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Discount Brokerage Weekly Roundup – October 5, 2020

So, if things seem like they might have gone from bad to worse this past week, with non-stop coverage of the US election chaos, the good news is that the stock market happened to shrug it off. While there’s a lot for everyday people to digest in terms of news flow, thankfully the online brokerage space offers up some good news to tune in to, especially for DIY investors.

In this edition of the Roundup, we check in on the latest deals and promotions activity to kick off October and highlight some early signs that suggest DIY investors are going to see even more offers from Canadian discount brokerages before the end of 2020. Next, we take a closer look at some trading metrics that reveal just how popular September 2020 was for trading, and we fish out some bonus news from Twitter chatter that is going to be very important to the online brokerage space in Canada in 2021. As always, we’ve got chatter from DIY investors on Twitter and the investor forums to close out on.  

Tricks or Treats? October Discount Brokerage Deals Activity Seems Tempting

If there’s anything that 2020 has taught us to be aware of, it’s pending change. The start of a new month is when we take the opportunity to check on the current slate of deals and promotions offered by Canadian discount brokerages to see what’s changed and, more importantly, what DIY investors can look forward to in the weeks ahead.

Despite the many dour social, economic, and political headlines, the stock market has managed to stay remarkably buoyant. 2020 has been an unusual year for investor behaviour online, and likewise for the deals and promotions market. Since March of 2020, there has been a significant contraction in the number of offers and the number of online brokerages coming to market with compelling incentives to win over DIY investors.

At the beginning of this month, however, it looks like deals activity is coming back to life. Although there were no new deals to start the month, the small but encouraging development is that one of the current offers, which was set to expire at the end of this month, has been extended through to the end of November.

National Bank Direct Brokerage, which is currently one of three online brokerages offering a commission-free trade offer, has extended their 100 commission-free trades offer until the end of November. Regular watchers of the online brokerage promotion space recall that a few months ago, the only online brokerage in Canada with an advertised commission-free trade offer was Questrade. Late in the summer, however, HSBC InvestDirect jumped into the deal pool, followed shortly thereafter by National Bank Direct Brokerage.

The early pattern emerging from the restart to activity in the deals and promotions space is that smaller or less popular online brokerages are leading the charge to bring new offers to market. No big-five-bank-owned online brokerage has launched an offer (at the time of publication), but there is a strong likelihood that, over the next 60 to 90 days, things could ramp up dramatically for investor promotions. There is simply too much at stake heading into the rush for RRSP season, and online brokerages don’t want to risk being left behind.

As such, it makes sense that the smaller players will be racing to get their offers out and advertised as soon as possible. When one of the larger brokerages in the space launches an offer, the typical response is that it generates a lot of interest and conversation.

There’s little doubt that the next few months will see a contentious battle for attention among Canadian online brokerages, so every extra bit of exposure helps – especially when it comes to deals and promotions.

Another interesting trend so far in the restart to deals activity is the lack of cash-back offers. There are commission-free trade offers that have come to market – some with expiry dates of up to a year – however, the most popular kind of offer, the cash-back, hasn’t made an appearance. There’s certainly a strong likelihood that this is something that could change heading into the thick of the RRSP season race, but for now, investors interested in cash-back offerings for opening an online trading account will have to rely on referral offers.

Although deals activity is muted by historical standards, data from online brokerages in the US shows the pace of account opening has plateaued, signalling the need to restart promotional offers to keep momentum strong. Also, according to discussions with several online brokerages, there are already plans underway to launch offers in the very near future.

It’s difficult to guess just how extreme the volatility predicted in the stock markets will be over the next several weeks, but it is likely that amateur and professional active traders alike will be looking to take advantage of the uncertainty. With their increased presence and activity fueling the conversation online about trading opportunities and online brokerage experience, and by virtue of the fact that this group of online investors is incredibly highly prized, it seems reasonable to expect that online brokerages will not be waiting on the sidelines for too long before coming into the market with some attractive offerings.

Investors and non-investors alike will be collectively on edge this month. Here’s hoping that in the run-up to the US presidential election, Canadian discount brokerages offer up some positive changes in the form of compelling offers for investors to smile about.   

In Data We Trust: Interactive Brokers’ September Metrics Reveal Heavy Trading

Despite the world having a sense of chaos at the moment, the steady marker of a new month in the form of trading metrics from Interactive Brokers helps to add a little bit of order back into things. This past week, the popular-with-active-investors online broker released their regular trading metrics for the month of September.

One of the great features of Interactive Brokers when it comes to reporting performance is their transparency and disclosure of trading activity stats.

Among the highlights from their most recent month’s trading metrics was that client account growth remains very strong. Interactive Brokers grew the number of accounts they have to 981,000, which is 4% higher than the previous month and 47% higher than the same point last year. By implication, it means that October 2020 is likely the month that Interactive Brokers hits 1 million total accounts. Although the number of accounts pales by comparison to competitor firms (including Robinhood), the number of trades and the revenue per trade at Interactive Brokers is nothing to sneeze at.

Another interesting data point that jumped out from the Interactive Brokers press release on trading metrics was the volume of trading on their IBKR PRO platform. Recall that Interactive Brokers launched a zero-commission platform in late 2019 (IBKR Lite), which ultimately catalyzed other big online brokerages into following suit and triggered an avalanche of consolidation (e.g., Schwab acquired Ameritrade; Morgan Stanley bought E*Trade). The paid-commission version, IBKR PRO, reports its metrics.

In September, Interactive Brokers reported that there were 14.21 million trades placed on the IBKR PRO platform, with 8.12 million being buys and 6.09 million being sell orders. For context, the total number of trades in September was only slightly lower than in March (14.52 million) and June (15.07 million), a signal that September was a very busy month for traders working via the pro platform. Interestingly, even though the total volume was very high compared to the past several months (volume was higher 11.7% m/m), the size of orders in terms of number of shares purchased (2.6B shares) or sold (2.5B shares) was actually at the lowest point since February, a signal that traders are making smaller-sized trades.

The takeaway from these figures is that trading volumes in the US were very strong in September, a pattern that likely was true here in Canada, too. Interestingly, Interactive Brokers doesn’t show many signs of slowing down in terms of account growth. With the prospect of even greater volatility and uncertainty in the lead-up to the election, it appears that will be a catalyst for more account growth at Interactive Brokers but more cautious trading for its clients.  

Interesting Chatter on Twitter

It’s an understatement to say that there’s a lot happening on Twitter these days, much of it dramatic and filled with vitriol. As with anything on social media, however, filtering through the noise can provide some interesting results.

First, this past week Questrade celebrated their 21st anniversary as an online brokerage in Canada. They have had a storied journey but today enjoy the position as one of the most popular online brokers in Canada, through a combination of ultra-competitive pricing, savvy operations, and clever marketing.

Another very big piece of news is that online brokerage Tastyworks telegraphed more information about their plans to launch in Canada and, most importantly, provided some sense of timing and which account types they will be making available (or hope to) at launch. In a tweet from Tastytrade Co-CEO and President Kristi Ross, the plan to come to Canada was confirmed, with the anticipated arrival date pegged at Q1 (which we assume to mean early 2021).

This throws yet another log on the fire for zero-commission trading to become a greater reality as Tastyworks – the online brokerage – offers zero-commission trading in the US for stock trades and ultra-low pricing for options. Whether the pricing will remain similar to the US operations is unclear. However, what is clear is that in addition to Tastyworks potentially coming to market here in Canada, there are some important changes slated for CI Direct Investing and CG Direct (and potentially E*Trade) that will increase the level of competition among brokerages.

With a dynamic US online brokerage setting its sights on Canada, the incumbent online brokerages are going to have to get ready to move faster and with more exciting features in 2021.

Discount Brokerage Tweets of the Week

From the Forums

Take the Bull by the Horns?

DIY investors weigh in on whether or not to hold onto a stock that’s currently on hard times. Some forum users laud this as a once-in-a-lifetime opportunity, while others are less certain in this post.

(Re)New and Old

A Redditor turns to the forums in this post for advice on which renewable-energy ETFs others are investing in.

Into the Close

On the plus side, October is Investor Education Month, and there’s a pretty good chance that investors of all stripes will be subject to some kind of lesson-learning. For all of the perils that misinformation has laid bare, it’s probably wise to check out some of the many investor-education activities planned, starting with this list from the Ontario Securities Commission. Alternatively, there’s always one more thing on the list of things that you never saw coming in 2020: the latest TikTok craze, for 1977’s “Dreams” by Fleetwood Mac.

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Discount Brokerage Deals & Promotions – October 2020

*Update: October 30* October is generally a spooky month for several reasons: The weather is colder, the sky is gloomier, and, of course, there’s Halloween at the end of the month. 

 In true 2020 fashion, October is predicted to unveil some more than a few tricks and even a few treats from Canadian discount brokerages, making it more uncanny than usual. This month, not only will there be a rare Halloween blue moon, but the markets are shaping up to become increasingly volatile as the US presidential election nears. 

As online brokerages brace themselves for what looks to be a bumpy ride, DIY investors who want to brave the impending instability and do some trick-or-treating for investments can scroll on for the most current deals and promotions from various Canadian online discount brokerages.

For those hunting for an online trading account, be sure to check back again during the month. We will continue to monitor and provide updates on new discount brokerage deals, and look forward to a month filled with all kinds of surprises.

Expired Deals

*Update: Oct. 30 – HSBC InvestDirect’s 60-day free online equity and ETF trading promotion has officially ended on October 30th.*

Extended Deals

National Bank Direct Brokerage extended their commission-free trade offer which was launched in the summer. This deal was originally slated to expire on October 30th, but has now been extended until November 30th. See the table below for full details regarding the promotion and eligibility. 

New Deals

No new deals to report at this time.

Discount Brokerage Deals

  1. Cash Back/Free Trade/Product Offer Promotions
  2. Referral Promotions
  3. Transfer Fee Promotions
  4. Contests & Other Offers
  5. Digital Advice + Roboadvisor Promotions
  6. Offers for Young Investors

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
HSBC InvestDirect is offering 60 days of free online equity and ETF trading (up to 60 transactions) for new accounts opened during the promotional period. There is no minimum funding requirement for the accounts; however, the fund must be from outside HSBC InvestDirect. Trading commissions will initally be charged but will then be credited back to the customer’s account within 120 days after the free trading period ends. $0 60 days of free trading 60 days Please refer to the full Terms and Conditions October 30, 2020
New accounts opened between Jun 22 and Nov 30, 2020 will be awarded 100 free online trades in one year. This promotion applies to new and existing NBDB clients who uses the code “FREE2020” to open new accounts.There’s no minimum funding requirement, however some other restrictions may apply. $0 100 Free Trades 1 year Please refer to the full details of the deal. November 30, 2020
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer. For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2020
Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details. $25,000 commission-free trades for 1 month + 1 month of advanced data. 1 month Active Trader Program December 31, 2020

Expired Offers
Last Updated: Sep. 30, 2020 9:20PT

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 B) $10,000 C) $25,000 D) $50,000 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTRADE account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
If you (an existing Qtrade Investor client) refer a new client to Qtrade Investor and they open an account with at least $1,000 the referrer and the referee may both be eligible to receive $25 cash. See terms and conditions for full details. $1,000 $25 cash back (for both referrer and referee) Cash deposited at the end of the month in which referee’s account funded Refer A Friend to Qtrade Investor none
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $5,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $5,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period (subject to conditions). BMO InvestorLine Refer-a-Friend January 5, 2021

Expired Offers
Last Updated: Sep 30, 2020 10:16PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 n/a Transfer Fee Promo none
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $200 in transfer fees. $200 $15,000 Transfer Fee Rebate Details none
Transfer $15,000 or more into a new HSBC InvestDirect account and you may be eligible to have up to $152.55 in transfer fees covered. $152.55 $15,000 Confirmed via email contact with HSBC InvestDirect Rep. Contact client service for more information. none
Transfer $15,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $15,000 Transfer Fee Rebate none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees. $135 $20,000 Transfer Fee Rebate none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Transfer Fee Promo Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account and you may be eligible to have transfer fees covered up to $200. Contact client service for more details. $200 Contact client service for more information Contact client service for more information (1-888-776-6886) none

Expired Offers
Disnat Desjardins Online Brokerage is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $10,000 into a Desjardins Online Brokerage account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info. $150 $10,000 Disnat 1% Commission Credit Promo January 8, 2020
Last Updated: Sep. 30, 2020 10:25PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Submit your information via the Hardbacon website to be referred to National Bank Direct Brokerage. Open and fund a qualifying account and you may receive up to 20 commission-free trades and discounted trading commissions. Be sure to read full terms and conditions. n/a Hardbacon Free Trade Promo none
Disnat Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details. $1,000 Broker@ge 18-30 Promotion none
Scotia iTrade Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details. $1,000 StartRight Free Trade offer none

Expired Offers
Last Updated: Sep 30, 2020 11:19PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1,000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Cash Back Open and fund a new or existing SmartFolio account with at least $1,000 and you could receive 0.5% cash back up to $1000. Use promo code PROMO1000 when opening a new account. See terms and conditions for full details. This offer can be combined with the refer-a-friend promotion. $1,000 0.5% cash back to a maximum of $1000. PROMO1000 January 2, 2020 SmartFolio Cash Back Promo
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $1,000 1 year no management fees STSF April 30, 2019 SmartFolio New Account Promotion
Cash Back – Referral BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details. $1,000 $50 cash back (referrer) $50 cash back (referee) Unique link generated from SmartFolio required. None SmartFolio Website
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: Sep. 30, 2020 10:31PT

Offers for Young Investors

Brokerage Offer Type Eligible Age Range / Client Segment Offer Description Min. Deposit Expiry Date Link
Student Pricing Clients with CIBC Smart™ Account for students $5.95 per trade and zero annual account fees not required None CIBC Student Pricing
Broker@ge 18-30 18-30 years old investors Benefits: * 5 free transactions (Minimum deposit of $1,000 required) * No inactivity fees * No asset minimum to maintain for free registered accounts * Exclusive events * Disnat Mobile App $1,000 None Broker@ge 18-30
Offers for professionals & Students Students in selected fields of study Professionals and students in the below fields can benefit from a reduced pricing structure: * Engineering students * Legal, accounting and business students * Healthcare students * Health sciences students * Nursing students Benefits: * $5.95 commission on equities * $0 commission on ETFs * $0 annual administration fee not required None NBDB Student Pricing
Young Investors Offer 18-30 years old investors Accounts holders who are 30 years old or younger are offered 10 free trades each year. After the free transactions, a commission rate of $4.95 per transaction will be applied (which is just half of the regular price). not required None Young Investor Offer
Young investor pricing 18-30 years old investors Benefits: * $7.75 commissions for stock and ETF trades * No account minimums * No quarterly admin fees min. $50 a month through pre-authorized contributions. None Young Investor Pricing
Waiver of account maintenance fee Clients who have RBC Student account, currently or in the past 5 years. The Maintenance Fee ($25 per quarter) is waived, regardless of the account balance. not required None Zero Account Management Fee
Young Investors Offer Clients below 26 years old Low activity account administration fee and the RSP account administration fee are waived. not required None Young Investors Offer
Zero Account Administration Fee Clients below 26 years old The account administration fee ($24.95 per quarter) is waived. not required None $0 Account Administration Fee
Last Updated: Sep. 30, 2020 11:17PT

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Discount Brokerage Weekly Roundup – September 28, 2020

It’s kind of hard to ignore the elephant in the room. In this case, the US presidential election is going to be the focal point for the next six weeks (maybe even more), and it seems like markets are bracing themselves for what is going to be a wild ride. Interestingly, this time around, it seems some online brokerages are doing more than just buckling up in preparation.

In this edition of the Roundup, we look at how one agile online brokerage is positioning itself once more for the volatility it sees heading into the US presidential election. On the topic of change, one popular Canadian online brokerage is providing an early look at its new online trading experience, starting first with a soft launch in beta. As always, we’ve got the latest commentary from DIY investors on Twitter and in the online forums.

Interactive Brokers Braces for Risky Times Ahead

When it comes to volatility in stock markets, online brokerages certainly have cause for optimism. Generally speaking, more uncertainty for stock prices is a good thing. It tends to mean more trading activity, and that means greater revenues. Of course, sometimes there can be too much of a good thing. For online brokerages, when it comes to volatility, there are also considerations that need to be made for the amount of risk that gets extended to investors for trading on margin. When prices for stocks move around too dramatically, there’s a good chance that traders can get caught offside, meaning they end up owing more than their account has available to finance a trade.

This past week, online broker Interactive Brokers once again tightened the risk belt by increasing the initial margin lending requirements from 50% to 67.5% for a new position and from 25% to 33.75% for maintenance. The underlying cause of volatility cited by Interactive Brokers is the run-up to the US presidential election. Despite the change in risk requirements being communicated directly to clients (rather than in a press release), the move has caught the attention of financial writers and media outlets.

At face value, prudence seems like a sound move. However, in the world of online trading, raising margin lending requirements is akin to raising the cost of doing business, which is a tricky proposition in a very competitive landscape. That said, the risk has to be worth the reward, and, in this case, there is some additional context that makes this move even more interesting.

Several years ago, Interactive Brokers made a similar forecast for volatility approaching in markets and were not only right, but their peer firms were considerably underprepared when volatility struck. The result: several large online brokerage firms in the US suffered some embarrassingly high trading-related losses as a result of client margin accounts going offside. Earlier this year, however, it was Interactive Brokers that was left stung by margin losses incurred by traders when oil prices went negative. So, though it might be cautious for Interactive Brokers to take some potential revenue off the table by raising margin requirements, the resulting savings from possible losses seems like the right tactical move.

As of the publication of this Roundup, it was not clear that any other online brokerage had made a similar move. Nonetheless, having served as a canary in the volatility coal mine before, Interactive Brokers is once again sending a signal that trading risks are likely going to intensify in the coming weeks.

For Canadian DIY investors, the important takeaway is to prepare appropriately for possible market volatility.

This year (and in previous years), volatility has tended to introduce unpredictability into trading systems. It is not unheard of for trading systems to fail during trading hours and/or even be unpredictable for days afterward. In fact, even when markets have not been facing exceptional trading volumes, there have been trading platform outages and connectivity issues, which makes the prospect of heightened volatility that much more worrisome.

Comments from social media this past week, for example, reveal that two of Canada’s largest bank-owned online brokerages suffered trading-platform connectivity issues, and Twitter comments from Canadian DIY investors show that several online brokerages continue to wrestle with getting their trading platforms up to the point where they can keep pace with the elevated interest from online investors. For active investors on these platforms who are using margin to trade, the move by Interactive Brokers should be a signal that more caution should be heeded throughout October.

No doubt active investors and traders will want to sail into the storm, but good traders know that it’s also important to be able to make it to the other side of the that storm intact. Here’s hoping both online brokerages and investors prepare accordingly.

CIBC Investor’s Edge Teases Changes

This past week, some chatter on investor forums put the latest move by one of Canada’s largest bank-owned online brokerages into the spotlight.

CIBC Investor’s Edge launched a new beta version of their online trading platform earlier this month, and even though there are still more changes to come, the first look at the user-experience enhancements points to a simplified and more modern look and feel to the platform.

For the moment, the updated sections include “My Accounts” and “Account Holdings,” with updates to accessibility features also reported to be available in the new version of the site.

While consumer response via the forums to the new site format was lukewarm, the interesting feature of some of the comments was the interaction with the feedback form, which is part of the new beta site experience. Rather than roll out the new site in its entirety, this partial rollout presumably enables design teams to hear from customers as to the things they do or don’t like about the new site direction. In particular, navigation has substantially changed, which can certainly confuse many users at the beginning of a new layout.

Although the full extent of the new site has not been revealed, it is interesting to see CIBC Investor’s Edge taking the approach to roll out portions of the new look and feel to their clients.

One of the areas of particular interest will be the new trading interface. Will active or somewhat active traders feel confident using it for order entry and execution? Standard commission pricing for CIBC Investor’s Edge is among the least expensive of the largest bank-owned online brokerages, which is why many online investors turn to this online brokerage. That said, platform experience has also been one of the major hurdles to adoption. If CIBC Investor’s Edge can get the new design and rollout to go smoothly, there’s a good chance that more DIY investor interest will turn their way.

Discount Brokerage Tweets of the Week

From the Forums

First-Time Caller, Long-Time Listener

A trepidatious Redditor looking to get into investing turns to the forum to determine what the best course of action might be. In this post, users give advice and list the merits and downsides of buying individual stocks.

Which Way Is Up?

In this post, a forum user asks about the continued impact of COVID-19 on the markets and sparks a conversation on what current trends may indicate for the near and distant future.

Into the Close

That’s a wrap on what was yet another bombshell-filled weekend. From COVID numbers to CERB to jobs reports to unpaid taxes, filtering through the noise will be especially challenging. On the plus side, working from home in sweatpants is probably going to be a thing for a while longer.

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Discount Brokerage Weekly Roundup – September 21, 2020

In a “normal” world, fall would be the start of the blockbuster movie launches that viewers expect to enjoy as the weather turns cooler. This, however, is the “new normal.” Instead of movies, IPOs are in the spotlight, with investors watching spectacular IPOs posting incredible numbers and driving FOMO to new heights even as tech starts to show signs of weakness.

In this edition of the Roundup, numbers take centre stage, as we review recent performance stats published by several online brokerages in the US and what it could mean for the current sentiment among Canadian online brokers. Next, we share some exclusive updates to new and exciting features coming this fall to SparxTrading.com. As always, we’ve got a great selection of interesting commentary from investors in the forums and on Twitter.

Painting by Numbers: A Portrait of the Online Investing Marketplace

It’s hard to believe but it has been already/only six months since the market meltdown and subsequent snapback in March. In crossing this milestone, there are lots of questions about how long the “rally” in stocks can continue and whether the surge in online trading has subsided or is still going strong.

This past week, and indeed this month, there have been some important trading metrics reported by US online brokerages that can shed further light into the momentum of online investing among self-directed investors.

Two big firms in the US online brokerage space, Schwab and E*Trade, reported their monthly activity metrics that showed continued strength in the interest of investors to open trading accounts, although it might be fair to say this heightened level of interest is showing signs of plateauing.

Starting first with E*Trade. The iconic online broker reported that its standard trading volume metric – daily average revenue trades (or DARTs) – was up about 2% on a month-over-month basis to 1.04 million daily trades, which is a whopping 256% higher than the same period last year. While robust trading volume was an interesting stat, what really jumped out was the surge in net new retail accounts opened in August at E*Trade, with 80,000 new accounts coming in. This represents a level 76% higher than the previous month and 439% higher than the same point last year.  

The largest online brokerage in the US, Charles Schwab, also saw its trading volume and new account numbers stay elevated – although nowhere near the percentage performance posted by E*Trade. For August, Schwab had amassed $4.5 trillion (with a t) in total client assets and saw a gain of 202,000 new online brokerage accounts, which is a slight dip (-2%) compared to July but still 60% higher than where new-account growth levels were at last year. Trading volume at Schwab still appeared to be significantly elevated, at 1.5 million daily average trades, which is about four times where it was for 2019.

Aside from E*Trade and Schwab, other large firms in the US that report their trading activity metrics regularly include Ameritrade and Interactive Brokers. Interestingly, this past August, the privately held Robinhood also reported trading metrics for the first time, in which they shared staggering figures from a record month in June. However, as of publication, no follow-up post with updated figures has been published.

Earlier this month, Interactive Brokers published its metrics, which showed DARTs were 88% higher than a year ago and new account openings were 374% higher than the same point last year.

Although several Canadian online brokerages are owned by publicly traded banks, the majority of these bank-owned brokerages do not disclose trading data at their online brokerage units in the same depth or with the same transparency as their US counterparts, with, perhaps, one important exception, RBC Direct Investing. The financial reporting for RBC includes reporting for direct-investing trade volumes, which are reported on quarterly. The third-quarter results for their 2020 fiscal year show that trading over the period from May through July was about 125% or so higher than the same point last year.

Six months after the major lows of the stock market in March, it appears that there continues to be very robust interest from investors in participating in online trading and investing.

Across several different data points, the picture emerging is that investors are still hungry for opportunities to grow their wealth via equities, despite the recent downdraft in the tech stocks having probably rattled a few nerves. The recent performance of IPOs like Snowflake, Nuvei, and “magic mushroom” company Compass point to the fast-money crowd looking for opportunities to jump into and out of the market.

On a macro basis, the stretch between now and November, when the US presidential race will be decided (or will it?), is expected to be filled with volatility, which should only be amplified by the increased participation of so many more retail investors. Interesting data on options trading behaviour and volume, for example, points to the “lottery ticket” trade taking place, and investor forums are rife with YOLO and moon-trade talks, which also signal investors are taking outsized risks to chase potentially outsized returns.

Any experienced farmer will say make to hay while the sun shines, and any experienced investor/trader knows it’s never different this time. For online brokerages, whether in Canada or the US, being flexible is going to be key to responding to whichever scenario plays out.  

Good News for 2020: Upgrades to SparxTrading.com Coming

2020 has been a year of big changes. Not many have been good, but despite the sentiment that this year should be over as quickly as possible, there are still a few months – and hopefully some good news – to come.

One piece of exciting news on our end: SparxTrading.com is going to be launching a new web experience for individuals interested in learning about and navigating all things online brokerage in Canada.

When SparxTrading.com first launched (way back in 2011, and officially in 2012), the online investing landscape was considerably different than it is today. Commissions were higher, “trading on the go” meant something very different, and finding information on online brokerages was filled with fragments of keyword- and agenda-driven content.

Since launching, we’ve chronicled the evolution of the online brokerage industry here in Canada (while keeping a keen eye on what’s happening in the US), and over that time we’re glad to report that many of the things that we saw as gaps for DIY investors have either started to improve or have been significantly addressed. One of those items that we saw as an issue was the absence of reliable, objective, up-to-date, and well-organized information about how to choose online brokerages.

Thankfully, there are now sites like GetSmarterAboutMoney.ca that act as credible touchpoints for investor-education basics and have the kind of support and expertise available to improve the financial literacy of Canadian investors (we also love that they share a preference for icons!). Further, there’s also a national strategy on financial literacy being championed by the federal government. And although there is lots of work still to do in educating individuals about investing, there are now some important building blocks in place.

Of course, with over a dozen online brokerages in Canada (and more on the way), there’s still a lot of confusion for consumers and DIY investors alike when it comes to investing online, which is why we’re still as excited and committed as ever to help bring clarity to the landscape. We’re extremely proud to have impacted tens of thousands of Canadian DIY investors who have referenced our simple but effective site as part of their journey into or through online investing.

More immediately, we’re also really excited to be launching a new edition of our Look Back/Look Ahead series, featuring exclusive content and insights from Canada’s online brokerages. This has been an unprecedented year in so many ways, so it will be fascinating to see how different online brokers have fared and what they have their sights set on for 2021. We’ve already got a great response from the industry and look forward to sharing what they have to say about what has been an eventful year.

Finally, over the coming weeks, we will be making some changes in preparation for the rollout of our new digital experience, so be sure to stay tuned to our Twitter account for early previews of features and content.

Here’s hoping that despite the negative news out there in 2020, SparxTrading.com can spark something positive to look forward to in the coming months.

Discount Brokerage Tweets of the Week

From the Forums

Two Roads Diverged

An unemployed musician who has received some inheritance in the form of stocks wonders whether to use it to pay off a line of credit or to hold off until the stocks are back to pre-COVID highs in this post.

Elect to Wait?

In this post, a new DIY investor wonders if they should try to factor the upcoming US elections into their investment timing. Fellow Redditors weigh in on this strategy.

Into the Close

Life in the markets primes you for volatility. Even so, sometimes the pull of gravity on the way down is undeniable. Once again, 2020 has claimed a beacon of hope, with the passing of US Supreme Court Justice Ruth Bader Ginsburg. The shockwave of this event will undoubtedly be felt for weeks to come and will overshadow an already contentious state of affairs in America. Of course, experience in the market also teaches that there is nothing quite as powerful as hope to fuel ambitious change. Stay rational, stay measured, and here’s hoping for some positive progress to start showing up soon.

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Discount Brokerage Weekly Roundup – September 14, 2020

If 2020 has any common theme, it’s that the year has been filled with things you never expected to write or say in a sentence. For example, tech giant Oracle decides to (seriously) buy social media platform TikTok’s US operations. Alas, here we are. Ironically, what has made TikTok culturally relevant has been its ability to reach users with short bursts of content, which is exactly what at least one online brokerage is also hoping to do.

In this week’s Roundup, we put the spotlight directly on one US online brokerage that announced they’re launching a video series and unpack what that means for the online brokerage competitors in the US and here in Canada. From there, we cap off this edition of the Roundup with comments from DIY investors on Twitter and in the investing forums.

Lights, Camera, Snacktion: Robinhood Takes Financial Content to Video

Staying on top of what’s happening in the world of finance is both easier and harder than it’s ever been before for DIY investors. There is no shortage of “news” out there about what’s happening in the markets, but for many self-directed investors, sorting through it all can be daunting.

Cue Robinhood and their latest announcement this past week of the launch of their first video series based on their ultra-successful Robinhood Snacks podcast.

While an online brokerage launching a video series may not seem like a big deal, in this case, the tweet referencing the launch of the series portends what the larger vision for Robinhood’s content ambitions are, and, frankly, now when Robinhood does something, the rest of the online brokerage world is wise to pay close attention.

Starting first with their comment “The ultimate goal is to make finance as culturally relevant as music, sports and the arts.”

This is an incredible throwdown: Bringing the conversation about money and investing into the mainstream in a way that puts it on par with everyday experiences is very ambitious. That said, so too was the prospect of a financially sustainable online brokerage offering zero-dollar commissions.

Given all the content (and not just financial content, either) that’s currently out there, the topic of money isn’t one that generally excites people, nor is there anything that stands out as best in class. If their podcast, which was the result of an acquisition of the popular show Market Snacks in March of 2019, is any indication, Robinhood has clearly struck a chord with younger investors by creating “digestible” news. Their new video format is launching with two updates a week (for now) and capping the show at about three minutes in length, which is just long enough to get viewers in today’s attention-challenged day and age to stick around.

Importantly, the format of Robinhood’s new YouTube/Instagram show will be distinct from the predictable business reporting that is typical of most stock market–centric content. It likely will not talk about the swings of the market so much as it will mirror the format of the podcast, which chooses to focus on stories about public companies.

What is potentially most fascinating about this new venture is being able to watch it grow from the ground level. At the time of publication, the current number of subscribers to the Robinhood YouTube channel is 1.85K. Here are some comparable figures at competing online brokerage YouTube channels:

  • TD Ameritrade – 109K subscribers
  • E*Trade – 49K subscribers
  • Charles Schwab – 43K subscribers
  • Interactive Brokers – 40.9K subscribers

Despite what seems like it could be a hard-fought climb in subscribers on YouTube, the numbers from the newsletter and podcast suggest an accelerated growth for Robinhood on YouTube (without having to pay for advertising). Their podcast has 1.9M+ monthly active listeners, and there are 20M+ subscribers to their newsletter, both of which could easily help boost subscribership to the YouTube channel in a hurry. A quick search of other online brokerages with podcasts turned up only TD Ameritrade, which had “market data”–style reporting.

With no real competition on podcasts, Robinhood has gained mindshare with a huge audience, which no other online brokerage can replicate overnight. Moreover, reading through the Instagram comments on the announcement of the video version of the Robinhood Snacks podcasts revealed just how enthusiastic the “Snackers” (present company included) are with the product.

What does all of this mean for online brokerages?

With significant consolidation taking place in the online brokerage industry in the United States, the number of unique players has narrowed. Even with the scale of those new enterprises, Robinhood, through pricing and now through content, is establishing their brand as the one to beat amongst their peers, and especially amongst millennials and new investors.

Even though their goal of bringing financial content into cultural relevancy seems far-fetched, the reality is they have significant momentum on their side to do so. Unlike their peers, Robinhood is distinct and attractive to a whole new generation of investors.

As it pertains to Canadian online brokerages, the gap between what is happening in the US as far as features, user experience, and pricing is only widening.

From a content perspective, there really isn’t anything being produced by Canadian discount brokerages that materially rivals Robinhood for Canadian DIY investors. Of the major online brokerages in Canada, only TD Direct Investing’s parent TD has a dedicated show via their MoneyTalk channel that has consistently provided market commentary and analysis. Recently, National Bank Direct Brokerage launched a “beginner investor” education series with Larry Berman (of BNN fame), which, while short and informative, is not really the same kind of content that investors would continue to tune in to over the long term.

Although most major online brokerages in the US already have some kind of video content going, the reality is that Robinhood’s launch into the YouTube and Instagram video channels will be highly problematic for other online brokerages to compete directly against.

Robinhood’s accelerating popularity in the US also means they are being watched (and listened to) by Canadian DIY investors, and as a result, Canadian online brokerages will be increasingly challenged to offer comparable kinds of experiences if they truly want to win over their clients.

The longer that larger or existing Canadian online brokerages overlook the importance of compelling content, the greater risk they leave themselves open to if, or potentially when, Robinhood decides to enter a new global market. Of course, it needn’t necessarily be Robinhood that comes here directly that could pose a challenge to the mainstream Canadian online brokerage market. It would just take an online brokerage willing to be thought of as the “Canadian” version. Case in point.

Discount Brokerage Tweets of the Week

From the Forums

Meme, Myself, and I

A Redditor who has learned a lot from the forums is now concerned that they bought into the meme-ification of VGRO in this post. Fellow forum users discuss how “just buy XGRO/VGRO” has become such common advice and their stance on the topic.

Rise and Grind

In this post, a forum user asks how fellow DIY investors keep their spirits up when saving and investing. Replies to the post offer a look into their personal savings philosophies as well as the age-old advice “comparison is the thief of joy.”

Into the Close

That’s a wrap on this smoky West Coast edition of the Roundup. After a surreal run in stocks, it looks like the stretch from now until the presidential election in the US is going to be filled with all kinds of uncertainty. Typically markets price in as much of the future as they can see, and even if they have made some kind of determination of who will be in the White House, the reality is that a lot can (and will) happen in the next 50-ish days that can’t be predicted. On the plus side, anyone looking for a different kind of portfolio volatility can once again turn to fantasy football.  

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Discount Brokerage Weekly Roundup – September 9, 2020

Now that September is officially upon us (and Labour Day behind us), it is officially no longer good form to wear white. For anyone long in the stock market, though, that’s probably sound advice, as a sell-off is upon us. Of course, some sales are welcome, and it looks like Canadian online brokerages are starting to warm back up to the idea of offering deals for online investors.

In this short-week edition of the Roundup, we dig into the latest deals and promotions activity from Canadian online brokerages and examine what they reveal about the lead-up to RSP season. Also, we review some interesting technology pitfalls that have impacted online investors lately and contemplate what online brokers need to get right in order to avoid being in the hot seat with DIY investors. As always, we’ve got some spicy comments from investors on Twitter and in the forums to close out with.

Signs of Spring in the Fall

Even though it seems like “fall” is the right name for the season that stock market investors are currently experiencing, for Canadian online brokerages it looks a bit closer to spring, as deals are once again about to start blossoming.

The start of a new month is always a convenient moment to take a snapshot of the promotions landscape among Canadian discount brokers, especially during this “new normal.” September is particularly interesting, however, because it is the time of year that brokerages start to gear up for their busiest season.

Before diving into the current deals activity, it’s useful to get some quick context around how recent events have impacted the online brokerage industry.

While many sectors of the economy were decimated by COVID-19, Canadian (and US) online brokerages saw their businesses experience an unprecedented surge in popularity. Millions of idled workers had nothing else to do and nowhere else to go, not to mention some stimulus money in hand. These would-be (and formerly sidelined) investors turned their attention to the stock market.

Unsurprisingly, opening an online trading account and trading stocks – such as Zoom and Tesla – became the goal of many an investor. As a result, there was a spectacular surge in interest in opening online trading accounts. This created a perfect storm for Canadian online brokerages, who no longer had to try to incentivize investors into the market or into opening a trading account. Instead, market demand to trade online reached an all-time high.

With such robust demand, almost all Canadian discount brokers opted to pause or halt running any special offers for Canadian DIY investors (aside from transfer-fee coverage). Instead, they chose a wait-and-see approach to determine what the impact of COVID-19 would be on their business and industry. 

Despite the unusual market dynamics, it appears the wait-and-see phase is over – at least in part. New promotional offers launched in July and August from HSBC InvestDirect and National Bank Direct Brokerage, respectively, as well as a contest by Wealthsimple Trade in August, are a signal that smaller names in the online brokerage market in Canada are itching to get out in front of the frenzy of advertising set to take place during RSP-contribution season.

It is perhaps no accident that the two bank-owned online brokerage promotional campaigns that have come to market in a COVID-19 world are both commission-free trading ones. While popular, commission-free trading offers are less popular than cash-back offers. For brokerages, however, this move makes sense. Commission-free trades are more cost-effective for brokerages to deploy, and the reality is that not every customer will use up all the free trades offered to them.

For example, National Bank Direct Brokerage’s offer of 100 commission-free trades is a high bar for most “average” investors to use up. Fortunately, the time horizon to take advantage of these trades is one year. Using up 100 trades in a year is much more likely than having to do so in 30 or 60 days. In contrast, HSBC InvestDirect is offering 60 commission-free trades, but the time limit to take advantage of this offer is 60 days. Unless one is a fairly active investor, executing 60 trades in 60 days would be a challenge. Further, HSBC InvestDirect is not known for having a best-in-class trading platform for active investing, so it would likely be difficult for them to efficiently enter and execute the trades. Thus, headline numbers for commission-free trades sound impressive but are subject to a number of conditions that are important for DIY investors to consider when comparing offers.

Another important development was the contest run by Wealthsimple Trade, which offered up a chance to win one of five prizes of $5,000. This contest, which was linked to Wealthsimple Trade’s referral structure, also managed to avoid the cash-back promotion directly and instead positioned a cash payout for new clients as a contest. Individuals who participate in Wealthsimple Trade’s referral campaign receive a humble $10 for the referrer and $10 for the referee – a considerably lower reward when compared to other offers from competitors. While Wealthsimple Trade’s referral bonus is an amount just short of being able to buy a Big Mac combo, in the current environment, a little something is better than nothing. Also, with zero-dollar commission rates, Wealthsimple Trade is not likely to receive much, if any, pushback from consumers who are really interested in taking advantage of the low commissions.

While “two points a trend does not make,” it is nonetheless telling that the first two bank-owned online brokerage promotions to come into the market during COVID times are commission-free trades. Peer firms or larger bank-owned brokerages might also be inclined to offer up something similar – potentially with more generous timelines to allow investors to use up the free trades over a longer period of time. Interestingly, if DIY investors do have a longer time horizon over which to use their commission-free trades, it may serve as a mechanism to keep clients around longer than if they were to have their free trades expire.

Also worth watching is whether other online brokerages launch contest offers similar to Wealthsimple Trade. There are only a small handful of Canadian online brokerages with referral promotions in place, so linking contest entry to referrals is an interesting proposition to grow a client base. While $5,000 for an individual investor is nothing to sneeze at, larger online brokerages have the spending power to make a headline-worthy contest. The combination of a fixed acquisition cost and the advertising boost a contest would receive could be a viable option for a larger brokerage to consider testing out.

With demand likely to stay higher than normal, online brokerages (especially the prominent ones) have less incentive to launch rebates or cash rewards. The smaller players or newer entrants in the Canadian online brokerage space, however, still need to show up on the radar of investors, which means having to get both creative and compelling. With the first big wave of investor interest now behind us, we’ll be watching closely to see how online brokerages navigate this new normal and how they ramp up into their busiest season in the early part of 2021.

Outages Hit Online Brokerages in US

Some days you’re a bug, and some days you’re a windshield. For many DIY investors, the digital reality of trading stocks online feels mostly seamless. As more of our lives shift to being online – now more so than ever before – it starts to create the perception and expectation that things always work. Celebrity pictures or TikToks aside, there aren’t many things that should break the internet. When it comes to personal finance, though, the expectation is that one’s money and investments will ALWAYS be available online (scheduled maintenance gets kind of an exception).

Earlier last week, despite having ample time to prepare for major changes to the Dow Jones and stock splits from Apple and Tesla, several online brokerages in the US – including Robinhood, Schwab, and Fidelity – suffered from trading outages and glitches.

There are a number of instructive lessons for DIY investors when it comes to the realities of investing online, the key one being that regardless of size and sophistication, errors at the online brokerage level happen, and the results can be far-reaching, if not catastrophic, for active traders in particular.

What makes the outages traders experienced on August 31st all the more concerning is that they were not related to trading volume but rather other technical challenges – and that is just from the brokerages that went on record with a potential reason. According to a report from Bloomberg, Schwab attributed their service interruption to a change in storage systems, but the fact that the Schwab outage coincided with issues at Robinhood, Fidelity, Vanguard, and Ameritrade points to a serious underlying issue.

While active traders and investors are a constant presence in the market, it appears that the recent market volatility, combined with features such as fractional share trading and zero-commission trading, has attracted larger numbers of very active traders.

Based on statistics/probability, this ultra-active investor would necessarily be more likely to encounter and be impacted by the kinds of outages that take place on occasion. The big difference, however, between the active investors of today and those of the dot-com era is that these ultra-active investors are likely on mobile platforms and thus are just a few swipes away from social media channels on which they can express their strong dislike/disdain for any kind of service interruption.

The takeaway for online brokerages is that even at 99.9% system reliability, the impact to clients can be material.

Customer expectations for the stability of systems have never been higher, but so too are the demands that those systems need to meet. From speed to security to ease of use, online trading platforms have a high bar of expectations set on their performance every day. For online brokerages – especially those in Canada – telling the story of system reliability and delivering on system reliability ought to be top priorities. For consumers, however, it is abundantly clear whether or not online brokerages have gotten reliability right, since it’s a story that writes itself on social media.

Discount Brokerage Tweets of the Week

From the Forums

Seeing Red

Redditors turn to the forums to discuss consecutive days of markets in the red and to share how it’s impacting (or not) their DIY investing in this post.

Mutual Understanding

A forum user asks if a mutual fund like XEQT or VEQT exists and for guidance on which brokerage will yield them the best results in this post.

Into the Close

That’s a wrap on another edition of the Roundup. Playoff basketball and hockey aren’t the only reasons to stress-eat this week – at least for online investors. After a meteoric run-up in prices in technology stocks, there appears to be some profit-taking (or making) in order, which means the only thing cooler than a Tesla Model X with air conditioning is the quickly cooling Tesla stock price (and Ontario weather!). Even though it’s a short week, here’s hoping you keep your cool and reach Friday in the green!

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Discount Brokerage Deals & Promotions – September 2020

*Update: September 18* Although it feels like we’ve barely had enough time to enjoy the simple pleasures of summer this year, the end of the season is now just around the corner. As 2020 progresses, DIY investors continue to be met with market volatility. In fact, as we release this month’s discount brokerage deals and promotions update, stock market indices are continuing their push into record territory. 

Despite September’s chillier weather, the Canadian online brokerage space appears to be heating up this month. After a few quiet months devoid of new promotions, Canadian discount brokers have recently begun to gradually unveil new deals, signaling the return of some sense of “normalcy” in the world of discount brokerages. 

Heading into this month, a pair of new commission-free trade offers from two bank-owned discount brokerages have appeared on our radar. Scroll on to learn more about these recently launched promotions, as well as other deals that are currently being offered by Canadian discount brokerages. 

Be sure to check back throughout September, as we continue to monitor and provide updates on new discount brokerage deals. Here’s hoping these updates will keep you warm as the fall season approaches! 

Expired Deals

No expired deals to report at this time. 

Extended Deals

*Update: Sept. 18 – National Bank Direct Brokerage’s recently launched commission-free trade offer has been extended. Previously set to end on October 30th, this deal will now expire one month later on November 30th. See the table below for full details regarding the promotion and eligibility.*

New Deals

DIY investors looking for free trade promotions can rejoice. National Bank Direct Brokerage launched a commission-free trade offer this summer that is set to run until October 30th. Also, HSBC InvestDirect has jumped into the deals pool with a commission-free trading offer of their own. See the table below for more details. 

Discount Brokerage Deals

  1. Cash Back/Free Trade/Product Offer Promotions
  2. Referral Promotions
  3. Transfer Fee Promotions
  4. Contests & Other Offers
  5. Digital Advice + Roboadvisor Promotions
  6. Offers for Young Investors

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
HSBC InvestDirect is offering 60 days of free online equity and ETF trading (up to 60 transactions) for new accounts opened during the promotional period. There is no minimum funding requirement for the accounts; however, the fund must be from outside HSBC InvestDirect. Trading commissions will initally be charged but will then be credited back to the customer’s account within 120 days after the free trading period ends. $0 60 days of free trading 60 days Please refer to the full Terms and Conditions October 30, 2020
New accounts opened between Jun 22 and Nov 30, 2020 will be awarded 100 free online trades in one year. This promotion applies to new and existing NBDB clients who uses the code “FREE2020” to open new accounts.There’s no minimum funding requirement, however some other restrictions may apply. $0 100 Free Trades 1 year Please refer to the full details of the deal. November 30, 2020
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer. For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2020
Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details. $25,000 commission-free trades for 1 month + 1 month of advanced data. 1 month Active Trader Program December 31, 2020
BMO InvestorLine Open a new qualifying account at BMO InvestorLine with new assets worth at least A) $50,000; B) $100,000; C) $250,000; D) $500,000 or E) $1M+, and you may be eligible to receive a cash back reward of up to A) $250; B) $450; C) $800; D) $1,000 or E) $2,000. Use promo code SPARXCASH when registering to qualify. Be sure to read full terms and conditions. A) $50,000 B) $100,000 C) $250,000 D) $500,000 E) $1M+ A) $250 B) $450 C) $800 D) $1,000 E) $2,000 Cash back will be deposited week of December 14, 2020 BMO InvestorLine Cash Back Offer Details June 1, 2020

Expired Offers
Last Updated: Sep. 18, 2020 10:28PT

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 B) $10,000 C) $25,000 D) $50,000 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTRADE account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
If you (an existing Qtrade Investor client) refer a new client to Qtrade Investor and they open an account with at least $1,000 the referrer and the referee may both be eligible to receive $25 cash. See terms and conditions for full details. $1,000 $25 cash back (for both referrer and referee) Cash deposited at the end of the month in which referee’s account funded Refer A Friend to Qtrade Investor none
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $5,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $5,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period (subject to conditions). BMO InvestorLine Refer-a-Friend January 5, 2021

Expired Offers
Last Updated: Aug 31, 2020 15:56PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 n/a Transfer Fee Promo none
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $200 in transfer fees. $200 $15,000 Transfer Fee Rebate Details none
Transfer $15,000 or more into a new HSBC InvestDirect account and you may be eligible to have up to $152.55 in transfer fees covered. $152.55 $15,000 Confirmed via email contact with HSBC InvestDirect Rep. Contact client service for more information. none
Transfer $15,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $15,000 Transfer Fee Rebate none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees. $135 $20,000 Transfer Fee Rebate none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Transfer Fee Promo Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account and you may be eligible to have transfer fees covered up to $200. Contact client service for more details. $200 Contact client service for more information Contact client service for more information (1-888-776-6886) none

Expired Offers
Disnat Desjardins Online Brokerage is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $10,000 into a Desjardins Online Brokerage account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info. $150 $10,000 Disnat 1% Commission Credit Promo January 8, 2020
Last Updated: Aug 31, 2020 14:25PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Submit your information via the Hardbacon website to be referred to National Bank Direct Brokerage. Open and fund a qualifying account and you may receive up to 20 commission-free trades and discounted trading commissions. Be sure to read full terms and conditions. n/a Hardbacon Free Trade Promo none
Disnat Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details. $1,000 Broker@ge 18-30 Promotion none
Scotia iTrade Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details. $1,000 StartRight Free Trade offer none

Expired Offers
Last Updated: Aug 31, 2020 14:29PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1,000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Cash Back Open and fund a new or existing SmartFolio account with at least $1,000 and you could receive 0.5% cash back up to $1000. Use promo code PROMO1000 when opening a new account. See terms and conditions for full details. This offer can be combined with the refer-a-friend promotion. $1,000 0.5% cash back to a maximum of $1000. PROMO1000 January 2, 2020 SmartFolio Cash Back Promo
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $1,000 1 year no management fees STSF April 30, 2019 SmartFolio New Account Promotion
Cash Back – Referral BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details. $1,000 $50 cash back (referrer) $50 cash back (referee) Unique link generated from SmartFolio required. None SmartFolio Website
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: Aug. 31, 2020 15:51PT

Offers for Young Investors

Brokerage Offer Type Eligible Age Range / Client Segment Offer Description Min. Deposit Expiry Date Link
Student Pricing Clients with CIBC Smart™ Account for students $5.95 per trade and zero annual account fees not required None CIBC Student Pricing
Broker@ge 18-30 18-30 years old investors Benefits: * 5 free transactions (Minimum deposit of $1,000 required) * No inactivity fees * No asset minimum to maintain for free registered accounts * Exclusive events * Disnat Mobile App $1,000 None Broker@ge 18-30
Offers for professionals & Students Students in selected fields of study Professionals and students in the below fields can benefit from a reduced pricing structure: * Engineering students * Legal, accounting and business students * Healthcare students * Health sciences students * Nursing students Benefits: * $5.95 commission on equities * $0 commission on ETFs * $0 annual administration fee not required None NBDB Student Pricing
Young Investors Offer 18-30 years old investors Accounts holders who are 30 years old or younger are offered 10 free trades each year. After the free transactions, a commission rate of $4.95 per transaction will be applied (which is just half of the regular price). not required None Young Investor Offer
Young investor pricing 18-30 years old investors Benefits: * $7.75 commissions for stock and ETF trades * No account minimums * No quarterly admin fees min. $50 a month through pre-authorized contributions. None Young Investor Pricing
Waiver of account maintenance fee Clients who have RBC Student account, currently or in the past 5 years. The Maintenance Fee ($25 per quarter) is waived, regardless of the account balance. not required None Zero Account Management Fee
Young Investors Offer Clients below 26 years old Low activity account administration fee and the RSP account administration fee are waived. not required None Young Investors Offer
Zero Account Administration Fee Clients below 26 years old The account administration fee ($24.95 per quarter) is waived. not required None $0 Account Administration Fee
Last Updated: Aug. 31, 2020 15:57PT

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Discount Brokerage Weekly Roundup – August 31, 2020

When it comes to summer, one way to beat the heat is to go for a frozen treat. For DIY investors, however, nothing could make the summer heat infinitely worse than encountering a frozen platform – especially on a day when a major stock decides to split.

In this edition of the Roundup, we gleefully report what looks to be yet another bank-owned brokerage jumping into the deals pool with a massive commission-free trade offer. From there, we take a look at the forecast for Canadian discount brokers ahead of major stock-split action and a perfect storm of conditions that could see DIY investors flood the markets yet again. As always, we’ve got comments from DIY investors in the forums and from Twitter to close out on.

National Bank Direct Brokerage’s New Deal Raises the Stakes

Lately, there’s been a lot of conversation and conjecture about different segments of the economy and society reopening. In the online investing world, however, “returning to normal” has a very different connotation for Canadian discount brokerages.

When COVID-19 initiated a crash in the stock market, the steep drop resulted in a counterintuitive move that saw many individual investors coming off the sidelines and diving headfirst into the market action. “Normally” most investors tend to shy away from chaotic markets, but this year it was clear the opposite was true. For Canadian online brokerages, the flood of interest was not something they were expecting, and on their end, what would have been a “normal” post-RSP season turned into a situation where many things had to evolve quickly – including the way in which online promotions were being run.

In a nutshell, as soon as retail-investor interest surged, most Canadian discount brokerages quickly removed their promotional offers, relying instead on the strong demand of online investors to open accounts regardless of any incentive offers being present.

Fast-forward to today and yet another deal appeared on our radar, a signal perhaps that some kind of “normalcy” is returning to the online brokerage space.

National Bank Direct Brokerage has launched a commission-free trade offer featuring 100 commission-free trades and, as such, has become the second bank-owned online brokerage (along with HSBC InvestDirect) to step back into the deals section this summer. Interestingly, though this offer had an official start date of June 22nd, there wasn’t the kind of promotion of this deal that would normally take place – that is, of course, until it showed up on the NBDB website homepage. Fortunately, this promotion runs through October 30th, offering DIY investors ample time to consider and/or take advantage of this deal.

Interestingly – and perhaps a sign of things to come – this commission-free trade promotion applies to equities, ETFs, and options. Compared to other deals, it is unusual to see commissions for options trades included in the mix, so this is something that might have considerable appeal to active traders. Further, the fact that there are 100 trades up for grabs is also a pretty compelling number. Finally, these free trades are good for one year, something that other commission-free trades don’t typically do.

In sum, even by historical standards, this is a highly competitive offer. Other Canadian discount brokerages that are thinking about deploying commission-free offers heading into the fall have just been thrown a curveball from a bank-owned brokerage.

With two new commission-free trade offers launched this summer, it appears that the race to get ahead of the fall rush has already started. With a swath of IPOs starting to come to market, a potential second wave of COVID-19 around the corner, and markets pushing all-time highs, there couldn’t be a better time to be an online brokerage – or, arguably a DIY investor. The combination of competitive promotional offers and the perfect storm of investor demand suggests that online brokerages who were looking for the right signal to step back into the deals melee just got one.

Weathering the Storm

Normally rain isn’t associated with summer, but every now and then a major storm hits. For Canadian online brokerages, the stock splits for Tesla and Apple will be just that.

Since this edition of the Roundup is being written prior to the launch of the new shares of Tesla, the story on whether online brokerage systems will get the split correct and withstand what is likely to be a crushing volume of interest remains to be seen. If the past few weeks have been any indication, however, DIY investors are in for a bit of a nail-biter.  

Over the past several weeks, there have been numerous reports on social media about various online brokerage platforms stalling out or having difficulties servicing online trading during market hours.

The volatility in stock markets this year has been unrivalled, and with it, systems of online brokerages large and small have been challenged to stay online and disruption-free. While the peculiarities of the market this year are exceptional, what will be most interesting to follow is what happens when two of the most popular stocks on the planet (right now) split and become even more accessible in price to online investors. How well will online brokerage systems hold up?

The fact that these two particular stocks are splitting within two days of each other, and that they happen to be among the most popular stocks for younger investors, means that if there are any issues from a technical standpoint (e.g. like a platform freezing or going offline) during trading hours, the consequences to that online brokerage’s brand could be dire.

Like many others, we’ll be watching to see how the story of online brokerage technology systems handling a crushing flood of interest plays out. Interestingly, with a surge in IPOs also taking place through the end of the summer and fall, this is likely not the last we will hear about which systems managed to successfully withstand the wave of investor interest and which systems were simply not equipped.

Discount Brokerage Tweets of the Week

From the Forums

Million Dollar Baby

A young Redditor wonders what their TFSA might be worth when they retire in this post. Forum users weigh in on the math of how contributions add up and what the world might look like in that time.

(Un)Steady State

The question of whether or not to pull out of the market due to COVID-19 volatility is brought up once again in this post. Redditors offer the advice to stay steady if investing in the long term and share their personal experiences and takeaways.

Into the Close

Where to even begin? From chips implanted into the brains of pigs, to yet more new all-time highs, to the firestorm of COVID-19 brewing across the globe, to massive earnings from big Canadian banks, to protests and boycotts. 2020 has thrown a lot at everyone. However, like many across the globe, we’re all deeply saddened by the news of losing Chadwick Boseman. As we say goodbye to yet another hero, we hope the inspiration he has sparked in others continues to carry his impact forward. Rest in power, Chadwick Boseman.

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Discount Brokerage Weekly Roundup – August 24, 2020

It’s funny that gravity is often associated with apples falling. This week, we’re seeing Apple as the symbol of defying gravity. Of course, the iconic tech brand isn’t the only one defying gravity with markets hitting new highs – and apparently, some online brokers are too.

In this edition of the Roundup, we review some interesting news related to an increasingly popular online brokerage that has decided to flex their recently growing muscles against their competitors. From there, we highlight an interesting online investor education event for options enthusiasts who might just find an extra reason to show up to class in September. As always, we cap things off with some colourful commentary from DIY investors on Twitter and in the investor forums.

Robinhood Finds Riches with Latest Raise

Of the many twists that nobody really saw coming in the online brokerage space in 2020, having the most financially successful year (possibly ever) would not have been one of them. And, yet, here we are.

With just a few more months left in the year, it is hard to characterize 2020 as anything but a runaway success for many online brokerages in Canada and the US, especially for Robinhood – who has firmly locked in their status as the breakout star of the online brokerage world.

This month, Robinhood, which is not publicly traded (yet), decided to flex by reporting its June trading metrics. Robinhood customers racked up a staggering 4.3 million trades per day during June – higher than all of the major existing online brokerages and, in some cases, by a lot. TD Ameritrade, which came in second behind Robinhood in terms of DARTs, saw clients place 3.84 million trades per day; Interactive Brokers and Schwab both clocked in at 1.8 million trades and E*Trade at 1.1 million trades.

Why Robinhood chose to release these figures now is a bit of a mystery. However, they may be laying the groundwork for their eventual plans to IPO and what better way to demonstrate value to the marketplace than with the core metric that many online brokerages are evaluated against. Perhaps not coincidentally either, Robinhood also successfully closed another round of financing (series g) this year, raising 200 million dollars and vaulting their company valuation to 11.2 billion dollars from 8.6 billion just a few months ago.

What does this mean for the industry as a whole and for Canadian discount brokerages in particular?

First, it reinforces the notion that the path to success in the online brokerage industry points in one clear direction: scale. Without it, the machinery of the online brokerage business model simply cannot achieve the level of activity required to generate profitability. Relevancy is measured in how many accounts you have, the assets under management and how much trading activity takes place on your platform. Other metrics, however, which were also released by Robinhood on social media, point to the strength of their content infrastructure which puts them well beyond the reach of any of their peers.

Second, user experience is a big picture concept – pricing has to match the platform. Robinhood was built around and for a defined audience. It was built mobile first. It was built for younger investors first. The kinds of services and experiences these younger investors found more appealing were the areas in which they focused. Perhaps more impressive than their rise in numbers has been the fact they managed to create a powerful brand. The recent purchases of TD Ameritrade ($26 billion) and E*Trade ($13 billion) reflect a price that includes the value of the brand. The most recent valuation of Robinhood reflects a brand that has room to run. And, with a brand, it enables a premium to be paid to belong to the ‘club’ that is Robinhood.

Third, there is a clear disconnect in the online brokerage industry around the “zero commission” brokerages like Robinhood (and in Canada, Wealthsimple Trade) and whether they can be considered peers/competitors to online brokerages.

This past week, for example, financial information publisher Kiplinger released its online brokerage rankings in the US and surprisingly, despite the numbers of users on the platform, Robinhood was left off the list of online brokerages in the US that were considered for part of the review. The reason Robinhood was not included was “the mobile-first brokerage doesn’t offer trading of bonds or mutual funds—key investment vehicles for many of our readers.” A similar tone appeared in reference to Wealthsimple Trade in the latest Moneysense online brokerage rankings of Canadian discount brokers. According to the Moneysense review, “Wealthsimple Trade, which has been wrongly labelled by many as an online brokerage firm as it only offers a mobile application with limited functionality, resources, account types, product, market information and services expected of a Canadian discount brokerage firm.”

The view that the ‘mobile first’ approach or limited feature set are not as “traditional” may be true but it is precisely why they are as popular as they are. Further, if these firms are not ‘discount’ brokerages in the truest sense when the commission rates per trade are now as low as possible, then it begs the question – what are they?

Popular media, for better or worse, has already decided these trading apps belong to the same category of financial service as an online brokerage. Clearly, consumers are not shying away from the limited feature set either. Valuations, media mentions, metrics and consumer sentiment are all pointing in the same direction with what Robinhood has produced thus far. For any existing online brokerage or ranking to exclude firms like Robinhood or Wealthsimple Trade from their planning, seems like they do so at their own peril.

Options Education Day Goes Virtual

With September just around the corner, so too is chatter of back-to-school. While the annual ritual of heading back to class is mired in controversy because of COVID-19, there exists a pretty clear alternative to meeting in person for educational activities.

For those looking to learn about options trading, the good news is that the Montreal Exchange is taking their one-day Options Education Day workshop into an online format for the second time this year. Filled with interesting content for beginners and intermediate investors, Options Education Day is typically a great way to learn about options and interact with other like-minded investors. Another standard feature of the event is the opportunity to interact with the sponsors, who in this case, are largely made up of Canadian discount brokerages.

The next session of the virtual Options Education Day will be taking place online on September 12th from 12pm to 3:30pm ET.

Canadian discount brokerages sponsoring this event include:

While most of these sponsors are fairly regular faces at these events, one relatively surprising online broker on this list is HSBC InvestDirect. For the most part, HSBC InvestDirect has flown under the radar when it comes to a lot of the activities that other brokerages typically do, so while this may be a fairly low-profile event, it is nonetheless interesting to see HSBC InvestDirect stepping forward to participate, in particular, at an event focused on options trading.

Given the high levels of investor interest and volatility in the market, options trading – while complex – represents a very profitable revenue source for many online brokerages in terms of trading commissions, even more so than with trading stocks.

With Options Education Day moving to a virtual format, attendees from across the country will be able to connect simultaneously, so in some ways, it will be an opportunity to connect with a larger audience than would be possible in person. Online brokerages stand to save quite a bit of money in terms of travel expenses and materials.

One underreported perk for attendees of these events is that there can be online broker specials offered for new account sign-ups. While there is no guarantee of a deal showing up, there’s a decent bet that the brokerages sponsoring will want to provide something to entice the attendees.

Check out the Options Education Day registration page for more information.

Discount Brokerage Tweets of the Week

From the Forums

Too Much of a Passive Thing?

A Redditor poses the question of what the impact of the popularization of passive investing might be in this post. Fellow forum users weigh in, discussing what this means for the market and for active traders.

Reimbursting a Bubble

Security is serious business for all Canadian online brokerages. This post on Reddit caught the attention of a lot of readers who were interested to learn about reimbursement fine print at a popular Canadian brokerage.

Into the Close

That’s it for a very heady week in the markets, from markets continuing to push higher and Apple continuing to make trillion-dollar market caps seem normal, to all kinds of showdowns looming on the political front and sports in hyperdrive. Wherever your focus happens to be, here’s hoping you get a better view of where things go next.

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Discount Brokerage Weekly Roundup – August 17, 2020

It’s just past the middle of August and, wow, have things heated up all over the place. From hot weather across Canada to action in the online brokerage market, to new market highs, there’s definitely no shortage of action under way.

In this week’s Roundup, we decided to shake things up a bit and cover several of the smaller stories that have taken place among Canadian and US online brokerages this month. Think of it like the salad bar edition, where the stories are crisp, fresh and offer a healthy dose of interesting insight into the online brokerage market dynamics.

Keep reading for updates about one offer that has snapped the dry spell for online brokerage deals; good news coming for active traders using thinkorswim; how one online brokerage is making waves by launching crypto trading; and how a recent merger will present challenges to staying “on brand” for a popular Canadian discount broker. As always, we’ve collected some of the chatter from DIY investors on Twitter and in the forums.

HSBC InvestDirect Launches New Commission-Free Trade Offer

The long dry spell in the Canadian discount brokerage deals and promotions section is finally over, courtesy of an unlikely source, HSBC InvestDirect.

While this online brokerage does launch promotional offers from time to time, the bigger story here is that nearly all of Canada’s discount brokers have been on the sidelines all summer (and as far back as late spring). As such, seeing a number of larger name online brokerages (such as TD Direct Investing and Scotia iTRADE) start to advertise online lately and now HSBC InvestDirect launching a new offer signals that brokerages are positioning for the annual ramp up in activity that takes place towards the end of the year.

The offer, which officially launched on July 27th and runs until October 30th of this year, is for 60 commission-free trades of North American equities or ETFs. The deadline to use these trades is 60 days from the time of account opening. This deal is open to new and existing clients of HSBC InvestDirect.

Although most Canadian discount brokerages recognize the small market share of HSBC InvestDirect in the online brokerage space, this could work out in HSBC’s favour – at least until other online brokerages start ramping up their own advertising efforts.

For the moment, HSBC InvestDirect only has to share the spotlight with Questrade when it comes to brokerage offers. And, while HSBC InvestDirect’s commission-free trade offer is good, the bigger benefit will be online investors, who are interested in promotional offers, kicking the tires (so to speak) on the HSBC suite of services more broadly.  

Just Keep Swimming

For many, there is no better way to stay cool during the summer than with a nice dip in a pool or lake. For DIY investors who are big fans of the thinkorswim trading platform, the recent acquisition of TD Ameritrade by Charles Schwab raised some questions on what exactly the new user experience would be in the new entity.

With the acquisition now cleared from a regulatory standpoint, many investors will be watching exactly how these two titans in the online brokerage space will integrate. The length of the integration period is forecasted to take between 18 and 36 months. One of the most popular features to active traders and investors, the thinkorswim platform, is being eagerly monitored.

Earlier this month, Schwab released a statement confirming that thinkorswim (and thinkpipes), as well as the accompanying educational offerings for retail investors, will be integrated in the new Schwab experience.

For Canadian investors who like (and use) the platform, this is welcomed news. The thinkorswim platform is currently available to Canadian customers via TD Direct Investing, although approval for a US margin account is required to access it.

Wealthsimple Moves Forward on Crypto Trading

Speaking of pools and making ripples, Wealthsimple, the parent to Wealthsimple Trade, announced earlier in the summer that they were going to enter the crypto trading space and allow clients to trade Bitcoin and Ethereum.

This month, Wealthsimple provided an update on the status of their cryptotrading venture. The Canadian Securities Administrators (CSA) have approved Wealthsimple to join the “regulatory sandbox” which essentially provides a regulator-approved framework to test this new service. There are many interesting details from the Wealthsimple filing, however a few that piqued our interest include:

– how Wealthsimple intends to make money from crypto trading (via the spread)

– whether or not investor assets are protected (assets are not protected by CIPF nor by CDIC)

– how transactions will actually take place (closed loop system)

Timing-wise, it is an interesting move for an online brokerage to pursue trading in cryptocurrencies considering the dramatic pullback in interest compared to 2018. Clearly, the same frenzy does not exist now, but the fact that Wealthsimple Trade will be the first Canadian online brokerage to offer direct trading in cryptocurrencies, like Bitcoin and Ethereum, means that the portion of the DIY investor market that is interested in these cryptocurrencies will now have a venue to do it on.

What is probably most interesting from a competitive standpoint is that many DIY investors who have been on the fence about Wealthsimple Trade might see this as the feature that they cannot access anywhere else. As such, the launch of cryptocurrency trading at Wealthsimple is as much about facilitating a way to trade these financial instruments as it is a way to try and win over new clients from other online brokers.

Given the regulatory framework under which this program is governed, and the nature of the crypto assets being traded, there will be considerable scrutiny on crypto trading at Wealthsimple. While the future of the program itself is uncertain, for the near term, this latest feature will give DIY investors (and other online brokerages) another big reason to pay attention to Wealthsimple Trade.

Staying on Brand: CI Direct Investing Continues to Take Shape

The big brand consolidation taking place at CI Financial took another big step forward this month, with the official announcement that WealthBar has officially transitioned over to CI Direct Investing.

The announcement itself was light on details other than to assure users that the investing experience won’t change. The only changes will include small (important) details, like the new website URL and the mobile app updating to the new branding. With WealthBar now taking on new branding, next on the list will be Virtual Brokers.

As announced in their Q1 2020 earnings call back in May, CI Financial will be looking to consolidate both WealthBar and Virtual Brokers under the CI Direct Investing banner. This could be an interesting moment in the online brokerage space in Canada for a number of reasons. First and foremost, Virtual Brokers, for multiple years, has earned top marks with the coveted Globe and Mail online brokerage rankings. The move to a new name will certainly stir up some degree of confusion among DIY investors; however, more than that, one of the reasons why Virtual Brokers has scored so well on the most influential online brokerage ranking in Canada is because it prioritized features that appealed heavily to younger investors and, of course, it was among the lowest-cost online brokerages in Canada.

With a new parent brand, especially one that has so much more of a premium feel to it, how Virtual Brokers transitions its ‘frugal’ roots to this new home will be interesting to watch. The decision to go with the marketing term of “direct investing”, compared to “discount brokerage” or “online brokerage,” is already a signal that CI Direct Investing would prefer to compete more directly with the bank-owned online brokerages who’ve both silently and overtly started referring to DIY investing as “direct investing.”

Of course, to help ensure that investors know who the CI Financial brand is, there will likely have to be a significant marketing campaign by CI Direct Investing to ensure investors know that this online broker exists and what kind of experience and pricing they can expect. This will be of particular interest to watch heading into the fall season, as this is typically the time of year when many online brokers release important new features.  

Discount Brokerage Tweets of the Week

From the Forums

Exit Strategy

An older forum user asks what the best course of action is for a couple with a remaining 10-year life expectancy in this post. Commenters provide their thoughts on capital preservation for inheritance and offer short-term plans with maximum benefits.

Should I Stay or Should I VGRO?

In this post, a Redditor turns to the forums to get a basic understanding of where to hold an ETF. Fellow forum users engage in a lively discussion on the subject.

Into the Close

If you’re feeling the heat, you’re probably not alone. With temperatures across the country soaring, stock markets reaching all-time highs and what feels like a volatile situation (to say the least) across the border, there are plenty of reasons to break a sweat this week. Fortunately, the heat also means that it’s fair game to find fun ways to stay cool. The big restart taking place in sports appears to have begun – so whether you own a big fan or are one, here’s hoping for an easy, breezy weak ahead. Oh and don’t forget to stay hydrated!