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Discount Brokerage Weekly Roundup – May 27, 2016

Source: Twitter

Even though the week was technically a shortened one for Canadian DIY investors, there were many who felt it was simply a bit too long (TGIF amirite?). Despite the shortened timing, oil managed to make a brief appearance above $50, Trump managed to make an appearance of wanting to debate a democrat but then changed his mind, and unfortunately for Toronto, they won’t be making an appearance in the NBA finals.  For Canadian discount brokerages, however, appearances on social media this past week illustrate just how important the “online” in online brokerage is becoming.

In this week’s roundup we take a look at two online brokerages who continue to push contest promotions as markets appear to head into the traditionally slower months. From there, we’ll take a look at another online brokerage that suffered a number of technical outages that left clients having more than a few colourful comments to share online. Finally, to cap off the shortened week, we take a look at reactions of DIY investors on social media and investor forums.

Look at me now…

If you happened to be in Downtown Toronto this past week you probably couldn’t help but notice that the excitement in the air. All the attention, however, wasn’t on the Raptors. There were a pair of online brokerages that also found a way to drum up some interest by launching a pair of contests involving frozen treats and bank vaults.

Scotia iTrade kicked things off by celebrating the one-year anniversary of their ‘new’ downtown Toronto investor centre with offers of free gelato. Fortunately, it was plenty warm enough in Toronto for gelato to be a hit.

The investment centre, as young as it is, has a history of tying in promotions to get people to visit. When the centre first launched there was a massive promotion that offered free trades AND cash back as opposed to having to choose between free trades OR cash back. The catch was that investors had to come down to the investor centre to get the deal.

Last year, Scotia iTrade also had a ‘selfie’ themed competition in which movie passes were up for grabs to folks who took a ‘selfie’ in the new investor centre. This year, however, in addition to the gelato giveaway, Scotia iTrade also offered up two free movie passes to individuals who made an appointment with one of their investment representatives. Interestingly, the total face value of the two passes ($24.98) is just shy of their standard commission price per trade.

In addition to these promotions, Scotia iTrade is also running a “shopping spree” themed contest that’s offering up a prize of $10,000 in TSX listed securities. And in case you didn’t see it, Scotia iTrade is also on the BNN ticker for BNN’s beta version of the new website and they’ve been broadcasting their promotions in online ads as well as on Twitter (to which there have been some interesting replies from Twitter followers).

Like the temperatures in Toronto this past week, Scotia iTrade is turning up the heat on its competitors.  By marketing more aggressively and running promotions across their social media channels, it’s clear that iTrade is looking to get out in front of their competitors during a traditionally slower time in the markets.

But they weren’t the only ones working hard heading into summer. Not too far down King St W another online brokerage, in this case National Bank Direct Brokerage, also held an interesting competition to attract the attention of local passersby.

No stranger to contest-driven promotions, National Bank Direct Brokerage was offering up a heftier prize of $5,000 towards an investment account. The catch – individuals had to sign up for a webinar/seminar with National Bank Direct Brokerage.

In comparing these two discount brokerages’ approach to running promotions, how they each advertised their respective contests on social media was actually quite interesting.

On the one hand, Scotia iTrade has its own Twitter account – which is independent of the Scotiabank twitter handle.  As a result, there was more specific promotion as well as greater coverage of the current promotion by Scotia iTrade on Twitter than there was for National Bank Direct Brokerage.

Source: Twitter

In fact, by comparison, NBDB did not appear to broadcast this event widely on social media, although the National Bank Direct Brokerage LinkedIn page did get more attention, it seems, than the message put forward on Twitter.

Source: LinkedIn

Why this is important, not only for brokerages but also for DIY investors is because individuals are increasingly spending more time on different social media channels. In particular, millennial investors – the ones who represent the largest and most important demographic that would take on DIY investing, will increasingly be judging how well (or poorly) brands are using technology platforms as a component to deciding who they wish to park their business with. For “online brokerages” claiming technological supremacy means they not only have to walk the walk, but they also have to talk the talk.

Technical Foul

This past week, there was a lot of attention being shone on one of Canada’s largest discount brokerages: TD Direct Investing for a series of outages that clients experienced on the trading platform WebBroker. Often, investors and traders are trying to take advantage of particular moments in the market, so when a platform goes offline, tensions mount.

Unfortunately for TD Direct Investing this week, those tensions boiled over when numerous clients experienced trading platform outages and then took to social media and forums to voice their discontent (see our tweets of the week for full details).

What was especially interesting to see was personal finance expert Rob Carrick weigh in on Twitter. As a response to several messages from users, Carrick tweeted to TD Direct Investing asking “Yo, @TD_Canada – Am receiving reader complaints about persistent problems getting access to the TD Direct Investing website. What’s up?”

Source: Twitter

While veteran DIY investors of every platform or provider know that outages can and do happen, the resources available to Canada’s major bank-owned brokerages (TD reported a profit of $2B this past fiscal quarter alone) mean that there is very little in the way of sympathy or patience for things to work right.

After all, if there’s one thing the parents of Canadian bank-owned online brokerages have, it’s money.

And, with the kinds of resources that kind of funding should buy, it’s a great example to DIY investors, that outages can happen anywhere or to any broker – big or small. The more important question DIY investors need to know the answers to is how effectively online brokerages prepare for and handle the mini-crises that inevitably will arise as trading relies more and more on technology.

Discount Brokerage Tweets of the Week

This week the big green (TD Direct Investing) was getting turfed by DIY investors for trading outages. Interestingly, Questrade didn’t miss the opportunity to try and reach out to unhappy TD Direct Investing clients and offer them a friendly (and functioning) alternative. Curiously, TD Direct Investing hasn’t yet responded in kind to the Questrade clients expressing concerns/complaining. Mentioned this week were Questrade, Scotia iTRADE, and TD Direct Investing.

From the Forums

Diamonds in the Rough

While bill payments aren’t a thing (yet) for most Canadian online brokerages, this post, from Canadian Money Forum, appears to reveal that certain account tiers (i.e. diamond level) may have access to this bill payment feature already.

Making a Fee Statement

With more regulations on fee disclosure coming into full force, Canadian investors should be getting a clearer picture of what kinds of fees they pay to their financial advisors and fund products. Of course, according to this post from, not everyone will be interested even if they are paying ‘high fees’.

Into the close

That’s a ‘Rap’ for this shortened Canadian trading week. It was an exciting run for the Raptors but alas they too will be heading into the weekend with a lot more time on their hands – time enough to catch up on their Game of Thrones. Whatever the adventures you may get up to, have a wonderful weekend and a quick reminder US markets closed on Monday for Memorial Day so expect lighter than normal trading volumes.

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Discount Brokerage Weekly Roundup – May 20, 2016

Source: Twitter

Even the best investors can be caught off guard by sudden moves in the market. It’s a humbling lesson and usually the tuition for poor risk management isn’t cheap. For Canadian discount brokerages, there are definitely signs in the US brokerage market that the risks for certain brokerages are rising.

In this week’s roundup, we take a deeper look into some interesting moves that took place in the US online brokerage market and what that might mean for Canadian online brokerages as the competition and race for technological supremacy heats up. Next, we take a look at standard online brokerage commission pricing, to see why it’s not exactly an apples-to-apples comparison across the board. From there we’ll take a look at the reactions from DIY investors on Twitter and close out with comments from the online investor forums.

Keep on Surviving

Why is a market so exciting? It settles debates from opposing sides using dollars and cents. The business of being a brokerage is something that we cover regularly in the weekly roundup and this past week there were some interesting developments that are shaping up to make the ‘online brokerage’ marketplace even more exciting.

On the one hand there’s a bullish case to be made with interest rates being telegraphed to rise. For borrowers this isn’t great news but online brokerages are also lenders and as we reported several weeks ago, significant portions of online brokerage revenues come from their margin lending. One of the long time messages Schwab has been trying to communicate to its shareholder base is just how material even small increases in interest rates will be for their financial performance.

On the other hand, there are the bears. Interestingly, the case is not entirely a bearish one considering the source, Thomas Peterffy, CEO of Interactive Brokers. According to a recent interview in the Financial Times, he is forecasting that 80% of brokerages in the US will disappear because of constrained revenues, changing investor habits, compliance costs and advances in technology. So, while this is clearly a bearish call for most of the players on the field, for some, including Interactive Brokers, it may be a self-fulfilling prophecy that they’re left standing after this massive cull.

This is not the first time he has pointed to this data this year either. Peterffy alluded to this point in a recent earnings conference call with an analyst which suggests that this forecast is both a clever marketing pitch to professional brokers that want to lower their cost and a way to showcase the merits of Interactive Brokers’ model of heavy automation. In either case, Interactive Brokerages certainly stands to benefit from brokerages either folding, being gobbled up or deciding to use Interactive Brokers for their platform of choice. Well played IB.

There is, however, one potential ‘canary’ in the Canadian online brokerage coal mine.

Now that Virtual Brokers has changed (i.e. raised) their commission structure and is starting to shift their focus towards ‘value’ rather than price, it may signal that they too are feeling the pinch of the low cost game. Unfortunately for small brokerages like VB, value is a game that the bigger financial brands in Canada have a clear edge over (think bundling of services and convenience).

To compound the challenges facing the independent brokerages they need the scale of client accounts (or trading activity per client) to be large otherwise commission prices need to be lower in order to offset the greater convenience offered by the bank-owned brokerages. The only other viable alternative for non-bank-owned brokerages is to invest in making their product experience exceptional – which is not a small investment in either the people running the brokerage or the technology needed to pull it off.

For Canadian DIY investors, ultimately, the scenario where costs/fees decrease is a good one.

Unfortunately for the non-bank-owned brokerages are now quite vulnerable to being priced out. There’s already proprietary data we’re seeing that shows they’re losing their edge against the banks, and the introduction of robo-advisors certainly doesn’t help matters either.

If the bank-owned brokerages were to drop their standard commission fees down even further, the traditional “low cost” or non-bank owned online brokerages would have a difficult time competing demonstrating yet again that the debate over the best online brokerage may just come down to who’s left standing.

Unpleasant Sur-price

Nobody likes discovering what’s in the fine print, especially after receiving a charge from their brokerage. Yet, despite all of the forms and acceptance of terms and conditions, so many DIY investors get tripped up by the fine print put forward by online brokerages.

Interestingly, this past week there were two examples of two different investors who unfortunately appeared to get dinged for fees they didn’t see coming.

The first was in a post in the Canadian Money Forum in which a Qtrade Investor client was charged $22 commission for a trade they thought should only cost $8.75.  In the second case posted on Twitter, a user was clearly caught off guard by the commission rates.

Of specific interest is the situation of the trade at Qtrade Investor. In this particular instance the individual in question stated they were charged a fee that was generated on top of their ‘commission fee’. As it happens, this fee appears in the “other fees” section of the Qtrade website pricing page where it states that a charge of 1/30th of 1% or (0.00033) of the value of the trade.

Breaking down the math of the trade, the standard rate of $8.75 per trade means that this individual incurred a charge of $13.25 in ECN fees for this trade. In order to generate that level of ECN fee they would have had to have a trade value of $39,750. Now since we know they sold 500 shares of BMO.TO that gives us a trade price of $79.50 (sounds like a good round number limit order price) which turns out to be a plausible price for BMO to have hit on April 12th – so the math checks out (13.25 divided by 0.00033333 = 39,750).

There are a number of interesting things about this scenario.

Perhaps the most fascinating is that this person described themselves as a relatively infrequent trader (<20 trades per year) with a six-figure portfolio. Yet for the surcharge of an extra $13.25 of a $39,750 order, the individual went through the motions of reconsidering their relationship with Qtrade Investor to consider moving their crosstown rival Credential Direct (or others who may offer truly flat pricing). And, not so much because of the $13.25 but as noted by the individual it was “the principle of paying double”.

It is important to mention that, while Qtrade Investor does offer to waive this fee for clients who make over 150 trades/quarter or who have at least $500,000 in assets across all Qtrade accounts, for this investor, the standard pricing rules applied.

From a business perspective, the bigger question is what is it worth to an online brokerage have that client or to try to win them back? The answer to this question is probably why, in some part, many bank-owned brokerages have decided to offer flat commission pricing rather than pass through the ECN charge.

For DIY investors, flat pricing is usually a more favourable option to have than variable pricing and the difference can certainly add up depending on the manner or volume of trade being executed. Flat pricing also simpler and more predictable.

Interestingly, Virtual Brokers is the only non-bank-owned brokerage to offer the flat commission pricing as a standard option. It should be noted that Virtual Brokers does pass through the SEC fee for US securities trades at the rate of $0.0002/share.

Brokerage Standard Commission Price
BMO InvestorLine 9.95 flat
CIBC Investor’s Edge 6.95 flat
Credential Direct 8.88 (not flat)
Disnat Classic 9.95  (not flat)
HSBC InvestDirect 9.88 (not flat)
Interactive Brokers 0.01/share (not flat)
Jitneytrade Variable pricing (not flat)
National Bank Direct Brokerage 9.95 flat
Qtrade Investor 8.75 (not flat)
Questrade 4.95 – 9.95 (not flat)
RBC Direct Investing 9.95 flat
Scotia iTRADE 24.99 (not flat)
TD Direct Investing 9.95 flat
Virtual Brokers 9.99 flat
Note: Flat is defined as no additional charges on the trade (e.g. no ECN fees will be charged)

With flat commission pricing the independent or “low cost” discount brokerages in the Canadian market are now not necessarily less expensive than the bank owned discount brokers. Other fees, such as account administration fees or inactivity fees certainly bear consideration but when looking at flat vs variable cost on a per trade basis – flat makes a compelling case.

Coming back to the bigger issue of changing a brokerage on principle, this example offers an important insight into the value that DIY investors place not only on transparency of fees, but also on clarity and customer choice.

DIY investing does mean that there will be fine print and unfortunately as individual investors, everyone who signs up for an online trading account is responsible to know some of the “quirks” and important conditions for trading through a particular online brokerage.

1/30th of 1% may not seem like much but it was enough to cause one client to take to the internet to voice their displeasure.

The lesson to brokerages seems clear: leave the surprises in price to the stock market and not in the commission structure of those doing the trading.

Discount Brokerage Tweets of the Week

We had a few technical difficulties with the tweets of the week, so only a selection of tweets are shown here. We will update this when we’re able to access the other tweets. In the meantime, there appears to be no shortage of reasons that caused investors to reach out – most notably an outage from TD Direct Investing’s web broker.

From the Forums

The Price of Advice

In this post from Canadian Money Forum, a product that we don’t often hear much about – BMO InvestorLine’s Advice Direct, was mentioned by someone considering the service. Interestingly there was also the mention of bonus trades for InvestorLine to sweeten the deal to the tune of 160 free trades per year. There’s an interesting debate about robo-advisors in there as well. Worth a read.

The Cost of Advice

In this post from reddit, an alleged interaction with a Questrade representative stating that someone should over contribute on their TFSA sounded alarms with other readers and also with Questrade community reps who replied. An interesting example of why it’s always good to trust but verify.

Into the Close

That’s a wrap on another week. Heading into the May long weekend remember that Canadian markets will be closed on Monday. Have a safe and fantastic weekend and for all the Raptors fans, hang in there!

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Discount Brokerage Weekly Roundup – May 13, 2016

Even in a world of robo-advisors and trading algorithms, human traders and investors are still prone to believing in the power of luck. Of course, it being Friday the 13th, the more superstitious folks probably are focused on avoiding the bad luck. For Canadian discount brokerages, however, it seems like they’re betting on the power of luck to reignite interest in the world of DIY online trading.

In this week’s edition of the roundup, we highlight the latest online brokerage-run contests that have come to market. Next we’ll do a quick scan of updates from across several brokerages that are busy rolling out new features. As always we’ll take a look at the latest tweets from the online brokerage space and close out with what investors were talking about this week.

Exchanges Only: Scotia iTrade Launches Contest

After sitting on the sidelines for April, Scotia iTrade rolled back into action launching the latest revival of their commission free trade offer. This latest version of the offer, however, comes with a twist. First there are no ‘cash back’ choices as there were previously. Second, there is also a contest that is being branded as a ‘shopping spree on the TSX’ worth $10,000 attached to the promotion. Also back on the list of deals is the refer-a-friend offer at Scotia iTrade. More information can be found in our deals and promotions section.

This is not the first time (nor probably the last) Scotia iTrade has tried their hand at a contest. Last year they tried to entice visitors to their Investor Centre with a Twitter selfie contest, the prizes for which were movie passes.

So why do online brokerages run contests? Do they work? For the most part, contests are a great way for online brokerages to a) get potential customer information and b) to lower the cost of getting a client. As for whether or not they work, the question is really whether or not they are cost-effective which is tricky to measure.

What is interesting about the latest offer from Scotia iTrade is that it pairs together their familiar offer of commission-free trades with a headline grabbing amount of cash as part of a contest. While 50 free trades may not get attention, $10,000 most certainly will. Headlines aside, it’s important to take a look at all deals with a clear understanding of what’s being offered and what special conditions are associated with the offer.

When looking at the tiers of the offer itself, it is worth noting that individuals typically don’t see the number of free trades go up proportionately to the amount of money being brought in. For example, whether individuals deposit $100,000 or $1M, the number of free trades offered differs by 50. In fact, at $250,000 the number of commission-free trades does increase even if deposit size does; the ‘sweetener’ is the contest ballots which increase the odds of winning. It will be interesting to see whether someone would move and/or park $1M with Scotia iTrade for a few extra chances to win $10K.

Scheduled for January 2017, the draw for the shopping spree is quite some time away. For DIY investors who’ve entered and stayed within the terms and conditions, at least they’ll have enough time to make a list and check it twice.

Jumping into Fintech: BMO InvestorLine Stirs the Technology Pool

It almost goes without saying these days that technology is evolving exponentially. For banks and bank-owned brokerages in particular, the buzzword of the day is “fintech” or the convergence of finance and technology.

There are signs everywhere that startups are already provoking change at the bank-owned brokerages. Robo-advisors, for example, are directly challenging the wealth management divisions of the major Canadian banks so much so that several brokerages have either partnered with or created their own in-house robo-advisor (although they don’t want to label it as such).

This week, BMO InvestorLine showed signs they are stirring as they launched an invitation to clients to participate in an ‘advisory panel’ survey and are rolling out some changes to their login protocols.

In terms of the survey to clients, the survey itself is about 25 questions and covers topics designed to get to know who their clients are demographically but also where they may have other accounts and how users interact with the services provided by BMO InvestorLine.

One of the questions that was particularly interesting was a question in which users were asked about any other brokerages where they held accounts.

Screenshot from InvestorLine Survey

On that list were all of the major Canadian online brokerages, however there were also 3 robo-advisor firms on the list: Wealthsimple, Nestwealth and Wealthbar. This is clearly a signal BMO InvestorLine is curious to know what kind of presence the robo-advisors are gaining with their clients.

To encourage users to participate in the survey, BMO InvestorLine is offering a draw for $1,000.

In addition to the survey, respondents can sign up to be a member of the BMO InvestorLine “advisory panel.” It appears that BMO InvestorLine is hoping to create and tap a pool of individuals for feedback and create an engaged community of brand loyalists. Fortunately, there are also opportunities for participants to win money via ongoing draws that users get entered into for completing surveys.

Another interesting angle to the evolving ‘fintech’ story at online brokerages is that of security.

As client data and interactions shift decidedly to the online experience, security is of paramount concern at all Canadian brokerages. To that end, BMO InvestorLine is about to roll out 2 step verification in which users attempting to log into their BMO InvestorLine account may need 2 steps (such as entering in a username & password on the website followed by a notification code being sent to their mobile device) to confirm their identity.

The story on fintech goes beyond security and automation. It also means rapidly evolving features and functionality at a pace never seen before in this space.

Questrade, for example, is repositioning itself as a leader in the ‘fintech’ race among brokerages. Already they’ve opened up their app marketplace which enables 3rd party technology partners to add functionality to the Questrade platform. In addition, and most interestingly, they’ve also created an API that allows the community of Questrade users to come up with interesting tools and improvements to their trading experience in true DIY fashion.

For brokerages big and small, the race to adapt to a leaner technology model is ramping up. The future investors and traders – the ones who have the time horizon and risk profile to actively trade equities and options – are going to demand smooth user interfaces and digital experiences that look and feel current. This means that online brokerages, like BMO InvestorLine, will increasingly be asking and listening to what customers want and, most importantly, now they’ll have to figure out how to build it quickly.

Discount Brokerage Tweets of the Week

In this week’s tweets, technology is giving brokerages lots to keep them busy. Mentioned this week: Questrade, Scotia iTrade, TD Direct Investing and Virtual Brokers.

From the Forums:

Getting a DRIP

In this post from the investing forum, one user is interested in harnessing the power of compounding by using a DRIP. The only catch was actually knowing how to set it up at TD Direct Investing. Hear what others had to say about setting up a DRIP at their broker and at TD.

Earning for Learning

Putting funds aside for a child’s future educational needs is sound financial planning. Figuring which brokerage was best for RESPs was the focus of this post from reddit. Find out why one user was weighing either Questrade or TD Direct Investing as their top 2 choices.

Into the Close

It’s been quite a roller coaster week for folks trading on Bay St as well as those further south on Bay in the neighbourhood of Jurassic Park. We’ve talked a lot about luck in this week’s roundup and heading into the weekend it looks like the Raptors are going to need all the luck they can get their claws on. On a slightly different note – it’s great to see the magnificent response to the needs of folks in Fort Mac as the outpouring of support continues. Certainly there are things and people to feel lucky to have. Enjoy the weekend!

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Discount Brokerage Weekly Roundup – May 6, 2016

Source: Twitter

Crisis and opportunity. For traders it’s often two sides of the same coin. The human toll of the tragic events in Fort McMurray are impossible to quantify however for those seasoned veterans of markets who can only watch in disbelief at this surreal disaster, the scale and impact of these wildfires are what need to be traded around – which means speculators are trying to quantify the impact to oil, the Canadian dollar and the insurance industry. That said, like markets, it is encouraging that because of the bravery of first responders and the steely resolve of those displaced by these unrelenting fires, individuals are looking to the future, patiently awaiting the chance to rebuild.

In this edition of the roundup we’ll take a look at the latest deals and promotions to hit the stands at the outset of the month. Following that, we do a lightning round of small updates at several brokerages which show that the ground is still shifting and highly dynamic. We close out the roundup with chatter on Twitter and in the Canadian investor forums.

Making a Market for Promotions

Even though markets seemed to have had a solid bounce off their February lows, for online brokerage deals, it seems that the case is quite the opposite. The number of deals and promotions from Canadian brokerages has steadily receded so that heading into a new month we’ve now spotted 17 advertised promotional offers.

Despite a couple of brokerages flashing bearish signals on offering DIY investors deals, the great thing about competitive markets is that there are other brokerages who are bullish, and as a result, the next few months should have some really interesting changes start to take shape.

Since March, it appears that Questrade and Scotia iTrade in particular have turned bearish on deals. After years of promotional activity that typically resulted in a new offer every few weeks, these firms have been noticeably more quiet – perhaps too quiet. In such a dynamic space, sometimes it not what players do but what they don’t that raises eyebrows. In this case, such a longstanding practice of headline grabbing offers suddenly pulling back is sign that something is definitely up.

In contrast, Virtual Brokers has decided to pick up its promotional pace in 2016. They head into May with a contest driven promotion ($500 Apple gift certificate prize draw) and more recently they’ve also teamed up with 5i Research to provide special access to this newsletter/information service to VB’s clients whose balances are greater than $4,000 (this is being marketed directly to existing clients for the moment although it is open to new clients).

Another brokerage that stepped back into the promotional arena this month was National Bank Direct Brokerage. In NBDB’s case, they are once again sponsoring the Horizons Exchange Traded Funds “Biggest Winner” ETF trading competition. The simulated trading competition involves contestants trading Canadian ETFs to see who can have the best performance over the 6-week competition. Top prize for the ‘biggest winner’ is $7500.

Incidentally the contest sponsorship coincides with National Bank Direct Brokerage’s commission-free ETF offer (for Canadian ETFs only), so the contest promotion has some overlap with the free ETF promotion as well.

Overall, the number of actively advertised deals has declined since the start of the year, owing in large part to the retracement of Questrade in this space.

That said, certain brokerages are running unadvertised marketing campaigns to select clients and there are already brokers that have signaled a pickup of deals activity heading into the fall.

While brokerages may not be too enthusiastic about dishing out free trades or cash-back incentives, the challenge of attracting new clients and standing out from one another still remains. It looks like the strategy across multiple brokerages is to stay away from price drops and focus on the value added experience (i.e. getting additional research or getting promotional items).  The fact there are several brokerages actively running contests as part of their incentive program could be signs of an early trend emerging.

Whatever the route that brokerages choose to take, the reality of attracting new clients while staying ahead of the competition has only gotten more complex. The notion that you have to ‘give to get’ is one that will remain true for brokerages, so it will be interesting to see who does the giving and what form those gifts take.

Lightning Roundup

This week there were a number of small developments across the online brokerage space. Though they might be small, however, they do highlight that this space is still a dynamic one, even heading into the second half of spring.

Qtrade Shifting the Focus

In an interesting shift of messaging on the front end of their website, Qtrade Investor has replaced their now-expired deal announcement with an image focusing on the customer service aspect of dealing with Qtrade.

Source: Screenshot of Qtrade Investor website

The choice of what to make front page news on a company’s website homepage is a deliberate and important one. In Qtrade’s case, the focal point on good service is one they most likely want to ensure gets equated with their brand.

This is another in a series of front-facing improvements Qtrade has made so it is interesting to see what this evolves into.

Interactive Brokers Trading Metrics

Interactive Brokers once again released their trading and company metrics for April. While there were mixed performances across different metrics, what continued to show consistency is their account growth. On a month over month basis, client accounts grew by 1% but on a year over year basis, this figure was +15%.

Interactive Brokers continues to attract more clients than they lose, a sign that traders are still stepping up to the plate. Looking a little deeper, they are continuing to maintain their dominant position with highly active traders with the average number of trades per client estimated at 444/year.

The Digital Transition

One of the biggest advantages that bank-owned brokerages have enjoyed over the non-bank owned brokerages has been the fact that there is the convenience of a physical branch to go into. That notion of convenience, however, is clearly becoming increasingly digital.

An area in which that has become particularly evident has been in investor education. Specifically, in looking at the educational events provided by TD Direct Investing, there has been a noticeable shift away from doing in-person/live events and towards doing online webinar style events.

Here are two images comparing the educational events across Canada from 2014 and that same picture heading into May 2016. It is interesting to note that there are more in-person events taking place in BC than there are in Ontario, despite the population size difference. Further, there are now fewer (if any) in person events in Quebec and regions outside of Ontario, Alberta and BC. For what it’s worth, TD Direct Investing also does in person events (such as their Tastytrade event in Toronto last fall) which are bigger in scale and offer much more of a spotlight on their brand than perhaps the network of small educational seminars could offer.

Source: Screenshot TD Direct Investing Seminars Page

Interestingly, looking at other educational event providers at the bank-owned brokerage level, Scotia iTrade tends to hold almost all of their educational events as online webinars while their in person events are largely as a sponsor of Larry Berman’s educational ‘road show’.

National Bank Direct Brokerage, on the other hand, does not tend to do large/big name events and tends to concentrate their efforts primarily in Quebec. Over time they’ve shifted from being mostly in-person events to now about an even split between online and in-person events.

The reality of busy people today is that technology exists to give investors the convenience of webinars rather than forcing them to commute and coordinate being in a room to listen and learn. Although this transition has clearly taken some time to manifest, the trend towards digital transition in financial services is evident and there’s really no going back from here. As everything around consumers gets more and more digital, the expectation that banks and online brokerages demonstrate leadership and agility with technology will be key to their survival. It is perhaps why Scotiabank announced a mindboggling spend of $275M to upgrade their technological infrastructure. The technology arms race has already begun so it will be interesting to see how and where online brokerages continue to digitize going forward.

Discount Brokerage Tweets of the Week

It looks like customer service in the digital age includes being able to connect on Twitter. Online brokerages that had their customer service skills tested included BMO InvestorLine, CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTrade, TD Direct Investing and Virtual Brokers.

From the Forums

As they say in the markets, sometimes the volume thins out. This week in the forums discount brokerages weren’t making waves. Nonetheless, there were a few ripples in the water.

Questrade vs Wealthsimple

The battle of the brokerages has now spilled over into the robo-advisor arena. This post from reddit’s personal finance Canada section is a great example of what might be facing brokerages with and without their own robo-advisor service.

Mutually E-xclusive

In this post, also from reddit’s personal finance Canada section, there was an interesting example of an individual seeking some direction on how to access the TD e-series low cost mutual funds and the kinds of information they encountered along the way.

Into the Close

It’s been an incredibly tough week for the folks in Fort McMurray. While we typically hope for sunnier skies for the weekend, here’s hoping that Fort McMurray gets the rain and relief it needs.

Amidst the tragedy and fear, there are tremendously courageous folks who are going above and beyond the call of duty to help. Thank you to all the good Samaritans and first responders for their efforts and for Canadians for being Canadian when it counts the most.

On a slightly different and more positive note, here’s a great reminder of what Canadians know about one another when it comes to rising to the occasion.

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Discount Brokerage Deals & Promotions – May 1, 2016

*Update May 9* Sell in May and go away. It’s a phrase many traders are familiar with and now that May has arrived it looks like there will be sales – just not a whole lot more from certain discount brokerages.

As we head into a new month, it looks like there’s a definite pull back in place with certain brokerages – notably Scotia iTrade and Questrade. Questrade has placed its bets on a handful of standing offers heading into May and appear to be taking a ‘wait and see’ approach while Scotia iTrade also appears to be in a holding pattern. Nonetheless, there are other brokerages that appear to be taking advantage of the pull back by ramping up their promotional activities.

This month the theme appears to be “contests” with two online brokerages now trying to win over clients with the lure of being a prize winner. One from Virtual Brokers, launched late last month, and the other from National Bank Direct Brokerage, are meant to either directly or indirectly shine a spotlight on their respective brokerages. It is also worth mentioning that RBC Direct Investing is still running its $1,000 draw for clients to join their investor community feature.

We’ll continue to monitor the deals and promotions activity heading into May, however it seems like there may be a tactical shift by brokerages to highlight “value” in place of things that reduce price.

Expired Offers

There were a couple of notable deals that expired in April. Midway through the month, TD Direct Investing’s free trade offer expired and at the end of the month, Desjardins Online Brokerages’ long running commission credit promo technically expired (see update in extended offer below). Qtrade’s lowered threshold transfer promotion also went dark as did Questrade’s tax-themed promotion.

Extended Offers

*Update May 9* It took some time but Desjardins Online Brokerage renewed their long-running $500 commission credit promotion. This deal has been extended to the end of June.

We didn’t spot any extensions at the outset of May.

New Offers

*Update May 9: Scotia iTRADE has re-appeared in the deals and promotions section reviving one of their multi-tier offers while at the same time getting on the contest bandwagon with an offer to win a “TSX shopping spree” of $10,000; there are also 5 runner-up prizes of $1,000 each. For individuals opening a new Scotia iTRADE account, the number of ballots for this contest increase as the amount deposited increases. See the table below for more information.*

Two new offers were noted by Virtual Brokers and National Bank Direct Brokerage.

Virtual Brokers’ latest promotion involves a draw for a $500 Apple gift certificate. In order to be eligible, a new account must be opened by June 30th with a deposit of at least $1,000. The draw for the gift card takes place at the beginning of August.

For National Bank Direct Brokerage, they are once again co-sponsoring the Horizons ETFs Biggest Winner Contest. This contest offers up $7,500 to the grand prize winner, $2,500 to the runner up and weekly prizes of $500. The competition starts on May 9th and runs until June 17th.

*Update May 9: Database issues have been resolved and we have now updated the deals section for May 2016. Thanks for your patience!*

*NOTE: We’re experiencing some technical difficulties with our database at the moment. We will update the data tables below when this issue has been resolved.*

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 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 contact TD Direct Investing for further details. $150 $25,000 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Apple gift card promo June 30, 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 information (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 June 30, 2016

Expired Offers

Last Updated: May 9, 2016 15:30 PT

Referral 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
National Bank Direct Brokerage is sponsoring the latest edition of the Horizons ETFs Biggest Winner simulated trading competition. Top prize for the contest winner is $7,500 with a runner up prize of $2,500. There will also be weekly prizes of $500. Be sure to read terms and conditions for full details on timing and eligibility. n/a Horizons ETFs Biggest Winner 6 June 17, 2016
Scotia iTrade Scotia iTRADE is offering a no-purchase entry option to their Stock Shopping Spree contest. There is a limit of one (1) ballot per person using the no purchase required method. Top prize is $10,000 and there are 5 runner-up prizes of $1,000. Be sure to read full contest rules and regulations for eligibility. n/a No Purchase Entry Link . Click here for full contest rules. July 31, 2016
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
Virtual Brokers is offering the chance for individuals who sign up for a new online trading account on the classic commission structure with a deposit of at least $1,000 to win an Apple $500 gift card. Be sure to read terms and conditions for more information. $1,000 Apple Gift Card Promotion June 30, 2016

Expired Offers

Last Updated: May 9, 2016 14:30 PT

Transfer Fee 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
Scotia iTrade Open and fund a new account at Scotia iTrade with at least A) $25,000; B) $50,000; C) $100,000 D) $250,000 E) $500,000 or F) $1,000,000+ and you may be eligible to receive up to A) 75 commission-free trades and 5 contest ballots; B) 150 commission-free trades and 10 contest ballots; C) 200 commission-free trades and 25 contest ballots; D) 250 commission-free trades and 50 contest ballots; E) 250 commission-free trades and 100 contest ballots; or F) 250 commission-free trades and 200 contest ballots. Use promo code SP16FT when opening account to be eligible. Be sure to read terms and conditions for full details. A) $25,000 – $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) 75 commission-free trades + 5 contest ballots B) 150 commission-free trades + 10 ballots C) 200 commission-free trades + 25 ballots D) 250 commission-free trades + 50 ballots E) 250 commission-free trades + 100 ballots F) 250 commission-free trades + 200 ballots 90 days for free trades TSX Shopping Spree Contest . For full contest rules, click here July 31, 2016
Disnat Disnat is offering new & existing clients up to $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 June 30, 2016
BMO InvestorLine Open a new qualifying account with BMO InvestorLine, and fund it with at least A) $100,000 or B) $250,000 or C)$500,000 in net new assets and you may be eligible to receive A) $200 cash back, B)$500 cash back or C) $1,000 cash back. Use promo code Summer1000 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 – $499,999 C) $500,000+ A) $200 cash back B) $500 cash back C) $1,000 cash back Cash back will be deposited the week of Mar. 6, 2017. Summer 2016 Promotion July 31, 2016

Expired Offers

Last Updated: June 1 16:25 PT

Other 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 June 30, 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 30 days none none
Last Updated: June 1, 2016 16:45 PT