Surveying the Canadian Online Brokerage Landscape
Highlights from more Canadian online brokers
What about the online brokerages not already featured? Not all brokerages chose to submit a review, but we still saw interesting developments worth reporting on. Keep reading to see what we spotted in 2020 and some possible trends to watch for in 2021.
CG Direct
By all measures, it was a year spent under the radar for CG Direct, the online brokerage arm of Canaccord Genuity. Aside from small website updates, there wasn’t much in the way of publicized information by or about CG Direct directly. Earlier in the year, however, US giant Morgan Stanley did select the parent of CG Direct, Canaccord Genuity Wealth Management, as a platform and a custody and clearing services provider for Morgan Stanley Wealth Management Canada. Indirectly referenced in that relationship is the self-directed online investing capabilities of Canaccord. There is clearly the potential for 2021 to hold some interesting developments for this online brokerage.
CIBC Investor’s Edge
Like many Canadian online brokerages, CIBC Investor’s Edge hit some turbulence during the most volatile patches of market trading. As the year progressed, however, they were able to regain their footing and get back to some of the original projects scheduled for 2020. One big milestone was the launch of their new online investing experience. Though still undergoing development, the new look and feel to their site is a promising upgrade that is generating buzz with clients. Also, heading into the end of the year, CIBC Investor’s Edge launched a competitive cash-back promotion that runs through RSP season in early 2021.
Desjardins Online Brokerage
After starting off 2020 with a significant restructuring to pricing for commissions for both the Disnat Classic and Disnat Direct platforms, the storm that was COVID-19 struck. In some respects, the timing for very active investors worked out, as the active trader pricing is among the lowest available at Canadian online brokers. That said, it appears from a features or activity standpoint that the focus was on improving client experience. An updated mobile app generated some positive responses with clients. For the moment, it seems Desjardins Online Brokerage will continue to pace itself and take its competitive cues from local competition rather than national players.
Interactive Brokers Canada
The Canadian arm of the popular US online brokerage maintained its usual pace of product and feature launches based on its larger US parent. In a year characterized by volatility, Interactive Brokers seemed relatively unfazed, a testament to both their technological prowess as online brokers as well as the fact that their clients are attracted to the kinds of volatility 2020 has brought with it. Of course, not even Interactive Brokers was immune from technological missteps, having to absorb losses on trades when oil futures amazingly went negative. With that in the rearview mirror, however, Interactive Brokers has maintained its positive growth among active, price-sensitive traders. One important milestone feature being rolled out by Interactive Brokers is their Impact Dashboard, which is geared to helping investors identify companies that align with their personal impact values.
Scotia iTRADE
Compared to the other bank-owned online brokerages in Canada, Scotia iTRADE was remarkably quiet through 2020. As such, it is more the story of what didn’t happen in 2020 – rather than what did – that makes Scotia iTRADE stand out. A previously vibrant (or semi-active) social media stream went largely dormant except for client service responses. Instead, it appeared that iTRADE leaned into paid advertising to stay visible with new investors and continued providing its usual rotation of investor education webinars. After staying out of the deals and promotions section for most of the year, Scotia iTRADE did flash signs of life with a strong cash-back plus discounted trade or commission-free trade offer.
TD Direct Investing
As one of Canada’s most popular bank-owned online brokerages, TD Direct Investing is no stranger to being in the spotlight. Of course, that kind of fame is a double-edged sword, as trading interruptions or other client service issues also get amplified. Momentum, however, was on the side of TD Direct Investing in 2020, as they experienced record-breaking account growth. After a relatively quiet summer, the fall saw a ramp-up of activity related to investor education culminating in the release of a flagship mobile trading feature called TD GoalAssist. The roll out of commission-free trading among Canadian online brokerages has been spotty; however, with GoalAssist, TD Direct Investing has put commission-free trading of ETFs into the spotlight. Looking ahead to 2021, it is likely this new app will feature prominently in TD Direct Investing’s strategy.
Virtual Brokers
Larger forces were at play in 2020 for Virtual Brokers. The historically active and visible online brokerage also kept a relatively low profile after the early part of the year. Likely contributing to that was behind the scenes activity related to the consolidation of multiple wealth management brands under the CI Financial (parent company to Virtual Brokers) umbrella. Though there was a change of pace in terms of visibility, Virtual Brokers did manage to achieve some important milestones in 2020, such as the launch of an updated mobile app experience. With some important branding changes on the horizon, there are some open questions on what from the existing Virtual Brokers suite will carry forward to the CI Direct Investing platform.
Wealthsimple Trade
It was a huge year for the challenger-brand online brokerage. The wave of zero-commission trading enthusiasm that swept across the US online brokerage marketplace in 2019 helped to propel Canada’s only full zero-commission online broker into the spotlight. 2020 saw record new-account growth at Wealthsimple Trade as well as the launch of new and innovative features. Cryptotrading – a first among online brokerages – was launched this year as well as a desktop version of the previously mobile-only trading app. Finally, in the promotions department, Wealthsimple Trade pulled off yet another clever move with a limited time “free stock” promo that sounds very similar to a promotion offered by popular US online brokerage Robinhood. Expect Wealthsimple Trade to continue to make waves in 2021 with new features released on a regular basis.