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Discount Brokerage Weekly Roundup – March 4, 2016

While much of Canada (save for the Wet Coast) has been digging out from under piles of snow, it seems like Canadian stock markets have also managed to dig themselves out from underneath the recent avalanche of bad news. For Canadian discount brokerages, the turn in the markets has been a welcome relief, and they’re gearing up to try and ‘make it rain’ as they head into the next busy stretch in the calendar.

In this week’s roundup, we take a slightly deeper focus on the deals and promotions developments that occurred this week. Specifically, we recap the deals action that unfolded at the outset of the month and highlight one specific brokerage’s launch of a referral program that is the focal point of the second part of the roundup. From there, we’ll take a look at the latest chatter from investors on Twitter – especially in the face of several major network outages, as well as what DIY investors had to say across the forums.

Kind of a Big Deal

With the RRSP contribution deadline now in the rear-view mirror, many brokerages are likely taking a moment to catch their breath before the next big push comes along with tax return season. That break, however, will likely be short-lived.

In the deals and promotions section this month, there are already signs that promotional offers over the next two months will continue at a relatively significant pace, especially from ‘the usual suspects’ Questrade, BMO InvestorLine and Scotia iTrade. Interestingly, it appears that there are also several other brokerages that are stepping up promotional activities.

Heading into a new month, there’ve been a number of interesting developments to report.

The biggest news on the deals and promotions front was that Virtual Brokers launched a refer-a-friend campaign that runs until the end of May. This was an interesting maneuver because the offer itself looks to compete directly with what Questrade has put together for its refer-a-friend campaign (although Questrade’s offer is not a ‘limited time’ promo). More on that in just a moment.

In addition to Virtual Brokers’ deal, Questrade also timed their latest promotion around a tax season theme by teaming up with H&R Block to provide free access to H&R Block’s Platinum tax return preparation software. Rounding out the new promotions heading into March, Qtrade Investor lowered the minimum deposit level amount to have transfer fees covered to $10,000 (for which they’re willing to cover up to $150 in transfer fees).

The introduction of these three offers offsets the two Questrade deals that expired within the first week of March as well as their New Year’s year-long free trade promotion that concluded at the end of February. BMO InvestorLine extended their cash back + free trade promotion out into May, rebranding it as a ‘spring’ promotion instead of a ‘winter’ one.

Another piece of exciting news on the deals and promotions front is that we’ve improved the way deals and promotions are being covered here on With the number and type of offers growing in size and complexity we felt it was time to evolve the deals and promotions section so that deals are easier and faster to research and evaluate.

To that end, there are now four categories of deal types which allows folks researching deals to get a better handle on what kinds of offers are being put forward.

Going forward, the deals section will be divided into four main categories:

  1. Commission Free/Cash Back Offers (11 currently live)
  2. Referral Programs (4 currently live)
  3. Transfer Fee Programs (10 currently live)
  4. Other promotions (4 currently live)

We’ve also reported the deals figures by each category, and, although we don’t expect the referral and transfer fee programs to be as volatile as the commission-free offers or the ‘other’ category, the recent deal from Virtual Brokers might touch off a few more creative responses from other brokerages.

Let us know what you think of the latest update by leaving your comments below.

Friend Zone

One of the most potent sources for new discount brokerage clients is actually other discount brokerage clients. Finance is one of those areas where there is clearly a lot of (well placed) skepticism from consumers towards providers – both big and small. To quote a current US presidential candidate, trust is ‘Yuge’.

The fact that trust ‘trumps’ other factors like low commissions means that online brokerages that don’t have a physical storefront (the way that banks do) are at a strategic disadvantage when clients are doing their homework to figure if these online brokerages are, in fact, trustworthy. Typically, most consumer audiences turn to offline sources, like friends and family as well as the online sources such as traditional media or third party rankings/ratings when trying to figure out whether to go with one brokerage versus another.

Of course, in a world where the line between online and offline are increasingly fusing, the online world has made investors more readily accessible to other investors, which is why social media and investor forums, including the forums, are where individuals go to access feedback from other investors.

Screenshot of Questrade’s Group of Refer-a-Friend Program Header Image (source:

While there are many interesting dimensions to the referral program strategy, what is by far the most interesting angle to this is that companies that create a product or service experience worth bragging about will earn the attention and the business of other clients.

For Canadian discount brokerages, the real marker of whether or not a referral program will actually succeed is the degree to which people stand up and advocate on behalf of a brokerage – especially in the face the naysayers and in the moments where an online investor expresses frustration. Of course, the incentive amount also helps.

Virtual Brokers’ incentive structure is somewhat similar to Questrade’s in that referrers get a $25 cash bonus for each account they successfully refer and a bonus of $50 (on top of the $25) for every third account. A key difference, however, is the amount that the referee receives at either firm. Under Virtual Brokers’ plan, the payout amounts to either $25 or $50 whereas under Questrade, a referee may receive between $25 and $250 depending on the deposit amount.

Screenshot of Virtual Brokers’ Refer-a-Friend Program (source:

In an upcoming piece we will be looking at these two programs in much closer detail, however at this point it is worth noting that referral programs are an efficient way to lower the cost of acquiring a new client but they will only really work if the service makes existing clients happy.

Unlike the Questrade affiliate program (which is distinct from their refer-a-friend program), for example, in which anyone can receive a bonus for referring a client to Questrade, the friends and family referral plan from Virtual Brokers explicitly defines that friends and/or family of account holders are the only individuals eligible to take advantage of this offer.

For Virtual Brokers and indeed all online brokerages who are considering referral programs, in order for existing clients to have the enthusiasm to put their own endorsement behind the product experience, there also has to be an extra investment in service levels to make the product worth advocating for as well as time spent to improve public perception. In comparing Questrade to Virtual Brokers in this regard, Questrade has a definite head start.

This latest move will be an interesting test to see whether or not Virtual Brokers can capitalize on its service record to date and if existing clients will be more inclined to step forward to advocate on their own Virtual Brokers experience.

Discount Brokerage Tweets of the Week

This week, the technology gremlins seemed to be all over TD Direct Investing’s WebBroker platform showing that regardless of size, technology can make or break an online trader’s day. Mentioned this week are BMO InvestorLine, Questrade, Scotia iTrade and TD Direct Investing.

Event Horizon

Details for this section were not available at time of publication and will be added when available.

From the Forums


What is considered a normal amount for brokerage fees? That was one question asked in this post from Canadian Money Forum by a user curious about whether what they would pay in commissions for ETFs may be too much.

Not So Simple Addition

When setting up an RESP, who should the caregiver be on an account? That was the question asked on reddit by a new parent setting up a new account with Questrade. Read what the community volunteered in terms of their experience with RESP rules & regulations.

Into the Close

That’s a wrap on this week’s roundup. It seems with each passing day there’s more and more coverage of the US presidential candidate Donald Trump. For some entertaining food for thought, here’s this past week’s latest crazy twist in the race. Stay warm and enjoy the rally while it lasts!

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