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Discount Brokerage Deals & Promotions – September 1, 2017

September is here and the fall selection of deals is almost upon us. With just a few weeks to go in the summer of 2017, the action in the Canadian discount brokerage deals section is nevertheless quite hot.

Discount Brokerage Deals Quick Nav

  1. Cash Back/Free Trade/Product Offer Promotions
  2. Referral Promotions
  3. Transfer Fee Promotions
  4. Contests & Other Offers
  5. Digital Advice + Roboadvisor Promotions (new!)

Although there are no new online brokerage deals to report at the outset of September, there is a new offer from the set of Canadian robo-advisors we cover as well as some shuffling of expiry dates on existing offers.

The biggest news for DIY investors, however, is National Bank Direct Brokerage’s official launch of their commission free trading on all ETFs. While technically not a promotional offer, it does warrant mentioning here, since it is a game changer for Canadian online brokerages.  Check out the weekly roundup post on this offer for more insight.

For DIY investors in the market for a new online trading account or looking to switch online brokers, the good news is that there are plenty of offers available across all categories.  Most notably there are still 8 offers for cash back or commission credits (11 if you include the referral offers which have cash back offers attached) which means there’s some added incentive to consider certain brokerages. Of course, there’s also the exclusive SparxTrading offer for those interested in a Questrade account which is among the more competitive offers on the table for a sign up bonus.

As usual, we’ll be keeping an eye out for more deals/promos this month but if there’s anything you spot that could be of interest to other DIY investors, add it to the comments section below.

Expired Deals

Heading into September, there was one offer that officially expired. National Bank Direct Brokerage’s cash back promotion expired, leaving only three providers in this space that currently offering promotions.

Extended Deals

Desjardins Online Brokerage has once again extended their 1% commission bonus offer. The new deadline to take advantage of this offer is December 31, 2017.

New Deals

BMO SmartFolio added an interesting offer into the promotional mix by launching a cash back referral offer. Of the group of online-brokerage affiliated robo-advisors, this is the first cash back referral offer in which referrers and referees can each receive $50 cash. The nice thing about this offer (in addition to the cash back) is that it can be combined with the existing SmartFolio promotion (so long as the deposit conditions are met). Be sure to check out the weekly roundup for September 1st for a detailed look at this promo.

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 (new!)

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
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details 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 $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, 2017
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive a $50 cash back rebate per quarter. To receive the cash back rebate, at least 20 commission generating trades must be made within a specified quarter. Use promo code: CSHBKQTR17 to access this offer. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) per quarter (up to $200 cash back over the total period) To qualify 20 trades must be made within a quarter. $50 cash will be rebated in the following quarter. Eligibility period ends June 2018. For more information, click the terms and conditions here September 30, 2017
Open and fund a new account with Virtual Brokers with a deposit of at least $5,000 and receive cash back commission rebates on the first 20 Canadian or US ETF trades made by September 30, 2017. For commission-free Canadian ETFs use promo code: CADSETF2017 and for US ETFs use promo code: USSETF2017. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) Trades must be completed by Sept. 30, 2017. Cash rebates will be deposited in Feb. 2018. For more information, click the terms and conditions here September 30, 2017
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatFlex or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo December 31, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $100,000 or B) $250,000+ in net new assets and you may be eligible to receive up to A) $300 or B) $750 cash back. In addition, eligible individuals can receive an extra $50 as part of the refer a friend program. Use promo code SPARXCASH when signing up for the cash back offer. Be sure to read the terms and conditions for more details on the offer. A) $100,000 B) $250,000+ A) $300 B) $750 Cash back will be deposited the week of June 11, 2018. Fall cash back offer October 31, 2017

Expired Offers
Last Updated: Sept. 1, 2017 11:55 PT

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 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 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
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 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. $50,000 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 June 30, 2018

Expired Offers
Last Updated: Sept. 1, 2017 11:55 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details 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 $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion. $150 $25,000 Credential Direct Transfer Fee Rebate none
Transfer $25,000 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 $25,000 Transfer Fee Rebate none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo 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 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo tbd
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
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatFlex. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo December 31, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPARXCASH when signing up to also be eligible for cash back offer. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 Fall cash back offer October 31, 2017

Expired Offers
Last Updated: Sept. 01, 2017 11:55 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Disnat Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information. n/a MoneyTalks Inside Edge Discount none
Scotia iTrade Share a story about a personal finance goal or moment (max 1000 characters) and complete the contest submission form and you may be eligible to win one of three monthly prizes of an Apple Watch Series 2. Contest is open to all Canadian provinces except residents of Quebec. Be sure to read contest terms and conditions for full details. n/a Terms & Conditions available here: Scotia iTRADE #MyMakeItHappen Contest; Entry link available here. October 31, 2017
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: Sept. 1, 2017 11:55am PT

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. $1000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
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. $5,000 1 year no management fees STSF October 31, 2017 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. $5,000 $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: Sept. 1, 2017 11:55 PT
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Discount Brokerage Weekly Roundup – August 25, 2017

Whether it’s mythical dragons, rare celestial events or a new album from a musical mega-celebrity, the bar for getting peoples’ attention this past week felt significantly higher. Of course, against the backdrop of so many big events DIY investors are looking for places to talk finance and trading – and astute online brokerages in Canada and the US are finding a way to tap into this desire in some new and exciting ways.

In this week’s roundup, we check in on an interesting social media/content-based contest from one of Canada’s bank-owned brokerages to see how the first month is shaping up. From there we take a look at a new technology solution being deployed in the U.S. that could change the face of online brokerage customer service here in Canada. For good measure, we’ll also take a look at the latest discount brokerage tweets and see what Canadian DIY investors were chatting about this week.

Make it Happening

Earlier this month we reported on an interesting contest being run by Scotia iTRADE as part of a new venture into user generated content. Their “#MyMakeItHappen” campaign seeks out submissions from Canadians on their personal finance stories, with entrants then being eligible to win an Apple iWatch Series 2.

Given the excitement that follows all things Apple as well as the lively conversations we track online every week about personal finance in Canada, we were curious about the progress thus far of Scotia iTRADE’s latest venture, in particular, what is being displayed online. Though not a perfect measure, the participation of DIY investors serves as an indicator of the level of interest and engagement with DIY investor audiences.

For a quick refresher, as part of this campaign, Scotia iTRADE will be posting stories about personal finance that individuals submit to iTRADE on the contest landing page. Specifically, those stories that meet the submission criteria will be selected for posting. At the time of publication, and just under a month into this contest, we have spotted one submission that has gone live.

A post from user, “Vanessa B” from Ontario, was posted to the stories section of the contest website and on Twitter, there have been a handful of user generated comments.

We checked on social media to see what kind of traction the hashtag received. Here’s what we found:

So far, the early results – at least on Twitter – suggest either participation is low or that people aren’t tweeting about their participation. Fortunately, this contest runs through the end of October so there is ample time for Scotia iTRADE to continue to build awareness of this competition and to generate more interest from DIY investors as there are numerous personal finance discussions happening online all the time.

Taking a step back, however, it is interesting to observe that part of this contest may rely on connecting with younger investors, in particular those that would be on Twitter to notice the hashtag, something that might prove to be particularly challenging for Scotia iTRADE.

One of the biggest challenges for Scotia iTRADE in gaining traction on social media, where millennial investors are largely present, boils down to pricing. Standard commission pricing at Scotia iTRADE ($24.99+ per trade) is almost 2.5x higher than at peer bank-owned brokerage institutions and almost 5x higher in some cases than firms such as Questrade.

While Scotia iTRADE does offer lower commissions for individuals with at least $50,000 in assets or relatively active trading levels, this generally doesn’t characterize the beginner or younger investor. The relatively high standard commission fee force DIY investors to carefully consider the value proposition put forward by Scotia iTRADE as a bank-owned brokerage. There is also another hurdle for Scotia iTRADE and Scotiabank to clear with social media users – reviews by other users.

As the post above (from Facebook) shows, online brokerage pricing strategy can also act as a drag on the banking side of the business underscoring how important it is for bank-owned brokerages to get the service and value experience consistent between services. The reverse is also true, the banking side of the business can impact whether or not investors may take their business elsewhere or not.

Ironically, the first user generated post published as part of the new campaign is about saving money, something that high commission rates make more difficult for the very demographic likely to come across the publication on Twitter.

While the lure of a contest will capture the interest of certain individuals, whether or not these folks turn into Scotia iTRADE clients (which is the hope behind this campaign) will largely depend on their financial situation. Many might find themselves looking at the minimum balance required to avoid fees or high commissions and saying ‘money just doesn’t happen.’

TD Ameritrade launches Facebook messenger chatbot

Now that robo-advisors are a thing for investors, could robo-customer service be next? For DIY investors, it very well could be.

This past week U.S.-based online brokerage TD Ameritrade, released a new chatbot feature enabling clients to ask a bot to provide updates on their investments and to get stock quotes. While the functionality of the chatbot is limited right now, there’s little doubt that the data provided by users will help improve the experience over time.

For the near future, however, TD Ameritrade will still have human representatives on standby to handle interactions deemed too complex or volatile for the chatbot to respond to. Amusingly, it appears that the use of “salty language” will automatically result in the chatbot escalating the session to a human representative.

With Canadian online brokerages generally lagging their US counterparts when it comes to technology and features, there doesn’t seem to be a definite time horizon to bring chatbots to DIY investors in Canada. Additionally, the technology is still in early stages, so there’s still a lot that needs to be learned about integrating a robo touch into a chat/client service role.

That said, there’s nothing quite like a functional demonstration of a technology in action to motivate decision makers and executives into seriously looking at a solution that might end up reducing the operating cost of an online brokerage client service program. Some estimates peg chatbots to be able to automate up to 46% of the tasks done by financial services contact centre staff.

Another data point to watch is the increasing number of individuals who rely on mobile banking rather than traditional banking options. Recent data from the Canadian Bankers Association measuring mobile banking usage found that 52% of individuals anticipate using a mobile device to do more banking over the next two to three years.

In an upcoming article on SparxTrading.com, we’ll be reviewing the client service options for DIY investors at Canadian online brokerages. Early data already shows, however, that there are major differences in the technologies made available by Canadian online brokerages as well as the time that ‘live chat’ services are available. With chatbots, online brokerages could conceivably add software-based resources at a fraction of the cost of a human service agent which could then provide coverage and support to clients trying to reach support personnel.

The “bot”tom line for investors is that whether it is a human or bot on the other end of a chat window, if it can handle basic requests easily and quickly, it probably won’t matter to most investors. For Canadian online brokerages, however, the potential for cost savings or for performance enhancement is compelling. Eyes will be on how this bot works with TD Ameritrade and if the initial feedback appears positive, it will then be a matter of ‘when’ not ‘if’ Canadian customer service chatbots start to appear.

Discount Brokerage Tweets of the Week

Some of the comments from DIY investors were ‘off the charts’ – specifically because the charts were off. Mentioned by Canadian DIY investors were CIBC Investor’s Edge, Questrade, Scotia iTRADE and TD Direct Investing.

From the Forums

Risk-free parking

When it comes to getting a good deal, asking around can pay off. In this post on the Canadian Investing Forum, one CIBC Investor’s Edge client was rewarded for asking around about their plan to get more mileage out their savings strategy.

Rebutting heads

A debate between friends as to which brokerage was better – Questrade or Interactive Brokers, spilled over into reddit in this post on the personal finance Canada section. Find out what other DIY investors had to say about the pros and cons of each brokerage.

Into the Close

That’s a wrap on another controversy-filled week. Of course, this weekend the biggest controversy will be whether to spend it indoors or out: UFC star Conor McGregor dukes it out with (yet to be) undefeated boxing star Floyd Mayweather and the season finale of Game of Thrones takes place on Sunday. For a lot of folks, there will be plenty of spoiler warnings, memes and time spent on social media. Ironically, that might also describe the U.S. President’s  schedule this weekend too. Wherever the last weekend of August takes you, have a safe and enjoyable few days off!

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Discount Brokerage Weekly Roundup – August 18, 2017

Right now, a lot of news in the US and from around the world seems bad. Rightfully so. This week, however, after many weeks of discounting the rhetoric, it seems that along with headlines, markets are also making a formation to look to the future with pessimism. For DIY investors and for online brokerages, however, figuring out how to adapt and ride out the storm is par for the course.

In this week’s roundup, we take a look at some of the interesting developments emerging from the US online brokerage market which might offer the promise of something the look forward to for DIY investors here in Canada. First, we look at the move of one very popular online brokerage into the world of traditional banking services and the potential impact it might have on how DIY investors manage more than just their investments. Next we shift gears to look at one rapidly growing online brokerage’s  creative approach to reach younger investors while also growing their client base on the cheap. As usual, we’ll also review the latest discount brokerage related tweets and see what DIY investors were chatting about in the investor forums.

Interactive Brokers plays an interest-ing card

One of the major reasons that individuals choose a particular online brokerage, especially a bank-owned brokerage, is because they have the convenience of accessing additional (and very useful) financial products or services.

This past week, however, Interactive Brokers sent a shock wave through the traditional online brokerage space by announcing their launch of a MasterCard-branded debit/credit card. Specifically, Interactive Brokers is ‘banking’ on being able to compete against big bank ‘convenience’ by offering IB clients a way to manage their daily finances through the IB platform with a low interest credit card or debit card.

As part of the roll out of this new initiative, chairman, founder & CEO of Interactive Brokers, Thomas Peterffy, took a personal approach to pitching the new ‘integrated’ value proposition of Interactive Brokers with a four-minute video in which he describes several reasons why he believes Interactive Brokers is a leading online brokerage.

Currently, the Interactive Brokers Debit MasterCard is only available to US residents, so unfortunately Canadian residents wanting one are out luck at this time. That said, the fact that an online brokerage has built the infrastructure and is now rolling out this kind of product, means that a genie has been let out of the bottle. Observers will be keenly monitoring what kind of traction this offer gets and if the model itself is a profitable one. In the event that it is, other online brokerages might be inclined to follow suit.

For clients who have a cash account, the new Interactive Brokers Debit MasterCard works like a debit card with a limit available equivalent to the amount of free cash that is in the account.

For margin account holders, individuals can borrow against the equity in the account so long as they can continue to meet margin requirements. Interest rates for borrowing against securities, at this time, range between 1.41% and 2.5%.

Interactive Brokers has put together a calculator on the information page related to this new feature to assist individuals in calculating what the amount borrowed will be. Shown below, for example, is the approximate spending limit under the Reg-T margin account option with a stock value of $100,000.

In addition to the simple ‘banking’ feature, Interactive Brokerage appears to be shifting its messaging to taking an “integrated” approach to personal financial management. Specifically, the functions that can be accomplished with Interactive Brokers account include borrowing, earning, spending and investing – the combination of which starts to sound much like a bank-owned online brokerage.

There is, of course, a catch (or two), the main one being that all of this takes place seamlessly within a ‘brokerage’ account. So, depending on whether your assets are in cash or securities, you can still access ‘cash’ for real world purposes the same way you would at a bank, but at substantially lower borrowing rates (if need be) and with the ability to earn interest on idle cash (i.e. the dry powder). There is no need to switch back and forth between accounts or providers.

Whether or not something like this can be replicated in Canada at a different brokerage is debatable.

At best, Canada’s non-bank owned online brokerages might emulate what E*Trade Financial had done several years ago by starting to offer other banking services, such as bill payments, to clients. As for Canada’s bank-owned online discount brokerages, thus far the best that individual clients can do is to access cash from their accounts or even pay bills from their online trading accounts. Using an online brokerage account card to purchase a cup of coffee the same way that one can with a credit card or deriving the same benefits (e.g extended warranties on purchases) is not yet a reality.

It will be particularly interesting to monitor if Interactive Brokers can roll this program out to other locations – including Canada. If they are able to do so, individual traders might find themselves asking a slightly different one than Peterffy posed, namely: “why not manage your finances on the Interactive Brokers platform?”

Robinhood online brokerage goes looking for friends

Refer-a-friend programs from online brokerages are generally a way for the brokerages to offer an incentive (such as cash back or free trades) to an existing client to help bring in new clients, often at a fraction of what it would normally cost to do so through other means.

Earlier this month, US-based startup online brokerage Robinhood, continued to disrupt the online brokerage space with an innovative and millennial-friendly promotional offer: namely a chance to get shares in popular companies as compensation for referring a friend.

One of the hallmarks of Robinhood is that it doesn’t charge commission fees on trades. While consumers love it, the flip side is that Robinhood has to get creative to ensure that the cost to acquire a client stays as low as possible. Being ultra-low cost will always get the attention of investors, however at the end of the day, Robinhood will have to be profitable to be sustainable.

The stocks that they’re putting up for grabs as part of this referral promotion are popular and predominantly large cap stocks. Value of the shares is between $2.50 and $200 however stocks are randomly selected so it’s more of a lottery based reward.

Referring parties who successfully get another party to sign up for a Robinhood account receive compensation in the form of a single share from an assortment of shares that Robinhood has in its inventory. There are shares from a number of companies representing, where possible, high market capitalization in various ranges of share prices between $3 and $175. Interestingly here is the probability of getting stocks of certain value according to their terms and conditions:

Stock Price Range Probability Min Expected Cost Max Expected Cost
$2.50 – $10.00 98%  $       2.45  $       9.80
$10.00 – $50.00 1%  $       0.10  $       0.50
$50.00 – $200 1%  $       0.50  $       2.00
Total 100%  $       3.05  $    12.30

Fans who enjoy calculating the expected value can see that the acquisition cost for the referral ranges between $3.05 and $12.30 (which might average out to $7.68). Stocks received as compensation, according to users on Twitter, include Sprint, Sirius XM, Groupon and others.

Interestingly, in looking at the fine print, there were not the same kinds of restrictions on defining what or who could be considered a friend for Robinhood as there are in Canada. For certain Canadian online brokerages, such as Scotia iTRADE, the terms and conditions of the refer-a-friend program explicitly define who can be designated as a ‘friend or family’ member. By comparison, Robinhood’s referral terms are similar to that of Questrade’s referral program.

Robinhood is an online brokerage that has clearly excited a large number of investors in the US. Since launching publicly in 2015 they’ve already managed to open more than two million accounts, an impressive feat considering other online brokerages such as Interactive Brokers report have over 436 thousand accounts (as of July 2017) but who’ve been around much longer and are substantially larger in terms of valuation.

Interestingly, like Interactive Brokers’ latest moves (see above), Robinhood is also seeking to disrupt more than just the online brokerage space by also setting its sights set on the traditional banking world.

According to a quote by Vladimir Tenev, one of Robinhood’s cofounders in a recent article in Fast Company, “Anything that you would be able to get walking into your local Bank of America branch office, you should be able to get faster, better, cheaper, with a much better user experience, from Robinhood.”

Ultimately, Canadian DIY investors would like to know if it could happen here. Could Robinhood realistically make a move into the Canadian marketplace?

Perhaps the better question is “could Robinhood move into the Canadian marketplace before a Canadian online brokerage enables commission-free trading?”

The reality is that there are already signs Canadian discount brokerages are experimenting with commission-free trading in one form or another. Certain ETFs at several Canadian online brokers, for example, are already completely commission-free; purchases on all ETFs at Questrade and Virtual Brokers, and all trades of Canadian ETFs at National Bank Direct Brokerage for example, are commission-free.

Robinhood’s growth has demonstrated that DIY investors have been looking for a cost conscious alternative to existing banks/brokerages. With so many Canadians hungry for low cost financial services,  it seems inevitable that zero-commission trading, akin to the Robinhood model, will come to Canadians.

Discount Brokerage Tweets of the Week

Technical difficulties rattled investor nerves on Twitter this week. Mentioned by Canadian DIY investors were CIBC Investor’s Edge, Questrade, Scotia iTRADE and TD Direct Investing.

From the Forums

Spot the difference

One of the downsides of certain online brokerages is the foreign currency exchange fees that can add up when trading or converting currency for US trades. In this post, from Red Flag Deals’ investing forum, one user was nervous about an upcoming change by RBC Direct Investing in the way foreign currencies are exchanged. Fortunately, another user helped provide an important clarification.

Banking on advice

Thinking about the best route to manage one’s financial future means having to consider who should be ‘in charge’ of handling the decisions for investing. In this post from reddit’s Canadian Investor thread, an interesting discussion ensued when one contributor asked for opinions on going the managed advice route and whether there’s good value in doing so.

Into the Close

It’s hard to fathom that the week could get any stranger than it already has, but it’s Friday and by now, we know better. It is certainly challenging to seek out stories of courage and human progress and to remember the good that people can and do carry out. Just like investing – what people do in life comes down to choices, which is why having the freedom to choose is as valuable as it is. Heading into the weekend, take a deep breath and find a way to stay positive. Hopefully this will help…

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Discount Brokerage Weekly Roundup – August 11, 2017

With the chaos in the Oval Office and the specter of nuclear war being played out on the world stage, Canadian DIY investors may’ve seen this short week as a week to either be short, enjoy wearing shorts or perhaps change shorts. To paraphrase a reference to Game of Thrones, to some, chaos is a ladder. For Canadian discount brokerages, perhaps the most enterprising among them will be looking for a way to climb up a rung.

In this week’s roundup, we take a look at interesting data from the US that seems to show that there might be more DIY investors willing to venture into the market rather than retreat from it. Next, we highlight one upcoming event for DIY investors that might help offer some much needed perspective on how to navigate markets and how certain Canadian online brokerages are hoping it will help give them some much needed visibility with DIY investors. As usual we’ll review the latest tweets about Canadian discount brokerages and find out what was being said in the forums.

A lesson from Mr. Market

As any seasoned investor or trader knows, “Mr. Market” always has a lesson (or three) to share for those who are observant enough to pay attention.

Despite the political uncertainty in one of the world’s most important economies, it appears that rising markets are trumping ‘Trump’ and drawing more folks into the market faster than the rhetoric and prospect of instability are pushing them away.

One of the interesting data points that crossed our radar this past week came from US online brokerage TD Ameritrade in the release of their most recent trading metrics (from July 2017). Specifically, compared to this point last year, the number of accounts is up (+6%) as is the average number of trades per day (+10%). While the latter might signal more volatility, the former suggests that more individuals are either jumping back or are stepping into the market, despite some of the negative news dominating headlines.  Additional data from other brokers might also support this assertion.

Earlier this month, Interactive Brokers, another US online brokerage, also reported yet another increase in the total number of accounts (+21% y/y) as well as the number of Daily Average Revenue Trades (+15% y/y).

For observers of the industry, it may not be surprising that the continuing uptrend in the major US market indices would stoke investor interest in entering the markets or to incentivize greater activity.

That said, it is an important lesson to observe that in spite of the negative headlines dominating the news, that markets and their participants continue to carry on. Markets attract opportunists and for now, they continue to discount the risk (rightly or wrongly) of economies going off the rails.

Whether the sentiment in the US DIY investor market can help inform what’s going on in Canada is hard to say for sure. If Canadian investors are as confident as their Southern neighbours, however, Canadian discount brokerages may want to (or need to) step up their efforts to win the attention of Canadian DIY investors.

Heading into the fall, if the world is still around, it seems that Canadian online brokerages will be stepping up efforts with something all market participants pay attention to: bargains.

MoneyShow coming to Toronto

The 2017 Toronto MoneyShow will be taking place in just under a month from now. As with previous shows, this year will feature a full lineup of speakers consisting of market analysts, traders and more, each providing their particular take on the direction on the markets.  Though the show will have a familiar feel to it, there are a couple of interesting observations about this year’s MoneyShow that will highlight what’s hot with investors.

One of the first things that stands out about this year’s show is the attention given to one of the most popular stories: the cannabis sector.

At this year’s MoneyShow, there are seven presentations focusing on cannabis investments including topics on the world’s first marijuana ETF and a panel discussion on the Canadian cannabis industry. In addition to speakers and panel discussions, there will also be a handful of cannabis-sector companies exhibiting at this year’s show.

With dozens of publicly-listed companies in the cannabis space, it will be a challenge for many of these companies to stand out to DIY investors, so it is likely that publicly traded cannabis companies will be a more common site at investor conferences going forward.

Another interesting observation is what Canadian online brokerages are up to at this year’s show.

For example, the presentations by BMO InvestorLine for their advanced trading platform – BMO Market Pro as part of the options trading offering may be a signal that BMO InvestorLine will be stepping up its efforts to compete directly against TD Direct Investing’s advanced options trading offering.

As a side note, for options enthusiasts, there will be a presentation by Montreal Exchange on the options trading simulator, Options Play, as well as what’s sure to be a large draw, an ‘up-close-and-personal’ session with Tom Sosnoff, founder of TastyTrade.

The fact that there will be at least four Canadian discount brokerages in attendance including BMO InvestorLine, Interactive Brokers Canada, National Bank Direct Brokerage and CIBC Investor’s Edge, is a signal that online brokerages are hoping to make a personal connection with attendees.

Interestingly, data from the MoneyShow demographic data of attendees show that TD Direct Investing (37%) is the most popular online brokerage with attendees by a factor of 3 over the second-most popular brokerage (Scotia iTRADE – 12%). Curiously neither TDDI nor Scotia iTRADE are listed on the exhibitors list (at the time of publication).

For DIY investors considering attending the show, the price of admission (free) is definitely ‘right’ however the tradeoff is that information about an attendee can be shared with companies exhibiting at or sponsoring the show.

Individuals who can’t make it to the show in person can also still participate. The MoneyShow Toronto will also be available in a ‘virtual’ show floor. There are streams available online to tune into what presenters have to say about topics of interest. Given the high level of uncertainty in the news, attendance and interest in figuring out how the ‘pros’ are approaching the markets will be popular draw and worth tuning into.

Discount Brokerage Tweets of the Week

It was a ‘quiet’ week by Twitter standards. Nonetheless, there were still many interesting comments. Mentioned this week were CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE and TD Direct Investing.

From the Forums

No Takebacksies

For DIY investors, navigating the maze of personal finance inevitably leads to some ‘teachable moments’. Case in point – this post from reddit’s Personal Finance Canada thread in which one DIY investor opened a Questrade RRSP only to realize it was not the right move. Worth a read to see how Questrade stepped in to help and what others had to say about the situation.

A Simpler Approach

In 2017 it is now possible to have a conversation about where money can be managed for what seems to be a much more reasonable rate. In this post, from reddit’s Personal Finance Canada thread, one user was curious about the ever popular TD E-series funds and how the DIY approach stacked up in terms of cost and convenience against the new comer Wealthsimple. Worth a read.

 

Into the Close

That’s a wrap on a very intense and very fiery week. From the battleground of Westeros to the battleground of social media, this week had its fair share of dragons. Heading into the weekend, however, it’s safe to say that there’s only one fire-breathing dragon that just about everyone is looking forward to seeing. Have a great weekend!

 

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Discount Brokerage Weekly Roundup – August 4, 2017

August is finally here and what a month so far. The Dow Jones touched a new all-time high, the US President’s popularity is finding a new low, and Canadian online brokerages are already stepping up their game in anticipation of the end of 2017. With only one month to go before September rolls around, a select group of Canadian online brokerages appear to be trying to capture as much of the spotlight before the DIY investing busy season begins its kickoff in the fall.

In this edition of the roundup, we look at the latest iteration of the deals & promotions being put forward by Canada’s online brokerages – including a rare sneak peek at one bank-owned brokerage’s offer set to launch next week. Following that, we’ll wade into the world of content marketing and the maneuvers that another bank-owned online brokerage is using to build out investor content and interest. From there we’ll see what DIY investors had to say on social media as well as in the investor forums.

The Chart of the Deal

As the calendar flipped to August this past week, the Canadian discount brokerage deals and promotions activity signaled that the news is still good for DIY investors shopping for an online investing account. Weekly roundup readers are in for an added bonus, however as, this edition of the roundup features an exclusive first look at a new BMO InvestorLine offer set to hit the tape next week.

First a recap. Heading into this month there was a little bit of turnover from Scotia iTRADE and Qtrade Investor, both of which had offers that expired.  Offsetting the decline was a new contest offering from Scotia iTRADE, which is profiled in more detail below, as well as an extension in the managed ETF department coming from BMO SmartFolio which extended its discounted management fee promotion through to the end of October.

From a numerical standpoint, however, the deals crop is still healthy, with 23 on the board for investors to choose from. An interesting observation, however, is that while there is participation from a wide array of brokerages in the transfer fee promotion category, it is a narrow group of online brokerages competing in the most popular segment with DIY investors: the cash-back or commission-free trade space.

This month (so far) it’s BMO InvestorLine, Desjardins Online Brokerage, Questrade and Virtual Brokers who are offering up either a cash-back or commission-free trade offer into the general marketplace. Scotia iTRADE, who previously did have an offer in this category, does offer a cash-back arrangement but this is done through its refer-a-friend program and as such is not quite part of the same group of offers as the cash back or commission-free trades open to the general public.

Drilling down further, it appears that the larger institutions, such as BMO and Desjardins, have offers targeting (or accommodating) individuals with higher deposit amounts (at least $100,000), whereas non-bank-owned brokerages such as Questrade and Virtual Brokers have offers with much lower thresholds to qualify. Interestingly, in the referral program category, there are two bank-owned brokerages, Scotia iTRADE and BMO InvestorLine and only one non-bank-owned brokerage, Questrade. It is the latter, however, which has an offer for deposits over $100,000 ($250 cash back).

Behind the Curtain: A look at BMO InvestorLine’s Upcoming Promo

For avid readers of the roundup, this month’s deals recap comes with an added treat, namely an exclusive first look at BMO InvestorLine’s latest offer that’s slated to go live next week (August 8th).

So, what’s under the hood of BMO InvestorLine’s upcoming cash back deal?

The latest promotion from BMO InvestorLine offers new or existing clients either $300 or $750 cash back depending on the deposit size. Deposits ranging between $100K and $249K qualify for the $300 cash back while deposits of $250K or more may qualify for the $750 cash back. In terms of timing, this new fall promotion runs from August 8th to October 31st.

This new ‘fall promotion’ replaces the outgoing summer cash back offer which offered up to $1200 in cash for deposits of at least $200K. While the new offer is not as high from a cash rebate point of view, it does have a lower qualifying deposit tier of $100K which opens cash rebate up to a wider user base.

What is interesting to note about this new offer, however, is that there are few extra perks that this promotion can be combined with which can increase the value by up to $250.

As part of their latest offer, BMO InvestorLine is willing to cover up to $200 for individuals switching from another online brokerage. The fact that BMO InvestorLine is now advertising their transfer fee coverage is somewhat new.

While it has been offered for quite some time, transfer fee coverage has not been widely publicized (BMO InvestorLine’s outgoing offer also advertised that users could also qualify for $200 in transfer fee coverage) by InvestorLine. A comparison of the current transfer fee offers shows, however, that $200 in transfer fee coverage is higher than any currently advertised transfer fee amount.

Another interesting feature of BMO InvestorLine’s latest promotion is that it can be combined with their “Refer a Friend” program. This means that new clients who are referred to BMO InvestorLine by an existing BMO InvestorLine client, can also receive an additional $50 in cash back (the referring party also gets $50 cash back for the referral). Currently, BMO InvestorLine, along with Scotia iTRADE, enable their referral offers to be combined with another promotional offer.

In addition to the self-directed investing promotion news, BMO SmartFolio, their online managed ETF portfolio service, also kicked off the month with an extension of their ‘no management fee’ promotion which offers the first $15K managed for free for one year.

The latest moves by BMO InvestorLine show that they’re continuing to target larger deposit sizes for their cash back offerings. With this fall campaign extending almost to November, it will be interesting to watch the response from online brokerage competitors to see if more cash back offers will be coming to the table. In particular, we will be watching to see just how long the bank-owned brokerage group will let BMO InvestorLine’s cash back promotion go unchallenged especially when competition for DIY investor attention and business is higher than ever.

[*disclosure note: SparxTrading.com has a referral program in place with BMO InvestorLine and BMO SmartFolio and may receive compensation for individuals opening a BMO InvestorLine account with code SPARXCASH or a SmartFolio account with code STSF and/or clicking through to the BMO InvestorLine or BMO SmartFolio websites]

Scotia iTRADE’s Making Content Happen

Many investors are familiar with the phrase: nothing ventured, nothing gained. As the world of online brokerages continues to evolve to rely more heavily on content to capture the attention and interest of DIY investors, the latest move by Scotia iTRADE appears to be yet another signal that they’re actively looking to sidestep some more traditional marketing in favour of something more content-rich.

This past week, Scotia iTRADE launched their latest foray into the content world, the #MyMakeItHappen campaign. Normally advertising or marketing efforts aren’t quite a story, but what is interesting about this particular approach is that Scotia iTRADE is looking for individuals to share their stories about how financial products or services are a part of reaching their personal milestones. Rather than take the approach of characterizing ‘personas’ the approach taken by Scotia iTRADE focuses on “life’s moments.”

In an environment where competition between online brokerages is quite fierce, and the service provided (trade execution) is fairly commoditized, the need to make things interesting, relevant and unique is what may ultimately sway individuals to try one brokerage over another. For Scotia iTRADE, this new campaign offers a fresh voice to online brokerages talking ‘at’ customers and instead lets investors talk to each other. In many respects, it’s a sign that the thinking has shifted to the “web 2.0” model of user generated content can offer deeper engagement than something an internal team could cook up.

Screenshot from Scotia iTRADE #MyMakeItHappen

Of course, to help incentivize individuals to participate, Scotia iTRADE has also incorporated a contest draw for one of three Apple iWatch series 2 smartwatches – something that will likely pique the interest of Apple fans (and perhaps a few Android fans as well). This contest is open to residents of all provinces except Quebec, and that, according to Scotia iTRADE, is because the current social media channel for Scotia iTRADE is offered in English only and would not provide the kind of user experience they would hope for their French speaking client base.

How things are supposed to work is that individuals can submit (for free) a story about they’re “achieving short-term investment goals, realizing long-term dreams – and everything in between.” This intentionally broad guideline enables many different types of stories to be shared and, frankly, will make for an interesting compilation assuming a large number or variety of stories are shared.

To control for the risk of essentially opening up a microphone to the investing public in Canada, Scotia iTRADE’s marketing team will review and curate the stories submitted. The terms and conditions themselves spell out what is or isn’t permitted, and the content will be policed so there’s a good chance that what makes it through is safe for general consumption. What will be interesting to watch for is if individuals share not just positive, inspirational messages but also realistic ones too – like being caught in an investment in a company that didn’t end up succeeding, or being charged high fees.

For Scotia iTRADE, this experiment, regardless of the outcome, will be sure to provide some interesting lessons in the world of content management, and especially in the world of user generated content.

We will continue to monitor this campaign as it progresses but for now, individuals interested in keeping an eye on what’s happening can follow the hashtag #MyMakeItHappen on Twitter or monitor the landing page for the contest. In all likelihood, many of Scotia iTRADE’s competitors will also be watching with intrigue to find out exactly what will happen next.

Discount Brokerage Tweets of the Week

An interesting blip this week as bank-owned brokerages saw an uptick in DIY investor chatter. Mentioned this week were Questrade, RBC Direct Investing, Scotia iTRADE and TD Direct Investing.

From the Forums

Looking for an online brokerage

This past week there was an interesting appearance of a couple of posts by DIY investors asking about online brokerages. One of these posts, for example, from reddit’s personal finance Canada section, looked at the pros and cons of familiar dance partners Virtual Brokers and Questrade.

Too much robo?

In this post on reddit’s personal finance Canada thread, one user asked when is it worth it to give the robo-advisor a try and when it is worth it to go it alone. For individuals on the fence or curious about robo-advisors vs DIY investing, it’s worth a read.

Into the Close

That does it for another week. A quick reminder that Canadian markets will be closed on Monday in observance of the Ontario Civic holiday. With lots of options to enjoy the weekend, hopefully you can have some fun with people that you enjoy spending time with (see pic below). On behalf of everyone here at SparxTrading.com, have a safe & enjoyable long weekend!

 

[*Editor’s Note: The article has been updated to include Scotia iTRADE’s as another online brokerage that enables their referral plan to be combined with existing promotions in provinces where the referral plan is eligible]

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Discount Brokerage Deals & Promotions – August 1, 2017

It’s hard to believe but August is already upon us. That’s right, this is the last full month of summer and in just a few weeks, activity in the markets and with investors is poised to ramp up as summer vacations come to an end. For Canadian online brokerages (and robo-advisors too), however, they’re still hard at work figuring out how to win the attention of Canadian investors.

Discount Brokerage Deals Quick Nav

  1. Cash Back/Free Trade/Product Offer Promotions
  2. Referral Promotions
  3. Transfer Fee Promotions
  4. Contests & Other Offers
  5. Digital Advice + Roboadvisor Promotions (new!)

Heading into a new month, there is still a healthy selection of discount brokerage deals and offers for DIY investors to choose from. Encouragingly, there are some new (and soon to launch) offers to replace a handful of expired offers. For the most part, however, it’s steady state from July – for now.  Keep reading to get the latest information on offers from Canada’s discount brokerages and as always, let us know in the comments section below if there are any offers that Canadian DIY investors might want to hear about.

Expired Deals

There were two offers that expired at the end of July. The first, from Scotia iTRADE, was their free trade + free movie points offer. With Scotia iTRADE’s ability to tap into the ‘free movie’ well, pairing trades with free movies was an interesting and unique offering for the bank-owned online brokerage to put forward.

The second offer to officially expire at the end of July was the commission-free trading of Canadian ETFs from Qtrade Investor. Offering an ‘all you can trade’ approach was an interesting venture by Qtrade Investor into ‘commission-free’ trading of all Canadian ETFs and is reminiscent of the strategy National Bank Direct Brokerage used and ultimately predated the move to allow for commission-free trading on all Canadian ETFs a few years later.

Extended Deals

In the robo-advisor department, BMO SmartFolio extended their offer to waive management fees for the first $15K deposited into a new account. The new expiry date to take advantage of this offer has been extended to October 31st.

New Deals

*Update: Aug. 21 – BMO InvestorLine has added a new cash back promotion for the fall. The deal launched on August 8th and will run until October 31st and features two tiers of cash back incentives. The first tier requires a deposit of at least $100,000 to qualify and features a cash back of $300. The next tier starts at deposits of $250,000+ and offers up a cash back rebate of $750. Both offers may also be combined with a refer a friend bonus. See details below*

Out of the gate, Scotia iTRADE is taking a very creative approach with a new campaign to hear from investors about their money goals. Tied to this campaign is a contest for an Apple iWatch (series 2) which is valued at $549 CAD. There’s lots to unpack about this contest, but for DIY investors interested in a chance to win an Apple iWatch, Scotia iTRADE’s latest promotion could be an interesting way to do so.

For those interested in BMO SmartFolio (and those who already have an account), there is a new refer-a-friend bonus that gives $50 cash to both the referrer and referee. Most notably, this referral offer can be combined with the existing BMO SmartFolio promotion.

Also officially launching this month will be another offer from BMO InvestorLine. We can’t release details on it just yet, but it will be a cash back offer that will replace the soon to expire offer currently being offered until August 8th.

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 (new!)

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
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details 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 $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, 2017
Qtrade Investor is offering commission-free ETF purchases for all clients (new and existing) for July 2017. See details link for full terms, conditions and pricing. $1,000 commission fees waived on Canadian listed ETF purchases Valid for Canadian listed ETF purchases made in July 2017. For more information, click here July 31, 2017
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive a $50 cash back rebate per quarter. To receive the cash back rebate, at least 20 commission generating trades must be made within a specified quarter. Use promo code: CSHBKQTR17 to access this offer. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) per quarter (up to $200 cash back over the total period) To qualify 20 trades must be made within a quarter. $50 cash will be rebated in the following quarter. Eligibility period ends June 2018. For more information, click the terms and conditions here September 30, 2017
Open and fund a new account with Virtual Brokers with a deposit of at least $5,000 and receive cash back commission rebates on the first 20 Canadian or US ETF trades made by September 30, 2017. For commission-free Canadian ETFs use promo code: CADSETF2017 and for US ETFs use promo code: USSETF2017. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) Trades must be completed by Sept. 30, 2017. Cash rebates will be deposited in Feb. 2018. For more information, click the terms and conditions here September 30, 2017
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatFlex or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo September 30, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $100,000 or B) $250,000+ in net new assets and you may be eligible to receive up to A) $300 or B) $750 cash back. In addition, eligible individuals can receive an extra $50 as part of the refer a friend program. Use promo code SPARXCASH when signing up for the cash back offer. Be sure to read the terms and conditions for more details on the offer. A) $100,000 B) $250,000+ A) $300 B) $750 Cash back will be deposited the week of June 11, 2018. Fall cash back offer October 31, 2017

Expired Offers
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least $200,000+ in net new assets and you may be eligible to receive $1,200 cash back. In addition, eligible individuals can receive a 60-day trial of BMO MarketPro and have transfer fees covered up to $200. Use promo code SPARXCASH when signing up for cash back offer. Be sure to read the terms and conditions for more details on the offer. $200,000+ $1,200 Cash back Cash back will be deposited the week of March 12, 2018. Summer cash back offer August 7, 2017
Last Updated: Aug. 21, 2017 10:30 PT

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 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 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
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 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. $50,000 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 June 30, 2018

Expired Offers
Last Updated: Aug. 1, 2017 12:30 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details 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 $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion. $150 $25,000 Credential Direct Transfer Fee Rebate none
Transfer $25,000 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 $25,000 Transfer Fee Rebate none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo 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 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo tbd
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
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatFlex. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo September 30, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPARXCASH when signing up to also be eligible for cash back offer. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 Fall cash back offer October 31, 2017

Expired Offers
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPARXCASH when signing up to also be eligible for cash back offer. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 Summer cash back offer August 7, 2017
Last Updated: Aug. 25, 2017 10:30 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Disnat Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information. n/a MoneyTalks Inside Edge Discount none
Scotia iTrade Share a story about a personal finance goal or moment (max 1000 characters) and complete the contest submission form and you may be eligible to win one of three monthly prizes of an Apple Watch Series 2. Contest is open to all Canadian provinces except residents of Quebec. Be sure to read contest terms and conditions for full details. n/a Terms & Conditions available here: Scotia iTRADE #MyMakeItHappen Contest; Entry link available here. October 31, 2017
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. 1, 2017 12:30 PT

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. $1000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
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. $5,000 1 year no management fees STSF October 31, 2017 SmartFolio New Account Promotion
Cash Back Open and fund a new Investcube account with National Bank Direct Brokerage and deposit with at least A) $10,000; B) $50,000; C)$200,000; or D) $300,000+ and you may be eligible to receive a cash back deposit of either A) $50; B) $200; C) $400 or D) $600. See offer terms and conditions for full details. A) $10,000 B) $50,000 C) $200,000 D) $300,000+ A) $50 cash back B) $200 cash back C) $400 cash back D) $600 cash back CUBE2017 August 31, 2017 Investcube Cash Back Promotion
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. 1, 2017 12:30 PT
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Discount Brokerage Weekly Roundup – July 28, 2017

Separating news from noise is harder to do some weeks than others. This might have been one of those weeks. Despite markets responding to earnings and fundamentals, and despite economic news that shows Canada’s economy is now firing on all cylinders, there’s just one story that seems to Trump it all. For traders and investors, venturing forward into the unknown is a daily exercise, but the biggest lesson every trader/seasoned investor has learned is the value of risk management.

In this week’s edition of the discount brokerage roundup, we take a look at the balance between innovation and risk management. The first story, a tale of a new website roll out, showcases how a large bank-owned online brokerage navigates the challenge of being both familiar but innovative with one of their most important customer touchpoints. From there, we’ll do a lightning roundup with updates from the deals and promotions arena and some interesting news that could make a splash with DIY investors interested in ETFs. As always, we’ll review what DIY investors were saying on social media and the forums.

CIBC Investor’s Edge rolls out new website

When it comes to websites and design, the common theme among Canadian online brokerages appears to be less is more. This week, CIBC Investor’s Edge officially launched their new public facing website with a refreshed look, simplified menus and navigation and a more focused approach to reaching their core client base.

After being telegraphed to website visitors several weeks ago, the new website is finally here. For a bank-owned online brokerage, such as CIBC Investor’s Edge, designing for the online investor is a balancing act between ensuring the look and feel is consistent with the brand while also creating an experience that resonates with the fast-moving world of online investing.

So, in some ways the new website is a tale of two stories. Yes, the new CIBC Investor’s Edge website is a significant overhaul from its predecessor. Gone are the drop-down menus, the snapshot of the markets and tiny, text heavy pages. In their stead is a visually more modern, responsive and focused website that features the fun and approachable icons present in much of the broader CIBC marketing and imagery (like the penguins). That said, there is still a connection to some of the familiar imagery choices/styles in the headers and the site itself isn’t a bold departure functionally or aesthetically from its peers.

As with many redesign projects, there are lots of interesting angles to discuss. In this case, looking at the reorganization of the content on the website – which appears to be a substantial change – can provide a way to walk through some of the changes and what they might suggest about the evolution of CIBC Investor’s Edge in the fast-moving digital space.

From a design and user experience point of view, one of the most visible changes is the use of a top navigation bar without accompanying drop-down menu items. Likely a design choice that arose from a ‘mobile friendly’ web design, simplifying the menu in this fashion means that users will be scrolling more to find information on the page of interest and that many items from the previous site have been revised to be shorter or removed entirely.

The new menu breaks the website into the following categories:

  • Accounts and Investments
  • Platforms and Tools
  • Research
  • Pricing
  • New Investors
  • Experienced Investors

Previously the menu, at the top level, was broken into:

  • Getting Started
  • Benefits
  • Investor Profiles
  • Education Centre

So, at a high level, there is clearly a shift from talking about how, why and who, to talking about what, how much and who.

A recurring theme in the new website design is that there appears to be a tighter focus on the “investor” rather than the “trader”.

There are subtle things, such as the language choice to use the term ‘investing’ rather than trading as well as some more obvious things, such as the placement of registered account types at the top of the accounts and investments section or, in the platforms and tools section, a heavy emphasis on monitoring and research rather than execution.

Why this is interesting is because despite the pricing for commissions being attractive to very active investors or traders, there isn’t the same technical emphasis either on trading platform, charting or technology/execution that active traders might respond to and that competitor brokerages have. CIBC Investor’s Edge, at least through this website refresh, appears to be catering towards less active investors which means that their bank-owned peers who do have more sophisticated active trading platforms, such as TD Direct Investing, Scotia iTRADE or National Bank Direct Brokerage, might be able to attract these types of active clients who also seek the convenience and security of a large bank-owned brokerage.

Another feature that is clear in the new website is that the layout of the text is less crowded, easier to read and there feels like there’s enough information about the product/service to get a reasonable understanding of what it is without going into too much detail. Subtler, however, is also the use of language. For example, the section for ‘new investors’ explains more clearly and simply what accounts are available and how the process to get started works.

Of course, despite the website refresh and even a web-based experience to help populate the application forms, users cannot (yet) fully open an account online with CIBC Investor’s Edge. New clients still have to print, sign and send forms in or open the account in-branch. While this is certainly not news to the development team at Investor’s Edge, the new ‘norm’ being set by robo-advisors and even some online brokerage peers, is that opening up an account for investing online can be done entirely online.

Overall, CIBC Investor’s Edge’s new website is an evolutionary step forward into the new reality of online investing.

The website has a more modern looking interface as well as a tighter focus on the kinds of clients that CIBC Investor’s Edge might be trying to appeal to. Their commission pricing strategy has given them immediate relevance with almost all DIY investors, so the choice for many DIY investors really comes down to value added features and experience. Fortunately for CIBC Investor’s Edge, buy and hold investors do have a certain amount of patience with the process of investing and are always in the market for a good deal.

Lightning Roundup

Deals get a digital boost

With a new month around the corner, Canadian discount brokerage deals are set to roll over next week. Currently on deck for expiry are Qtrade Investor’s commission-free ETF offer for Canadian ETFs and Scotia iTRADE’s free movie points and free trades offer. The exciting news heading into the new month is that BMO SmartFolio has extended the deadline to qualify for its no management fee offer promotion through to the end of October. Also, another offer is in the pipeline at SmartFolio which we will release more details on in the coming weeks – stay tuned!

Questrade ETFs acquired by WisdomTree

Even though it may be summer, Questrade is busy making waves in the news this past week. Starting first with the big story, the acquisition of Questrade’s ETFs by WisdomTree Canada. Specifically, Questrade has sold its ETF division to WisdomTree in a tactical move to focus on the online brokerage and robo-advisor businesses.

In a quote to the Globe and Mail, president of Questrade Edward Kholodenko stated “After a careful review, we decided that we wanted to focus on our core direct online business as well as our roboadviser business, both of which have seen fast paced growth.”

Deeper in that same story, however, the mention that WisdomTree Canada and Questrade will be working in concert to provide educational materials to Questrade clients and that WisdomTree will be consulting on Questrade’s roboadvisor arm, Portfolio IQ is something that will be particularly interesting to watch evolve.

Another interesting stat, however, also caught our attention. This one was buried in the bottom of the press release in the ‘About Questrade’ section and stated “With 17 years of challenging status quo as Canada’s leading, non-bank online brokerage, over $5 billion in assets and more than 30,000 accounts opened every year, Questrade and its companies provide financial products and services: securities, foreign currency investment, and online wealth management.”

Some quick math suggests that over 500,000 accounts have been opened with Questrade since their launch (no mention of churn or account closures though), which is an interesting stat in and of itself.

What makes it even more interesting is another announcement from Questrade this past week regarding their designation yet again as one of “Canada’s Best Managed Companies.”

While that accolade is a great milestone, in a communication sent to clients there was also another reference to account openings this year, specifically that there have been over 40,000 accounts opened this year. Though it is unclear if this refers to trailing twelve months or year to date, regardless, it is again an intriguing stat considering the size of the Canadian market.

These stats are noteworthy because unlike publicly traded online brokerages in the US, there is very little publicly disclosed information about the number of accounts opened (or currently open) at each Canadian discount brokerage. Again, it warrants repeating that Questrade is referencing accounts opened, which is a combined figure across their managed wealth arm as well as their DIY investing segment and doesn’t report accounts that have been closed – or specify the more accurate stat of net new accounts.

The signals that Questrade’s robo-advisor and DIY investing units are going to get increased focus is certainly going to be worth monitoring. Add into the mix a relatively large US ETF partner and it could make for an interesting combination for both the bank-owned and independent online brokerages to try and maneuver around.

Discount Brokerage Tweets of the Week

A relatively quiet week by Twitter standards but there are a few interesting product launches and client experience feedback gems. Mentioned this week are CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

Premier choice

In this post from reddit’s personal finance subreddit, news of WisdomTree’s acquisition of Questrade’s ETF business raised an eyebrow or two.

Withhold the phone

Trading stocks internationally can sometimes come with a peculiar quirk – withholding taxes. This thread from RedFlagDeals’ investing forum started long ago on a withholding tax situation at Interactive Brokers but was revived again as DIY investors bumped into a similar issue once again in dealing with interlisted stocks in the US (and other international) markets.

Into the Close

So that was a crazy week. If there’s one interesting thing about investing and markets, it’s that people take risks – and many times those risks turn into failures. That said, there’s a bigger prize and despite what might be dominating the headlines this weekend, there’s some comfort knowing that there are lots of great people reaching for new heights. On that note, enjoy the following compilation of people being awesome – perhaps there might even be an idea or two for a great weekend project. Have a safe and enjoyable weekend!

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Discount Brokerage Weekly Roundup – July 21, 2017

If there’s a lesson emerging from the scandal in the US or from Game of Thrones, it’s that details matter. At least in the case of the US, the details are emerging and in the process, the spin doctors are working overtime to shape the conversation. While this may seem like a leap for the online trading world, in reality, the lesson for DIY investors when considering online brokerages is to try and see past the spin and to focus on the details.

Fortunately, this edition of the roundup is chock-full of details as we take a deep dive into the latest rating of Canadian discount brokerages to be published. From there we provide an update on the latest insight piece on one Canadian online brokerage’s venture into sustainable investing. Wrapping up this week will be a collection of the many interesting (and sometimes colourful) DIY investor conversations that took place on Twitter.

A Q’rious result: Non-bank-owned Canadian online brokerages earn top marks in MoneySense’s latest rankings

For many DIY investors and those looking for a quick answer to the question: “who is the best online brokerage in Canada?” the answer appears to have evolved over the years. The shift appears to evolved from finding a singular ‘best’ online brokerage, to providing a category-based approach to report on discount brokerages who are the best at particular features.

Such is the case in the latest MoneySense ratings of Canadian online brokerages, which were published this past week. Based on data supplied by financial services research firm Surviscor, the latest online brokerage rankings suggest that when it comes to the “best overall” experience for online investing, non-bank-owned online brokerages are edging out their larger and better financed competitors.

Starting first with the ‘winners’ (beware the spoiler alerts). BC-based Qtrade Investor earned the top pick as best overall brokerage followed by Questrade which earned the runner up title of ‘honourable mention’.

In the bank-owned brokerage category, BMO InvestorLine and Scotia iTRADE tied for top pick with no runner up (or ‘honourable mention’) reported.

For followers of the MoneySense online brokerage rankings, there is an air of familiarity about the winners this year compared to 2016. Both Scotia iTRADE and BMO InvestorLine were rated as the best and ‘runner up’ bank-owned brokerage, while Qtrade Investor and Questrade took first and second place in the non-bank-owned online brokerage category respectively. So, as far as the top contenders are concerned, things look largely the same as they did last year. A few notable changes, however have shown up in the 2017 analysis.

This year, for example, the category of “user experience” was used instead of “ease of use”; “best for ETFs” was also introduced given the popularity of ETF trading choices now available and the popularity of these instruments with DIY investors and finally, the category of “best overall” replaced the category of “top independent brokerage.”

 

2017 2016
Category Top Pick Runner Up Top Pick Runner Up
Getting Started Questrade TD Direct Investing BMO InvestorLine Virtual Brokers
User Experience Questrade Qtrade Investor Scotia iTRADE Questrade
Fees & Commissions CIBC Investor’s Edge

Questrade

 Qtrade Investor

Virtual Brokers

 Questrade Qtrade Investor
Customer Service Qtrade Investor Desjardins Online Brokerage Qtrade Investor Scotia iTRADE
Reporting & Record Keeping BMO InvestorLine Qtrade Investor Scotia iTRADE BMO InvestorLine
Market Data TD Direct Investing Qtrade Investor TD Direct Investing Credential Direct
Best for ETFs Questrade

Virtual Brokers

 National Bank Direct Brokerage n/a n/a
Best Overall Qtrade Investor Questrade Qtrade Investor (best independent) Questrade (honourable mention independent)
Best bank-owned brokerage BMO InvestorLine
Scotia iTRADE		 Scotia iTRADE BMO InvestorLine

 

A quick scan of the results between last year and this year will show some new faces in certain categories, but by and large, this year’s MoneySense online brokerage rankings show a high degree of similarity to 2016. Nonetheless, as we’ve mentioned time and again on SparxTrading.com, when it comes to evaluating the online brokerage rankings, it is important to look at the details and critically evaluate the findings to ensure a more thorough understanding of what’s behind a rating or ranking.

Diving into Details

Perhaps one of the most immediate observations is that there are some brokerages that make multiple appearances across different categories. Specifically, although 9 different brokerages were mentioned in at least one category this year, either Qtrade Investor or Questrade were first or second a combined 9 times out of 17 possible mentions.  And, while that does make sense given the overall rankings of both of these online brokerages, when compared to the profile of results from 2016, it is notable that for the bank-owned online brokerages, Scotia iTRADE is far less visible in the top or runner up spots in 2017 than in 2016, despite landing a tie with BMO InvestorLine for top bank-owned online brokerage.

Ratings of Canadian discount brokerages according to MoneySense online brokerage rankings, 2017
Source: MoneySense online brokerage rankings, 2017

A closer look at the 2017 results reveals that of the top two bank-owned online brokerages, only BMO InvestorLine managed to achieve the best in the category of reporting and record keeping while Scotia iTRADE did not make a top pick or runner up in any of the categories mentioned. Curiously, despite TD Direct Investing placing in top spot for ‘market data’ and runner up for ‘getting started,’ it did not make the cut for best bank-owned brokerage or even ‘honourable mention’ according to the results.

Shut out from winner or runner up circles from this year’s rankings were Credential Direct, HSBC InvestDirect, Laurentian Bank Discount Brokerage and RBC Direct Investing. Also overlooked again this year was Interactive Brokers Canada, which was excluded from consideration and almost certainly would be a challenger in the fees & commissions, getting started, and market data categories.

One of the most crowded categories, curiously, was the commissions and fees spot.

Fee-ling crowded

Top pick for fees this year was a tie between CIBC Investor’s Edge as well as Questrade, while honourable mention (another tie) went to Qtrade Investor and Virtual Brokers. Given that commission pricing changes at CIBC Investor’s Edge appears not to have dramatically changed since we first reported the drop 2014, it was strange to see Investor’s Edge disappear from the 2016 ratings (while it did appear in 2015) but reappear in 2017. Likewise, commission pricing at Virtual Brokers has been restructured so that there is now standard commission structure pricing of 9.99 per trade, but Credential Direct (with standard commission pricing of $8.88), which was cited alongside CIBC Investor’s Edge as low cost by MoneySense in 2015, seems like it would have made the cut.

The takeaway: commission pricing is low at many Canadian online brokerages and one of the important factors to consider is whether there are any ECN fees or not. While the MoneySense ratings do not disclose a full methodology of how fees and commissions are calculated, the big picture shows that DIY investors who want to buy based on commission pricing do have a number of choices for good value.

Of course, the commissions and fees category is not without some controversy in this year’s ratings. A concern that we noted with the standard commission reporting, however, is that Scotia iTRADE’s “basic online equity” commission pricing is listed as $9.95, a condition which is true only if clients have more than $50,000 in assets at Scotiabank entities.

If having at least $50,000 in assets is the qualifying definition for standard commission pricing at Scotia iTRADE, then HSBC InvestDirect should have their rate posted as $8.88 rather than $9.95. Conversely, if having the minimum deposit to open an account is considered the threshold for ‘standard pricing’ – which we would argue should be the case – then Scotia iTRADE’s standard commission pricing would be at least $24.99 per trade – almost 4x that of CIBC Investor’s Edge and easily double the $9.95 at most of Scotia iTRADE’s bank-owned brokerage peers.

Again, without methodology detailing how these were calculated, the inclusion of Scotia iTRADE as a top pick with standard commission pricing so far above its peer group and no top pick or ‘honourable mention’ in any of the categories makes it a strange result. Unlike 2016, where Scotia iTRADE does appear in 3 categories as either top pick or ‘honourable mention’, this year’s inclusion in the winner’s circle at the bank-owned brokerage level seems less obvious as to why that would be the case.

To be fair, we’re not trying to penalize Scotia iTRADE. In fact, we noted that there were some notable discrepancies from Scotia iTRADE’s details (at the time of publication) that would be of value for potential clients to take note of and which could shift the scoring in Scotia iTRADE’s favour. Specifically, Scotia iTRADE is better at customer service availability and investor education support than the MoneySense comparisons would imply.

For example, the customer service hours which on the table on MoneySense are listed as Monday to Friday, 8:30am to 5:00pm (no timezone specified) whereas according to the Scotia iTRADE website contact section, the hours are listed for client support are Monday to Friday, 8:00am to 9:00pm ET and Saturday from 8:00am to 6:00pm ET. Offering service on a Saturday is something that stands out for Scotia iTRADE so, though the MoneySense category does list hours which might correspond to new account openings, it doesn’t necessarily reflect the experience that existing clients could expect to receive nor does the category clarify the meaning of “telephone services.”

Another point of concern appears under the ‘buyer beware’ category in the MoneySense breakdown where it states Scotia iTRADE has “weak educational material.” The characterization as “weak” seems highly subjective and inconsistent with the fact that Scotia iTRADE has not only had a long-standing focus on investor education but even on the relatively recent redesign of their website, they committed to having education as one of the four main menu choices. Further, Scotia iTRADE also has learning modules on basic topics related to trading and platform orientation, and more importantly, they have an extensive calendar of educational events (such as webinars) that are presented frequently and regularly throughout the year. For a claim of ‘weak’ educational material to be applied to Scotia iTRADE to be substantiated, even on a relative basis, it would mean that the vast majority of Canadian online brokerages ought to be called out for the same ‘buyer beware’ drawback and even more so for not having these webinar/seminar supports in place.

Wait a minute, Mr. Postman

Another interesting aspect of the rankings and ratings is the customer service response times on email across the Canadian online brokerage industry.

Surviscor regularly monitors the email response times for Canadian discount brokerages and has reported this data as part of its Service Level Assessment (formerly the Customer Email Responsiveness program) scoring. Included in MoneySense’s online brokerage rankings this year was a particular focus on email performance, and in particular, how poor the industry (with a few exceptions) is doing when it comes to responding to requests via email.

The range reported from this year’s analysis was substantial. Qtrade Investor was the quickest to respond with an average of just under 2 hours while Laurentian Bank Discount Brokerage came in at 113 hours.

Canadian discount brokerage email response times
Source: MoneySense online brokerage ratings, 2017

Given the staggeringly high variation, it would have been nice to have the standard deviation and number of emails sent to each firm reported. Averages, in and of themselves, are of limited value when trying to figure out “what’s normal” or representative of a service experience. Another unknown which would add more context would be knowing how many emails were sent (was it 3 or 30?), when they were sent (Friday nights, weekends or during market hours)? and what qualifies as a response (did the question get answered or was the note simply acknowledged as received?).

Another interesting observation was that the figures reported for Desjardins Online Brokerage’s response time in the dynamic chart supplied show it at 9 hours, which is the same for RBC Direct Investing. That is relevant because Desjardins Online Brokerage managed to score as a ‘honourable mention’ for that score while RBC Direct Investing did not. It is likely the case that the reported chart is rounding numbers (since Qtrade Investor was reported in the text to have an average under 2 hours but is reported in the chart as 2 hours) but this clarification is one that becomes important, since rounding to the nearest hour is a significant amount of time in an online world.

For the Ratings

For many DIY investors, including readers of MoneySense magazine, navigating the maze of Canadian online brokerages is both time consuming and complicated. Ratings such as the latest online brokerage comparison provide a handy way to understand the strengths and limitations of particular Canadian online brokerages.

While the latest ratings don’t necessarily “rank” numerically where particular online brokerages stand,  the MoneySense online brokerage nonetheless showcase a ‘top pick’ and an ‘honourable mention’. So, those DIY investors looking for a recommendation can find a brokerage worthy of consideration. In fact, a particularly nice feature for this year is the comparison tool which enables side by side comparisons of online brokerages.

All that said, as has been stated many times on SparxTrading, it is important for readers and users of discount brokerage rankings to have clarity on what the categories being used mean as well as how they’re measured. The MoneySense online brokerage ratings rely heavily on data sourced from Surviscor’s analysis and as such, it might be useful to point readers to the methodology sections on the Service Level Assessment (which explains some of how the email testing is done) and also on the assessment for categories like user experience or commissions and fees.

In sum, Canadian online brokerage account shopping can be as simple or complicated as DIY investors want it to be. To help make the task of figuring out what other rankings or ratings are saying (such as the MoneySense brokerage rankings or those from the Globe and Mail), we’ve added all the ratings received by a Canadian online brokerage onto the profiles of each individual brokerage (accessible in each online brokerage’s profile page).  The best news for DIY investors coming out of these rankings, however, is that competition amongst brokerages is pushing at least a handful of them to put forth their best effort into winning new clients and keeping existing clients satisfied.

Socially responsible investing in the spotlight at Scotia iTRADE

For many investors, there is a growing trend towards thinking carefully about the impact and nature of where profits come from. Socially responsible investing is definitely gaining in popularity with investors and even this past week, there were headlines that major robo-advisors in the US were moving into this space by adding the SRI into their portfolio offerings.

For DIY investors in Canada, however, there’s at least one online brokerage who’s taken the leap to provide a tool to research and analyze companies according to their environmental, social and governance (ESG) components. Earlier this year, Scotia iTRADE became the first Canadian online brokerage to launch this ESG tool for their clients.

This past week, we profiled this tool in detail and provided a highlight of some of the issues that DIY investors might want to consider when using this tool, as well as whether this tool – itself a measure of controversy, might in fact also be a source of controversy in the Canadian online brokerage landscape.

The ESG screener and associated reports enable DIY investors to investigate the ESG rating of hundreds of companies listed on the TSX in order to learn more about whether those companies fit within the investor’s goals of socially responsible investment decisions.

Of course, while socially responsible investing is an idea that many can get on board with, in reality the definition of what this means and how it works exactly are important to know.

In the world of DIY investing, in particular in Canada, there has been a discussion as to the nature and types of tools that order execution only brokerages can provide. Separately, events in the US with respect to fiduciary duties of money managers and advisors have also helped to colour the debate on social responsible investing – namely that it introduces a bias that may be at odds with the duty or objective to maximize the monetary benefit to the investor.

Click to read the full story in the blog here.

Discount Brokerage Tweets of the Week

This week it looks like outages and advertising were the topics of choice for DIY investors on Twitter. Mentioned this week were Questrade, RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

Into the Close

That’s a wrap on another week. Now that the weekend is here, hopefully there’s some sunshine to enjoy. Of course, for GoT enthusiasts, there’s plenty of winter to look forward to on Sunday and lots of watercooler talk on Monday. For a more real-life GoT experience, however, be sure to tune into CNN as the intensity level of the drama that is US politics ratchets up. On that note, now that ‘Spicey’ has left the building, here is a fun collection of memes commemorating the departure.


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Let’s get ethical: Scotia iTRADE launches tool to help DIY investors with sustainable investing

Even though Scotia iTRADE has a predominantly red logo, it appears that they’re banking on investors seeing this online brokerage as being green thanks to a new sustainable investing push.

Earlier this year, Scotia iTRADE launched an interesting tool for DIY investors interested in socially responsible investing by introducing a sustainability research add-on to its online trading platform. The sustainable investment tool, developed by Sustainalytics, offers information on three key company components—environmental, social and governance (ESG)—that the DIY investor can use to guide their investment choices.

Observant Scotia iTRADE clients have undoubtedly already noticed the barrage of ads online as well as the new addition to their online platform (screen capture below) seamlessly incorporated into their ‘Quotes & Research’ page. DIY investors can see at a glance how a company is performing against its peers in terms of its ESG measure.

Currently, the tool holds information across 20 industries and 1200 companies from the TSX and the Russell 1000. So, although the universe of companies covered is limited, with tens of thousands of publicly listed companies globally, presumably coverage and range will improve as more companies begin reporting ESG measures.

Scotia iTRADE may already be anticipating an expansion since the onscreen drop down menu of industries already offers more than 40 picks. Options range from ‘Aerospace & Defense’ to ‘Utilities’, with choices in-between such as ‘Automobiles’, ‘Chemicals’, ‘Consumer Services’, ‘Healthcare’, ‘Oil & Gas Producers’, ‘Steel’, ‘Textiles & Apparel’, and ‘Transportation’, to name just a few.

The overall ESG gives a score from 1 to 5, “laggard” to “leader” (a single “green leaf” with an ESG score in the bottom 5% of the industry to five “green leaves” with an ESG score in the top 5%). There is also a ranking of the company’s level of controversy with respect to “customer incidents.”

DIY investors who want more information can also download a multi-page ESG report that details how and why the company has earned its score in each area of environmental, social and governance activity. In this way, DIY investors can decide whether the company’s organization and business structure aligns with their own views and support them, or not, with their investment dollars.

Interestingly, Scotiabank, parent to Scotia iTRADE, has an ESG report score of 61 (out of 100) and is considered an ‘average’ performer when it comes to ESG, with a relative rank of 100. Among the risks cited in the ESG report is a significant governance controversy arising from a class-action suit naming Scotiabank (and 22 other banks) in a money laundering and market manipulation investigation in the US. Ironically, where investors set their own ESG threshold might preclude them from using Scotia iTRADE at all (being a subsidiary of Scotiabank). If DIY investors felt strongly enough about ESG, then this bank-owned brokerage’s score of 61 may or may not be acceptable.

Screenshot of ESG snapshot report

A quick tour of the platform shows that the onscreen tool is easy to see, read and navigate, and the downloadable PDF document that details the ESG of a company is well laid out and comprehensive. That said, there are a few limitations too, the most important being that readers might find that comments made by the report are not thoroughly referenced.

For example, the Bombardier ESG report claims that their CSeries aircraft’s lighter weight and “other aviation techniques” can allow for “20% fewer carbon emissions during flight.” The reference to “other aviation techniques” is vague, and the carbon emissions reduction claim needs a reference the reader can trace.

That said, sustainable investing issues are complex to distill down to a short format and the layout of these reports may simply indicate a lot of information crammed into too few pages. Striking a balance between depth of coverage and readability is a challenge when the information’s scope is so broad.

Another feature of interest is an ‘Equities Screener’ page if DIY’ers want to view more companies with similar ESG values.

On the ES page, the ‘Sustainable Investing’ button, lower left, is marked with a bright red & white “NEW” notice, hard to miss on an otherwise grey and white page, as the screen capture, below, illustrates. Here is also where investment criteria get really interesting for the DIY investor—and possibly controversial.

Screenshot from screener with sustainable investing feature

DIY investors have long been able to include fundamental criteria such as the sector, country and various valuations on price and returns when looking to invest, but now investors can also screen for ‘Business and Human Rights’, ‘Bribery & Corruption’, or ‘Military Contracting’. These criteria are considered extra-financial concerns, deemed by most corporations as “noise” in terms of investment interests and by only a few as a “signal” that speaks to a company’s values and is reflected in its stock worth.[i],[ii]

The DIY investor should decide whether these criteria are important to them, or perhaps more, financially influential to a stock’s value. What’s the return on investment (ROI) on diversity hiring or labour relations in terms of a company’s performance on the stock market? Does it matter that they recycle? Or offer healthcare? Can these components even be teased out of a stock valuation?

Indeed, recent research shows that they can, and the white paper prepared for Scotia iTRADE by Sustainalytics draws on the 2016 Harvard study’s findings.

The study separates immaterial issues from material ones; that is, issues that are not generally reported as part of a company’s financial filings, but that do have impact on its corporate value (material issues) from ones that do not. The study found that corporations addressing material issues while ignoring immaterial ones outperform companies that address both material and immaterial concerns by 4% and companies that address neither by almost 9% (8.90).[iii]

Possible impacts of sustainable investing on advisors

Ironically, the notion of sustainable investing or ESG-based investing is itself not without controversy, especially for advisors or individuals who make investment decisions on behalf of others.

In the US, the Department of Labor has struggled in giving direction through its Interpretive Bulletins on the consideration that financial advisors should give to non-monetary issues aka economically targeted investing (ETIs), socially responsible investing (SRIs) and ESGs when advising on investment concerns for publicly held trusts.[iv] Its latest issuance on the matter of the Employee Retirement Investment Security Act (ERISA) and ETIs, IB 2015-01, says that ETIs may be considered when financial considerations between choices is otherwise equal.

Regardless, the issue of ETI and ESG criteria utilized when choosing investments has been argued as far as the US Supreme Court.

In its 2014 unanimous ruling that fiduciary duty was breached with the introduction of ETI or ESG criteria, the judge stated that public trustees must act solely for the “financial benefits” of plan members rather than pursue “non-pecuniary benefits” such as “employee ownership of employer stock.”[v]

This argument has been further argued in a 2016 US law paper, where the authors note that the legislation guiding trustees for ERISA requires them to invest funds “prudently,” “diversely” and “loyally.”[vi] According to this argument, anything else opens the doors to influence that might adversely impact the decision making process and possibly introduce extraneous factors that unduly influence the trustee.

The bottom line

There is some compelling evidence to suggest ESG impacts company value. What value these tools that provide this information to DIY investors offers must wait to be seen.

The issues in the US while distant, could influence policy here, where a number of provinces are now considering tightening up fiduciary responsibilities of financial advisors to guidelines similar to their US counterparts. Further, it does add an interesting twist into the conversation around what constitutes influence and recommendations – something Canadian discount brokerages (as order execution only entities) and investment industry regulators are currently wrestling with.

For the moment, however, Scotia iTRADE continues to double down on its marketing efforts to trumpet the ESG banner. In doing so, they are not only highlighting that there are now tools that can help investors make more ethically informed investments but they are also getting other Canadian online brokerages asking whether this is something that could help inspire DIY investors to vote (and trade) with their dollar.

End Notes

[i] “ . . . the number of companies issuing sustainability reports has grown from less than 30 in early 1990s to more than 7,000 in 2014, while the United Nations Principles for Responsible Investment (UNPRI), as of 2014, had 1,260 signatories with $45 trillion in assets under management.” Mozaffar Khan, George Serafeim, Aaron Yoon. “Corporate Sustainability: First Evidence on Materiality”, Digital Access to Scholarship at Harvard, Working Paper 15-073, Retrieved from https://dash.harvard.edu/bitstream/handle/1/14369106/15-073.pdf?sequence=1
[ii] “In the financial sector, half of the 63 companies surveyed by SASB’s Industry Working Group said they currently provide no disclosure on ESG issues in their 10-K filings, with another 14 percent offering only boilerplate statements and 30 percent reporting on industry-specific issues. Just 6.0 percent of the companies disclose ESG metrics. Reporting on performance and goals is virtually unheard of.” David Bogoslaw. “SASB previews sustainability standards for financials”, Corporate Secretary, 18 April, 2013. Retrieved from  https://www.corporatesecretary.com/articles/compliance-ethics-csr/12425/sasb-previews-sustainability-standards-financials/
[iii] IBID, 2, Table 6, 32.
[iv] “An economically targeted investment broadly refers to any investment that is selected, in part, for its collateral benefits, apart from the investment return to the employee benefit plan investor.” Department of Labor. 29 CFR Part 2509 RIN 1210-AB73. “Interpretive Bulletin Relating to the Fiduciary Standard under ERISA in Considering Economically Targeted Investments.” Retrieved from https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-27146.pdf

[v] 134 S.Ct. 2459 (2014). “Fifth Third Bancorp et al., Petitioners, v. John Dudenhoeffer et al.”No. 12-751. Supreme Court of United States Retrieved from https://scholar.google.ca/scholar_case?case=17046701813240930601&hl=en&as_sdt=6&as_vis=1&oi=scholarr&sa=X&ved=0ahUKEwjN1fzKnujSAhWn34MKHcAqC3gQgAMIGygAMAA

[vi] Edward A. Zelinsky, Morris and Annie Trachman. “The Continuing Battle Over Economically Targeted Investments: An Analysis of DOL Interpretive Bulletin 2015-01”, 2015. Retrieved from: link here
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Discount Brokerage Weekly Roundup – July 14, 2017

If there’s one thing Canadian investors heard a lot about this week, it’s that interest rates are coming. Also, winter is coming. While the latter is something Game of Thrones fans will be clamouring over,  ironically it’s the former that will get Canadian discount brokerages pretty stoked. After years of being forced to operate with lower commissions and volatility, interest rate increases will provide a bump to earnings. Not without a sense of irony, however, the rise in rates might make online trading slightly less attractive to DIY investors. As such, online brokerages are going to have to get even more creative about improving services and their image if they want to weather that storm.

This edition of the roundup keeps it light and easy. First, we kick off with a recent post about digital innovation at Canada’s largest bank-owned online brokerage. From there we look at the performance metrics of a popular independent brokerage and why the math on trading activity points to some interesting developments with active traders. Also on tap, there’s lots of chatter to share from DIY investors on social media and in the investor forums.

Behind the screens: A look at digital innovation with TD Direct Investing

What does it take for a Canadian online brokerage to compete in a digital world? It’s that question that prompted us to find out how Canada’s largest online brokerage, TD Direct Investing, is navigating such a rapidly evolving world.

In a fascinating interview with Richard Wilks, associate vice president, self-directed and advised client digital capabilities at TD Wealth, we took a ‘behind the screens’ look at how exactly an online brokerage with the size and scale of TD Direct Investing manages to improve its stable of digital platforms while at the same time keeping pace with the speed of change that is forcing financial firms to compete on a fintech playing field.

Frequent readers of the roundup, and especially those paying attention to social media and forums, will recall the flare ups when things have gone off the rails during the roll out of WebBroker. In this in-depth look at how TD Direct Investing stick handles platform development and maintenance, however, it becomes clear that all online brokerages in Canada are tasked with the same challenge: being able to innovate while also providing stability of delivery and service. In fact, because change is going to happen so rapidly, and so often, the culture of many of the largest financial firms in Canada is evolving to become responsive to technology shifts. The notion of what constitutes ‘perfect’ has changed from ‘being error free’ to ‘can this be addressed quickly’

One of the interesting angles to the technology story is how increasingly important the digital experience will be as a benchmark of quality when selecting an online brokerage. Now that smartphones have enough computational power, accessibility and screen real estate, most if not all, of the core functionality of online trading can be taken care of with a mobile device – including service requests.

For Canadian discount brokerages, competing against “robo” style automation means that DIY investing is going to have to feel like less work, and to achieve that will take continuous investment in technology and, most importantly, listening to clients.

And, while commission price is always going to be something that DIY investors consider when selecting an online brokerage, there is a value that is attached to having secure, reliable and user-friendly technology.

Check out the full article on digital innovation at TD Direct Investing here.

Tale of the tape: Interactive Brokers’ trading metrics post some interesting numbers

If there’s one thing that investor’s love about charts (unless they’re short of course), it’s when they go up and to the right.

For Interactive Brokers, the chart of customer growth continues to do just that. The latest figures on account growth for June 2017 show that Interactive Brokers now has 428 thousand clients, an increase of 20% relative to last year and 2% higher than in May. Keep in mind that this is net of any clients who left so it is an impressive number for Interactive Brokers to have reached.

Interestingly, even though they added 9.8 thousand accounts in June, which was close to double the 5 thousand that were added in April, the total number of DARTs (Daily Average Revenue Trades) for IB (368K trades) in April (used for comparative purposes) was only slightly lower than in June.

This touches on an interesting development for one of the most ‘active trader’ focused segments of the market, namely why, despite the growth in the number of clients is trading activity in terms of cleared DARTs not increasing proportionally? And, if active traders in the US are not trading as much, is the same true for Canadians?

With interest rates on the rise and markets continuing to press higher in the US, it will be interesting to hear what Interactive Broker’s leadership has to say on their conference call next week. The message so far has been that the lower volatility in the markets, in part due to algorithmic and high-frequency trading, means that active traders have shied away from trading this market. Stay tuned as there may be a few more gems on what comes out of the conference call.

Discount Brokerage Tweets of the Week

Interesting conversations were on Twitter this week as DIY investor’s gave their colourful opinions on technical hits and misses. Mentioned this week were Credential Direct, Questrade, RBC Direct Investing, Scotia iTRADE and TD Direct Investing.

From the Forums

Putting Norbert on the spot

When it comes to currency exchange for DIY investors, Norbert’s Gambit is a handy tool to have in the toolbox. That said, there is one Canadian discount brokerage that it doesn’t seem necessary to use it, at least according to this post from reddit’s Personal Finance Canada section. Click to learn more.

Take my money

Funding an online trading account seems simple enough. Or at least it should. In this post from redflagdeals.com’s investing forum, one user was looking to fund a TD Direct Investing account and got many creative suggestions on how it could work.

Into the Close

That’s a wrap on yet another wild and wacky week in the markets. Despite all of the noise around what’s happening in the oval office, markets continue to push higher. It’s hard to look away from the political drama but in case you missed it, there’s a great tweet that sums up the hijinks of the week in the way that only a tweet can. Looks like Jon Snow isn’t the only one who knows nothing. Have a great weekend!