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Discount Brokerage Weekly Roundup – May 26, 2017

‘Bubble, bubble, toil and trouble’ seems to capture the sentiment of any market when buyers get far too ahead of themselves. Whether it’s real estate, the latest feverish run up in cryptocurrency ethereum, or tulip bulbs, wherever bubbles appear, Shakespearean style trouble isn’t too far behind.

In this edition of the roundup, we look at a couple of different approaches Canadian discount brokerages are attempting in order to make it easier for DIY investors to navigate the world of online trading. Our lead story looks at one independent online brokerage’s moves in the investor education space and what it means for them heading into the summer. From there we take a look at another independent brokerage’s release of a mobile trading app that appears to be hitting the right notes with DIY investors. As is customary, we round out by looking at what DIY investors had to say on Twitter and in the investing forums.

Webinar from Virtual Brokers

This week, Virtual Brokers started advertising for an upcoming educational webinar on navigating this very long and very stubborn bull market. The online webinar will be presented by Ziad Jasani, head swing trader at the Independent Investor Institute, who will discuss how to approach trading in both ‘break out’ or ‘break down’ scenarios.

Three things that stand out as important about this event within the context of recent moves by VB and the Canadian discount brokerage industry. First, this webinar is the second investor education event held between Virtual Brokers and the Independent Investor Institute this year. Earlier in February, there was an in-person seminar that reportedly saw strong attendance and investor interest.

A second important observation about this webinar is that there is a promotional offer being attached to this session. Specifically, it appears that there is discounted access to a two-day active investing class held by the Independent Investor Institute available at no cost with the opening of a Virtual Brokers account. The second important offer is that individuals who sign up for a new Virtual Brokers account will receive three months of commission-free online trading of ETFs.

Finally, this seminar discusses using ETFs to construct growth-focused portfolios. As mentioned in last week’s roundup, there has been a considerable gap between the proliferation of ETF providers (and accompanying ETFs) and the materials around to support investors to be able to make sense of this landscape. In response, it appears that Virtual Brokers, and even CIBC Investor’s Edge this past week, may be taking additional steps to service DIY investors with better informational resources to improve the experience of trading online.

Despite a quiet start to the year for Virtual Brokers, it appears that as we near the halfway point in 2017, things are starting to pick up at this Canadian online brokerage. With a previously noted revival of their social media activity, a concerted push into investor education, as well as increased promotional activity, it is likely that DIY investors will be hearing more from Virtual Brokers as well as from clients via social media into the second half of this year.

Questrade launches new mobile trading app

This week, after much anticipation, Questrade quietly rolled out an updated version of their mobile trading app. And, based on early reviews it appears that many users are enjoying the refresh.

Out of the gate the first 31 reviews available for the Questrade mobile app on the Google Play store gave the new app a 4 out 5 rating, which is in stark contrast to the 2.4 out of 5 score that the mobile IQ edge received (with 1,039 reviews). On the Apple App Store, the first 17 ratings gave it a 3.5 out of 5. One of the biggest shortcomings, according to the reviews posted on the App Store, was the lack of TouchID to log into the app/authenticate.

While mobile interfaces are undoubtedly popular with investors, the fact is that trading involves being able to look at charts and lots of data in a short amount of time. Getting a mobile interface that is both aesthetically pleasing and functional (and secure) is no easy feat, however it appears that Questrade has taken the lessons from the previous iterations of mobile app and built those lessons into this new mobile trading experience (for the most part).

From a functionality perspective, Questrade’s new mobile trading app reflects the fact that Questrade is now both a DIY investing company and a managed wealth company, as the app supports both lines of their business.

On the DIY investing side, however, the new mobile trading app has many of the necessary features for traders who need to step away from their computers/monitor their positions remotely as well as for those investors who simply like to get progress reports on what their portfolio might be doing throughout the day or after hours.

Features such as technical indicators, level 1 and level 2 data, legible charting, easy switching between stocks and options and account management tools mean that, so long as there is a decent internet signal and battery life, the biggest concerns active traders would have on this platform would be fat-finger trades.

With this latest release, Questrade appears to have significantly improved their mobile trading experience. And, while there is clearly room for improvement for users, other Canadian brokerages with mobile trading apps, such as Qtrade Investor, Scotia iTRADE and Virtual Brokers, will have their work cut out for them to improve their ratings and user experience to match Questrade’s current scores.

Discount Brokerage Tweets of the Week

With the weather warming up, sunnier skies may have lured some traders away from Twitter. Mentioned this week were Questrade, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

Not so g-rate

Conversion fees are just one way online brokerages can make up for lowering commission prices. One CIBC Investor’s Edge user found the multicurrency experience in dealing with USD to be less than appealing after this new feature was introduced. Learn more in this post from RedFlagDeals.com’s investing thread (out of interest, see the original post celebrating the lower conversion fees before things were changed).

Cross Border Brokerage

For Canadians living or working in the US, the DIY investing experience can get a little bit complicated. Here is one post from RedFlagDeals’ investing forum that provides some useful perspective of one Canadian DIY investor looking for a suitable online brokerage in the US that could also easily accommodate a switch when coming back to Canada.

Into the Close

Heading into the US Memorial Day long weekend means that trading action on Canadian markets will be noticeably quieter on Monday. Also, with the Sens now knocked out of the playoffs (but what a way to go), NBA finals a few days away and the House of Cards launch on the other side of the weekend, it seems like the perfect opportunity to relax and enjoy the sunshine and fresh air.  Just watch out for the bears.

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Discount Brokerage Weekly Roundup – May 19, 2017

Drama. It’s what draws viewers into reality TV and it’s what reality TV producers and those in the entertainment world know how to harness – the innate human tendency towards uncertainty. Funnily enough, financial markets aren’t that different either, with human reactions (and aversions) towards uncertainty playing out almost daily. Interestingly, Canadian discount brokerages are also trying to figure out how to harness the tendencies to avoid emotional decisions as well as the tendencies to be moved by them.

In this week’s roundup, we go part-robo with the rundown of Canadian online brokerages who’ve ventured into the automated/digital/robo-advisor space, and the incentives that are being offered to win new clients. From there, we take a more social turn to tell a tale of two online channels by looking at the social media activity from a pair of Canadian discount brokerages. Of course, as always, we cover the full scope of DIY investor chatter with a summary of online investor tweets and a few interesting posts from the DIY investor forums.

Domo Arigato, Mr. Roboto

This month, one of the (if not the) leading robo-advisors in Canada just reached a crucial milestone. Wealthsimple, the flagship robo-advisor that is building their brand with a combination of star-power, zeitgeist and deep-pocketed backers, added to their celebrity status by having Canadian Prime Minister Justin Trudeau pop by their offices as they crossed the $1B AUM (assets under management) marker.

Without question, Wealthsimple and their peers – the independent robo-advisors, have shaken the wealth management tree in Canada. Over the past three years, the robo/digital advisory landscape in Canada has mushroomed from nothing to just over a dozen firms competing in this space. And, on either side of the robo-advisor industry are a long list of financial services firms who are not going to quietly give up market share or mind share to these newer entrants.

One of the interesting challenges that ‘digital advice’ products such as robo-advisors face in the Canadian investment landscape is carving out enough of a presence to make them a profitable and sustainable enterprise. As yet, there hasn’t been a vicious price war among robo-advisors but that may soon change thanks to recent moves by Canadian online brokerages.

On the DIY investor side of the spectrum, there are now at least four Canadian discount brokerages (or their parent brands) who’ve deployed some kind of digital advice/robo-advisory service. These providers (and their services) include:

  • BMO Wealth Management (with BMO SmartFolio)
  • National Bank Direct Brokerage (Investcube)
  • Questrade Wealth Management (Portfolio IQ)
  • Qtrade Securities (Virtual Wealth)

No stranger to competition, the brokerage-associated robo-advisors have gone on the offensive launching promotional offers to draw investor attention. Specifically, this month NBDB’s Investcube launched a cash back offer and BMO SmartFolio’s launched a no advisor fee introductory management offer, both of which will rattle the cages of more than a few Canadian robo-advisors.

Starting first with BMO SmartFolio, there is now a promotional offer for new clients which enables the first $15,000 of assets to be managed with no fee – specifically no advisory fees, for up to one year (until the end of September 2018). For amounts over $15,000 the regular advisory fee schedule rates apply. Currently there aren’t that many similar types of fee waiver promotions for deposits of that size. Interestingly, this asset level appears to appeal to beginner investors or to those who are curious about the SmartFolio experience.

[*disclosure note: SparxTrading.com has a referral program in place with BMO SmartFolio and may receive compensation for individuals opening a SmartFolio account with code STSF and/or clicking through to the SmartFolio website]

For National Bank Direct Brokerage, the Investcube product isn’t a typical robo-advisory although it often is described as such. Nonetheless, the automatic rebalancing features and ‘hands off’ appeal to investors put Investcube’s pre-built portfolios up against those of the more recent robo-advisors. Earlier this month, NBDB launched a tiered-cash back promotion that offered between $50 and $600 for new and existing account holders.

It will be interesting to monitor the online brokerage space as a whole to see a) whether the other online brokerages who offer robo-advisory services also start offering more aggressive promotions and b) if other Canadian discount brokerages (or their parent brands) also start deploying robo-advisors. Of course, in researching the field of Canadian robo-advisors and their current promotions, it looks like these online brokerage affiliated offers from BMO SmartFolio and Investcube are also going to start shaking the tree at the robo-advisors to step up with something better.

A tale of two tweets

VB Twitter gets a reboot

After a number of months of relative quiet from Virtual Brokers on social media, the Virtual Brokers Twitter account appears to have come back to life with tweet activity picking up over the past few days.

While it is still early, this uptick in activity coincides with addition of bandwidth in the client service arena. Specifically, Virtual Brokers recently added resources to their phone service by opening a call centre in Montreal.

As any longtime reader of the weekly roundup will note, however, the presence of a Twitter account also opens up a service channel directly with an online brokerage.

In the past few months, Virtual Brokers has been receiving tweets and responding, albeit after a longer period of time than what the channel typically demands. So, to see not only customer service tweets but also a ‘general interest’ topical tweet emerge from the VB Twitter account is a sign that perhaps additional resource has been allocated here as well.

While being on Twitter is not without its growing pains, a reboot is still better than radio silence. From a strategy point of view, it will be interesting to see what kind of content will be coming from VB and the kind of traffic/response it receives as a customer service channel as more DIY investors (and VB clients) also start to take note of the uptick in activity.

Scotia iTRADE gets insta-famous

Earlier this week, Scotia iTRADE held a promo to drive traffic into their investor centre in downtown Toronto. Instead of coffee or ice cream, this time it was popcorn and SCENE points. Specifically, Scotia iTRADE appeared to be offering up 2000 SCENE Points (which could land two general admission movie tickets) for a $5,000 deposit. This offer is open until June 15, 2017.

As good as the popcorn may sound, however, it should be noted that at the deposit level of $5,000, there may be a quarterly fee of $25 that applies (the $25 per quarter fee is waived if, among other conditions, there’s at least $10,000 in aggregate account value) as well as standard commission rates of $24.99 per trade which are worth considering. The minimum account balance to receive the better trading commission rate of $9.99 per trade is $50,000.

If SCENE points are your thing, there is an existing offer which starts at deposits of $25,000 and can provide 50 free trades and considerably more SCENE points.

Once again, Scotia iTRADE is taking advantage of its parent Scotiabank’s association with the SCENE points program to be able to offer up this ‘free movie’ perk for signing up for an online brokerage account.

In addition to the promotion itself, there were also two other interesting observations. First, the deposit level for opening an account and qualifying for a promotion had been lowered to $5,000 – which is significantly lower than their current (or usual) set of offers. Perhaps this lower hurdle for an offer might be a signal of a coming shift in either the pricing or requirements to hold a Scotia iTRADE account.

The second observation of interest was that, unlike some previous campaigns, there wasn’t any uptake of this event on Twitter (at least under the hashtags associated with iTRADE or this promotion). There was, however, some visibility on Instagram by an iTRADE marketing manager which showcased members of the iTRADE team in action.

In terms of keeping up on social media, perhaps this is also a signal that branching out into yet another social channel is necessary to get exposure and engagement that isn’t happening on Twitter.

Discount Brokerage Tweets of the Week

The markets weren’t the only places where volatility could be found – DIY investors also had some volatile comments of their own for a few brokerages this week. Mentioned on Twitter were Questrade, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

Wealthsimple gets Bigly

If you’re wondering if robo-advisors have struck a chord with the Canadian investor community, especially the millennial crowd, look no further than this post from the reddit Personal Finance Canada subreddit. While the Canadian Prime Minister and robo-advisors are lightning rods independent of one another on most days, when they combine, there was an undeniable reaction.

Saving for School

For one iTRADE customer, saving for their children’s education was top of mind in this post from RedFlagDeals’ investing forum. Find out what one user learned when asking how to set up a family RESP with Scotia iTRADE.

Into the Close

T.G.I.F. The long weekend is finally here and although it could end up feeling much longer if you happen to watch any news, the ‘good news’ is that the weather in most of the country makes it much easier to peel away from a screen and enjoy the outdoors (or stick to a screen and cheer for the Sens!). A reminder that Canadian markets will be closed on Monday for Victoria Day, not that that will stop the die hard traders from looking at the US markets for trading opportunities or a cue on how to kick-off on Tuesday. Have a safe and enjoyable long weekend!

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Discount Brokerage Weekly Roundup – May 12, 2017

While savvy investors and traders enjoy the ‘boring’ trades, in these markets, the truth is that nothing is quite so boring. For now, stock markets are moving on earnings – which is a good sign – however there appears to be a little extra uncertainty thrown into the mix, which for better or worse, makes things exciting to have to trade around. For mainstream investors, it seems that rather than try to pick off individual success stories, another product, ETFs, are continuing to be the ‘boring’ trade with some exciting results for those who run them and the online brokerages that facilitate the trading of these.

In this week’s roundup, we take a look at some interesting and interrelated developments in the world of investor education and ETFs that could be an area where Canadian online brokerages look to battle it out next. From there, we profile what the hiring decision of one online brokerage might mean for the Canadian landscape, especially out west. As always, we’ll serve up the latest DIY investor tweets and a pair of interesting forum posts to see what Canadian investors are talking about.

When a webinar is more than a webinar

One of those bigger trends among the online brokerages is the shift to digital content, in particular, with investor education. While the shift from seminars to webinars is nothing new in this space, what is noteworthy is the uptick in investor education content that one bank-owned brokerage, CIBC Investor’s Edge, has been deploying via webinar.

In late March, there was a webinar by Jamie Golombek that discussed some of the implications of the latest Canadian Federal budget and this past week, we noted an announcement for a webinar on ETFs presented by David Barber or First Asset. While two points a trend does not make, it did signal that something is stirring at CIBC Investor’s Edge.

Source: Screenshot of CIBC Investor’s Edge Website

A handful of brokerages, notably Desjardins Online Brokerage, National Bank Direct Brokerage, TD Direct Investing and Scotia iTRADE, have structured, regular and ongoing investor education webinars and seminars. The recent uptick in CIBC Investor’s Edge’s webinar schedule may signal a more concerted effort to deliver DIY investor educational content or it may resemble the approach taken by brokerages such as Credential Direct or Virtual Brokers where webinars are held intermittently during the year. Either way, both the timing and the topic are an interesting choice given what other online brokerages are delivering in terms of ETF-related content.

In May, TD Direct Investing is planning a pair of webinars on ETFs and Desjardins Online Brokerage has introduced a webinar showcasing the latest Desjardins-branded ETFs.  By comparison, National Bank Direct Brokerage also includes a regular webinar on the basics of ETFs and are running their latest promotional sponsorship of the Horizon’s ETF ‘Biggest Winner’ competition with, you guessed it, ETFs at the core of the contest structure.

There’s very little doubt that ETFs have become very popular with investors – this past week for example, ETFGI, a research group that tracks the ETF ecosystem, reported that more than $4T USD (yes trillion) is invested in exchange traded funds/products globally. In Canada, figures from the latest CETFA report (data to April 30, 2017) show a total of $126.2B in assets under management across 22 ETF providers and 495 funds.

Source: Screenshot of CETFA report

One of the interesting observations of the Canadian data is the remarkable growth over the last year of assets at players both big and small. Some noteworthy names for the DIY investor space include BMO Asset Management (45.4% y/y), Questrade Wealth Management (+58.9% y/y), RBC Global Asset Management (65.1% y/y) and TD Asset Management (173.7% y/y).

What has not grown as quickly, however, has been the content from Canadian online brokerages for DIY investors on understanding and navigating the ever-expanding world of ETFs.  To be fair, the ETF providers themselves do provide quite a bit of educational content (usually about their specific types of funds) and often partner with online brokerages to deliver the content to the online brokerages’ clients. With 495 Canadian funds in play and well over 6,000 internationally, picking and choosing ETFs is starting to rival picking individual stocks in complexity and choice – especially for the DIY investor.

With a new webinar from CIBC Investor’s Edge on its way as well as webinars about ETFs from several online brokerages who are active with investor education, the race to provide quality investor-focused educational content on ETFs appears poised to heat up during the next few months. Already the commission-pricing for ETF trading/investing has become a focal point for DIY investors, so the combination of continued retail investor interest and increasing competition (both among ETF providers and online brokerages) could result in some very interesting maneuvers by Canadian discount brokerages and some very creative tools and services for DIY investors.

Deal  Extension

It’s always a good sign to see deals come to market and to have them extended. Qtrade Investor has extended their transfer fee promotion for about a month with the new deadline being June 12th. This offer lowers the minimum deposit amount to qualify for a transfer out fee coverage (typically $150) from $25,000 to $10,000. For more details on the latest deals/promotions from Canadian discount brokerages, check our current deals section here.

Interactive Brokers looking to Vancouver for Customer Service Centre

Even though the Canadian online brokerage space is a dynamic one – especially when it comes to staffing and turnover, there are the occasional developments that provide an interesting window into the inner workings of these largely private organizations.

One of the interesting pieces of information that recently crossed our radar was a post for a job opportunity from Interactive Brokers Canada. Specifically, the post was for a customer service representative for a brand-new office located in Vancouver, BC. The significance of this last sentence is threefold.

 

Source: Screenshot from Interactive Brokers’ website

 

First, it appears that Interactive Brokers Canada is expanding beyond its headquarters in downtown Montreal. While several brokerages have a footprint in BC, many do not, so for Interactive Brokers to open an office in Vancouver (even if it may be largely a call-center) is a signal that they’re pushing to serve Western Canada and potentially areas further afield.

The second interesting aspect of this position is the language requirement, specifically that applicants need to have fluency in Mandarin as well as English. This additional language requirement is in line with other reported news of Interactive Brokers growing its account base in Asian markets. Whether these reps would be servicing exclusively Canadian clients or international clients is unknown, however the region (i.e. along the Pacific) and skillset of these prospective employees suggests Interactive Brokers Canada may be building infrastructure for strategically important demographic of user and doing so at a fraction of the cost it would require for the same operation in the US (think currency advantage).

Finally, with the introduction of the TFSA and RSP accounts, Interactive Brokers has opened itself up to dealing with many more client service-related inquiries (in addition to the traditional trading account queries). Bolstering their client support infrastructure (especially their call centre) means that in addition to providing low commission pricing, Interactive Brokers is also paying attention to customer support.

Discount Brokerage Tweets of the Week

A relatively quiet week for most brokerages on Twitter, nonetheless there were more jeers than cheers. Mentioned this week were CIBC Investor’s Edge, Questrade, Scotia iTRADE and TD Direct Investing.

From the Forums

A propos

Sometimes the timing just works out. This post from the Personal Finance Canada thread on reddit is a great example of the kinds of scenarios that beginner DIY investors find themselves in when trying to navigate the world of ETFs & online brokerages for the first time.

Itch to Switch

One of the most consistent reasons DIY investors think of switching online brokerages is because of the fees they’re paying. In this post on reddit’s Personal Finance Canada subreddit, one user expresses their frustration at the fees paid by their spouse and is looking for a better deal.

Into the Close

That’s a wrap on another wild and crazy week. And, it seems fitting that this weekend should be a time to thank mom’s everywhere for putting up with us during our crazy toddler/teenage (and adult) years – so thanks mom for being awesome and to mom’s everywhere for all of the wonderful things you do!

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Discount Brokerage Weekly Roundup – May 5, 2017

Not sure if May got the memo, but it was April that was supposed to get the showers. For many traders, however, this is the month when many of them will be looking to exit the market according to the saying: ‘Sell in May and go away’. While things don’t always go to plan, Canada’s discount brokerages are hoping that nobody rains on their parade, especially with the launch of their summer campaigns on the horizon.

In this week’s roundup we review the latest discount brokerage deals & promotions, including where to find out about a special offer being launched by SparxTrading.com in the coming weeks. From there we look at the latest trading stats from one US online brokerage and how the no-commission trading pricing could reshape the way online brokers operate. Following that story is the profile of a Canadian independent discount brokerage who was recognized for keeping their people happy and motivated. As always, we’ll close out the roundup with a summary of DIY investor tweets as well as a selection of DIY investor forum posts.

Let’s May a Deal

Now that spring has sprung, the weather isn’t the only thing changing. With RRSP season and income tax season now officially over, interest in online brokerages will start to wane until the fall, so Canadian brokerages will start to have to get a little creative to get the attention of DIY investors over the next few months.

With so much happening in the news, it seems that this year investors who are in the markets will be keeping a closer eye on their portfolios in case, you know, nuclear war breaks out. Aside from that unpleasant reality, it appears that Canadian online brokerages are hoping that some creative promotional offers will be good enough to get the attention of the folks who are in the market for an online trading account.

At the start of this month, Scotia iTRADE and National Bank Direct Brokerage were the only two brokerages to advertise new offers for DIY investors. Desjardins Online Brokerage also made headlines in the deals section by extending their existing offer out through the end of June.

In the case of iTRADE, there’s a promotion linked to the SCENE points program where new account registrants to Scotia iTRADE can receive 25 commission free trades plus between either 5,000 and 100,000 SCENE points (depending on deposit levels). The SCENE points can then be redeemed either for free movies or with partner restaurants or retailers where SCENE points are accepted.

Whether the points offer moves the needle with DIY investors is debatable (i.e. are movies really that valuable?) however the fact that there is a promotion and that people might pay attention to the deal might make it worthwhile campaign.

Another offer in the Canadian discount brokerage space comes in the form of a fantasy stock (ETF) picking competition from National Bank Direct Brokerage and Horizons ETFs.

With NBDB being the only Canadian online brokerage to allow commission-free trading on Canadian ETF buys and sells, ETF investors and those who want to learn about investing using ETFs, would find the competition (and the possibility of winning up to $7,500 cash) appealing.

For DIY investors, it appears competition between discount brokerages is still healthy.

There are still at least 23 advertised offers, and based on a number of in-person conversations with Canadian online brokerages, there are several deals and offers in the pipeline – with some being planned for later in May.

Of course, we saved the best news for last. This month, SparxTrading.com will also be launching a special promotional offer for DIY investors that will be sure to get quite a bit of attention. Be sure to stay tuned as we’ll be dropping the news on our Twitter feed first.

Interactive Brokers in a Squeeze

With the rollover into a new month, Interactive Brokers has once again published their trading metrics and provided a unique window into the landscape of online trading.

As we had reported in a previous edition of the weekly roundup, there are some interesting storm clouds brewing in the online brokerage space in the US that make looking at these stats important – especially because they might offer some insights into what may happen in Canada.

To recap, there appears to be a price war in the US online brokerage market in which major players such as Schwab, TD Ameritrade and E*Trade Financial have all drastically cut commission prices. Interactive Brokers, by comparison, reported an average equity commission per trade of about $2.30 and thus has yet to follow suit with some of their competitors.

It is against that backdrop that there are several noteworthy observations about Interactive Brokers’ stats.

First, since Interactive Brokers releases their full set of trading metrics dating back to 2008, it is very interesting to note that they continue to grow their account base. From the start of reporting in January of 2008 to the most recent set of results, accounts at Interactive Brokers have climbed from 97.2 thousand to 410.8 thousand. For those keeping score at home, IB’s accounts have grown four-fold in about nine years. Curiously, however, the crucial metric for online brokerages – Daily Average Revenue Trades (DARTs) – has not grown at the same pace. In 2008, the cleared average DART per Account was  774; in 2017 the YTD average is 382, which is slightly less than half the average in 2008. Granted, 2008 and 2009 were crazy years for volatility and trading, however, it is a curious observation that despite the growth in accounts, trading has not followed suit.

Another interesting stat to compare this against comes from online brokerage Robinhood. Specifically, the growth chart recently reported on their blog which shows that they’ve grown from no accounts in 2015 to over 2 million in 2017 and are now valued at about $1.3B (USD).

Source: Robinhood.com blog screenshot

Robinhood has been increasing its feature set to cater to more active investors (including those that would use margin).

A third interesting development from the past week was the spike in E*Trade Financial’s share price on the whispers that there may be a buyer. Without speculating on who that might be, it is interesting because E*Trade is also caught between its identity as an online brokerage firm that caters well to active traders and one that can service the client base being sought after by TD Ameritrade, Schwab and even Robinhood.

What does this all mean?

What these data points suggest is that Interactive Brokers, which has typically been branded as the ‘active trader’ brokerage of choice, has either been bringing on clients who don’t trade as much as some of their earlier clients have, or if there are active traders in the mix, there hasn’t been the volatility around to get traders really excited. Likely it’s a mixture of both, especially since Interactive Brokers has made the decision to shutter its market making division because it’s been losing money.

Going after a less active trader, however, means competing with upstarts, like Robinhood, who’ve been crushing it from an account growth point of view, as well as going up against bigger players, some of whom are also prepared to go to zero commissions and would still be profitable.

At first blush, Interactive Brokers’ continued account growth, growth in assets and increasing margin balances are good signs. The fact that the active trading segment appears to be stalling, however, reinforces that active traders are hard to come by and are being sought by all sides. In trying to add accounts by bringing on less active traders, Interactive Brokers is moving into a very crowded space, so it will be interesting to see how their metrics, particularly the account growth, behaves with deeper value alternatives now becoming more prominent.

Questrade wins best managed company award

One of the interesting things about a recent visit to the Questrade offices in Toronto is not only the level of security in their offices, but also to see how much they’ve grown and continue to evolve.

Despite the addition of the size of their team, there is something different about Questrade than at the bank-owned brokerages, namely that at Questrade there are lots of ‘younger’ folks on staff.

While it may not seem consequential, it might help to explain how, unlike some of their peers, Questrade has a very pronounced presence on social media – especially on Twitter and in forums. To their credit, there’s a certain authenticity (aka street cred) to the culture of being able to connect with younger investors because so many of their own team would fit the mold of a typical client.

Recently Questrade received (yet again) an award for being a well-managed company. Part of the online brokerage (and financial services) experience entails knowing that who you’re dealing with is doing something right in the people department.

Here’s a video from the President & CEO of Questrade, Edward Kholodenko, which sheds some light on life at Questrade.

It was a rough week for a couple of online brokerages who caught more than a little flak for some technical outages. Of course there were plenty of customer service sirens going off all around. Mentioned this week were CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

 

From the Forums

Insight Scoop

With deals and promotions being a feature of this week’s roundup, we found this post from RedFlagDeals’ investing forum to be interesting. Specifically, it looks at one user’s experience in trying to see if the current BMO InvestorLine deal is a good fit.

Trading Places

There’s usually someone in the forums looking for a little help in understanding the transfer process from one brokerage to another. In this post from reddit’s Personal Finance Canada section, the original poster wanted to know about the process of moving into Questrade from Disnat. It’s an interesting story because 1) it’s not a move you hear about every day 2) it got a few very insightful reactions from some readers 3) it is another example of where Questrade and Qtrade get mistaken for the same brokerage and 4) Disnat’s parent – Desjardins Online Brokerage – purchased Qtrade Investor, so possibility that things could end up going full circle was mildly amusing (at least for the bystanders – and since it wasn’t to Qtrade but to Questrade not actually a case that the original poster would encounter, but someone actually might).

Into the Close

It’s Friday – otherwise known as the day of the week on which all of the crazy, potentially life changing news gets announced.  It’ll be a good weekend to stay indoors and enjoy thinking of being in a galaxy far, far away (where it doesn’t rain so much). Have a great weekend!

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Discount Brokerage Deals & Promotions – May 1, 2017

*Updated: May 19* Now that spring is in full swing, it looks like the deals and promotions section is getting a little spring cleaning of its own. Like the big puffy Canada Goose jackets, there are a number of deals that are getting shelved for the season (or perhaps for good), however there are some exciting new developments to share as well, so you’ll probably want to have a gander.

With the tail end of spring typically slowing down a notch, it appears that brokerages are getting a bit more creative with the offers in play. In addition to the standard cash-back or free trade promotions, there is also an ETF trading contest (with a real cash prize) from National Bank Direct Brokerage as well as a promotion from Scotia iTRADE linked to movie or dining out points. In addition, the offer from Desjardins Online Brokerage, which was scheduled to expire at the end of April, has been extended through to the end of June.

The good news for DIY investors looking for an online trading account is that there is still lots of selection.

The deals and promotions section currently has 23 advertised offers for DIY investors, and with activity already being telegraphed to start the month off, it’s a good sign that brokerages are still interested in competing for new business. A recent edition of the Weekly Roundup pointed out the competition for assets between US online brokerages is heating up, something that may shape how things play out here in Canada as both banks and brokerages will be racing to gather assets.

Also adding some intrigue into the deals and promotions space is the announcement by Desjardins to fully acquire Qtrade Investor, and what that might mean for the space as a whole.

Another new change readers will note is the appearance of Sparx-branded codes in the current BMO InvestorLine offer. Specifically, users can input the code SPARXCASH or SPARXTRADES when signing up for the current BMO InvestorLine promotion. For full transparency, SparxTrading.com will receive a referral payment from BMO for anyone using these codes to open an account.

We’ve also got another offer in the works so check back for updates to our selection of referral offers soon.

As always if there are any offers that we’ve missed and that would be valuable to share with our readers, please let us know in the comments below.

Expired deals

Virtual Brokers was the most active in terms of deal turnover heading into May. They saw three offers (RSP cash back bonus, 2 months free trading bonus, apple gift card draw) expire officially at the time of publication. While it’s no guarantee, recent history has shown Virtual Brokers to come back to the market with an offer a short time after the expiration of another, so stay tuned.

Extended Deals

*Update: May 19 – Qtrade Investor has extended their commission transfer offer to mid-June. See table below for more information.*

Desjardins Online Brokerage’s popular 1% commission rebate offer has been extended until the end of June. Previously scheduled to expire at the end of April, this offer provides up to $1150 in value back to clients (maximum commission credit based on amount transferred is $1000 plus $150 in transfer fees).

New Deals

Scotia iTRADE’s  latest offer was originally telegraphed in the most recent edition of the Weekly Roundup and features a combination of 50 commission free trades plus SCENE points which are good for use either at Cineplex theatres or with partner restaurants or retail outlets. The minimum deposit to qualify for this offer is $25,000 and the highest tier, $1M+ in deposits, lands the highest amount of SCENE points (100,000), which is good for the equivalent of 100 free movies. Commission-free trades are also good for up to 90 days. Read the table below for more information.

National Bank Direct Brokerage is sponsoring the Horizons ETF Biggest Winner contest. This contest enables participants to compete for cash prizes, which are awarded weekly and at the conclusion of the competition. Contestants trade Canadian ETFs to see who can achieve the best performance over the duration of the competition, which runs from May 8th through to June 16th 2017.

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
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 June 30, 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 SPARXCASH when signing up for cash back offer or SPARXTRADES 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
Scotia iTrade Open and fund a new account with 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 A) 5,000; B) 7,500; C) 20,000; D) 35,000; E) 50,000 or F) 100,000 scene points as well as 50 free trades. In addition, new clients will also be reimbursed up to $150 in transfer fees. Free trades will be valid for 90 days. Use promo code 17SC when signing up 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+ SCENE Points A) 5,000 B) 7,500 C) 20,000 D) 35,000 E) 50,000 F) 100,000 + 50 Free Trades 90 days Free Movie & Free Trade Promotion July 31, 2017

Expired Offers

Last Updated: May 1, 2017 13:00 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: May 1, 2017 13:00 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 June 14, 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 June 30, 2017

Expired Offers

Last Updated: May 19, 2017 14:00 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) 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: May 1, 2017 13:00 PT