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Discount Brokerage Weekly Roundup – April 28, 2017

This week, NAFTA was causing all kinds of nausea for media, government and economists who were trying to figure out exactly what was happening with this long standing free-trade deal. While not a multinational economic agreement, Canadian discount brokerages are looking to their own free-trade deals as a way to generate interest and enthusiasm across the nation of DIY investors.

In this week’s roundup, we look at the latest promotions to hit our radar, both of which are from bank-owned online brokerages. From there, we take a look at the parent company of one brokerage that may be looking to go on a bit of a buying spree and potentially change the Canadian discount brokerage landscape in the near future. Of course, what would a roundup be without the tweets of the week? We’ll serve those up alongside the investor chatter on the forums.

Play Date

The 7th edition of the Horizon’s ETF ‘Biggest Winner’ competition is back and, once again, is being sponsored by National Bank Direct Brokerage.

This popular annual competition, which kicks off on May 8th,  comes at a time in the financial markets where activity and uncertainty have picked up. For contestants, this means that there are bound to be a handful of exciting trading days – especially if it’s fantasy money on the line.

The prizes for this contest, however, are not make believe and include:

  • $7500 cash for the grand prize
  • $2500 for the runner up
  • 6 weekly prizes of $500

As this competition is restricted to only Canadian ETFs, the ultra ultra leveraged ETFs in the US will not be available to trade here. That said, one of the more interesting names in the game is likely to be the recently launched HMMJ, a long-awaited ETF that includes companies in the marijuana space.

Fantasy stock market games, such as this one, are fun ways to follow and learn about markets. In this case, the name of the game is to get the best performance using only Canadian ETFs.

For contest sponsor National Bank Direct Brokerage, the branding win is clear. They are the only Canadian discount brokerage to offer fully commission-free buying and selling of all Canadian ETFs (not just the Horizons family of funds).

As and when this competition goes live, there’s likely to be more attention directed to the National Bank Direct Brokerage brand and their commission-free ETF offer. Although the summer months are typically quieter than the rest of the year, if there’s one thing that’ll get the attention of investors and traders everywhere, it’s a cash prize. For more information on the contest, click here.

Free Trades & a Show?

Another creative offer for DIY investors also just crossed our radar this week, this time from Scotia iTRADE.

Their latest promo is a combination of free trades and, for the cinephiles, free movies. The headline offer (which is typically available to the highest deposit tier in the offer) is 100 free movie admissions.

The catch? It’s not available until May 1st 2017.

Drilling down into the promotion, there are 6 tiers of deposit which range from a minimum of $25,000 all the way to $1,000,000+. For each of those tiers, eligible new clients will receive 50 trades plus the associated number of scene points. At the minimum deposit tier, in addition to free trades, there are 5,000 scene points up for grabs, which translates into either 5 movies or a $50 credit at dining or sporting wear retailers (in case being inside during the summer is not your thing).

Two things stand out as interesting about this promotion. First, Scotia iTRADE is once again reaching into its toolbox to leverage scene points / free movies incentives. There have been a handful of times when Scotia iTRADE has run a cross promotion with the free movie incentive (including one of the more memorable ones where visitors to the Toronto iTRADE had to take selfies) but the fact that they can do that gives them a unique promotional edge.

Screenshot of Scotia iTRADE’s latest promo offer (source: Scotia iTRADE website)

The Scotiabank tie-in with the Cineplex Scene points program means that Scotia iTRADE can offer something that other Canadian brokerages don’t.

A second interesting aspect of this promotion is that it is being telegraphed publicly before the deal actually goes live. This is an unusual step, something typically seen in contests not free trade offers.

As we head into the summer blockbuster season, a world awash in Netflix content (oh and don’t forget Game of Thrones) and good weather generally, it will be interesting to track if DIY investors prefer the indoor scene or the outdoor scenery.

Desjardins Getting Ready to go Shopping

Some people love the thrill of shopping, some people loathe it. Desjardins Online Brokerage’s parent Desjardins Financial, however, appears to be in a spending mood.

This week, the CEO of Desjardins Group (Guy Cormier) mentioned in an interview on Bloomberg Canada that Desjardins is looking to expand its reach outside of Quebec, stating that “Desjardins is open for business.”

Aside from the very encouraging sound bite, the article went on to specify that Desjardins would be particularly interested in insurance providers, as well as looking to take on full ownership of Qtrade Investor, the Vancouver-based brokerage that they bought a 40% stake in in 2013. Desjardins’s desire to be “more aggressive and have a stronger presence outside Quebec on wealth management” means that after firming up full ownership, there will likely be a very interesting transition in the Canadian online brokerage landscape.

Whether Qtrade Investor remains an independent brand or gets merged into either the long-standing DISNAT or more recent Desjardins Online Brokerage is an open question – one that will need to weigh the many years of Globe and Mail online brokerage ranking wins and other achievements against the desire to work under a united banner. From a look and feel perspective, there are some similarities, but there are some very clear design and branding differences.

How this all unfolds is going to be interesting to say the least. With other independent brokerages, or bank-owned brokerages that don’t necessarily want to continue an increasingly costly business unit, the time might be ripe for some consolidation or M&A activity of some of the players on the field.

Discount Brokerage Tweets of the Week

Spring may have sprung, but there are plenty of storms that blew through social media this week. Mentioned are BMO InvestorLine, Questrade, Scotia iTRADE, TD Direct Investing, and Virtual Brokers.

From the Forums

Pool Sharks

The mechanics of trade execution are details that only very few individuals can truly claim to understand. Even after a reading of Flash Boys, the intricacy and complexity of the transaction system is mind boggling. So, where exactly does an order go and are investors getting the ‘best’ price available? It was this set of questions from one investor that had sparked a conversation in this post on the Canadian Money Forum – definitely worth a read.

Tuning In

Something, or rather someone, very interesting was spotted in the DIY investor forums this week – BMO InvestorLine. In this post on RedFlagDeals.com’s investing forum, one unhappy user asked the community of readers for a suggestion for an online brokerage. The answers themselves were all quite interesting however seeing that a ‘verified’ BMO InvestorLine responded. This appears not to be a one off as there’ve been at least three other posts to date.

Into the Close

Some folks look at the weekend as a time to relax while the current leaders of two nuclear armed countries appear to relish Friday’s for some old-fashioned high stakes shouting. While that’s kind of an odd note to sound off on, perhaps the video below offers some hope that people can resolve their differences amicably and that beer commercials may be able to save the world. Enjoy the weekend!

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Discount Brokerage Weekly Roundup – April 21, 2017

There’s been lots of sabre rattling in the news recently. While the world is facing specter of war, online brokerages in the US are already in the throes of their own price war. For Canada’s discount brokerages, the storm clouds are still off in the distance but as their counterparts in the US have shown, that could change quite quickly. Of course, it’s not all doom and gloom, and sometimes competition can make winners of us all.

This week’s roundup is the tale of two stories. The first is an epic battle shaping up in the US online brokerage space that highlights just how big the stakes are for winning the war for DIY investing and how that could easily spill over to Canada. The second is the latest chapter in the story of sustainable investing and how one Canadian brokerage’s efforts to bring this to DIY investors might be a catalyst for other brokerages to follow suit. Of course, we have the usual feature of DIY investor chatter on Twitter and from the investing forums.

The Price is Right

With Q1 of 2017 now officially in the books, the details of a sudden commission price drop and the scramble that brokerages had to undertake to meet this new pricing reality have emerged. Specifically, the earnings conference calls from E*Trade Financial, TD Ameritrade and Interactive Brokers from this past week provide a fascinating look at the aftermath of the pricing cuts announced in February and March and how executives at online brokerages are bracing themselves for a potentially massive price war.

Now, there are lots of intriguing details in this most recent set of earnings conference calls, more than we can cover off in a single roundup, however what might be instructive to Canadian DIY investors and Canadian discount brokerages is the fact that prices definitely have room to fall and brokerages should probably prepare for that.

One of the most fascinating scenarios acknowledged by both TD Ameritrade’s CEO Tim Hockey and Interactive Brokers’ founder and CEO, Thomas Peterffy, is that it is possible for major US online brokerages today to be charging nothing on commissions and still be profitable.

While upstart online brokerage Robinhood has shown that it doesn’t take charging commissions for trades to be a success, it is an entirely different matter when the largest online brokerages in the US are contemplating the “nuclear option” for commission pricing.

In the case of TD Ameritrade, Tim Hockey stated the following:

“First of all, the good news is that even if commission rates went to zero tomorrow, we’d still be profitable….So, we reached that critical mass size where we’re fully able to work with the competition in terms of the price structure that seems to make sense.”

Loosely translated, this is a clear signal that TD Ameritrade wouldn’t be afraid to throw the first punch or throw down entirely with other online brokerages, big or small, that would like to lower trading commission pricing.

Interestingly, CEO of Interactive Brokers, Thomas Peterffy, also weighed in on the commission price drops with guarded optimism.

Commission pricing for Interactive Brokers is far below that of its US online brokerage competitors and the latest earnings results show that Interactive Brokers is crushing it when it comes to operating margins, earnings and other metrics. In short, there’s a long way that commission prices at the major US online brokerages would have to fall before Interactive Brokers would feel ‘threatened’ and be forced to react with a pricing change.

With that in mind, what Peterffy said that was so striking was:

“if they really were to cut the commissions to 0 as Schwab, for example, could easily do, I think we would have to go out and explain in advertisements more thoroughly as to what is going on here behind the scenes. Because interestingly enough, they advertise that their commissions now are $4.65 a trade, but you see that their commissions are more like $8 or $9 a trade. So it’s hard to figure what’s happening.”

In effect, Peterffy and Hockey are signaling that the largest players in the US online brokerage industry could take commission pricing to zero even today and still emerge standing. Of course, another interesting thing Peterffy disclosed in his statement is that Interactive Brokers would not take such price drops lying down. In fact, throughout the conference call transcripts as well as in recent investor calls, it is clear that Interactive Brokers is not a brokerage that moves slowly or without purpose.

Interactive Brokers and TD Ameritrade aren’t alone in their call to arms. Of the three brokerages’ conference calls that recently took place, E*Trade Financial’s stood out as having the most pointed ‘fighting words’ and with good reason. According to CEO Karl Roessner, “there is a lot of competition out in the marketplace and a lot of offers, unlike things that we’ve seen in the past, we continue to do what we’re doing to make sure we keep our customers and defend the book.”

In fact, it appears that E*Trade is in full ‘transformation’ mode, mobilizing across a number of different facets of their business to compete even more aggressively in the US online brokerage space. Lacking the scale of either Schwab or Ameritrade, E*Trade is shifting the tone of their brand identity by going ‘back to their roots’. They’ve put a target on the active trader segment and appear to be ready to fight tooth and nail to protect their clients from leaving and win over this highly prized segment from the other brokerages.

While there are no publicly traded online brokerages in Canada that would disclose the level of information that these US brokerage CEO’s have shared, the example of what is happening could be highly instructive for Canadian online brokerages.

Yes, the Canadian market is smaller, moves more slowly than the US and just doesn’t have the same kind of marketing firepower at its disposal that the US online brokerages mentioned above do (TD Ameritrade’s annual marketing budget is $250M US, likely a multiple higher than all the marketing budgets of Canadian discount brokerages combined), but the message is clear: in order to win, you have to grow assets.

All of the US online brokerages are confronting the very real scenario of zero commission trading. For Canadian brokerages, however, the storm clouds are on the horizon. The question on this side of the border now becomes: which of Canada’s brokerages will marshal the resources and marketing efforts required to start gathering assets soon enough?

Environmental Scan

With Earth Day just around the corner, the folks at Scotia iTRADE continued their online push of sustainable investing with a Twitter chat, hosted by Canadian personal finance blogger Tom Drake and featuring a number of other online personal finance and sustainable investing voices.

Lasting just about an hour, the Friday afternoon chat was part marketing, part awareness building of sustainable investing. Naturally, Scotia iTRADE being the organizer of the chat had the messaging and branding locked down and put together a very polished campaign to generate interest and engagement in their latest new product offering.

What was particularly interesting, however, is the number of personal finance/independent investing voices that were also involved as well as the amount of social media (specifically Twitter) coverage that the iTRADE ESG (standing for Environmental, Sustainability and Governance) tool received. Since we first reported the launch of this new feature several weeks ago, we’ve seen steady coverage online of this new investing tool.

Clearly, there’s a well-coordinated effort at work to ensure that people are finding out about this new tool and kudos to the Scotia iTRADE team for bringing the tool to investors and to iTRADE’s marketing efforts to have the communications tools (videos) and content to support explaining what it is and why investors should pay attention.

While it is hard to separate the ‘marketing’ from the content of the Twitter chat, there were 6 questions that host Tom Drake pitched to followers of the hashtag #FairTrader. In case you missed it, we’ve provided the tweets from the session below.

Here are the list of questions tackled during today’s Twitter chat on sustainable investing:

  1. What is sustainable investing?
  2. What is ESG and why does it matter?
  3. Sustainalytics, tell us more about the research behind Scotia iTRADE’s Sustainable Investing tools.
  4. Where can you find more information about Sustainable Investing & ESG?
  5. Can you tell us how Scotia iTRADE’s Sustainable Investing & ESG tools work?
  6. Why may Sustainable Investing or ESG be important to direct investors?

Of the answers provided to this series of questions, perhaps the most succinct was from @BoomerandEcho who stated “Profit doesn’t have to be a dirty word – it’s okay to make money as long as it’s not at the expense of people and planet #FairTrader

Scotia iTRADE was not the only Canadian discount brokerage to put the spotlight on sustainable investing this month. Earlier in April, Desjardins Online Brokerage published a short article highlighting the exceptional growth in interest in ESG concerns among managed assets and had scheduled (but later canceled) a webinar on ‘investing and the environment’ for April 20th.

Suffice to say, with the visible success and early traction of the ESG tool and sustainable investing buzz on social media, other Canadian discount brokerages will likely (if they haven’t already) take note. Given the competitive nature of the industry, ideas that resonate with investors tend to get replicated at multiple brokerages (e.g. commission-free ETFs).

The irony and good news heading into Earth Day is, that the competition for profits amongst the brokerages will help bring the ESG and responsible investing tools to investors, which will in turn drive a more socially conscious flow of capital.

Discount Brokerage Tweets of the Week

Lots of interesting chatter this week to keep brokerages on their toes. Mentioned this week were CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE and TD Direct Investing.

From the Forums

Can’t Fight the Fee-ling

For better or worse, there are those that enter into the world of DIY investing not fully appreciating that it really is about doing it yourself. In this post, from reddit’s personal finance Canada section, one DIY investor learned the hard way that agreements can be changed and that signing on to be a DIY investor means keeping close watch on what’s happening in their accounts.

That Settles It

Although computers and online trading seem to make things work instantly, the reality of stock trading is that there still has to be a transfer of shares from a seller to a buyer and funds from a buyer to seller. As one investor in this post on reddit found out, when you want to tap into your TFSA by selling some stocks, be sure to budget a few days to let the dust and the trade settle.

Into the Close

That does it for another week. As we hurtle towards May, market technicians are watching for sell signals and will no doubt be pouring over charts this weekend to stake their exits. And speaking of exits, Earth Day is a great reason to exit a building and enjoy the great outdoors (so long as the great outdoors is enjoyable) by cheering for a cause (hockey, basketball, Earth, science, or whatever). Have a great weekend!

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Discount Brokerage Weekly Roundup – April 14, 2017

With markets closed today in observance of Good Friday, investors on both sides of the border can spend their weekend recounting United Airlines memes, legalization of marijuana in Canada and the mother of all bombs. Say what you will about the news, but investors have a lot on their plates to digest – and that’s before sitting down to a long-weekend dinner.

Fortunately, one thing DIY investors won’t have to do this weekend is search for the latest news from Canadian discount brokerages. In this week’s roundup we take a look at movement from two western-Canadian based brokerages. The first is reviving a new deal that might be part of a broader strategy to attract younger investors (even away from other discount brokerages). The second story focuses on changes to user experience brewing at another western Canadian online brokerage and what that might mean for competitor brands. As usual, we have the fan favourites of DIY investor chatter from Twitter and investor forums to close out on.

Qtrade Investor launches new transfer deal

After a small lull in the deals and promotions section this month, a “new” transfer deal has emerged from Qtrade Investor. The deal itself isn’t new per se; it is a reboot of an offer that has shown up from time to time over the past several years.

Still, a deal is a deal. And when it comes to transferring accounts, this latest offer from Qtrade Investor stands head and shoulders above other transfer offers. Specifically, Qtrade Investor is offering to pay the transfer out fees (typically around $150) for a minimum deposit of $10,000. Qtrade Investor normally requires deposits of at least $25,000 in order to rebate a transfer fee from another brokerage, so it is an interesting offer for those on the fence about switching to Qtrade Investor.

Typically, Canadian discount brokerages offer to cover transfer out fees for deposits of at least $25,000. Exceptions to the $25,000 threshold are RBC Direct Investing, who requires deposit of at least $15,000, and more recently National Bank Direct Brokerage, who has lowered their transfer fee coverage threshold to $20,000.

Although Qtrade Investor’s latest promotion is a limited time offer, it appears that there might be additional momentum starting to build amongst brokerages to lower the bar to cover transfer fees.

Of course, the transfer fee coverage game is a tricky one.

At any time, a major player in the market could decide to raise the bar to leave and effectively negate (or cost) other brokerages trying to incentivize clients to switch. Switching fees are not something brokerages actively advertise so once a DIY investor chooses to become a client of an online brokerage provider, the cost to exit isn’t generally part of what they think about. Arguably, however, every investor and trader should consider the cost to exit before agreeing to enter.  In reality, it is unlikely that many investors consider the switching cost as part of the reason to choose a brokerage.

On a side note, Qtrade Investor’s latest promotional offer also appears to visually be appealing to younger, more active individuals (or those who aspire to be). For those who keep a close eye on the ‘imagery’ choices of Canadian online brokerages, there has been a distinct shift in what an investor “looks like”. This includes the visual identity for Qtrade Investor.

Clearly the combination of a lower threshold for switching to Qtrade Investor and some younger, more active characters helping to sell the deal and other features on Qtrade Investor signal a definite interest in appealing to the millennial investor crowd. An interesting (perhaps ironic) question is whether other brokerages can ‘keep up’ with what Qtrade seems to be doing.

Credential Direct signals a digital shift

Hunting around on Easter seems to be a thing that people look forward to. Not so much on websites, however, where hunting around for information generally leads to frustration if not outright abandonment.

This past week we noticed an invitation to complete a survey about the Credential Direct website on the front end which naturally piqued our curiosity.

Specifically, the 10-minute survey stated that it was requesting feedback on a prototype of the website, with the feedback being used to make some informed decisions on how to organize the menus to make them as user-friendly as possible.

The usability questionnaire asked visitors to complete an action based on a scenario/question, such as locating information in the website menu for upcoming webinars. Specifically, it appears that Credential Direct is looking to discover where users are most likely to look for information.

For comparison, the website menu structure is organized into the following top level sections:

  • Why us
  • Pricing
  • Research & Tools
  • Education
  • Forms
  • About Us

The prototype menu structure, however, appears to consist of the following top-level options:

  • Features
  • Fees
  • Knowledge & Support
  • About
  • Partnerships

One of the first things to note is that there are fewer menu items, a sign that some navigation simplification is in order. Secondly, there seems to be a shift away from a ‘hard sell’ to a ‘soft sell’ highlight features instead of telling users ‘why’ they should choose Credential Direct and changing the term ‘pricing’ to ‘fees’.

Another interesting observation stems from the items being included in the ‘Knowledge & Support’  – specifically the inclusion of the categories for popular content, featured content and DIY Investor knowledge.  It’s one thing to create special categories of information, however, it’s another to populate these categories with enough information to warrant making a category in the first place.  These categories seem to suggest that Credential Direct might shift the current set of ‘DIY Investor knowledge’ on markets and investment types for a new home, but perhaps they may also be prepping to include more DIY investor focused content, something that their competitors across the street (quite literally) at Qtrade Investor have been building out.

Although things are still very much in the prototype stage, it’s clear that change is brewing at Credential Direct. One other interesting data point in support of this digital evolution is a tweet from their account (which appears to have been deleted and replaced later by a tweet from the parent Credential Financial account) that suggests that building a better digital experience for wealth management service providers is on the minds of the Credential leadership.

Discount Brokerage Tweets of the Week

What happens when a brokerage popular with social media savvy users has an outage? Read on. Mentioned this week were BMO InvestorLine, Questrade, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

Spot the DI-fference

One of the challenges that the big five Canadian banks have is differentiating themselves to consumers. For those DIY investors thinking of going with a big bank-owned online brokerage (aka direct investing with an online brokerage) the challenge of telling them apart is even trickier. In this post from Reddit’s Personal Finance Canada section, readers weigh in with their experiences on a couple of bank-owned online brokerages.

Getting an Edge

Active traders are always on the look out for ways to shave costs. That said, price isn’t the only factor, there’s also user experience and trade executions that matter. One reader on Canadian Money Forum in this post sought advice from other readers on shifting away from CIBC Investor’s Edge and got some interesting recommendations.

Into the Close

With the combination of playoff hockey and basketball and spring baseball, there’s no shortage of fun distractions heading into the weekend. Of course, there are also lots of not-so-fun distractions to keep an eye on too; however, hopefully you-know-who decides to play golf rather than a real-life version of risk. Have a safe and hoppy Easter weekend!

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Discount Brokerage Weekly Roundup – April 7, 2017

In the same week that the electric vehicle maker Tesla became the most valuable US automaker, a marijuana ETF launched and the world inched closer to war. Nevertheless, stock markets continued to price in the myriad of opportunities and risks to enable capital to flow into fueling the world of tomorrow (assuming of course the world is still here, which markets suggest is the case). For online brokerages and DIY investors alike, it continues to be an interesting time to be in the markets with stories that are finally getting investors excited and a little afraid.

This week’s roundup looks at the latest update to the deals section with the first few days of the new month providing an early look at how the market is shaping up for promotions. From there, we look at another popular discount brokerage and the many stories they were involved in as they transform themselves to capitalize on brave new trading reality. As usual, there’s a healthy dose of investor chatter from Twitter and the forums as well as a new feature of the weekly roundup – a look ahead at articles coming to the SparxTrading.com blog.

Deal Dance

There’s a classic saying for investors trying to time the markets: buy when it snows and sell when it goes. Of course, depending on where you may be in the country the timing of that ‘advice’ can vary widely.

For DIY investors, however, history has shown that when it comes to deals & promotions, snow might be a decent indicator of when to go shopping for a bargain for opening an online trading account.

Yet again this year, Canadian discount brokerages have stepped back from offering up promotions now that the RRSP season is behind us. Dropping from a high of 35 offers last month to 24 deals to kick off April, the promotional race has cooled off heading into middle of spring.

With another four deals set to expire through the month of April, the deal cull is not quite finished. That said, the news for DIY investors isn’t all grim. There are already whispers some more offers are coming and the odds are quite good that marketing teams are not about to take the spring or summer off.

The sole online brokerage offering a ‘new’ promotion to start the month is BMO InvestorLine, whose cash back or commission free trade offer is likely to spark the interest of investors and brokerage competitors alike.

Despite this cyclical phenomenon, there are indicators suggesting positive investor sentiment and a few stories that are genuinely exciting to investors (such as the proposed legalization of marijuana and renewed interest in IPOs). So, while the past two or three years have not had a robust set of trader friendly stories heading into the summer season, this year things appear to be ‘different’.

Thus, competitive brokerages may seize upon this opportunity to shift gears on a typically slow season to take advantage of the uptick in investor sentiment.

For DIY investors looking to open an online trading account, there are still lots of deals for those in a hurry to open an account and the prospect of some interesting offers on the horizon for those with a bit more patience. Stay tuned.

Spotlight lands on Interactive Brokers

As many west coast readers can attest to, when it rains it pours. For Interactive Brokers, it has been one of those moments where lots of things are happening all at the same time. In this section, we run through a week filled with analyst downgrades, impressive account growth, news appearances and the launch of a new feature for Canadian investors.

Earlier in the week Interactive Brokers announced that they would be winding down the market making segment of their business – an operation that has struggled to be profitable – in a move that signals just how challenging active traders have found the low volatility environment of the past several years.  The irony, of course, is that as an online brokerage Interactive Brokers’ valuation rests on the fact their clients are active and/or professional traders.

The transition was not taken favourably by analysts, at least for the moment, as the move resulted in downgrades on IBKR. While the stock price faltered momentarily, by week’s end it had made back ground and then some.

One of the reasons the stock chart on IBKR may have recovered so quickly came from the report of their trading metrics.

The image below (from the March 2017 trading results) indicates an increase of new accounts in March compared to February (+2%) and compared to the same point last year, the increase an increase of 18%. The spike in net new accounts from February to March 2017 was more than 61% higher than the percentage of net new accounts from the same period in 2016. Perhaps the SNAP IPO in early March along with an increased interest in the IPO market generally helped to serve as a catalyst; however, the slow and steady march upward in account growth is noteworthy.

Interactive Brokers trading stats March 2017

There was a negative metric picked up on by analysts, namely the decrease in the number of trades (DARTs) that was observed on both a month over month basis as well as on a year over year basis. That said, there was a significantly higher size of order being placed with the number of shares traded 13% higher in March than in February and 63% higher than March 2016.

Big picture: Interactive Brokers continues to shine with active traders, the most lucrative segment for many online brokerages.

One of the reasons that Interactive Brokers earns the accolades from the trading community is that it is both creative and resourceful in the offerings it gives to its clients.

This week, Interactive Brokers Canada announced that its stock yield enhancement program is now available to Canadian investors (officially).  Briefly, the program enables Interactive Brokers to lend out securities of its clients to other investors and, in exchange, the clients lending the securities receive a portion of interest paid on cash collateral put up by the borrower.

There is an extensive FAQ page detailing many of the conditions and requirements associated with the Stock Yield Enhancement Program but a few key takeaways are that individuals with at least $50,000 in account value can participate and that eligible securities can be either Canadian or American (whereas the Stock Yield Enhancement Program was previously restricted to just US securities).

This program is of primary interest to those active investors who wish to short stocks. Specifically, online brokerages that can tap into client securities to lend out facilitate greater availability of those shares.

Several years ago, Questrade tried to gauge interest in a similar program; however, the launch of the program was contingent on approval from Canadian regulators – something that appears to either have stalled or not proceeded.

Regardless, now that Interactive Brokers offers such a program, it will be interesting to see if other online brokerages follow suit (to cater to active traders) or if this becomes yet another reason that active traders will seek out Interactive Brokers as their brokerage of choice.

Finally, Interactive Brokers’ founder and CEO Thomas Peterffy was on CNBC earlier this week providing his take on the latest developments of US retail investors and markets in general. It was particularly interesting to note his position on the markets at these levels but also his take on DIY investor sentiment.

Around the Corner

We’re making some adjustments to how content is delivered on SparxTrading.com and are pleased to announce that we will be including announcements/previews of articles that we’ll be publishing on the blog here in the weekly roundup.

Be sure to check back on the blog (or follow us on Twitter) to get the latest insights on features and developments at Canadian discount brokerages.

In our first ‘around the corner’, be on the lookout for a detailed look at Scotia iTRADE’s launch of their ‘sustainable’ investment assessment tool. This tool has been gathering quite a bit of attention online and has also seen associated media (video) developed to help investors understand what it is and how to use it.

Discount Brokerage Tweets of the Week

An interesting week for DIY investors on Twitter with new features and platform stability on the wishlist. Mentioned were BMO InvestorLine, CIBC Investor’s Edge, Questrade, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

Transferustration

Moving between online brokerages can be a costly affair. In this post one user is considering the move from TD Direct Investing into Questrade and comes up with an interesting (albeit round about) way to deal with the transfer fees.

Transferustration 2: Not so Simple

With robo-advisors gaining in popularity, the shift away from DIY passive investment portfolios into a robo-advisor based platform will only continue to gain traction. This post was particularly interesting as it shows the (rough) experience of one user transferring from Questrade into Wealthsimple.

Into the Close

The first week of April is officially in the books. It’s been a very interesting week across the markets and more importantly across the globe. While the world is nervously watching what happens with the US war machine now being mobilized, traders are inevitably wondering how best to navigate this terrain. And, speaking of things moving quickly, science (or a pipe dream) finds its way into our imaginations yet again this week. Here’s a look into the future of ultra high-speed transportation. Have a great weekend!

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Discount Brokerage Deals & Promotions – April 2017

*Updated April 14* Even though this is technically April Fool’s Day, the pullback in deals is no laughing matter. After a very busy March in which there were as many as 35 deals in play, April kicks off with a more modest 24 live deals. The bigger story, however, is recognizing that now might not be the best timing for brokerages to be on the sidelines.

Having compared online brokerage deals & promotions for several years now, there is clearly some seasonality at play. Last year, for example, the transition from March to April saw the deal count drop from 33 to 19.

Discount brokerage deals and promotions typically ramp up at the beginning of a new year and crest heading into the RRSP contribution deadline at the beginning of March, after which things slowly subside.

Coming into 2017, however, it was noteworthy that several online brokerages had launched their major promotional pushes just before the end of 2016, signaling a much fiercer competitive environment for attracting new clientele.

And, although the start of April begins with a major contraction in offers, it is also interesting to see that competitive forces are still at play in the early part of 2017.

While we can’t be certain of the timing of this change, National Bank Direct Brokerage quietly lowered their minimum transfer deposit requirement from $25,000 to $20,000 for individuals to receive a transfer fee credit. The majority of Canadian online brokerages have set the bar at $25,000 to qualify for the transfer fee credit to apply so this move from NBDB might be enough to tip a few competitors to do the same.

Another interesting development at the outset of a new month is absence of special offers listed on the Scotia iTRADE ‘special offers’ page.

Along with BMO InvestorLine, Scotia iTRADE has been a stalwart of the deals race, typically running promotions to attract new clients. Interestingly, the ‘refer-a-friend’ and the ‘Start Right’ offers appear to have been labeled as “programs” (in the Fees section) rather than being listed under the special offers section.  The same is true for their ‘buck-a-bond’ offer, which has been a fixture of previous special offer sections.

The restructuring of Scotia iTRADE’s deals could be a consequence of the new website organization but for DIY investors looking for an incentive, this change has made it less clear that there are offers available.

On the surface, it seems that running offers/promotions when DIY investors are in the market for opening an account makes sense. It’s why retailers concentrate their efforts around big shopping dates in the calendar year. Unlike retail, however, the reality is that DIY investors, especially those on the margins, might be driven more by the investment climate than by seasonal deadlines.

With our own internal data showing steady DIY investor interest, markets trading at all-time highs and economic forecasts flashing green, there’s a case to be made that there’s no better time for brokerages to be offering up more promotions rather than less. If investors are coming back to the markets, it will be interesting to see just how long brokerages are going to sit this opportunity out. Stay tuned.

Expired Deals

*Update: April 3 – BMO InvestorLine has retired their winter promotion and replaced it with a new offer (see below).*

There were 12 deals that expired at one point or another during March. Here’s a list of the deals that didn’t make it into April (as of April 1st):

  • CIBC Investor’s Edge – Cash back promotion
  • Credential Direct – Cash back promotion
  • HSBC InvestDirect – 50 commission-free equity trades
  • National Bank Direct Brokerage – Cash back promotion
  • Qtrade Investor – Cash back promotion
  • RBC Direct Investing – Pay with points promotion
  • Scotia iTRADE – Travel points promotion
  • Scotia iTRADE – Transfer fee promotion
  • Scotia iTRADE – Visa Gift Card promotion
  • TD Direct Investing – 200 commission-free trade promotion
  • Virtual Brokers – $10,000 commission rebate offer
  • Virtual Brokers – 5i Research Subscription Offer

Extended Deals

No deals that were set to expire at the end of March have been extended (as of time of publication).

New Deals

*Update: April 14 – Qtrade Investor is once again offering their transfer promotion which lowers the minimum deposit amount required to qualify for covering transfer fees from $25,000 to $10,000. This is the most competitive transfer fee offer currently available from a Canadian online brokerage. See table below for more details.*

*Update: April 3 – BMO InvestorLine has introduced a very competitive cash back or commission-free trade deal for DIY investors. For deposits of at least $100,000, eligible individuals can receive either $200 cash back or 20 commission-free trades; for deposits of at least $250,000, eligible individuals can receive either $1,000 cash back or 100 commission free trades. According to the terms and conditions for this deal, the eligible account types are cash or margin (individual or joint) accounts, corporate accounts, sole proprietorship accounts, RRSP and spousal RRSP accounts.*

No new deals or promotions to report (as of time of publication).

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, 2017
Open and fund a new registered account at Virtual Brokers with at least A) $5,000; B) $25,000; or C) $50,000+ in new assets and you may be eligible to receive A) $30; B) $50; C) $100 cash back. Use promo code RRSPCB2017 when signing up. Be sure to read terms and conditions for full details. A) $5,000 – $24,999 B) $25,000 – $49,999 C) $50,000+ A) $30 B) $50 C) $100 Cash back will be deposited just after October 31, 2017 RSP cash back bonus April 30, 2017
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive 2 months of commission-free equity trading and a $250 USD/mo credit towards Edge Trader Pro for 2 months. Use promo code 2MFREE2017 at sign up to qualify. Be sure to read full terms and conditions for details. $5,000 2 months commission-free equity trading + $250 USD/mo platform fee rebate. 2 months 2 months free trading April 30, 2017
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatFlex or email: [email protected] See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo April 28, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $100,000 or B) $250,000+ in net new assets and you may be eligible to receive A) $200 cash back or 20 commission-free trades; B) $1,000 cash back or 100 commission-free trades. Use promo code CASH when signing up for cash back offer or TRADES to be eligible for commission-free equity trade offer. Be sure to read the terms and conditions for more details on the offer. A) $100,000 – $249,999 B) $249,999+ A) Cash back: $200 OR 20 commission-free trades B) Cash back: $1,000 OR 100 commission-free trades. Cash back will be deposited the week of January 8, 2018. Commission-free equity trades are eligible for use up to August 6, 2017. Cash back or Free trade offer June 5, 2017

Expired Offers

BMO InvestorLine Open a new qualifying account with BMO InvestorLine, and fund it with at least A) $100,000; B) $200,000 or C) $300,000+ in net new assets and you may be eligible to receive A) $200; B) $400 or C) $750 cash back. Use promo code PROMO750 when signing up to be eligible. Be sure to read the terms and conditions for more details on the offer. A) $100,000 – $199,999 B) $200,000 – $299,999 C) $300,000+ Cash back bonus A) $200 B) $400 C) $750 Cash back will be deposited the week of November 6, 2017. 2017 Winter Campaign *Expired* April 2, 2017 *Expired*
Last Updated: April 22, 2017 01:00 PT

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 tbd
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 45 days after minimum 90 day holding period(subject to conditions). BMO InvestorLine Refer-a-Friend June 30, 2017

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: April 1, 2017 14:30 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 $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $20,000 Transfer Fee Rebate 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
Transfer $10,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $10,000 Transfer Fee Rebate May 11, 2017
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 Transfer Fee promo tbd
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
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 DisnatFlex. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo April 28, 2017

Expired Offers

Last Updated: April 14, 2017 23:30 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, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information. n/a MoneyTalks Inside Edge Discount 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 [email protected] 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
Open a new account with Virtual Brokers with a deposit of at least $1,000 (for the Classic Commission Account) and you may be eligible to win a $250 gift card to the Apple store. Use promo code 250AGC2017 during sign up to be eligible. Residents of Quebec are not eligible for this contest. Be sure to read terms and conditions for full details. $1,000 (Classic Commission Account) $250 Apple Gift Card Draw April 30, 2017
Open a new account with Virtual Brokers with a deposit of at least $1,000 (for the Classic Commission Account) or $5,000 (for the Commission Free Trading Account) and you may be eligible to receive a one-year subscription to access 5i Research. Use promo code 5iVB2016 when signing up. Be sure to read terms and conditions for full details. $1,000 (Classic Commission Account); $5,000 (Commission Free Trading Account) 5i Research Offer March 31, 2017

Expired Offers

Last Updated: April 1, 2017 14:30 PT