Discount Brokerage News – Page 32

Posted on December 18, 2015 by user — Leave a comment

Discount Brokerage Weekly Roundup – December 18, 2015

With the Canadian dollar and oil prices looking like they’ve been on the wrong end of an imperial destroyer, what was in demand this week was cool technology, light-sabers and a chance to escape to something better. The takeaway lesson that markets always teach traders is that demand is a powerful force when awakened and oversupply a powerful enemy.

Kicking off the roundup this week, we’ll take a look at one Canadian online brokerage that may not have amazing special effects and symphony orchestras, however unveiled their latest attempt to move their website into future at light speed. From there we’ll take a quick look at another discount brokerage who launched a last-minute gift idea for DIY investors. Next we’ll quickly check out the latest banter from investors on Twitter, peruse through the investor education event (singular) and close out with some interesting feedback from investors in the forums.

Because it’s 2015.

With only a few more days left in 2015, one of Canada’s largest bank-owned online brokerages has managed to join the six or so other Canadian discount brokerages who’ve launched new front facing websites this year. It couldn’t have come soon enough.

Just over two weeks ago the Globe and Mail’s online brokerage rankings characterized RBC Direct Investing’s previous website as “O-L-D school.” This past week, however, the old rolled out and the new rolled in.

With the focus of the online brokerage rankings in 2015 shifting heavily towards website experience and the growing pressure from their bank-owned peers updating and upgrading their own websites, RBC Direct Investing clearly had upgrading their website on their radar. That said, given their latest review in the Globe and Mail brokerage rankings and the score in Surviscor’s rankings, it was interesting that the roll out of the new RBC Direct Investing website did not merit more of a response.

Despite the radio silence about the new website, there are several enhancements and design choices that are worth pointing out.

The first, and perhaps most obvious, is that the new website layout is contemporary. What that means is like many of the other websites released by other brokerages this year, RBC Direct Investing’s new site has rearranged information and layouts so things don’t seem as overwhelming as they did previously. In other words, less is more. Sections are more readily divided, text is clearer and it’s easier to focus on the content that’s relevant to a reader.

In line with a more modern layout, another interesting feature is that site is not just responsive, but looks to have been built by taking a ‘mobile first’ approach. The traditional top navigation menu has been removed altogether in favour of a ‘mobile’ style menu in the top left. The items in the menu also mirror the vertical order of the sections of the homepage which is a clear design choice to accommodate users swiping a tablet or smartphone screen rather than scrolling on a mouse.

A rethinking of the organization also means that users have a series of simpler choices to make. This arrangement was not unlike TD Direct Investing’s previous approach as well as BMO InvestorLine’s current strategy of “Tell us who you are and we’ll show you how we can meet your needs”.

Digging a little deeper, however, there is another element to the new RBC Direct Investing website that seems to reflect something unique: a deliberate focus on including women in the imagery. Specifically, the new website places women at the focal point of the featured images and does so on key pages throughout the website (see collage below).

Source: Screenshot RBC Direct Investing website

While it is not unique to see financial institutions, especially the largest Canadian financial services brands, reflect a more diverse and inclusive picture of their clients, RBC Direct Investing’s new site has made some interesting design choices. For example, by placing women in the featured images of both the “beginner investor” and the “experienced investor” pages, the website highlights an important rethinking of what an “investor” looks like. BMO InvestorLine and TD Direct Investing have also done this with their latest redesigns, however RBC Direct Investing’s website stands out as it deliberately places women at the focal point across all three categories that users are choosing from on the homepage i.e. beginner investors, experienced investors and those planning for retirement.

As many of the comments from this past year’s Globe and Mail online brokerage ranking pointed out, user interaction with a new website is highly subjective. That said, how users engage with an online brokerage is going to matter more now to DIY investors than it ever has in the past.

For brokerages, striking the right balance of being “familiar enough” to inspire confidence and “bold enough” to stand out from their peers is rarely easy or cheap. Moreover, online investors of all stripes are savvy enough to detect the difference between a user experience has been thoroughly thought through and one that seems formulaic. The details matter.

Even though much hasn’t been said yet online about the RBC Direct Investing website, the design choices of the site itself will hopefully create a new conversation about what investors can expect from Canadian online brokerages heading into 2016.

Deals Update

With only a few shopping days left till Christmas, it looks like there are still some last minute deals to be had. This past week, National Bank Direct Brokerage stepped back into the deals and promotions race with their latest commission-free trading offer. Specifically individuals opening a qualifying account with at least $20,000 can receive up to $500 in commission credits and those depositing at least $100,000 can receive up to $1,000 in commission credits. See our deals & promotions section for additional details.

Deals activity has been in a holding pattern for most of this month however the new offer by NBDB brings the total number of offers up to 17. It should be interesting heading into the New Year as there are 8 offers set to expire at the end of December. Further, once the holidays are over, the big push to RRSP season will begin so brokerages big and small are sure to kick their promotional activity into high gear. The online brokerages currently putting offers forward are undoubtedly hoping to capture the interest of the keener investors who are doing their homework early.

Event Horizon

Ho-ho-hooray, the holidays are almost here, and there’s one more discount brokerage-sponsored investor education event to squeeze in before Jolly Old Santa makes his appearance. This upcoming session may be of interest to those who are new to investing, and interested in learning about options.

December 22

TD Direct Investing – Introduction to Investing in Options

Tweets of the Week

You’re a mean one, Mr. Glitch

With the latest roll outs from Questrade and TD Direct Investing, there are inevitably some bumps and bruises that DIY investors (and the brokerages) encounter. This past week, the Twitterverse was more quiet however Questrade and TD Direct Investing seemed catch a little bit of extra shade from frustrated users.

From the Forums

No Such Thing as a Free Launch

Star Wars wasn’t the only major release this month. Two popular Canadian online brokerages also launched their own updates and upgrades to their respective web platforms. Here are a couple of great threads that capture the reactions of users to the changes made by TD Direct Investing and Questrade:

Reactions to TD Direct Investing website from the Financial Wisdom Forum here.

Reactions to Questrade’s latest platform upgrade from RedFlagDeals’ forum here.

Battle of the Brokerages

While there may be no light-sabers in this battle, the ongoing debate between value players Virtual Brokers and Questrade was worth a revisit in this post on reddit’s Personal Finance Canada thread.

Into the Close

That’s a wrap for this week’s roundup. Finding a way to adequately punctuate the roundup on such an historic event as the opening of another Star Wars reboot was tough. Especially with winter coming, it was a Stark reminder of Snow in the long range forecast. Enjoy the weekend or ‘geek’end!

Posted on December 11, 2015 by user — Leave a comment

Discount Brokerage Weekly Roundup – December 11, 2015

“We’re often led to believe migration is a drain on the country’s resources but Steve Jobs was the son of a Syrian migrant. Apple is the world’s most profitable company, it pays over $7billion a year in taxes–and it only exists because they allowed in a young man from Homs.” – Banksy *source: Twitter*

Like it or not, the one great lesson that markets continuously teaches its students is that prices reflect some vision of the future and not the present. Of course what makes markets so exciting is the fact that there are so many companies thinking up new ideas and products to bring that future into reality.

For the heads of Canadian discount brokerages, the future of DIY investing is always on their minds. The speed at which they’re able to respond to it or even shape it, however, is what has started to separate those who are known as ‘innovative’ from those deemed to be stagnant.

In this week’s edition of the roundup, we take an in-depth look at one brokerage who has figured out that it will take more than just technology to be able to be a leader in the DIY investor world of tomorrow. Next, we’ll look at the reaction to last week’s Globe and Mail online brokerage rankings from across social media and also take a look at what investors were reacting to this past week on Twitter. Finally, we’ll preview the upcoming investor education events for the week ahead and round out with chatter from the investor forums.

Using the Force

While it may not be quite as big as the release of the new Star Wars movie, the battle for intergalactic supremacy in the discount brokerage world is poised to heat up yet again this weekend. Rolling out this weekend are two major platform updates from Questrade that are sure to bring cheer from DIY investors and rattle the nerves of bank-owned and independent brokerages alike.

Rolling out this weekend will be a highly anticipated set of upgrade to the suite of Questrade trading platforms. Their active trader platform, IQ Edge will see some long sought-after features finally go live and a new web-based trading platform join their bench.

Starting first with the update to IQ Edge, the upcoming refresh will be the third major upgrade to the platform this year taking the release number to 4.2. The major feature to be added is the ability to use conditional orders when placing trades – a feature that many active traders rely on to plan their entry and/or exit points. In fact, Questrade is not the first brokerage in 2015 to roll this feature out nor are they alone in being able to offer this as part of a trading platform. Recall that earlier this year Desjardins Online Brokerage also launched conditional trading into their trading platforms and brokerage platforms, such as the Active Trader and US trading (aka ThinkOrSwim) platforms at TD Direct Investing and Interactive Brokers’ Trader WorkStation have had conditional orders for quite some time.

With each release of Questrade’s IQ Edge, it is clear that they are moving closer to having a trading platform that is as good as if not better than many of the third party platforms currently being offered by other brokerages. And, while there appears to still be features and functionality that users are looking to have built in, Questrade is clearly listening and executing on getting trader-friendly features integrated on a regular basis. This is certainly one area in which they have outshone their larger bank-owned brokerage competitors who seem to be much slower at releasing upgrades to trading platforms.

For less active traders, Questrade is also releasing a browser based platform that is slated to replace (eventually) IQ Essential.

One of the key features being trumpeted for the new online platform is the watchlist. While a watchlist is not a technological marvel, the small changes, such as adding sparklines for a visualization of price trending, is a nice and modern touch. Enabling snap quote refresh of the watchlist is also a much more convenient way to source quotes from the watchlist that aren’t part of a real-time update feed.

Another feature being highlighted is the ability to trade seamlessly across devices. The reality of 2015 and now 2016 is that individual investors would like access to information about their investments as well as the ability to buy or sell them, across any device.

Of course, while all this innovation is exciting, it also creates a challenge for DIY investors and clients. Questrade now has more platforms, they offer more services, and a wider variety of packages than they ever have before. And, while more is usually better, for most consumers, it’s also a challenge to understand exactly what Questrade has to offer.

With all of these choices and changes, as well as the many areas of investing and wealth management that Questrade is now in, their product offering is no longer so simple to understand. Even though Questrade has maintained a very human voice, and has anchored its presence on social media, the reality is that Questrade is now doing more things than it ever has done before.

This tweet, taken from this week for example, shows that there are still folks out there who remember (and think) that Questrade is the no-fee broker when they shed this status several years ago.

For DIY investors, the lesson is that they can expect Canadian brokerages to have to innovate much more quickly in order to compete effectively with one another. While in theory this competition will drive better pricing and products, it will also create a whole new learning curve to stay on top of the changes within their own brokerages.

Without great support and communication to accompany these changes, the intended ‘improvements’ may backfire into user frustration. Fortunately for brokerages such as Questrade and Desjardins Online Brokerage, their individual releases of new features (such as the conditional orders) have been well supported with videos and content describing how these work.

Ironically, it seems that in order to truly succeed at innovation going forward, tech savvy won’t be the magic ingredient. Rather, a very human quality, emotional intelligence, will be needed to help customers navigate the brave new world of online investing.

Tweets of the Week

In addition to the regular overview of the Canadian discount brokerage voices on Twitter, we’ve also collected the reactions to the most recent discount brokerage rankings from the Globe and Mail’s Rob Carrick from Twitter and Facebook.

Here are some of the reactions to the 2015 Globe and Mail online brokerage rankings from across social media:

View the story “Globe and Mail 2015 Online Brokerage Rankings ” on Storify

Here are some comments from Facebook:

Event Horizon

Counting down to the holidays, it’s a festive week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to those who are new to investing, curious about trading strategies, and options enthusiasts. ETFs, technical analysis, and registered accounts round out this week’s selection.

December 15

Scotia iTRADE – Introduction to ETF Strategies with Pro Market Advisors

TD Direct Investing – Introduction to Investing in Options

December 16

TD Direct Investing – Building Wealth Through Registered Accounts

Scotia iTRADE – Placing Your First 10 Trades with Sarah Potter

December 17

Scotia iTRADE – Head & Shoulder Patterns with AJ Monte

December 18

Scotia iTRADE – Active, Passive or Both Strategies with Purpose Investments

From the Forums

Limiting Factors

This past week, the Liberals made good on the pledge to lower the TFSA contribution amounts from $10,000 back down to $5,500. In this post from the RedFlagDeals.com investing forum, the discussion from DIY investors highlights some of the initial reactions and perspectives from the price-savvy crowd.

Smorgasbord

In this post from Reddit’s Personal Finance Canada section, a user is looking for a few answers related to moving funds from Sunlife to Questrade as well as other financial planning questions for a newly started position. Worth a read for those curious about employer contributions.

Into the Close

This week has seen so many different versions of the future, from dystopian to fantastic. Heading into the weekend, here’s a glimpse into the distant future as well as a post that signals a chance to finally dream about a better future.

Posted on December 4, 2015 by user — 2 Comments

Discount Brokerage Weekly Roundup – December 4th 2015

One of the great things about watching professionals in action is just how easy they make things look. If you’re Aaron Rodgers, airing out a game-winning pass with no time left on the clock just seems like a day’s work. While Canada’s discount brokerages don’t have quite the dramatic finishes that the NFL seems to produce, this past week brokerages have had their fair share of unexpected comebacks and champions that make winning look effortless.

This edition of the roundup is chalked full of commentary and perspective on one of the biggest weeks of the year. Kicking off the roundup is the review of this month’s deals and promotions and the signals that brokerages are moving more aggressively into 2016 than ever before. Next we dive into discount brokerage rankings season by looking at the two big names in Canadian brokerage rankings that published their results this week. Finally we take a look at the news and chatter across the discount brokerage space on social media and in the forums. Saddle up, this is going to be a fun ride.

Deals in Play

At the outset of December it looks as if at least two brokerages, HSBC InvestDirect and Questrade, are interested in spreading some holiday cheer in the form of new deals and promotions.

Starting first with Questrade. Late last month they relaunched their popular Apple Watch promotion – which is actually a $500 gift card to the Apple store. While the addition of yet another promotion brings the number of promotions to at least 8, the launch was interesting for two other reasons.

First, with the expiry date of this promotion well into March of 2016, this seems like one of the premiere offers Questrade will be putting forward heading into the coveted “RRSP season”. The timing of this offer just before the Christmas holiday buying season means that it might just be enough to tip someone into considering Questrade as an online brokerage. Further, the value of $500 at the Apple store for a $100,000 deposit makes it a competitive offering at this deposit level.

A second reason this offer is interesting is because Questrade continues to offer more incentives and promotions than any (or almost all) other online brokerages. Going into December, Questrade alone accounted for just about half of all of the promotions being offered. Alongside the offer for the Apple Watch, Questrade is also offering up an iPad Mini promo as well as other commission-free trading promos. For other Canadian discount brokerages, the fact that Questrade has continued to offer the number and diversity of offers should demonstrate that DIY investors are clearly interested in brokerages who are prepared to give in order to receive.

The second online brokerage to get into the giving spirit this month is HSBC InvestDirect. From December through to March 2016, HSBC InvestDirect is offering up 30 commission-free North American equity trades for individuals signing up for a new account. While this is not the first time HSBC InvestDirect has put forward a commission-free trading offer, it is interesting to note that they too have set their expiry date on this promotion well into March and have launched this offer a month before the end of the year signaling that perhaps HSBC InvestDirect is preparing to compete a little harder for new clients than they have in the recent past.

Like most other competitive marketplaces, these moves by Questrade and HSBC InvestDirect will not go unnoticed. The fact that both of these offers stretch well into 2016 are a signal to other brokerages that it is going to be a very competitive RRSP season and that the sooner they can bring interesting offers to market, the better.

BMO InvestorLine Goes for the Three-peat

This past week financial industry ranking firm Surviscor released their updated set of Canadian online brokerage rankings crowning BMO InvestorLine as their choice for top online brokerage yet again. These past few weeks have been good to BMO InvestorLine as they also took the prize for top online brokerage from the Morningstar awards, which are also very similar in structure to rankings/analysis underpinning the Surviscor ratings.

Below is a video from BNN of Surviscor President Glenn LaCoste giving his thoughts on the latest rankings and trends in Canadian discount brokerages.

In terms of scoring, Surviscor’s rating system included some new elements that weren’t present in years past, namely a ‘Service Level Assessment’ as well as a ‘Mobile Accessibility’ consideration.

One of the interesting components about the Surviscor analysis is that it takes into account over 4000 criteria when coming up with the final score. Of course, since those criteria are proprietary it is difficult to know exactly the weights that lead to the scoring.Even so, a look at the distribution of this year’s scores also shows just how tightly clustered most of the brokerages are according to Surviscor’s analysis.

The graph below (a histogram for the stats nerds) shows that most firms in the ranking have a score between 65% and 74%. What stands out when looking at this chart is just how poorly HSBC InvestDirect performed on this analysis compared to the rest of the firms profiled.

Distribution of scores from Surviscor 2015 online brokerage rankings.

At the other end of the spectrum, BMO InvestorLine and Scotia iTRADE scored above most of the other brokerages but relatively close to one another. This is particularly interesting given the fact that standard commission pricing at both firms is very different.

In terms of BMO InvestorLine, standard commission pricing is in line with many other bank-owned brokerages at just under $10. Conversely, Scotia iTRADE’s standard commission pricing is still closer to $25. Thus, commission pricing is only part of what factors into making a firm rank well in these ratings and, according to these rankings, the overall experience between BMO InvestorLine and Scotia iTRADE may be too close for most to notice.

In fact, the scoring shows that according to these rankings, for about 50% of the brokerages, the experience is bound to be “pretty close” to another brokerage.

For DIY investors the take home message to keep in mind when considering the rankings is that these scores represent a snapshot in time. The industry is constantly evolving and so new features or improvements may show up in between ranking cycles which then in turn change the order in which these firms would be ranked. The fact that many discount brokerages are clustered around the same scores show that most firms do a reasonably decent and probably similar job in terms of the criteria measured by the Surviscor rankings, so it seems that personal preference will have a greater role to play for most DIY investors.

That said, these numbers also show that most brokerages are locked in a very tight race with one another. The big challenge in front of the brokerages for 2016 is just how they’re going to start separating themselves from one another.

2015 Globe and Mail Online Brokerage Rankings Released

Of course what would online brokerage rankings season be without the most widely anticipated and longest running ranking of Canadian brokerages?

Earlier today the Globe and Mail’s Rob Carrick published his annual review of twelve of Canada’s most popular online discount brokerages and there were certainly some surprises contained in this year’s rankings.

Starting first with the actual scores. In the 2015 rankings, there was a clear theme that the top three Canadian online brokerages according to Rob Carrick just happened to be non-bank owned brokerages.

Virtual Brokers has once again reclaimed its title as best online brokerage after having lost it last year to Qtrade Investor (who incidentally came in 2^nd place this year). Following in third place was Questrade, a firm that has continuously been moving up the rankings for the past few years.

The battle between Qtrade Investor and Virtual Brokers may now be turning into somewhat of a rivalry as both of these firms continue to score well in the Globe’s brokerage rankings only narrowly edging one another out each year for the past 4 years. And, even though Questrade may have placed third, according to Rob Carrick’s comments on this brokerage, they may very well take top spot should they continue at their current pace.

For the bank-owned brokerages, the only bright spot appeared to be TD Direct Investing. With a revamped website and the implementation of long awaited features (such as the US Dollar RRSP account), TD Direct Investing scored the best among Canada’s bank-owned online brokerages with a grade of a B+.

The rest of the pack of bank-owned brokerages, however, seemed to draw less glowing praise, to put it mildly.

Interestingly, for the businesses with the biggest profits (i.e. the Canadian banks), the ability to create exceptional experiences (at least in the view of the rankings) fell far short of what they could do. One of the reasons often cited by industry insiders, is that the online brokerage arms of many banks just don’t get the resources and respect as some of the other banking units. Ironically, for many bank-owned brokerages, the marketing that their parent bank spends to create expectations for consumers tends to backfire when the bells and whistles and attention to product experience don’t make it to the wealth management arm of their business.

Perhaps the clearest case to be made in these results is that the smaller, independent brokerages are able to be more innovative than their bank-owned counterparts. Some might even argue that in order to compete effectively, the smaller players have to innovate to stay relevant.

Innovation, however, is not without its downsides either. With so much of today’s DIY investing experience tied to being online, being first to market or creating a new platform or website is one thing – having it work under normal and even stressful conditions, however, is something completely different. As we’ve seen time and time again this past year, releases of new software platforms, app updates and websites has not been smooth for any brokerage. For smaller brokerages in particular having technology go down (or misbehave) can create a cascading series of frustrations as they neither have the customer service resources nor the communication channels that larger brokers have to mitigate these kinds of scenarios.

In the case of this year’s Globe and Mail online brokerage rankings, however, there seemed to be an especially large component of the analysis, scoring and commentary devoted to the look and feel of brokerage websites. The argument for doing so, according to Carrick, is that commission pricing is no longer the biggest component to differentiating brokerages. Instead, client experience and more specifically, website experience is.

Another interesting observation about this year’s rankings was that they were not as lengthy or detailed as they have been in years passed (including compared to last year’s). While it is purely speculative, a great deal of the shine on DIY investing has been eclipsed by robo-advisors and a significant focus of the personal finance conversation has been about Canadian real estate. Add to that a fairly abysmal year for Canadian equities and it’s clearly been a tough time for DIY investing to get any positive headlines.

Clearly, many of Canada’s discount brokerages have their work cut out for them in 2016. With rankings season now over, the writing is on the wall for the Canadian discount brokerage industry: step up or step back.

The non-bank owned brokerages are going to have to continue to innovate in order to fend off their larger competitors. Large bank-owned brokerages clearly have to work both smarter and harder at becoming seen as leading edge technology firms – something that is tough and expensive to do given their size. Perhaps the clearest message of all, however, is that discount brokerages that are on ‘auto-pilot’ are probably at the biggest risk of making themselves appear obsolete. While it may be tough to rank first in multiple rankings, occupying the basement of multiple rankings is a sign that DIY investors will almost certainly use to stay away.

Event Horizon

Bundle up and hunker down, it’s a busy week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to yield hounds, those who are new to investing, curious about trading strategies, and options enthusiasts. Tax efficient investing, technical analysis, and registered accounts round out this upcoming week’s selection.

December 7

Scotia iTRADE – Dividends, Balanced Portfolios and the Quest for Yields with Larry Berman

December 8

TD Direct Investing – Alternatives to Mutual Funds: Learn What Else Is Out There

TD Direct Investing – Options as an Income Strategy

December 9

TD Direct Investing – The Evolution of Indexing

TD Direct Investing – Technical Analysis – Advanced Indicators

TD Direct Investing – Tax Efficient Investing

December 10

Desjardins Online Brokerage (Disnat) – Discover the Benefits of the TFSA

Scotia iTRADE – Trading The Double Top with AJ Monte

From the Forums

In this edition of the forums sweep we found an update to this post from the RedFlagDeals investing section that highlights what will be a disappointing change for many Norbert’s Gambit fans at one of Canada’s largest brokerages.

Into the Close

That’s a wrap for this week’s roundup. Now that Black Friday and Cyber Monday have come and gone, there still might be a chance to save big. Speaking of big saves, here’s a treat for the Leafs fans and their new goalie Sparks (yep, we already like him) getting into the saving spirit. Have an awesome weekend!

Posted on November 27, 2015 by user — Leave a comment

Discount Brokerage Weekly Roundup – November 27, 2015

This past week, many DIY investors have been turning their attention to ways to spend their money rather than to grow it. Although online traders have typically avoided coming to blows with each other over discounted vegetable steamers, online trading is most definitely a fierce battle to get a deal that can be monetized by selling to someone further down the line. Undoubtedly there have been and will forever be expletives hurled at screens of all sizes when orders or trades don’t go as planned. Luckily those screens don’t talk (at least not for the moment).

For Canada’s discount brokerages, this past week they’ve done their best to score some time in the news cycle for much more positive reasons. In this edition of the roundup we take a look at one bank-owned brokerage’s three-peat in the winner’s circle for an online brokerage award. Next we take a look at what a survey from Canada’s largest online brokerage has to say about the future of DIY investing in Canada. We then focus on the latest tweets of the week and gather some interesting investor commentary from the forums.

BMO InvestorLine Crowned Best Online Brokerage by Morningstar

As one of Canada’s most visible bank-owned brokerages, BMO InvestorLine continues to find the awards spotlight. For the third consecutive year, this Canadian discount brokerage was recognized by the Morningstar Canada awards as being Canada’s best discount brokerage.

The ceremony took place on November 25th in Toronto and was an evening that recognized many within the Canadian financial services sector. For DIY investors, the best discount brokerage selection was performed by a committee of members

Morningstar’s Best Online Brokerage award is a submission based award which requires brokerages interested in participating to pay a $1,000 submission fee. According to their selection criteria, the Morningstar award for best online brokerage jurors are particularly interested in knowing the following from participating brokerages:

In what areas have you differentiated your business from that of your peers?
Emphasis should be placed on developments and upgrades introduced within the past 1-2 years.
Your submission should discuss any particular segments of the market targeted by your firm and how these are being reached.

Additionally, the three major categories that the panel of jurors considered were:

Online Presence
Customer Service
Costs

Of note, the Morningstar awards for best online brokerage are structured around several of the criteria used in the Surviscor discount brokerage rankings. Surviscor also helps to provide research and contributes to the MoneySense brokerage rankings. These also happen to be the rankings in which BMO InvestorLine has finished at or near the top of, and so it seems that BMO InvestorLine has maintained their strong showing throughout the year.

For BMO InvestorLine, the third consecutive victory also falls at the third anniversary mark of their advice-direct platform – something that hasn’t garnered nearly the same recognition or attention as their DIY investing arm has.

As we head into the end of the year, there is still one more major brokerage ranking (the Globe and Mail 2015 discount brokerage ranking) to go.

For DIY investors, it will be interesting to compare the results from the Globe’s rankings as they represent a very different approach than the Surviscor/MoneySense/Morningstar rankings. Historically, BMO InvestorLine has also performed well in those rankings however unlike the Morningstar awards, there is no submission fee to be evaluated. With free admission, the field is bound to be more crowded and therefore tougher to outshine.

DIY Investing Gathers Momentum

In spite of all the talk of competition between brokerages, it seems that a recent study commissioned by TD Direct Investing suggests the pool of Canadian DIY investors will continue to expand.

Results of recent survey of 1750 Canadian DIY investors this past September provided a number of compelling insights, many of which are summarized in the infographic below.

Aside from the finding that that the number of investors who are managing at least part of their investments could double within the next 10 years, it was what investors reported was still lacking on the part of the online brokerage providers that might touch off a wave of features in the near future.

One of those items DIY investors reported was that websites are ‘too complex’ to navigate. This is particularly timely given the number of new website releases that have taken place this year, with a handful more in the pipeline. TD Direct Investing also recently revamped their website with a decidedly simpler front end.

Another item that stood out was that only 7% of users polled preferred to use their smartphone for DIY investing. While stats were not provided for tablet users, this number is expected to grow now that the technology, internet connections and user interfaces/apps have matured. There are still features, such as charting and research, which are going to be challenging to do efficiently on a small screen, however the mobile trading experience today is drastically different than it was even just 2 years ago. That said, a quick look at the discount brokerage tweets for the past several weeks would show that that there is a divergence between theory and reality when it comes to mobile trading sites and apps.

For Canadian DIY investors, there is clearly an interest in taking a more hands on approach to managing their financial futures. With the upcoming fee disclosure changes coming to the advisor world and a tough year for Canadian equities, there might be additional momentum towards considering the benefits of DIY investing as investors take a closer look at what their fees are earning them. And, although several brokerages have already undertaken major redesigns of their website in anticipation of the new ways investors are hoping to interact with their products, the biggest challenge confronting brokerages will be to provide experiences to investors that truly meet their diverse needs.

Discount Brokerage Tweets of the Week

This week’s tweets feature a mixture of highs and lows. For DIY investors, the word of the week was ‘frozen’ (trading apps that is) and unlike Elsa and Anna, they did not let it go. Mentioned this week are BMO InvestorLine, CIBC Investor’s Edge, Questrade, Scotia iTrade, TD Direct Investing and Virtual Brokers.

From the Forums

Trading out of the money

As any investor knows, it takes money to make money. Of course, nobody specified exactly whose money it has to take in order to make that next return. In this post from RedFlagDeals’ investing forum, it was interesting to note one DIY investor’s experience trying to trade an RBC Direct Investing account without funds in the source account.

Staying in-formed

Paperwork (and lots of it) is usually synonymous with DIY investing. Of course for anyone trading with US securities this only becomes even more of a challenge. In this post, one user with multiple brokerage accounts at several big brokerages has the onerous task of keeping the regulatory powers that be apprised of their financial and citizenship status.

Into the Close

That’s a wrap for this week’s roundup. Best of luck hunting great deals as cyber Monday promises another day of marketing madness and some great bargains. Of course, one savvy retail experiment shows that even if you promise nothing, people are still willing to pay.

Posted on November 20, 2015 by user — Leave a comment

Discount Brokerage Weekly Roundup – November 20, 2015

November is quickly drawing to a close. For many that means its Grey Cup season, and for those south of the border, Thanksgiving and yes, deals galore for Black Friday. While all three may be full contact endeavours, they all seem somewhat tame compared to the upcoming jockeying for title of best Canadian discount brokerage which is soon to be released by the Globe and Mail.

In this week’s roundup we take a look Canadian brokerages pulling out all the stops heading into the release of the brokerage rankings. Starting first with the latest promotion being offered by one brokerage who seems to have a reason to smile come November. Next, we take a deep dive into the latest round of website upgrades by two very different Canadian brokerages and look at what insights judging a book by its cover can actually provide. As usual we’ll take a look at the discount brokerage tweets of the week and cap-off the roundup with a look at the upcoming investor education events and interesting chatter from DIY investors in the forums.

Globe Trotting

November has typically been a good month for Qtrade Investor. For the better part of the past 8 years, Rob Carrick’s rankings of Canadian online brokerages has featured Qtrade Investor as the top or among the top of the Canadian online brokerage providers.

This November, Qtrade Investor seems to be giving new clients a chance to smile, courtesy of the Globe and Mail, as the two have teamed up for a promotion. Launched earlier this month, Qtrade Investor is offering new clients 6 months of free access to Globe Investor (valued at $23.99 per month or $143.94 for the duration of the promotional period).

There are, naturally, a few terms and conditions. Of note is that this offer is available to the first 350 individuals who sign up for a new Qtrade Investor account or until the deadline of November 30^th. For full details on this offer, check out their terms and conditions here.

Needless to say, with the next round of discount brokerage rankings expected out shortly, there might be a few more readers of the Globe and Mail seeing familiar names near the top.

Out with the old

As we’ve mentioned several times already this year, 2015 is definitely the year of the website upgrade for Canadian discount brokerages. With November being an award heavy month (most notably the Globe and Mail’s discount brokerage rankings) it seems no coincidence that there was a bit of a sprint on the part of two brokerages to also launch their newest websites before the month was over.

Both Virtual Brokers and TD Direct Investing launched upgrades to their websites, and, even though they are two very different brokerages, they are competing fiercely for clients and to be seen as relevant to the DIY investors of today and tomorrow.

While the changes associated with each new website could fill an article unto themselves, the visual choices each firm has elected to go with provide an interesting angle on the battle to look (and therefore to be judged as being) relevant.

Form follows function

Interestingly, the lesson from the slew of design changes in 2015 has shown that while cosmetic changes are needed, functionality and authenticity are components that clients use to judge the value of a particular brand. Things still have to work otherwise DIY investors will go elsewhere and complain very publicly on their way out– any reading of the weekly roundup of discount brokerage Twitter feeds has made that abundantly clear (especially this week).

Now that commission pricing has become less of a distinguishing factor for most brokerages, DIY investors are naturally going to be left which asking more about other features brokerages have to offer. Of course, with so many brokerages having such similar offerings, ultimately the decisions about which brokerage is best are likely to be swayed by emotion rather than bells and whistles. The question when it comes to these sites and brokerages as brands is who you would feel comfortable having a conversation with; who can you relate to? who would you trust?

In that light, it is entirely understandable that brokerages who want to relate their clients would start to sound and look like their clients. That shift is clearly seen in the images on financial websites. Gone is the stock imagery of people in offices with desks filled with scattered paper and calculators. Replacing them are the button down collars, plaid shirts and the new stock imagery of more everyday looking people in their homes or in a coffee shop on their smart devices.

Net worth vs. a picture’s worth

Looking at the imagery of TD Direct Investing’s website, for example, while they do rely on the familiar images of people with their technology, they have the image of the young woman with the tattoo and the baby that seems to be uncharacteristic for a “big bank”. In fact there is an interesting and diverse mix of people on the TD Direct Investing website page that subtly seems contemporary. There are no big animations, sliders or moving parts. Just clear and simple messaging.

In contrast, is the new Virtual Brokers website. It’s bold, it’s animated and the new site is responsive meaning that it should play nicely with devices from desktops to tablets to smartphones. There’s a lot going on and while it’s definitely a more contemporary website, the usability of the menu and navigation have taken a hit.

What really stands out as different on the new Virtual Brokers site, however, is the imagery on the homepage compared to that of TD Direct Investing. VB’s homepage imagery seem somewhat less reflective of the new ‘normal’ and thus less authentic. To add to their challenges, there still a number of bugs in the new website which will require ironing out (such as the language of the site changing as one navigates via the sitemap).

Fortunately for VB, these are easily remedied and the inner pages of the website look and feel new, improved and much more like the contemporary design VB was intending to put forward. That said, leaving those small but significant details unattended for too long erodes the trust and confidence they need to compete in the financial services space.

Robots are better at being human

Ironically, it is the robo-advisor websites who have put on a more authentic, creative and even human presentation. Wealthsimple’s website, for example, has pictures of people living everyday life and stories of young people coming of age while trying to figure out their financial future. Unlike many of the brokerage websites, the robo-advisors have stuck with the “less is more” philosophy which is in line with having a product that is supposed to be simpler than DIY investing. It’s undoubtedly authentic.

In the end, Canadian online brokerages of all sizes are recognizing that the people reading and interacting with their websites and platforms are also consuming digital information in much more interesting ways. It’s only a matter of time before the brokerage website change cycle has to increase to keep pace with contemporary designs that consumers use as the benchmark of what it means to be innovative. What the online brokerages may not be realizing as quickly as their robo-advisor competitors are is that DIY investors are people first and investors second and the best way to appeal to people is by being authentic and interesting.

Discount Brokerage Tweets of the Week

While ‘Spectre’ is still in theatres and making the James Bond franchise money weekend after weekend, the very real specter of technological glitches are wreaking havoc on online brokerages. This week’s tweets show that the writing’s on the digital wall for brokerages who can’t keep ahead of new technology.

Event Horizon

It’s an exciting week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to options enthusiasts. An estate planning primer rounds out this week’s selection.

November 24

TD Direct Investing – Introduction to Investing in Options

November 25

TD Direct Investing – Estate Planning

Scotia iTRADE – Trading Options Actively with Sarah Potter

From the Forums

Makeover Madness

In this post from RedFlagDeals’ investing forum, users react to the rollout of the new Virtual Brokers website. While mostly positive and in favour of the update, there’s still work that seems like it needs to be done.

Time flies when you’re having funds

For active traders and even occasional investors, having timely information about market pricing of particular equities or options is essential to make wise trading decisions. In this post also from RedFlagDeals, a user asks which brokerages offer real-time quotes to clients as a standard feature.

Into the Close

That’s it for this week’s roundup. While most people are dreading the frost this weekend, here’s one company that is quite happy they found this chunk of ice. Congrats to those who were fortunate enough to share in the diamond windfall!

Posted on November 13, 2015 by Ken Yeung — Leave a comment

Discount Brokerage Weekly Roundup – November 13, 2015

Fans of Star Wars have probably already seen the trailer to the next episode, The Force Awakens, as the movie is set to be released before Christmas. Undoubtedly one of the most successful movie franchises ever, Disney shareholders are hoping the sci-fi series can also awaken their quarterly earnings well into the future. Interestingly, it seems that Canadian discount brokerages are also banking on robots helping to boost earnings.

In this week’s roundup we take a closer look at the latest move by one of Canada’s largest online brokerage into the ‘robo-advisor’ space and how it is quickly becoming a ‘battle of the bots’. Next, we’ll highlight some end-of-year milestone dates DIY investors may want to consider to take advantage of some of their portfolio misses. From there we’ll jump into hyperspace through the discount brokerage tweets before easing into investor education events, investor forum chatter and land this ship safely on the close.

Invest Like a … Robot?

In popular culture, there have been positive depictions of robots and artificial intelligence, such as in Star Wars and Star Trek, and there have been the not-so-positive — even apocalyptic — machine scenarios of The Terminator, The Matrix, and the revised Battlestar Galactica saga. In our current world, we’re not on the verge of the machines taking over — yet — but robots, or programmed machinery, have had increasing roles in our society. The Canadian investor space is on the verge of bursting out with its own version of robot functionality.

As we reported earlier this year, the U.S. has already plunged head-first into the world of robo-advisors (portfolio suggestions offered by automated algorithms usually at lower cost than human advisors) with Charles Schwab having attracted billions of dollars in new business as a result of launching its robo-advisor service, Schwab Intelligent Portfolios, which adds to the existing mix of dozens of other robo-advisor services south of the border.

Here in Canada, the robo-advisor space is starting to get crowded, too.

As reported by numerous sources, BMO InvestorLine will be entering the space in 2016 with its new robo-advisor offering, which will add to a number of existing players, including Questrade’s Portfolio IQ, which has already been on the market for some time.

While Virtual Brokers has had an arrangement with independent robo-advisors WealthBar and Wealthsimple, it is signalling a more formal entry of its own into the space. Nest Wealth and ShareOwner are examples of other independent players in the field. According to Motley Fool, there are about 10 robo-advisor services currently in Canada, but BMO’s entry would mark the first foray by a major Canadian financial institution.

So, what does this all potentially mean for Canadian investors?

According to the Financial Post’s Jonathan Chevreau, BMO’s entry would lend a kind of credibility to robo-advisors that the banks gave mutual funds a few years back. Chevreau also reports that independent robo-advisors Wealthsimple and Nest Wealth are excited about the news of BMO’s entry into the field. In the end, robo-advisors provide more choice to investors, especially to a tech-savvy millennial generation looking for low-cost investing alternatives.

So, while the machines aren’t taking over Canadian investing, robotic advisors are set to become a formidable force in the market.

When Losses Are Gains

As the saying goes, there are two unavoidable facts of life: death, and taxes. Unfortunately, not even stocks can avoid that same fate. When a stock (or investment) tanks, however, the news isn’t all bad.

While governments tend not to provide investors with ways to minimize paying some taxes, they do recognize that there is a symmetrical relationship to risk and reward that keeps an economy healthy. Investors need to be compensated for taking a risk and one of the mechanisms the Canadian tax structure has in place to do that is to claim capital losses against capital gains. For DIY investors, that means its time to consider “tax loss selling” as a strategy to optimize their portfolio performance.

If there’s one thing to be said about 2015, it’s that there seems to be plenty of opportunity to use tax loss selling. On all Canadian indices, stocks that were lower after a 52-week period outnumbered those that were higher by 31 percent. For the same 52-week period, the S&P/TSX Composite Index fell by more than 10 percent.

As tempting as it might be to simply dump some of these poorer performing stocks at the last possible moment (while also waiting/hoping for a miraculous turnaround) in order to benefit from tax loss selling, as with all shrewd investing tactics, there needs to be a strategy, as well as a knowledge of the rules.

First, there’s the deadline. Investors who sell their losing stocks on December 31st (the last day of the calendar year) will be out of luck since it takes three business days for a trade to settle, and both Christmas and Boxing Day are statutory holidays. That makes Dec. 24th as the last day investors can actually sell a stock for 2015 tax purposes.

In addition, the government does not grant tax loss selling benefits when a sale results in what’s called a superficial loss. According to the Canada Revenue Agency, this essentially happens when the same asset is purchased, or there’s still a right to purchase, by you or an affiliate within 30 days before or after the sale, or you or an affiliate still own, or have a right to buy that asset, 30 days after its sale.

To still benefit from tax loss selling, and also maintain exposure within a certain sector, such as mining, there are a number of tips and strategies. One option, for example, is to sell one stock and buy another in the same sector: mining. Since it’s not the same asset, it’s not a superficial loss, and still allows you to maintain your desired portfolio diversification/exposure. Using different ETFs that have close compositions is also another way to do this. Whatever the case, be sure to get a head start on identifying which stocks will make it into your portfolio for the start of 2016.

Discount Brokerage Tweets of the Week

Scotia iTrade’s mobile app got an improvement, but it wasn’t all positive as one user was unable to access the new app through their Android device. By using Twitter the user was able to get a quick response and the bug was solved a few days later. This week’s discount brokerage tweets showcase customers using Twitter to provide feedback and complaints directly to brokerages for responses. Making the roundup this week are Scotia iTrade, Questrade, and TD Direct Investing.

Event Horizon

It’s an intriguing week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to both technical analysis and options enthusiasts alike. An introduction to tax-loss harvesting rounds out this week’s selection.

November 16

Scotia iTRADE – Tax Loss Harvesting with BMO Global Asset Management

November 17

TD Direct Investing – Advanced Options

Scotia iTRADE – How and When to Use the MACD with Pro Market Advisors

November 18

Scotia iTRADE – Options Strategies for Beginners with Montreal Exchange

NBDB – Tools and Technical Analysis with Michel Carignan – [Fr]

November 20

Scotia iTRADE – Charts & Patterns 101 with AJ Monte

From the Forums

From Index funds to ETFs

Every week it’s easy to find a discussion about low cost index funds or ETFs. In this post from the RedFlagDeals investing thread, a user asks for advice on when to switch from index funds to ETFs. The discussion touches on the optimal amount of money to invest in index funds followed by when and how to switch your investment to ETFs.

Index funds through Scotia iTrade?

Investors not investing with TD Direct Investing are looking for alternatives to the popular TD E-series index funds that are available at other Canadian discount brokerages. For those of you curious about what Scotia iTrade has to offer in terms of something similar, this thread on the RedFlagDeals investing thread asks the question.

Into the Close

Since today is Friday the 13th, we hope your superstitions don’t get the better of you. While it may seem like an unlucky day for the major US markets, savvy investors know that money is made on the way up AND on the way down. Whether you’re doing some portfolio pruning this weekend or content to leave it to the robots, we hope you have a great weekend! Of course, with Black Friday just around the corner, it may be more fun to look for places to spend your hard earned gains.

Posted on November 6, 2015 by Ken Yeung — Leave a comment

Discount Brokerage Weekly Roundup – November 6, 2015

Some people don’t even refer to this month as November anymore. “Movember” – the trendy moustache-growing period of the year, has now overtaken the second last month of the year all with the aim at raising men’s health awareness, of course, and having a little fun. As many traders and online brokerage providers know, however, the trend is your friend until it ends.

In this week’s roundup we take a look at the evolving trends in the deals and promotions circuit, with some interesting changes to the deals mix that took place at the start of the month. Next, even though many razors will be on hiatus for November, there is one that seems to apply to Canada’s largest brokerage in their bid to pull ahead of their brokerage peers. In keeping with the roundup tradition, we’ll close out with a look at the tweets from the past week as well as investor education events and some interesting chatter from the Canadian investor forums.

Let’s Make a Deal

It’s a new month and with it comes updates on the status of promotional deals being offered by Canadian discount brokerages, as well as a look at monthly trading activity stats from Interactive Brokers in the US.

Starting first with the deals, Questrade once again leads the online brokerage pack with almost half of the 15 current promotions or deals coming from the alone. Leading the news on the promotional front, Questrade is once again offering an iPad mini 2 for anyone opening an online account by Dec. 31 and funding it with a minimum of $100,000.

Questrade is also still offering contest entrants a chance to win $5,000 towards a professionally-managed RESP, offer ending Jan. 31, 2016, as well as a $50 Amazon.ca gift card for opening a new online account, with at least $5,000 in funding, between Nov. 9 and Dec. 31. Another new Questrade contest involves a chance to win a $5,000 portfolio with Portfolio IQ. This contest opened Oct. 31 and ends on Jan. 31.

BMO InvestorLine is looking to ring in the New Year resolutely with a promotional offer. Anyone opening an account by Jan. 6, with a minimum of $100,000 in assets, is eligible to receive $200 cash back, and 20 trades that are good for use for up to a year. This offer started on Nov. 2. Unfortunately, their youth-oriented offer didn’t fare as well. It expired at then end of October after a very long run through 2015.

Desjardins Online Brokerage is also busy on the promotional side of things with a unique offering of its own. Current and new clients are getting a combined $1,646 discount to enroll in the Power of Options Educational Course from Trade Global. The $995 course is available for $99 under the promotion, and enrollees also get three months access to optionsource.net, a stocks and options advisory service normally priced at $750 for the three months.

On the trade activity front, U.S.-based Interactive Brokers has released its monthly report for electronic brokerage activity. Of note, there were 655,000 daily average revenue trades (DARTs) in October, which is a one-percent drop from September, and a 4-percent drop from last October. Average commission per cleared client order was at $3.70 for the month, which includes exchange, clearing and regulatory fees.

On the Razor’s Edge

Everyone’s heard the expression: simplicity is a virtue, but not everyone’s heard of Occam’s razor, which is a philosophical principle dating back to the 12th century that selects alternatives based on simplicity. So, if you take Occam’s razor to a set of competing options, the simplest one wins.

Translating this principle into practice for online brokerages, however, has not been so simple. Trading platforms for DIY investors have been notoriously challenging to use – either with too many features, which makes them challenging to learn or too few, which inevitably limit the usability for many types of investors. This year, however, there has been a clear focus on improving usability and simplifying the interface investors use to manage their investments and trade online.

TD Direct Investing is the latest brokerage to upgrade their platform with their new TD WebBroker investor platform. The discount brokerage is touting the greater simplicity of the new online design. A primary feature of this new simplified layout is the navigation menu at the top left of the screen. It contains three links that are always readily available — Accounts, Research, and Trading — all with extensive sub-menus viewable with a click, as well as an easy-access Quick Links toolbar menu to the right.

The new WebBroker homepage layout can be personalized, and includes a summary of a client’s accounts, market and real-data updates — available before, during and after trading hours. If you’ve become accustomed to Microsoft Windows’ tile layout, WebBroker provides a similar nifty feature by placing a client’s accounts in tiles that can be scrolled horizontally and selected with a simple click.

In fact, if there’s one thing that stands out with the new homepage layout, it’s just how many features are available on the same page. Scroll down, and a big “Go to Balances” button takes a user to a detailed view of real-time balances for all accounts. Scroll down even further, and an impressive Top Movers section provides an easy-to-see layout of holdings that are experiencing the greatest market value change for the day.

So, if there are a couple of things that stand out with this new layout, it’s that it’s visually more appealing and accessible than the old format, with more features readily available in one location. The new WebBroker also appears to be simpler: streamline navigation, easier access and customizable features.

Discount Brokerage Tweets of the Week

This week’s discount brokerage tweets showcase customers using Twitter to look for answers from brokerages and receive relatively prompt responses. Making the roundup this week are BMO Investorline, Scotia iTrade, Questrade, and TD Direct Investing.

Event Horizon

It’s a busy week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to those who are new to investing, intrigued by technical analysis, and options enthusiasts. An ETF portfolio primer rounds out this week’s selection.

November 9

Scotia iTRADE – Active Investing Strategies with Independent Investor Institute

November 10

TD Direct Investing – Options Fundamentals

Scotia iTRADE – ETF Model Portfolios with Horizons ETF

November 12

TD Direct Investing – Introduction to Investing

Scotia iTRADE – Price Volume Divergence with AJ Monte

From the Forums

Make the switch

There are a growing number of reasons for individuals to move their money from one institution to another. It’s easier than ever to switch your discount brokerage due to the number of promotions for opening accounts and paying transfer fees, you can check them out here. In this post from the Canadian Money Forum, a user is looking to see what benefits or promotions they can get when they move their portfolio to RBC Direct Investing. Another individual asks for an exit strategy for their Tangerine TFSA invested funds in this thread from the RedFlagDeals investing forum.

ETFs coming to TD

For those of you interested in trading ETFs, TD Direct Investing has joined the party. In this post from the RedFlagDeals investing thread, a user informs the community about TD’s plans to offer ETFs in 2016. It’s going to be a great new year for ETF investors!

Into the Close

The theme of the week appears to be change with a new brokerage platform as well as new deals and promotions to accompany a news cycle that included a surprising change in Blue Jays management, a new World Series champion Kansas City Royals, and fresh faces in a federal cabinet yet to be tested with its new duties. It looks like 2015 may have a few more surprises after all.

Posted on October 30, 2015 by Ken Yeung — Leave a comment

Discount Brokerage Weekly Roundup – October 30, 2015

Much of Canada is currently experiencing the effects of fall weather: falling leaves, lowering temperatures, and Toronto Maple Leaf’s fans thinking about a Stanley Cup run. As many of Canada’s discount brokerages know, however, while hope may be a good thing, hedging your bets is a necessity.

In this week’s roundup, we’ll take a look at how some of Canada’s largest online brokerages are hedging their bets when it comes providing more features to DIY investors. Of course, deals and promotions are a great way to hedge against the falling commission prices which is what we look at, followed by an eventful week on Twitter. We cap off the roundup with some exciting investor education events and interesting investor forum chatter.

Lending an Invisible Hand

If nothing else, DIY traders believe in capitalism: a market-based system in which companies are rewarded for being more competitive. At this point, the market for DIY investors reads somewhat like a textbook case in competition. With pricing now less of a differentiating factor, the real fun begins with discount brokerages having to get creative to figure out (or finally listen to) what investors want. This week, we take a look at what two bank-owned discount brokerages in particular are doing right now to capture your attention, and ultimately your business.

First, earlier this month, BMO InvestorLine announced a new feature that can benefit the DIY trader, especially during tax season. Specifically, the brokerage has replaced its Activity Report with an enhanced Realized Gain and Loss Report that provides a detailed and customized transaction history and portfolio performance report. Among other things, this new feature will allow InvestorLine clients to export transactions to CSV spreadsheet format, resulting in a much simpler calculation of capital gains and losses when filing returns to the Canada Revenue Agency.

Our second look this week at new features from a discount brokerage also involves simpler calculations from trading activity. That’s what Scotia iTrade aims to achieve for its clients with its added ‘Income Details’ tab on the brokerage’s online platform. With this feature, users can instantaneously access and calculate historical and projected income from equities, ETFs and fixed income securities. Details of any interest paid on cash in an account is also accessible in this new platform.

The competition to provide DIY traders with increasingly enhanced features appears to be proceeding quite nicely, thank you very much, and the beneficiary should be prospective brokerage clients looking for value, and a competitive edge. After all, that’s what capitalism should be all about, isn’t it?

All Good Things Come to …

The fall season represents a transition from the fullness of summer, when life and energy are often at their peak, to the uncompromising cold of winter, where both animal and plant life often slumber until the rise of spring. Of course, for online brokerages, it’s a catch-22. When the weather is good, investors typically don’t want to hunker down and watch the markets – they’d rather be on vacation. With the return of activity of the markets, there’s a scramble to keep up with interest and to get the attention of DIY investors.

While some brokerages are able to selectively put on promotions during the year, others have to (or choose to) offer incentives year-round.

Not surprisingly, old habits are hard to die for Questrade as it leads October with a whopping six promotional offers active during the month. Only two are set to expire at the end of October: the prepaid Visa promo, and the $250 cash back program. BMO InvestorLine is next in line, forgive the pun, with three promotional offers for the month. Sadly, all three are set to expire with the leaves of autumn: youth promotion phase 2, refer a friend, and the 20 free trades with $200 cash back deal. Virtual Brokers is also slated to have one of their student promotions expire.

Of course, there’s nothing to prevent these offers from being extended. In total, and by our count, Canada’s discount brokerages had 17 active advertised promotional deals during October, with only six set to expire by the end of the month.

Luckily for DIY investors, we here at Sparx Trading keep a pulse on who’s doing what with respect to promotions at the discount brokerages, and what’s exactly falling by the wayside as we head into a new month. Be on the lookout as next week as the deals roster is set to change, perhaps quite substantially, as we head into the final stretch of 2015.

Discount Brokerage Tweets of the Week

Technology strikes again. This week’s tweets showcase the hiccups and the completely unexpected events that make DIY investing online a wild ride. Making the roundup this week are CIBC Investor’s Edge, Scotia iTrade, Questrade, Virtual Brokers and TD Direct Investing.

Event Horizon

Fear not, there’s no tricks, just treats in the week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to those who are new to investing, curious about trading strategies, and options enthusiasts. Margin accounts, and a national investment conference rounds out this week’s spooktacular selection.

October 31

Desjardins Online Brokerage (Disnat) – The World Money Show (participating)

November 3

Scotia iTRADE – Stocks Search Selection Strategy with Pro Market Advisors

NBDB – Trading Plan and Investment Strategy for Mid and Short Term Traders – [Fr]

November 4

TD Direct Investing – Understanding Margin & Short Selling

Desjardins Online Brokerage (Disnat) – Protect Your Portfolio Using Options – Preview

From the Forums

It’s not only about price

Competitive forces have leveled the playing field among discount brokerages. In this post from the RedFlagDeals investing thread, people compare the pros and cons between Scotia iTrade and Questrade. We’ve seen big banks decrease their commission rates which results in clients comparing more than just price.

For the passive investor

For those of you that aren’t looking to become active traders and still want to be involved with DIY investing, a great option is passive trading. In this post from the Financial Wisdom Forum a user posts about their lack of interest with active investing. The thread discusses the options for DIY investors that would like to take a more passive approach to investing.

Into the Close

So that’s it for this week’s roundup. Regardless of whether you’re looking for treats from the market, your discount brokerage or simply the candy bar variety, have a happy Halloween!

Posted on October 23, 2015 by Ken Yeung — Leave a comment

Discount Brokerage Weekly Roundup – October 23, 2015

Landslide elections, time machines, and Drake’s infamous victory dances (we think) – this has been a marathon week for peering into the future. While they may not have legendary locks of hair, a hoverboard or some rather original dance moves, Canadian discount brokerages are constantly thinking about and trying to keep up with the future of DIY investing.

In this edition of the roundup we take a look at the interesting moves by one online brokerage South of the border that tip their hand at what’s around the corner for the active traders/investors. Next, a short lesson in volatility that all DIY investors who trade on margin should keep in mind. On the topic of lessons we 1000 tweets deep into personal finance tips from this past weekend from some of Canada’s leading voices on personal finance to see what emerged from the ether. We cap off the roundup with some exciting upcoming investor education events, insightful tweets of the week, forum posts and some dance moves you probably won’t be able to unsee but might be able to relate to after this week.

Earnings Hotline Bling

Earnings season is back once again and this go around there was an interesting reveal made by the US-based Interactive Brokers on their Q3 2015 earnings conference call. As we mentioned in last week’s roundup, Interactive Brokers published a communique highlighting their investor marketplace’s progress but also the launch of their newest practice account feature.

This past week, the founder and CEO of Interactive Brokers, Thomas Peterffy, provided more context around this feature and what it means for his company. There were several interesting tidbits of information within that call.

First, the practice accounts. Peterffy revealed that “about 35% of new account applicants actually completed their applications and funded their accounts” however now that applicants will get immediate access to all of Interactive Brokers’ trading tools, Peterffy believes that a greater percentage of individuals will actually want to follow through on signing up. What was particularly interesting is that users can sign up for a practice account with full access to all the trading tools that they can keep using with delayed data indefinitely.

Second, their target clients are. Interactive Brokers’ platform, marketing and product experience are not geared towards every kind of investor. By their own admission they are more interested in and cater to the active traders – individuals who trade on average “about 500 times a year”. In contrast, the larger bank-owned brokerages who are typically the choice of less active investors often struggle to provide a robust platform and competitive pricing for active traders. In short, IB is a product being built for and marketed to active traders. This was particularly important in the context of platform stability in which Interactive Brokers was able to weather the storm of market outages that hit other bigger platforms, such as Ameritrade and Schwab in August. The reason, according to Peterffy was a lack of bandwidth.

Finally, it’s hard to make money, even as a market maker. This was particularly fascinating as an investor to see that major exchanges reserve the right to cancel trades. For market makers, a business arm of IB, having no visibility or certainty in times of heightened volatility means that they and others like them are not eager to jump into a position because of the risk a trade they take may get cancelled.

There were more interesting nuggets in the call especially for those interested in learning about how Interactive Brokers’ business model and approach.

A Short Lesson

One of the biggest news stories for investors and traders alike this week has been the volatility hitting Valeant Pharmaceuticals.

While volatility is a double edged sword in terms of risk and reward, for those looking to chase the storm for some short term gain, there was a very instructive lesson dealt by Questrade in terms of margin requirements being raised.

Covering their own assets by changing margin requirements is not unique to Questrade. In fact, in the conference call with Interactive Brokers referenced above, one question appeared to focus on an investor who noticed margin requirements were suddenly raised across the board – much to the surprise of the company CEO. This past week, however, clients of Questrade took notice of the drastic change from 30% to 50% margin requirement.

For individuals who run afoul of margin requirements, brokerages typically reserve the right to ‘derisk’ the position either by liquidating the offside position or requiring the account holder to bring the margin requirement up to the minimum acceptable threshold.

Interestingly, by raising margin requirements, it makes it more likely that individuals will have to sell/liquidate in order to satisfy their lenders risk comfort level. As a result, more traders are selling into the falling price and create a lower price forcing more investors to either shore up margin or liquidate. And so the death spiral goes until the buyers step in or the short sellers start to cover (of course if an exchange can cancel trades, market makers are not going to want to step in and start buying).

Another interesting consequence of ending up in a margin call is that certain deals and promotions, especially the cash-back promotions, may get invalidated. In the fine print of many of these offers, accounts must be kept in “good standing” which can mean that an account not be subject to a margin call during the promotional qualification period.

Storm chasing always attracts those with a penchant for danger, however there are risks that can creep up all through the transaction pathway that DIY traders should be aware of.

1000 Tweets on Canadian Personal Finance

The 2015 edition of the Canadian Personal Finance Conference or #CPFC15 was held last weekend in Toronto. Organized by CPFC co-founder Krystal Yee and RateHub.ca’s Kerri-Lynn McAllister, this two day event featured lots of great personal finance tips and gems passed along by many of Canada’s most influential and passionate personal finance writers.

One of the great side benefits of having so many social media savvy writers in one room is the sheer volume of information they can collectively generate. While yours truly did not attend in person, there were a large number of like-minded Twitter stalkers watchers also in attendance.

Naturally the question arose as to what could be gleaned from a room full of personal finance writers and speakers by reading their Twitter posts.

The answer is: lots.

After sorting through and removing the spammy messages that appeared because the hashtag #CPFC15 managed to get itself trending across Canada (apparently thanks in large part to Jonathan Chevreau and Capital One Financial), what remained was an interesting cross section of personal finance topics covered from borrowing to investing.

Below are 1000 tweets collected from this year’s #CPFC15 (minus the spam) that show a bit of the ramp up, the conference itself as well as some of the reactions post conference.

While it is nearly impossible to sum up that many tweets and topics into a “Top 10” list, here are 3 interesting observations related to the DIY investing and discount brokerage space:

First, Questrade was the only Canadian discount brokerage who was actively tweeting from that conference. Keep in mind that this event brought together some of the most influential voices in the Canadian social media and personal finance blogger/writer community – including those who comment on investing. Questrade also took that opportunity to promote their affiliate program (full disclosure SparxTrading is also a participant of that program) to the community of personal finance writers which also raised a few eyebrows in the room, most notably from Jonathan Chevreau.

Second, Robo-advisors are gaining in popularity and resonate with younger investors. The real nugget was that apparently BMO is finally moving into this space after many months of trying to understand the landscape and opportunity.

More broadly, the impact of financial technology or fintech is starting to become a real challenge to the traditional model of banking and wealth management. Now there are robot money managers, branchless banks and peer to peer lending platforms encroaching on the traditional financial services sectors. That’s not news per se but the storm is real and it’s coming.

Finally, DIY investing isn’t so easy according the Canadian Couch Potato Dan Bortolotti. While the ‘discount’ in discount brokerage is appealing, there is a lot that investors take on by trying to sort through the news and noise of the markets, let alone the emotional ups and downs that accompany investing.

Overall, it was great to see the cross section of professional journalists and personal finance bloggers sharing ideas and inspiration on how best to bring the message of better financial literacy and practice to a wider audience. Happy reading!

Event Horizon

Time to bundle up and hunker down, it’s a busy week ahead for discount brokerage-sponsored investor education events. Below are some upcoming sessions that may be of interest to those who are new to investing, options enthusiasts, and those interested in technical analysis. Risk management, trading strategies, a networking opportunity, and a national investment conference round out this week’s selection. Also on the docket, the Tastytrade special event in Toronto this Monday. Here is a recap of the co-founders on a previous edition of Money Talk on BNN.

October 24

TD Direct Investing – Introduction to Investing in Options

October 26

TD Direct Investing – Stock Talk

October 27

NBDB – Introduction to Technical Analysis – Moving Averages – [Fr]

Scotia iTRADE – Concepts in Technical Analysis with Recognia

NBDB – Portfolio Management Using Momentum Strategies – [Fr]

October 28

Credential Direct – Understanding Economic and Market Trends with Fidelity

Scotia iTRADE – Options as an Income Strategy Using Puts with Montreal Exchange

October 29

NBDB – Introduction to Technical Analysis – Oscillators – [Fr]

TD Direct Investing – Introduction to Investing in Options

October 30

Desjardins Online Brokerage (Disnat) – The World Money Show

Tweets of the Week

There was lots of interest in Questrade this week as they were the only online brokerage at this year’s CPFC. It was a surprisingly quiet week for certain brokerages. TD Direct Investing continue to make waves on social media. Also surfacing this week was Credential Direct in the promo for their upcoming webinar.

From the Forums

DIY another day?

Investors are becoming more informed about how to invest their money but does this knowledge justify going it alone? In this post from the RedFlagDeals investing thread, a user asks the question about whether to manage investment funds themselves or to use a financial adviser and pay higher fees. The debate continues.

Saving commissions on ETFs

The ability to save on commission fees while purchasing ETFs is influencing some DIY investors to switch from their current discount brokerage to others. For users who want to make frequent purchases of ETFs, paying a commission each time they buy isn’t cutting it. In this post from the reddit Personal Finance Canada subreddit, one user pitches the idea of switching from TD to Questrade to avoid paying commissions on purchasing ETFs. Also check out another thread from Reddit’s personal finance Canada section where an individual with $20,000 recently opened a Questrade account and is asking for advice on how to invest in ETFs.

Into the Close

Congratulations on making it through a marathon edition of the roundup. Whether you’re celebrating or commiserating the marathon season for the Blue Jays, or portfolio hits and misses from the week, here are some fun, but headscratching, dance moves to inspire DIY investors in those squirmy market moments. Have a great weekend!

Posted on October 16, 2015 by user — Leave a comment

Discount Brokerage Weekly Roundup – October 16, 2015

It’s rally time. Midway through October, baseball, bats and Blue Jays are top of mind in this post-Thanksgiving trading week. While there’s lots more than baseball that the personal finance enthusiasts are talking about this week, we’ll pitch the idea of a baseball themed roundup, tossed bats and all.

In this edition of the roundup, we’ll recap the field of dreams approach that several discount brokerages are hoping will give them an edge in the race to be crowned best online brokerage. Next we provide a virtual highlight reel of personal finance and investing education conversations happening this weekend and throughout the month. Also on deck will be our discount brokerage tweets of the week, upcoming investor education events and batting cleanup will be the forum chatter from the Canadian investor forums.

‘if you build it they will come’

This past week Interactive Brokers provided an update via their latest ‘Communique’ that revealed just how much interest there has been with their ‘investor marketplace’ initiative as well as revealing more details about their practice trading platforms.

Earlier this year, Interactive Brokers launched an interesting initiative to bring together a community of providers of investing related products and services under the umbrella of their investor ‘marketplace’.

Since the launch in June, they have attracted:

386 investment service providers
155 research providers
308 technology providers
89 administrative service providers and
15 business development providers

This initiative was a bold one to undertake but so far it looks to be paying off and interest appears to be growing.

The strategy to offer up value added services without actually taking on the overhead of hiring staff means that Interactive Brokers has found an interesting way to compete against the armies of staff that larger (and typically bank-owned) brokerages offer but at a fraction of the cost.

It’s not quite a grand slam, but it does give Interactive Brokers a chance to score big points with lots of their key stakeholders.

Interactive Brokers isn’t the only brokerage looking to build new features to attract interest from investors. Questrade, TD Direct Investing and Desjardins Online Brokerage are all working on new platforms to be rolled out in the near future and another popular brokerage (who shall remain unnamed) is gearing up to launch a new website in the upcoming weeks.

Clearly there is a big push to improving the product or platform experience in 2015 and brokerages that can’t keep up will, very visibly, be distanced from those firms that can.

Avoiding the Doubletalk

Talking about finance is not something most people typically choose to do with their weekend. Not so for many of Canada’s most popular personal finance writers and enthusiasts.

This weekend, the Canadian Personal Finance Conference is taking place in Toronto and it promises to bring together dozens of voices from across the personal finance landscape to talk about all kinds of acronyms from RRSPs, TFSAs, DRIPs, PiPs and more. To find out what’s getting the personal finance community buzzing, follow along at the hashtag #CPFC15 or better yet, reach out on Twitter as they will have a live feed at the conference.

Tom Drake of the Canadian Finance Blog also put together a great compilation of personal finance tips from some of the experts in attendance. Keynote speakers at the event include popular names such as David Chilton, Dan Bortolotti, Rob Carrick and Ellen Roseman.

Also interesting is the demonstration of some of the newer frontiers of personal finance from robo-advisors to peer-to-peer lending. Questrade will also be on hand for a demo as part of the fintech portion of the conference. Follow along here on Twitter: #CPFC15

Getting more people to open up and engage in discussions about investing is also on the minds of many of the Canadian financial regulatory agencies. As part of their efforts to increase awareness of important topics for investors, they’ve been offering up all kinds of great resources and content relevant to DIY investors for Investor Education Month.

As many regular readers know, we regularly feature the investor education events offered up by Canadian discount brokerages as well as some of their educational partners. Check out the upcoming events for October below or on our investor education calendar of events.

To follow the conversation on investor education, check out the hashtag: #IEM2015

Event Horizon

It’s an interesting week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to those who are new to investing, female investors, options enthusiasts, and those interested in technical analysis. Fixed income and ETFs round out this week’s selection.

October 19

Scotia iTRADE – Simple Options Strategies for Part Time Trading with Sarah Potter

October 20

Scotia iTRADE – Trading Commodity ETFs with Pro Market Advisors

TD Direct Investing – Chart Smart – Reading Candlestick Charts – [Fr]

October 21

TD Direct Investing – Introduction to Fixed Income

Scotia iTRADE – Smart Indexing-Benefiting from Min. Volatility & Fund. Index ETFs with iShares

October 22

TD Direct Investing – Do-It-Yourself Investing for Women

NBDB – Tools and Technical Analysis with Michel Carignan – [Fr]

Discount Brokerage Tweets of the Week

With a shortened trading week and lots of better things to watch on TV, it looks like Canadian DIY investors were busy tweeting about and watching other things. Nonetheless there were a handful of interesting exchanges with the brokerages mentioned this week. Stepping up to the plate were Questrade, Scotia iTrade, TD Direct Investing and Virtual Brokers.

From the Forums

Striking Out Costs

TD’s E-Series funds are a popular choice among self-directed investors looking to invest in low cost index funds. In this post from Reddit’s personal finance Canada section, a user discusses BMO Series D Funds as a possible alternative. For added insight, another thread discusses the differences between BMO InvestorLine and TD Direct Investing as a brokerage here.

ETFs Continue to Rally

The increased availability of commission free ETFs at discount brokerages has piqued the interest of DIY investors. In this thread from the Canadian Money Forum, a user is looking for places to find information about these ETFs.

Into the Close

That’s a wrap on the short week that was. Of course, there’s really nothing better than showing this off again – so here is the highlight reel of that epic home run. Have a great weekend and #GoJaysGo!