May 2018 – SparxTrading

Posted on May 25, 2018 by user — Leave a comment

Discount Brokerage Weekly Roundup – May 25, 2018

Though this was a short week because of the holidays, there was still a healthy dose of news to digest and trade around. For Canadian online brokerages, the race is on not only to report some of the big news but to put a creative spin on it.

In this week’s roundup we go to both extremes with in-depth analysis of the latest set of online brokerage rankings followed by a small but important revelation of one online brokerages upcoming features on Twitter. As usual we’ll close by taking a look at what DIY investors were chatting about on social media and in forums.

Moneysense’s 2018 online brokerage rankings go live

Earlier this week, MoneySense magazine published the 2018 edition of its Canadian online brokerage rankings. As with past years, Surviscor provided data for the analysis and presented a category-driven approach to presenting which online brokerages were “the best” in each feature measured.

The author of this year’s review was the well-known Canadian personal finance writer, Jonathan Chevreau, who added considerable depth to the commentary and analysis – more so than in previous editions of this article.

At SparxTrading.com, we’re always keen to review the comparisons of online brokerages, so we thought we’d take a deeper look at this year’s MoneySense rankings to get an idea of how DIY investors might be impacted by the ratings and to determine what trends or insights might emerge from the ratings themselves.

Before diving into the results in detail, we thought it would be important to review what was being measured in the MoneySense rankings and how this year’s rankings differ from last year’s.

Historically we’ve observed that there is considerable variation when it comes to Canadian discount brokerage rankings. There can be variation between different ratings of the same discount brokerages within the same year as well as variation between years for the same rankings. For example, the Globe and Mail’s online broker rankings use a different approach than does J.D. Power or Surviscor when evaluating Canada’s online brokerages for cost, service or accessibility.

For the 2018 MoneySense online brokerage rankings, the underlying data comes from Surviscor’s analysis of the online brokerage space, with specific parameters selected for the MoneySense report. The snapshot that the data is based upon comes from 2017, specifically from the 2017 online brokerage rankings conducted by Surviscor. As such, the ‘new’ information in the MoneySense rankings is really in the commentary as well as in some of the detailed category breakdown. The “best overall online brokerage” ranking, however, mirrors the findings published in December 2017.

2017 rankings vs 2018 rankings

To help add more context to this year’s results, we’ve summarized the MoneySense rankings data from last year and this year along with including the scores firms received for the 2018 edition.

The categories that were reported on this year were mostly similar to last year, although there were some notable differences.

This year the following categories were reported on:

Best overall online brokerage
Best discount brokerages for ETFs
Best online brokerages for mobile and market data
Best online brokerages for low fees
Best online brokerages for design and user experience

Interestingly, a category from last year, the ‘best online brokerage for reporting and record keeping’ was not included in this year’s review.

New for this year, however, was the mobile accessibility category which was intended to reflect the importance of mobile experiences to investors. Data for this category came from Surviscor’s 2017 mobile online brokerage review. There was also a name change for the ‘getting started’ category used in 2017 to ‘initial impression’ for 2018.

Category	2017	2018
Overview + Winner	T: Qtrade Investor H: Questrade Bank-owned: T: BMO InvestorLine + Scotia iTRADE	Qtrade Investor – 22 Questrade – 21 Scotia iTRADE – 14 BMO InvestorLine – 14
ETFs	T: Questrade + Virtual Brokers H: National Bank Direct Brokerage	National Bank Direct Brokerage – 17 Qtrade Investor – 16 BMO InvestorLine – 13
Mobility + Data	Data: T: TD Direct Investing H: Qtrade Investor	Mobile Accessibility: BMO InvestorLine – 26 Questrade – 14 Qtrade Investor – 10 Data: TD Direct Investing – 20 Qtrade Investor – 17 RBC Direct Investing – 9
Fees + Services	Fees: T: CIBC Investor’s Edge + Questrade H: Qtrade Investor + Virtual Brokers Service: T: Qtrade Investor H: Desjardins Online Brokerage	Fees: HSBC InvestDirect – 10 Questrade – 10 CIBC Investor’s Edge – 7 Service Interaction: Qtrade Investor – 8 RBC Direct Investing – 7 Questrade – 6
Initial Impression & UX (Getting Started – 2017)	Getting Started: T: Questrade H: TD Direct Investing User Experience: T: Questrade H: Qtrade Investor	Initial Impression: Questrade – 13 Scotia iTRADE – 9 TD Direct Investing – 9 User Experience (UX): Qtrade Investor – 40 Scotia iTRADE – 31 BMO InvestorLine – 30
Reporting & Record Keeping	T: BMO InvestorLine H: Qtrade Investor
Legend: T = Top Pick; H = Honourable Mention

As shown in the summary table, one important change between last year’s report and the 2018 results is the number of discount brokerages being reported in each category.

In the 2017 online brokerage rankings, MoneySense reported the “top pick” and “honourable mention” in each category. This year, however, there are more online brokerages being reported in each category (typically three or four vs two) than last report. As a result, this presents “more data” for DIY investors to sift through when comparing online brokerages. In the best overall online brokerage category, last year this section was split into non-bank-owned online brokerages and bank-owned online brokerages however this year there doesn’t appear to be an explicit distinction being made. Interestingly, the same four institutions from 2017 were in the list of top firms overall in 2018.

Another important change between last year and this year is that there are now also numerical scores being reported. Specifically, the scores (points) earned by online brokerages in each category were reported.

While it was useful on a relative basis to compare brokerages within the same category (e.g. Qtrade Investor received 22 points while Scotia iTRADE and BMO InvestorLine each received 14) it was difficult to tell in an absolute sense how well a brokerage could possibly do in a category (i.e. what was the maximum number of points Qtrade Investor or BMO InvestorLine could’ve earned?).

In addition, the point system for each category was unfortunately not explained so there wasn’t any real context to what receiving 10 points vs 15 points meant. We can assume more points is better, but based on the scoring of best overall, does Qtrade Investor’s score of 22 mean that they are 1.6x better than either BMO InvestorLine or Scotia iTRADE?

Overall, however, the 2018 version of MoneySense’s online brokerage assessment offers readers a detailed look at the state of the online brokerage space with 12 online brokerages getting covered and a reasonable variety of factors that matter to investors – chief among them being pricing.

What’s interesting about the MoneySense online brokerage rankings?

While it likely wasn’t a surprise that Qtrade Investor took home top prize in the 2018 MoneySense rankings, the optics of yet another influential award being received serves to strengthen Qtrade’s perception in the marketplace as one of the premium online brokerages in Canada.

Typically strong performers on the rankings circuit, Qtrade Investor has had an especially strong year for recognition with top spot finishes in the Globe and Mail, Surviscor and now MoneySense as well as a close second place finish with JD Power’s rankings.

As mentioned above, there is considerable variation between rankings and what they’re measuring however Qtrade Investor has managed to score well on all of them, perhaps a strong sign they’re doing more than a few things right. On the MoneySense rankings, there were three categories in which Qtrade Investor placed first: best online brokerage user experience, best online brokerage service interaction and best overall.

It bears mentioning again, that how these categories are defined is very important as are the indicators that are used to measure performance within the categories. For example, what constitutes a strong service experience or effective user experience is likely more subjective than which broker has the lowest trading commission prices or fee structure. Yet, both components go into determining the final score.

So, with that caveat in mind, it was also interesting to note that in certain categories it was easier to see which online brokerages were further ahead than others.

The differences in the best overall online brokerage or brokerage with best mobile accessibility, for example, were very apparent. For example, the category of mobile accessibility, which was new for 2018, shows that BMO InvestorLine is very far ahead of its category competitors, Qtrade Investor and Questrade. Similarly, in terms of user experience (UX) Qtrade Investor scored much higher than either BMO InvestorLine or Scotia iTRADE.

In other categories, the race between brokerages was much tighter. Fees and services, for example, each had relatively close scores that made distinguishing first from third place difficult. ETFs was another category that posed a challenge for brokerages to stand out in.

Considering how important costs and fees are to DIY investor clients, the latest rankings data seems to suggest that when it comes to the lowest cost online brokerages, the differences in pricing are small, and as such, other criteria will be what tilts a decision one way or another when choosing a brokerage.

With prices being where they are for commissions, it is probably worth mentioning that it will be challenging to differentiate on price alone. That said, savvy online brokerages can use this to their advantage. One of the important factors in trading costs for DIY investors is ECN fees. So, highlighting “flat” fee commission pricing versus trades that charge ECN fees will be key to standing out.

For both DIY investors and online brokerages, the challenge in choosing an online brokerage comes down to what else beyond low commission pricing that online brokerages can offer.

Based on the results from the 2018 MoneySense online brokerage rankings, these opportunities might present themselves in the user/digital experience. As we’ve mentioned before, technology is the new benchmark for service – it enables the provision of a consistent experience at an unprecedented scale – something the ‘human’ touch cannot do.

The data from these rankings show that firms like BMO InvestorLine and Qtrade Investor are, at least in the Surviscor analysis, doing much better than their peers in the digital experience. Whether it’s improved navigation or ease of access, if using the product feels simpler, the process of managing your own investments doesn’t feel frustrating which is what DIY investors really value.

Finally, a third interesting observation about the online brokerage landscape in Canada is that aside from Qtrade Investor, it appears that there is a lot of diversity in who has been designated as a top performing firm. A surprise move onto the list by HSBC InvestDirect (best online brokerage for fees) as well as top podium finishes for Questrade, BMO InvestorLine and TD Direct Investing. Of all the category winners, Questrade was the first organization to make a splash on social media. We have yet to see other category winners, including best overall category winner, Qtrade Investor, push something out on these results on their LinkedIn pages (as of the time of publication) or social media. No doubt things are busy in Qtrade’s tent with the merger taking place – which might be a tactical time for other Canadian online brokerages to try and gain mind share.

There were certainly a number of other interesting observations about the online brokerage industry in this year’s online brokerage ranking, however an important takeaway for both online brokerages and DIY investors is that the Canadian online brokerage space is crowded and the market is small. Even so, online brokerages are now locked in a race in which the nimblest providers will survive.

Chatter: Scotia iTRADE possibly launching USD registered accounts this summer

It’s summer blockbuster season. For online brokerages it will be an interesting time with independent online brokerages Qtrade and Credential Direct merging and with plans being made ahead of a typically big fall season.

This week we spotted two mentions of the possibility that Scotia iTRADE is getting USD registered accounts this summer.

The first was a mention in MoneySense magazine that the launch may be coming in the summer, while on Twitter, a representative from Scotia iTRADE mentioned to an individual that USD registered accounts are close to launch.

Discount Brokerage Tweets of the Week

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Brokerage Tweets – Curated tweets by SparxTrading

From the Forums

Trust Issues

Creating efficient tax exposure is just one of several important financial planning strategies DIY investors have to consider. In this post from reddit’s Personal Finance Canada thread, it is interesting to read how one DIY investor’s journey with trying to set up an informal trust at an online brokerage is working out.

Exiting Times

When it comes to standard commission rates, Scotia iTRADE stands out among Canadian online brokerages as the highest. In this post, also from reddit, one client is looking to make an exit and gets a little math to help plan an escape.

Into the Close

That does it for another week. Monday is Memorial Day in the US so there is likely to be lighter trading action in Canada. Although, with the first of a wave of US-based cannabis companies listing on the CSE, lighters won’t be the only things being traded here in Canada. All the best to our US neighbours for a safe & happy long weekend!

Posted on May 18, 2018 by user — Leave a comment

Discount Brokerage Weekly Roundup – May 18, 2018

Being online can sometimes be an occupational hazard. Case in point: Laurel or Yanny. Despite having captured the imagination of the internet and having squandered so many people’s valuable time there’s a lesson in here for online brokerages, which is to get attention online, you have to be interesting.

In this edition of the roundup we take a look at some interesting developments that crossed our radar this week. The first was a fleeting promotion from one bank-owned brokerage that tried to snag some new clients with the lure of snacks. From there, we look at how one US-based online brokerage is attracting massive amounts of capital and DIY investor love and how it will undoubtedly become a challenger to existing brokerages. As per our usual fare, we’ve got a great selection of tweets and forum posts for DIY investors to check out.

Scotia iTRADE wants to be SCENE

In what is becoming a bit of an annual tradition, Scotia iTRADE was spotted on Twitter offering up an interesting in-person promotion at their investor centre in downtown Toronto.

Specifically, a tweet caught our attention that was offering up 2,000 SCENE points for anyone who opened a new account with Scotia iTRADE with a minimum of $5,000.

For those keeping score at home, that’s the equivalent of a VIP admission for one, or if you’re into sharing, two general adult admissions.

The ultra-limited time offer from Scotia iTRADE could be a trial run at a broader promotion that enables them to leverage their partnership with the SCENE movie points program. In addition, it may also be an interesting response to the recent move by RBC Direct Investing who launched a commission-free trade campaign and also set the minimum requirement to qualify for a promotion at $5,000.

It will be interesting to see whether the ‘free movies’ are enough of an incentive to tip an individual in favour of opening an account with Scotia iTRADE versus free trades or cash back with one of their competitors. Since this was basically an ‘in person’ offer and relied on individuals coming into the Scotia iTRADE in downtown Toronto, it may be a very limited sample with which to test on, but nevertheless, early data is still data.

As delicious as the allure of free popcorn is, it may not be enough to entice people to put $5,000 into an investment account with Scotia iTRADE – especially considering that the standard commission rates of $24.99 per trade (and up) as well as account maintenance fees of about $25 per quarter for balances under $10K mean that those are some very expensive kernels for low balance, passive investors.

Still there are insights to this offer that are worthy of being mentioned.

First, it looks like RBC Direct Investing has stirred the pot by lowering the threshold for qualifying for a promotional offer at a major bank-owned online brokerage. There are currently no offers from RBC DI’s peers that would rival the value of their commission-free trade deal for the amount that has to be deposited in order to qualify. Scotia iTRADE’s latest move is a bullish sign that other online brokerages are watching and are likely to step forward with something compelling while the RBC DI offer is live.

A second important takeaway is that, in addition to free trades or cash back, there are also rewards points that bank-owned brokerages can rely on as part of their tactical mix.

The fact they chose movie points over commission-free trades or cash enables Scotia iTRADE to keep their own costs low while providing something of potential value to prospective clients. Ultimately, however, the market will decide if the promotion is valuable enough.

Another observation we found interesting is that, for a national brand, restricting access to this deal means there are lots of folks across the country that are left wondering whether they can access the same offer. At a time and in a market that is this competitive, leaving potential clients on the sidelines will definitely cause them to wonder about the price of admission.

Robinhood makes investors merry

Is it possible to let investors trade for free and still make money? Apparently, yes.

Last week in their company blog post, online brokerage Robinhood secured $363 million in Series D funding led by DST Global. The deal, which valued Robinhood Financial at USD $5.6 billion, means that it is now starting to encroach on the traditional players in the US online brokerage market. Though it is still far behind the market cap of Interactive Brokers (~$32B), TD Ameritrade (~$34B), and Schwab (~$80B), it is materially competitive with E*Trade ($17B) and with 4 million users, has actually surpassed E*Trade (3.7 million accounts) on that metric.

Some more interesting nuggets in the press release announcing the capital raise is that a number of new features have been released in a short span of time including commission-free options trading, commission-free cryptocurrency trading in CA, MA, MO, MT, CO, MS, WI, NM, FL, MI and, as of yesterday, to PA. In addition, they have also rolled out a web-based version of their highly popular mobile app all the while maintaining a solid excitement level for their product.

The new capital infusion will no doubt help to accelerate Robinhood’s ability to widen their user base in the US and even around the world. They are certainly not shy about wanting to challenge Coinbase as the leading cryptocurrency trading platform in the US also and are targeting being a significant competitor (if not leader) by the end of the year.

A quick scan of their recent announcements online also shows that the snowball effect is taking hold, with talent.

In another recent post about Robinhood an influential engineer, Lee Byron, joined Robinhood after a 10-year stint with Facebook.

What jumped out about the post was the appeal that the brand, mission and platform had with Byron.

Specifically, he states:

“They’re driven by a mission I believe in: to democratize access to America’s financial system. Despite having a popular service and established mobile apps, their web app is a newer effort and has only just scratched the surface of its full potential. There is so much of the mission the current product doesn’t reach.”

He goes on to state:

“One of the reasons Robinhood is unique is that it brings a much-needed focus on user experience and high-quality consumer products to the financial industry.”

And, based on the user comments and reactions to this article, he’s not the only one who seems to be putting a premium on the design appeal. The following comment by a reader (Ernesto Rodriduez) is particularly telling:

I’m an avid user of Robinhood these days, but prior to it I knew very little about investing and the stock market in general. Having such a beautiful, intuitive and well thought-out UX was and still is the main reason why I felt so attracted to it initially and inspired to want to learn more about trading in general.

Why is this important? For starters, the level of passion and enthusiasm for UX-driven trading/investing experiences in the Canadian online brokerage space doesn’t rival what Robinhood has managed to accomplish in the US. Improvements in online brokerages in Canada have been iterative not necessarily transformational.

Another, much more important, reason why this is a telling comment is because user experience/ease of use is one very important driver of whether or not someone feels confident enough to try out (and keep) investing on their own. Simply put, whether they view investing online as “too hard” “too complicated” or “too inconvenient” has a lot to do with how the experience is perceived.

With Robinhood now venturing into the web application space, they will be competing against more established players, however if they can maintain the same enthusiasm for their web app that they have for their mobile one, their next valuation can and will be cause for concern for their competitors.

As for Canadian online brokerages, the evidence is pretty clear. They can either wait for the no-cost commission train to arrive at full speed or they can get ahead of it – especially with a highly-prized market of younger professionals looking for a better experience – by investing in better UX and more compelling pricing.

Discount Brokerage Tweets of the Week

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Brokerage Tweets – Curated tweets by SparxTrading

From the Forums

Daytrader Taxes

Although it’s not nearly as popular as it once was, there are still a few brave souls who want to take a stab at beating the market – and other daytraders. But, being a daytrader also means taking care of more complicated matters, especially taxes. In this post from RedFlagDeals.com’s Investing forum, one user was looking for a little input on how others have approached getting started as a daytrader.

Planning Ahead

While the bulk of what we focus on is directly related to online brokerages, for DIY investors it’s important to also think about the big picture when it comes to personal financial planning. While the internet is full of stories of individual experiences, this particular story (from reddit) is one that will likely be more common as the general population ages.

Into the Close

That does it for this week. While it was a bit of a slow week on the trading front, there’s no shortage of entertainment on screens of all shapes and sizes. Whether you’re watching a royal wedding or just looking to kick back and enjoy some long overdue good weather this Victoria Day weekend, on behalf of everyone here at Sparx have a safe and enjoyable long weekend!

Posted on May 11, 2018 by user — Leave a comment

Discount Brokerage Weekly Roundup – May 11, 2018

Eventually spring was bound to show up. And, like the green shoots, flowers and sunshine, it’s a time for change and opportunity. Fortuitously, Canadian discount brokerages are also taking their cues from spring and rolling out some interesting new items for the season.

In this edition of the roundup we take a look at a big bank-owned online brokerage that decided it was time to jump back into the deals pool with a new spring offer. Next, we review a posh new service line for high net worth investors unveiled by one online brokerage which could signal a new front in the competition for DIY investor assets. From there, we get a sneak peek at the roll out of new features from a popular online brokerage. And, to round things out, we’ll review the latest tweets from DIY investors as well as some interesting conversations in the forums.

RBC Direct Investing Launches New Promotion

Even though there was a pullback in online brokerage deals action to start this month, it didn’t take too long for that to change – and in a big way. After a prolonged absence from the spotlight of the deals and promotion section, RBC Direct Investing made a splash by launching a new commission-free trade offer.

It isn’t just the timing of the offer that is bound to get the attention of DIY investors looking for an online investing account.

In addition to launching a new promotion at a time when many online brokerages have decided to take a breather from pitching deals, RBC’s new offer has a very low deposit threshold to qualify ($5,000), has a high number of commission-free trades (20) and the commission-free trades are good for one year from when the account opened. Further, the rebates for the commission charges incurred for these trades takes place within three days and not several months into the future.

All told, for any DIY investor curious about trying out RBC Direct Investing, the timing and incentive to do so are compelling.

Given the size and popularity of RBC Direct Investing, it will be very interesting to see how long their competitors decide to wait on the sidelines. The latest RBC Direct Investing promotion is scheduled to expire in June however there’s no guarantee that the offer won’t be extended – especially if it is popular and can bring in new clients or assets.

Based on our internal data, we note that the big bank-owned online brokerages (especially those with comparable fees) will likely want (or need) to consider how to respond in kind.

For the moment, however, RBC Direct Investing has packaged an offer that puts them atop the deals board for compelling value. And, if there’s one thing investors are always on the hunt for, it’s a good deal. Fortunately, now they know where to find one.

Desjardins Online Brokerage Rolls Out New Prestige Service Perks

At the upper end of the account size spectrum, Desjardins Online Brokerage unveiled new Prestige Service features to the front end of their website.

This new premium offering is geared towards DIY investors who have portfolios starting at $250,000 and higher, and comes in three tiers: Bronze (minimum $250,000), Silver (minimum $500,000) and Gold (minimum $1M).

The new tier, Bronze, offers some of the key features of the prestige experience, such as lower priced commissions on stock trades, transfer fee refunds and no fees for registered or inactive accounts.

Like other ‘premium’ plans at other online brokerages, such as BMO InvestorLine, RBC Direct Investing, Scotia iTRADE, or TD Direct investing, there are perks on pricing or rates.

What is particularly interesting for Desjardins clients of the Prestige program, however, are the perks to receive annual statements of capital gains and losses as well as the inclusion of exclusive client appreciation events.

With the race to gather more assets heating up, competition will inevitably turn to offering better and more compelling features to higher net worth clients.

Stay tuned as the latest offering by Desjardins will undoubtedly raise eyebrows with those trying to put together a premium experience for high net worth DIY investors.

TD Direct Investing Previews New Advanced Dashboard Features

Earlier this week, we spotted a tweet on the TD Direct Investing Twitter feed pointing to a webinar previewing new features that will be rolling out to the Advanced Dashboard trading platform.

The webinar offered a detailed look at the new features and walked through where the changes in the platform will occur (complete with sound effects!). As for when the new updates will roll out, the official line is the next few weeks.

One of the big (and cool) enhancements is the ability to use a ‘traditional’ order entry ticket to place trade orders or use an in-line editing view, which essentially looks and feels like entering an order from a spreadsheet table. So, rather than have to walk through orders one trade ticket at a time, users can have a full-view of multiple securities and quickly configure trades from there.

Other feature enhancements were geared towards decluttering or improving user experience (such as colour coding buy/sell buttons) or improving trading execution tools (such as order settings). Of course, one of the great (but possibly daunting) features is how customizable the workspace is.

Fortunately, very active investors are generally pretty motivated and self-directed when it comes to learning. As such, the walk-through webinar is helpful to orient users to the new features and how they can be used to get the most out of Advanced Dashboard. Especially useful was the Q&A section with webinar host Ryan Massad (of TD Direct Investing) which started at around the 32-minute mark.

Another interesting angle that was mentioned several times during the presentation, was that client feedback was an important driver for the feature enhancements. As part of an interview we did with TD Direct Investing last year, it was neat to learn how user feedback finds its way into the feature enhancement conversations and workflows. This new rollout appears to have been the result of that process and for TD Direct Investing clients, there are numerous paths to submit feedback.

Discount Brokerage Tweets of the Week

Discount
Brokerage Tweets – Curated tweets by SparxTrading

From the Forums

Hunting for Deals

Are online investors hungry for a good deal when opening an online trading account? This week the answer was definitely. In this post, from RedFlagDeals.com, one user was looking for an online brokerage offering the best deal for opening an account and, on reddit in this post, a user was specifically interested in the best offer from Questrade. Spoiler alert, users were pointed to SparxTrading.com’s deals section for the answers to both.

Not So Simply the Best

The ongoing desire to find out which online brokerage in Canada is the best is starting to change. After extensively covering and monitoring the conversation on which discount brokerage is best, it was interesting to read this thread in reddit’s personal finance Canada subreddit in which the notion of a “best” brokerage didn’t matter as much as the “best brokerage for your needs.”

Into the Close

Stick a fork in this week, because it’s done. Yes, another cautiously optimistic week for investors is in the books but by now everyone is primed to be a little bit nervous when things seem ‘calm’. So, enjoy it while it lasts and for everyone fortunate enough to get some sunshine for Mother’s Day, be sure to share that sunshine with the moms in your life!

Posted on May 4, 2018 by user — Leave a comment

Discount Brokerage Weekly Roundup – May 4, 2018

The old trading adage of sell in May and go away clearly did not apply to this week’s market activity. It’s still early enough in the month that anything can happen, however. With the announcement of the end of decades of hostilities between North and South Korea, it’s as good as any segue into the action taking place in the Canadian discount brokerage space.

In this edition of the roundup we check in on the latest updates from an important merger taking place among two online brokerages. Next, we’ll review the latest deals and promotions activity for the beginning of a new month. From there, we’ll take a look at what DIY investors were chatting about on Twitter and in the investor forums.

Credential Direct merger shows signs of progress

After the merger between Credential Direct, Qtrade Investor and NEI Investments to form Aviso Wealth was announced late last year, it wasn’t exactly clear how and when things would unfold. Earlier in April, however, we learned that the merger between the three firms was officially finalized and, as of this week, the Credential Direct website started to direct new and existing clients to the Qtrade Investor product.

As we mentioned in last week’s roundup, the Canadian online brokerage landscape has seen some major moves over the past several months. With acquisitions of Virtual Brokers and Jitneytrade by much larger wealth management firms, as well as this latest merger between Qtrade Investor and Credential Direct, the rest of the year for the Canadian discount brokerage landscape should shape up to be quite interesting. After years of recognition that there were simply too many online brokerages in Canada, the field appears to be narrowing. And, it is likely that there is still further consolidation to come as online brokerages wrestle with staying competitive and profitable at the same time.

While consolidation and removing of an online brokerage from the list of providers might reduce competition, the reality is that Credential Direct was primarily influential in Western Canada and in terms of market share, they were certainly on the small end. As a result, it is unlikely to tip the scales with either investors or among other industry competitors.

According to the Credential Direct website, there will be a transition period over which existing clients will get migrated over to Qtrade’s platform. The target appears to be this coming fall for that to be completed.

That said, it will be interesting to see how the rest of the Canadian online brokerage field responds to what will be a larger Qtrade Investor competitor. Aviso, the parent to Qtrade, will reports having a combined $55 billion in assets under management and over 500,000 clients collectively across the country, so other Canadian online brokerages will have a considerably larger organization to contend with.

It will also be interesting to see where, from a marketing perspective, the Qtrade Investor brand is going to push and what new resources it may have to push with. For example, could pricing or platform improvements be justified given the larger scale? With Credential Direct previously being active on social media, could this be the tipping point to enable Qtrade Investor to wade into the social waters?

For DIY investors, fewer choices may, in this case, provide stronger choices. Without having to allocate resources to competing regionally against Credential Direct, could Qtrade Investor now allocate those resources to better servicing their existing clients? Certainly, for Credential Direct clientele, there will be access to better pricing (in most cases), service and trading experiences.

While Qtrade is likely to become even more of a formidable opponent to the bank-owned online brokerage space, the lesson this merger and additional acquisitions have shown to be true, is that the playbook to surviving the online brokerage space in Canada requires scale. And, the race for new clients and their assets, is almost certainly going to become even more fierce as a result.

May-day Deals Update

The big story in this month’s deals and promotions section is the pullback in offers from Canada’s discount brokers.

After what was an abnormally busy start to 2018, things have definitely quieted down on the deals front with barely more than 20 advertised offers currently in play. Perhaps the greatest concern for DIY investors looking for a bonus to open an account is the general absence of offers in the cash back promotions section.

Currently, BMO InvestorLine is the sole Canadian discount brokerage offering a cash back promotional offer – something that is very unusual considering how competitive the online brokerage space is to acquire new clientele.

All is not lost for investors looking for a cash back promotion, however. DIY investors can also access the Questrade referral offer posted in the deals section but aside from BMO’s offer, the only other way to access a cash back offer at the moment is via referral.

Currently there are three of these offers available from BMO InvestorLine, Questrade and Scotia iTrade. At this point, for new clients looking to open an online investing account, it pays to be extra nice to friends at these brokerages.

Fortunately, there is still the cornerstone offer for coverage of transfer fees available at most brokerages. So, for those looking to try a new provider, that door is certainly open.

Don’t expect the drought to last too long though. It is unlikely that BMO InvestorLine and Questrade will be left unchallenged in the cash back space, especially considering how popular these offers tend to be with folks opening a new account.

With marijuana legalization on the horizon, and the conversation on blockchain still simmering, there are a couple of possible catalysts in play to entice online investors back into the market. Finally, bank-owned brokerages aren’t usually so chivalrous when it comes to ceding market share, so there’s a business case to be made for at least another bank owned brokerage to step back onto the field while it is not so crowded.

We’ll continue monitoring the deals landscape for new movements, but for the time being, only a small number of brokerages are in the deals spotlight, which we’re guessing is totally fine by them.

Discount Brokerage Tweets of the Week

Discount
Brokerage Tweets – Curated tweets by angeloAtSparx

From the Forums

RESP-onding to requests

The Financial Wisdom Forum deserves credit for sharing the news that TD Direct Investing now offers BC residents access to the British Columbia Training and Education Savings Grant (BCTESG) (here is the reference link to TD).

Battle of the Q’s

Questrade or Qtrade? The question is now more pertinent than ever as the narrowing field of online brokerages (that are not bank-owned) casts a spotlight on these two firms. This post from Canadian Money Forum provides some interesting perspectives on both.

Into the close

That’s it for another week. With the world no longer on the brink of war and the economy powering along, even Elon Musk found things a bit…boring. Fortunately for him (and us) there’s plenty of other (cooler) things to be looking at heading into the weekend instead of stock charts. Have a great weekend and #Maythe4thbewithyou.

Posted on May 1, 2018 by user — Leave a comment

Discount Brokerage Deals & Promotions – May 2018

*Update: May 29* There’s an old trader tip that says “buy when it snows and sell when it goes.” Now, it wasn’t too long ago that the snow actually did leave but the arrival of May “should” mean no more snow. Alas, snow wasn’t the only thing disappearing to kick off this month. Several Canadian discount brokerages decided to hang up their promotional skates (for the moment anyway) which has certainly cleared the field for those brokerages actively promoting offers, to continue to post offers to win over new clients and assets.

Discount Brokerage Deals Quick Nav

Cash Back/Free Trade/Product Offer Promotions
Referral Promotions
Transfer Fee Promotions
Contests & Other Offers
Digital Advice + Roboadvisor Promotions

Yes, the big story heading into the new month isn’t who arrived but rather who stepped back. As of the beginning of May, HSBC InvestDirect, National Bank Direct Brokerage and Virtual Brokers all let the clocks on their respective offers run out.

For DIY investors seeking out cash-back promotions, the field is slim, with either Questrade (via their referral offer) or BMO InvestorLine (whose offer also comes with free trades) providing easy to access cash back offers.

Scotia iTRADE and BMO InvestorLine also offer referral promotions with a cash-back component to them however accessing these offers requires more effort that either Questrade’s referral-based cash-back offer or BMO’s standard offer. Side note, BMO InvestorLine’s referral offer can be combined with their current commission-free trading + cash back offer.

It will be interesting to see just how long competitor online brokerages to BMO InvestorLine and Questrade are willing to sit on the sidelines while both firms dominate the deals field unchallenged (at least for now). For the moment, however, the stats are clear: for DIY investors looking for a deal are going to focusing hard on the only brokerages in the spotlight at this point.

Correction: an earlier version of the table that referenced a cash reward of $400 at Questrade for a deposit of $250,000 was incorrect. The current table has been updated with correct information.

Expired Offers

Several offers from Canadian online brokerages expired at the end of April. Virtual Brokers’ transfer fee technically expired, while National Bank Direct Brokerage’s commission-free trading promotion also expired. HSBC InvestDirect’s cash back promotion officially ended after having been extended just a little while longer.

Extended Offers

No offers were extended as of the beginning of May.

New Offers

*Update May 29 – After an interesting little blip in the deals section, National Bank Direct Brokerage is back once again with their commission-free trade offer.

The deal, which is interestingly not posted on their promotions section or in their header slider, is being advertised (and was discovered) on Facebook. In any case, there is a live link to the offer that we’ve included in the table below.

This new offer is similar previous commission-free trade deal of 25 trades which are good for one year except there is also promotional pricing of $6.95 per trade when the 25 trades are used up. This is actually quite a compelling offer for anyone interested in trying out NBDB because they are lowering their standard commission pricing down from $9.95 to where CIBC Investor’s Edge pricing is on a standard basis. So, although this discounted pricing is temporary, it definitely means National Bank Direct Brokerage has one of the most competitive offers out there.

See table below for more information.*

*Update May 7 – After a long absence from the commission-free trade section of the deals section, RBC Direct Investing is stepping back into the mix with a new offer of 20 commission-free trades which are good for up to one year. This is likely to be a popular offer in the category for several reasons. First, the hurdle to qualify for this offer is incredibly low – the minimum deposit required is only $5,000. Second, RBC Direct Investing is part of Canada’s largest bank, which means there’s lots of attention this offer will garner from DIY investors. Last (but not least), there are fewer players on the deals field at the moment which necessarily means this offer will get more exposure. Scroll down to read additional details.*

No new offers to announce at the outset of May.

Discount Brokerage Deals

Cash Back/Free Trade/Product Offer Promotions
Referral Promotions
Transfer Fee Promotions
Contests & Other Offers
Digital Advice + Roboadvisor Promotions

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
	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 $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully.	$1,000	$88 commission credit	60 days	Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, 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, 2018
	Open a new account at National Bank Direct Brokerage with at least 5,000 and you may be eligible to receive up to 25 commission-free trades, good for up to one year. There is also a promotional discounted commission-pricing available within the first year to individuals who use up their 25 trades; trading commissions for the first year are $6.95. Use promo code SPRING 2018 when signing up to be eligible for this offer. This offer is also available to existing clients. Be sure to read terms and conditions for full details.	$5,000	25 commission-free trades + $6.95 commission per trade pricing	365 days	National Bank Spring Offer	July 6, 2018
	Open and fund a new account at RBC Direct Investing with at least $5,000 in net new assets and you may be eligible to receive up to 20 commission-free equity trades which are good for up to one year. Be sure to read terms and conditions for full details.	$5,000	20 commission-free trades	365 days	RBC Direct Investing Commission-free Trades Promotion	June 14, 2018
	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 DisnatTransfer 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	May 31, 2018
	Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details.	$25,000	commission-free trades for 1 month + 1 month of advanced data.	1 month	Active Trader Program	December 31, 2018
	Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $50,000; B) $100,000 or C) $300,000+ in net new assets and you may be eligible to receive up to 20 commission-free equity trades plus A) $50 cash back; B) $150 cash back or C) $500 cash back. Commission-free trades are good for up to two months. In addition, eligible individuals can receive an extra $50 as part of the refer a friend program. Use promo code SPRING when signing up. Be sure to read the terms and conditions for more details on the offer.	A) $50,000 B) $100,000 C) $300,000	20 commission-free equity trades AND A) $50; B) $150 C) $500.	Commission-free equity trades are good for up to two months. Cash back will be deposited the week of January 21, 2019.	BMO InvestorLine Spring 2018 Campaign	May 31, 2018
Expired Offers
Last Updated: May 29, 2018 10:15 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 B) $10,000 C) $25,000 D) $50,000 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
	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
	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	October 31, 2018
Expired Offers
Last Updated: May 1, 2018 22:45 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 Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details.	$150	$15,000	Transfer Fee Rebate	none
	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
	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 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 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 DisnatTransfer. See details link for more info.	$150	$50,000	Disnat 1% Commission Credit Promo	May 31, 2018
	Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPRING when signing up. Be sure to read the terms and conditions for more details on the offer.	$200	$200,000	BMO InvestorLine Spring 2018 Campaign	May 31, 2018
Expired Offers
Last Updated: May. 1, 22:35 PT

Other Promotions

Company	Brief Description	Minimum Deposit Amount Required	Details Link	Deadline
	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
	Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details.	$1,000	Broker@ge 18-30 Promotion	none
	Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details.	$1,000	StartRight Free Trade offer	none
Expired Offers
Last Updated: May. 1, 2018 22:35 PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor	Offer Type	Offer Description	Min. Deposit	Reward / Promotion	Promo Code	Expiry Date	Link
	Discounted Management	Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link.	$1000	1st month no management fees	KDKFNBBC	None	Questrade Portfolio IQ Promo Offer
	Discounted Management	Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details.	$1,000	1 year no management fees	STSF	April 1, 2018	SmartFolio New Account Promotion
	Cash Back – Referral	BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details.	$1,000	$50 cash back (referrer) $50 cash back (referee)	Unique link generated from SmartFolio required.	None	SmartFolio Website
	Transfer Fee Coverage	Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth.	$25,000	up to $150 in transfer fees covered	None	None	Contact customer service directly for more information.
Last Updated: May 1, 2018 22:45 PT