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Discount Brokerage Weekly Roundup – December 30, 2016

Welcome to the last edition of the roundup for 2016. As the year winds down, it looks like markets and investors have finally decided to take a pause and celebrate an eventful year. This edition of the roundup will be short and sweet, featuring the final installment of the roundup of roundups from 2016 as well as the last batch of tweets and chatter from across social media and investor forums.

Roundup of Roundups: Q4 2016

The last quarter of activity in 2016 saw a big focus on feature announcements from Canadian discount brokerages, the year-end rankings and ratings as well as the release of some interesting data on deals & promotions that highlighted the gap between what DIY investors want and what brokerages have been offering. With the uncertainties now thrown into financial markets, increasing competition between brokerages as well as from robo-advisors, the moves being made in the last few months of the year have set the stage for an interesting start to 2017.

Tell You What I Want…

Online investors are, not surprisingly, turning to online channels when doing their research on which online brokerages to choose. Seeing a fair share of traffic from these folks, we at set about asking those in the market for an online brokerage whether or not the deals or promotions actually matter to a purchase decision and if they do matter, what kinds of promotions were they interested in. The results, published in October and November, pointed to an interesting set of findings. First, for those respondents in the market for a discount brokerage account, 85% said deals make a difference as to who they would choose. Secondly, there appears to be a disconnect between what DIY investors really wanted and what online brokerages typically offered as an incentive. For example, even though respondents said they overwhelmingly prefer cash back incentives, the majority of deals or incentives offered in 2016 did not fall into this category. Interestingly, and perhaps not coincidentally, later in the fall of 2016 major online brokerages started marketing commission credit deals as ‘cash back’ offers.

Two Steps Forward

The fall continued to be busy with announcements and unveilings of new features. Several Canadian discount brokerages, including TD Direct Investing, Qtrade Investor and Virtual Brokers announced significant additions to their set of services. In the case of TD Direct Investing, they were able to successfully roll out conditional order types on WebBroker. Qtrade Investor, on the other hand, released a number of feature enhancements, most notable among them being the addition of more commission-free ETFs to bring the number to 100. Finally, Virtual Brokers launched into the world of investor education in a big way with the addition of an investor education section.

Climbing the Ladder

The last big story for the final calendar quarter of 2016 was the rankings and ratings of Canadian discount brokerages. The ranking and comparison of online brokerages is something that we’ve spent a lot of time on over the years and what stood out about the 2016 rankings, especially from the Globe and Mail, is the sense that we may have reached peak DIY investor. While it doesn’t spell immediate decline for DIY investing, there are now alternatives to the DIY investor approach, notably from robo-advisors, that offer yet another choice in the landscape of financial services for investing. As for the results themselves, Qtrade Investor had a strong showing in 2016 taking top prize in both the Surviscor ratings as well as in Rob Carrick’s annual online brokerage rankings. Interestingly, when we compared the rankings from the Globe and Mail for the past several years, the rank and order of results were largely the same, suggesting that in spite of the many changes that have occurred, the changes have been more evolutionary rather than revolutionary.

Discount Brokerage Tweets of the Week

The diehard investors were still online and tweeting heading into the last week of 2016. Mentioned this week were CIBC Investor’s Edge, Questrade, Scotia iTRADE & TD Direct Investing.

From the Forums

Investors in the House

One of the great developments over the past few years is that online brokerages, or at least some online brokerages, are allowing members of the same household (or even friends) to qualify for a group discount on fees. This post from reveals what happened when one investor tried to set this up at Scotia iTRADE.

Double Take

Sometimes it pays to get a second, third or fourth opinion when making a financial decision. In 2016 (soon to be 2017) the power of crowd-sourced wisdom is available to tap into when it comes to making financial decisions. In this post from reddit’s Personal Finance Canada subreddit, one user was looking for some added perspective before taking the leap into DIY investing at TD Direct Investing.

Into the Close

That’s a wrap for 2016. It has been another eventful year in the Canadian discount brokerage space and 2017 is sure to be even more exciting. On behalf of everyone at the team, have a safe and happy New Year!


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