, 2015

(source: giphy)

From spiking share prices of tech giants such as Google and Amazon to gold losing its luster with investors, this week showed that expectations about the future are what drive the rapid moves up and down in share pricing. Arguably, reputation is its own kind of currency and this week we saw examples of how Canadian discount brokerages are having to learn to navigate expectations of online investors via social media.

In this edition of the roundup, we continue with the lighter summer format by taking a look at some sneak peeks at what a couple of discount brokerages are up to over the summer. Next we look at who is facing the heat and why in the discount brokerage tweets of the week. From there we’ll take a look at the upcoming investor education opportunities on the horizon and cap the roundup off with some interesting forum chatter from the past week.

Trading Places

This past week, spent some time with several Canadian online brokerages in Toronto discussing what’s coming around the corner for this fall. Here’s a hint: there’s going to be more than a few big announcements that will get the attention of DIY investors.

Some of what can be shared comes a result of doing a walkthrough of the offices of two close competitors in the low-commission cost segment: Questrade and Virtual Brokers.

What was interesting about being able to go behind the scenes was the level of activity at each of the brokerages and the fact that they are both growing and planning for continued growth. Offices of both brokerages continue to expand and improve which is a testament to the interest these two firms have been receiving from commission-sensitive DIY investors.

As any good summer teaser would do, stay tuned in the upcoming weeks for more interesting content related to these latest adventures.

Discount Brokerage Tweets of the Week

The summer heat was definitely bearing down on social media this week as a couple of discount brokerages found themselves having to cool the nerves of some frustrated investors. In particular it was the bank-owned brokerages that seemed to end up in detailed back-and-forth conversations for issues such as delayed account openings and platform glitches.

This week’s tweets offer a unique and instructive read for anyone interested in what challenges online trading can present and how online brokerages (including the big bank-owned brokerages) respond on Twitter.

Mentioned in this week’s tweets were Questrade, RBC Direct Investing, Scotia iTrade and TD Direct Investing.

Event Horizon

Despite it being near the end of July, there is a lot of activity for those interested in learning about investing. Check out some of the interesting sessions below:

July 27

TD Direct Investing – Planning Your Retirement | Tips for Winding Down Your RSP

July 29

TD Direct Investing – Introduction to Investing in Options

TD Direct Investing – Advanced Options

TD Direct Investing – Options as an Income Strategy

Scotia iTRADE – Concepts in Technical Analysis with Recognia

July 30

NBDB – Learn About Investment Basics – [Fr]

From the Forums

Wading Poll

Discount brokerages were on the minds of a few DIY investors this past week in the investing forum. An informal poll of users of the site asking them which discount brokerage they used provided the following results (based on 78 respondents). Interestingly, but perhaps not surprisingly, TD Direct Investing was the dominant online brokerage that voters mentioned (29.49% or 23 of 78 visitors) followed by Questrade (17.95% or 14 out of 78 visitors) and then BMO InvestorLine in third place (12.82% or 10 out of 78).

With small numbers of respondents, there are obvious limits to the kinds of conclusions that can be drawn. It was, however, noteworthy that Questrade was the second most popular answer and that other fairly well-known brokerages, such as Interactive Brokers, were not mentioned. User comments below the survey results also pointed out some of the gaps and interesting observations.


Upside vs Downside

The decision to become an independent or self-directed investor is definitely an important one. Aside from the usual conversations regarding how much effort is involved, or even which online brokerage is best, the following post from the Financial Wisdom Forum on the downsides of using discount brokerages was a really interesting look at some perspectives of DIY investors on the downsides of the discount brokerages.

Into the Close

That does it for this edition of the roundup. Have a great weekend wherever you happen to be and congrats to the Canadian athletes for the strong Canadian showing at this year’s Pan Am games.

(source: giphy)
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Discount Brokerage Weekly Roundup – July 17, 2015

Whether it was tech giant Amazon cutting prices for prime day or the Bank of Canada cutting prime rates, this past week it seems that consumers’ economic engines are in need of a little priming to get them into gear. As Canadian discount brokerages know all too well, cutting prices or rates can only go so far in terms of stimulating interest. At some point, the path to growth requires getting creative.

In this edition of the roundup, we take a Pan American look at how brokerages here and south of the border are creatively approaching staying competitive despite some challenging market conditions. First we’ll take a look at the story of what seems to be powering one the largest online brokerages on the planet even higher. Next, we’ll scan through the social media banter from Canadian brokerages and then look at upcoming education events and what DIY investors were talking about in the forums. Of course, it wouldn’t be a true Pan American edition of the roundup without a questionable choice for a musical close out.

That’s Trillion, with a T (and a rillion)

One of the largest online brokerages on the planet got a little bit bigger this past quarter even against the backdrop of decreased trading activity and stagnant interest rates.

US online brokerage Charles Schwab reported their quarterly earnings this past week and the results are more than a little mind-boggling. In the quarter they managed to attract 280,000 new brokerage accounts (an increase of 16% y/y) and grow their total assets by 6% to $2.54 trillion (USD). By comparison, another popular brokerage in the US, Interactive Brokers, had a total of just over 300,000 total accounts (as of the end of April).

While most observers understand the sheer scale of the brokerage gives them quite a bit of clout in the online brokerage space, it was the recent entry of Schwab into the robo-advisor space that has gotten a lot of attention. After being launched in Q1, their robo-advisory has 39,000 accounts and $3 billion (USD) in assets.

Of course, as with most releases, a little bit of extra digging tends to turn something interesting – such as the following quote from CEO Walt Bettinger stating “we remain committed to expanding existing platforms in areas of strong client demand. We have broadened Schwab ETF OneSource to include over 200 commission-free ETFs as of month-end June. Investors can access a wide range of funds from 13 providers and 66 Morningstar categories with zero online commissions.”

What the latest results from Schwab show is that brokerages can get ‘creative’ with products that the investing public is clearly asking for. In this case, commission free ETFs and robo-advisor style management are what seem to be turning heads.

Within the Canadian space, there are already internal committees and groups within the larger bank-owned brokerages actively discussing a strategic opportunity to participate. These results are likely to add more fuel to the fire for the larger brokerage players and that is great news for DIY investors.

Discount Brokerage Tweets of the Week

In this week’s discount brokerage tweets of the week, technology looks to be the Achilles heel for a number of DIY investors and online brokerages. The technology minions don’t seem to care whether it’s a bank-owned brokerage or not, somehow, someway they find the chance to create a bit of mayhem. Mentioned this week were BMO InvestorLine, Questrade, RBC Direct Investing and Scotia iTrade.

Also, we’ve got updated coverage of the Scotia iTrade selfie contest that’s still running. Below is an update which includes this week’s selfie action, most notably from a marketer/promoter looking to drum up more exposure for the contest.

Event Horizon

Even though its summer and school is out, students of the market can always find time to learn. This week there are a number of interesting investor education events on margin trading, options, stock picking and more.

July 21

TD Direct Investing – Understanding Margin & Short Selling

Scotia iTRADE – How To Pick A Stock with Pro Market Advisors

TD Direct Investing – Options as an Income Strategy

July 22

TD Direct Investing – Understanding Margin & Short Selling

July 23

NBDB – Stop Orders: A Winning Solution Worth Knowing – [Fr]

TD Direct Investing – Introduction to Technical Analysis

From the Forums


Now that summer is here, there are lots of DIY investors who want to take advantage of the break or the weather to enjoy some time away from the markets. As this post from’s investing forum shows, however, don’t forget to close out the open orders or bad things can happen.

After Hours

No, it’s not the wild costume and crazy glow stick crowd (although trading outside of normal market hours can be equally as crazy) but after hours trading refers to trades made outside of the normal market hours. In this post also from’s investing forum, one member wonders aloud about the afterhours and there are a few polite acknowledgements and some strange looks given in return.

Into the Close

That does it for this edition of the roundup. As promised, here is but one of 21 creative earworms that still feel less questionable to indulge in than either Amazon prime day, yet another interest rate cut or Kanye West closing out the Pan Am games. Good luck to the Canadian athletes at the Pan Am games, and good luck keeping these tunes out of your head over the weekend.

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Discount Brokerage Weekly Roundup – July 10, 2015

Source: Twitter (@Sweetfacefergie)

Even though the official kick off to the Pan Am Games was today, in the week leading up to it markets have given traders more than enough diving, hurdles and nail-biting drama for weeks to come. For a handful of Canadian discount brokerages, this week proved to be equally eventful with contests and competitors going at it full swing. It looks like it’s game-on for the brokerages once again.

In this edition of the roundup we kick things off with a look at a major bank-owned brokerage tearing a page out of the Kardashian playbook with their new selfie contest. Next we’ll look at some big news from two Quebec-based discount brokerages that is sure to create a few sparks in that market for years to come. Also we’ll scan through the investor education events and take a look at some really interesting exchanges that took place on Twitter. Finally we cap off the roundup by looking at the forum chatter from DIY investors across Canada and close off with one funny/scary view of this week’s market glitches.

But First, Let Me Take a Selfie

In a quirky bit of timing, not long after the selfie aficionado Kim Kardashian was interviewed about her financial wisdom tips, Scotia iTrade launched their selfie-themed promotion. This latest contest, which runs during the month of July, involves people taking selfies at the recently launched Scotia iTrade investor centre at Scotia Plaza in downtown Toronto. The “eligible winners” will be awarded a movie pass for one (approximate retail value of $13).

While they’re not the first big bank to try and capitalize on the selfie (TD put a twist on it with their ‘housie’ campaign) Scotia iTrade might be the first Canadian online brokerage to run a selfie-themed promo. And, although contests are nothing new, this particular one shows some interesting quirks of mixing the world of personal finance with the worlds of selfies, millennials and Twitter.

Here are a couple of interesting observations.

First, there are the contest’s terms and conditions. At about 2300 words long this is one of the longest scrolling workouts folks are going to have before they fully know what they’re getting themselves into.

Once in the terms and conditions, however, there are some interesting finds such as this phrase: “Take a selfie of yourself at the branch”.

Not only has ‘selfie’ made it into the vernacular of the financial world, the way in which its used is like the Hugh Grant moment in Mickey Blue Eyes (the la Trattoria).

And, while it may seem mildly comical, as it turns out, the details actually matter. According to the Wikipedia definition of a selfie, it is “a self-portrait photograph featuring the photographer”. That would make the following image submitted by @carr71 for the promo technically seem to not count (it looks like a photo of a person that was taken by someone else).

Unfortunately, it looks like @Scotia_iTrade didn’t accept either of @carr71’s submission(s) and she got directed to read those rather lengthy terms and conditions.

With 10 days now gone in July, it looks like the contest has yet to gain significant traction. Of the 3 photos submitted thus far one may not be a selfie, one appears to have been disqualified (not sure why) and one went unacknowledged (at least publicly) so it’s not clear by looking at it if it counts. That’s a tough batting average a third of the way through the contest window.

Of course, figuring out what will or won’t work on Twitter is all about experimentation. Like most things on Twitter, it’s difficult to predict where things will go and the timeline for events to happen. The fact that Scotia iTrade is willing to get creative on social media is a good sign and it should hopefully spur other discount brokerages to flex their creative muscles. We’ll keep watching to see how the contest unfolds.

New Pricing at Desjardins Online Brokerage

After numerous commission price adjustments by Canadian discount brokerages, Desjardins Online Brokerage has updated their standard commission pricing for the active trader-focused Disnat Direct service.

Instead of a standard rate of $19.95 for less active traders (i.e. those who traded less than the 10 trade per month threshold to qualify for lower commission pricing) Disnat Direct account holders can now qualify for the best commission rates of between $5 and $9.95 per trade. Standard options trading has also been adjusted to $1.25 per contract (down from $1.50) and the minimum per options trade is now $8.75.

The actual commission paid still depends on the combination of the volume of shares purchased/sold, the currency of the trade and the price of the stock. This means that there is still some extra effort involved to keep track of what a transaction will cost however for the less active traders, this is definitely a smaller price to pay than the higher upfront fee.

Some other fees were also announced to be changing. The platform fees for individuals not meeting the trading threshold look to be rising by between $5 and $8 depending on the platform (see table below). The new fees are scheduled to take effect on October 1st.

Trading Places

For many professional sports players, the off-season is where the major trades take place. This past week the Canadian discount brokerage space also saw a rather dramatic trade (of sorts) happen.

As mentioned in this article in the Globe and Mail (for subscribers only), the general manager of Desjardins Online Brokerage, Laurent Blanchard, will be leaving Desjardins and assuming the role of president of National Bank Direct Brokerage. Blanchard has been instrumental in working with Desjardins’ online brokerage unit since its early days and had been the general manager since 2012.

The rivalry between NBDB and Desjardins Online Brokerage is amicable but nonetheless present. Both are quite well known within the Quebec market and both have been especially close in the competition for the J.D. Power Investor Satisfaction Survey award over the past several award cycles.

As both firms will now be seeing transition at the top, it should be interesting to see where the competition between these online brokerages goes next.

Event Horizon

July 13

Scotia iTRADE – Trading Weekly Options As An Income Strategy with Sarah Potter

July 14

NBDB – Introduction to Technical Analysis : Supports and Resistances – [Fr]

Scotia iTRADE – Technical Analysis and Seasonal Investing with Horizons ETFs

TD Direct Investing – ETFs 101

July 15

TD Direct Investing – Investing Idea: An Introduction to REITs

Scotia iTRADE – Preparing for Rising Interest Rate Environments with iShares

July 16

TD Direct Investing – Introduction to Investing with Options

Scotia iTRADE – Risk Management Trading with the 1% Rule with AJ Monte

Discount Brokerage Tweets of the Week

This week on Twitter, Questrade continues to field requests for features while the larger bank-owned brokerages were being kept busy with client service questions. What was most interesting, however, were a couple of conversations between traders regarding the pricing and functionality of certain discount brokerages.

From the Forums

The hard sell

For most DIY investors it’s challenging enough to keep Mr. Market from taking back trading gains. In this post from reddit’s personal finance Canada subreddit, it was interesting to note the report of one large bank-owned brokerage deciding to use outbound sales calls to see if users of their discounted mutual funds would consider also using some premium products.

Son of a glitch

This past week has seen a major airline and a major stock exchange have technical difficulties cause some mayhem. For one user of the Financial Wisdom Forum, their online brokerage experience got a little nerve-wracking when they had login difficulties. Check out this post for a great example of the some of the stranger technical difficulties that can occur while trading online and on-the-go.

Into the Close

That’s a wrap for this week’s roundup. With so much going on in the markets (China, Grexits, interest rate hikes, computer glitches and more!) it’s enough to make anybody’s head spin. Thankfully with the sun shining for most Canadians this weekend, there are lots of fun ways to not have to worry about it (at least for a little while) starting first with the big opening to the Pan Am Games in Toronto. Good luck to all the athletes on and off the GTA highways this weekend!

Source: Twitter (@TorontoPolice)
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Discount Brokerage Weekly Roundup – July 3, 2015

With both Canada Day and Independence Day arriving at the beginning of July is the kind of month that should literally come in with a bang. Once the fireworks die down, however, it’s also the time when you can hear the crickets chirping. Oddly enough, this characterizes the Canadian discount brokerages heading into July where, at least on the surface, it seems things have quieted down some.

We continue with the summer edition of the roundup with a quick look at the new deals/promotions lineup for July as well as some interesting news from discount brokerages in the US in terms of trading activity and interesting initiatives for older clients. From there we take a look at upcoming investor education events as well as the week for Canadian discount brokerages on Twitter. Finally, we close out with investor chatter on the forums and an interesting video in honour of the leap second that made July that much later this year.

Deals on Tumbleweed

This past week, the latest selection of discount brokerage deals were posted and things are looking a little, um, spacious.

The downward trend in the number of deals continues heading into July with 14 offers distributed over seven different brokerages. Interestingly a significant chunk of those promotions (six) are from just one brokerage – Questrade.

While summer is typically less busy than earlier portions of the year (such as the lead up to the RSP contribution deadline), the forum chatter continues to show that money doesn’t sleep nor does it take a vacation for the summer. There are still plenty of people out there curious about brokerages and their offerings.

It’s an interesting strategy to pull back going into the summer, especially considering the competitive landscape.

One of the challenges many of the bank-owned brokerages have is how DIY investors will differentiate between these brokerages. In a forum thread on Canadian Money Forum earlier this week, a user by the name of CalgaryPotato nailed it by saying:

“Most of the big banks are pretty similar with their do it yourself investing accounts”

While the discount brokerage rankings might argue otherwise, there’s clearly a growing perception that a bank-owned online brokerage is a bank-owned online brokerage.

With that in mind, it was interesting to see brokerages such as BMO InvestorLine back away from the $100,000+ deposit segment for the moment by retiring a deal geared towards that group and replace that deal link on their homepage with one that describes all of the recent discount brokerage ranking awards they’ve won. That leaves Scotia iTrade as the sole bank-owned brokerage that has a (non-referral) promotion for that segment.

Compared to the past few months, there’s a definite dip in discount brokerage promotion activity at the outset of this month (and it is still early in this month). The fact, however, that a dozen or so brokerages have to find ways to get investors not only to know that they’re out there but also to get excited suggests (and perhaps necessitates) bigger, bolder moves on the promotion horizon.

Interactive Brokers on Data-Driven Roll

With the rollover into a new month, Interactive Brokers has once again published their trading stats for the previous month (June). While Interactive Brokers has historically provided a great deal of information about its trading activity, recently there have been additional disclosures that provide a very interesting window into the world of online trading in the US as well as the inner workings of a discount brokerage.

Although most of their metrics of interest are slightly off last month’s pace, one of the most interesting ones that is up is new accounts. Interactive Brokers gained 18% on a year over year basis and 1% on a month over month basis to come in at 310,000 accounts. While that might pale in comparison to the number of accounts at some of their bigger competitors, those accounts placed an average of 447 (annualized) trades per account which works out to about 37 trades per month. Also interesting to note is their average commission for stock trades is $2.66 with an average order size of 2795 shares. Clearly these aren’t the typical buy and hold types.

On a year over year basis, however, the figures are still fairly impressive: 21% higher trades cleared, 22% higher client equity and 23% higher margin loan balances.

While it is unfortunate for Canadian DIY investors that this kind of transparency and granularity doesn’t exist with discount brokerages here, what these numbers paint a picture of is an online brokerage that continues to grow and win new clients who are active traders.

Rankings and ratings may help the cause of getting attention, but these kinds of figures reflect individual traders voting with their dollars and they have been for some time now.

Protecting Seniors

An interesting article on the potential for fraud or mishandling of seniors’ funds via brokerage accounts highlights the current landscape facing older adult DIY investors in the US are facing.

The groundswell of an aging population combined with the proliferation of technology that makes financial transactions so effortless means that brokerages may find themselves in the position of having to police their client’s trading habits.

The demographic shift has not been lost on the discount brokerage (and wealth management more generally) industry.

About a year ago, BMO InvestorLine published results of a study they commissioned on the rise in wealth transfer that could accompany an aging population. More recently, BMO Wealth Management also published a series of papers on caring for aged parents as further recognition of the impact that aging individuals will have on the financial services requirements of older adults and those who care for them. Also, Canadian Securities Administrators have placed a special emphasis on educating and empowering individuals and especially seniors about recognizing fraudulent investment opportunities.

As more investors start aging, however, the questions being debated now in the US will inevitably come up regarding Canadian investors. Given the extent to which policies in the U.S. tend to shape decisions here in Canada, this will be an interesting issue to follow in the months to come.

Event Horizon

This upcoming week there are a flurry of investor education opportunities. If you’re looking to learn about options, the technical indicator MACD or some basics on options or short selling, check out one of the sessions below.

July 7

NBDB – Introduction to Technical Analysis: Trends – [Fr]

Scotia iTRADE – Trading Options in 3-D with Pro Market Advisors

TD Direct Investing – Chart Smart – Using the MACD

July 8

TD Direct Investing – Introduction to Investing in Options

July 9

TD Direct Investing – Understanding Margin & Short Selling

Discount Brokerage Tweets of the Week

This week on social media there were a number of interesting glitches on data feeds that got the attention of a few DIY investors. Mentioned this week are BMO InvestorLine, Questrade, Scotia iTrade, TD Direct Investing and Virtual Brokers.

From the forums

Dress Rehearsal

Diving into the world of investing head first is something most beginner DIY investors should probably rethink. On the other hand, wouldn’t it be nice to be a total expert before putting real money on the line? Of course folks have to take the plunge at some time, however it is always better to learn the ropes with a safety net in place. In this post from the reddit Personal Finance Canada section, there are a number of interesting suggestions put forward to one reddit user who wanted to get the hang of investing before playing for keeps.

Coming up Short

When it comes to trading online, there’s probably one law that every DIY investor (and perhaps discount brokerage too) should keep in mind: Murphy’s Law. Yes, a healthy dose of paranoia is always in order when considering just how many moving parts there are to executing a trade and just what can go wrong in the process. With that scary prelude out of the way, this post from the RedFlagDeals investing forum highlights what went wrong for one investor trying to go short.

Into the close

That’s a wrap for this week’s discount brokerage roundup. In case you missed it, June was extended by an extra second (the ‘leap second’) and if that doesn’t seem like much, here is something interesting to watch that showcases some spectacular leaps that can happen in much less than a second. Hope you find lots of great reasons to jump for joy this weekend!

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Discount Brokerage Deals and Promotions – July 2015

Summer is a great time for taking vacations, staycations and generally taking it easy. While Canadian discount brokerages are keeping busy behind the scenes, heading into July it looks as though most of them have given the deals and promotions a break to cool off.

At the start of this month there are 14 offers currently available from seven different brokerages. Of those, nearly half (43%) come from Questrade, signaling once again that Questrade is the discount brokerage offering the most deals or incentives of the field.

With some rather prominent discount brokerages on the sidelines, it will be interesting to observe just how much traction brokerages like Questrade may gather in the summer simply because the field is less crowded. If history is any indicator, however, they won’t be left unchallenged for too long and the field may ramp up rather quickly once this holiday-shortened first week has passed.

Expired Deals

Several noteworthy deals came to an end in June. Among the most interesting was Virtual Brokers’ 25 free trade offer. Questrade launched a 25 trade offer of their own however with Virtual Brokers electing to not renew this particular deal, there is a definite gap in the segment of offers that allow clients ample time to use them. Another interesting observation was that BMO InvestorLine decided to let their ‘Five Star’ promotion come to an end. For the moment, this means that BMO InvestorLine is not currently advertising an offer geared towards large deposit accounts. Finally, Scotia iTrade and Questrade both had offers that expired in June.

Extended Deals

With so many deals scheduled to expire at the end of June, there were bound to be some extensions granted. In this month’s case, there were 3 offers that had their deadlines extended. First on deck, BMO InvestorLine extended their youth promotion (this go around naming it “phase II”) until the end of August. Next Desjardins Online Brokerage bumped the expiry date of their $500 commission rebate offer until the end of September as did Scotia iTrade with their refer-a-friend promotion.

New Deals

Late last month, Questrade launched a cleverly worded promotion that gives clients 25 commission-free trades which are good through the end of 2015. This deal requires a deposit of at least $25,000 in order to be eligible for the commission-free trades. See table below for more details.

As always if there are any offers that we may have missed or that you would like to share, feel free to drop us a note directly or to post in the community section for deals & promos.

Discount Brokerage Deals

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion 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, $50 cash back and potentially waived account minimum fees. Use promo code “YOUNG” when signing up. Be sure to read the terms and conditions for more details on the offer. A) for commission free trades: n/a B) for cash back: $25,000 A) 35 commission-free trades B) $50 cash back + 35 commission-free trades 90 days Youth Promotion August 31, 2015
Open a new account with HSBC InvestDirect and you may be eligible to receive up to 30 equity trades (North American listed equities only) commission free. Only trades placed within the first 60 days of account opening will be eligible. Be sure to read the terms and conditions for full details on this offer. n/a 30 commission-free trades (commission will be rebated within 90 days after 60 day trading period) 60 days HSBC InvestDirect Summer Promotion Terms & Conditions August 31, 2015
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
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions; Code Number: 476104302388759 none
Open and fund a new account at Questrade with at least A)$1,000, B)$25,000 or C)$50,000+ and you could be eligible to receive either A)1 month, B) 2 months or C)3 months of commission-free trading. Use offer code UNLIMITED2015 when opening an application to qualify. Be sure to read full terms and conditions on this offer. A)$1,000 B)$25,000 C)$50,000 A) 1 month commission-free trading B) 2 months commission-free trading C) 3 months commission-free trading (*note trading commissions will be rebated within 10 business days of trade execution) A) 1 month B) 2 months C) 3 months Unlimited Trading Promotion August 31, 2015
Open and fund a new account at Questrade with at least $5,000 and complete at least one commission-generating trade and you may be eligible to receive a $50 gift certificate from Amazon. Use promo code AMAZON2015 when signing up to qualify. Be sure to read the terms and conditions associated with this offer. $5,000 $50 Amazon gift certificate Gift certificate emailed within 30 days of eligibility requirements being met. Amazon gift certificate promotion July 30, 2015
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 September 30, 2015
Scotia iTrade Open and fund a new Scotia iTRADE account with at least A) $15,000 – $49,999; B) $50,000 -$99,999; C)$100,000 – $249,999; D)$250,000 – $499,999; E) $500,000 – $999,999 or F)$1,000,000+ you may be eligible to receive a corresponding cash back or commission rebate. For commission-free trades use code: THSP15 or for cash rebates use code: RNYDMN. Be sure to read the terms and conditions carefully for rebate and cash back eligibility. Contact Scotia iTRADE for full details on this offer. A) $15,000 – $49,999 B) $50,000 -$99,999 C) $100,000 – $249,999 D) $250,000 – $499,999 E) $500,000 – $999,999 F) $1,000,000+ A) 50 commission-free trades OR $50 cash back B) 100 commission-free trades OR $100 cash back C) 250 commission free trades OR $250 cash back + KeeneOnTheMarket Subscription D) 350 commission-free trades OR $350 cash back + KeeneOnTheMarket Subscription E) 500 commission-free trades OR $500 cash back + KeeneOnTheMarket Subscription F) 1000 commission-free trades OR $1,000 cash back + KeeneOnTheMarket Subscription 120 days for commission-free trades Cash back to be deposited by February 13, 2016. $1000 or 1000 free trade offer September 13, 2015
Open and fund a new registered or margin online trading account with Questrade with a deposit of at least $25,000 and you may be eligible to receive up to 25 commission free trades. Use promo code “TRADEFREE15” when signing up. Be sure to read full terms and conditions. $25,000 25 commission-free trades Trades good for use until December 31, 2015. Canada Day Campaign July 31, 2015
Disnat Disnat is offering new & existing clients $500 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 1-866-873-7103 and mention promo code Disnat500. See details link for more info. $50,000 $500 commission credit 6 months Disnat $500 Commission Credit Promo September 30, 2015
National Bank Direct Brokerage is offering either A) a 16GB iPad Mini or B) $300 cash back to new clients who sign up for the InvestCube service and deposit at least $50,000. Use either promo code “Mini2015” for the iPad or “Cash2015” when signing up to be eligible for this offer. Be sure to read the terms and conditions of this promotion carefully. $50,000 A) iPad Mini (16GB) B) $300 cash back Within 45 days of the eligibility date either A) the order for the tablet will be processed or B) cash back will be credited to the account. InvestCube Tablet or Cash Back Promotion August 31, 2015
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 – $249,999 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). BMO InvestorLine Refer-a-Friend October 30, 2015
Open a new account (registered, margin, or FX & CFD) with at least $100,000 in new assets and execute at least one commission-generating trade and you may be eligible to receive an Apple Gift Card worth $500.00. Use promo code APPLEWATCH2015 when registering. Be sure to read the full terms and conditions on this offer. $100,000 $500 Apple Store gift card Apple Store gift card will be emailed within 30 days of eligibility requirements being met. Apple Gift Card Promo August 31, 2015
Last Updated: July 1, 2015 15:15 PT

Transfer Fee Deals

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Scotia iTrade Transfer $15,000 or more to Scotia iTrade from another Canadian brokerage, and iTrade may pay up to $150 in transfer fees. $150 $15,000 1000 Free Trade or $1000 Cash Back Offer September 13, 2015
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
Transfer $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion. $150 $25,000 Credential Direct Transfer Fee Rebate none
Qtrade Investor Qtrade Investor will reimburse your transfer fee up to $150 when transferring a balance of $10,000 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. $150 $25,000 Transfer Fee Rebate 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
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 confirmed with reps. Contact client service for more info (1-800-567-3343) none
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
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 1-866-873-7103 and mention promo code Disnat500. See details link for more info. $150 $50,000 Disnat $500 Commission Credit Promo September 30, 2015