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Discount Brokerage Weekly Roundup – August 2, 2021

While Canada being on fire at the Olympics is a definite plus, Canada is literally on fire (at least in this neck of the woods in BC) this long weekend. Despite the hazy skies, ambitions at Canadian (and American) online brokers are pushing faster and higher.

In this long (and smoky) weekend edition of the Roundup, we jump into the latest updates from the deals and promotions section, highlighting a new offer from a popular online brokerage. Next, we do a quick sweep of some interesting developments, including new stocks available for trading at Wealthsimple and the brave new world for Robinhood now that they’ve IPO’d. Finally, there is some fascinating fodder in the forums to cap your summer reading list off.

Deals Activity Update – August

It’s the start of a new month, and as such, time to check in on the latest deals and promotions from Canadian online brokerages. This summer (and year) has been filled with surprises, and this month, there’s a positive surprise in the form of a new offer from Qtrade Direct Investing to kick things off in August.

Before diving into the details of the promotions active this month, it’s important to highlight that August is the start of the final quarter of the fiscal year at many Canadian online brokerages. Why that matters is because this final stretch of the year offers brokerages a chance to bring their full year numbers up. While trading volume isn’t something that brokerages can directly impact, attracting assets and new accounts are. And, one of the fastest ways to do that is with promotional activity.

Looking first at the newest offer in play, Qtrade Direct Investing has an interesting promo aimed at the FOMO crowd: 50 commission-free trades. One of the reasons this promotion is interesting is because it lives up to its FOMO name, with the deal only lasting until the end of September. Another FOMO angle is that only the first 100 people to sign up for this account are eligible to receive it.

While limited time offers are not unusual, short term (one to two month) offers are fairly rare and combining these offers with a limited quantity feature is virtually unheard of at other brokerages. This is not the first time Qtrade Direct Investing has tried the limited quantity approach, but the titling of this offer as a “FOMO” promotion is targeting this deal to millennial investors who would have likely also seen this labelled applied to GameStop and AMC trading earlier this year. The fact that the deposit requirement is a minimum of $10,000 also significantly lowers the hurdle for younger investors to be able to take advantage of it.

Promotions generally take time and effort on the part of online brokerages to configure and manage, so there have to be additional benefits to the exercise that go beyond just the new accounts. One of those additional advantages would likely be understanding what kind of demand for online brokerage accounts currently exist.

Earlier this year there was an unmistakable tsunami of interest in opening new accounts; however, as the year has progressed, there has been a definite pullback in the number of new accounts opened. The launch of a new promotion at a typically quiet time in the calendar year might be a way to gauge whether DIY investors – especially younger ones – are still keen on trading.

Two other online brokerages on the deals radar this month are BMO InvestorLine and Scotia iTRADE.  Both of these bank-owned brokerages have promotions that are currently scheduled to conclude at the end of August. In the case of BMO InvestorLine, there is a strong likelihood that a new offer will appear to replace the outgoing promotion; however, for Scotia iTRADE, it is not entirely clear whether there will be another special offer coming.

The good news for DIY investors is that the quiet period for promotional activity is almost over. In all likelihood, the combination of the end of the fiscal year and a surge in new feature releases means that online brokerages are going to be more inclined to either test some creative offers or launch some campaigns that will last into the mid-fall when the ramp up to RRSP season kicks off.

Online Brokerage Quick Updates

Wealthsimple Trade Enables Hundreds of Canadian Securities Exchange Listed Stocks

When it comes to online brokerages in Canada, Wealthsimple Trade represents an interesting case. On the one hand, there is a clear value proposition with zero-fee trading commissions for Canadian-listed securities, on the other, there is a limited availability of those shares for trading because stocks have to meet certain price and volume criteria.

This past week, Wealthsimple Trade took a significant step forward in increasing access to a big chunk of a Canadian-listed stocks by enabling access to just over 200 stocks listed on the Canadian Securities Exchange (CSE). The CSE is home to Canada’s largest contingent of publicly-traded cannabis companies and also has stocks in blockchain and esports, all areas in which the core audience of Wealthsimple Trade are interested in trading.

For the CSE and Wealthsimple, this is clearly a win-win. Wealthsimple Trade has achieved a unique position in the online trading landscape in Canada, having reaching a critical mass of importance that enables it to challenge larger and older online brokerages despite not having all of the features of those other brokerages. By closing that gap between themselves and the existing competition, Wealthsimple Trade is well-positioned to benefit from any big movements in the cannabis space that could reignite investor interest in the industry (e.g. any movement on legalization in the US). On the CSE side, more access to retail investors also means more possible trading to take place on their market, ultimately translating into greater potential revenue.

Memes in the HOOD

If there’s one name in the US online brokerage market that’s been in the news practically all year, it’s been Robinhood. Earlier in the year, it was a rollercoaster ride of emotion from hero to villain, as Robinhood found itself in the middle of a public firestorm from DIY investors who wanted to ride on the “meme stock” train only to find themselves shut out of trading those stocks by Robinhood.

The fallout from the meme stock controversy has still not subsided, and despite what would ordinarily been considered a blowout year of performance, there is a clear overhang on the Robinhood story that clearly had an impact on what should have been an exceptionally big deal of Robinhood going public via IPO.

The Robinhood IPO and the journey to this incredible milestone will almost certainly be the focus of business case studies, more so as a question of what went wrong. The fact that the stock was priced at the lower end of its range and that it still fell on opening day (and for a few sessions afterwards) point to clear pessimism on the part of the investing public. Until the market can accurately discount the risks for activities such as payment for order flow (and where regulators may elect to clamp down) as well as some of the liabilities, there will be a constant uncertainty to what Robinhood should be worth. The bigger challenge, however, is how Robinhood will fare as a public company in order to grow its revenue to make it an attractive investment over the long term. They have a massive account base (22 million at last count) so there is room to monetize that, and it’s not just any account holder, it’s the prized millennial segment that so many online brokerages and wealth managers are only now ramping up to try and win over. Robinhood has a six-year head start on this group. The question, ultimately, is how Robinhood intends to grow its earnings.

One interesting feature about Robinhood is that because of its line of business, it can be a better proxy for ordinary online investors than Interactive Brokers can. In the case of Interactive Brokers, their target is more active investors, including day traders, so there is some limitation as to what can be interpreted when Interactive Brokers releases its trading figures. Another interesting feature we can expect as well is that in order to grow earnings in what might be a declining level of interest in markets (compared to 2020 and early 2021), Robinhood will have to innovate and that could open up a slew of new features and components that Canadian online brokerages can look to for inspiration as they too wrestle with how to attract and win market share with millennial investors.

There is much more on the new chapter in the Robinhood story, so be prepared for this name to become cemented into the psyche of retail investors and wealth management everywhere.

From the Forums

Fractional Shade

Some stories you find in the spotlight, others you find in the shade. And in the case of this forum post on reddit, there was clearly a lot of shade being thrown by Interactive Brokers Canada at the whole Canadian fractional share trading story.

The shots fired by Interactive Brokers Canada management at Wealthsimple Trade and the latest innovative launch of Canadian Depository Receipts at Neo Exchange are unlike anything we’ve seen from the normally spotlight-shy brokerage. Ironically, despite having access to fractional shares for years, Interactive Brokers Canada has not heavily marketed this feature and as a result, Wealthsimple Trade and now the new CDR feature have stolen the innovation thunder away from Interactive Brokers. See what sparks were flying among online investors here.

Help with Homework

DIY investing requires doing some degree of homework, especially when picking an online brokerage to start trading with. In this post from RedFlagDeals.com, it is fascinating to see the degree to which some online investors would prefer to seek out answers to questions from fellow DIY investors rather than addressing questions directly to online brokerages or digging around on a website for answers. While at first glance it may seem like trying to take the easy route out, long customer service wait times and website navigation are some of the unseen reasons why sometimes even simple questions get raised in forums instead of addressed by online brokers themselves.

Into the Close

That’s a wrap on this short-week edition of the Roundup. Here’s hoping you’re managing to stay safe and squeezing in relaxation before what is shaping up to be a very busy September.

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Discount Brokerage Deals & Promotions – August 2021

August is here and even though we’re still in the midst of summer, for many online brokerages in Canada, they’re kicking off the final stretch of their fiscal year. When it comes to deals and promotions, this is the final stretch to get any important performance boosts in or any budgets submitted for next fiscal year.

The good news for investors is that there is already a new offer to kick off in August courtesy of Qtrade Direct Investing. Also, this month will be important for two bank-owned brokerages: BMO InvestorLine and Scotia iTRADE. In the case of the former, there is a seasonal shift in deals, with their current cash back promotions set to conclude at the end of this month. For Scotia iTRADE, the investor-education-oriented offer for attending their bootcamp expires at month’s end.

With September just around the corner, there’s no question online brokerages are collectively strategizing on what they should be doing for this fall. For online brokers keen to get a jump on the extremely busy few months ahead, be on the lookout for more headline-worthy offers.

Expired Offers

No offers expired to begin the month

Extended Offers

No extended offers to begin the month

New Offers

Qtrade Direct Investing launched a new commission-free trade deal aimed at millennial investors. To qualify, new clients need to deposit at least $10,000 and be one of the first 100 individuals to open an account. This promo runs from the beginning of August just until the end of September. See the online brokerage deal comparison tool for more details.

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Discount Brokerage Weekly Roundup – July 26, 2021

The Olympics are a very public stage on which athletes have to be prepared to do their best. In more ways than one, this year’s games serve up some lessons to online brokerages on how to stay cool in the public eye, as well as under the pressure of intense competition.

In this edition of the Roundup, find out which US online brokerage appears to be taking the lead when it comes to innovative approaches for the new terrain of online investing and what it could signal for Canadian online brokerages looking to get creative with client experience. Next, we recap the highs and lows for Canadian online brokerages this week and close out with healthy dose of debate and chatter from DIY investor forums.

Interactive Brokers Positions Itself for a New Normal

There’s no doubt the upcoming Robinhood IPO is going to capture a lot of attention from curious onlookers, analysts, and investors this upcoming week.

As a publicly traded company, there will be a lot of scrutiny on the operations and performance of Robinhood, and a lot more information to dive into on the kinds of efforts Robinhood is going to undertake to drive reasonable rates of return to investors.

While reporting performance might be new to Robinhood, one online brokerage that has become well-practiced to life in the public markets is Interactive Brokers. This past week, Interactive Brokers held their regularly scheduled earnings call, and while there were some blisteringly high headline numbers on client growth to report on, there were several interesting things that surfaced that appear to have flown under the radar that we see as reflecting a very agile move to navigate the new normal of online investing.

Record-breaking Client Growth

There’s no question about what the headline is with respect to the latest earnings release.

Client growth compared to a year ago was up 61% to over 1.4 million client accounts. And while it may pale in terms of number of accounts when compared to Robinhood (which is estimated to have 22.5 million funded accounts), what stands out about Interactive Brokers is that the average account balance is $250,000. By comparison, the reported median balance of Robinhood account holders was $240. 

Even though Interactive Brokers has a competitor offering to the Robinhood cost model (i.e. IBKR Lite), the primary revenue driver for the online broker is still trading commissions, not payment for order flow.

There were two other interesting things that popped up in the earnings call which didn’t get much attention and one that should have gotten more attention but was not covered in the analyst Q&A.

Inactivity Fees Lower Friction to Restart

Earlier this month, Interactive Brokers made an interesting move by removing inactivity fees. On the surface, the move seemed to suggest that Interactive Brokers might be positioning itself to make an overture to some of the clients that would typically not qualify to have the inactivity fees waived – namely, individuals with less than $100,000 in assets or those who didn’t generate at least $10 per month in commissionable trades. For an online brokerage that deliberately sets its sights on active traders, this seemed a little unusual.

Fortunately, this past week, the founder (and still active spokesperson) for Interactive Brokers, Thomas Peterffy, provided additional context for dropping the inactivity fees. Peterffy stated:

“we would like to hold on to the people who have had accounts with us to run them to continue to have accounts with us even if they become inactive for a while. And so, the account is open even if they just leave a few dollars. And then, when they are ready to invest again, they will do it with us.”

Thus, the decision to waive inactivity fees was actually a move to hold onto active trader customers who would want a pause from trading. Instead of closing an account while it is not being used and potentially going to another source to reopen it when wanting to restart trading, by waiving the inactivity fees, Interactive Brokers is hoping that those lucrative, highly active traders will find it easier just to restart an existing account rather than try to open a new one.

This use case is a great example of looking at client behaviour and finding an opportunity to reduce the friction for a client who is behaviourally inclined to actively trade to be able to restart again.

As all online brokerages are aware, active traders are particularly hard to come by, so the motive behind the move for Interactive Brokers to remove inactivity fees makes a lot more sense when positioned in terms of retention as opposed to new client recruitment.

Investor Education Innovation

Another interesting development that was mentioned in the latest Interactive Brokers earnings call was an investor education initiative developed for the online learning platform Coursera. Interactive Brokers has developed and launched a specialization, entitled a “Practical Guide to Trading Specialization,” which is actually comprised of four courses covering the following topics:

  • Fundamentals of Equities
  • Forex – Trading Around the World
  • U.S. Bond Investing Basics
  • Derivatives – Options & Futures

As of the date of publication of this edition of the Roundup, the Interactive Brokers course had a 4.3 rating (out of 5) from 45 participants and enrollment of just over 2,450 students.

In addition to being free, there is a significant bonus feature of getting a “shareable certificate” which can be displayed on LinkedIn. The very interesting catch is that in order to receive the certificate, attendees must complete a hands-on project. And one of the tools that students can use in order to complete the hands-on project is the Trader Workstation (made available via free demo account), which is the Interactive Brokers trading platform.

Investor education was mentioned in the quarterly results, indicating that this feature continues to serve a strategic purpose to better educate investors on how markets work – especially those investors who are newer to investing. Interestingly, this theme is also echoed among several Canadian online brokerages who are investing additional efforts to provide educational resources to online investors, many of whom are just getting started on their online investing journeys.

For Interactive Brokers, the Coursera investor education offering is a very polished mechanism to generate awareness and interest in the Interactive Brokers platform.

Beyond just awareness, however, the fact that users are being nudged to download the Trader Workstation is a savvy move by Interactive Brokers to directly market to, if not, onboard new customers. Granted, a course as demanding as this won’t see a crushing flood of individuals flock to it; however, Interactive Brokers understands that their strategy on new customers is about quality rather than quantity. The added bonus that individuals who complete this course can share it on their LinkedIn profile will advertise the course as social proof and underpins just how innovative this latest move is from a marketing perspective.

As online brokerages here in Canada and in the US wrestle with trying to provide educational content that DIY investors will actually consume, this Coursera offering by Interactive Brokers provides an interesting example that other online brokerages are likely going to be inclined to consider replicating.

Crickets on Crypto

Of course, one of the big developments that we were listening for more information on, which surprisingly, did not get discussed on the conference call, was the launch of cryptocurrency trading on Interactive Brokers.

Earlier this year, we reported the launch of crypto trading by Interactive Brokers; however, there hasn’t been much in the way of details provided since then. Perhaps not entirely by accident, Thomas Peterffy – a notable critic of cryptocurrency – also went on record as saying that he himself now owns some cryptocurrency.

The shift, it seems, sounds like capitulation.  

Peterffy has clearly seen that there is at least some possibility of cryptocurrency becoming a valuable asset class regardless of his personal belief on the thing. Most traders understand that it’s best not to fight the tape, and for the foreseeable future, cryptocurrencies continue to be a part of where money is flowing to.

What was said about the cryptocurrency trading at Interactive Brokers was minimal – the only update we received is that there is more news to come at the end of the month.

Once again, the remarks made over the earnings call and during the Q&A component of the call provide a unique window into the mindset and possible strategic direction of Interactive Brokers going forward. While the kinds of disclosures and discussions are usually well-vetted and rehearsed, the reality is that the occasional hint or nugget gets dropped.

By their own admission, despite the strong numbers posted for the quarter, Interactive Brokers (like other online brokerages) is seeing that there is a slowdown in the pace of online investors rushing to open an online brokerage account and trade it with the same fervor that they had last year or during the first calendar quarter of 2021.

To navigate the next normal, it’s becoming clearer that new features and offerings are going to be required. In this case, it seems that for Interactive Brokers, features such as cryptocurrency trading, as well as client experience features, like reducing inactivity fees, educational resources, and ramping up of customer service are going to be important drivers to hold onto existing clients rather than purely seeking out new ones.

Canadian Online Brokerage Updates

While there’s been lots happening with US online brokerages this past week, Canadian online brokerages have also been busy juggling their own ups and downs.

On the upside, National Bank Direct Brokerage announced the conclusion of the Biggest Winner competition. The ETF picking contest, organized by Horizons ETFs and sponsored by National Bank Direct Brokerage, is now in its 10th year with National Bank Direct Brokerage, having sponsored the competition for the past nine years.

This year, there were 2,620 registrants which, according to contest organizers, was the highest registration since the first edition of the competition. The winner of the competition managed to generate a six-week return of 25.67% and took home the top prize of $7,500. Second place won $2,500 and there were six weekly prizes of $500.

For National Bank Direct Brokerage, this contest is a unique way to boost awareness of the online brokerage and position itself alongside an important selling point: the fact that they offer commission-free trading of ETFs. Of course, the challenge for all Canadian online brokerages coming out of the pandemic is to find creative ways to connect with investors, especially at a low cost.

With a prize payout of $13,000 and just over 2,600 registrants, the numbers from an advertising point of view work out to just under $5 per registrant, which is an exceptionally good deal if some of those registrants end up taking a closer look at either Horizons ETFs and/or National Bank Direct Brokerage.

Even though National Bank Direct Brokerage has been a long-time sponsor of this event, the past year seems especially relevant in terms of the attention that this bank-owned online brokerage has been getting from online investors. And (see forum post below), the additional marketing activities that NBDB is undertaking will almost certainly help in generating more interest and curiosity.

On a literal down note, this past week also saw a number of online brokerages in Canada impacted by a technical outage from Akamai that took down brokerage trading during market hours. More than just online brokerages were impacted, with major banks in Canada, as well as major tech and business names, experiencing service interruptions.

In predictable (and understandable) fashion, Twitter and reddit were awash in acrimonious posts from unhappy online investors, many of whom learned the hard way just how fragile the online trading environment can sometimes be. And even when online brokerages aren’t themselves the culprit, the fact that customers can’t get what they want, when they want it, is enough to leave a digital trail of negative sentiment.

Interestingly (and fortunately), the immediate reaction from investors who were frustrated by the outage were tempered by other online investors and users who posted that the outages were impacting other sites and companies, and this was not an event that was broker-specific.

Nonetheless, the lesson for online brokerages is to be prepared for some (or many) users to take a shoot-first, ask questions later approach to service interruptions. The easier it is for online brokerages to communicate service status and cause of interruptions, the easier it will be for the “fact-checkers” to be able to broadcast reliable information to those users simply blowing off steam.

From the Forums

Word on the Street

When it comes to questions about online brokerages, there are the usual suspects that DIY investors are curious about. Lately, however, we’ve spotted more questions being asked about National Bank Direct Brokerage, such as this post from reddit, in which one user is looking for opinions from fellow DIY investors on this increasingly popular online broker.

Banter Ads

When it comes to advertising, there is simply no pleasing everyone. Of course, if the goal is to generate an emotional response to get people thinking (and talking), then mission accomplished. This fascinating reddit commentary emerged from the recent advertising battle taking place between popular online brokerages Questrade and Wealthsimple Trade.

Into the Close

That’s a wrap on this week’s online brokerage activity. There’s no question that the Robinhood IPO and associated fanfare are going to be in the spotlight. Like everyone else, we’re curious to see where the dust (and price) will settle on the first day, but this is certainly a week for the history books. And, speaking of history in the making, the Olympics are now well underway. Congratulations to team Canada for already making a splash at the games.

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Discount Brokerage Weekly Roundup – July 19, 2021

There are rare occasions in the Weekly Roundup when the outside world serves up a perfect metaphor for what’s going on in the world of online brokerages. And this week, it’s all about big names, big billionaires, and big launches.

In this edition of the Roundup, we take to the launchpad to witness the liftoff of new feature at a popular bank-owned online brokerage. From there, we pull up the radar screen for some interesting activity on the advertising front, as well as a potential billion-dollar payday to the founders of a US-based online brokerage (if they can manage to scale their business even farther than it already has gone). As is standard fare, we also serve up intriguing DIY investor commentary on fractional shares and trading platform glitches.

BMO InvestorLine Launches adviceDirect Preview

About two weeks ago, the BMO YouTube channel (BMOCommunity) started to share a number of videos about one specific product line: adviceDirect.

Fast forward to an announcement this past week of the launch of a new service from BMO InvestorLine: adviceDirect Preview. This new service enables users to take a test drive of the adviceDirect experience (albeit with limited functionality) and tinker with the “free account” features.

This announcement isn’t so much a new service as much as it is a new twist on an existing service. adviceDirect launched (waaay back) in September 2012 as a solution to support self-directed investors with decision making around their trading and portfolio management. Since its initial launch, adviceDirect has undergone a number of changes, including lowering the minimum required to open an adviceDirect account from $100K to $50K, and the capping of annual fees to be paid for this service at $3,750.

The new “preview” feature for adviceDirect is aimed at providing new users with some of the resources available to full adviceDirect clients. Signing up for an adviceDirect Preview account is free and provides users with access to personalized watchlists, trading ideas via five preset stock screeners, learning and educational materials, and access to the recently launched Healthcheck portfolio analyzer.  

One of the natural questions that has accompanied adviceDirect is who this service is for exactly?

On the one hand, self-directed investors are generally averse to paying for advice, and on the other hand, those who might be willing to pay for advice and wealth management services prefer to have the day-to-day oversight and management taken care of by a professional.

That adviceDirect has managed to endure despite these questions is an indicator that there is a segment of online investors who prefer to have access to a trusted, credentialed professional who can weigh in on trading and portfolio management decisions.

Interestingly, unlike the world in 2012, in 2021 there are now rich and active communities of online investors in places like reddit that can help investors “crowdsource” answers to investment decisions. That said, getting personalized attention from a professional in a reasonably convenient manner is a compelling proposition to those who don’t believe that random strangers on the internet will be a reliable resource for financial advice.

On balance, adviceDirect Preview is an interesting proposition for DIY investors who are advice-curious.

While only a select number of features are available in the adviceDirect Preview platform, those features could be used to help evaluate whether or not an investment plan is “on track” – something the adviceDirect platform is essentially built around.

Given the relatively high watermark to qualify for an adviceDirect account, younger investors or those just getting started might not qualify for the full experience for some time. That said, by offering a free version of the adviceDirect experience, it is a creative way for BMO InvestorLine to identify and cater to potentially valuable new clients.

From an industry perspective, being able to offer a “try before you buy” is a great strategy to create a relationship with curious DIY investors. For adviceDirect in particular, this move will hopefully help open up opportunities for skeptical investors to see whether there is value to be had in the advice-lite version of wealth management solutions.

Among the important benefits for BMO InvestorLine is that the adviceDirect platform is unique among online brokerages in Canada. Getting the model to work and to be cost effective is not something that can happen overnight, so if other online brokerages are going to start emulating or delivering something similar, there is going to be a long runway before adviceDirect finds a direct competitor.

And, while adviceDirect might not be a stranger to uphill battles, this year in particular stands out as a challenging one to launch new features in.

This spring/summer in particular has seen a surge in feature releases from Canadian online brokerages big and small. As we’ve covered in numerous Roundups this year, the flurry of new features coming to market suggests that the marketing and communications teams have their work cut out for them. Already, the activity on YouTube to release content related to adviceDirect suggests that a significant push is coming to promote this platform. The creation of a “preview” version of adviceDirect offers up both a boost of awareness of the platform, as well as a possible group of prospective future clients, so for BMO InvestorLine, it seems like a winning combination.

If history offers any lesson on adviceDirect, it is that it will continue to be more niche compared to the core DIY investing experience. With many more new investors now participating in the stock market, however, a material number of these investors might be inclined to seek out additional tools – and advice – about what to do after the fast money trades have come and gone. And, if there’s one clear example in favour of taking things slow and steady, adviceDirect is it.

On the Radar: Quick Online Brokerage Stories

Ad Battle

Even though there is a really interesting YouTube video about sharks and blood in the water, it still feels apropos to point out that in a fiercely competitive space, it seems like Canadian online brokerages sense something is up. Or more appropriately, down.

After scanning casually through reddit, one very interesting ad campaign from Questrade surfaced that appears to take direct aim at some of the pain points users have expressed with Wealthsimple Trade.

Ironically, for anyone who has spent any time on YouTube lately, Wealthsimple Trade ads are everywhere, indicating that there’s a bit of a digital media blitz taking place among Canadian online brokerages.

As mentioned above, there have been a whole slew of new features launched this year by online brokerages, and clearly, there’s got to be new marketing campaigns associated with these brands.

With much more advertising expected this year than in past years, we anticipate even more fierce competition for attention and some creative campaigns to surface before the end of 2021. Stay tuned!

Sherwood Like a Billion

Would a billion-dollar payday make you work harder or more creatively? We’ll soon find out whether or not putting another billion dollars on the line will prove to be the catalyst that gets Robinhood’s share price to hit certain targets by 2025.

In a recent article on the upcoming Robinhood IPO spotted on Reuters, there’s apparently a huge payday ($1.4 billion USD) for cofounders Vladimir Tenev and Baiju Bhatt if they can get the stock price of Robinhood up to $101.50 per share, even more money if the share price hits higher price levels.

What would need to be true for Robinhood, an already popular online brokerage, to hit the kind of per share price levels noted in their filing, would be to attract even more clients who are active investors and for Robinhood to find more ways to monetize their growing client base. With the cash generated from the IPO, there will certainly be a number of options to consider; however, it looks like increasing their global footprint and their service offering to clients will likely be a big part of the plan.

From the Forums

A Glitch to Scratch

After a year with a popular online brokerage, one DIY investor simply had enough of the technical hiccups. Find out from this post, which features ended up becoming points of frustration for one reddit user, as well as what other DIY investors had to say in response.

It’s Been a Slice

Now that fractional shares are here, there are clearly some kinks to get out of the way. In this post from reddit, a confused reader turns Wealthsimple Trade’s latest feature into an intriguing discussion about how, exactly, fractional shares work.

Into the Close

That’s a wrap on another out-of-this world edition of the Roundup. While billionaires going to space is definitely going to make it to the highlight reel for the year, there are also going to be lots of upcoming records to be broken at the Olympics. Attendance won’t be one of them (unless it’s for the fewest attendees). Here’s wishing everyone an award-winning week and the Canadian athletes all the best!

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Discount Brokerage Weekly Roundup – July 12, 2021

Seems like soccer and hockey players aren’t the only ones working overtime this summer – online brokerages are keeping themselves (and their competitors) very busy. While there might not be any big trophies or awkward press conferences, it seems like there is no shortage of things for online investors to be cheering about this summer.

In this edition of the Roundup, we highlight the biggest small development: the arrival of fractional stock trading in Canada. Next, we dive into a fee drop announcement that appears to be a much bigger deal than it seems. As always, we wrap up with DIY investor chatter from the forums.

Fractional Shares Now Available at Wealthsimple Trade

Thirteen isn’t usually considered a lucky number, but for Canadian DIY investors, it just became one.

This past week, Wealthsimple Trade launched fractional share trading in Canada (albeit on a limited basis), and as result, the landscape of online trading appears to be poised for yet another big change.

Although the list of stocks eligible for fractional stock trading is small, by introducing fractional share trading to mainstream investors in Canada, Wealthsimple Trade has managed to take yet another highly sought-after feature from the US online brokerage space and make it a reality for Canadian DIY investors.

Ever since fractional share trading became commonplace among mainstream US online brokerages, such as Schwab’s “Stock Slices” and Robinhood’s fractional share trading program in late 2019, Canadian DIY investors have been vocal about wanting this kind of feature to be launched by Canadian online brokerages.

This launch is yet another example of Wealthsimple Trade following the lead of US online brokerage Robinhood in delivering online brokerage services in a commission-free way. It also comes at a time in the Canadian online brokerage market when new features and value-added offerings are flooding the market. Given how popular this latest release will be, however, other features being released by brokerages are now going to have to compete even harder for user attention.

There’s lots to unpack with this latest announcement by Wealthsimple Trade, perhaps the most significant being that the die has been cast for fractional share trading here in Canada.

To tease out how the rest of the online brokerage field might respond, it is valuable to look at some context around fractional share trading, especially focusing on who this feature is most appealing to.

To level set, fractional share trading is when online investors can purchase a fraction of a share instead of a whole share. In some dividend reinvestment schemes, investors have been able to do this with dividends but never when buying a stock that doesn’t offer a dividend.

The primary appeal of fractional share trading is that investors with limited assets can still participate directly in purchasing shares of companies whose stock prices might be quite high. For example, one of the names on the list of eligible stocks, Shopify, is currently trading at almost $1,863 per share (closing price at the time of writing), which would require an investor to pony up at least this amount to purchase one whole share. With fractional share trading, investors can now own the amount of a stock that they can afford to buy.

Clearly, fractional share trading is not something that ultra-high net worth clients might be interested in as much as DIY investors who are just starting out, or who have modest investable assets. And that, it seems, is a key driver behind why we’re seeing fractional share trading at Wealthsimple Trade before we’re seeing it elsewhere – they’re deliberately launching features that would appeal to their core customer demographic base. Although the target audience for Wealthsimple Trade is younger and therefore not flush with a large amount of investible assets (yet), the reality is there is a very large target audience to who this applies, which provides the scale required for a program like this to be economical for Wealthsimple Trade.

Another interesting angle to this launch is that Wealthsimple Trade opted to have only four Canadian securities and nine US-listed securities to start. Of the four Canadian stocks, Shopify seems like a shoe-in based on its price and trading volume, but the remaining three choices seemed somewhat arbitrary. Even if Royal Bank and Canadian National Railway could be attributed to the combination of relatively high price and high liquidity, TD Bank – which at last check was trading at $84.70 – is lower in price than say BMO or CIBC, so it is curious as to why the one bank was included in the first list and not several others. It was also curious to see why only four names made the starting grid in Canada, but twice as many in the US.

Based on the business model of Wealthsimple Trade, offering up more choices for investing in fractional shares in US-listed stocks makes sense. Not only are there more “high priced” stocks to choose from to be a part of this program, but Wealthsimple Trade stands to make more money per trade (1.5% foreign exchange fee) for US-listed stocks.

And therein lies the fly in Wealthsimple Trade’s “low cost” ointment.

There is a growing “awakening” taking place among online investor communities that while Wealthsimple Trade’s zero commission pricing is a good deal for Canadian investments, it can actually be more expensive than a traditional online brokerage for US-listed stocks. The fractional share trading model unfortunately does nothing to alleviate that situation for smaller investors, and gives them the unenviable choice to pay a premium to participate on a fractional basis, or to use an ETF to obtain fractional exposure (potentially at another online broker).

There is no doubt more buzz to come around fractional share trading at Wealthsimple Trade. Competitor Canadian online brokerages are almost certainly going to have to follow suit in much the same way that several US online brokers did when fractional share trading went live in the US. That said, until Wealthsimple Trade changes their business model to allow for more competitive pricing to trade or invest in US-listed securities, incumbent Canadian online brokerages have a narrow window of opportunity to highlight their own cost efficiency in this regard and bring to market the ability to trade fractional shares.

We don’t anticipate Wealthsimple Trade’s list of eligible stocks for fractional share trading will stay at 13, however, the longer they keep their pricing for US-listed securities in place, the unluckier they may become.

Interactive Brokers Eliminates Inactivity Fees

If there’s one thing that online investors collectively enjoy hearing about, it’s a fee drop. Interactive Brokers announced this past week that effective July 1, 2021, they are no longer charging the $10 per month of inactivity fees to their clients. News of this move made a big splash.

While inactivity fees are sometimes a deal breaker for beginner or less active investors, at Interactive Brokers, their core customers have usually been highly active investors or day traders. So hitting the $10 per month in commission spend or having more than $100K in assets was not much of an issue.

Data from their most recent monthly metrics reveal, for example, that clients are averaging 500 trades per year for 2021 (estimated from the annualized Daily Average Revenue Trades or DART data per account for the first six months, and then averaged), which works out to about 2 trades per day – a threshold that would handily get most clients past the $10 per month in commission fees generated. As such, inactivity fees are likely not a material source of revenue for Interactive Brokers – although the impact of this move will be something we’re looking out for on their next earnings release.

Despite the $10 fee per month not necessarily being relevant to active investors, for passive or less active investors, the fee was a point of contention. It was interesting to note that coverage of the fee drop made it to Barron’s magazine, and among Canadian online investors, there was significant chatter about the decision to drop the monthly fee.

It is helpful to note that among online investors in DIY investor forums, Interactive Brokers is (and has been for many years) a very popular recommendation among active and value-conscious investors. With low commission charges and incredibly low margin rates compared to peer firms, one of the few things that kept coming up among online investors as a strike against Interactive Brokers was the inactivity fee. Thus, while it is not surprising to see some level of discussion take place about this latest development, it is remarkable that there is THIS much discussion about it.

As it happens, there’s a good reason for Canadian online investors to be extra happy about the inactivity fee drop.

Inactivity fees are one place that TFSAs are susceptible to being charged. Given the contribution limits and the caution against over trading in a TFSA account (lest one catch the ire of the CRA), it seems only natural that this account type at Interactive Brokers would attract inactivity fees (a similar case could be made for RRSPs as well for many investors). As such, inactivity fees served as a major deterrent to investors being able to consolidate accounts with Interactive Brokers until now.

Although it might be a function of the demographic that both trades online and who frequents reddit, the names that continuously came up in forum threads alongside Interactive Brokers were Questrade and TD Direct Investing.

Like Interactive Brokers, Questrade and TD Direct Investing also allow for options trading, which is typically associated with active investing. One of the quirks that characterizes Canadian DIY investors is that they often have more than one online brokerage account – with different accounts at different providers serving different purposes.

With this latest announcement from Interactive Brokers, it is likely that both Questrade and TD Direct Investing are going to see existing clients – especially active traders – move some of their other less active registered accounts over to Interactive Brokers. In industry lingo, it means that Interactive Brokers is poised to win a greater share of wallet.

For DIY investors, it won’t necessarily be all upside though.

If online investors aren’t mindful of transfer fees, leaving one brokerage to go to another could incur some non-refundable transfer fees. Unlike most Canadian online brokerages, Interactive Brokers doesn’t cover the transfer fees charged by another online brokerage. As the tweet below shows, it’s because Interactive Brokers doesn’t charge them when clients transfer out, and as such, IB doesn’t believe they should pay for them when other brokers charge them.

Another feature that investors used to the bank-owned online brokerage experience may not factor in is data subscription fees. At some online brokerages in Canada, data fees are included for level one or two quotes. At Interactive Brokers, however, clients must pay extra for snap quotes or real-time data, which drives up the cost for the casual user.

Despite Interactive Brokers’ largely active trader customer base, the elimination of an inactivity fee will likely have a positive impact on those Canadian clients who have multiple types of accounts with Interactive Brokers, or who have until now elected to not have less active accounts.

The fact that something as seemingly benign as the removal of an inactivity fee has generated as much discussion as it has points to there being significant user interest to consolidate some or all eligible accounts into Interactive Brokers.

As is the case in the US, around the world it appears that Interactive Brokers is squaring off against low-cost players that can attract less active or less affluent clientele. By reducing the hurdle to being a client, Interactive Brokers is embarking on an interesting direction to become much more appealing to mainstream investors than a niche trader-focused tool. In Canada specifically, this small but important fee change appears to be enough to trigger a wave of account transfers, and as a result, we expect to see some interesting developments in the active trader segment in response.

From the Forums

Need Some Pace

The innovation game is tough, especially among Canadian online brokerages. In this post, one user laments a perceived lack of innovation at a popular online brokerage once seen as cutting edge.

Storied Service

One thing is true about social media, folks aren’t shy to complain about what is not going well. For that reason, this post on reddit where someone took the time to relay their positive service experience at an online brokerage, stood out as unusual.

Into the Close

That’s a wrap on an especially nail-biting week (at least for sports fans). Of course, heading into earnings season (again) with economic data looking especially bullish and vaccination rates continuing to creep higher, there’s likely no shortage of excitement coming. Here’s hoping you find a fun way to stay cool and take time out to enjoy a treat (or two)!

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Discount Brokerage Weekly Roundup – July 5, 2021

It seems fitting that a short week is also a week for shorts (and not the bearish kind). With Canada Day and Independence Day interrupting the normal flow of trading activity for most DIY investors, it’s actually a great time to sit back, relax, and enjoy a good summer read. Fortunately, the online brokerages here in Canada and the US are teeing up a fair bit of interesting reading heading into July.

This edition of the Roundup features a recap of the latest deals and promotions activity at the outset of July, and what deals activity this month is telegraphing for the remainder of this year. Next, we take a quick look at a huge development in the US online brokerage market: the Robinhood IPO. As always, we keep things spicy with some fascinating DIY investor banter from the investing forums.

Online Brokerage Deals Get Creative

Summer is normally a time when things get a little sleepy in and around the online brokerage space – especially when it comes to deals and promotions. This year, however, things are definitely not “normal” among Canadian online brokerages.

The start of a new month is a convenient time to check in on the state of deals and promotions among Canada’s online brokerages, and this month’s pulse check has turned up some interesting findings for DIY investors and industry watchers to consider.

While there were no new (big) deal launches to announce to start the month, one of the biggest headlines to report on is the extension of National Bank Direct Brokerage’s 100 commission-free trade deal. This offer, which launched in March of this year and was set to expire at the end of June, has been extended until the end of September. On a relative basis, it is by far the biggest commission-free trade deal available to DIY investors in Canada. And with a year to use those commission-free trades, it is also a challenge for rival online brokerage offers to measure up to.

Contextually, this past year has also been an important one for National Bank Direct Brokerage in terms of mainstream exposure.

Having earned top spot in several online brokerage rankings, including the low cost online brokerage crown from Surviscor, and best online brokerage from MoneySense, and best online brokerage for investor satisfaction from J.D. Power, forum chatter among DIY investors clearly shows increased awareness of, and interest in, this online broker. After many years at the periphery, there is something noticeably different about the volume of interest as well as the comments and feedback from existing users.

Objectively, National Bank Direct Brokerage’s price point of standard commissions, the option for commission-free ETF trades combined with the commission-free trade promotional offer for new clients, and the perceived safety and convenience of a bank-owned online broker present a compelling combination for DIY investors. The biggest hurdles facing National Bank Direct Brokerage at this point, it seems, are awareness by more Canadian DIY investors (something that advertising can address) as well as the account opening experience.  

Thus, the decision to extend the deal through the end of the summer bodes well for National Bank Direct Brokerage, as well as for DIY investors, and raises the bar for competing Canadian online brokerages.

Differentiating between Canadian online brokerages is challenging for most DIY investors, so one of the natural starting points is price and subsequently features. With National Bank Direct Brokerage in the spotlight on both of those components, promotions are a natural complement to round out the increased visibility of this online brokerage with value-conscious DIY investors.

In addition to National Bank Direct Brokerage’s promotion extension, there were a couple of other bank-owned online brokerages that had important developments in the deals arena.

HSBC InvestDirect’s 60 commission-free trade offer expired at the end of June. Promotional activity from HSBC InvestDirect has been somewhat cyclical in terms of offers coming to market. Unlike other brokerages, such as BMO InvestorLine, which have much more frequent promotions, HSBC InvestDirect tends to be very tactical during the calendar year. As a result, though this commission-free trade offer expired, if history is any predictor, there could be space for one or two more promotions from HSBC InvestDirect between now and the end of the RSP contribution deadline in 2022.

The other bank-owned online brokerage to cross our deals and promotions radar this month was Scotia iTRADE. Specifically, the modest commission-free trade deal that offers new clients five commission-free trades, plus a bonus five for attending a series of educational webinars aimed at educating attendees about investing online.

With the number of free trades offered being so low (in comparison to other offers currently available), the point of interest here is that Scotia iTRADE is reactivating promotions and doing so by positioning commission-free trades alongside investor education. Of note, this commission-free trade promotion and associated investor education webinar series (pitched as a “bootcamp”) is targeted to younger investors.

This younger demographic of investor is increasingly of interest to Canadian online brokerages, as the past year has shown the appetite for online investing has increased among younger DIY investors. There is clearly a need for better understanding of how investing and markets work that DIY investors can benefit from.

It will be interesting to see how other established online brokerages – such as the bank-owned online broker peers – apply incentives and promotions around key activities (like attending a webinar series). For Scotia iTRADE, however, it is going to be important to gauge whether DIY investors believe that the effort required to attend a webinar is worth the reward of a few commission-free trades.

The bank-owned brokerages weren’t the only ones getting creative with deals and promotions this month, as the challenger brand Wealthsimple Trade also appeared to ramp up its promotional efforts as well.

Throughout the spring and into the early part of the summer, there has been a noticeable acceleration of the use of the “free stock” promotion by Wealthsimple Trade. As part of this offer, new clients (that sign up organically or via referral) can be eligible to receive the cash equivalent of the price of a stock from a pool of select stocks (chosen by Wealthsimple Trade).

This lottery-based approach appears to be similar to the approach used by popular US online broker Robinhood, however, in the case of Wealthsimple Trade, the dollar-equivalent of the stock is provided to the new client instead of a share of a particular company. And, to boot, the dollar amount for the highest stock, Amazon – which last closed at about $3,500 USD (about $4,300 CAD) – makes for a great headline.

The fine print on the Wealthsimple Trade promo clarifies that the “bonus” is a cash deposit and that the value of the bonus ranges between $5 and $4,500, with about 90% of clients receiving less than $50.

One of the most important objectives of online brokerages offering promotions is client acquisition (i.e. getting more customers). In the case of the Wealthsimple Trade promotion, the math behind the current promotion implies that there is a very low cost to Wealthsimple Trade to obtain a new client by using this structure. Even without knowing the probabilities and associated bonus amounts for the remaining 10% of clients, the fact that the average payout is $20 for a new client makes the cost to Wealthsimple Trade extremely attractive.

Despite it being an unusually busy summer for feature releases at Canadian online brokerages, there is also creative activity taking place on the deals and promotions front.

Now that we’ve crossed the halfway point of the calendar year, it is a safe assumption that several influential Canadian online brokerages are already working on their plans for promotions launching this fall (or sooner).

With a massive amount of money invested in enhancements and improvements at many online brokerages, looming competition on the commission-free trading front, as well as a return to “normal” that now includes individuals working from home (and returning to an office), it will be increasingly more challenging to stand out to DIY investors. As a result, like the weather in the summer, we fully expect deals and promotions action to heat up from here.

Robinhood IPO in Motion

Despite it being an incredibly busy year for IPOs (or perhaps because of it), there is one recently announced IPO that is almost certainly going to make waves when it officially launches: Robinhood.

This past week, the popular US online brokerage filed its prospectus to become a publicly traded company under the ticker symbol HOOD (to be listed on Nasdaq). While the details about how much money they intend to raise, and at what share price they intend go public at, are still to be determined, the ability to look “under the hood” at the company’s financial and performance figures reveals a data gold mine to anyone interested in the online brokerage industry in general, and the rise of Robinhood in particular.

Like any prospectus, the document is comprehensive, and as a result, incredibly long and detailed. Buried in the 300+ page document, however, are some incredible figures and statements about the current state of the online broker and what some of its future plans include.

As lengthy as the Weekly Roundup can get, there is far too much information about the online brokerage industry in the prospectus than can be covered in detail here. So, as more information inevitably emerges over the next few weeks, here are some initial figures that stand out.

Valuation: The rise in the valuation of Robinhood is staggering. From its inception in 2013, the company has grown to be worth (at time of publication) $12 billion USD and forecasted to be worth as much as $40 billion at public offering.  

Number of new accounts: The stat cited by Robinhood in its prospectus was that an estimated 50% of all new accounts created in the US between 2016 and 2020 were Robinhood clients. The total number of clients at Robinhood as disclosed in their prospectus was 18 million.

Cost of acquisition: Through the use of a variety of tactics, Robinhood’s cost of client acquisition at the end of March 2021 was – wait for it – $15. That number reflects exceptional performance improvements that have taken place over time, however, it’s a figure that’s sure to give any online brokerage, Canadian or American, a jolt. One of the key drivers of the exceptionally low client acquisition cost has been the Robinhood Referral Program. As mentioned above in the context of Wealthsimple Trade, the promotion of providing a “free stock” for the referral bonus has paid off in spades for Robinhood. It almost defies belief to report that 98% of customers receive a reward between $2.50 and $10.

Revenue mix: There are several interesting data points reported on when it comes to Robinhood’s revenues, but the standout figure relates to the product mix – specifically that options trading represented the highest amount of revenue for Robinhood.

Unlike many other IPOs, the Robinhood IPO is more than just business – it has taken on almost a cultural significance.

While many industry observers and consumers might view the vision of Robinhood to “democratize finance” with skepticism and discount it as marketing, the reality is that through a combination of design, technology, and pricing (and marketing – which they also have spent a fortune on), Robinhood has carved out a space for itself that enables it to compete – on some level – with much larger and longer established brands in the same space.

What was perhaps most striking about the vision for the company as laid out in the IPO filing, was the desire to become the “go-to” app for personal finance, just as Gmail is the go-to app for email and Google Maps is for maps. And, just like those apps, the market that Robinhood is eyeing goes beyond just the US, and is looking at Asia and Europe as additional destinations.

Without question, the Robinhood IPO is going to be in focus and discussion throughout July – which is being forecasted as the launch date for the IPO. To add to the conversation, Robinhood has set aside a significant portion (between 20% to 35%) of its shares to make available to its customers at the time of IPO, meaning that clients will be able to access the actual IPO pricing rather than have to wait until the stock starts trading to get those shares.

From a big-picture perspective, it is fascinating to have witnessed Robinhood launch from inception and grow into an internationally recognized financial services brand worth billions of dollars. The lesson for Canadian online brokerages is clearly that fintech firms can and will come in and displace market share for existing stakeholders. It is already happening in Canada with Wealthsimple Trade, and if Robinhood’s IPO journey is any indicator, there’s an even stronger impetus for Canadian online brokers to pay attention to design and features or risk being forced to play catchup.

From the Forums

Day Trading Up

Fast money and high stakes trades aren’t for everyone. Rare as they might be, DIY investors interested in day trading need to know which online brokerage is best when it comes to supporting this kind of activity. Find out which online broker was a unanimous choice in this reddit thread.

In-formed Opinion

When it comes to opening an online brokerage account, one of the least enjoyable parts of the experience is the sheer number of forms and agreements that need to be completed. One common anxiety-inducing form is the W-8BEN. Find out what one DIY investor went through in this post.

Into the Close

That’s a wrap on this early-July edition of the Roundup. Now that we’re into the second half of the year, and things are opening up again, trips and get togethers will be in focus. Of course, for any hockey fans, the Stanley Cup is in focus as is the cool rink the games are being played in. Stay cool out there!

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Discount Brokerage Deals & Promotions – July 2021

As we kick off a new month, the activity in the online brokerage deals and promotions section appears to be mixed.

On the positive side for DIY investors, there was an important extension of a popular promotion from National Bank Direct Brokerage that will undoubtedly continue to attract attention and serve as a catalyst for other online brokers to serve up something equally compelling to new clients.

Wealthsimple Trade also appears to have made some important updates to its promotional mix, pushing more definitively into the “free stock” deal for new account sign ups and for referral offers.

Finally, there was a small commission-free trade offer from Scotia iTRADE linked to DIY investor’s taking a stock market education training series which reflects the ability of incentives to be used alongside key value drivers (in this case investor education).  

Less positive is the fact that some deals have expired heading into July. Specifically, HSBC InvestDirect’s commission-free trade offer ran its course and concluded into the start of July.  

Now that we’ve crossed into the second half of the calendar year, we fully expect deals and promotions activity to start picking up, even more so as we approach September.

This year there’s definitely something unusual in terms of online brokerage activity. Given the large number of new features being released by online brokerages this summer, it’s a safe bet things won’t be as quiet as they usually are when it comes to promotions, and we’re anticipating seeing some more creative offers surface over the next few months.

As always, if there are promotions that we’ve missed that would benefit other DIY investors, let us know and we’ll update our coverage.

Expired Deals

HSBC InvestDirect’s commission-free trades offer formally wrapped up at the end of June.

Extended Deals

National Bank Direct Brokerage extended its popular 100 commission-free trade offer. The new expiry date for this promotion is September 30th.

New Deals

The newest offer to cross our radar was from Scotia iTRADE, who is offering up to 10 commission-free trades (five for using the promo code during account sign up, and five for attending their educational ‘bootcamp’ on investing). This was an interesting offer insofar as it was offering up commission-free trades as a reward for attending a series of educational webinars on investing.

Be sure to check out our discount brokerage deals filter for more information on current promotions.

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Discount Brokerage Weekly Roundup – June 28, 2021

There’s no doubt about it, summer is here. While the prescription for most folks is to take it easy, online brokerages have been doing anything but resting up so far this year.

In this month-end edition of the Roundup, we focus on the launch of a new trading dashboard by a big bank-owned online brokerage who is hoping to make strides with the active DIY investing crowd. More new features abound as we highlight announcements at popular online brokerages and some associated chatter from the DIY investor forums.

RBC Direct Investing Launches New Trading Tools

As any seasoned online investor knows, being adaptable and capable of change is a prerequisite to finding new and interesting opportunities to invest in. That said, when it comes to the platform and interface used to pursue those opportunities, changing things around can often be a stressful affair – especially for those individuals who like to have things “just so” or who are familiar enough with the way things have been for some time. Inertia, it seems, is the enemy of momentum.

This past week, one of Canada’s largest and most recognizable bank-owned online brokerages, RBC Direct Investing, officially announced the launch of yet another new feature this year: a new trading dashboard.

At its core, the trading dashboard is intended to provided active investors with a nimble environment in which to manage and execute trades of stocks and ETFs. Actively trading stocks is more time and opportunity-sensitive than passively trading stocks, and as a result, the features required to make and act upon decisions quickly need to be able to support that.

As popular as RBC Direct Investing may be with investors, one of the areas in which several of their bank-owned peers, such as TD Direct Investing and Scotia iTRADE, have managed to outcompete RBC Direct Investing has been in the active trader segment, specifically because of the trading platform experience.

The existing (and now “Old”) RBC Direct Investing trading dashboard provided some of the essential features of a trading-focused user experience, such as the ability to efficiently place trades, and monitor watchlists and level 2 activities.

In the newest incarnation of the active trading experience, RBC Direct Investing has maintained the purpose of the trading dashboard, which is to provide a streamlined trading experience, but has completely redesigned how users can manage information related to tracking and trading stocks and ETFs.

Of the many changes to the user experience that the new trading dashboard introduced, one of the most striking is that the new dashboard enables significant customization of how information gets organized.

By using floating windows, known as widgets, inside of a “workspace,” a user can organize account information, watchlists, charts, quotes, and more in virtually any layout that best suits them. And with five workspaces that can be easily navigated through, there is enough opportunity to track a respectable amount of information quickly and efficiently.

Another huge improvement to the trading experience is the charting on the new trading dashboard. Although it takes a little getting used to, once over the learning curve, there are multiple chart indicators that users can do research with. And, for active traders, it is nice to be able to look for different kinds of technical setups as well as to create notes on the charts themselves. Being able to annotate things like entry and exit points along with reasons on the chart is a big time-saver.

Ironically, one of the biggest strengths of the new approach to design and rendering of trading-oriented information is that with so many moving parts, finding where things are is going to take some getting used to. While watchlists are at the core of the transition from the old system to the new, not all the information about a security that was available in the old version is available in the new (yet).

On that last point, it is clear that RBC Direct Investing is actively collecting feedback on their new trading platform experience, and will (likely) be continuously working to enhance the offering for DIY investors, so this new platform will still evolve from its current state. The nice thing about the configuration of the design is that it is very modular, so changes and improvements can be made without negatively impacting all clients and new enhancements.

In turning to design and modern interfaces, the new dashboard feels more at home in 2021 than does its predecessor. That said, the new interface also has new jargon for DIY investors to have to learn in order to navigate this platform. For example, labels such as “Hub” and “X-ray” do not clearly convey what those things do, which then requires users to learn and remember this information. If there’s an area in which the dashboard will have to be mindful, it’s focusing on being intuitive while at the same time providing something unique to the brand.

Recognizing that active investors and traders have different, and likely more complex, needs and requirements than novice investors, the new trading dashboard is a step in the right direction for RBC to provide these valuable segments of users with enhanced functionality. By enabling a highly customizable interface, the platform experience can be configured by the user and thus change along with their changing needs and preferences. If there’s one thing that can be counted on, it’s that the world of DIY investing is going to continue to change. The challenge for all Canadian online brokerages is whether or not they can keep up.

More Online Brokerage Features Keep Coming

RBC Direct Investing wasn’t the only Canadian online broker making big feature announcements this past week. Three other online brokerages had new features to showcase, which is a clear signal that the self-directed investing space is going to be incredibly busy heading into the end of the year.

All of the new features will undoubtedly need to be marketed as well, so it seems like even though new items are going live in the summer, they’re going to be around and in the spotlight for quite some time.

Here’s a run-down of some important new developments:

Interactive Brokers Launches Credit Card in Canada

Convenience has always been one area that bank-owned online brokerages in Canada have enjoyed a clear advantage over independent brokerages. Whether it’s Canada Post, tech giants like Apple, or retailers like Walmart, the walls around the banking business are being pursued on a number of fronts. This past week, the credit card landscape in Canada just got a little more crowded, and the online brokerage space a whole lot more interesting, as Interactive Brokers Canada announced the arrival of the prepaid Mastercard for Canadians.

This credit card has been available to Interactive Brokers clients in the US for several years, and offers incredibly low interest rates. The fact that it is now being rolled out into Canada is a signal that this program can be delivered cost effectively and with a high degree of confidence. In short, Interactive Brokers has likely figured out how to position this service to its clients – many of whom are active traders – as a way to deepen the relationship with these clients.

While the headline and interest rate will undoubtedly get the attention of financially savvy investors, the details for this card will certainly be a bit of a barrier to adoption. In particular, there are restrictions on the number of point of sale transactions that can be done in a day, as well as limits on withdrawals and purchase amounts.

That limitation in mind, combined with the ultra-low interest rate, suggests that this product offering may represent an alternative to having to tap into a HELOC. With an advertised interest rate of 1.63% (at the time of publication), it will almost certainly raise some eyebrows. In several reddit forums, it has already generated an interesting discussion regarding how and when this kind of card could be useful.

Questrade Bulks Up on Research

This past week, Questrade announced its latest feature category: more robust research. Using “big data” to process multiple input points, the new service for Questrade clients, called TipRanks, aggregates and reports investor data and provides tools for DIY investors to conduct additional research.

While research may not seem like the most popular user feature, in reality it makes a big difference to finding or validating a trading decision. Historically, Questrade has lagged behind its peers in the research component, however, this latest foray into the research pool will be interesting to watch.  

From the Forums

Who Let the Doge Out?

This past week offered Canadian online investors a boost as Wealthsimple added 14 new coins to its suite of cryptocurrencies offered to trade. With so many coins available to be traded now, users on this reddit post weighed in on the expansion of crypto trading at Wealthsimple, and shared what coins they’d love to see become available.

Mass Market

With a clear interest in increasing the accessibility of investing, is it any wonder that marketing would need to be involved? Cue Wealthsimple Trade, who was called out in a (mostly respectful) exchange on reddit. At issue is the saturation of advertising for Wealthsimple Trade and how clients and observers are “not over it.”

Into the Close

Canada Day is just around the corner, and the week ahead will be shorter because of the statutory holiday. Similarly, the US statutory holiday the following week will also slow things down on the trading front for Canadian DIY investors. Wherever you choose to spend this year’s holidays, we hope it is safe and restful.

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Discount Brokerage Weekly Roundup – June 21, 2021

Welcome to the official start of summer. With the weather getting nicer, and folks making plans to get out and about, you might be pondering some big thoughts, like where a cow goes on vacation – it’s to the moovies. Yes, pun intended. Here’s hoping all the dads and father figures enjoyed Father’s Day.

Blockbuster features continue to surface this year, and in this summer-ized version of the Roundup, we review an interview with the founder of Interactive Brokers who talked about meme stocks (like the movie chain AMC) and several new features that are slated to be game changers for this innovation-focused brokerage. Also in the new features column, a potentially big new feature – fractional shares – possibly being tested. Find this and DIY investors encountering trading outages in the stories from the forums.

New Feature Spotlight: Interactive Brokers Reveals Big Features Coming Soon

There’s an old trader’s adage that says don’t fight the tape. Most people understand this in terms of the saying “the customer is always right,” or “listen to what the market wants.” In looking at the online brokerage industry, it seems that catering to what the customer wants might be setting the financial and social infrastructure of the world down a dangerous path – or so one executive at an online broker might have us believe.

Heading into the summer, we’ve already observed a flood of new features being announced at Canadian online brokerages, as well as at their US counterparts. Earlier this month, for example, we’ve noted that, at Canadian online brokers, faster account funding has started to surface as an incremental innovation. In the US online brokerage space, this year we’ve seen some interesting developments come from Robinhood in the form of early access to IPOs (likely as a lead up to their IPO), and just announced this month from Interactive Brokers, the launch of cryptocurrency trading by the end of the summer.

News of the announced rollout was delivered by Thomas Peterffy, the founder of Interactive Brokers, at the most recent Piper Sandler Global Exchange & FinTech Conference on June 9.

The interview itself was very intriguing. Contextually speaking, it was fascinating to hear Peterffy’s pessimism with the global state of affairs and disbelief at people buying digital coins on the one hand, while later announcing the launch of cryptocurrency trading (of those very same coins) on the other.

Although he has formally stepped down as CEO of Interactive Brokers, he is still actively campaigning on behalf of the brand, and his lack of enthusiasm about the cryptocurrency product was evident.

Normally, Peterffy brings a clear passion for all things trading. But in this case, it seemed like capitulation to what customers and the market was asking for that led to the decision to launch a cryptocurrency trading offering. One of the formal challenges he cited was ensuring that the trading of cryptocurrencies would be 100% safe – something he deferred providing details into until the product launch at the end of the summer.

While the news of a new product offering launch is big, Peterffy also dropped a hint of another feature announcement that is “coming soon.”

When asked about the way in which the impact of the global pandemic affected customer service, Peterffy revealed that automation was the key to solving many problems, but it could not solve all of them. His answer to discussing customer service was positioned from the perspective of the business itself, breaking down the need for customers to access speaking to an agent in terms of dollars per hour spent on servicing a client.

In the final analysis, Peterffy’s view was that it should not cost more to service the client than the client is worth to the firm. And, it was at that point that he revealed that Interactive Brokers is working on something interesting related to client service, and potentially something that could bring down the cost of servicing clients.

There were several other really interesting nuggets revealed by Peterffy as to the direction and position of Interactive Brokers on a number of fronts, but the final one to highlight was his response to new account growth and what the future may hold for Interactive Brokers.

Specifically, as we’ve noted in the Roundup last month, there has been a consistent and significant downward trend in the number of new accounts being opened this year at Interactive Brokers since the numbers peaked in January. The graph below illustrates this trend, and based on the numbers from May, this is the fourth consecutive month over month decline in the net new account growth. Although there were just over 26,000 net new accounts opened at Interactive Brokers in May, this represented just shy of a 24% decline compared to the number of new accounts opened in April, and reflects a drop of just about 78% from the number of net new accounts opened in January.

Peterffy’s take on what drives new account growth was especially noteworthy. In his response, he stated that the biggest source of new clients at Interactive Brokers is through referrals – somewhere in the neighbourhood of 33%. Regardless of what channel a new client comes in from, the fascinating thing, according to Peterffy, is that the percentages from the sources remain about the same. So, what ultimately drives online investors into opening an online brokerage account is the “buzz” around what’s hot in the markets, and as it turns out, consumers will choose or consider an online brokerage that they’re familiar with. The implications of this revelations are really important – it suggests that online brokerages would be better off continuously advertising. However, the real advantage for doing so would emerge when a “hot” story drives online investors to market.

Although the interview with Peterffy was relatively short, there was a wealth (pun intended) of insights related to investing online. The pessimism about the global and financial state of affairs for online investors was palpable, and summarized by the following statement he made:

“We’ve completely lost our grounding, we’ve become unhinged, nobody knows what our values are, we are floating and hope we land right side up.”

The context of these comments generally center around what investors today are piling into – such as meme stocks – and that the shortcomings of the regulatory frameworks that are currently in place for investors are being laid bare by online investor “armies” that have shown the ability to push back against larger institutional players. This pessimism is worth paying attention to, however, as the domino effect of losses in the meme stocks has a possibility (and a likely one suggested by Peterffy) to be catastrophic.

In the meanwhile, the big picture takeaway from Peterffy’s comments is that whether or not he likes it, everyone, including online brokerages, will have to confront a brave new world of “investing.” That means preparing technical systems for wild volatility. And for other online brokerages hoping to push their own growth agenda, it means being ever visible in anticipation of when the next big thing hits. Because, when it does, that’s when investors will really start to pay attention.

From the Forums

Wealthsimple Testing Fractional Shares?

Online brokerages continue to push new features out this year, however, some may be dropping hints before they go completely live. If this new feature from Wealthsimple Trade turns out to be true, it is yet another possible game changing feature that will undoubtedly capture the interest of DIY investors. According to this reddit post, Wealthsimple Trade is apparently piloting fractional share trading on select securities. While it may be too early to trade in fractions of a share, the presence of a fractional trading tag is raising more than a few eyebrows among DIY investors. And, if true, it will undoubtedly push other Canadian online brokerages to move even faster to deliver innovative offerings for investors.

Stability Now

It’s been a tough month for system and trading outages at Canadian bank-owned online brokerages. Earlier this month, TD Direct Investing had an outage during market hours, and this past week, CIBC Investor’s Edge users suffered a trading outage during market hours. Angry clients took to social media to vent their frustration and provide a clear picture of what DIY investors think when an online brokerage system goes offline during the trading day. Check out what investors had to say in this reddit post.

Into the Close

This week, we’d like to call special attention to Indigenous People’s Day which recognizes the heritage, diverse cultures, and achievements of First Nations, Inuit and Métis peoples. It is our hope that readers make some time to reflect on the history of the Indigenous peoples in Canada, as hard as it may be, and be an advocate for a building a better future. An important starting point is the Final Report of the Truth and Reconciliation Commission of Canada.

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Discount Brokerage Weekly Roundup – June 14, 2021

Taking a Moment

There’s a lot that goes into the production of a Weekly Roundup that many readers don’t see. Looking back on the week that was is as much a habit as knowing which letters to capitalize in an online brokerage’s name. Despite the hundreds of times having done this, occasionally something happens in a week that forces a pause from business as usual.

This past week there was a terrible tragedy that took place in London, Ontario. Four members of a family were murdered simply for looking and being different than what someone decided was appropriately Canadian. They were murdered because they were Muslim.

Like many Canadians, it is hard to find words to capture how thoroughly awful and traumatic this event was. And so, we are left with yet another heavy but necessary exercise: to not turn away from the terrible news but this time to watch and engage.

The news cycle will move on before the people will. A young boy will be left to figure out the rest of his life without his parents and sister beside him. Muslims and other religious and ethnic communities across Canada will forever be slightly less trusting that everything will be OK.

Before getting back to business as usual, I wanted to call attention to Islamophobia and the responsibility all of us bear to call out prejudice when and where we see it.

Please take a moment and either watch or read about this family.

All of us have a part to play in looking out for each other.

A Tale of Two Tables: 2021 MoneySense Online Brokerage Rankings Released

It’s hard to believe, but the DIY investor datapalooza (or datastravaganza?) that is characterizing 2021 continues to chug along well into June.

Earlier this month, a popular Canadian investment publication, MoneySense magazine, published their 2021 Canadian online brokerage rankings, essentially capping off the last of the major discount broker rankings for the summer.

Even though the fall feels far away, online brokerages are undoubtedly at work planning for their ramp up at the end of the year. These latest Canadian online brokerage rankings will ultimately prove to be a big part of what will help online investors shape their perceptions and decisions around which online broker they choose to go with, and ultimately impact how online brokerages market and talk about themselves for the rest of the year.

Why is this Online Brokerage Ranking Important?

Now in its ninth year, the MoneySense rankings have become a go-to resource for many DIY investors curious about the online brokerage marketplace in Canada. As the landscape evolves for online brokerages and self-directed investing, so too do these rankings.

Helping MoneySense stay on top of those changes is Surviscor, a financial services research firm that evaluates Canadian online brokerages across a number of different parameters.

Frequent readers of the Weekly Roundup will already be familiar with the research and in particular, the online brokerage rankings, produced by Surviscor. For a timely throwback, be sure to check out our Look Back/Look Ahead series featuring Glenn LaCoste, President and CEO of Surviscor, and the author of this year’s MoneySense online brokerage rankings.

With yet another online brokerage ranking appearing this year, it’s a lot for online investors to digest. The MoneySense rankings in particular offer an interesting way to see the importance of defining what’s “best” when it comes to online brokerages. Also, in digging through the data, we uncovered an interesting relationship between a major driver of investor decision making, cost of services, and the performance on measures of investor experience – like service.

There’s lots to dig into, so grab some caffeine and get ready to scroll.

Methodology

Online brokerage rankings and evaluations help to make sense of the often-confusing question: “which online brokerage is best?”

With several Canadian online brokerage rankings available for online investors to consult, it is important to come back to a familiar concept – that each online brokerage ranking measures the idea of what’s best in a different way.

The MoneySense online brokerage rankings are often cited as a resource to evaluate almost all of Canada’s online brokerages. Like most of the other comprehensive rankings, information is published annually, and as a result, the data takes a snapshot of the past year or so in the world of DIY investing at Canadian online brokerages.

It is important to note that the data for the MoneySense online brokerage rankings comes from financial services research firm Surviscor. Specifically, according to the methodology, the MoneySense rankings are based on a combination of the following Surviscor reviews:

1. Online experience

2. Mobile experience

3. Cost of services experience

4. Service experiences

Points were assigned to each online brokerage according to a points-based system in which each brokerage received a score based on its ranking within the seven sections of the review:

1st = 5 points

2nd = 4 points

3rd = 3 points

4th = 2 points

5th = 1 point

The overall score was the sum of the awarded sections and reported as points.

In addition to reporting on the points earned by each brokerage as part of this review, the MoneySense rankings also reported the “Best online brokers” by category. The breakdown is as follows:

  • Best online broker for fees
  • Best online broker for customer service
  • Best online broker for ETF investing
  • Best online broker for stock investing
  • Best online broker for financial literacy
  • Best online broker for market data
  • Best online broker for customer onboarding
  • Best online broker for mobile experience

Within each of these categories, the top two firms were reported.

Strengths & Limitations

One of the strengths of the review is that there is lots of data reported for investors to consider, and it has been published in a way that identifies the top two firms in each of the stated categories. This saves a lot of time for investors or readers who simply want or need a quick answer from a reputable source.

A big plus this year is that there is a companion publication on the Surviscor blog which dives into detail on the scores and provides more context on the process.

In terms of limitations, presenting this volume of information can be a challenge. For example, the methodology stated:

“Each firm was assigned a score based on its ranking within the seven sections of review (5 points for first; 4 for second; 3 for third; 2 for fourth; and 1 for fifth), and the overall score was the sum of the awarded sections.”

Given that there are eight reported categories (noted above), it was not immediately clear which seven sections of the review were being referred to, and as a result, validating the math or seeing how scores varied across sections would have added important context to rankings.

For example, one of the immediate questions that jumps to mind with the points system is what the maximum possible score would be?  Without that information, it is hard for the reader to get a sense of just how good a particular brokerage is. And, when the scores are close, or tied, the value of points and how they get calculated becomes even more important to contextualize results.

Results

The results for the 2021 MoneySense online brokerage rankings are shown in the following table.

FirmMoneySense PointsMoneySense Rank
Questrade361
National Bank Direct Brokerage312
TD Direct Investing253
Qtrade Direct Investing224
BMO InvestorLine95
Scotia iTRADE66
RBC Direct Investing57
Desjardins Online Brokerage48
Wealthsimple Trade48
Virtual Brokers48
Canaccord Genuity Direct48
CIBC Investor’s Edge212
HSBC InvestDirect113
Laurentian Bank Discount Brokerage014

Questrade took the top spot in this year’s rankings with a total of 36 points, followed closely by National Bank Direct Brokerage (31 points), and TD Direct Investing in third place (with 25 points). Again, without a maximum score, it is difficult to know exactly how well any one brokerage could have done.

The methodology states that there are seven “sections” and a five-point maximum which would imply a maximum score of 35. However, Questrade has clearly exceeded that score, hence some confusion.

Data outside of the top five brokerages was not published in the MoneySense rankings, however, it was available on the Surviscor site, which helped identify additional context on how the entire field of online brokerages performed this year.

One of the first noteworthy items is just how sharp the drop off is from fourth to fifth place in these rankings. Qtrade Direct Investing placed fourth with 22 points. However, BMO InvestorLine, with just nine points, managed to make it into the top five.

Even though on a relative basis, a top five finish may not sound so bad, in the case of this year’s ranking, the distance between fourth and fifth is materially different.

Another interesting observation about the data is the number of firms who tied for eighth place. CG Direct, Desjardins Online Brokerage, Virtual Brokers, and Wealthsimple Trade are very, very different firms, and yet each tied for eighth place with four points.

Somewhat stunning are the positions of CIBC Investor’s Edge and HSBC InvestDirect, who placed 12th and 13th respectively. In the case of the former, being a “Big Five” bank-owned brokerage should in theory enable it to have the resources to score better, but with a score of two points, it implies that Investor’s Edge was rarely a top five brokerage in any of the evaluated categories. Similarly, HSBC InvestDirect scored one point, and it too barely placed in a top five finish in any of the categories measured.

Surviscor’s “behind the scenes” look at the MoneySense rankings also provided some additional context and important takeaways when it came to this year’s analysis. The following five statements were made in reference to the data and the items that online investors (and online brokerages) should pay attention to.

  • Beware the marketing when it comes to fees
  • Firms never get a second chance to make a first impression
  • Financial literacy is weak
  • Mobile experience is still not where it needs to be
  • $0 commission is not always worth it

With so much data to crunch, it can be a challenge for DIY investors and industry analysts alike to form a “big picture” of what’s going on in the online brokerage space.

Surviscor’s multiple studies to measure online brokerages got us curious, so we compiled the ranking data from each of the four online brokerage analyses cited in the MoneySense rankings, and crunched the numbers to see what the correlation would be between the combined rankings of each evaluation and the MoneySense ranking data.

Methodology, Part Deux

First a(nother) note on methodology. The rankings in each of the four different Surviscor evaluations used in the MoneySense ranking were averaged out and reported along with a standard deviation. The computed rank is one that we generated based on the average rank across each of the evaluations.

 To try and get as close to an apples-to-apples comparison of how different online brokerages ranked against each other in each of the four evaluations, it was necessary to make some minor adjustments to the data.

In the Service Experiences, Interactive Brokers was actually evaluated, so for the sake of consistency across comparisons, they were excluded from the data and the ranks of other brokerages adjusted upwards by one. Wealthsimple Trade was assigned the lowest value for not having been able to be measured. For the actual service experience scores, check the link here.

Adjustments were also made in the Online Experience and Mobile Experience rankings. Laurentian Bank Discount Brokerage and CG Direct were assigned the lowest rank since they did not offer anything that could be evaluated using those tools.

Results

One of the first things to stand out is that the top four brokerages in the 2021 MoneySense online brokerage rankings are the same four online brokerages when computing scores across the four Surviscor evaluations, however, the order in which they appear is different.

In the computed rank, the measure that we calculated, Qtrade Direct Investing came in first, followed by National Bank Direct Brokerage, Questrade, and TD Direct Investing, respectively. What also stood out in the top three is that the average rank between Qtrade Direct Investing, National Bank Direct Brokerage, and Questrade is very close, ranging between 4.0 and 4.8. Having the standard deviation handy (shout out to the stats profs who drove home the point about standard deviations) as a measure of consistency, however, adds a bit more nuance to the top three online brokerages.

Specifically, Qtrade Direct Investing has a relatively low standard deviation (2.3) indicating their ranking is relatively consistent from one evaluation to the next. By comparison, Questrade has the highest standard deviation of the group (5.7), which points to the remarkably poor ranking they received in the Cost of Services evaluation (they ranked 13th). Having the context of all the data helps to illustrate where exactly the top three online brokerages excel relative to each other, and to see how consistently (or inconsistently) online brokerages are scoring.

Consistency cuts both ways, however.

RBC Direct Investing had the lowest standard deviation (1.2) of all of the rankings, implying a fairly consistent score across different evaluation studies. Their average rank was sixth, and the computed rank put them in fifth place overall.

By comparison, Virtual Brokers also had a very low standard deviation score (relatively speaking) at 2.1, but their average rank of 9.8 landed them with a computed rank of 13th overall. This implies that Virtual Brokers has consistently performed poorly on the four Surviscor evaluations for 2021.

It was also intriguing to note that after about eighth place in the MoneySense ranking, the divergence between these scores and the computed rank became more pronounced. In particular, CIBC Investor’s Edge ranked 12th in the MoneySense ranking but ninth in the computed ranking, only slightly behind Scotia iTRADE and Desjardins Online Brokerage.

Takeaways

Being able to step back and take a big picture view of the data provides a unique window into how the different evaluations generated by Surviscor come together, and how they compare to the MoneySense rankings.

When placed side by side, the combined Surviscor studies used in the MoneySense ranking show that firms that are strong on experiential factors, such as online, mobile, and service, tended to do better overall in the rankings.

Interestingly, with the exception of National Bank Direct Brokerage, firms that tended to do well on pricing had a negative correlation to performance on the MoneySense or combined Surviscor rankings. This points out that perhaps there is an inverse relationship between the cost of services and the experience of online investing.

Thus, having the additional data presented in a big picture format does help illustrate what exactly online investors would have to trade off. For example, in choosing between Questrade and National Bank Direct Brokerage, investors can see that the tradeoff might be one of “cost of services” versus “online experience.”

Clearly there is lots of data to explore, which can be both a pro and a con for online investors looking for a quick answer to “which online brokerage is best?”

The reality is that rankings help to compress a lot of the analysis into an easy to digest number. However, as illustrated above, how one defines “best” – even when using the same underlying data – can impact how specific brokerages are perceived and reported on by media, online brokerages themselves, and other DIY investors.

What is evident in looking at the big picture of this data is that the field of Canadian online brokerages is crowded, and with even more new entrants poised to add to the numbers, keeping on top of the evolving space is an ongoing challenge. For those that want to avoid the spreadsheets and comparisons, rankings offer a quick shortcut. But like everything else when it comes to investing online, it pays to do your homework.

Into the Close

That’s a wrap on this week’s Roundup. It’s been a difficult week but here’s hoping we can look for, find, and create the good in the week ahead.