Category: Discount Brokerage News

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Discount Brokerage Weekly Roundup – October 7, 2019

You have to hand it to October. For whatever reason, this is the month of the calendar year where there happens to be more volatility than usual in stock markets. It even featured prominently in the Back to Future franchise as the date in which travelling through time would be achieved. Although time travel in a DeLorean may not be here, it seems like for Canadian DIY investors, the future of online trading is.

In this week’s Roundup, the commission rate carnage in the US takes centre stage. With all major online brokerages in the US dropping trading commission rates to zero, it was an historic time to be witnessing this seismic shift in this industry. Speaking of history, our follow up story is about a Canadian bank-owned brokerage who marked their 30-year anniversary as an online broker with a timely video on how much has changed. Of course, staying on top of the comments on social media and in the forums is standard fare, and these close off this edition of the Roundup.

US Online Brokerage Commissions Rocked

There are big deals, and then there are the kinds of weeks like the one the online brokerage industry in the US had. In what could genuinely be characterized as the most explosive (or implosive) week in online brokerage history, investors, media, and online brokerages alike all watched in jaw-dropping awe as commission prices for trading online collapsed to zero. Everywhere.

Within one week of the already low-cost online brokerage Interactive Brokers announcing that they would introduce zero-commission trading as part of IBKR Lite, the entire suite of online brokerage players in the US followed. Starting on October 1st with Charles Schwab, then TD Ameritrade, and finally E*TRADE on October 2nd, billions of dollars in commission revenues were vapourized, along with market caps for the publicly traded US online brokers.

With the moves catching many in the investment world (surprisingly) by surprise, stock prices for the US online brokerages were hit hard. Charles Schwab dropped by 9%, TD Ameritrade was decimated to the tune of 25%, and E*TRADE fell by 16%. The blow back even hit Canadian bank TD for a drop of 2%, which owns 42% of TD Ameritrade.

There is certainly lots to unpack, and likely still many more stories to emerge from what just happened. One thing that does stand out, however, is just how fast the industry as a whole followed the lead of Interactive Brokers.

As we mentioned in last week’s Roundup, the “Z Day” playbook had likely already been written, with many online brokerages in the US aware of what could or would need to happen if one of the major competitors took commission rates to zero. For that reason, although it was painful to do so, the industry was prepared to respond quickly in the event the nuclear option was triggered.

As part of the fallout, the question many Canadian investors are asking (if not outright demanding an answer to) is when online brokerages in Canada will move to full zero-commission trading.

When the online brokerages in the US finally hit the big red button, Schwab was offering standard commissions at $4.95 and both TD Ameritrade and E*TRADE were at $6.95 (all dollar amounts in USD).

For an apples to apples comparison, the “standard” commission rates for Canadian online brokerages range from $4.88 at HSBC InvestDirect to $9.99 (at Scotia iTRADE and TD Direct Investing). Other online brokerages offer variable pricing of $0.01/share with minimums of $1 (Interactive Brokers), $1.99 (Virtual Brokers), and Questrade ($4.95) so depending on the order size, it may be cheaper to execute certain trades there than by paying a fixed fee. And, as we reported last week in the Roundup, National Bank Direct Brokerage will soon be launching their active trader pricing at $0.95. Flat fee pricing for active traders at Virtual Brokers is $3.99, and $4.99 at Scotia iTRADE.

The key takeaway is that the point of no return has likely already been passed for Canadian online brokerages’ commission pricing. For some quick context, Schwab’s $4.95 USD converts roughly into $6.59 CAD.

So, it seems that Canadian online brokerages are going to be counting on the “inertia” effect of Canadian DIY investors as long as they can, hoping that investors don’t want to go through the “hassle” of switching online brokerages if the perceived benefit is not really worth it.

It is worth pointing out that the majority of the word “meh” is comprised of “eh” and that might be appropriate to characterize what the response would be here if Canadian online brokerages took down their pricing to the near zero level. As such, it is likely that Canadian online brokers have much more time than their US counterparts to bring commission rates down. And that time buys flexibility.

One of the important differences between the Canadian and US online brokerage marketplaces is that the level of competition is nowhere nearly as intense. So, while the impact of publicly traded online brokerages taking their commission rates to zero makes headline news and moves markets in the US, there are no publicly traded online brokerages here in Canada to make the same kind of splash.

If zero is not the right number, then what is? Would it really be worth it for passive investors to switch online brokerages if the commissions they paid per trade were $3 or $2 or just $1?

For example, it might not be inconceivable that a Canadian online brokerage attempts to try the gym membership strategy of charging a monthly fee whereby traders can make as many trades as they want (subject to some very well thought out terms and conditions).

Alternatively, Canadian online brokerages could take their rates down to a “toonie” or a “loonie,” and the rates could seem inconsequential. A round trip using a cash fare on the TTC (Toronto’s transit system) costs $6.50 (as of the writing of this post) so a round trip for a stock trade that came in at less than that (without the risk of similar delays hopefully!) would be easy marketing fodder.

Perhaps the biggest ace up the sleeves of bank-owned online brokerages in Canada would be the bundling of banking relationships to achieve the best commission rates. National Bank Direct Brokerage’s latest pricing move is a perfect example of this approach where clients of National Bank get a break on commission pricing at NBDB. A much larger online brokerage competitor could, however, afford to take pricing even lower than the $6.95 watermark. For the non-bank-owned (or non-credit union-owned) brokerages, this latest pricing cut is a bellwether to move faster to cut rates and figure out other value drivers. Dragging their heels is not an option any more.

There will undoubtedly be lots to continue to watch unfold as the US industry tries to adjust to a new commission rate environment while still trying to remain profitable. One of the main forecasts for what will happen next is that industry consolidation will take place.

Sustainability in the online brokerage space lies in scale, which for now will be achieved through acquisition, so it won’t be surprising to see E*TRADE surface again an as acquisition story. Potentially, however, so could Robinhood. It has been structuring itself for an IPO and has been operating as a zero-commission broker from day one, so it not only has the infrastructure and critical mass of key client segment baked in, but it also has founders and their backers looking for a liquidity event. Add to that the terrible climate for tech IPOs in the US at the moment, and it seems like paying a premium for a Robinhood now would likely leapfrog an acquisition of E*TRADE. Like other brokerages, E*TRADE’s forecasts are going to be revised downwards, which means they’re also likely to be acquired at somewhat of a discount if they do get acquired at all.

For Canadian online brokerages, it is likely that the battle for DIY investors will further its split into either passive investors or active ones. With lower commission fees will likely come more trading, and more active traders need better tools – like trading platforms, and data, to time their entries and exits. With zero commissions, frequent trading is likely to see a resurgence, so those novice “day traders” on the sidelines will undoubtedly be enticed to step back in.

On balance, it seems that online brokerages who can offer a better trading experience are going to likely earn higher praise than those who simply offer lower pricing. Any broker who offers both a great trading platform and lower price for commission (*ahem Interactive Brokers*) will be a natural contender for Canadian DIY investors going forward. Throw in the convenience of managing banking, credit cards, line of credit or a mortgage, and you’ve got a trifecta for DIY investors.

The only question now is how long Canadian DIY investors will have to wait before someone claims the mantle of being the first to offer all three in this brave new commission-free world.

RBC Direct Investing Celebrates 30 Years as an Online Brokerage in Canada

The universe can be somewhat poetic in its timing. Amidst the backdrop of all of the activity in the online brokerage space in the US, this past week RBC Direct Investing officially celebrated the incredible milestone of 30 years as an online brokerage for Canadians.

To mark the occasion, the team from RBC Direct Investing opened the market at the Toronto Stock Exchange and produced a video commemorating the journey from 1989 to 2019.

It will undoubtedly be an exciting year for all the online brokerages, but in particular for bank-owned online brokerages like RBC Direct Investing for the remainder of 2019 and 2020.

No stranger to jumping ahead of their bank-owned brokerage peers in lowering commission prices, RBC Direct Investing was the first of the big bank-owned online brokerages to lower their commission rates down to $9.95 a trade in 2014. Like their peers, it’s clearly a question of when, rather than if, commission prices will drop again and by how much.

We’re keen to see whether RBC Direct Investing will once again set the pricing pace among the bigger brokerages and especially given the spotlight being shone on zero-commission rates in the US (and further afield in Europe and Australia). Given the volatility in the space right now, we’re curious where the next 30 (days) takes Canadian DIY investors.

Discount Brokerage Tweets of the Week

From the Forums

Unluck-eh

While applying for a permanent residency, a Redditor who’s new to Canada is having trouble opening a TFSA and has asked the DIY investor community for their advice. Read the full discussion here.

Uncomfortable Questions

A Redditor with a managed portfolio is curious about index funds but worries that the inquiry will offend their financial advisor. DIY investors discuss the situation and the potential profit outlook here.

Into the Close

Staying on the throwback to the 80s, it was 30 years ago in 1989 that the video game Zero Wing was launched, which eventually gave rise to the meme “All your base are belong to us.” Video games, like the online brokerage industry, have changed dramatically since then. What the events of the past week have shown, however, is that the future can show up faster than expected and that those clamouring for commission-free trading (at least in the US) have now received what they wished for. While we now chuckle at how silly the games 30 years ago look compared to today’s, it is also remarkable to think that one day it will be considered equally silly that online brokerages were able to charge as much as they were for trades for so long.

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Discount Brokerage Weekly Roundup – September 30, 2019

One of the best parts of summer happens to be ice cream. Of course, just because the season is behind us, it doesn’t mean that we can’t enjoy a good scoop – or in this case, a couple of incredible scoops – of online brokerage news that are sure to put just as big of a smile on the faces of DIY investors as the frozen treat would.

In this edition of the Roundup, we dish out two incredible stories about pricing changes. The first is a game-changing announcement south of the Border that is sure to make waves in the industry here in Canada. And if those waves weren’t enough, we dive into the news that is going to also make a major splash with DIY investors and other discount brokerages here in Canada, as the first big shift in pricing from a bank-owned online brokerage in several years is coming. Not to be glossed over, we’ve also included a healthy portion of treats from Twitter and the DIY investor forums.

Z-Day is Here: Interactive Brokers Offers Unlimited Commission-Free Trades

After the meteoric rise in popularity of US online brokerage Robinhood and their zero-commission trading fee model, the online brokerage industry as a whole knew it would be only a matter of time until they had to decide to follow suit.

When Robinhood was first launched in 2014, it’s fair to say there was a substantial level of skepticism that zero-commission trading would ever take flight, let alone be profitable. Yet, year after year, momentum behind the zero-commission brokerage grew, attracting major investors (such as Sequoia, Google’s venture capital fund Capital G, and others), achieving a USD $7B valuation and earning numerous awards for design and user experience. Beyond just the product or platform, it turns out that Robinhood also appealed heavily to the next generation of online investors: millennials.

Fast forward to last week, and any skepticism about the viability of the business model has been put to rest by a firm that few predicted would become the first of the major online brokerages in the US market to also take trading commissions to zero.

Interactive Brokers, already one of the lowest-cost online brokerages in the US (and internationally), announced last week that they would be rolling out a new option of their online brokerage service known as IBKR Lite which will provide online investors commission-free trading on all US equities and ETFs. The existing service provided by Interactive Brokers (whose ticker symbol is IBKR) will be rebranded to IBKR Pro and will retain the existing pricing and feature set.

At the heart of the new IBKR Lite is how and where an order for an equity or ETF trade gets routed. Rather than go through Interactive Brokers’ proprietary order routing algorithm, known as the IB SmartRouting system, orders for equities placed through IBKR Lite will be sold to market makers (aka high-frequency traders) who will be able to take advantage of minuscule variations in pricing that can then be turned into profits.

Often snubbed by Interactive Brokers’ founder and CEO, Thomas Peterffy, selling client order flow or trading against clients was touted as contrary to the core of Interactive Brokers – who has always sought to offer clients the best execution price for trades.

Interestingly, it was just over a year ago that they opted to become the first company to be listed on IEX, the US stock exchange founded by Brad Katsuyama – of Flash Boys fame – largely because there was strong overlap in organizational values. Just a few days prior to the announcement that Interactive Brokers would be launching IBKR Lite, however, Interactive Brokers announced that they would be delisting from IEX and moving back to NASDAQ, a fascinating turn of events in its own right.

Against the backdrop of the launch of IBKR Lite, something that is almost antithetical to the IEX mission, the continued presence of Interactive Brokers on that exchange seems to now be irreconcilable. Further, with the exit of Interactive Brokers, IEX is also exiting the listings business altogether and will not be seeking at this time to list publicly traded companies on the exchange.

So – why the about-face for Interactive Brokers?

Ever the entrepreneurial organization, Interactive Brokers is agile enough to see what the market is asking for and be able to mobilize to deliver. The past two to three years have seen a number of innovative services added to the Interactive Brokers ecosystem, that have sought to deepen the relationship (and share of wallet) Interactive Brokers has in its clients’ financial lives.

Ultimately, the move to zero commission fees appears to be a ‘why not’ moment at Interactive Brokers – if the market is showing that there are investors who are willing to forsake the best execution price for a trade-in order to save on the commission up front, then Interactive Brokers is simply leaving money on the table by not doing this.

For many years, their primary discount brokerage competitors (for example, TD Ameritrade) have been selling order flow and generating significant revenues from doing so. A snapshot from the FY18 report for TD Ameritrade shown below illustrates the growth in revenue derived from order routing and clearly shows just how lucrative this has been for them. From FY17 to FY18, for example, the revenue from this source grew 43% to USD $458 million.

And, in FY19, revenue from order routing has contributed to 32% (USD $365 million) of the trading revenues earned by Ameritrade.

While the information is publicly available, what appears to be different about the approach Interactive Brokers is taking compared to that of their peers is that they are being very transparent about the fact that users of IBKR Lite are getting commission-free trades because they are giving up (or trading away) best execution price. Even zero-commission trading firm Robinhood isn’t as clear as they could be in stressing this to potential clients.

For other online brokerages who both charge commissions for trades AND make money from routing orders, the new launch by Interactive Brokers is highly problematic.

Competing online brokerages will now be forced to answer the question of the real value of order execution, as well as the value of the other features that define a client experience, whether that be great user experience, an amazing mobile app, education, charting, support, access to research, or some other feature.

While the reaction of stock prices of the online brokerages to the news was generally negative, there are clearly some online brokerages that were more negatively impacted than others. TD Ameritrade, who derived 36% of its revenues in FY18 from trading commissions and order execution, for example, was down 6% on the news while Schwab fell only 2% – a sign that the latter is less reliant on trading commission revenues than the former.

Despite the announcement, the online brokerages in the US have undoubtedly prepared a playbook for this scenario. They may not have known exactly when this “Z-day” would come but in conference calls over the past year, the spectre of zero commission trading has been raised and addressed with the general response being along the lines of “we can handle it”.

Earlier this year, Peterffy hinted at something big happening at Interactive Brokers in the latter stretch of the year. While we thought that the sports betting platform might have been it, clearly the market-disrupting thing Peterffy was referencing was the deployment of this zero-commission option. Evidently, Interactive Brokers has seen the writing on the wall when it comes to mass market appetite for commission fees on trades, and what consumers are willing to trade away for those prized zero-commission rates.

For the moment, the zero-commission fee offering of IBKR Lite is restricted to the US. Canadian discount brokerages, therefore, have a bit more breathing room to figure out their game plan if and when a major player here decides to offer up full commission-free trading here.

Already offered (with some restrictions) here by Wealthsimple Trade, this feels a bit like déjà vu with Robinhood.

Canadian online brokerages are generally slower to innovate than their US counterparts – and the skepticism on the street around Wealthsimple Trade still permeates. For that reason, it is unlikely that a larger online brokerage in Canada is going to move to full zero commission trading until they absolutely have to.

For the foreseeable future, the battleground among Canadian brokerages will clearly be in other value offerings – like account integration, ease of access (and stability!), of platforms (including mobile), and user experience to name a few. Like their US counterparts, Canadian discount brokerages had better be prepared to clearly explain to DIY investors what benefits there are to be paying for trading commissions.

If Canadian brokerages ignore or downplay the accelerating trend towards zero-commissions, however, they will ironically have to pay a hefty inactivity fee for that.

At National Bank Direct Brokerage, It Pays to be Young, Stay Active and Be Connected

Were it not for the news out of the US online brokerage market this past week, the big news story would have been in the Canadian discount brokerage market, when it broke that National Bank Direct Brokerage is getting to shake up their commission pricing and making a very aggressive play to go after young (aka millennial) investors as well as the active trader segment.

In a mention in the French language publication La Presse, National Bank Direct Brokerage’s President Claude-Frédéric Robert was quoted as saying that National Bank Direct Brokerage is getting set to roll out a new pricing program for investors aged 18 to 30, that offers up a generous 10 commission-free trades per year and a decreased commission pricing tier of $4.95 per trade. Added to that, there are no account minimums required or inactivity fees to be charged.

For very active traders – those making more than 100 trades every three months – the news is also great – a jaw-dropping $0.95 pricing for trades.

And finally, individuals who have an account with National Bank will benefit from that relationship by getting standard commission rates of $6.95 per trade instead of $9.95.

So, as referenced above, the trend towards zero commission trading is finding its way to Canadian discount brokerages and has shown up yet again at National Bank Direct Brokerage, which already offers up commission-free ETF trading on all ETFs (with a caveat of a minimum purchase/sale amount required to qualify for the commission-free status).

This latest move by NBDB is a salvo at both their bank-owned online brokerage peers – in particular, Desjardins Online Brokerage – and the low commission leader in Canada, Questrade. Offering up 10 commission-free trades per year is unheard of in the marketplace today, so that alone will generate buzz among the younger investor crowd, who are especially keen on passive investing. And, active traders are sure to be kicking the tires with sub $1 trading commissions.

While services like Wealthsimple Trade offer unlimited commission-free trading, there are still a number of restrictions in place on the kinds of markets (e.g. Canadian Securities Exchange or TSX-Venture listed securities) investors can access as well as that whole forced currency conversion thing to trade US-listed securities. Neither Wealthsimple Trade nor Questrade are bank-owned online brokerages, so there is not the reputational security or the integrated convenience factor of managing multiple financial products in one place (yet).

While we are awaiting more details on the pricing plan, clearly it pays to be a young investor in 2019.

With respect to younger investors, the calculus here is interesting for National Bank Direct Brokerage. Young investors don’t have the kind of investible assets (yet) that make them attractive prospective clients. What is likely the case is that NBDB is hoping to generate enough traction with and provide sufficient incentive to younger investors so that they stick around with NBDB, especially as they start working/earning more and begin inheriting wealth from older generations.

To say this is interesting is really putting it mildly.

The test being played out in real time is whether bank-owned brokerages like NBDB can edge out peer bank-owned firms before they act to match or beat the offer and before newer players figure out how to offer more bank-like services (e.g. higher interest on idle cash).

For millennial and younger investors, NBDB has got it right, insofar as pricing is clearly a pain point. That said, they are in for a tough fight when it comes to user experience on digital platforms, such as mobile, where those prized millennial and younger investors are going to be spending most of their time. The mobile experience for National Bank Direct Brokerage is something that will be crucial to their success perhaps as much as if not more so than the price of commissions.

Whether it’s Netflix, Skip the Dishes, Uber or some other subscription or fee for service offering, paying the money for things isn’t the issue so much as the ease with which the experience takes place is. If it feels hard to do, the price is already too high.

Once the pricing rolls out officially in October, NBDB will be poised to make a splash about it and their bank-owned peers will have to take a serious look at both their ‘millennial engagement’ strategy and active investor offering when it comes to pricing.

It’s never been a better time for younger investors to be DIY investors. With discounted (now free) commissions, waivers of account minimums and inactivity fees, Canadian online brokerages are clearly competing for investors who may not have lots of capital now but with whom important relationships need to be built. One crucial thing for brokerages to keep in mind though is not only what it will take to win the interest of these new investors, but also to keep it.

Discount Brokerage Tweets of the Week

From the Forums

Short Changed by a Long Transfer

Worried about a recently transferred account that seems to be missing funds, a DIY investor on Reddit vents about Questrade. Read the full conversation and the response from the online brokerage here.

Dazed and Confused

Puzzled after a debate that started over a family dinner, one DIY investor asks fellow Redditors to clarify whether an RRSP or a TFSA is the better option for saving and investing. Read the full discussion here.

Into the Close

Snow getting dumped on Calgary in September is sort of crazy, but not out of the realm of possibility. It is, by comparison, a far saner development than what just got dumped on all of the other online brokerages this past week. The avalanche of pricing news that is sure to follow in October and November from the online brokerages in Canada and the US is likely to make the Calgary snowfall in September seem like cupcake frosting. We started with dessert and ended with it too – something tells me this is a particularly sweet time for Canadian DIY investors.

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Discount Brokerage Weekly Roundup – September 23, 2019

Fall is finally here. Along with the changing colours of the leaves, it’s also a time that the fashion industry looks to shine. Much like fashion, investors are also interested in what’s du jour. Trendspotting is a big feature in both fashion and investing and it seems that knowing where to spot the trends is equally challenging.

In this week’s edition of the Roundup, we take a look at where investors are turning to in person for their dose of trendspotting, especially given the upcoming turbulent market forecast. From there, we take another look at the double-edged sword of social media and its impact on online brokerages, with one bank-owned online brokerage being called out by a fairly influential Twitter user. To add to the social media content, we’ll dish out more tweets of the week as well as comments from DIY investor forums to cap things off.

Investor Conferences: Getting Together to Chat About Investing

Hindsight is 20/20, but ironically it is 2020 that a lot of investors are looking to with uncertainty. With the fall season now here, it means that the new year is just around the corner and given how stock markets have behaved this year, it’s no surprise that investors are more anxious than ever to get some perspective on how to navigate the current and upcoming market forces.

One of the ways to do so is by learning from market “experts” and analysts on where to find trading opportunities amidst the headline noise. This past weekend, both Toronto and Vancouver played host to two investor-focused conferences that provided insights to consider heading into 2020 and beyond.

In Toronto, the annual edition of the MoneyShow took place, and, as with previous editions of the show, featured a solid lineup of well-known personal finance names, including Rob Carrick from the Globe and Mail, Peter Hodson of Canadian Money Saver and 5i Research, and Benj Gallendar of Contra the Heard, to name a few. There were also some well-known stock and options trading personalities from the US speaking at the show, such as Tom Sosnoff, founder and CEO of tastytrade, and frequent CNBC personality Jon Najarian.

Often a reflection of the sentiment among retail investors, this year’s MoneyShow featured a couple of core themes.  One of the more prominent themes was ETF investing. With the gold and silver sponsors of the show being big names in the ETF space, as well as a number of speakers focusing specifically on ETF investing, this was clearly an important topic and reason to attend the show.

Another interesting theme was cannabis investing. In spite of recent volatility and pullbacks in investor interest, there were a number of publicly-traded cannabis firms in attendance, as well as a special investing panel on the topic.

Being a central gathering place for retail investors, it was also interesting to observe which online brokerages appeared as exhibitors. An interesting combination of bank-owned online brokerages, BMO InvestorLine and National Bank Direct Brokerage, were part of the exhibitor list. RBC’s digital advice (aka roboadvisor) InvestEase was also featured prominently as a sponsor of this year’s MoneyShow.

Earlier this month, several online brokerages were also sponsors of the Options Education Day in Toronto – a recurring set of events that focus on educating DIY investors on options trading.

Across the country, the weather wasn’t nearly as nice for the third edition of the Extraordinary Future conference in Vancouver. In contrast to the show in Toronto, the tone and focus for Extraordinary Future were decidedly forward-looking.

Among the big ideas being batted around at this two-day show (the second day of which is currently underway as of the publishing of the Roundup) were biohacking, cannabis and technology, digitization of healthcare, eSports and many more frontier-industry topics. While some of these topics, such as eSports and plant-based foods, are very much in the spotlight, the organizers of this show were very much intent on creating a platform for ideas that are on the cusp of becoming commercially viable.

For that reason, both risk and reward profiles for this year’s show would pull in slightly different crowds than at the Moneyshow. Nonetheless, it was interesting to observe that unlike the show in Toronto, in Vancouver, there was not an online brokerage to be seen exhibiting at this year’s show (or in previous years).

It is the absence of online brokerages at a show like Extraordinary Future, which is perhaps telling of where the focus is for the industry as a whole.

Pragmatically, it pays to follow the money – and with so many Canadian investors buying into ETFs, certainly the crowds and lineup of speakers reflect the interest to which online brokerages would like to be proximal. It also doesn’t hurt that the conference takes place in Toronto. That said, the stories that get investors excited are the ones that would be covered at a show like Extraordinary Future. For an industry that is now starved for engaging content ideas as well as how to connect with audiences beyond their traditional cohort of older investors, it is somewhat of a mystery to see them absent at a show like this (fun fact, there is now an egaming ETF).

For Canadian online brokerages to truly be seen as innovative, however, they have to be doing ‘innovative things’.

Enhancing platforms and features are one way to do this, but being present at, or even participating in forums where the next big ideas are being hatched, seems to make far more sense to earn the title of ‘innovative online brokerage’.

Building trust and earning the reputation of being innovative implies, almost by definition, doing things differently. We’re keenly watching to see which brokerage (or brokerages) will be the first to do so.

Friction on Twitter: Scotia iTRADE in the Hotseat

It seems almost trite to have to say so, but it pays to remember that people are invested in their money and not just investing their money.

For most DIY investors, earning enough to invest and then putting that money to work in assets like equities means having to come to grips with the prospects of losses in the market. One of the places that DIY investors are not expecting to incur losses, however, is with their online brokerage.

For any regular reader of the Weekly Roundup’s ‘Discount Brokerage Tweets of the Week’ section, there are, however, countless examples of outages or system disruptions resulting in missed opportunities or even being blamed as the ‘cause’ of losses. Occasionally, we’ve even witnessed investors flagging margin calls being triggered ‘unfairly’ on social media.

One thing that we have rarely, if ever, witnessed is something like the tweet posted by the Twitter account of Investor Relations Vancouver:

Why this sticks out as unusual, is that it is coming from a Twitter handle of a company (not just an individual investor) that is directly advising its more than 27K followers (and of course anyone who will listen) to avoid using Scotia iTRADE because of mishandled trades.

The direct nature of the message and the distribution of it both combine for a very sticky public conversation that may unfold. Just last week, Questrade was ensnared in a very public customer service moment when they were called out in a Reddit post for language in their security guarantee that made it less than ideal for coverage. Questrade quickly contained and remedied what was a rather rapid and large discussion.

So, while the incident that Questrade encountered was different in several respects from the one that Scotia iTRADE now finds itself in, there are nonetheless some similarities. Having to address client service issues in the public eye is part of the reality of being an online business in 2019, and certainly how this unfolds is something for all investors, clients, and competitors to see.

Historically Scotia iTRADE’s Twitter channel has been fairly responsive in fielding concerns or questions by clients. A scroll through the recent tweets directed at the iTRADE Twitter channel reveals that, as of August, response times there have gone down compared to historical norms.

Finally, as an interesting juxtaposition, a few weeks ago Scotia iTRADE held a session geared towards recruiting social media influencers to answer questions about investing, and to share their experiences with Scotia iTRADE. In this case, there is clearly an influential voice on social media speaking up about their experience and, like many observers, we are certainly curious to see what transpires.

Discount Brokerage Tweets of the Week

From the Forums

Freshly Minted

A young Redditor just started earning a steady income and is looking to learn about DIY investing. Read through helpful suggestions from the forum here.

Divided by Dividends

DIY investors got into a heated discussion over a video that asserts that the growth of dividends is not necessarily an indicator of good stock. Read the full Reddit debate here.

Into the Close

That’s a wrap on another edition of the Roundup. There’s no mistaking it, there are definitely bears lurking about in chatter about the markets, even though the indices are pushing new highs. Certainly being pushed to new heights is what’s making some bears cranky. Nonetheless, with October just around the corner, new highs in spitting distance and the bearish sentiment being tested, if there’s one thing you can bet on, it’s turbulence.

 

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Discount Brokerage Weekly Roundup – September 16, 2019

In the stock markets, is it better to be lucky or smart? Even though the markets closed out the week on Friday the 13th, it seems that fortune is smiling on the markets with indices holding near their all-time highs. Is it a false sense of confidence, or are the “warning signs” no more predictive than superstitions?

In this edition of the Roundup, we dive into the mixed signals being presented by one online brokerage in the US that has some observers thinking that things are going to go from bad to worse for some online brokers. Of course crises happen, and one Canadian online broker provided an interesting demonstration of calm under social media fire on a touchy subject for investors. We’ve trimmed the forum chatter for this Roundup but still have a healthy serving of Twitter content to wrap up on.

Charles Schwab Announces Layoffs

By many accounts, the stock markets remain in good shape. With many indices drifting near their all-time highs, it seems like markets are paying attention to the “strong economy” narratives in Canada and the US, and not so much to the “inverted yield curve” signals that portend economic slowdowns.

If those mixed messages weren’t enough, this past week, the US online brokerage space generated yet another signal that perhaps things aren’t so great in the financial services world in general and in the online brokerage space in particular.

An article in the Wall Street Journal reported that Charles Schwab, the largest online brokerage in the US, would be cutting about 3% of its workforce, or approximately 600 jobs. The primary culprit: interest rates.

To understand why interest rates, and in particular low interest rates, matter so much to an online brokerage like Schwab, it is important to recognize that the size of this online brokerage – which has over $3.75 trillion dollars (USD) in assets under management – plays a significant role in determining how quickly it can navigate through averse economic conditions.

Over the past four years, Schwab has undertaken an important transition in terms of where their revenues originate. As for any online brokerage, trading commissions have been important to the revenues of the firm, however, over the past few years, efforts to diversify away from relying just on commission revenue mean that other fee generating services, such as advice, or growing assets to a massive scale and collecting interest, have come to play important parts in the total revenue of the company.

Their decision to lay off 3% of their workforce appears anchored in cutting costs to stay competitive. Regardless of the exact reasons, an organization the size of Schwab must make moves well in advance of deteriorating business conditions.

Interestingly, they saw the writing on the wall with the battle for lower-price stock commission prices and potentially lower volatility and, as a result of diversifying their reliance on trading commission revenues, have been able to achieve solid growth in new accounts and fend off other low-commission and commission-free competitors. They now generate approximately 6.5% of their total revenues from trading commissions with the remainder coming from other sources such as fee-based advice services (29.3%) and net interest (61.5%).

Not too long after Schwab made these moves to diversify the sources of their business revenue, other online brokerages followed suit by doing something similar – notably TD Ameritrade.

What the job cuts at Schwab signal, however, is that interest rates may stay depressed for quite some time or are going to get much lower. To that end, the importance that people play in the online brokerage business, at least according to Schwab’s math, is dwindling. More automation and reliance on software and digital systems means businesses like online brokerages can do more with fewer people.

Naturally the latest moves by Schwab prompt the question of whether something similar could happen to online brokerages here in Canada?

It is not impossible that the cuts to interest rates that are taking place across the globe impact Canadian financial service players at one level or another. For the online brokerages in Canada, however, there is still a heavy reliance of commissions to generate revenue. And while the Bank of Canada is standing firm on interest rates here, without increased trading activity, or in the face of declining commission prices, there aren’t too many other levers left to pull for Canadian online brokers to make their line of business profitable.

As one writer in the US put it, this is like seeing a “canary lying dead in the mouth of a coal mine.” With negative interest rates showing up across the globe and the calls by the US President for that to happen in the US, and the head of JP Morgan telegraphing that they too are exploring the scenario, the big picture signals challenging times ahead for financial service providers.

For online brokerages in Canada, there are two competing forces at play that will have to be reconciled. On the one hand, lower interest rates, or the spectre of negative interest rates, might prompt individual investors to get out of cash (finally) and into a different asset class for which they would (likely) need an online brokerage account. Conversely, in the face of market volatility and uncertainty that can hinge on a Twitter message, actively trading into the storm also seems like bad move.

Now that the largest online brokerage in the US has decided that it’s time to cut its workforce by 3%, it will invariably raise questions about layoffs at other US online brokerages. As for Canadian brokerages, it seems that as long as interest rates stay where they are in Canada, and there are opportunities to trade in a market that might be immune to Twitter tirades, there might be a bit more of a reprieve.

Nonetheless, if in a hyper-competitive market like the US, the largest and arguably best insulated online brokerage has pared back its head count, what must Canadian online brokerages have to be prepared to do to control costs?

Walking the Talk: Questrade Shifts Stance on Security Breach Guarantee

Peace of mind is, arguably, one of the most important sentiments that a financial service provider can give to their clients. For DIY investors, the Canadian Insurance Protection Fund (CIPF) offers some measure of confidence by protecting the investments of individual investors to the tune of $1 million dollars in the event that the online brokerage somehow goes out of business. In an increasingly online world, however, another crucial piece of coverage that investors seek out and ask for when it comes to parking a significant portion of their nest-egg with a provider is some kind of online security guarantee.

It is against this backdrop that an interesting post, which made it to the Personal Finance Canada thread on Reddit, sparked immediate and comprehensive discussion with investors and eventually culminated in a revision of the Questrade security guarantee.

According to the (now) previous security guarantee policy, Questrade required individuals to report any suspicious activity in their account within four days of that activity taking place. While the policy was not necessarily hidden, it did go unnoticed by many until one user raised this in the Reddit thread, at which point a firestorm of commentary ensued.

The commentary itself makes for instructive and colourful reading. What was most compelling about this incident, however, was the speed with which the questions prompted a response from Questrade, as well as the turn around time for a revision of their security policy. Here is the initial response from Questrade on the Reddit channel, 2 days after the original post:

And here is the follow up response from Questrade indicating that, in fact, they have updated their security policy to require clients notify Questrade of any suspicious activity within six days of receiving a monthly electronic statement.

There are a number of interesting takeaways from this incident that are likely to prompt some changes to take place across the Canadian online brokerage space. One of the first important observations is that online security matters don’t matter to DIY investors until they do.

There were so many DIY investors who were taken by surprise at the Questrade online security guarantee’s “fine print” terms, and when they became aware of the actual details, they were unpleasantly surprised. The massive response from DIY investors will likely prompt other online brokers to review their policies to ensure a) that they’re offering competitive coverage for online security breaches, and b) that they do a better job of communicating that guarantee to their clients.

Another important set of observations relates to the credibility Questrade earned in the face of a potentially significant crisis.

First, they were able to address the issue on Reddit – where they have a history of responding to clients or individuals talking to/about Questrade – and commit to a timeline for resolution. Second, they were able to rectify the situation within a week; a new policy, better terms and a jab at the security policies of other providers for good measure. That whole episode played out publicly on Reddit for the world to go back and comb through, and while there will certainly be spin that could be applied here, ultimately, Questrade righted a wrong in a very public fashion.

Now, granted that Questrade landed themselves in hot water by having a security guarantee structured with such a short time frame for notification, but the key takeaway for customers is that it got resolved. Surely some customers were put off, but for the clients that love and speak up for Questrade, this will cement yet another reason why they would recommend or stand up for the online brokerage in the melee of financial forums. Based on the watershed of concern that was raised by this incident, it is going to be very interesting to see how/if other online brokerages start to highlight online security as a selling point.

Discount Brokerage Tweets of the Week

From the Forums

Accompany or Keep Company?

A Redditor’s financial advisor successfully moved to a new job, and now this Redditor is wondering whether it’s better to follow the advisor, or to stay with the current company.  Read suggestions from the forum here.

Into the Close

That’s a wrap on another choppy week. After what looks like a bit of a reprieve from trade war, the drums of actual conflict were beating again and oil prices are now in the spotlight. There’s likely to be no shortage of news to tune into this week but for the set-it-and-forget-it crowd, thankfully there’s also lots of other places to tune out the drama.

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Discount Brokerage Weekly Roundup – September 9, 2019

Sports offer a great metaphor for the highly competitive nature of the stock market. After an epic weekend of football and tennis, there was lots to cheer for (not so much for Raiders fans though). While there are many lessons on the field that apply to the markets, another great feature of sports is the highlight reel.

In this edition of the Roundup, we serve up a series of highlights from what online brokerage activity crossed our radar this past week. Keep reading to learn more about deals updates, a pull back on shorts, healthy performance stats, new features, and upcoming investor education initiatives. As always, we’ll serve up the staple DIY investor conversations on Twitter and the investor forums.

Deal and No Deal at BMO InvestorLine

This past week, BMO InvestorLine saw a couple of interesting developments take shape. First, on the deals and promotions front, the popular bank-owned Canadian online brokerage kicked off their latest offer for the new season.

Similar to their summer promotion, BMO InvestorLine’s latest offer is also a tiered cash-back offering. The latest promo, like the one before it, has tiers that skew towards higher deposit amounts with the maximum tier with a reward being the $2M one. Interestingly, when compared side-by-side, the fall offer makes getting a deal more accessible, since the latest offer has a lower threshold to qualify ($100K minimum deposit vs $500K minimum deposit) for it.

Min Deposit Required Summer Offer Reward Fall Offer Reward
$100K – $100
$250K $500 $225
$500K $1,000 $600
$2M+ $2,500 $2,000

 

Unlike the summer offer, the most recent Fall promotion by BMO InvestorLine requires a minimum deposit that starts at $100K, which likely means that more DIY investors will be able to qualify for this cash back offering. Interestingly, for the other deposit tiers, the amount of the cash back reward was lowered significantly, with the highest cash back offering topping out at $2,000.

A quick scan of the deals board shows that there two big-bank owned online brokerages with cash back offers – BMO InvestorLine and Scotia iTRADE. Interestingly, they appear to be trying to reach very different segments with cash back offers. In the case of the latest offer from Scotia iTRADE, it is possible to qualify for a $50 cash back bonus for a deposit of $2,500. By comparison, BMO InvestorLine’s bonus is $100 for a deposit of $100K, a 40x difference in deposit size from the Scotia offer.

In spite of the scope/size difference in the reward amounts, when it comes to DIY investor interest in online brokerage deals, cash is king. As such, the amounts being offered are still better than nothing.

For more information, be sure to check out the deals & promotions section.

Short Shorts

Another “short” story from BMO InvestorLine surfaced last week and had to do with DIY Investors encountering difficulties with trying to short trade select cannabis securities. In this article in the Financial Post, author Victor Ferreira details the experiences of a few DIY investors who were unable to short sell shares of cannabis companies.

When the availability of shares to short sell, especially from a bank -owned brokerage, starts to dry up, it is often a sign of a very bearish market sentiment.  Very recently, the shine has come off the cannabis sector which means, as an investment, they may be considered “riskier” than other symbols or assets. Compounded with the overall volatility in the market, and its possible that BMO is preparing for the storm to hit.  What will be interesting to monitor is the extent of the restriction, whether it’s been formalized, and whether other financial services will follow suit.

Interactive Brokers Posts Stronger Numbers

This past week, Interactive Brokers announced performance metrics and highlights for the month of August as well as rolled out the ability for individuals to bet on NFL games via the free online sports betting platform.

Starting first with metrics, for this month’s numbers, the biggest highlight appears to be the volume of trades. Clients of Interactive Brokers generated 930K daily average revenue trades, which is a staggering 26% higher than trading volume at the same point last year. As per usual, the streak of account growth continues with the online broker now being home to 600K accounts which is a 17% growth compared to last year.

As we mentioned in this previous roundup, the volatility is generally good for generating trading activity which, in turn, is good for online brokerages. The double-edged sword though, is that, with the uncertainty contributing to jitters in the market, it also happens to be a deterrent to people wanting to invest on their own.

Another interesting development coming out of Interactive Brokers is that they’ve officially added and launched the NFL on their online betting platform. Recall that Interactive Brokers rolled out an official sports betting program in the summer to try and attract individuals who are into sports betting in the hopes that those folks who take it seriously would be a good fit for the IB platform and would want to trade real money.

The ability to bet on games opens up two weeks prior to the event itself, so there is some capability to wager on the outcomes in advance. Also interesting is the “trading” interface that IB has created to explain the “bet”. This betting console contains odds as well as what users can expect to gain if the bet materializes. In this way, it is more about understanding the consequences of the action (investment) than it is to blindly speculate.

Learning About Earning

September is synonymous with back to school. For students of the stock market, however, school happens to always be in session. Nonetheless, there is an uptick this month in the number and caliber of learning events for DIY investors.

Online brokerage events related to investor education are becoming increasingly rare except at larger online brokers, and even then, there is just a small group that deliver educational content on a regular basis. This month, TD Direct Investing and CIBC Investor’s Edge both have compelling information/education events planned and, as mentioned last week, Scotia iTRADE has an interesting education event planned for clients.

In the case of the former, TD Direct Investing has put together a well-structured and comprehensive series of webinars as part of their “Master Class” series. This series includes webinars on investing basics as well as advanced topics and software platform orientation. Even though this has been available for some time, it does stand out from amongst its peers in terms of breadth, structure and accessibility.

CIBC Investor’s Edge is also in the mix with an event of their own. Coming up on September 27th, CIBC economist Avery Shenfeld will be presenting his economic outlook for 2020 and the kinds of things investors will need to be aware of heading into 2020. With the volatility and uncertainty in markets, this is likely to be a highly sought after event.

Discount Brokerage Tweets of the Week

From the Forums

Bubbling Over With Excitement

In a recent interview, Michael Burry dubbed index funds “subprime CDOs” and declared the existence of a “bubble” in passive investing. Investors on Canadian Money Forum are up in arms as they interpret and discuss the statement here.

Ou(TD)oing the Competition

TD e-Series mutual funds have been a long-time favourite for DIY investors, and as changes are being introduced, Redditors are discussing the new possibilities. Read the full discussion here.

Into the Close

Canada appeared to defy expectations on both the job front and on the tennis court. Of course, when it comes to the markets these days, there appears to be even more racket(s) than at the US Open – and probably just as much back and forth. It’s definitely a challenge to be a market spectator these days but just like viewing tennis, it’s important to focus on the long game and enjoy the rallies while they last.

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Discount Brokerage Weekly Roundup – September 3, 2019

The unofficial end to summer is now here, and while it’s poor form to wear white after Labour Day, it seems like white flags and white knuckles are still very much going to be part of the investing experience in the weeks and months ahead.

In this shortened week edition of the Roundup, we take a rather lengthy look at recent developments in the deals and promotions department as well as in the marketing tactics of one bank-owned online brokerage. Not only did they decide to make a big splash in the deals pool just ahead of the long weekend, but they’ve also decidedly put getting friendly with millennials on the top of their to-do list. After those profiles, be sure to stick around for interesting comments and thoughts from DIY investors this past week from Twitter and the investor forums.

Discount Brokerage Deals & Promotions Updates

Even though summer is supposed to be a typically quiet time when it comes to investing, these past few weeks, the stock markets have been dominating headlines. Naturally, how things are going to play out is on the minds of many Canadian DIY investors as well as the online brokerages sitting between investors and the market action.

With the heightened uncertainty, the already challenging job of the online brokerages has become tougher, but as the deals and promotions activity in August has shown, the only choice at this point is to navigate the storm.

Heading into a new month, the big deals & promotions news to start off September are the several new offers from Scotia iTRADE that landed at the end of August. These offers undoubtedly soured some competitors’ long weekend relaxation plans and generated some buzz among Scotia iTRADE’s existing clients as well as new clients.

Like the stock markets, September will also likely see its share of deal volatility. There’s a new offer from BMO InvestorLine expected at the outset of the month and HSBC InvestDirect’s commission-free trade promotion is due to expire at the end of the month. Toss in the ramp-up for many online brokerages to capture interest in TFSAs and RRSPs before the end of the calendar year, and this September is likely to see a few surprises in the deals department for DIY investors.

Of course, while there is still quite a bit of choice for DIY investors looking for a deal when opening an online trading account, the biggest story to watch unfold is the fallout from Scotia iTRADE’s promotional burst.

The first thing to watch out for is the fact that Scotia iTRADE is offering up commission-free trades to existing clients who attend a specific webinar on US dollar positions on the 24th of September. To deepen the intrigue, the webinar is not being advertised (as of the time of publishing) on the public webinar calendar on Scotia iTRADE’s website and thus, may be restricted to existing clients.

For many reasons, Scotia iTRADE offering up commission-free trades to attend a webinar is an important development – not the least of which because it signals a ramp up in the use of incentives to drive client behaviour to objectives other than depositing cash. For many years, commission-free trades were generally available only as account sign up bonuses (or to add assets). And now that they are being used to encourage investors to attend webinars, the door is open to steer them into other behaviours as well. It will be interesting to see whether other online brokers who offer investor education might feel inclined to do the same thing to boost awareness of new feature launches. Additionally, those that do not offer investor education or who don’t have US dollar trading account capabilities need to come up with alternative value drivers somewhat quickly. Further, if this is something Scotia iTRADE continues to do on occasion, other brokerages who don’t follow suit may be perceived as not valuing their clients the way Scotia iTRADE does.

The other big development that Scotia iTRADE initiated with their latest deal is that they’ve lowered their standard commission price from $9.99 to $6.99 per trade for qualified new clients (for a limited time) and thrown in a $50 bonus, all on top of an ultra-low minimum deposit requirement (by Scotia iTRADE’s standards) of $2,500.

After holding out for over five years on a standard commission price drop, this promotion effectively signals a second price drop within a year at the same firm. And, because it is one of the big five bank-owned online brokerages, competitors are sure to take notice.

Typically, in order to get to the $7 commission per trade rate, the volume of activity has to be relatively high (e.g. 150 trades per quarter). So, to both lower the required deposit to qualify for the rate down to $2,500 while also dropping the price of a standard commission fee is a throw-down to the rest of the industry. For DIY investors looking around for an offer they can easily qualify for and benefit from, Scotia iTRADE’s latest will certainly find its way into contention.

The takeaway for DIY investors heading into the end of the year is that competition among Canadian discount brokerages is likely to intensify. Scotia iTRADE has laid out their business case for going after millennial investors – something their counterparts have also signalled an interest in. Millennial or not, investors of all ages are about to benefit from the race to win over newer investors.

Scotia iTRADE’s Living Their Best Life

After some time in cruise control, it appears that Scotia iTRADE, one of Canada’s big-bank-owned online brokerages, is stepping on the gas to pursue a new segment of DIY investors: millennials. Last week, we spotted an interesting series of promotional launches (described above) as well as an event tailored towards engaging with millennials via some serious influencer-driven marketing.

Starting first with a live event, which was billed as a “finance-y event for people who don’t typically go to finance-y events” three young, accomplished, “self starter” figures with large social media (Instagram) followings were recruited to share their views on, and journey with, money and investing.

Included on the panel list were:

  • Brandon Olsen (12.7K Instagram followers)
  • Amy Shio (13.2K Instagram followers)
  • Tristan O’Brien (77.1K Instagram followers)

Peeling back the swanky curtains a bit on this event revealed some interesting observations about how this event came together and who the intended audience was.

The first interesting observation is that this event was produced in conjunction with Bay Street Bull who describe themselves as “a business luxury lifestyle publication for professional men and women.” The nature of their typical content aligned well with the panelists.

Another interesting facet was the decision to post Instagram handles of the panelists rather than other social media channels (such as Twitter) and to elect to not go the route of having an “official hashtag” effectively closed off the event to people who wouldn’t be on Instagram or who didn’t follow Bay Street Bull. This certainly speaks to the desire to focus on reaching a typical millennial audience watering hole online. Other channels are clearly less important to this segment, or at least that’s what’s being implied.

 

Then there is the “self starter” campaign itself. Specifically, the “beginner guide to self-directed investing” brochure created to detail the stories of the abovementioned three self-starters and what they think about investing in general and the Scotia iTRADE experience.

Written in an interview format, the three different perspectives provide a different kind of “testimonial” to using the platform. Again, leaning on the production expertise of Bay Street Bull, the brochure paints a compelling picture of the millennial investor market opportunity, including the often-cited massive wealth transfer that is poised to take place from Baby Boomers to millennials.

Of course, despite talking about the future, the irony here is that millennials know all too well that the internet doesn’t forget.

For Scotia iTRADE, there is a genuine challenge ahead of them to shed the reputation of being the least competitive (from a pricing point of view) option for young investors. Recall that they kept their standard commission rates well above $20 per trade during the five-year period when the rest of the industry had started to lower standard commission rates to under $10. Shedding that kind of reputational drag will undoubtedly require some very big, bold (and potentially costly) overtures. Nevertheless, change has to start somewhere, and this year it has.

From lowering their standard commission fee (finally) to introducing the option for younger investors (under age 26) to have their low activity administration fee of $25 per quarter waived (on balances under $10,000), and now a direct campaign for millennials, there are clearly signs that things are beginning to shift at Scotia iTRADE.

Perhaps the most interesting thing about the launch of the deals and offers for existing clients and for the live event was that almost none of it appeared on the Scotia iTRADE Twitter feed or LinkedIn profile, nor did the promotional offer appear on the Scotia iTRADE website in the special offers section. Instead the deal surfaced via Google search and only after some searching online was the information about the iTRADE event retrieved. All of which begs the question, why keep this under wraps?

Another important consideration in the new millennial charm offensive that will be important to monitor is the degree to which the “influencer endorsement” builds traction with millennial investors. Among the older investors, the partnership with Canadian personal finance/investing celebrity, Larry Berman, worked particularly well for Scotia iTRADE for many years and resulted in many full hotel banquet rooms across Canada. That said, millennials are cut from a different digital cloth. They are savvier when it comes to vetting authenticity and as far as endorsements go, this is an interesting experiment at the intersection of social media marketing and DIY investing.

Ultimately, however, enlisting social media influencers may not prove to be as potent as other strategies.

Robinhood, the US online brokerage, Wealthsimple and Wealthsimple Trade (here in Canada) have also managed to create DIY investor evangelists by going a different route. The recipe, it seems, includes drastically reduced commission costs (or in the case of both online brokerages, zero commission costs) as well as a dramatically improved technology and user experience.

For a campaign strategy that leaned so heavily into a visual medium (like Instagram) to connect with a millennial audience, the hope is that the platform and experience with Scotia iTRADE will follow suit. Reading through the Scotia iTRADE Twitter comments, however, suggests there’s still quite a bit of work to be done (as well as a strange fixation on the large yellow Lego banana from their TV commercials). The hazard for iTRADE is that by setting visual and brand experience expectations without being able to follow through on them runs the risk of further alienating the next generation of DIY investor clients.

While outreach events and lowering the price barriers will put Scotia iTRADE back into consideration with younger investors, what will ultimately get millennials talking about investing on social media and using Scotia iTRADE as an online brokerage is how amazing and easy the experience is on the platform. The one thing that iTRADE needs to start hearing from millennials is “shut up and take my money” – anything short of that and there’s a lot more design and user experience work to be done.

Discount Brokerage Tweets of the Week

From the Forums

Any Port(folio) in a Storm

In light of increasingly unpredictable market fluctuations, one worried investor is looking for advice on “recession-proofing” their portfolio. Read on to find out what fellow Redditors recommend here.

Loony for our Loonie

With the recent publication of the Goldman Sachs prediction on the loonie, Canadian Redditors are up in arms, discussing potential strategies, profits, and economy-wide ramifications in this thread.

Into the Close

That’s a wrap on the shortened week version of the Roundup. It looks like it’s going to be more of the same kind of back and forth rhetoric, as well as precarious talk of recessions, all the while the economic numbers are still pointing to solid growth in Canada. As far as forecasts go, this sounds like things could go up or down or not anywhere or everywhere. Whichever way you’re trading takes you this week, pack some Rolaids and have a profitable week!

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Discount Brokerage Weekly Roundup – August 26, 2019

It seems like more and more discussion is taking place around the “R” word. Of course, with stranger things taking place around the world with respect to interest rates, trade wars, and conflicting accounts from economic indicators, it’s tough to make heads or tails of what’s going on. Despite the pervasive and heightened uncertainty, one thing is clear: there’s a lot of forecasting taking place about what may happen next in the stock markets.

In this edition of the roundup, we pile onto the prognostication bandwagon to forecast what online brokerages and DIY investors can expect heading into the last few months of the year. From what online brokerages have already telegraphed to signals of interesting developments, an intriguing picture is forming of the new landscape for online brokerages. As always, we’ve got a healthy serving of DIY investor chatter from Twitter and the investor forums to close things out.

Interactive Brokers Big Bet Gets Bigger

As far back as April of 2019, Interactive Brokers founder and outgoing CEO, Thomas Peterffy, signalled that Interactive Brokers would officially launch something “big” to catalyze growth to their business. That big bet, as it turned out, was the launch of a simulated sports betting platform (launched in July) designed to attract individuals who were a cut above the traditional gambler. Think Moneyball meets Wall Street.

With September now just a few weeks away, the kickoff to the new season of the NFL will also usher in a tsunami of football chatter around trading desks and water coolers across North America. As it happens, the NFL is slated to be added to the lineup of games that users of the Interactive Brokers sports betting simulator can bet on.

Fantasy football (indeed fantasy sports in general) is a wildly popular endeavour. So, it stands to reason that with the influx of interest in the new season of the NFL combined with a platform that offers up the stats and quant geeks of the football world a chance to flex their bulging bell curves, Interactive Brokers may find its pool of potential new clients after all.

Another big catalyst for online brokerages like Interactive Brokers is the market volatility itself.

When markets become uncertain, that’s typically when efficiency in pricing breaks down and when active traders step back into the mix to find compelling trades. So, despite volatility being generally bad news for many investors, for active traders, the volatility is a sign of opportunity.

Combined with lower interest rates, the ability to access margin means that firms like Interactive Brokers could stand to benefit from increased trading activity (and therefore commission revenue). That said, the last time the markets were signalling an increase in volatility, Interactive Brokers pre-emptively raised margin requirements to protect against the sudden swing in prices, a deft move that saved them from considerable margin loan losses while their peer firms unfortunately did not fare as well.

As September nears, we’ll be keeping a close eye on what Interactive Brokers (and other online brokers) will be doing with margin requirements as that may once again prove a definitive canary-in-the-coal-mine.

Stimulus in the Deals & Promotions Section

With the “R” word now making the rounds in major news and business media (as well as the content of several large online brokerages), sentiment among DIY investors towards entering into the markets is undoubtedly going to turn negative.

As it just so happens, September is historically when investing activity picks up again and for many financial services firms (especially online brokerages), this represents the second-last month of the fiscal year. Translation: it’s a great time to boost performance stats for the fiscal year by landing more client accounts.

Financial performance aside, savvy online brokerages understand that in today’s fiercely competitive market for DIY investor assets, it will be important to stand out, especially during the market storm.

One quick way to incentivize investors to pay attention is with a good deal. The seasoned investors will undoubtedly be out looking for compelling deals in the stock market and will also recognize a good offer from an online brokerage if one were to surface. Ironically, central banks won’t be the only ones contemplating how to boost market performance with rate cuts.

Pricing discounts are just one option, however. In the current market climate, one way to soothe the angst of investor uncertainty is with access to good information and market coverage. So, while cash back promotions or commission-free trades are always fan favourites, the ability to stay informed about what’s happening in markets in either real-time or with in-depth coverage would also be value added.

This past week, RBC Direct Investing tackled the thorny subject of trade protectionism in its “Inspired Investor” publication, and TD’s MoneyTalk tried to unpack the possibility of a recession in its most recent episode. Most Canadian online brokerages, however, have been mum on the subject. For those online brokerages who have invested in strong content production programs, now is the time when those investments pay off not only as news sources for their own clients, but also as a mechanism to stand apart from other brokerages (or other content providers) who can’t offer the same degree of insight into market direction.

More Price Disruption Coming

Of course while incentives and promotions are one quick way to get on investors’ radar, the so-called “nuclear option” of getting noticed is to drop commission fees down to zero.

So far, Wealthsimple Trade is the only Canadian online brokerage to offer zero commissions on all trades, with other providers such as Questrade, Virtual Brokers, and National Bank Direct Brokerage offering some kind of commission-free trading on ETFs.

One interesting dark horse that could still shake things up for online brokerages in Canada is Canaccord, whose 2018 acquisition of Jitneytrade could enable them to pursue a maneuver akin to Wealthsimple’s acquisition of the brokerage Canadian ShareOwner Investments Inc., which then enabled Wealthsimple Trade to offer online brokerage services to DIY investors.

In addition to price, there’s also going to have to be a step change in how incumbent Canadian online brokerages connect with clients (and potential clients).

What Wealthsimple’s latest advertising stunt of the tiny stadium in downtown Toronto shows, is that they’re also capable of pushing the envelope for innovation in messaging for wealth management services providers. At the heart of it though is the “perceived value” of what a commission charge gets you. Many large Canadian online brokerages have publicly been called out for struggles with technology stability or scalable customer service access, so the notion that “bigger is better” doesn’t necessarily match consumers comments and reviews online.

The takeaway is that as competition continues to grow for investor assets, so does the likelihood that there will be another major commission pricing announcement from an existing provider. For new entrants into the online brokerage space, unless there’s a quantum leap in trading platform experience, going to zero-commission or using ultra-low commission pricing is likely the path forward.

Regardless of the stock market’s immediate direction and sentiment, Canada’s online brokerages have had to navigate choppy waters before. What is different this time, however, is that there is a strong likelihood that there is a recession on the horizon and considerably more competition to boot. Heading into busier times in the weeks ahead, the advice for Canadian online brokerages is simple: prepare accordingly.

Discount Brokerage Tweets of the Week

From the Forums

Pure and (Wealth)simple

An inexperienced investor collected opinions about Wealthsimple and found out what fellow Redditors like, what types of investments they recommend through this brokerage, and how they use their Wealthsimple accounts. Read the discussion here.

Asset Tripping

Freshly motivated to maximize his returns and concerned about missed opportunities, a Redditor who passively accumulated savings into a TFSA is looking for advice on a more assertive investment strategy.

Into the Close

Savvy investors know that there’s always a bull market somewhere. With headlines the world over fixated on the trade war and uncertainty, sentiment is clearly shifting negative, but with gold perking up and a range of vehicles available to capitalize on volatility, it seems that aside from capital to wade into this storm, it’s going to take the gumption to keep going.

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Discount Brokerage Weekly Roundup – August 19, 2019

One of the marvels of modern physics is that you can experience “zero gravity” right here on Earth by hopping on a flight of what’s affectionately known as the vomit comet. After diving and rallying and causing many investors to toss their cookies, this past week was a reminder that in spite of fundamentals, predictability is what the current market is lacking. Ironically, it seems like some of that uncertainty is also spilling over into the online brokerage space this year too.

In this edition of the roundup, we profile one newsworthy development at a Canadian online brokerage that’s pushing to add more value to the trading experience for DIY investors. From there, we look at yet another announcement of a CEO resignation at a US online brokerage this year, a signal that the whole space is going through a major shakeup. On a more familiar note, we close out the roundup with chats and tweets from DIY investors in the forums and on Twitter.

Questrade Clients to get Benzinga-Powered News

For longtime observers of the Canadian online brokerage space, one of the curious changes to have taken place gradually over the past few years is that the entities that used to call themselves “discount brokers” no longer do. Instead, the term direct brokerage or online brokerage have come to describe the providers that enable DIY investors to trade the market.

The shift in name away from “discount” is one small but important indication that the industry wants to move away from competing against one another in terms of price. After waves of commission drops, and now the launch of a zero-commission provider, Canadian online brokerages are collectively exploring alternatives to dropping commission prices by delivering “better value” for their clients in the form of new features or enhanced technology.

One of the features that smaller online brokerages have a tough time competing against larger bank-owned brokerages on is research and news. Often, the wealth management branches within banks have armies of analysts and writers to draw from, and as such, can supply DIY investors with a “wealth” of in-depth coverage. Further, their size of client pool justifies them being able provide access to larger newswire services that can be tailored to individual stocks within a watchlist or portfolio.

This past week, however, an interesting announcement crossed our radar, stating that financial news provider Benzinga will be providing Questrade clients premium “access to earnings releases, trade ideas, breaking stories and interviews,” as well as “real-time calendars for earnings guidance, analyst ratings, IPOs, splits, dividends, and more.” Clients of Benzinga in the US online brokerage market include TD Ameritrade, E*TRADE, Interactive Brokers and Tradestation, to name a few.

Interestingly, neither Questrade nor Benzinga’s review of Questrade have yet mentioned this feature (as of the time of writing this roundup), however, for DIY investors at Questrade, getting convenient visibility on key developments that drive action in a stock means an improved trading experience. And, in looking at the firms that Benzinga services, this means that Questrade clients will be getting a competitive solution for research data on Canadian equities – a new venture for Benzinga.

Access to news about equities is certainly not a new feature, but in the race to provide additional value without having to lower trading commissions, it becomes a key differentiator between brokerages. DIY investors trying to decide which online brokerage provides the best value will certainly be looking at price first, however, Questrade has always historically competed well in that category. With this new feature of quick-to-market data being part of the investor experience, it’s clear that Questrade is fixed on giving their higher priced competitors a real run for their money.

CEO of E*TRADE Announces Departure

It looks like 2019 is the year of the turnover at US online brokerages. This past week, yet another head of an online brokerage has announced they’ve moved on.

CEO of E*TRADE Financial, Karl Roessner, surprised industry observers by announcing his abrupt departure from the head of this online brokerage after having stepped into the role in 2016. Last month, the head of TD Ameritrade, Tim Hockey, also announced that he would be stepping down as President and CEO and, earlier in 2019, Thomas Peterffy, CEO and founder of Interactive Brokers, announced he too would be stepping down from the popular online brokerage firm he founded over 40 years ago.

Unlike the situation at Interactive Brokers, however, the departure of Roessner was fairly abrupt, and because it fell between earnings announcements, did not have the same reassuring tone of Tim Hockey’s departure from TD Ameritrade.

With pressures to revenue generation mounting at US online brokerages, including at E*TRADE, this cascade of executive departures will bring with it fresh uncertainty against an already challenging backdrop. After all, the CEO has a crucial role to play in steering the organization and with so much change, it will be hard to know who is steering the ship and how the industry as a whole will respond.

For challenger brands like Robinhood and Tasty Trade, or even bigger players like JP Morgan, the momentary transition by incumbent online brokerages undergoing key leadership changes could be an ideal moment to step up their efforts to win over their competitors’ business. Both Robinhood and Tasty Trade are still founder-led organizations, and as such, are driving towards their vision of their respective businesses.

Within the Canadian online brokerage space, there has been (and perennially is) substantial turnover at the leadership level (e.g. President) at many of the bank-owned online brokerages. Interestingly (and potentially unsurprisingly), Questrade stands out as having the longest standing President of the organization among online brokers. Since it was launched in 1999, Questrade has had the same President & CEO, Edward Kholodenko. Within the Canadian market, even though Questrade has been around for almost two decades, only now is it starting to hit its stride with the online brokerage reviews in terms of overall DIY investors experience, perhaps a nod to the notion that founder-led firms typically outperform peers.

What this latest departure highlights is that it is difficult to do transformational work without a long runway. While progress can be achieved (as demonstrated by both Hockey and Roessner) in a relatively short amount of time, the nature of the ambitions and the ability to see big changes through invariably take time and leadership continuity. To add even more uncertainty into the mix, the next class of online brokerage CEOs are going to have to contend with choppy (and potentially falling) markets, as well as a possible recession. Certainly anyone stepping next into the role of an online brokerage CEO is going to have nerves of steel – oh – and be able to get along with their board of directors.

Discount Brokerage Tweets of the Week

From the Forums

Simply De-fee-ted

Concerned over unexpected fees and itching for a change, this weary investor turns to fellow Redditors for advice. Read through for interesting opinions on other investment options in this Reddit thread.

Hello Downticks, My Old Friend

Fluctuations in the market leave a lot of us with sleepless nights and stressful days. A few confident investors weigh in on dealing with the recent volatility in the following Canadian Money Forum thread.

Into the Close

That’s another wild week in the books. One of the telltale signs of disagreement in the markets is volatility, aka uncertainty. While bonds are usually the smarter securities in the room, there seems to be a consistent theme from “experts” that fears of a recession are just overblown. Which simply goes to show, that nobody really knows where things go from here. Such is the dance. Have a great week!

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Discount Brokerage Weekly Roundup – August 12, 2019

One of the highlights of any summer barbecue is the dip. Of course, for anyone who’s ever arrived at one a bit too late, often it’s just the dip that’s left. For DIY investors, it seems that the newsies are no longer talking about the market barbecue anymore and instead are focused on the dip.

In this edition of the Roundup, we take a look at a global trend towards commission-free trading that’s taking shape, and what that might mean for Canadian DIY investors (and online brokerages too). From there, we spotted another emerging trend from one online brokerage who knows how to get noticed this summer. As always, we’ve got a great medley of investor chatter and a few spicy tweets to close things out.

Commission-Free Trading Growing Globally

Now that the back to school sales are ramping up, it’s a sure sign that September is just around the corner. Of course, for DIY investors and online brokerages alike, the approach of September is also the time of year when activity starts to pick up again. The competing forces of volatile, tweet-driven behaviour on the one hand and solid economic fundamentals on the other mean that the stock market (and bond market) are becoming decidedly undecided on a direction. In spite of the surrounding uncertainty for the stock market itself, it seems that a clear trend is emerging for existing online brokerages to contend with: zero-commission trading.

This past week, the US online brokerage that has captured the imagination (and loyalty) of millennial investors, Robinhood, announced that they have officially been permitted to launch in the UK.


Robinhood’s intentions to expand globally are no secret. In 2015, for example, we reported their plans to expand to Australia, and there have been signals for a few years that the UK was also on the roadmap for the no-commission discount broker’s expansion plans. It is a clear indication that in the world of commission-free trading, scale matters.

Nonetheless, unlike in the US, Robinhood’s journey to UK won’t be a cake walk.  There are at least three other firms already offering some form of commission-free trading program in the UK: Revolut, Trading 212 and Freetrade, with Trading 212 having had the largest head start since 2018. Even at home in the US, Robinhood is starting to face new competitors, like JP Morgan, stepping up to offer commission-free trading. And, in Australia, there are also firms already offering commission-free stock trading.

In the wake of Robinhood’s latest announcement, it is becoming abundantly clear that zero-commission trading is no longer an anomaly. Rather, it is now a footrace for new entrants to get into the space, disrupt existing players, and potentially get in front of the global expansion plans of Robinhood.

For Canadian DIY investors, Wealthsimple Trade is the closest to zero-commission trading that we can get. And, in some interesting news that crossed our radars at the end of July, they too are bulking up their technology stack to take on the existing Canadian discount brokerage market. Specifically, a news release at the end of July that mentioned Wealthsimple Trade choosing market data technology provider Xignite could be an indicator that real-time trading quotes are actively under development and coming to Wealthsimple Trade soon. Incidentally, Xignite counts Robinhood as one of its customers, so not only is Wealthsimple Trade tearing a page out of the zero-commission provider’s pricing playbook, but also one from the technology side too.

Although there are no plans or mention of Robinhood expanding to Canada (yet), the lesson from across the globe appears to be that even in comparable markets, there can be multiple zero-commission trade providers. While in Canada there is currently just one, the odds favour there being more than one in the foreseeable future.

If existing Canadian online brokerages were not serious about getting in front of zero-commission trading before, there is now growing international evidence and developments here in Canada that suggest rethinking how to compete in a zero-commission world. New brokerages are figuring out how to provide an exceptional online trading experience at little to no commission cost, and the existing ones who already do are looking beyond their own borders for opportunities to grow.

BMO InvestorLine Staying in the Spotlight

If there’s one lesson to take away from the melee that is the US political system, it’s that being talked about is key to staying on the minds of audiences. This past week, we noted yet another interesting profile of BMO InvestorLine surface on a popular investing website, Benzinga. Earlier this summer, we noted that InvestorLine picked up major coverage from the Financial Post, which offered up an exclusive look at the launch BMO InvestorLine’s new trading platform.

With traditional advertising budgets under fire, BMO InvestorLine appears to be shifting tactics by using public relations (PR) as a tool to set the narrative straight on BMO InvestorLine. Going the PR route means that there are likely to be a lot more eyeballs reading the story than if it were just on the company blog. In fact, there were a few posts about BMO InvestorLine’s latest review/interview on social media, which highlights BMO’s strategy to spread the word about their online trading capabilities.

Ultimately, it is great to see people talking excitedly about one (or more) of the Canadian online brokerages. For the moment, BMO InvestorLine appears to be setting the pace of a new PR-driven strategy.  That said, PR is something that each bank-owned brokerage is generally well equipped to compete against, so BMO InvestorLine may not be uncontested for too long.

Even though we’ve noted an uptick in tweeting and advertising activity from TD Direct Investing as well as from Qtrade Investor recently, it will take more than Twitter to connect with investors. BMO’s latest moves on the PR front show that to boost a tweet’s range, it helps to have one of the big financial information provider names get the social media ball rolling (and having many of the employees help by sharing is great for momentum too).

With fall just around the corner, it’s only going to get trickier for online brokers to stand out with just news releases. To get investors’ attention at this point, and to BMO InvestorLine’s credit, Canadian online brokerages need to come out with features or promotions that get people talking, AND be much more active in reporting what’s happening inside of their own shops. Now, if only there were a channel for them to do that on 😉.

Discount Brokerage Tweets of the Week

From the Forums

Mutually Beneficial?

One DIY investor has questions about the advantages of ETFs over mutual funds. See what fellow forum users had to say in this Canadian Money Forum thread.

Starting Small

A DIY investor wants to know if the learning experience of making small, but risky, investments will eventually result in a payoff, and fellow Redditors chimed in with their opinions. Read it all here.

Into the Close

That’s a wrap on another wild week. There’s a lot of information flying around – from trade rumours to cryptocurrency rallies. With interest rates falling in the US (and around the world) and likely here in Canada too, it’s a particularly important moment for online brokerages to consider how investors will react to an ultra-low interest rate environment and pull their money out of savings and into the stock market.

The one story that happens to be gathering steam though is chatter about interest rate cuts and a recession. With just a few more weeks left to enjoy the summer, it might not be a bad time to unplug. Of course, for those strapped into the roller coaster adventure that is the stock market right now, just make sure to keep your arms in the ride and secure your personal belongings. Good luck & stay profitable!

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Discount Brokerage Weekly Roundup – August 6, 2019

It’s definitely shorts weather outside as well as in the markets. And, what better way to celebrate a short week (at least for Canadian DIY investors) than with a brief update of what’s moving the needle for online brokerages here in Canada as well as in the US.

In this edition of the roundup, we take a quick look at the latest activity in the discount brokerage deals section that is bound to put a dent in some brokerages’ vacation plans. From there, we look at some important developments in the US online brokerage market that could help paint a picture of the future for Canadian online brokers and DIY investors. As always, we’ll be sure to toss in the latest investor chatter from Twitter and the investor forums.

Deals – Get ’em While They’re Hot

Heading into the long weekend at the beginning of August, we thought activity in the deals and promotions space would likely be on cruise control until closer to September, the month when activity typically picks back up. Instead, DIY investors were treated to a pleasant surprise, as there was one bank-owned brokerage that decided a dip into the deals pool for the month of August.

RBC Direct Investing just kicked off a month-long promotion that frequent watchers of the deals section will be familiar with. The offer is for 25 commission-free trades which are good to use for one full year, and requires a deposit of $5,000.

Like most things market-related, timing is key. It is interesting that the CIBC Investor’s Edge promotion was extended into early August from its original expiry date at the end of July. If Investor’s Edge decides not to extend their existing offer (or replace it), then RBC has the “lion’s share” of the spotlight for commission-free trading offers for the near term. Another brokerage that should be concerned with RBC DI’s latest maneuver is HSBC InvestDirect. Their promotion, which launched in July, offers 30 commission-free trades which are good for use for up to 60 days.

When an online brokerage the size of RBC Direct Investing jumps into the deals pool, they’re going to make a splash. Interestingly, the fact that the deal is set to expire at the end of August means this is a rare window for investors looking for a deal to actually get one from RBC Direct Investing, outside of the usual RSP rush in the late winter/early spring.

For DIY investors, a deal this early from a major online brokerage is a great signal of the level of competition between Canadian brokerages, which makes us believe there are more deals likely coming to market.

Quick Notes from the US Online Brokerages

Not all the news from across the border is acrimonious. In fact, for online brokerages, there are some bright spots in terms of performance updates, concept projects, and big business moves which show that the space is continuing to evolve around tricky macro conditions.

With the start of a new month, Interactive Brokers has published their latest set of performance metrics for July. As has been the case for a number of years now, metrics for the popular online brokerage continue to push higher with latest annual growth figures in client accounts clocking in at 17% and, on average, 276 (annualized) trades per client. Interactive Brokers is clearly managing to attract individuals with a tendency towards active trading. Even more interesting for the brand will be the next several weeks in which the VIX continues to flash volatility is at hand – something that can pull active traders into the mix to compete for big swings in price.

Another big growth story announced at the end of last month came from the largest online brokerage in the US – Charles Schwab – who (for the tidy sum of USD $1.8B) is acquiring about one million of USAA’s brokerage and managed accounts, and will become the exclusive wealth management service provider to USAA.

While these two firms differ substantially in size, they do help provide examples of what options confront the current Canadian online brokerage space in terms of pathways to growth. On the one hand, Schwab’s growth announcement illustrates that when a firm is in the wealth management space and wants to exit it, the bigger players are typically going to have an edge over the smaller firms. For Canadian online brokerages, there definitely seems to be a sentiment to deploy features to keep up with leading brands rather than to push the envelope on innovation. As a result, it is likely that upstarts, like Wealthsimple Trade, can hustle and out-compete existing providers, which in turn may prompt some existing players to exit the space the way USAA did in the US.

Another important takeaway is the power of building a best of breed trading experience and the impact on investors.

Interactive Brokers still has a lot of currency with active traders/investors and continues to grow as a result (see this recent forum post for example). The result of their investment in automation is clearly paying off, as they are able to offer much lower commission per trade pricing than many of their peers and still be a profitable enterprise. By comparison, the no-commission online brokerage, Robinhood, has managed to carve out their own niche with millennial investors, and has layered in paying for additional services as part of their way of balancing being accessible and sustainable. Incidentally, this past week, they also launched a new messaging feature that keeps their platform’s user base informed about important announcements in a way that looks and feels like it belongs within the Robinhood platform. Even more forward looking, TD Ameritrade flashed a sign of what’s to come with DIY investors potentially being able to place trades while driving.

For Canadian online brokerages, the fork in the road to growth is clear. Either win at creating an innovative product that customers rant and rave about, or start buying up other online brokerage providers who may be much slower to innovate. It’s already happening in the US and will almost inevitably happen here.

Discount Brokerage Tweets of the Week

From the Forums

Man or Machine?

No one can deny the relentless level of automation that has taken over the financial world. This has people torn between human advice and robo-advice for managing their investments. See what individuals in this reddit thread have to say about the new age of robo-advisors.

Parent Trap

With the average amount spent raising a single child to adulthood being over $200,000, parents have to budget carefully. The individual in this reddit thread is going the extra mile, trying to set up an RESP for their newborn. Find out what advice fellow readers offered to help avoid the pitfalls of planning.

Into the Close

That’s a wrap on another week’s action in the online brokerage space. Now that August is here, we’re keeping our ear to the ground for what’s likely going to be a very busy fall in the online brokerage space. Perhaps figuratively and literally, the actual ground seems to be a little more palatable to listen to than what’s happening on social media anyway.