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Discount Brokerage Weekly Roundup – May 27, 2019

From Game of Thrones, to now a game of throws. Ironically, with the Toronto Raptors making it all the way to the NBA finals, getting onto the iron throne might actually be a tad easier than finding good tickets to the Raptors games. Of course, basketball fans aren’t the only ones with a reason to cheer this week, as DIY investors are also in for some good news of their own.

In this edition of the roundup, we review the latest deal to cross our radar and (teaser alert) it’s from a bank-owned brokerage who managed to make it back onto the deals board after a very short hiatus. Speaking of breaks, our second story spotlights one fintech firm that has charted a course to break the bank (model) and got a sizable endorsement to further that aim. Finally, we’ve also included a healthy dose of Twitter chatter and investor queries from the forums.

No More Tiers: CIBC Investor’s Edge Launches Commission-Free Trade Offer

After a few weeks of relative quiet, it looks like the deals section is ready to spring back to life with the entry of CIBC Investor’s Edge’s latest promotional offer.  And, what better way to make waves in the deals pool than with the equivalent of a cannonball commission-free trade offer that has no tiers or advertised minimum deposit to qualify. Oh, and did we forget to mention that this is for 100 commission-free trades?

After reading the official terms and conditions for this offer, we were admittedly amazed that an offer of this magnitude has now come to market and that the usual strings that get attached to offers of this size didn’t show up in those “T&Cs.”  Also surprising was the brevity of the terms and conditions. It’s unusual to see terms and conditions of a promotion that are this light. However, very little gets past compliance teams, so here’s hoping that it sticks as is.

In terms of important information about the offer, the promo runs until July 31st and offers clients 100 commission-free trades that are good to use within 90 days of an account opening. This commission waiver offer applies to both equity and options trades, however, to clarify it does not apply to the per contract fee that is associated with options trading.

When it comes to commission-free trading offers, what is nice for investors considering this deal is that this is not a “rebate” of commission fees, but rather a waiver when the trades are made, so there is no waiting for a rebate. What this also means is that there isn’t a minimum time required to keep the account open or a requirement to keep the account in good standing to qualify for this offer.

With the end of May now just around the corner, the addition of the CIBC Investor’s Edge deal will help to smooth out the expiration of the HSBC InvestDirect cash back promotion at the end of the month. Shortly after that, there’s also a BMO InvestorLine promotion that’s set to expire. So, like the stock market lately, the deals and promotions section will likely see some volatility.

Big picture though, with CIBC Investor’s Edge coming back into mix with a fairly sizeable and aggressive commission-free trade promotion, they’re going to make a big splash in the deals pool. With RBC Direct Investing’s offer also in play, our quick math shows three of the big five Canadian bank-owned brokerages with active offers. This should send a little peer pressure across the space, and we expect that at least one or two Canadian online brokerages will step forward with their own offers to increase their visibility during the summer months.

Strategically, there is very little downside to keeping an offer for DIY investors during the summer months. At best, investors will discover an offer that sways them into an online brokerage and at worst, the online broker gets to maintain visibility with DIY investors who happen to be looking around for an online broker during the summer months. Either way, this summer is looking to be a bit sunnier for DIY investors interested in getting into the markets for a hot IPO season.

Allianz Banking on Wealthsimple

This past week there was some Canadian fintech news that is having a ripple effect around the financial world. No, we’re not talking about the cryptocurrency, but rather a literal wave of interest/concern that is sure to force digital teams and strategies at many of Canada’s online investing firms back to the drawing board. It happened when global insurance giant Allianz decided to invest $100 million into Wealthsimple, a move that enables them to garner exposure (and unique access to) the increasing digitization of financial services.

Recently, it was reported that Power Corp now holds an 89% stake in Wealthsimple having invested over $230 million dollars into the robo-advisor, which may have something to do with Wealthsimple achieving a dominant stake (~78%) in this space. Though that is impressive, to put things into perspective, Wealthsimple is reported to have $4.5 billion dollars in assets under management and 130,000 customers, which shakes out to $30,000 per customer. So, while Wealthsimple has carved out a small foothold in the Canadian wealth management space, there are many much bigger rivals in the sandbox.

Nonetheless, this latest move by Allianz begs the question: why now? It seems like their decision to invest is a clear endorsement that the wave of digitization in financial services is poised to drastically alter the way in which those services are sought out and ultimately accessed.

Like any good investment, thinking about what the world will look like in five years and working backwards to today, it might be readily apparent that the world is moving towards “digital wealth.” In particular, finding a scalable, technology-driven solution to connect with millennials is incredibly valuable – something both Power Corp and Allianz are banking on. The service providers of tomorrow need to figure out how to work with (and delight) the consumers on the cusp of being very wealthy but who have little desire or inclination to navigate the financial markets in an expensive manner. The list of service providers who do that well is remarkably short.

The level of capital being invested in and partnerships being forged with Wealthsimple mean they are looking well beyond just “investing” and are taking aim at more traditional financial services too – including banking. In fact, CEO of Wealthsimple Michael Katchen was quoted saying as much in a recent article on CNBC.

Something similar appears to be taking place in the US as well with Robinhood Financial – the online brokerage firm best known for their commission-free trading. Although the savings feature faltered out of the gate in December, they have made no secret of their intent to go after the traditional “savings” account (and perhaps more banking services). Thanks to its own funding round, at latest reporting, Robinhood is being valued at over $7 billion (USD). Interactive Brokers also has now built out an ecosystem of financial services beyond their online trading business which is aimed to keeping clients (and specifically their assets) within the Interactive Brokers tent. IB has also telegraphed “something big” in the works for this year so there’s still another shoe to drop in their business evolution. Here in Canada, Questrade also made an interesting acquisition outside of the “wealth management” space by purchasing a mortgage lender.

Putting those pieces together, the picture is starting to emerge that “traditional” banks are being targeted for disruption on many fronts.

Despite being well-capitalized, funded, and wielding enormous influence, the large Canadian financial service providers must get their entire enterprises future-proofed if they are to withstand this onslaught. Wealthsimple has been able to grow to where it is because it has been a challenger-brand; it is not entrenched by tradition, maybe not even familiar, which makes its growth in the financial services space to this point all the more impressive. As Wealthsimple is starting to emerge as a Canadian fintech success story on the global stage, the principle guiding their growth might be best summed up by another Canadian great, Wayne Gretzky (ironically also a brand ambassador for TD), when he advised skating to where the puck is going.

Discount Brokerage Tweets of the Week

From the Forums

A Bid of an Ask

One DIY investor wants to know what other forum users ask themselves when choosing investments. See what the big questions are in this Canadian Money Forum thread.

Bearly Optimistic

A DIY investor with a pessimistic outlook seeks advice on where to invest. Read on for insights and counterpoints from fellow forum posters in this Reddit thread.

Into the Close

With markets in the US closed on Monday for Memorial Day, it’s likely to be a quieter trading volume day, which is probably OK because when the end of the week rolls around, it will be a lot louder for Raptors fans (and anyone in Toronto). Hopefully there’s just as much to cheer about further up on Bay Street as there is at the bottom of it.

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Discount Brokerage Weekly Roundup – May 20, 2019

Whether it was the Raptors or Game of Thrones fans, it was good news (mostly) for the North all around on this long weekend. While the popular HBO series has now officially wrapped, it looks like a different video series is starting to command the attention of Canadian investors and the envy of some online brokerages.

In this edition of the roundup, we review a new investor education series produced by a new name in the online investing space that is sure to make waves with millennial investors as well as those online brokerages also hoping to connect with that audience. From there, we review an interesting blip on the growth radar for one popular US online brokerage that could be a sign of clouds brewing on the horizon for the traditional players in the space. As always, we’ve got a great recap of investor chatter with conversations from Twitter and the investor forums.

Battle for Investor Education

Adulting, like investing, can be like, hard. Fortunately, there’s YouTube. And now Wealthsimple. So goes the premise of the latest investor education series to come to market from the best known name in the robo-advice space in Canada.

Although a new investor education initiative from Wealthsimple launched in mid April, it is worth putting the spotlight on this video series because, as mentioned in last week’s roundup, it appears that the battle for the millennial investor’s attention (and wallet) is starting to heat up. And, it appears that one of the key battlefronts will be in the investor education piece.

Like most things that set Wealthsimple apart from most of the established pool of wealth/financial service providers in Canada, this latest video series is a reflection of investor education done “Wealthsimple style.”

Teaching the basics of investing in an easy to follow, engaging format is not easy, but Wealthsimple’s investor education series manages to do just that. That means their content is well designed to resonate with a younger – or beginner – audience by using plain language, humour and keeping things (mostly) brief.

In addition to the content, the delivery is also on point. Host Nicholas Braun (himself a 31-year old) is cast to relate well to the millennial audience, with the right balance of humour and information that makes sitting through a video on investing actually interesting. Rather than dwell on too many facts or theory, the videos lean heavily towards a “how-to” style that is likely familiar to most younger audiences who turn to YouTube to help solve many a life problem.

The series itself is split up into 10 episodes, with 8 out 10 of those episodes taking less than 4 minutes, one taking just under five minutes, and the longest coming in at 8 minutes.

What was especially interesting about this video series is that it very much reflected the Wealthsimple view of the world: that passive investing strategies are a sound way to build wealth.

While it probably is no surprise that they did so, what was interesting about how they went about positioning investing was that it is something to do after attending to other more immediate financial priorities – like focusing on paying down high interest credit card debt and creating an emergency fund, before jumping into investing.

In that way, the message about getting started down the road to investing didn’t come off as pushy or selling something you won’t be ready for, but rather an important milestone to reach after getting one’s financial house in order.

Of course, it wasn’t all entirely selfless, impartial content on how to navigate the stock market. Wealthsimple clearly has skin in the game in turning viewers towards a passive investing solution and does make it a point in latter videos to mention how viewers can achieve investing goals/outcomes by using Wealthsimple’s products, including their Wealthsimple Trade product for those moments when investors want to try their hand at investing directly in a specific company stock.

As with their robo-advice product, this investor education series reimagines what it is like to learn about investing. Instead of the standard powerpoint presentation webinars or low-budget cartoon explainer videos, Wealthsimple has once again set the bar high for other financial service firms to try and match the mix of information and entertainment that these videos deliver, and do so in a way that looks and feels authentic to the audience and the brand.

What is especially important to point out about this investor education series is that almost none of the information delivered is new information about the world of investing, but it is a far cry from the approach that historically (and even currently) characterizes the way other online investing providers approach investor education content.

It will be interesting to see whether this move by Wealthsimple kicks off a trend of younger voices telling others about the “how-to’s” of investing – it might already be happening as we mentioned last week. Of course, there is still an entire cohort of investors who might respond better to an older actor/personality for the same kind of content. In any event, the race is on for just about every Canadian online brokerage to once again put investor education back on their radar if they hope to balance out the narrative on DIY investing. At this point, commercials, cartoons, and long articles aren’t going to cut it any longer.

Canary in the Online Platform

While scanning through the online brokerage news this past week, yet another interesting data point crossed our radar from US online brokerage E*Trade Financial: a remarkable stall in the number of new retail investor accounts.

Last week, we had noted that along with the recent lift in cryptocurrencies, there was news of E*Trade Financial (as well as TD Ameritrade) exploring the ability of clients to trade Bitcoin and Ethereum on their platform in the near future. That was the good news.

The not so great news to cross the wires this week was an important number related to the growth of E*Trade’s retail (aka online brokerage) business in the US last month. As part of a recent update on their performance figures, E*Trade reported a sharp decline in the number of net new retail clients compared to the previous month (-95%) as well as relative to the past year (-84%). The total net new clients to join E*Trade in April worked out to just 1,219 – which on a total retail client base of just under 5.1 million accounts is basically a rounding error (0.02%).

After what appeared to be an incredibly busy March, the volume of new retail online accounts effectively dropped off a cliff and could be a harbinger of headwinds for the US online brokerage space in the face of mounting low or no commission competition and jitters around an inverted yield curve.

Another interesting data point which might support that thesis: the news in April by TD Ameritrade’s CEO that they dramatically reduced their marketing spend because “fish weren’t biting” in the first quarter.

It is against that backdrop that the metrics at Interactive Brokers, specifically around account growth, stand out as interesting. Interactive Brokers’ client base continued to grow at a steady clip, adding 8,200 clients over April. Of course, it should be noted that Interactive Brokers did not report the figures for growth specifically in the US, which would allow for a more accurate comparison with E*Trade’s figures. Also to clarify, E*Trade changed the way in which they counted and reported their client growth metrics, combining banking and online brokerage accounts under the “retail” category – so not all the retail clients listed actually reflect online brokerage customers.

These headwinds come at an interesting time, as the Robinhood IPO on the horizon could see challenges to growing a user base that might be waiting on the sidelines because of macro concerns about being exposed to markets at this time. Conversely, it could be that Robinhood is the cause and benefactor of E*Trade’s drop off in popularity.

It is going to be particularly interesting to see where E*Trade’s client growth numbers trend over the next month or two because of the hot IPO market, and whether that would have been enough to propel new investors into the DIY investing game. If it turns out that even with one of the biggest rosters of IPOs in recent memory can’t coax investors into the market, then it won’t only be US online brokerages that have a problem to contend with – that is something that could very well spill over to Canadian investors. Like the inverted yield curve, it might be a signal of a pullback to come.

While cryptocurrency trading could help to reinvigorate the new client growth figures for E*Trade in the near term, there is definitely something that impacted the pace and enthusiasm of retail investors participating in the markets in April – at least through E*Trade. It might be competition from disruptors like Robinhood and even JP Morgan offering commission-free trading, or it could very well be investors being spooked by uncertainty (or worse) in the markets. Stay tuned.

Discount Brokerage Tweets of the Week

From the Forums

Child’s Play

One forum poster wants to know more about the best way to get their children into DIY investing. See what advice they received on this Canadian Money Forum thread.

Homing in on Strategy

A DIY investor has questions on whether to purchase real estate or invest in ETFs. See what fellow Redditors had to say here.

Into the Close

That does it for another edition of the roundup. Canadian markets have the day off on Monday, but it’s safe to say most traders of crypto and other stories will be looking for trading setups and tuning into what’s happening over the fence in the US markets. The only thing that seems certain in the weeks ahead now is a lot more uncertainty. So, the irony is that while one series of games has ended, another one continues to drag-on.

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Discount Brokerage Weekly Roundup – May 13, 2019

While talk may be cheap, not talking is turning out to be very expensive for two major market moving voices. Ironically, it is the power of conversation that online brokerages are hoping to tap into and yes, for those that aren’t part of the new conversation on money and wealth management, their silence might just turn out to be very costly indeed.

In this week’s roundup, we take a look at a recent investor education event that provides an interesting indicator of measuring engagement in financial content, and how one Canadian online brokerage is well out in front in the content game. Next, we cast the radar wider than normal to see the big picture forming for online brokerages in Canada and the U.S. and what that might mean for DIY investors on both sides of the border. As usual, we’ve got our staples of investor tweets and forum chatter to close things out.

TD Direct Investing Levels Up Investor Education

When it comes to analyzing the stock market, there are all kinds of indicators that investors use to track performance and progress. From MACD’s to Bollinger bands, indicators tend to provide some measure of investor sentiment.

Interestingly, when it comes to measuring the sentiment around investor content, there’s an uncommon indicator that reveals something about the nature of the investors consuming it: hair.

Having sat through countless investor education events and investing seminars (many of those from the back of the room) there has been a constant indicator of who actually attends. Historically, the view of the hair colour (if the hair was there at all) was typically on the lighter end of fifty shades of grey.

It is against this backdrop, however, that the recent investor education event sponsored by TD Direct Investing, entitled “Levelling Up Your Money” stands out as somewhat unique.

From the picture shown above (sourced from Twitter) it is immediately clear that, in addition to being well attended, the “hair” indicator reflects a very different demographic in the room compared a picture below taken at the biggest investor conference in Toronto, the MoneyShow.

Gradually, it appears that a shift in the demographics of both audience and presenters is taking place. There seems to be a new wave of voices and consumers providing and seeking out investment information and education resources.

This past week’s panel featured a solid range of millennial personal finance voices, including Jessica Moorouse, Erin Lowry, and Barry Choi. The focus of this session was on investing, financial planning, and the reality faced by millennials deciding how and where to get started with investing.

What is noteworthy about this particular event is that TD Direct Investing was the title sponsor on an event that brought together a selection of younger personal finance voices that have a direct connection to a “millennial” audience. The result – younger people coming to attend an event in real life to learn about money and wealth.  For TD Direct Investing, it was a unique opportunity to be in the room with and get access to the target pool of their next wave of clients.

Taking it a step further, TD Wealth also featured one of the speakers at the event, Jessica Moorhouse, on a recent edition of their original program Money Talks to discuss millennials and investing.

One reason that this event and the subsequent feature on the Money Talks segment matters is because when it comes to attention and winning “mindshare” with DIY investors, content and influence are two important ingredients.

In terms of producing financial education content, TD Direct Investing is arguably the leading online brokerage in Canada for creating and deploying structured financial education related to investing (especially DIY investing).

They have also historically been very adept at providing “in-person” events and this latest iteration shows what happens when popular online personalities get a platform in the “real world” to provide a session to curious and enthusiastic followers.

Tactically speaking, this puts other Canadian online brokerages in a challenging position to supplement their offering with something as compelling from an educational content standpoint. For consumers looking to learn more about investing, and who base their choice of which online brokerage to go with, TD Direct Investing’s educational content makes them a hard contender to beat.

A second important observation of this event is that the coveted millennial audience is out there and they are curious about learning about investing.

With a big-bank-owned brokerage taking the lead in reaching out to this demographic, it could kickstart activity from other Canadian online brokerages to do the same.

We have already observed a shift in the frequency and style of several other online brokerages’ content efforts to make them more accessible to a contemporary (read: younger) audience. TD Direct Investing’s latest move means that those online brokerages interested in reaching that same demographic are going to have to, ironically, level up their game to go beyond just execution price to gain traction with a younger investor.

A Convenient Truth

Despite the differences broadcast in the news between Canada and U.S., one thing that online brokerages on both sides of the border face as a challenge is looking for ways to grow their business. This past week, there were interesting stories on both sides of the border that collectively point to a strategy of diversification on the part of online brokerages to keep their businesses economically viable.

Case in point, even though the heady times of early 2018 are in the rear view mirror for cryptocurrency traders, late last month a Bloomberg story reported that one of the well known online brokerages in the U.S., E*Trade Financial, is going to enter into the cryptocurrency trading space by enabling direct trading of Bitcoin and Ether. Direct competitor to E*Trade, TD Ameritrade, has also been reportedly quietly testing Bitcoin trading (not just the futures trading which is already available on their platform). With Robinhood already well out in front of the “crypto” trend at online brokerages with their launch last year of cryptocurrency trading, the normalization of crypto trading at online brokerages may be soon at hand. For Canadian online brokerages, this is one trend that could help to ignite a connection with millennial investors and those investors who seem more comfortable with the digital currency trade.

Perhaps the most compelling example of the evolution of the “online brokerage” into a holistic financial management platform is with Interactive Brokers. They have gone from the platform of choice for active traders to an “integrated” model that lets clients earn, borrow, spend and invest.

Meanwhile, in the Canadian online brokerage space, the recent example of independent online broker Questrade adding a residential and commercial mortgage lender, Community Trust, to their stable of services signals a major step change for this financial services provider who started out focusing on DIY investing.

With new competitive forces continuously pushing commission fees ever lower, there are examples in the U.S. and Canadian markets that reflect how online brokerages are responding: diversification. What that means for DIY investors appears to be that as wealth and money become increasingly digitized, the line between traditional banking service providers and traditional investing services is going to get very blurry.

As the mammoth valuations on Uber and Lyft highlight, convenience culture is alive and thriving.  If any online brokerage north or south of the border can walk the tightrope of being compliant with regulations while also providing an experience to access financial services that screams convenience and reliability, it won’t just be on our radar, it will be on a lot of others’ too.

Discount Brokerage Tweets of the Week

From the Forums

Start Your Engines

With the launch of Uber’s brand-new IPO, one DIY investor has questions about the best time to invest in this company. See what other forum users had to say in this RedFlagDeals thread.

Getting Invested

One DIY investor has contribution questions after being offered a chance to invest in their company at a discount. See what advice fellow Redditors provided here.

Into the Close

That’s a wrap on another edition of the roundup. While there’s controversy on the origin of the phrase/curse “may you live in interesting times,” there’s probably more agreement on the fact that we’re living through those very interesting times. After a nail biting weekend courtesy of the Raptors, Game of Thrones, and trade talks, there’s a pretty high bar for the next week to surpass in terms of “interesting.” Here’s hoping there’s something boring to talk about next week!

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Discount Brokerage Weekly Roundup – May 6, 2019

It’s hard to believe that May is already upon us and there’s talk everywhere about untimely ends. Whether it’s from King’s Landing, or the basketball court, or deals and promotions, there’s clearly some drama ahead in May that will make for gripping entertainment.

In this edition of the Roundup we’ll review the latest interesting twist in the deals and promotions space from a rather large player, as well as profile a novel way to derive income for buy & holders. As always we’ll toss in some forum posts and Twitter conversations for good measure.

Deals and Promotions Update

If you’re looking for a safe place to hide from Game of Thrones spoilers, this may not be the best spot to seek refuge. So, what does this legendary television show have in common with Canadian online brokerage deals and promotions this month? Plot twists.

Heading into May, things were looking somewhat grim in the deals and promotions space. After an incredibly hectic start to the year, there were many promotions set to unceremoniously end in April. One of the more noteworthy offers that wound down last week after itself having been extended through the income tax filing deadline was CIBC Investor’s Edge cash-back promotion.

But, like any good market, competitors giving one another a free pass wasn’t going to last very long.

The first bit of good news for DIY investors came from an unlikely source, as the usually reserved HSBC InvestDirect decided to extend their cash back promotion by another month. While it wasn’t a major extension, it nonetheless bulked up the cash back offerings for DIY investors. This meant that BMO InvestorLine and Questrade were not alone in offering a cash-back promotion.

The second bit of good news for DIY investors that crossed our radar last week was that they wouldn’t be waiting for a new offer for very long at all. RBC Direct Investing rolled out a new cash back promotion for the better part of May which serves up between $100 and $1,000 in cash back bonuses to investors who deposit between $25,000 and $500,000 or more.

Despite the modest size of the cash-back amounts, the latest move by RBC Direct Investing is kind of a big deal as they themselves are also kind of a big deal. The size and profile of RBC Direct Investing means when they bring an offer or new feature to market, other online brokerages will have to pay attention, if not figure out a way to respond in kind.

While it is likely by design, this deal was not in the public spotlight the way that previous mass market promotions were. In fact, this promotion came to light because it was emailed to investors who in turn, posted the information about it on investing forums. For a modest-sized offer to create any chatter online is largely the result of who is offering it – in this case a major provider. The lesson for other online brokerages is clearly that if they want to generate buzz about themselves then it is going to take a serious investment in incentives (such as deals) and advertising.

The second important observation about this offer is its duration. According to the terms and conditions, this offer was technically live as of April 25th however the deadline to take advantage of it is May 24th.

This is an unusually short duration for a promotion from an online brokerage – especially a larger one – so it indicates that there is more to this deal than meets the eye. Digging deeper into the terms and conditions, what is interesting to take note of is that to qualify for this offer, accounts must be opened by May 24th but deposits or transfers don’t have to be received by RBC Direct Investing until July 26th. Finally, another observation related to timing is that the requirement that clients who take advantage of this offer need to keep these assets with RBC until December to qualify for the payout.

Where the rest of the online brokerage space goes from here will be interesting. As we had referenced in last week’s Roundup, there’s clearly a fundamental case to be made for online brokerages to get in front of the IPO wave currently washing over markets. With stories like Beyond Meat debuting and doubling to serve as a counterpoint to the disappointing Lyft IPO, it means that investors on the sidelines of these “unicorns” might be coming back to the market to invest, and the deals or promotions on offer will certainly factor into which online brokerage gets chosen.

Of course, the fact that RBC has timed their promotional offer to last about one month only, means that other brokerages might be less inclined to launch their own promotion and hope they can ride out the storm. Regardless, there’re clearly more twists and turns left in the deals and promotions story in May, and that’s a great net result for DIY investors.

Interactive Brokers Enables Stock Yield Enhancement in Canada

The old saying goes that it takes two to make a market. When it comes to the stock market, however, it is important to remember that every trade requires a buyer and a seller. Of course, there’s one other necessary ingredient: shares. While buyers typically don’t run into problems finding shares to purchase, the same cannot be said for shares for short selling.

Last week, Interactive Brokers expanded its unique Stock Yield Enhancement program to now include eligible Canadian securities. The Stock Yield Enhancement program effectively lets Interactive Brokers clients who happen to be owners of a security lend that security out into a pool overseen by Interactive Brokers. More often than not, these shares/securities will be lent out again for short sellers to take advantage of.

The announcement last week is an interesting example of how a previous dark-horse online brokerage is creating something investors will benefit from, particularly in Canada. This move changes the value proposition so that Canadian investors can monetize the stocks sitting in their portfolios.

It is also worth noting that Interactive Brokers Canada rolling out new features for Canadians is taking place at the same time that other brokerages are trying figure out how to reduce costs. This juxtaposition is both a reflection of and warning to other online brokerages that in addition to lowering prices, Interactive Brokers continues to innovate with technology tools and pass those savings to clients.

Discount Brokerage Tweets of the Week

From the Forums

Above Average Joe

A DIY investor wants to know if it’s possible to generate a significant amount of passive income per day through investing. See what other forum users had to say in this Canadian Money Forum thread.

To Pay or Not to Pay

A student has questions about whether to invest or pay off their student loan. Find out what advice fellow Redditors offered here.

Into the Close

That’s a wrap on the latest action at Canadian online brokerages. From new features to new deals, it appears that anyone planning to take it easy this summer at an online brokerage may want to rethink that one. Of course, with all that is going on in real life and on television, it’s going to be tough not to need a vacation from all the angst being shared on Twitter. Regardless, have a profitable week!



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Discount Brokerage Deals & Promotions – May 2019

*Updated: May 27* April showers are supposed to bring May flowers but when it comes to deals for DIY investors in Canada, the promo parade in May is definitely getting rained on. After an incredibly busy start to the year – especially in the lead up to the RSP contribution deadline, deals activity at Canadian brokerages has tapered off considerably at the start of May.

Although some pullback in discount brokerage deals and promotions activity is normal for this time of year, to see brokerages step back in terms of offering incentives is noteworthy. Specifically, the context this year matters: there has been strong stock market performance to begin the year; there are lots of big-name IPOs coming to market and a new ultra-low cost competitor has entered the online brokerage space. Add these factors up, and it should be a perfect storm for Canadian discount brokerages to be more aggressively promoting offers to win over new investors and appealing to investors who are now more tuned into what the markets are doing.

Of course, it’s great news to the handful of online brokerages who are offering promotions to investors as they will get a greater share of attention from investors hunting around for an offer on a new account.

Specifically, to start off the month, BMO InvestorLine, CIBC Investor’s Edge, Desjardins Online Brokerage, HSBC InvestDirect and Questrade have offers in play. That said, CIBC’s offer is scheduled to expire on May 2nd and HSBC InvestDirect chose to extend their offer to the end of May from its previous deadline of April 30th.

On balance, we see a strong likelihood that additional online brokerage offers come to market over the late spring/early summer period. The opportunity to get access to a younger, engaged investor ahead of the major IPOs taking place this year seems too tempting to pass up. We’ll be keeping our eyes open for deals that hopefully also evoke that same sentiment.

Expired Deals

Heading into May, National Bank Direct Brokerage’s offer for 50 commission-free trades officially expired as did the BMO SmartFolio promotional offer for the free first year of management (BMO SmartFolio’s cash back offer is still running until June).

Extended Deals

In a surprise move, HSBC InvestDirect opted to extend their winter promotion for another month, with the new deadline for their cash back offer falling on May 31st.

New Deals

*Update: May 27 – There have been a couple of interesting deals from large bank-owned online brokerages to cross the deal wire this month.

RBC Direct Investing kicked things off earlier this month with a cash back offer for new (i.e. not existing) clients of RBC Direct Investing. This new promo was a really limited time offer and expires in early June. Cash back rewards for this promotion range from $100 for a minimum deposit of $25,000 to $1,000 cash back for a deposit of $500,000+. See table below for more details.

CIBC Investor’s Edge also launched a new deal in May that is going to turn a few heads with investors and competitors alike. CIBC Investor’s Edge is offering 100 commission-free trades which are good for 90 days from the date of account opening. This deal is especially enticing as it has no minimum deposit requirement stated to qualify and commission fees are waived at the time the trade is placed meaning there is no long wait for a commission rebate. See table below for more information.*

There are no new deals to announce (yet).

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 a new qualifying account with CIBC Investor’s Edge and you may be eligible to receive 100 commission-free trades. Eligible trades include equity, ETF and options trades (per contract charges still apply). Commission-free trades are good for up to 90 days after account opening date. Use promo code EDGE28 when signing up. Be sure to read terms and conditions for full details. n/a 100 commission-free trades 90 days CIBC Investor’s Edge Free Trade Promotion July 31, 2019
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, 2019
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 none
Open and fund a new account with at least A) $25,000; B) $100,000; C) $250,000; D) $500,000 or E) $1M+ AND place at least three commission-generating trades and you may be eligible to receive a cash back promotion amount of at least A) $188; B) $388; C) $688; D) $988 or E) $1288. Be sure to read offer terms & conditions for full details. A) $25,000 B) $100,000 C) $250,000 D) $500,000 E) $1M+ A) $188 B) $388 C) $688 D) $988 E) $1288 Cash back will be deposited by November 29, 2019 HSBC InvestDirect 2019 Winter Offer May 31, 2019
Open and fund a new eligible RBC Direct Investing account with at least A) $25,000; B) $50,000; C) $100,000; D) $250,000 or E) $500,000+ and you may be eligible to receive a cash back reward of A) $100; B) $150; C) $200; D) $500 or E) $1,000. Use promo code CASHB when registering. Be sure to read terms and conditions for full details. A) $25,000 B) $50,000 C) $100,000 D) $250,000 E) $500,000+ A) $100 B) $150 C) $200 D) $500 E) $1,000 Cash back will be deposited by December 16, 2019 RBC Cash Back Offer June 7, 2019
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, 2019
BMO InvestorLine Open a new qualifying account or fund an existing qualifying account at BMO InvestorLine with new assets worth at least A) $50,000; B) $100,000; C) $500,000 or D) $1M+ and you may be eligible to a cash back reward of up to A) $100; B) $300; C) $900 or D) $1600. Use promo code SPARXCASH when registering to qualify. Be sure to read full terms and conditions. A) $50,000 B) $100,000 C) $500,000 D) $1M+ A) $100 B) $300 C) $900 D) $1,600 Cash back will be deposited the week of December 16, 2019. BMO InvestorLine Spring 2019 Campaign June 3, 2019

Expired Offers

Open and fund a new qualifying account with CIBC Investor’s Edge with a deposit of at least A) $25,000; B) $50,000 or C) $100,00+ and you may be eligible to receive a cash back bonus of A) $100; B) $200 or C) $400. This offer is open to both new and existing clients. Be sure to read full terms and conditions for complete details. A) $25,000 B) $50,000 C) $100,000 A) $100 B) $200 C) $400 Cash back will be deposited on the week of September 2nd. CIBC Investor’s Edge Cash Back Promo May 2, 2019
Last Updated: May. 27, 2019 08:30 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 (an existing Qtrade Investor client) refer a new client to Qtrade Investor and they open an account with at least $1,000 the referrer and the referee may both be eligible to receive $25 cash. See terms and conditions for full details. $1,000 $25 cash back (for both referrer and referee) Cash deposited at the end of the month in which referee’s account funded Refer A Friend to Qtrade Investor 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 $5,000 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. $5,000 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 January 2, 2020

Expired Offers

Last Updated: Apr. 1, 2019 17:00 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 no minimum required Transfer Fee Promo June 30, 2019
Transfer $15,000 or more into a new HSBC InvestDirect account and you may be eligible to have up to $152.55 in transfer fees covered. $152.55 $15,000 Confirmed via email contact with HSBC InvestDirect Rep. Contact client service for more information. none
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 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 Desjardins Online Brokerage 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 Desjardins Online Brokerage 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 none
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 SPARXCASH when signing up. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 BMO InvestorLine Summer 2018 Campaign September 3, 2018

Expired Offers

Last Updated: May 1, 2019 21:00 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 Broker@ge 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: May1, 2019 21:45 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. $1,000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Cash Back Open and fund a new or existing SmartFolio account with at least $1,000 and you could receive 0.5% cash back up to $1000. Use promo code PROMO1000 when opening a new account. See terms and conditions for full details. This offer can be combined with the refer-a-friend promotion. $1,000 0.5% cash back to a maximum of $1000. PROMO1000 January 2, 2020 SmartFolio Cash Back Promo
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 30, 2019 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, 2019 21:45 PT