For the past two years, adapting to drastic changes has been part of a “new normal.” So, perhaps it shouldn’t be a total surprise at this point that something unusual (dare we say unprecedented?) is taking place with online brokerage deals and promotions in the month of April.
Although in more “normal” times we would expect to see a drop off in the number and size of promotions for online investors after the RRSP contribution deadline (at the beginning of March), last month we noted that there actually offers being extended – or so we thought.
April, however, brought with it not just rain, but reining in of promotion deadlines or of offers altogether.
Starting first with what was supposed to happen. Scotia iTRADE’s big RSP-season push closed out with their cash back / commission-free trade promotion wrapping up at the beginning of April, as intended. As of the time of publication, there has been no new offer to replace the outgoing one; however, Scotia iTRADE still offers a welcome bonus of 10 commission-free equity trades in the first year (and 5 commission-free trades each year) to holders of a Scotiabank Ultimate banking package. Curiously, this is not advertised in the promotions section of the Scotia iTRADE website, but rather only on the banking side.
On the other side of the deals ledger, March saw the launch of a new deal from National Bank Direct Brokerage that was unlike any other offer that is currently available. National Bank Direct Brokerage is offering a discount on margin interest rates for four months, a clever way to attract active traders with larger balances into the firm.
So, while things seemed to even out, there were a couple of noteworthy moves by bank-owned online brokerages RBC Direct Investing and BMO InvestorLine that suggest some important changes across the summer.
The first important update is that RBC Direct Investing officially extended their 100 commission-free trade offer for another month, with the new expiry date set for the end of April. While that would normally be a positive, last month we noted a published deal page by RBC Direct Investing that showed that same promotion expiring in November, not April.
Finally, the biggest question mark to arise during the deals and promotions scan starting the month is the disappearance of the BMO InvestorLine cash back offer. This is an important development on a number of levels because it marks a significant departure from the historical activity of BMO InvestorLine in terms of having an “always on” offer for self-directed investors interested in opening an online trading account.
At the time of publication, the cash back offer, which launched only in the beginning of March and was scheduled to expire at the end of May, is no longer visible on the BMO InvestorLine page. That said, the offer may be available to certain clients in branch which means the offer is a “YMMV” (your mileage may vary) situation.
With the elimination of the public BMO InvestorLine cash back offer and Scotia iTRADE’s cash back promotion officially concluded, Qtrade Direct Investing is the lone online brokerage with a mass market cash back promotion. Historically speaking, it’s unusual territory for Qtrade to be the last deal standing. However, earlier this year Qtrade also signaled a shift in posture towards promotional offers by upping the dollar amounts available for their cash back deal despite the deal already being live.
Clearly this year has become the year of quick pivots when it comes to deals and promotions. Given the backdrop of competition for new clients as well as the pressure to lower cost of services, online brokerages are exploring different ways to drive new business without engaging in an arms race for customers longer than needed. That said, it seems online brokerages are starting to get more agile and responsive to market conditions, so it will be interesting to see how things unfold from May to September. If there’s a pullback from bigger players, it might just be the window of opportunity for smaller brokerages to gain a foothold ahead of next year’s RRSP season.
Scotia iTRADE’s combined cash back or commission-free trade promotion officially ended on April 1st. This offer gave customers the choice between cash back or commission-free trades, and deposit tiers ranged from $5,000 to $1M+.
Also expired (sort of) – the BMO InvestorLine cash back promotion. Though technically it may be accessible by contacting customer service or in branch it is no longer being advertised. This was a hasty exit for the deal which launched in March and was scheduled to expire at the end of May. No word yet on whether there will be a replacement.
RBC Direct Investing is back in this category, clarifying an earlier reported extension. So technically this extension is more of a revision, but, nonetheless, the official word is RBC Direct Investing’s RRSP season promotion has been extended for one more month and now expires at the end of April. This promotion offers 100 commission-free trades which clients can use over two years.
There are no new deals to report at the start of the month. Last month we saw the addition of a new offer by National Bank Direct Brokerage join the deals pool. That new promotion lasts until the end of May.