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Discount Brokerage Weekly Roundup – April 29, 2016

It’s hard to believe but here we are at the end of April. For some, it’s a sprint to the tax filing deadline. For sports fans, it’s been a lottery filled week with ‘mathletes’ trying to calculate who pick up prospects in the NFL and NHL. Of course, Canadian discount brokerages know all too well the value of being a first round pick for DIY investors – and they also fortunately know not to tweet embarrassing videos of themselves (at least they haven’t yet).

In this week’s roundup, we take a look at the latest Canadian discount brokerage comparison to see which brokerages ended up gaining accolades. Next, we take a look at a fascinating court case involving a trade gone wrong and a discount brokerage on the bad end of an unhappy trader. From there we cap off this week’s roundup with a look at more unhappy traders in the discount brokerage tweets of the week and close out with chatter from the investor forums.

Comparing Canadian Online Brokerages

This past week, the latest ranking and comparison of Canadian discount brokerages hit the digital news stands as Monysense published its guide to online brokerages (the digital edition of the June issue is now available to digital subcribers). Authored by Dan Bortolotti with research and commentary provided by Glenn Lacoste of Surviscor, this is the fourth year in which Moneysense has collaborated with Surviscor to provide an overview of the Canadian discount brokerage space.

Comparing online brokerages is not an easy task. With more than a dozen providers and so many features to consider, it’s great to have summaries and commentaries to help provide some perspective and hopefully narrow down the research required.

Unlike most of the other rankings and ratings of Canadian discount brokerages, the Moneysense approach tends to segment out top brokerages by key features or by the specific types of investors (e.g. beginner investors) that would find a particular brokerage attractive. In addition to the commentary, they usually also provide a good summary table that organizes a lot of the information DIY investors care about.

This year’s edition of the table has a neat inclusion of robo-advisors ETF services available at three brokerages: BMO InvestorLine, National Bank Direct Brokerage and Questrade (although most of these brokerages would not characterize their service as a “robo-advisor”).

Of course, when it comes to comparing brokerages, the devil is always in the details. And, as a recurring reminder to readers of, it’s important when looking at rankings and ratings to try and understand exactly what’s being measured and driving the title of “best online brokerage”.

To that end here are a couple of interesting items that stood out.

First, it was interesting that instead of crowning a “best online brokerage” overall Moneysense chose two categories that distinguish brokerages: either bank-owned brokerages or independent brokerages. The following table shows the breakdown of category winners and honourable mentions.

Category Top Pick Honourable Mention
Getting Started BMO InvestorLine Virtual Brokers
Ease of Use Scotia iTRADE Questrade
Fees & Commissions Questrade Qtrade Investor
Customer Service Qtrade Investor Scotia iTRADE
Reporting & Record Keeping Scotia iTRADE BMO InvestorLine
Market Data TD Direct Investing Credential Direct
Best Overall Bank-Owned Scotia iTRADE BMO InvestorLine
Best Overall Independent Qtrade Investor Questrade

While the distinction between bank-owned and independent does exist, the piece did not really dive into why this was a critical distinction to make.

As a result it was a challenge to get an ‘apples to apples’ view of the online brokerage field especially since both independent and bank-owned brokerages were compared side by side according to particular features.

Another interesting component to the comparison was the reporting of the average time to respond. As was drilled into me by multiple university stats profs, the average alone is not as informative as knowing both the average and standard deviation. Reporting the range and number of attempts at each firm would give a much clearer picture of how consistent that average really is.

Finally, a place in which readers should be cautious with this comparison is in the standard commission fee category.

Given the importance of the standard online commission fee for equity trades to consumers who want to find out how much they would presumably have to pay per trade, the way in which these numbers were reported was slightly confusing.

In particular the standard equity trade for Scotia iTRADE is reported as $9.99 per trade which happens to only be true for individuals whose account is worth at least $50,000. For individuals who do not achieve that threshold, the standard equity commission is at least $24.99 per trade. Unfortunately the “basic” commission at Scotia iTRADE according to this table seems like it is $9.99 (the fact that it is $24.99 is reported in the next row). The fact that a minimum account value is required in order to receive a ‘basic’ value is confusing, especially since it would imply that $50,000 is a ‘basic’ balance. Further, it would mean that HSBC InvestDirect’s commission would be $8.88 per trade at that balance level and not the $9.88.

Another caution is in the choice was to not mention CIBC Investor’s Edge as having the lowest commission structure under the fees & commissions section. At $6.95 flat per trade, this is one of the most competitive standard equity trade commissions available to DIY investors, including those investors making frequent small trades. In particular it is the fact that the commissions are capped (inclusive of ECN fees) that makes CIBC Investor’s Edge (and any brokerage that caps fees) a compelling choice.

While the Moneysense discount brokerage ratings do offer a unique, user oriented overview, it’s clear that there’s lots of information for DIY investors to try and digest when comparing.

Ratings and summaries such as this do help with navigating the maze of data however it is always important to check brokerage fee schedules and the fine print as many of the terms/conditions can’t easily be captured or communicated in one easy view.

Oh no he DI-n’t

If you’ve ever been blown out of a bad trade and/or been on the unfortunate other end of a margin call, it can be about as much fun as a root canal, perhaps less so. Examples abound on Twitter and in forums, however, of traders who’ve had trades go the wrong way on them in a hurry and as a result have to take a significant hit. When it happens, it’s not pretty.

That said, there was an incredibly interesting (for those keenly following the discount brokerage space) case where one trader got caught (or taken) offside and tried to take their online brokerage to court for over $340M in damages.

The brokerage in this case was TD Direct Investing and (sorry for the spoiler) no, the trader was not successful in his attempt to claim anything back for his trades gone wild.

Given the length and detail of the examination and case, there is a trove of interesting stuff in the court filings. For those that don’t want to wade through the 14 thousand words, here are some of the highlights:

First, options trading is risky. And, while risky is a term that is synonymous with trading, it’s important to spell it out: when DIY investors trade, they risk losing their money. And when trading on margin it means that you can lose a considerable amount of it.  For added edutainment, here’s a South Park clip from Margaritaville that nails it:

The trader in this case (Frank Oktay Turkson) got caught offside when a company he had written put options on went belly up (the stock was GTAT). So, while he did manage to get himself a premium of about $14K (and paid a commission of $47.49 USD) the loss more than wiped out any gains he would have received (he also had to pay $43 commission for the assignment). The fact that he had his other securities liquidated to meet the margin call was a rather unpleasant lesson in the powers that brokerages have to ensure that an account is kept within its stated risk limits.

In this case, it was interesting to see it pointed out that ‘discount brokerages’ do NOT provide advice or recommendations on where or how to trade. Discount brokerages simply communicate over and over again in the terms and conditions, and in the sign up forms (account opening documents) that trading involves potential for financial loss and that by opening an online brokerage account, DIY investors accept that they could lose money.

This is even more so the case with options. This was a case where in spite of having gone through the terms and conditions, and having signed that they understood them, a trader got burnt and tried to go after the brokerage for margin call and loss on the position.

One of the most interesting revelations from this court case was that a brokerage has the option to liquidate a margin position whether or not the position is at a loss. This implies that even a high flying gainer on margin can be shut down at the brokerage’s discretion.

If there’s one takeaway it’s that the documentation that brokerages provide at the outset of opening an account basically protects them from having to take responsibility in the case that things go wrong on a particular trade. Discount brokerages are a business and they are not prepared to take on someone else’s risk or subsidize a risky trader with margin.

DIY investors need to be aware that the risks of trading and financial loss are seldom presented with as much excitement or fanfare as the prospect of winning or the ease with which trading can occur. The conversation is definitely in favour of “making money” and how easy it is to trade rather than stating how easy it is to lose money.

Options are especially risky so it is important to be clear on how they work and how to manage the risks associated with them before trading them. Unfortunately for the trader, they had to learn a very expensive and hard lesson that when it comes to DIY investing, it’s every party for themselves.

From the Forums

Counting Potatoes

While the ‘couch potato’ approach to investing is popular with many investors, it’s important to know what buying and rebalancing will cost in terms of trading commissions. In this post from reddit’s Personal Finance Canada section, one investor heeds some handy math when considering RBC Direct Investing for their ETF investing strategy.

Need a Joint?

Wedding season is soon to be upon us. As couples tie the knot they may start to find their finances starting to also get a little more complicated. In this post from Canadian Money Forum, one user asks about a potential joint TFSA with Credential Direct. Find out the interesting feedback that helped shed some light on how TFSA’s work and how to access a spouses account.

Into the Close

That’s a wrap for this week. In case you missed it, today was also International Dance Day and there was a running man challenge, both of which were captured in this football themed video courtesy of ‘Gronk’ of the New England Patriots. That’s a whole lot of meme action to close out the week (triple witching meme?). Enjoy the rollover into May and have a great weekend!

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Discount Brokerage Weekly Roundup – April 22, 2016

With storm clouds thicker than this week’s 420 protests-turned-celebrations and tension greater than the imminent showdown coming in the next installment of Game of Thrones, it seems the fog of war has set in with online brokerages. On the home front, things are nervously quiet, however from the revelations this past week in the US, the battle of the brokerages south of the border is raging.

In this week’s roundup, we extend our coverage of the latest performance of the major online brokerages in the US to glean where the industry there (and eventually here in Canada) is headed next. From there we’ll update the latest move from one independent brokerage that suggests a shift in strategy that other brokerages have yet to respond to. As always, we’ll scan the latest chatter from investors on social media and investor forums and also highlight some of the upcoming investor education events.

Quest for the Best

Last week we reported on the latest earnings from Schwab. This week saw earnings releases from the three other major publicly traded online brokerages in the US: E*trade, Interactive Brokers and TD Ameritrade.

Collectively, these four brokerages earned just under $2.5B (USD) in revenues and $1B USD in net income for the quarter. Overall, each of the firms posted relatively strong performances in the quarter, attracting new accounts, in some cases breaking records for earnings and trading activity.

Aside from these mind-boggling numbers (especially when compared to Canadian online brokerages) the real story is revealed by reviewing what gets said on the earnings call which feature commentary from senior executives (often CEOs and CFOs) as well as questions from analysts that cover these companies.

One of the biggest themes from this last set of earnings calls had some very real concerns about the impact of the latest investor protection measures (the “Fiduciary Rule”) being implemented in the US.

While the mammoth (apparently 1000 page long rule) being put forward by the US Department of Labor (DOL) impacts retirement accounts specifically and what it means to be considered a ‘fiduciary’ the online brokerages are still digesting exactly what the requirements and costs to meet those requirements will be. Ironically talking about the sheer volume of added paperwork this rule has generated and will generate on Earth Day underscores the unintended consequences of well-meaning regulation.

This push towards greater investor protection, especially within the ‘advice-based’ or managed wealth realm is not unlike the CRM2 regulations being phased in here in Canada. The goals of achieving greater transparency on fees charged for services and for improving the disclosure from financial advisors are aligned in both cases, although it appears the Canadian approach is less onerous.

While the DOL rule and CRM2 may make it more challenging for some advisors to convince investors to park their money in the ‘managed’ space, this move actually may play out in favour of the self-directed account providers. The thinking is that when investors see what they are being charged for their funds or for the advice they’re being provided, they’re likely to consider alternatives.

In addition to the self-directed route, one of those alternatives happens to be robo-advisors – a seemingly middle ground solution between the ‘human’ advice world and the DIY investor option.

Interestingly, after the DOL Fiduciary Rule concerns, robo-advisors and fintech appeared to be the ‘next big thing’ on the minds of analysts and executives. Specifically, all the brokerages were asked about robo-advisors and the extent to which they are either gaining traction (such as at Schwab which has pulled in $6B in assets within a year) or are not (such as with Interactive Brokers).  That said, there is a definite recognition of the importance of fintech.

One of the more interesting remarks came from the CEO of E*trade Paul Thomas Idzik who stated that they’re clearly interested in expanding the banking functions that a fintech solution could provide to their business. In other words, even though they’re an online brokerage, they’re looking to expand their financial services into what banks have traditionally done (such as bill payment and transaction processing).

The award for most interesting commentary, however, had to come from Thomas Peterffy, CEO of Interactive Brokers.

In response to a question from analyst Mac Sykes of Gabelli about the strategic direction of Interactive Brokers, Peterffy stated “Mac, I’m obsessed with trying to grow this to become the largest brokerage in the world. That’s the only thing I care about. I don’t care about the returns.”

Not only does this comment perfectly capture the intensely competitive nature of the online brokerage space within the US but it also shows Canadian brokerages that there are those in the space that have the capital and motivation to outperform those who don’t want to win badly enough.

Virtual Brokers Uptick

On this side of the border, the action is a bit sleepier. Nonetheless, this past week Virtual Brokers launched yet another promotion signaling their shift towards offering prospective clients more incentives and promotions than they have previously.

The latest promo from VB is actually a contest for a $500 Apple gift card (a promotion they’ve run previously) for individuals depositing at least $1,000 into a new Virtual Brokers account. Unlike many of the other promotions currently offered by Canadian discount brokerages, the ‘contest’ route doesn’t offer an immediate reward but it does offer those with low starting balances the possibility of getting another perk for signing up.  For the brokerages, however, this is a lower cost way of trying to attract new clients and/or leads for those who enter the contest.

While promotional activity at several other brokerages has geared down, it appears that Virtual Brokers (either by design or coincidence) is starting to ramp up their promotional strategy.

For VB the timing gives them an edge to get attention from DIY investors looking for an online trading account, especially since some of their closest rivals have elected to slow down in April. Heading into the end of the month, it should be interesting to see what May holds as even more offers (such as the free trade deal from TD Direct Investing) are scheduled to expire.

Tweets of the Week

This week’s tweets feature some interesting tech highs and lows. Mentioned this week are Questrade, RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

Event Horizon

Spring is in full swing, and it’s a glorious week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to options enthusiasts, those interested in networking with other investors, and technical and fundamental analysis. ETFs, a review of recent TD Direct Investing rate changes, and a fundamental landscape overview round out this week’s selection.

April 25

Desjardins Online Brokerage (Disnat) – ETFs as Precision Tools

TD Direct Investing – Stock Talk

April 26

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

TD Direct Investing – Understanding the Rate & Fee Changes Effective March 15, 2016

Desjardins Online Brokerage (Disnat) – Macro Masters Foundations Course

April 28

Scotia iTRADE – Beginner Options with AJ Monte

Desjardins Online Brokerage (Disnat) – Macro Masters Foundations Course

TD Direct Investing – Introduction to Fundamental Analysis

From the Forums


Given the interest all around in what’s going on with robo-advisors, it’s no surprise that DIY investors are starting to become a bit more curious about how effective (or not) the robo-advisor ‘promise’ will live up to the hype. In this post from the Financial Wisdom Forum, the topic of robo advisors rebooted with some more recent chatter on the subject.

A Series of Fortunate E-vents

While a lot of the conversation about brokerages online tends to skew negative, it was nice to see something positive emerge. In this post from reddit’s Personal Finance Canada section, one investor shares their experience with getting their TD e-Series funds.

Into the Close

Heading into the weekend, there is definitely a cloud hanging over music lovers with the passing of a musical genius this week. While the artist may gone, the art will continue to inspire. On that note here’s an encore performance showcasing a talent that the world will definitely miss.

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Discount Brokerage Weekly Roundup – April 15, 2016

While one basketball legend is retiring another one is seeing his star rise. Whether it’s professional basketball or the world of DIY investing, performance is what counts. For the race that is the Canadian discount brokerages landscape, however, coasting along is not an option.

In this week’s roundup, we take a look at continued signs of life with one online brokerage who is getting prepped to move deeper into the investor education space. Next we take a look at the latest results from online brokerage in the US to see what trends are emerging across the brokerage industry as a whole. From there we’ll preview the upcoming investor education events in the week ahead and close out the round up with comments from DIY investors on Twitter and around the investor forums.

Making the Grade

This first few months of 2016 have been busy for Virtual Brokers. After their recent commission price adjustments, Virtual Brokers has tried to distance itself somewhat from the “ultra low cost” discount brokerage image and in place of the label try to introduce features and services that offer up more value for the dollars being spent on commissions. A recent article in the Globe and Mail featured a quote from Virtual Brokers CEO Bardya Ziaian in which he stated “I want to go beyond the notion that Virtual Brokers is a cheap way of trading, we want to add value.”

In line with this move to offer greater value, Virtual Brokers appears to be ramping up efforts to provide additional market research information and education to DIY investors. Their latest move was noted this week as they announced a webinar in partnership with Morningstar to discuss the Morningstar economic moat feature. In addition to the webinar, there are also plans in the near term to offer more value-added research and analysis of markets to clients. While details are still to come, it’s clear that Virtual Brokers is actively moving towards a ‘value’ focused offering.

As one of the relatively newer entrants into the DIY investing space, however, Virtual Brokers still has to outcompete the massive amounts of advertising and marketing resources being spent by their peers. The boost in exposure by being crowned the top online brokerage in the Globe and Mail has certainly made a material difference to Virtual Brokers. And, in order to keep atop the standings, there has to be a clear focus on delivering innovative and useful features. In other words, for Canadian online brokerages, the best way not to be noticed is to stand still.

Let’s Get Digital

Earnings and quarterly reports from US online brokerages are kicking off once again. What’s particularly interesting about this round of reports is that Charles Schwab, the largest online brokerage in the US, has just crossed the one year mark since they launched their robo advisor service (or as they call it the ‘digital advice’ segment), and, according to the numbers, there are about 6.6 billion reasons to celebrate.

On a year over year basis, Schwab had very healthy gains in net revenues (+16% to $1.8B), net income (up 36% to $412M) and modest account growth (+3%). Part of the reason for those gains came from their robo-advisor segment which attracted $6.6B in assets in just over a year’s time.

Despite being an online brokerage, Schwab makes the majority of its revenue from interest revenue, asset management and administration fees whereas trading revenue made up 13% of net revenues for the quarter. And, while the volatility over February and March may have provided a 12% quarter over quarter increase in trading revenues, the notion of what it takes to succeed in the online brokerage space clearly points to having something more than trading revenues to keep you going.

The reason these numbers matter is because they clearly demonstrate that there is a market for the ‘managed wealth’ that appears to be outpacing the DIY trading segment. Further, it also shows how sensitive the earnings at online brokerages are to interest rate moves and why low rates are a challenge to the business model.

For Canadian online brokerages, there has clearly been an interest in following suit with Schwab’s model of deploying robo-advisors; Questrade and more recently BMO began offering these ‘digital advice’ products as a way to capture market share from the not-so-do-it-yourself crowd. Virtual Brokers also appears to be positioning themselves within this space as they were recent sponsors of the Morningstar robo-advisor conference.

While the scale of the US wealth management market is considerably larger than Canada’s, it is interesting nonetheless to see how online brokerages are going to have to adapt their offering and business for a robo-world. Earnings for E*trade and Interactive Brokers are also on deck for the upcoming week so the picture of where investors are (or aren’t going) will be even clearer heading into the end of April.

Event Horizon

Patio weather has arrived, and it’s a refreshing week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to options enthusiasts, those interested in international investing, and ETFs. Technical analysis, trading strategies, and a fundamental landscape overview round out this week’s selection.

April 18

NBDB – Technical Analysis with Mr. Gaetan Royer of Cobalt Investments – [Fr]

April 19

Scotia iTRADE – Dogs of the Dow – Easy as 1, 2, 3 with Pro Market Advisors

April 20

TD Direct Investing – Introduction to Investing in Options

NBDB – International Investing – [Fr]

April 21

Scotia iTRADE – Options Trading Using Technical Analysis with Montreal Exchange

TD Direct Investing – Introduction to Investing in Options

Desjardins Online Brokerage (Disnat) – Macro Masters Foundations Course

Virtual Brokers – Understanding Morningstar’s Economic Moat

Discount Brokerage Tweets of the Week

Spring is here. And while it brings flowers, and showers it also seems to bring bugs – at least for some. Mentioned this week are: BMO Investorline, Questrade, Scotia iTrade TD Direct Investing and Virtual Brokers.


From the Forums

Clouds Forming

For many investors keeping a handle on all of the official slips and forms and calculations can be, well, taxing. In this thread from reddit’s Personal Finance Canada section, however, the stress level for some of Questrade’s clients (and for many Questrade staff) spiked as it appears T3 forms for some clients were being sent to others. Whoops. The link is worth a read to see the reactions of investors as well as how Questrade stepped up to address the situation.

Green or Red?

It seems many investors looking for an online brokerage account tend to narrow the field down to a couple of choices and from there the hair splitting begins. In this post from’s investing forum, the community weighs in on TD Direct Investing vs CIBC Investors Edge vs Questrade.

Into the Close

That’s a wrap for this week. With earnings season in full swing and a rally that nobody seems to trust, the next week will be fun one for traders. In the meantime, enjoy the spring weather and the human highlight reel that is Kobe Bryant (arguably a great DIY’er) in his last game.

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Discount Brokerage Weekly Roundup – April 8, 2016

While April showers might bring May flowers, April is also about the time to start nervously watching the calendar for the ‘sell in May and go away’ moment. For many Canadian online brokerages, however, the hope is that wherever investors decide to go this spring, that they take their brokerage account along for the ride with a smartphone.

In this week’s roundup, we keep it nice and light (we have to enjoy the great weather sometime right?) and take a look at the latest online brokerage to release a new client website.  From there we’ll take a look at a very handy resource for DIY and mainstream investors to enhance their own financial literacy. As usual, we’ll include a look the latest chatter from investors across social media and from the investor forums.

A Classic Move

Another week, another website release. Following on the heels of RBC Direct Investing’s announced rollout of a new website last week, this past week Desjardins Online Brokerage announced that they are launching a new client website for their Disnat Classic account type.

In 2015 Desjardins Online Brokerage unveiled their current website and their latest rollout of an update to the Disnat Classic website provides users with a consistent, clean look and feel. According to their description of the new website, the new ‘classic’ interface will create an easier navigating experience especially around account management.

Even though their branding has changed some time ago, Desjardins Online Brokerage still uses their original branding of Disnat for the two primary DIY accounts offered to investors: Disnat Direct and Disnat Classic.

While Disnat Direct is geared towards more active investors/traders, the Disnat Classic product is geared towards less active investors. And, as such, the new Disnat Classic interface does a good job of catering to the specific needs of the long-term or less active investor.

Screenshot of Disnat Classic’s new website teaser.

One of the great features of the new roll out is the support material that accompanies it. Desjardins has put together a solid selection of tutorials that walk users through the basics of navigating the new layout as well as performing key tasks (such as entering an order or managing accounts).

As far as interfaces go, the classic platform strikes a good balance between usability and features that investors/occasional traders use. In particular, there are handy research tools such as charting and analytics all within the same page and a ‘research’ tab offers more in-depth fundamental insights. While several of these tools (such as Recognia and Morningstar) are available with other brokerages

Similar to the rollout of their refreshed site just over a year ago, this new site for Disnat Classic users offers an interface geared towards modern investors.

The ability to access their new site across multiple devices and screens is even more appropriate for investors who want to stay informed about or manage their account on the go. What continues to be clear though is that Desjardins Online Brokerage continues to focus on user experience and it may just be a matter of time before more and more investors take notice of the efforts being made.

In the Loop

For individuals that are looking for a trusted resources to learn about current events impacting investors, there is a great resource in the newsletter from the Investor Office of the Ontario Securities Commission.

This week’s edition of their newsletter features a great selection of articles on topics such as the risks of binary options and understanding mutual fund series. In fact, there are a number of articles and alerts related to the dangers of binary options and binary options providers that most investors ought to read and stay on top of.

Launched at the end of October 2015, the Investor Office is specifically focused on providing quality information about finance and investing to ‘main street’ investors. And, while the content does definitely contain geographically specific information, the bulk of the material contained pertains to investors across Canada.

To sign up for their newsletter or to access previous issues of the Investor News, click here.

Discount Brokerage Tweets of the Week

Event Horizon

Spring has sprung, and it’s a spectacular week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to options enthusiasts, yield hounds, and those who are new to investing. ETFs, technical analysis and trading strategies round out this week’s selection.

April 12

NBDB – Equities and ETFs – [Fr]

TD Direct Investing – Introduction to Fixed Income

Scotia iTRADE – Leveraged and Inverse ETFs – Understanding them and strategies for using them with Horizons ETFs

TD Direct Investing – Options Trading Using Technical Analysis

April 13

TD Direct Investing – Introduction to Investing in Options

April 14

TD Direct Investing – Introduction to Technical Analysis

Scotia iTRADE – Top Ten Investor Myths with AJ Monte

From the Forums

Green with ETF envy

ETF providers may be more than a little green with envy as TD’s six new ETFs commanding quite a bit of attention this past week in a couple of posts (here and here) on Worth a read for those considering what TD may have to offer with the ETF mix.

Small Potatoes

Every investor has to start somewhere. For this investor from reddit’s personal finance Canada section, using Questrade’s RESP for a couch potato portfolio required a little bit of help from the DIY community.

Into the Close

That’s a wrap on another crazy week. Wherever you happen to be when reading this week’s roundup, don’t forget to take some time out to relax from behind the screen to have a little fun. In the meantime, for those considering the ‘sell in May’, here’s an idea that can get you in the summer spirit. See you next week!


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Discount Brokerage Weekly Roundup – April 1, 2016

Welcome to April. While there may be pranks and gags to kick off the start of a new month and a new quarter, it seems like some Canadian discount brokerages are taking the chance to start anew a little too seriously.

In this week’s roundup we take a look at the latest deals action that shows some interesting changes to the makeup of the brokerage landscape. From there, we’ll take a look at a major online brokerage that sees nothing but upside as they bet big on technology. Technology also seems to be the focal point for many DIY investors on Twitter in this week’s tweets summary albeit for those brokerages that are still struggling with bugs. We close out the roundup with more interesting chatter about commission pricing from the investor forums.

Out with the Old

It looks like Canadian discount brokerages have taken spring cleaning seriously this year, especially when it comes to their deals and promotions.

Heading into a new month, the number of commission-free trade and cash back offers from Canada’s online brokerages saw a sharp decline, with a significant number of offers expiring at the end of March. While many of these deals were deployed specifically to capitalize on the seasonal interest in RSP accounts, only a handful of brokerages have standing offers that ran alongside RSP season and into what is now ‘income tax refund’ season.

That said, there are still 19 offers that we’ve noted, which still provides many DIY investors interested in an online trading or investing account some kind of incentive to try one brokerage over another. Of course, the big unknown for many brokerages is whether DIY investors are turning to more passive or automated strategies (such as Robo-advisors) or interest in markets is waning in favour of other more popular investment types.

While the firm numbers of account openings and assets brought into each firm will give the best idea of what’s going on, there is something that is definitely different about the start of Q2 2016 – especially in the deals and promotions space.

Specifically, what stands out as interesting is that one of the most active brokerages (historically) in offering commission-free and cash-back offers, Questrade, is not significantly present in this category at the launch of a new month and new quarter.

In addition, Virtual Brokers’ move to offer an as yet unrivaled commission-free trading offer means that the winds of change appear to be blowing in the discount brokerage deals space. In fact, the new promotions page on Virtual Brokers’ website also signals they’re likely to be more active in offering promotions which will pose a challenge to all other players on the field.

While 19 or so offers is still substantial, it is unlikely that the deals and promotions field will remain this thin for much longer. Whether brokerages are going to mix up their promotional offers to more partner or product offers (VR headsets anyone?) or rely on the tried and true commission-free trade offer, one thing is clear – there is all of a sudden a lot more room for brokerages to make a splash by offering up a bold offer to DIY investors.

View from the Top

Not one to shy away from the spotlight, the CEO and founder of Interactive Brokers Thomas Peterffy, was featured in an interesting interview from The Wall Street Transcript in late March.

The interview itself offers a great overview of Interactive Brokers’ focus on technology and automating as much of their process as possible in order to achieve efficiency and also cost advantages over their peers.

Three points from this interview stand out: the role of robo-advisors, mobile trading and technological preparedness.

With regards to robo-advisors, it’s clear that Interactive Brokers sees this as a significant enough trend to get in on. In particular, their acquisition of Covestor as well as their investor marketplace are both moves that diversify Interactive Brokers away from just the DIY investor client. In fact, many of the tools mentioned by Peterffy resemble the automatic or more passive investor strategies that don’t fit their typical ‘active trader’ client base signaling a clear interest in going after the ‘managed wealth’ space.

Another area in which Interactive Brokers is signaling they’re going to push into is mobile trading. This is particularly challenging to get right for active traders, many of whom are still trading on a desktop (with multiple monitors). That said, there is definitely a balance between form, function and features when going from one screen size and device to another.

The success and resonance of the Robinhood app with mobile users signals that thinking ‘mobile first’ tends to favour functionality over features. Interactive Brokers’ platforms, however, are appealing because they are so robust. Fortunately, smartphones now are powerful enough to handle heavy applications, however usability will ultimately determine whether a trader feels comfortable enough stepping away from their desk and letting their phone be their lifeline to the market action.

Finally, the most ominous (for competitor brokerages) comment came at the end of the interview where Peterffy was asked about the landscape of the online brokerage industry in the next five years to which he responded “Five  years  from  now  the  industry  will  have  fewer and technologically more advanced participants…” The pace of technological change and the associated costs of keeping up with that technology means that Canadian online brokerages who aren’t able to fund this technological arms race will likely be made obsolete.

Discount Brokerage Tweets of the Week

Even though the weather was improving outside, storm clouds were brewing on Twitter. From platform outages, to delayed tax slips and frustrations with reporting, Twitter users didn’t hold back when it came to the shortcomings of Canadian brokerages. Mentioned this week were Questrade, RBC Direct Investing, Scotia iTrade, TD Direct Investing and Virtual Brokers.

From the Forums

A valuable lesson

Whether you focus on price or value is the job of marketing departments and sales staff being able to tell one story or the other. In this post from Reddit, there is definitely some debate over whether recent fee changes at Virtual Brokers represent an increase in price or an increase in value.

Sound Bites

An article on discount brokerage commission fees from the Globe and Mail’s Rob Carrick this past week stirred up a lot of strong opinions about the current perception of price and value across the Canadian brokerage landscape.

Into the Close

That does it for another week. Here’s a great little roundup of April fool’s day ideas that are surprisingly not all that far-fetched. Enjoy the sunshine if you’re lucky enough to have some this weekend!

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Discount Brokerage Deals & Promotions – April 1, 2016

People often look at springtime as a chance to clean house. And, for many of Canada’s discount brokerages, that is exactly what they did with the deals and promotions heading into April.

At the outset of this month, there are almost half as few deals being offered as there were throughout March which is a signal that online brokerages are stepping back as the summer season approaches.

Cash Back / Free Trade

Referral Promotions

Transfer Fee Promotions

Contests & Other Offers














The biggest decline was seen in the number of cash back or commission-free trades being offered however at the time of publication, several brokerages, such as Scotia iTrade and Virtual Brokers, still had the expired offers listed on their website raising the prospect of a potential extension from someone.

What is interesting is who has managed to keep a promotion alive through the spring turnover. Specifically, Virtual Brokers’ commission-free trading offer has definitely been on the radar of many deal hunters and the two bank-owned brokerages in the mix, BMO InvestorLine and TD Direct Investing, have much more attention thanks to the exit of so many other players.

There’s a high likelihood that many brokerages will be assessing where they need to go next now that the busy first quarter of 2016 is officially over. With tax return (and for many, tax refund) season now underway, we anticipate that the deals and promotions activity will start to pick up again in April.

For DIY investors, 19 discount brokerage deals on the table still means that there are still lots of options to consider, however with any deal be sure to read the fine print to know exactly what strings are attached.

Expired Deals

The list of expired  Canadian discount brokerages deals from last month is quite long. Here’s a quick list of what expired in March:

  • Questrade – Apple Watch ($500 Apple Gift Card)
  • Scotia iTrade – Free Trade Offer
  • Scotia iTrade – Refer a Friend
  • Virtual Brokers – RRSP 2016 Promotion
  • Credential Direct – Cash back offer
  • Questrade – 3 months free trading
  • Questrade – 3 months unlimited trading
  • NBDB – $500 or $1000 commission credit
  • HSBC InvestDirect – 30 commission-free trades

Extended Deals

Only one discount brokerage at the start of the month extended an existing offer. Desjardins Online Brokerage kept their $500 commission credit alive for another month extending the deadline for this offer out to April 30, 2016.

New Deals

No new deals to announce at the beginning of April.

Discount Brokerage Deals

  1. Cash Back/Free Trade/Product Offer Promotions
  2. Referral Promotions
  3. Transfer Fee Promotions
  4. Contests & Other Offers

Cash Back/Free Trade/Product Offer Promotions

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 Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2016
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive 3 months of commission-free equity trading and a $150 USD/mo credit towards Edge Trader Pro for 3 months. Use promo code sent at sign up to qualify. Be sure to read full terms and conditions for details. $5,000 3 months commission-free equity trading + $150 USD/mo platform fee rebate. 3 months 3 months free trading / Sign up form for promo code available here none
BMO InvestorLine Open a new qualifying account with BMO InvestorLine, and fund it with at least A) $100,000 or B) $250,000 in net new assets and you may be eligible to receive either A) $200 cash back and 100 commission-free equity trades or B) $600 cash back and 100 commission-free equity trades. Use promo code Spring1600 when signing up to be eligible. Be sure to read the terms and conditions for more details on the offer. A) $100,000 – $249,999 B) $250,000+ A) $200 cash back + 100 commission-free equity trades. B) $600 cash back + 100 commission-free equity trades. 60 days for equity trades. Cash back will be deposited the week of Oct. 10, 2016. Commission rebates will be paid week of Oct. 10, 2016. Spring 2016 Promotion May 31, 2016

Expired Offers

Open and fund a new account at TD Direct Investing with at least A) $25,000; B) $50,000 or C) $100,000+ and you may be eligible to receive up to A) 50; B) 100 or C) 200 commission-free trades. Be sure to read terms and conditions for full details. A) $25,000 – $49,999 B) $50,000 – $99,999 C) $100,000 A) 50 commission-free trades B) 100 commission-free trades C) 200 commission-free trades 60 days Commission-free Trading Offer April 15, 2016
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 April 30, 2016
Last Updated: May 9 9:45 AM

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
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
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 March 31, 2016
If you (an existing Virtual Brokers client) refer a friend or family member to open a new account with at least $5,000 you may be eligible to receive $25 cash per referral. For 3 or more referrals Virtual Brokers will add a $50 bonus. Referred individuals depositing either A) $5,000 – $50,000 or B) $50,000+ may be eligible to receive A) $25 or B) $50 cash back. Be sure to read the full terms and conditions carefully for full details. Be sure to read the terms and conditions to this offer carefully for full details. A) $5,000 – $50,000 B) $50,000+ Referrer: $25 per referral; $50 bonus for each 3 or more referrals. Referee: A) $25 B) $50 Cash to be deposited to VB account by August 15, 2016. Cash Referral Program May 31, 2016
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $50,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs after 45 days (subject to conditions). BMO InvestorLine Refer-a-Friend June 30, 2016

Expired Offers

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
Last Updated: May 1, 2016 21:30 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
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
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 at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to read terms and conditions for full details. $150 $25,000 Commission-free trade promo April 15, 2016
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

Expired Offers

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 April 30, 2016
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 $10,000 Transfer Fee Rebate April 29, 2016
Last Updated: May 1, 2016 21:30 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Credential Direct has partnered with Trend Micro to offer 50% off Trend Micro Titanium Internet Security. Use code “TrendCF” at checkout. n/a Trend Micro Special Offer Code none
Disnat Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details. $1,000 Broker@ge 18-30 Promotion none
Scotia iTrade Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details. $1,000 StartRight Free Trade offer none

Expired Offers

Open a new account with Questrade with at least $2,000 and you may be eligible to receive free tax software and the platinum bundle package form H&R Block. Use promo code HRBLOCK2016 when signing up to qualify. Read the terms and conditions for full details. $2,000 H&R Block Promo April 15, 2016
Last Updated: May 1, 2016 21:30 PT