Online Brokerages on the Radar
While all Canadian online brokerage firms we regularly cover were invited to participate in this year’s issue of Look Back / Look Ahead magazine, not all chose to participate. Nonetheless, true to Sparx Trading form, we wanted to ensure we provided coverage of all brokerages to highlight our thoughts on important developments in 2021 and what we see coming in 2022.
CIBC Investor’s Edge
CIBC Investor’s Edge spent a good portion of 2021 flying under the radar. As with their peers, the flood of interest in opening online trading accounts early in the year overwhelmed client service channels.
Despite the radio silence for much of the year, there were some interesting enhancements that reaffirmed the Investor’s Edge strategy of measured improvements. They added new online order trade types, extended the duration of orders and improved the buying power experience. Further, CIBC Investor’s Edge leaned into promoting research tools such as TipRanks and TC Market Buzz resources.
CI Direct Trading
Formerly known as Virtual Brokers, 2021 was the year this online brokerage officially transitioned into an identifiably CI Financial brand. As the year draws to a close, however, reskinning of apps and the website point to the rebranding as a work in progress.
Change looms large at CI Financial. Ambitious corporate growth objectives (such as rapid US expansion) have taken priority over large self-directed investing developments here in Canada. That said, despite the slow pace of change on the front end (to date) of their self-directed platform, CI Financial has shown its ability to move quickly and boldly, which means that improvements to key features could come sooner than we think in 2022.
After the acquisition of Jitneytrade by Canaccord Genuity (parent of CG Direct) in 2018, not much appears to have changed on the front end. Behind the scenes, however, is a different story.
A pattern of hiring by their parent brand Canaccord Genuity reveals that they are in the midst of hiring a sizable marketing team and some support roles for the CG Direct business line.
Canaccord Genuity’s relationship with Morgan Stanley Wealth Management Canada could be worth keeping an eye on. Morgan Stanley Wealth Management Canada recently launched a mobile app which revealed a zero-commission direct investing platform, Access Direct.
Despite some big feature rollouts and award wins in 2021, Questrade is keeping a low profile heading into the end of the year.
The response to the new QuestMobile app launch in September might have something to do with it. Forum chatter and feedback dealt Questrade some tough lessons about technology expectations among online investors, despite having previously released a quality mobile app.
The next big challenge facing this brand heading into 2022 is how it is going to maintain its perception as a “low cost” leader. Now that some large financial institutions have launched commission-free trading and with more zero-commission trading alternatives poised to arrive, Questrade needs a big new feature (and smooth launch) or better pricing to regain ground.
Like several other online brokerages, rebranding was the driver for what we saw on the front end for Scotia iTRADE.
After quietly upgrading their public-facing website, Scotia iTRADE appeared to pivot away from social media by decommissioning (no pun intended) their longstanding Twitter account. Though a pull back in marketing might be a reason, another seems to be a multi-year struggle with customer service response times.
Although the better-looking website is a step in the right direction, getting people to listen to what’s coming next in 2022 will be directly related to how well Scotia iTRADE can restore confidence in its service experience.
TD Direct Investing
When you’re an online brokerage as big as TD Direct Investing, scale matters. The sheer number of DIY investor clients creates a business case for features like content and education at a scale that other online brokerages find hard to justify. However, scale is a double-edged sword, especially when there are gaps in service experience or platform outages, both of which they navigated this year.
Customer service wait times and platform interruptions at TDDI made news headlines. The asymmetry of media coverage, however, meant that there wasn’t much of a spotlight on some of the positive developments.
In 2021, TDDI invested heavily in the development of content infrastructure. Heading into the new year, momentum for their content machine is revving up, giving them a chance to tell their story their way.
Early in 2021, Wealthsimple Trade was one of the only online brokerages in Canada to provide easy access to a trifecta of high-demand features including cryptocurrency trading, fractional shares and zero commission fees.
After record success, however, came a serious downtick in investor sentiment.
Outspoken active traders saw just how much conversion fees for US dollar trades ate up in costs and voiced their displeasure. Compounding Wealthsimple Trade’s challenges in 2021: hypercompetitive cryptocurrency trading alternatives, the launch of CDRs and the launch of commission-free trading by two large financial institutions.
We expect 2022 to be like 2021, with regular new feature rollouts to bring them closer to other online brokerages, bonus offers and a continued push into crypto.