Posted on Leave a comment

Discount Brokerage Weekly Roundup – June 29, 2018

It’s hard to believe but the halfway point of 2018 is just around the corner. Heading into the Canada Day long weekend, it’s an opportune time to review the latest activities from the second quarter of 2018 and see what stories made waves, as well as some of the trends we see taking shape in the online brokerage space.

In this edition of the roundup, we’ll take a look back at the (calendar) Q2 of 2018 and review what we think are the most compelling stories and developments. Suffice to say technology has been a key driver of change, but it also seems like the fundamental economics of the space are experiencing a shift. As usual, we’ll also serve up some DIY investor content treats with DIY investor tweets and close out with interesting forum posts.

Making the Highlight Reel

Before jumping in to Q2, a quick recap of what happened in Q1 is available in this roundup from early April. In the first quarter of the year, some of the dominant stories included online brokerage outages, RSP season promotions and online brokerage rankings from the Globe and Mail.

At the end of the second calendar quarter of 2018 there are a number of interesting stories to reflect on as well as some hints dropped and telegraphed by Canadian discount brokerages as to what’s coming around the corner for the summer of 2018.

Acquisitions

One of the biggest news stories to emerge in Q2 was the announcement that independent online brokerage, Jitneytrade, was being purchased by wealth management giant Canaccord. The deal, the terms of which were not published, means that the small independent online brokerage players in the Canadian space have all but disappeared. Only Questrade stands out as the online brokerage that is not owned by a larger parent financial brand, bank or other significantly larger financial services company.

Last year saw the purchase of BBS Securities (parent to Virtual Brokers) and the merger of Qtrade Investor and Credential Direct. This trend towards consolidation or purchase by deeper pocketed investment firms is a signal that the online brokerage space is in transition. Some services, such as Jitneytrade, cater to a very select group of active/professional traders – so the requirements for a broader investor profile are not as prominent as firms such as Qtrade Investor or Virtual Brokers. With bigger backers, however, the online brokerage platforms will really be put to the test to see if they’ve got what it takes to challenge the big bank online brokerages.

Online Brokerage Reviews – Moneysense magazine

In late May, the online brokerage reviews and rankings prepared by Moneysense magazine were published. Our roundup post on the Moneysense reviews compared the ratings from last year to this, and looked at the categories that these rankings included this year such as:

  • 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

One of the big stories from this year’s Moneysense rankings is that Qtrade Investor came out on top, narrowly edging out Questrade in the category of “best overall” online brokerage. Interestingly the top four firms last year are once again in the top four this year. Joining Qtrade Investor and Questrade are Scotia iTRADE and BMO InvestorLine, although it should be noted that these latter two bank-owned online brokerages scored notably lower than either Qtrade Investor or Questrade.

Looking at the results from a category point of view showed that different online brokerages have particular strengths in certain areas. For example, HSBC InvestDirect and Questrade were ranked best for fees; Questrade was ranked highest for initial impression; TD Direct Investing was ranked best for Data while National Bank Direct Brokerage was ranked best for ETFs.

All told, when it came to online brokerage rankings, Qtrade Investor performed exceptionally well, managing to top both the Globe and Mail and Moneysense rankings and placing second overall in the last J.D. Power Investor Satisfaction rankings. From a competitive point of view, this provides a lot of positive momentum for Qtrade Investor as they transition into life as the dominant non-bank online brokerage brand in Western Canada (now that Credential Direct has merged). It will be particularly interesting to see how a considerably bigger Qtrade Investor decides to challenge bank-owned rivals in ways that Qtrade has traditionally avoided, such as with more prominent advertising or with platforms/products for active investors (or even traders) – the affiliation with Desjardins Online Brokerage (and in particular Disnat) – could present a compelling wildcard that would almost certainly cement Qtrade Investor’s status (among its peers) as the brand to beat going forward.

V for Volatility

The past several years since the financial meltdown, markets have been mostly on a steady track upwards. This year, however, that all changed. Since the election of Donald Trump, markets – in particular US equity markets – have done really well. But, as all seasoned traders know, the trend is your friend until it ends. For US online brokerage, Interactive Brokers, the move on their part to raise the cost of borrowing for clients requiring margin of US stocks was a direct response to the data pointing to a pending downturn. Well, they called it, and earlier in the second quarter of this year, Interactive Brokers published the results of having prepared well in advance of the pending volatility. The result, Interactive Brokers was able to limit losses to a fraction of the losses experienced by names such as TD Ameritrade and E*TRADE.

Uptick in Deals Activity

On the deals and promotions front, Q2 of 2018 presented a little bit of volatility of its own as the post-RSP dip in activity also took down a number of online brokerage deals and promotions. That said, it didn’t take too long for a rebound to take hold so that by the time the quarter was winding down,  offers were back on the table and during the quarter, a short lived but very intriguing offer from RBC Direct Investing also surfaced indicating that this big player is capable of some nimble promotional work.

Cash back offers in particular saw a resurgence in Q2, with BMO’s SmartFolio launching a new cash back offering and Scotia iTRADE also launching a cash back offer (in the form of a gift card) for existing clients.

Be sure to check out the deals action this summer as the online brokerages get themselves ready for the fall and invariably try to find some winning combination for investors active during the summer.

What’s Coming Up

In addition to setting the world on fire with the Yanny vs Laurel craze, social media also proved itself to be useful in providing DIY investors some hints as to what several online brokerages have coming up in the near future.

Keeping Currency

One great example comes from Scotia iTRADE, whose service staff let one tweeter know that USD registered accounts are ‘on their way’ (i.e. close to completion) for DIY investors. This kind of insight is easy to miss but will be a notable value driver when it does go live. We also expect there to be quite a bit of noise generated when it is released which means even more iTRADE commercials.

Platform Leap

Another interesting tip that came from social media was from TD Direct Investing, who let followers know about a webinar that provided a first look at the new Advanced Dashboard to be rolled out to clients. This new approach to rolling out feature releases appears to be something TD is testing the waters with – as a recent enhancement for French-speaking users was also telegraphed on Twitter in mid-May and was confirmed to be live as of this past week.  As for the Advanced Dashboard, we’ll be watching to see what the reaction is like to a new user experience and to upgraded trading features.

Also rolling out in the summer is a new trading platform from Virtual Brokers – VB Wave. We first spotted the new platform on the VB website in early June however it appears to still be in active development with the soft roll out intended to help iron out any wrinkles in performance or user experience that may arise. In any case, the addition of a new trading platform to the suite of Virtual Brokers’ product line positions them as having one of the most diverse selections of trading platforms available to any online brokerage in Canada.  Stay tuned.

Discount Brokerage Tweets of the Week

 

 

Into the Close

That’s a wrap for this pre-Canada Day edition of the roundup. Although markets are going to be closed in Canada on Monday, there’s no doubt that traders will want to keep an eye out for the fallout from the trade tariffs which are set to take effect July 1st. For all the folks in Ontario, stay cool and for the folks out west in BC, feel free to blame it on the rain. On behalf of the Sparx Trading team, Happy Canada Day to everyone!!

Posted on Leave a comment

Discount Brokerage Weekly Roundup – June 22, 2018

There are lots of reasons to cheer as summer officially started this week and, of course, its Friday. For Canadian DIY investors, and much of the world really, the news coming out of the US has dominated airwaves. And, while nobody really knows exactly what’s going to happen next, it’s interesting to see how the leaders of online brokerages in the US are positioning themselves in this uncertain environment.

In this edition of the roundup, we take a deep dive into a recent financial services conference in the US that brought together the heads of three large US online brokerages to provide insights into their particular companies and on the space for online investing in general. From there, we’ll tack on the tweets from DIY investors this week as well as some interesting forum posts on two popular online brokers.

Views from the Top: Perspectives from US Online Brokerage Leaders

In early June, many financial services providers gathered in New York City for the annual Sandler O’Neill Global Exchange and Brokerage Conference. The participant list included many notable names from the US online brokerage market, including the leadership from E*TRADE Financial, Interactive Brokers and TD Ameritrade, three of the four largest publicly traded online brokerage trading firms in the US.

As part of the conference, one-on-one interviews with the three US online brokerages were conducted which offered a unique window into what’s going on at each firm – as told by the leadership themselves.

Given their status as public companies, it is a balancing act to reveal something meaningful about what’s taking place either in the industry or in their firm, while being cautious not to let too many ‘secrets’ out of the bag. Suffice to say, it’s also kind of fun to hear how the different leaders communicate and pull it off.

There were a number of themes that emerged from the conversations with Karl Roessner (CEO, E*TRADE Financial), Tim Hockey (President & CEO of TD Ameritrade) and Thomas Peterffy (CEO & Founder, Interactive Brokers) as well as some interesting reveals and hints of things to come.

Of course, the human side of the interactions was also interesting to take note of – specifically the styles of each of the leaders. Before jumping into the details of what we learned, we’ll detour into some observations about the leaders themselves.

In Karl Roessner’s interview, for example, the energy and enthusiasm came through in the cadence and pace of his answers. It seemed to match the overall banner that E*TRADE appears to be marching under, which is a return to their core identity as a leading trading firm. By comparison, Thomas Peterffy was a much more measured speaker which seemed to also match the ‘slow and steady’ approach to continued success achieved by Interactive Brokers. Between the two was Tim Hockey, again another articulate and calculated speaker who seemingly matched the overall arc of where the firm has come from since he came aboard and where it may go under his leadership.

Getting back to important themes and discoveries from the Sandler O’Neill Global Exchange and Brokerage Conference, one of the most prevalent talking points was growth in accounts.

In the case of E*TRADE and TD Ameritrade, recent acquisitions of other trading firms have helped to contribute growth to the number of accounts and client assets. The fact that both of these firms opted to acquire to grow presented some intriguing comparison points.

For example, in acquiring another firm, the timing and nature of the impact to the clients of acquired firm is something that has to be carefully planned for. E*TRADE acquisition of OptionsHouse for $725 million in 2016 as well as the purchase of one million Capital One retail brokerage accounts in January 2018 have added a substantial number of new clients to the organization. In the interview, Roessner stated that to ensure the transition for the Capital One clients goes smoothly, E*TRADE is taking some extra time to get the client experience just right. Of particular interest is the fact that E*TRADE has made a concerted effort to go back to its ‘active trading’ roots for the past two years, however many of the Capital One brokerage account holders are typically not that active, so it should be interesting to see how E*TRADE tackles the challenge of having many more clients that don’t necessarily have the time, confidence or desire to trade actively. One way might be via E*TRADE’s own roboadvisor service – which they call “Core Portfolios.”

TD Ameritrade’s acquisition of Scottrade, which was announced in October 2016 and was finally completed in September 2017 brought the total number of accounts at TD Ameritrade to 11 million. In recounting that transaction, which was the first major acquisition at TD Ameritrade under Hockey’s leadership, it was interesting to hear how Ameritrade had modeled what was going to happen and when they could start to see the impact to clients when the platforms were finally combined (which happened in February 2018). The impact to clients really didn’t take shape right away, it was only after the existing Scottrade clients found themselves using TD’s platforms did they attrition (turnover) rate start to increase. Nevertheless, what was revealing was that once new clients familiarized themselves with the TD Ameritrade platform (Thinkorswim), there was an accompanying lift in the number of trades made by clients.

Also, while on the topic of TD Ameritrade, it was intriguing to hear that Investools, the exceptionally well-designed investor education program offered by TD Ameritrade is being translated to service the Asian markets (China) and that it is going to become an area of even greater focus as Ameritrade looks to pursue getting into the Chinese/Asian investor marketplace.

The growth-by-acquisition strategy was one end of the spectrum and squarely at the other was Interactive Brokers, which has seen incredibly strong growth almost from the get go of becoming a public listing. The interview with Thomas Peterffy was filled with nuggets of information that add depth and context to the IB approach and the realities of being an online brokerage.

 

One of the most interesting takeaways from the Interactive Brokers session is how Peterffy described the ‘ecosystem’ of online brokerages in the US. Namely that TD Ameritrade and E*TRADE clients that outgrow the experience, platform or pricing of these two firms naturally gravitate to Interactive Brokers. In other words, Ameritrade and E*TRADE act as feeders for Interactive Brokers – which is one of the reasons IB has been able to maintain its growth trajectory. Another important contributor to growth for Interactive Brokers has been their international footprint – in particular their longtime presence in Asia (they have been in Hong Kong for about 25 years). The account sizes of the Hong Kong investors rival, on average, those of the US clients.  Perhaps the biggest news that was revealed by Peterffy was that Interactive Brokers will be opening an electronic bank. There are already plans in motion to do so which will enable Interactive Brokers to offer an even broader array of banking services to clients in certain jurisdictions.

The US online brokerage space is always an exciting market to look into because it is dynamic as well as transparent about the kinds of performance metrics and initiatives that impact (or are result of) clients. Canadian discount brokerages, on the other hand, are not as large, do not report the same kind of granularity of data and typically don’t move at the speed and scale of the US online brokerages. Even so, it is worth noting that all the brokerages in the US don’t focus exclusively on order execution only anymore.

The online brokers in the US now include digital/managed advice services (e.g. robo-advisors), banking services and international expansion plans. That each of these US online brokerages have had to diversify their businesses from just online trading is a sign that Canadian discount brokerages are going to compete more heavily with both the banking as well as the managed advice services already in place. It is seemingly ironic that over the span of time that online brokerages have been around, the ‘DIY’ investing world seems to have come full circle as more individuals gravitate towards the managed wealth or digital wealth solutions – perhaps the most convenient is that there are now more one-stop-shopping options to choose from.

Discount Brokerage Tweets of the Week

From the Forums

Weighing in on the Best Online Brokerage

A perennial question among online investors is which online brokerage is best? In this recent post from the reddit Personal Finance Canada threads takes a long look at the pros and cons of Questrade as well as several other online brokerages as viewed by online investors.

Getting Started with TD Direct Investing

As one of Canada’s most popular online brokerages, TD Direct Investing’s recent enabling of online account openings is only going to help speed up the process of getting a new account opened. In this post from reddit’s Personal Finance Canada thread, one user is curious about the online signup and learns some interesting tips from fellow forum users.

Into the Close

That does it for (yet) another eventful week. With uncertainty continuing to grow in markets the upside is that the volatility of the ‘summer’ weather doesn’t quite seem to matter much. If you do find yourself out and about, try to find a way to make it enjoyable! To help get things along, here’s a fun compilation of dance moves – have a great weekend!!

Posted on Leave a comment

Discount Brokerage Weekly Roundup – June 15, 2018

There is no doubt that deal making is an art. Sometimes it’s a Michelangelo, sometimes it’s a Pollock, sometimes it’s a Vandelay. In either case, online brokerages know that like beauty, a good deal is in the eye of the beholder. This week we know we’ve seen all kinds of ‘deals’ make the news but we’ve spotted a few which might have flown under the radar with all of the other hubbub going on.

In this edition of the Roundup we take a look at some hot deals action from two bank-owned providers coming just in time for the summer. Next, we look at why gross can be good, especially for a few US online brokerages. As always, we’ve also got a fresh batch of DIY investor tweets and forum threads to close out the recap.

Deals start to sizzle

For many keen observers of the deals and promotions section, one of the important takeaways is that online brokerages need to continuously be thinking about how to grow and attract new clients and assets. It is perhaps a timely question to pose as news outlets report this past week that Canada’s population officially clocked in at 37 million individuals, up from 36 million just over two years ago and, it seems, that firms such as RBC are in the hunt to acquire new clients on a massive scale.

Of course, the tried and tested way to get attention and incentivize individuals to try out an online brokerage has been by using deals and nothing gets investors’ attention like cash back offers. This past week there were two cash back offers that came to market that appeal to online investors – the DIY type and those that want the ‘autopilot’ version.

Starting first with the DIY investor option, Scotia iTRADE launched a new campaign earlier this week that offers up a tiered cash back promotion of up to $1,500 (in the form of a prepaid VISA). Interestingly, it was not found on the promotions section of the Scotia iTRADE website but rather via an email campaign which appears to be because the offer is valid for existing iTRADE account holders (as of May 14th) only.

In all there are six deposit tiers to this offer, ranging from a minimum deposit of $25,000 (for which there is a reward of $100) to the top deposit tier of $1M+ (which results in a cash back offer of $1,500).

It is worth noting that the terms and conditions for this offer are written in an incredibly small font size, so anyone considering the deal is well advised to zoom in to make sure you don’t miss something important – like the condition that you can only take advantage of this offer if you haven’t participated in a cash, free trade or prepaid VISA or SCENE point promo since June 10th 2017. In case anyone was wondering the font size for the important legal text is set to 9 pixels while the ‘normal’ reading size of the font on the page is 18 pixels and those conditions are 459 words long. In a single paragraph. But I digress.

Aside from the small font size, this is a very big deal – sadly only for existing Scotia iTRADE clients but perhaps for new clients who read the deals section or weekly roundup and are prepared to negotiate, this might also be made available.

Perhaps the biggest news is that, when compared to existing cash back offers currently live in the market, this is the highest cash back offer for deposits of $25,000+, more than double in fact, and in some cases more than triple the highest amount being offered. So, as word spreads about this offer, it will be interesting to see a) whether iTRADE decides to roll out the offer publicly to all prospective clients before B) another online brokerage steps up with an even more aggressive offer.

Another cash back offer to cross our radar this week was from BMO SmartFolio. Specifically, the offer is for new or existing clients and offers 0.5% cash back on every dollar invested into a SmartFolio account up to a maximum cash back amount of $1,000.

The minimum deposit tier to qualify for this promotion is $25,000 (which offers up a $100 rebate)

While not an apples-to-apples comparison in terms of where to park your money, the SmartFolio cash back promotion is equal to and at certain tiers, higher than the cash back bonus offers at Canadian discount brokerages (including BMO’s InvestorLine). So, for online investors it is an interesting moment – if they have been curious about a ‘digital advisor’ or ‘robo advisor’ – the cash incentive certainly makes the case for giving it a try. It doesn’t hurt either that BMO SmartFolio will cover up to $200 in transfer fees if moving from another institution into this solution.

For online brokerages with a digital or robo advice arm, such as Qtrade Investor, Questrade and Virtual Brokers for example, competing on both the online brokerage side and now the digital management side just got even trickier. Right now, BMO has the field almost exclusively to themselves from this group and they’ve already got three promotional offers that users can take advantage of plus the transfer fee coverage, so as far as bank-owned robo-advisors go in Canada, they’re certainly setting the bar high.

Gross is Good

To paraphrase Gordon Gecko, gross, for lack of a better word, is good – especially when talking about growth in new accounts at online brokerages. This week, US online brokerages E*TRADE and Charles Schwab reported May activity metrics including new account data and client assets and the numbers paint a positive picture at both firms.

For the month of May, E*TRADE saw about 40,261 gross new brokerage accounts for the month created (and a total net new account number of 22,228) and finished the month with almost 3.9 million brokerage accounts. By comparison, Schwab also reported their metrics this week and opened 122,000 new brokerage accounts bringing their total up to 11.1 million. It’s worth mentioning that Schwab is the giant player in the US online brokerage space with $3.4 trillion in assets. At the end of March of 2018, Interactive Brokers had about 517,000 accounts and TD Ameritrade had 11.3 million funded accounts.

By all accounts (pun intended) May appeared to be a strong month for the online brokerage space in the US. Of course, there are bullish signals with US interest rates poised to rise which should also help push earnings higher at US online brokerages in the near term.

Comments from TD Ameritrade also seem to echo this sentiment with chief market strategist JJ Kinahan stating in a recent press release regarding May performance that “For the first time this year we saw clients taking on more exposure to the market, with millennials increasing their exposure at a faster rate than the rest of our client base, as market levels stablilized following an early May rally, clients were mostly net buyers the last two weeks of the month.”

Big picture, it appears that strong economic fundamentals are continuing to draw investors in off the sidelines, even in the midst of headline news and uncertainty. That’s good news for the online brokerages. And, although the market may have tempered somewhat, the fact it hasn’t yet fallen off a cliff despite the rhetoric of war suggests that it is pricing in growth (at least for now) rather contraction.

Discount Brokerage Tweets of the Week

From the Forums

Getting Settled

In the online investing world even though trading happens instantly on a screen, behind the scenes things take substantially longer to sort themselves out. In this post from RedFlagDeals.com’s investing forum, one user tries to fine tune exactly when money needs to be moved into their trading account to beat the settlement deadline.

Double Trouble

Like most Canadian DIY investors, peering over the fence at US online brokerage accounts generates a certain amount of interest and even, dare we say, envy. For one keen investor, the lure of US online brokerage account was sufficiently strong enough to open one before fully thinking it through. Find out what they learned about having both a US online brokerage account as well as a Canadian one in this post from reddit’s Personal Finance Canada thread.

Into the Close

That’s a wrap on another eventful week. With the ‘longest day’ of the year coming up, it’s a great time this weekend to enjoy some type of screen, whether it’s watching the World Cup or lathering up the sunscreen to enjoy the great outdoors responsibly. Whatever the case, we’d like to wish everyone a great weekend and a special shout out to all the dad’s out there for a happy Father’s Day!

Posted on Leave a comment

Discount Brokerage Weekly Roundup – June 8, 2018

As any seasoned investor knows, the stock market is one very big voting machine. And, while there is no ‘leader’ per se, those stocks that get to the top are those that enrich their shareholders. Heading into the end of this week, there’s certainly been a lot of news about politics, which has everyone guessing what’s coming next. For online brokerages, figuring out how to understand the human angle of this market is going to keep a lot of folks very busy these next few months.

It’s been a heavy week for rapid news so we thought we’d slow things down a little by focusing on an emerging trend from one Canadian discount brokerage that is likely to set the tone for ‘online investing’ in the near future. From there, we’ll take a snapshot of the latest tweets from DIY investors & online brokerages this week and close out with interesting chatter from the investor forums.

Going Digital, Getting Human

As a Canadian online investor, it’s not often that you get to hear from the head of an online brokerage outside of a quarterly newsletter. Despite the fierce competition among Canadian online brokerages, it seems that many of the leaders of these firms prefer to stay out of the spotlight, which is why a recent interview from the President of BMO InvestorLine, Silvio Stroescu, caught our attention.

The interview, which appeared on a BMO website – bmoforwomen.bmo.com – was part of a podcast by wealth psychology expert Kathleen Burns Kingsbury, and covered a number of interesting topics related to investing online, with a particular focus on women’s experiences with investing.

For added context, what makes this interview particularly interesting isn’t just the content of the interview itself, but also the bigger picture that it fits into. Specifically, it is interesting to see BMO InvestorLine (and SmartFolio’s) digital strategy take shape in a way that their peers aren’t keeping up with. More on that in a moment.

The overall theme of the interview was that ‘online investing really is for everyone’ which is an interesting premise to start from, and probably a reflection of where the “online investing” conversation has shifted to in 2018. Specifically (and especially for BMO InvestorLine) online investing doesn’t necessarily mean DIY investing any longer. The presence of digital/automated/robo advice services, as well as the hybrid AdviceDirect at BMO, mean that going online doesn’t require the same kind of time, mental or emotional commitment that comes along with DIY investing.

It was through this lens that this interview looked at ‘myths’ of “online investing” as well as the impact that technology has had and, perhaps the most interesting, the behavioural insights about investors and the role gender plays.

The latter portion of the interview in which Stroescu details the evolution of SmartFolio is particularly revealing. In this section he reveals how, though the use of Twitter chats, BMO discovered that there was a much deeper emotional component to wealth management and how big of a role that anxiety plays. It was especially noteworthy to learn that in the Twitter chats (which we’ve covered in prior Weekly Roundups) participation was largely female and that there was an open dialogue about the anxieties of investing. In contrast – and also fascinating – was the insights gained from focus groups in which male participants, through their body language, also displayed anxiousness and discomfort in talking about online investing even though they did not come out and state explicitly that online investing made them uncomfortable.

Specifically Stroescu stated:

What we noticed happening was, when we asked the questions about how comfortable are you with investing, the verbal response was, ‘comfortable.’ You wouldn’t hear a lot of anxiety in their voice, yet, when we looked at the body language and the facial expressions, if you could picture people cringing as they say the word comfortable, it showed us that verbally, we didn’t get a high degree of confidence, didn’t get a high degree of anxiety. It was somewhere in the middle. But the facial expression and the body language actually showed a greater tilt towards people being anxious about investing, period.

While there’s a lot to unpack from that statement, the takeaway is that building confidence is not necessarily the same as alleviating fear; it’s remarkable that it was the very human process of observing body language and non-verbal cues rather than the words people used that revealed this phenomenon.

Earlier it was stated that beyond the content itself, it was interesting that how this interview fits into a much bigger digital picture for BMO InvestorLine (and SmartFolio).

What makes this interview remarkable is that unlike many of their peers (both bank-owned and non bank-owned brokerages) is that BMO InvestorLine has made great strides in their online presence. This podcast, the Twitter chats that created a conversation around investing online and perhaps most notably, that their president has a Twitter account and uses it often are signals that there is a level of digital savviness that their competitors are not able to replicate.

In an era when ‘president with a Twitter account’ has come to cause people to hesitate, BMO InvestorLine enabling their president to have and use a Twitter account doesn’t come off as scripted, and even in an interview within a BMO site, the content delivers an interesting, engaging message (rather than being overly self-congratulatory or a sales pitch for services).

For DIY investors, and for the broader category of ‘online investors’ BMO’s approach to providing the ‘digital advice’ as well as the ‘self-directed’ services is probably a model that will be more widely deployed in the future. Of course, it is also their digital and social media savvy that might spur their competitors to “invest” more in creating more human, and ultimately more interesting, investor experiences.

Discount Brokerage Tweets of the Week

From the Forums

Voting for (keeping) Change

Savvy investors, no matter what stage they’re at, are always looking to maximize their gains. For beginner investors, however, it can be tricky to know exactly which move makes the most sense for the effort involved. In this post, from reddit’s personal finance Canada thread, one beginner investor is looking to the internet to help choose between Questrade and BMO for a TFSA.

Paid Parking

For many DIY investors thinking about online brokerages, the focus is generally on a lot of things like commissions or platforms, but very seldom does the topic of where to put uninvested cash come up. That said, this week there were two interesting posts about investors getting the best return on ‘dry powder’ – this post from reddit’s personal finance Canada thread looks at what to do with ‘spare’ cash in Questrade while another post, from the Financial Wisdom Forum, provides some insights from a thread on Interactive Brokers.

Into the Close

That’s a wrap on another frenzied week. The spotlight certainly had no shortage of movement this week, however it did land on a very tragic ending to a very inspiration person – Anthony Bourdain. Loss is always a tough note to close out on, but in that there is also the importance of remembering hope and encouraging one another to connect. So, on that note, have a great weekend and if you can, find a way to extend a hand to connect or reconnect with someone, perhaps over a simple meal. It all starts with hello.


Posted on Leave a comment

Discount Brokerage Weekly Roundup – June 1, 2018

Even though it was a tough week for hacking scandals, pipeline purchases and provincial politics, none of it mattered because Kim Kardashian visited the US President, J.R. Smith royally messed up game 1 for the Cavs, the US touched off a trade war with Canada and other trading partners. Even for traders who relish in volatility, this summer is going to be one heck of a ride.

In this edition of the roundup we take a look at the latest crop of discount brokerage deals, including a new trend for the summer season. From there we’ll review another emerging trend in the area of investor education topics that online brokerages seem to be more active in. As always, we’ll cue up the latest tweets from DIY investors and review the forum conversations on DIY investing.

Summer Deals

Even though summer is just around the corner, the fact that it is still spring means that the latest online brokerage deals are considered part of the spring crop – at least if you look at the promotional codes of some of the deals.

The latest update to the Canadian discount brokerage deals and promotions section is now live and the good news is there is a strong selection of offers for DIY investors to choose from, especially until the middle of June.

There are a couple of interesting observations to take note of in the deals and promotions section this month. The big news specifically is that National Bank Direct Brokerage has come to market with an offer of commission free trades which are good for up to one year. The other bank-owned brokerage with a similar time frame on their commission-free trade offer is RBC Direct Investing.

This is likely no coincidence. The move by National Bank Direct Brokerage has some similarities to RBC’s offer, notably that time to use the commissions is one year and the minimum deposit is the same ($5,000). That said, there are some differences such as the fact that NBDB is offering five more trades than the RBC Direct Investing offer and NBDB is throwing in a discounted commission rate in the first year for anyone who uses up the 25 commission-free trades.

Another interesting observation is that both BMO InvestorLine and Desjardins Online Brokerage elected to extend their current offers; the latter being exclusively a commission-free trading offer while BMO InvestorLine’s is a combination of cash back and commission-free trades. Unlike the offers from National Bank Direct Brokerage and RBC Direct Investing, however, the time to use the free trades from BMO or Desjardins is significantly shorter.

Two key bank-owned online brokerages coming to market in the summer with similar promotional offers might not signal a trend, but it does point to the market shifting tactics – especially on the length of time for the commission-free trading.

We’re curious as to what will happen at mid-month, as National Bank Direct Brokerage has now clearly upped the ante with a more competitive offering than RBC’s in terms of free trades and incentives after the trades are used up. It begs the question, will RBC call, raise or fold?

From a strategy point of view, the popularity of commission-free offers has opened up an opportunity. Cash-back offers are not as crowded, and as a result, it may be a compelling spot for an aggressive offer to come to market. We know from internal data that there is definitely an appetite for cash-back offers among DIY investors. So, the combination of a lack of competition with those offers coupled with high demand from DIY investors means a cash-back offer can command the spotlight. Currently, BMO InvestorLine and Questrade (through the referral offer) are the only widely available cash-back offers. And, because of the nature of the Questrade offer, it’s only BMO InvestorLine that is widely advertising for theirs, which means they’ve got the digital field to themselves – at least for the time being.

Optional Credit

Even though school has wrapped up (or will very soon) there seems to be an uptick in the investor education activities heading into summer. In particular, it looks like options trading is coming back into focus at several online brokerages.

Last week, the Options Education Day took place in Montreal and there were five online brokerages that sponsored the event.

Three of the five brokerages (National Bank Direct Brokerage, Desjardins Online Brokerage and Interactive Brokers) are all headquartered in Montreal so there was a home field advantage there, but for TD Direct Investing and CIBC Investor’s Edge, it was an interesting event to participate in.

According to the tweet posted on the Montreal Exchange’s Twitter account, there were over 200 attendees that participated which is a great draw for a Saturday session.

In addition to Options Education Day, National Bank Direct Brokerage has been broadcasting their options education video playlist, put together in conjunction with the Montreal Exchange, on their homepage for the past few months. And, coming up at the end of June, CIBC Investor’s Edge is holding a couple of options education webinars in English and French.

Even though we’re not quite over the line to summer, there is already a signal that online brokerages are ramping up their options education partnerships and content. With improved market volatility and some exciting stories coming to the stock markets through the second half of the year, it looks like options education might be a hot spot for new and interesting content.

Discount Brokerage Tweets of the Week

From the Forums

Interesting problem

Even though trading platforms have made it easy to buy and sell US-listed stocks, actually ensuring that the trade is being structured the way it is intended can sometimes be less intuitive. In this post from reddit’s Personal Finance Canada thread, one user learned the hard way about ensuring that cross border trades get executed and settled with the right currency conversions in place.

Simpler times

DIY investing is supposed to be less expensive but it hasn’t necessarily been a ‘set it and forget it’ experience until very recently. This post, also from reddit, is an interesting look at the alternatives now available for DIY investors who, like the author of the post, are looking to take a simple, low cost approach to investing on their own.

Into the Close

That’s a wrap on yet another wacky week. Fortunately the start of the new month falls on National Donut Day which means everyone wanting to emotionally eat their way into the weekend can feel a little less guilty for doing so. Of course, if you’re thinking to distract your way through the weekend with an Avengers movie, you might want to have some more donuts handy. Have a great weekend!

Posted on Leave a comment

Discount Brokerage Deals & Promotions – June 2018

It’s hard to believe but June is already here, which means summer is right around the corner. While temperatures outside are heating up, the discount brokerage deals and promotions section is gradually warming back up.

Heading into the new month there was a good mix of extensions as well as a new offer from National Bank Direct Brokerage in May that is sure to add some sizzle to the summer shopping season.

Starting first with extensions, two big deals players, BMO InvestorLine and Desjardins Online Brokerage, gave the go ahead for their existing offers to continue (more details below). This is a healthy sign as both of these firms are long time proponents of deals and promotions.

The big news, however, is the offer that crossed our radar from National Bank Direct Brokerage. This offer has a relatively low threshold to qualify ($5,000) and offers 25 commission-free trades which are good for up to one year. If it sounds familiar, it’s because another bank-owned online brokerage, RBC Direct Investing, also has an offer that is currently running to mid-June that offers 20 commission-free trades for a deposit of $5,000. So, in this case, the commission-free trade promotion bid has been raised by NBDB.

Another interesting feature of the offer from National Bank Direct Brokerage is that once the trades are used up (within the first year only), the standard commission charge per trade is only $6.95 which means that there is a trading discount as well as free trades.

With one offer set to expire mid-month (from RBC Direct Investing), it will be interesting to see if it too will get an extension or if there will be another provider currently on the sidelines jump in to the deals and promotions mix to be ready for the building interest in the marijuana legalization ‘buzz’ that is building.

We’ll keep a look out for new offers and if there are any that might be of interest to DIY investors, feel free to let us know in the comments below.

Expired Deals

No expired deals to report at the outset of the month.

Extended Deals

There were two offers that were scheduled to expire at the end of May that have been renewed:

First, Desjardins Online Brokerage has extended their commission credit offer through to the end of September.

Also, BMO InvestorLine extended their combined commission-free trade and cash back offer through to the end of June.

New Deals

While there were no new deals announced on June 1st, there was a new deal from National Bank Direct Brokerage that did cross the wire late in May. While this deal may technically have been in rotation at the end of April, it is not advertised in the special offers section of the NBDB website; we discovered this add running in rotation on social media and verified that it is active (at the time of publication).

Discount Brokerage Deals

  1. Cash Back/Free Trade/Product Offer Promotions
  2. Referral Promotions
  3. Transfer Fee Promotions
  4. Contests & Other Offers
  5. 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
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 $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
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 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 September 30, 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
BMO InvestorLine 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 June 30, 2018

Expired Offers

Last Updated: June 01, 2018 18:55 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
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 October 31, 2018

Expired Offers

Last Updated: June 1, 2018 18:55 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 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 September 30, 2018
BMO InvestorLine 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: June 1, 18:55 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
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

Expired Offers

Last Updated: June 1, 2018 18:55 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: June 1, 2018 18:55 PT