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Discount Brokerage Weekly Roundup – October 26, 2020

With just a few days to go, the news cycle is now going into hyperdrive. Not a day goes by without some reference to an election – mostly likely THE election that the entire world has its sights set on. For Canadian DIY investors and online brokerages alike, the news coming out of the US is very much on our radar, and more than just the election is influencing the discount brokerage space.  

In this pre-Halloween edition of the Roundup, we focus on a scary issue for any investor to confront: cybercrime, and how the consequences of some bad actors in the US have prompted worry here in Canada. Next, we get a sneak peek at a thriller move by one of Canada’s newest online brokerages to make the leap to the big screen (we mean desktops!). As always, we’ll feature some thoughtful conversation from DIY investor forums and a collection of interesting tweets from DIY investors.

Robinhood Accounts Get Hacked

If you want to talk about a DIY investor nightmare scenario, it’s probably close to something that has played out for some clients of US online brokerage Robinhood. According to reporting earlier this month from Bloomberg, close to 2,000 clients of the popular online brokerage have had their accounts compromised and in many cases cleared out.

While the number of accounts that were compromised is noteworthy, when compared to the total number of clients Robinhood has, which is about 13 million, the number is relatively small by comparison (0.015%).  

According to what Robinhood has commented on so far, the breach was the result of individual clients’ emails being compromised. The kinds of activities undertaken by the criminals seemed fairly advanced, with the hackers successfully creating fake identification documents to pose as the clients.

What is most troubling to hear is that in spite of some clients having set up two-factor authentication, their accounts were nonetheless compromised. To make matters worse, Robinhood does not have a customer service line for clients to call for additional support – everything is done online.

In Canada, the only online brokerage that does not have a dedicated phone support line is Wealthsimple Trade (interestingly, it’s also the online broker in Canada most similar to Robinhood). That said, this year has shown that even if an online brokerage does have a customer service line, DIY investors hoping to connect by phone could be forced to wait excruciatingly long to talk to a representative.

Cybersecurity is part of the “new normal” reality for online investors, and even more so in the time of COVID-19, where many individuals are being forced to navigate all kinds of services online that previously they may never have thought to.

The kind of breach of account activity in the case of Robinhood certainly sounds fraudulent to the reasonable observer, but whether a brokerage is ultimately responsible for reimbursing clients is not as clear-cut. Among Canadian online brokerages, security policies tied to coverage for reimbursement vary between brokers. This means that in order to be covered by the security guarantee, online investors need to demonstrate that they have taken all of the precautionary measures prescribed by their online brokerage.

Interestingly, in light of the news regarding the breach of Robinhood, there were Canadian DIY investors who were curious as to the kind of security coverage they would receive from Wealthsimple Trade, and they asked about it in a forum post in the Wealthsimple Trade Reddit thread.

While the response from Wealthsimple Trade is interesting, the fact that events in the US online brokerage market also prompt Canadian DIY investors to think about (and potentially ask questions about) factors related to their online investing experience is important to take note of. Despite there being significant differences between the size of the two markets, when it comes to features – including security – Canadian DIY investors are paying attention to the developments at US online brokers.  

The latest breach of Robinhood customers’ security serves as a warning for Canadian online brokerages and Canadian DIY investors. Unfortunately, we suspect that this won’t be the last time we hear of a security breach at an online brokerage. However, there are clearly steps that online brokerages and DIY investors can take to prevent it from happening.

Wealthsimple Trade Testing Desktop Platform

It’s been an eventful few weeks for the folks over at Wealthsimple and Wealthsimple Trade, from launching cryptocurrency trading in late September, to attaining the elusive unicorn status (aka billion-dollar valuation) earlier this month on a recent fundraising round, to the latest initiative: rolling out desktop trading.

This past week, several users on the Wealthsimple Trade Reddit thread shared the “good news” of being selected for an invite-only trial of the new desktop trading platform.

Unlike other Canadian discount brokers, Wealthsimple Trade opted to start with “mobile first” – which positioned their brand as something completely different from the standard online DIY investing experience. Of course, even getting onto the platform required making it past a “waitlist,” which made it all the more exclusive to be able to have a Wealthsimple Trade account.

The decision, of course, was not without its share of controversy. In terms of online brokerage ratings and rankings, Wealthsimple Trade did not qualify for the Surviscor online brokerage rankings specifically because it was not up to the “standard” experience provided by other online brokerages.

Rankings and some customer alienation aside, the numbers of clients at Wealthsimple Trade and the recent valuation increase of the parent company Wealthsimple to a “unicorn” valuation more than validate the decision to start and grow with mobile. In many ways, this playbook was established by the online brokerage in the US that Wealthsimple Trade often gets compared to: Robinhood. From pricing (zero commission) to platform (mobile first) to products (including cryptocurrency trading), there’s a lot that parallels the Robinhood story. Of course, the valuation and customer growth are also part of that same story, too.

For other Canadian online brokerages, the list of new releases and features at Wealthsimple Trade these past few weeks has been met with relative quiet. That is not something we expect to last for too much longer, however. There are already new platforms and web experiences actively under development at several Canadian online brokerages, and as we near the end of the calendar year, there will almost certainly be a significant ramp-up to promotional and new-feature announcements.

If there wasn’t already enough drama coming in the next few weeks of 2020, this latest development by Wealthsimple Trade has added the right kind of excitement into the final stretch of the year. A lot of DIY investors are still stuck at home – including working from home – so having a desktop version of an already popular trading platform is sure to be a welcome addition to the many browser tabs competing for attention.

Discount Brokerage Tweets of the Week

From the Forums

Zero Is the Hero

A Redditor on a quest for the holy grail of zero-commission investing asks in this post what Canada’s closest equivalent to Robinhood is. The answers are somewhat surprising.

Limited Options

A twentysomething investor accidentally went over the year’s TFSA limit and asks for advice and guidance in this Reddit post.

Into the Close

They say too much of a good thing is not a good thing. Just ask NASA scientists trying to hang onto the galactic trick-or-treat run on OSIRIS-REx. For traders, these next two weeks are going to be filled with more uncertainty than a Seahawks fourth quarter. For the non-football fans: it means that just about anything can happen to the markets, so be prepared to move quickly.

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Discount Brokerage Weekly Roundup – October 19, 2020

Despite the stock market being a voting machine on what the future is expected to look like, the videos of people making lightsabers and satellite internet deploying also provide reassurance that despite the pandemic, people are still hard at “work” making interesting things happen in the world (and outside of it). Online brokerages are also still keeping busy building and planning for the future, too. As big deals move through their paces, the world of DIY investing that they’re preparing for seems far away now but should be coming into reality by the 2024 US presidential election.

Big Deals Keep on Turning: Schwab Locks in TD Ameritrade Acquisition

While eyes are on America for the next few weeks because of the election, that doesn’t mean that there aren’t some interesting developments taking shape in the DIY investing space.

While the US Congress is awaiting a big deal on stimulus (at the time of publication), in the background there are two big deals that are now done and dusted in the US online brokerage space that will have some interesting consequences for online investors on both sides of the border.

Starting first with the acquisition of TD Ameritrade by rival Charles Schwab.

Eleven months and $22 billion (US) later, the “kind of a big deal” deal is officially done. The result is a gargantuan online broker in the US with about $6 trillion in client assets, 28 million online brokerage accounts, and more than 5 million daily trades. Fun fact: When Schwab first started, they were processing 50 trades per day.

This massive deal raises the stakes for “Schwabitrade” to get right the things that have made TD Ameritrade and Schwab clients as loyal and as vocal as they have been prior to this merger. The integration of the two brands will take an estimated 18 to 36 months, and for the time being, the two firms are going to be operating as separate companies.

Already, though, there are important changes to the executive team at Ameritrade that signal it won’t be “business as usual” for the next few years. Earlier this month several important TD Ameritrade executives were let go, indicating that there might be important changes coming to the client experience. One of the notable departures was that of the executive vice president of trading and education.

Mergers/acquisitions are an interesting proposition, since it essentially means taking what is hopefully the best parts of two platforms/experiences and creating an even better one in the end. At this stage, however, with such a long road ahead, there are many skeptical voices internally and among online investors who question the performance of some of the Ameritrade flagship tools (like Thinkorswim) post-merger.

For competitors in the space, the uncertainty offers an opportunity to win over unhappy clients. There is no shortage of competition among brokerages in the US, and as a result, Schwab must do a very good job of transitioning Ameritrade clients into a new experience and continue to innovate in a way that appeals to customers. E*Trade, Robinhood, Interactive Brokers, Fidelity, and others are all capable of benefitting from any missteps during the Ameritrade/Schwab deal, and it’s a fair bet that they will be actively advertising while Schwab is busy sorting out its next steps.

Of course, Schwab/Ameritrade isn’t the only big merger taking place in the online brokerage space. E*Trade is being acquired by Morgan Stanley, and for Canadian online investors, this could represent an interesting opportunity for another online brokerage competitor in the Canadian space.

Earlier this year (after the acquisition of E*Trade), Morgan Stanley announced the launch of a wealth management arm in Canada that specifically cited providing “a discounted self-directed investing solution” as part of their service offering. While it is unclear exactly what that might mean in terms of the platform/service that will provide the self-directed experience, the reality is that 2021 looks to be a year in which more than one US online brokerage may set up shop in Canada.

The other big Canadian consequence of the TD Ameritrade/Schwab merger is that TD Bank, parent to TD Direct Investing, is set to gain a 13.5% stake in Schwab because of the 43% stake that TD owned in Ameritrade. The approximate value of TD’s position in Schwab is worth just over $12 billion. Not a bad payday to avoid having to battle out what is increasingly a tougher fight in the online brokerage space in the US. Case in point: Robinhood’s valuation just reached almost $12 billion (US), with no signs of slowing down.

Investor Education Month – Update

This past week featured a solid lineup of educational content for Investor Education Month, to help individuals learn more about the nitty-gritty of managing wealth and investing. Of course, it being COVID times, all of this content was delivered via webinar, and as a result, attending these sessions was something you could do conveniently from the comfort of home.

Up first was a session prepared and delivered for Investor Education Month by TD Direct Investing. Specifically, TD Direct Investing arranged a webinar featuring YouTube finance and investing personality Brandon Beavis. Owner of the Brandon Beavis Investing channel and Investing for Beginners online investor education course, Beavis discussed the topic of how to become a more resilient investor.

There were a number of topics covered as part of this webinar, ranging from understanding the basics of the stock market, to opportunities to invest in during the pandemic, to some tips on how to go about buying and selling stocks.

In terms of staying “resilient,” the major tip Beavis offered to viewers was to come back to the basic principle of proper asset allocation.

This webinar was interesting in that both the guest speaker and the topics were geared specifically to younger and less-experienced investors.

For a new generation of investors, there are now lots of different places on the internet to turn to for information about online investing. However, YouTube is clearly a favourite when it comes to trying to learn just about anything. For younger/millennial investors, YouTube has a wealth of information on everything from cannabis to crypto to couch potato investing. Where Beavis stands out is not so much in the “get rich quick” content but more in the long-term balanced-investment approach.

The audience-size and viewership metrics speak for themselves for YouTube content creators like Beavis. There is clearly a value-add to having a younger, relatable voice explaining how things work in the stock market. Interestingly, this webinar seemed to emphasize a more “passive” investing approach that is more aligned with the “digital advice” of less-frequent investing, as compared to the online brokerages, which are incentivized toward a more active investor audience.

Overall, this was a great event to hear a broad conversation about the world of investing and personal finance. Specifically, it was effective for beginners who are curious about investing and want to get familiar with some of the terms and concepts of managing wealth.

In addition to the free webinar hosted by TD Direct Investing, there was also this past week an in-depth three-day personal finance series called the Canadian Financial Summit. Access to the event was free, but viewing the content more than 48 hours after the session required purchasing an all-access pass.

This series of webinars featured some of the most well-known names in Canadian personal finance, such as Rob Carrick, Ellen Roseman, and Peter Hodson, as well as many independent content creators and personal finance bloggers.

Among the topics most relevant to DIY investors that were featured in this summit:

  • TFSA Creator Shares Best Practices for Optimizing Your Financial Literacy
  • How to Pick the Right Stocks in 2020-2021
  • What DIY Passive Investing Style Is Optimum for You?
  • Why I Became a DIY Investor and How You Can Too
  • How to Crisis-Proof Your Finances
  • How to Easily Outperform Investment Advisors and Robo-Advisors
  • How To Automate Your DIY Investing Without Paying the Massive Fees
  • The High Risk of Bonds: Are Bonds Actually Safe Investments?
  • The Top Mistakes Canadians Make in Their Investment Portfolios
  • How to Build a Portfolio That Is COVID-Proof

There were lots of fascinating conversations about the fundamentals of investing as well as references to how to navigate some of the challenging financial realities presented by the current COVID-19 crisis. Interestingly, although not formally positioned as part of Investor Education Month, there was an abundance of material that was of value for DIY investors to have tuned in to. While the content is available for viewing after the conference, it does come at the steep price tag of $197.

From the Forums

No More Pencils, No More Books

A recent grad with no debt wants to set up an investment portfolio but feels lost and overwhelmed trying to study all the available information. Fellow Redditors weigh in with their advice in this post.

Lost That Loving Fee-ling

Can having more than one online brokerage lead to better outcomes? One DIY investor is starting to think about splitting assets among different brokerages rather than housing them all in one place and asks members of the Financial Wisdom Forum in this post for some perspective on whether having more providers leads to better returns.

Discount Brokerage Tweets of the Week

Into the Close

If the markets continue to move the way Donald Trump does, well, we’re not quite sure what direction they’ll be going next. This week will have a number of big earnings announcements, so all kidding aside, it’s likely to feature its fair share of volatility. Whatever screens you happen to be glued to this week, here’s hoping you find some time for something to smile at.

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Discount Brokerage Weekly Roundup – October 12, 2020

As much as turkey and mashed potatoes are a staple of the menu for many Canadians on Thanksgiving, so too is discussion of what’s happening in the world. Inevitably for DIY investors, the gravy comes in the form of what’s been hot and what others are looking at in terms of potential money-making ideas. During COVID, however, the gatherings are likely (or should be!) smaller, and that might make for less banter about what folks are trading (not including recipes for turkey). Nonetheless, this month, despite the dour news, some Canadian discount brokers are giving DIY investors reasons to be optimistic for the remaining few months in 2020.

In this short-week edition of the Roundup, we highlight a new twist on a story of inactivity fees at one Canadian online brokerage that will be sure to get DIY investors chatting as news spreads. Following that, we review some of the latest activities taking place during Investor Education Month, including World Investor Week, and who is (and isn’t) showing up in the Canadian online brokerage space. Despite the short week, we’ve served up a healthy portion of DIY investor chatter from Twitter and the investor forums.

Questrade Eliminates Inactivity Fees

With all the big headline news swirling, it’s easy for some important news to get lost in the shuffle. In the case of Questrade, one of Canada’s most popular online brokerages, their latest move regarding inactivity fees is almost certainly going to make waves once word catches on.

The big news for DIY investors: As of October 1st, Questrade has eliminated inactivity fees on all accounts.

Yes, that’s right, the storied history of inactivity fees at Questrade has added another chapter to it, and in this case, Questrade has returned to its low-cost roots and put an end to quarterly inactivity fees.

For those who have followed the Questrade inactivity fee saga for as long as we have, there is almost no forgetting the firestorm that emerged on social media – in particular on investor forums – when Questrade first made the decision to introduce inactivity fees to clients in July 2012.

At that time, the launch of the inactivity fees was a step change in the identity and perception of the brand. Up until that point, Questrade had become a fixture in the minds of value-conscious DIY investors, and one of the reasons why – aside from the low commission rates – was the lack of inactivity fees.

Understandably, then, the first iteration of inactivity fees proposed by Questrade did not go over well. The first rollout involved charging a monthly fee of $9.95 for clients who did not make at least one commission-generating trade in the month or who had a balance of assets across all accounts of less than $5,000.

When the news of this fee change broke, the very vocal dismay of the Questrade community of clients on a popular forum on caused Questrade to revisit the decision and modify the terms and conditions around the inactivity fee. Aside from substantially changing the structure of the inactivity fee, they also pushed back the date of the rollout of their inactivity fee to the beginning of October 2012.

A post on set in motion the official response and policy on inactivity fees for Questrade for the better part of the past eight years:

Unlike many of their Canadian online brokerage peers up to that point (and arguably since), Questrade had successfully built up a strong following and audience in various online investing communities and on social media. Because of its appeal as a lower-cost option for online investors, and the propensity of investor communities to provide “helpful” suggestions to one another regarding DIY investing products/services, Questrade often stood out as a natural counterpoint to most other online brokers at the time.

Although introducing inactivity fees at Questrade brought them into line with “the rest of the pack” of Canadian discount brokers at the time, the exercise of hearing out many online investing clients’ concerns and responding with changes to Questrade’s pricing was one of the more extraordinary moments in the history of the Canadian DIY investing community.

More than anything, it showed that as a service provider, Questrade was prepared to listen to their customers and respond with changes.

At the time, there were only two other online brokerages that didn’t charge inactivity fees – Qtrade Investor and Virtual Brokers, both of whom eventually came around to launching these fees as well.

Over time, the quarterly inactivity fee at Questrade increased from $19.95 per quarter to $24.95 per quarter, and the requirement to maintain $5,000 as a minimum value of assets was reduced to $1,000.

Now, almost exactly eight years after it was launched, and even though a lot has changed about the online investing industry and commission pricing in Canada, Questrade is venturing forward with no inactivity fees. Other Canadian online brokerages, with the exception of Wealthsimple Trade, will now be forced to re-evaluate their stance on inactivity fees altogether, or at least the threshold minimums required to have them waived.

As a tactical move, heading into the coveted RSP season, Questrade is now able to claim to be one of the only Canadian online brokerages that does not charge inactivity fees with no other strings attached.

What is curious about the latest drop in inactivity fees at Questrade is that, as of the time of publication, there hasn’t (yet) been much chatter online about this move – perhaps owing to the fact that there hasn’t been too much in the way of formal communication about the change in pricing.

It is likely, however, that Questrade will be shining a spotlight on dropping the inactivity fee heading into the end of the year and that it will undoubtedly spark a conversation among DIY investors. Hopefully, said conversation will also encourage online brokerages in Canada to consider what they can do to lower the barriers for DIY investors to access markets and to take their time when learning the ropes without being penalized for “going slow.”

Investor Education Month Activities Underway

In case you missed it, October is the official month for investor education awareness in Canada. This past week it was also World Investor Week, an initiative promoted by the International Organization of Securities Commissions, or IOSCO (yes, that last O is intentional). IOSCO is an international body that “brings together the world’s securities regulators and is recognized as the global standard setter for the securities sector.”

Now in its fourth iteration, World Investor Week was “conceived to raise awareness about the importance of investor education and protection. The project, organized and implemented by IOSCO’s Committee 8 on Retail Investors (C8), consists of up to a week of outreach activities carried out by participating IOSCO member jurisdictions.”

A quick search of the hashtag #WorldInvestorWeek on Twitter illustrates the many international organizations that participated in last week’s event. For the most part, the messages from securities exchanges and regulators around the world reinforced the messages around prudent investing strategies. To assist with getting their core messages out, IOSCO also prepared a list of key “investing basics” messages positioned around being a “smart investor.”

Below are the 10 messages set out for World Investor Week 2020:

On the home front, there were a few Canadian organizations that did make an appearance in support of World Investor Week, with one of the more active ones being the Ontario Securities Commission’s Investor Office via their “Get Smarter About Money” initiative.

Among Canadian discount brokerages, however, World Investor Week was largely invisible.

That said, when it comes to Investor Education Month more broadly, there was only one Canadian online brokerage that stood out: TD Direct Investing.

To their credit, TD Direct Investing has actually put together a comprehensive set of investor education activities in recognition of Investor Education Month – something that other online brokerages in Canada will want to take note of, especially if they are positioning themselves as serious about investor education. In fact, a quick look at the Twitter account for TD Direct Investing reveals that even in their description, investor education is the first thing they reference as being available.

While the spirit of promoting investor awareness and education is something all Canadian online brokerages would (likely) be on board with, it is noteworthy that only TD Direct Investing has compiled dedicated educational content for this specific month. In putting this together, TD Direct Investing has reinforced one of its strongest value offerings as an online broker that provides access to robust educational materials for DIY investors.

As many Canadian (and international) online brokerages wrestle with the reality that millions of new (or novice) investors have stepped into the world of DIY investing, it will be increasingly important for Canadian online brokers to provide resources to better inform these investors about the realities of investing online.

For the moment, TD Direct Investing has managed to take the lead among Canadian brokerages in tackling this – and given their depth of educational content, TDDI is well positioned to curate existing information that could apply to the current market uncertainty.

Looking at the social media accounts of their peers, it seems like most Canadian online brokers are taking a “wait and see” approach, or are too busy focusing on other areas to put investor education in the driver’s seat, or are simply relegated to having to watch and learn.

Discount Brokerage Tweets of the Week

From the Forums

HI(SA) School Musical

In this post, a Redditor ponders if the advice to keep all funds needed in the next five years in a HISA holds up when interest rates are so low. Commenters weigh in on if this course of action still seems wise.

(Half a) Million Dollar Baby

A would-be DIY investor turns to the forums in this post to find out what returns they might reasonably expect if they invest some of their money.

Into the Close

That’s a (turkey) wrap on another eventful week. Sports fans were not disappointed by this past weekend featuring NBA championships and yet another nail-biting performance in the NFL (looking at you, Russell Wilson) – and Prime Day! Of course, there are plenty of less fun but anxiety-inducing days ahead, as the US presidential election looms large. Whether you’re a spectator to the markets or thinking of playing the field this week, there’s no doubt you’ll have lots to watch.

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Discount Brokerage Weekly Roundup – October 5, 2020

So, if things seem like they might have gone from bad to worse this past week, with non-stop coverage of the US election chaos, the good news is that the stock market happened to shrug it off. While there’s a lot for everyday people to digest in terms of news flow, thankfully the online brokerage space offers up some good news to tune in to, especially for DIY investors.

In this edition of the Roundup, we check in on the latest deals and promotions activity to kick off October and highlight some early signs that suggest DIY investors are going to see even more offers from Canadian discount brokerages before the end of 2020. Next, we take a closer look at some trading metrics that reveal just how popular September 2020 was for trading, and we fish out some bonus news from Twitter chatter that is going to be very important to the online brokerage space in Canada in 2021. As always, we’ve got chatter from DIY investors on Twitter and the investor forums to close out on.  

Tricks or Treats? October Discount Brokerage Deals Activity Seems Tempting

If there’s anything that 2020 has taught us to be aware of, it’s pending change. The start of a new month is when we take the opportunity to check on the current slate of deals and promotions offered by Canadian discount brokerages to see what’s changed and, more importantly, what DIY investors can look forward to in the weeks ahead.

Despite the many dour social, economic, and political headlines, the stock market has managed to stay remarkably buoyant. 2020 has been an unusual year for investor behaviour online, and likewise for the deals and promotions market. Since March of 2020, there has been a significant contraction in the number of offers and the number of online brokerages coming to market with compelling incentives to win over DIY investors.

At the beginning of this month, however, it looks like deals activity is coming back to life. Although there were no new deals to start the month, the small but encouraging development is that one of the current offers, which was set to expire at the end of this month, has been extended through to the end of November.

National Bank Direct Brokerage, which is currently one of three online brokerages offering a commission-free trade offer, has extended their 100 commission-free trades offer until the end of November. Regular watchers of the online brokerage promotion space recall that a few months ago, the only online brokerage in Canada with an advertised commission-free trade offer was Questrade. Late in the summer, however, HSBC InvestDirect jumped into the deal pool, followed shortly thereafter by National Bank Direct Brokerage.

The early pattern emerging from the restart to activity in the deals and promotions space is that smaller or less popular online brokerages are leading the charge to bring new offers to market. No big-five-bank-owned online brokerage has launched an offer (at the time of publication), but there is a strong likelihood that, over the next 60 to 90 days, things could ramp up dramatically for investor promotions. There is simply too much at stake heading into the rush for RRSP season, and online brokerages don’t want to risk being left behind.

As such, it makes sense that the smaller players will be racing to get their offers out and advertised as soon as possible. When one of the larger brokerages in the space launches an offer, the typical response is that it generates a lot of interest and conversation.

There’s little doubt that the next few months will see a contentious battle for attention among Canadian online brokerages, so every extra bit of exposure helps – especially when it comes to deals and promotions.

Another interesting trend so far in the restart to deals activity is the lack of cash-back offers. There are commission-free trade offers that have come to market – some with expiry dates of up to a year – however, the most popular kind of offer, the cash-back, hasn’t made an appearance. There’s certainly a strong likelihood that this is something that could change heading into the thick of the RRSP season race, but for now, investors interested in cash-back offerings for opening an online trading account will have to rely on referral offers.

Although deals activity is muted by historical standards, data from online brokerages in the US shows the pace of account opening has plateaued, signalling the need to restart promotional offers to keep momentum strong. Also, according to discussions with several online brokerages, there are already plans underway to launch offers in the very near future.

It’s difficult to guess just how extreme the volatility predicted in the stock markets will be over the next several weeks, but it is likely that amateur and professional active traders alike will be looking to take advantage of the uncertainty. With their increased presence and activity fueling the conversation online about trading opportunities and online brokerage experience, and by virtue of the fact that this group of online investors is incredibly highly prized, it seems reasonable to expect that online brokerages will not be waiting on the sidelines for too long before coming into the market with some attractive offerings.

Investors and non-investors alike will be collectively on edge this month. Here’s hoping that in the run-up to the US presidential election, Canadian discount brokerages offer up some positive changes in the form of compelling offers for investors to smile about.   

In Data We Trust: Interactive Brokers’ September Metrics Reveal Heavy Trading

Despite the world having a sense of chaos at the moment, the steady marker of a new month in the form of trading metrics from Interactive Brokers helps to add a little bit of order back into things. This past week, the popular-with-active-investors online broker released their regular trading metrics for the month of September.

One of the great features of Interactive Brokers when it comes to reporting performance is their transparency and disclosure of trading activity stats.

Among the highlights from their most recent month’s trading metrics was that client account growth remains very strong. Interactive Brokers grew the number of accounts they have to 981,000, which is 4% higher than the previous month and 47% higher than the same point last year. By implication, it means that October 2020 is likely the month that Interactive Brokers hits 1 million total accounts. Although the number of accounts pales by comparison to competitor firms (including Robinhood), the number of trades and the revenue per trade at Interactive Brokers is nothing to sneeze at.

Another interesting data point that jumped out from the Interactive Brokers press release on trading metrics was the volume of trading on their IBKR PRO platform. Recall that Interactive Brokers launched a zero-commission platform in late 2019 (IBKR Lite), which ultimately catalyzed other big online brokerages into following suit and triggered an avalanche of consolidation (e.g., Schwab acquired Ameritrade; Morgan Stanley bought E*Trade). The paid-commission version, IBKR PRO, reports its metrics.

In September, Interactive Brokers reported that there were 14.21 million trades placed on the IBKR PRO platform, with 8.12 million being buys and 6.09 million being sell orders. For context, the total number of trades in September was only slightly lower than in March (14.52 million) and June (15.07 million), a signal that September was a very busy month for traders working via the pro platform. Interestingly, even though the total volume was very high compared to the past several months (volume was higher 11.7% m/m), the size of orders in terms of number of shares purchased (2.6B shares) or sold (2.5B shares) was actually at the lowest point since February, a signal that traders are making smaller-sized trades.

The takeaway from these figures is that trading volumes in the US were very strong in September, a pattern that likely was true here in Canada, too. Interestingly, Interactive Brokers doesn’t show many signs of slowing down in terms of account growth. With the prospect of even greater volatility and uncertainty in the lead-up to the election, it appears that will be a catalyst for more account growth at Interactive Brokers but more cautious trading for its clients.  

Interesting Chatter on Twitter

It’s an understatement to say that there’s a lot happening on Twitter these days, much of it dramatic and filled with vitriol. As with anything on social media, however, filtering through the noise can provide some interesting results.

First, this past week Questrade celebrated their 21st anniversary as an online brokerage in Canada. They have had a storied journey but today enjoy the position as one of the most popular online brokers in Canada, through a combination of ultra-competitive pricing, savvy operations, and clever marketing.

Another very big piece of news is that online brokerage Tastyworks telegraphed more information about their plans to launch in Canada and, most importantly, provided some sense of timing and which account types they will be making available (or hope to) at launch. In a tweet from Tastytrade Co-CEO and President Kristi Ross, the plan to come to Canada was confirmed, with the anticipated arrival date pegged at Q1 (which we assume to mean early 2021).

This throws yet another log on the fire for zero-commission trading to become a greater reality as Tastyworks – the online brokerage – offers zero-commission trading in the US for stock trades and ultra-low pricing for options. Whether the pricing will remain similar to the US operations is unclear. However, what is clear is that in addition to Tastyworks potentially coming to market here in Canada, there are some important changes slated for CI Direct Investing and CG Direct (and potentially E*Trade) that will increase the level of competition among brokerages.

With a dynamic US online brokerage setting its sights on Canada, the incumbent online brokerages are going to have to get ready to move faster and with more exciting features in 2021.

Discount Brokerage Tweets of the Week

From the Forums

Take the Bull by the Horns?

DIY investors weigh in on whether or not to hold onto a stock that’s currently on hard times. Some forum users laud this as a once-in-a-lifetime opportunity, while others are less certain in this post.

(Re)New and Old

A Redditor turns to the forums in this post for advice on which renewable-energy ETFs others are investing in.

Into the Close

On the plus side, October is Investor Education Month, and there’s a pretty good chance that investors of all stripes will be subject to some kind of lesson-learning. For all of the perils that misinformation has laid bare, it’s probably wise to check out some of the many investor-education activities planned, starting with this list from the Ontario Securities Commission. Alternatively, there’s always one more thing on the list of things that you never saw coming in 2020: the latest TikTok craze, for 1977’s “Dreams” by Fleetwood Mac.

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Discount Brokerage Deals & Promotions – October 2020

*Update: October 30* October is generally a spooky month for several reasons: The weather is colder, the sky is gloomier, and, of course, there’s Halloween at the end of the month. 

 In true 2020 fashion, October is predicted to unveil some more than a few tricks and even a few treats from Canadian discount brokerages, making it more uncanny than usual. This month, not only will there be a rare Halloween blue moon, but the markets are shaping up to become increasingly volatile as the US presidential election nears. 

As online brokerages brace themselves for what looks to be a bumpy ride, DIY investors who want to brave the impending instability and do some trick-or-treating for investments can scroll on for the most current deals and promotions from various Canadian online discount brokerages.

For those hunting for an online trading account, be sure to check back again during the month. We will continue to monitor and provide updates on new discount brokerage deals, and look forward to a month filled with all kinds of surprises.

Expired Deals

*Update: Oct. 30 – HSBC InvestDirect’s 60-day free online equity and ETF trading promotion has officially ended on October 30th.*

Extended Deals

National Bank Direct Brokerage extended their commission-free trade offer which was launched in the summer. This deal was originally slated to expire on October 30th, but has now been extended until November 30th. See the table below for full details regarding the promotion and eligibility. 

New Deals

No new deals to report at this time.

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
  6. Offers for Young Investors

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
HSBC InvestDirect is offering 60 days of free online equity and ETF trading (up to 60 transactions) for new accounts opened during the promotional period. There is no minimum funding requirement for the accounts; however, the fund must be from outside HSBC InvestDirect. Trading commissions will initally be charged but will then be credited back to the customer’s account within 120 days after the free trading period ends. $0 60 days of free trading 60 days Please refer to the full Terms and Conditions October 30, 2020
New accounts opened between Jun 22 and Nov 30, 2020 will be awarded 100 free online trades in one year. This promotion applies to new and existing NBDB clients who uses the code “FREE2020” to open new accounts.There’s no minimum funding requirement, however some other restrictions may apply. $0 100 Free Trades 1 year Please refer to the full details of the deal. November 30, 2020
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, 2020
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, 2020

Expired Offers

Last Updated: Sep. 30, 2020 9:20PT

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
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
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 5, 2021

Expired Offers

Last Updated: Sep 30, 2020 10:16PT

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 n/a Transfer Fee Promo none
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $200 in transfer fees. $200 $15,000 Transfer Fee Rebate Details none
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 $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 Transfer Fee Promo 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
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account and you may be eligible to have transfer fees covered up to $200. Contact client service for more details. $200 Contact client service for more information Contact client service for more information (1-888-776-6886) none

Expired Offers

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 $10,000 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 $10,000 Disnat 1% Commission Credit Promo January 8, 2020
Last Updated: Sep. 30, 2020 10:25PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Submit your information via the Hardbacon website to be referred to National Bank Direct Brokerage. Open and fund a qualifying account and you may receive up to 20 commission-free trades and discounted trading commissions. Be sure to read full terms and conditions. n/a Hardbacon Free Trade Promo 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: Sep 30, 2020 11:19PT

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: Sep. 30, 2020 10:31PT

Offers for Young Investors

Brokerage Offer Type Eligible Age Range / Client Segment Offer Description Min. Deposit Expiry Date Link
Student Pricing Clients with CIBC Smart™ Account for students $5.95 per trade and zero annual account fees not required None CIBC Student Pricing
Broker@ge 18-30 18-30 years old investors Benefits: * 5 free transactions (Minimum deposit of $1,000 required) * No inactivity fees * No asset minimum to maintain for free registered accounts * Exclusive events * Disnat Mobile App $1,000 None Broker@ge 18-30
Offers for professionals & Students Students in selected fields of study Professionals and students in the below fields can benefit from a reduced pricing structure: * Engineering students * Legal, accounting and business students * Healthcare students * Health sciences students * Nursing students Benefits: * $5.95 commission on equities * $0 commission on ETFs * $0 annual administration fee not required None NBDB Student Pricing
Young Investors Offer 18-30 years old investors Accounts holders who are 30 years old or younger are offered 10 free trades each year. After the free transactions, a commission rate of $4.95 per transaction will be applied (which is just half of the regular price). not required None Young Investor Offer
Young investor pricing 18-30 years old investors Benefits: * $7.75 commissions for stock and ETF trades * No account minimums * No quarterly admin fees min. $50 a month through pre-authorized contributions. None Young Investor Pricing
Waiver of account maintenance fee Clients who have RBC Student account, currently or in the past 5 years. The Maintenance Fee ($25 per quarter) is waived, regardless of the account balance. not required None Zero Account Management Fee
Young Investors Offer Clients below 26 years old Low activity account administration fee and the RSP account administration fee are waived. not required None Young Investors Offer
Zero Account Administration Fee Clients below 26 years old The account administration fee ($24.95 per quarter) is waived. not required None $0 Account Administration Fee
Last Updated: Sep. 30, 2020 11:17PT