BMO InvestorLine – Page 15

Posted on June 29, 2018 by user — Leave a comment

Discount Brokerage Weekly Roundup – June 29, 2018

It’s hard to believe but the halfway point of 2018 is just around the corner. Heading into the Canada Day long weekend, it’s an opportune time to review the latest activities from the second quarter of 2018 and see what stories made waves, as well as some of the trends we see taking shape in the online brokerage space.

In this edition of the roundup, we’ll take a look back at the (calendar) Q2 of 2018 and review what we think are the most compelling stories and developments. Suffice to say technology has been a key driver of change, but it also seems like the fundamental economics of the space are experiencing a shift. As usual, we’ll also serve up some DIY investor content treats with DIY investor tweets and close out with interesting forum posts.

Making the Highlight Reel

Before jumping in to Q2, a quick recap of what happened in Q1 is available in this roundup from early April. In the first quarter of the year, some of the dominant stories included online brokerage outages, RSP season promotions and online brokerage rankings from the Globe and Mail.

At the end of the second calendar quarter of 2018 there are a number of interesting stories to reflect on as well as some hints dropped and telegraphed by Canadian discount brokerages as to what’s coming around the corner for the summer of 2018.

Acquisitions

One of the biggest news stories to emerge in Q2 was the announcement that independent online brokerage, Jitneytrade, was being purchased by wealth management giant Canaccord. The deal, the terms of which were not published, means that the small independent online brokerage players in the Canadian space have all but disappeared. Only Questrade stands out as the online brokerage that is not owned by a larger parent financial brand, bank or other significantly larger financial services company.

Last year saw the purchase of BBS Securities (parent to Virtual Brokers) and the merger of Qtrade Investor and Credential Direct. This trend towards consolidation or purchase by deeper pocketed investment firms is a signal that the online brokerage space is in transition. Some services, such as Jitneytrade, cater to a very select group of active/professional traders – so the requirements for a broader investor profile are not as prominent as firms such as Qtrade Investor or Virtual Brokers. With bigger backers, however, the online brokerage platforms will really be put to the test to see if they’ve got what it takes to challenge the big bank online brokerages.

Online Brokerage Reviews – Moneysense magazine

In late May, the online brokerage reviews and rankings prepared by Moneysense magazine were published. Our roundup post on the Moneysense reviews compared the ratings from last year to this, and looked at the categories that these rankings included this year such as:

Best overall online brokerage
Best discount brokerages for ETFs
Best online brokerages for mobile and market data
Best online brokerages for low fees
Best online brokerages for design and user experience

One of the big stories from this year’s Moneysense rankings is that Qtrade Investor came out on top, narrowly edging out Questrade in the category of “best overall” online brokerage. Interestingly the top four firms last year are once again in the top four this year. Joining Qtrade Investor and Questrade are Scotia iTRADE and BMO InvestorLine, although it should be noted that these latter two bank-owned online brokerages scored notably lower than either Qtrade Investor or Questrade.

Looking at the results from a category point of view showed that different online brokerages have particular strengths in certain areas. For example, HSBC InvestDirect and Questrade were ranked best for fees; Questrade was ranked highest for initial impression; TD Direct Investing was ranked best for Data while National Bank Direct Brokerage was ranked best for ETFs.

All told, when it came to online brokerage rankings, Qtrade Investor performed exceptionally well, managing to top both the Globe and Mail and Moneysense rankings and placing second overall in the last J.D. Power Investor Satisfaction rankings. From a competitive point of view, this provides a lot of positive momentum for Qtrade Investor as they transition into life as the dominant non-bank online brokerage brand in Western Canada (now that Credential Direct has merged). It will be particularly interesting to see how a considerably bigger Qtrade Investor decides to challenge bank-owned rivals in ways that Qtrade has traditionally avoided, such as with more prominent advertising or with platforms/products for active investors (or even traders) – the affiliation with Desjardins Online Brokerage (and in particular Disnat) – could present a compelling wildcard that would almost certainly cement Qtrade Investor’s status (among its peers) as the brand to beat going forward.

V for Volatility

The past several years since the financial meltdown, markets have been mostly on a steady track upwards. This year, however, that all changed. Since the election of Donald Trump, markets – in particular US equity markets – have done really well. But, as all seasoned traders know, the trend is your friend until it ends. For US online brokerage, Interactive Brokers, the move on their part to raise the cost of borrowing for clients requiring margin of US stocks was a direct response to the data pointing to a pending downturn. Well, they called it, and earlier in the second quarter of this year, Interactive Brokers published the results of having prepared well in advance of the pending volatility. The result, Interactive Brokers was able to limit losses to a fraction of the losses experienced by names such as TD Ameritrade and E*TRADE.

Uptick in Deals Activity

On the deals and promotions front, Q2 of 2018 presented a little bit of volatility of its own as the post-RSP dip in activity also took down a number of online brokerage deals and promotions. That said, it didn’t take too long for a rebound to take hold so that by the time the quarter was winding down, offers were back on the table and during the quarter, a short lived but very intriguing offer from RBC Direct Investing also surfaced indicating that this big player is capable of some nimble promotional work.

Cash back offers in particular saw a resurgence in Q2, with BMO’s SmartFolio launching a new cash back offering and Scotia iTRADE also launching a cash back offer (in the form of a gift card) for existing clients.

Be sure to check out the deals action this summer as the online brokerages get themselves ready for the fall and invariably try to find some winning combination for investors active during the summer.

What’s Coming Up

In addition to setting the world on fire with the Yanny vs Laurel craze, social media also proved itself to be useful in providing DIY investors some hints as to what several online brokerages have coming up in the near future.

Keeping Currency

One great example comes from Scotia iTRADE, whose service staff let one tweeter know that USD registered accounts are ‘on their way’ (i.e. close to completion) for DIY investors. This kind of insight is easy to miss but will be a notable value driver when it does go live. We also expect there to be quite a bit of noise generated when it is released which means even more iTRADE commercials.

Platform Leap

Another interesting tip that came from social media was from TD Direct Investing, who let followers know about a webinar that provided a first look at the new Advanced Dashboard to be rolled out to clients. This new approach to rolling out feature releases appears to be something TD is testing the waters with – as a recent enhancement for French-speaking users was also telegraphed on Twitter in mid-May and was confirmed to be live as of this past week. As for the Advanced Dashboard, we’ll be watching to see what the reaction is like to a new user experience and to upgraded trading features.

Also rolling out in the summer is a new trading platform from Virtual Brokers – VB Wave. We first spotted the new platform on the VB website in early June however it appears to still be in active development with the soft roll out intended to help iron out any wrinkles in performance or user experience that may arise. In any case, the addition of a new trading platform to the suite of Virtual Brokers’ product line positions them as having one of the most diverse selections of trading platforms available to any online brokerage in Canada. Stay tuned.

Discount Brokerage Tweets of the Week

Discount
Brokerage Tweets – Curated tweets by SparxTrading

Into the Close

That’s a wrap for this pre-Canada Day edition of the roundup. Although markets are going to be closed in Canada on Monday, there’s no doubt that traders will want to keep an eye out for the fallout from the trade tariffs which are set to take effect July 1^st. For all the folks in Ontario, stay cool and for the folks out west in BC, feel free to blame it on the rain. On behalf of the Sparx Trading team, Happy Canada Day to everyone!!

Posted on June 15, 2018 by user — Leave a comment

Discount Brokerage Weekly Roundup – June 15, 2018

There is no doubt that deal making is an art. Sometimes it’s a Michelangelo, sometimes it’s a Pollock, sometimes it’s a Vandelay. In either case, online brokerages know that like beauty, a good deal is in the eye of the beholder. This week we know we’ve seen all kinds of ‘deals’ make the news but we’ve spotted a few which might have flown under the radar with all of the other hubbub going on.

In this edition of the Roundup we take a look at some hot deals action from two bank-owned providers coming just in time for the summer. Next, we look at why gross can be good, especially for a few US online brokerages. As always, we’ve also got a fresh batch of DIY investor tweets and forum threads to close out the recap.

Deals start to sizzle

For many keen observers of the deals and promotions section, one of the important takeaways is that online brokerages need to continuously be thinking about how to grow and attract new clients and assets. It is perhaps a timely question to pose as news outlets report this past week that Canada’s population officially clocked in at 37 million individuals, up from 36 million just over two years ago and, it seems, that firms such as RBC are in the hunt to acquire new clients on a massive scale.

Of course, the tried and tested way to get attention and incentivize individuals to try out an online brokerage has been by using deals and nothing gets investors’ attention like cash back offers. This past week there were two cash back offers that came to market that appeal to online investors – the DIY type and those that want the ‘autopilot’ version.

Starting first with the DIY investor option, Scotia iTRADE launched a new campaign earlier this week that offers up a tiered cash back promotion of up to $1,500 (in the form of a prepaid VISA). Interestingly, it was not found on the promotions section of the Scotia iTRADE website but rather via an email campaign which appears to be because the offer is valid for existing iTRADE account holders (as of May 14^th) only.

In all there are six deposit tiers to this offer, ranging from a minimum deposit of $25,000 (for which there is a reward of $100) to the top deposit tier of $1M+ (which results in a cash back offer of $1,500).

It is worth noting that the terms and conditions for this offer are written in an incredibly small font size, so anyone considering the deal is well advised to zoom in to make sure you don’t miss something important – like the condition that you can only take advantage of this offer if you haven’t participated in a cash, free trade or prepaid VISA or SCENE point promo since June 10^th 2017. In case anyone was wondering the font size for the important legal text is set to 9 pixels while the ‘normal’ reading size of the font on the page is 18 pixels and those conditions are 459 words long. In a single paragraph. But I digress.

email from Scotia Bank. Get up to$1,500 prepaid Visa if you open iTrade account*!
*if you transfer A MILLION DOLLARS (literally a million)

— Jeff Marshall (@JeffMarshallNL) June 14, 2018

Aside from the small font size, this is a very big deal – sadly only for existing Scotia iTRADE clients but perhaps for new clients who read the deals section or weekly roundup and are prepared to negotiate, this might also be made available.

Perhaps the biggest news is that, when compared to existing cash back offers currently live in the market, this is the highest cash back offer for deposits of $25,000+, more than double in fact, and in some cases more than triple the highest amount being offered. So, as word spreads about this offer, it will be interesting to see a) whether iTRADE decides to roll out the offer publicly to all prospective clients before B) another online brokerage steps up with an even more aggressive offer.

Another cash back offer to cross our radar this week was from BMO SmartFolio. Specifically, the offer is for new or existing clients and offers 0.5% cash back on every dollar invested into a SmartFolio account up to a maximum cash back amount of $1,000.

The minimum deposit tier to qualify for this promotion is $25,000 (which offers up a $100 rebate)

While not an apples-to-apples comparison in terms of where to park your money, the SmartFolio cash back promotion is equal to and at certain tiers, higher than the cash back bonus offers at Canadian discount brokerages (including BMO’s InvestorLine). So, for online investors it is an interesting moment – if they have been curious about a ‘digital advisor’ or ‘robo advisor’ – the cash incentive certainly makes the case for giving it a try. It doesn’t hurt either that BMO SmartFolio will cover up to $200 in transfer fees if moving from another institution into this solution.

For online brokerages with a digital or robo advice arm, such as Qtrade Investor, Questrade and Virtual Brokers for example, competing on both the online brokerage side and now the digital management side just got even trickier. Right now, BMO has the field almost exclusively to themselves from this group and they’ve already got three promotional offers that users can take advantage of plus the transfer fee coverage, so as far as bank-owned robo-advisors go in Canada, they’re certainly setting the bar high.

Gross is Good

To paraphrase Gordon Gecko, gross, for lack of a better word, is good – especially when talking about growth in new accounts at online brokerages. This week, US online brokerages E*TRADE and Charles Schwab reported May activity metrics including new account data and client assets and the numbers paint a positive picture at both firms.

For the month of May, E*TRADE saw about 40,261 gross new brokerage accounts for the month created (and a total net new account number of 22,228) and finished the month with almost 3.9 million brokerage accounts. By comparison, Schwab also reported their metrics this week and opened 122,000 new brokerage accounts bringing their total up to 11.1 million. It’s worth mentioning that Schwab is the giant player in the US online brokerage space with $3.4 trillion in assets. At the end of March of 2018, Interactive Brokers had about 517,000 accounts and TD Ameritrade had 11.3 million funded accounts.

By all accounts (pun intended) May appeared to be a strong month for the online brokerage space in the US. Of course, there are bullish signals with US interest rates poised to rise which should also help push earnings higher at US online brokerages in the near term.

Comments from TD Ameritrade also seem to echo this sentiment with chief market strategist JJ Kinahan stating in a recent press release regarding May performance that “For the first time this year we saw clients taking on more exposure to the market, with millennials increasing their exposure at a faster rate than the rest of our client base, as market levels stablilized following an early May rally, clients were mostly net buyers the last two weeks of the month.”

Big picture, it appears that strong economic fundamentals are continuing to draw investors in off the sidelines, even in the midst of headline news and uncertainty. That’s good news for the online brokerages. And, although the market may have tempered somewhat, the fact it hasn’t yet fallen off a cliff despite the rhetoric of war suggests that it is pricing in growth (at least for now) rather contraction.

Discount Brokerage Tweets of the Week

Discount
Brokerage Tweets – Curated tweets by SparxTrading

From the Forums

Getting Settled

In the online investing world even though trading happens instantly on a screen, behind the scenes things take substantially longer to sort themselves out. In this post from RedFlagDeals.com’s investing forum, one user tries to fine tune exactly when money needs to be moved into their trading account to beat the settlement deadline.

Double Trouble

Like most Canadian DIY investors, peering over the fence at US online brokerage accounts generates a certain amount of interest and even, dare we say, envy. For one keen investor, the lure of US online brokerage account was sufficiently strong enough to open one before fully thinking it through. Find out what they learned about having both a US online brokerage account as well as a Canadian one in this post from reddit’s Personal Finance Canada thread.

Into the Close

That’s a wrap on another eventful week. With the ‘longest day’ of the year coming up, it’s a great time this weekend to enjoy some type of screen, whether it’s watching the World Cup or lathering up the sunscreen to enjoy the great outdoors responsibly. Whatever the case, we’d like to wish everyone a great weekend and a special shout out to all the dad’s out there for a happy Father’s Day!

Posted on June 8, 2018 by user — Leave a comment

Discount Brokerage Weekly Roundup – June 8, 2018

As any seasoned investor knows, the stock market is one very big voting machine. And, while there is no ‘leader’ per se, those stocks that get to the top are those that enrich their shareholders. Heading into the end of this week, there’s certainly been a lot of news about politics, which has everyone guessing what’s coming next. For online brokerages, figuring out how to understand the human angle of this market is going to keep a lot of folks very busy these next few months.

It’s been a heavy week for rapid news so we thought we’d slow things down a little by focusing on an emerging trend from one Canadian discount brokerage that is likely to set the tone for ‘online investing’ in the near future. From there, we’ll take a snapshot of the latest tweets from DIY investors & online brokerages this week and close out with interesting chatter from the investor forums.

Going Digital, Getting Human

As a Canadian online investor, it’s not often that you get to hear from the head of an online brokerage outside of a quarterly newsletter. Despite the fierce competition among Canadian online brokerages, it seems that many of the leaders of these firms prefer to stay out of the spotlight, which is why a recent interview from the President of BMO InvestorLine, Silvio Stroescu, caught our attention.

The interview, which appeared on a BMO website – bmoforwomen.bmo.com – was part of a podcast by wealth psychology expert Kathleen Burns Kingsbury, and covered a number of interesting topics related to investing online, with a particular focus on women’s experiences with investing.

For added context, what makes this interview particularly interesting isn’t just the content of the interview itself, but also the bigger picture that it fits into. Specifically, it is interesting to see BMO InvestorLine (and SmartFolio’s) digital strategy take shape in a way that their peers aren’t keeping up with. More on that in a moment.

The overall theme of the interview was that ‘online investing really is for everyone’ which is an interesting premise to start from, and probably a reflection of where the “online investing” conversation has shifted to in 2018. Specifically (and especially for BMO InvestorLine) online investing doesn’t necessarily mean DIY investing any longer. The presence of digital/automated/robo advice services, as well as the hybrid AdviceDirect at BMO, mean that going online doesn’t require the same kind of time, mental or emotional commitment that comes along with DIY investing.

It was through this lens that this interview looked at ‘myths’ of “online investing” as well as the impact that technology has had and, perhaps the most interesting, the behavioural insights about investors and the role gender plays.

The latter portion of the interview in which Stroescu details the evolution of SmartFolio is particularly revealing. In this section he reveals how, though the use of Twitter chats, BMO discovered that there was a much deeper emotional component to wealth management and how big of a role that anxiety plays. It was especially noteworthy to learn that in the Twitter chats (which we’ve covered in prior Weekly Roundups) participation was largely female and that there was an open dialogue about the anxieties of investing. In contrast – and also fascinating – was the insights gained from focus groups in which male participants, through their body language, also displayed anxiousness and discomfort in talking about online investing even though they did not come out and state explicitly that online investing made them uncomfortable.

Specifically Stroescu stated:

What we noticed happening was, when we asked the questions about how comfortable are you with investing, the verbal response was, ‘comfortable.’ You wouldn’t hear a lot of anxiety in their voice, yet, when we looked at the body language and the facial expressions, if you could picture people cringing as they say the word comfortable, it showed us that verbally, we didn’t get a high degree of confidence, didn’t get a high degree of anxiety. It was somewhere in the middle. But the facial expression and the body language actually showed a greater tilt towards people being anxious about investing, period.

While there’s a lot to unpack from that statement, the takeaway is that building confidence is not necessarily the same as alleviating fear; it’s remarkable that it was the very human process of observing body language and non-verbal cues rather than the words people used that revealed this phenomenon.

Earlier it was stated that beyond the content itself, it was interesting that how this interview fits into a much bigger digital picture for BMO InvestorLine (and SmartFolio).

What makes this interview remarkable is that unlike many of their peers (both bank-owned and non bank-owned brokerages) is that BMO InvestorLine has made great strides in their online presence. This podcast, the Twitter chats that created a conversation around investing online and perhaps most notably, that their president has a Twitter account and uses it often are signals that there is a level of digital savviness that their competitors are not able to replicate.

In an era when ‘president with a Twitter account’ has come to cause people to hesitate, BMO InvestorLine enabling their president to have and use a Twitter account doesn’t come off as scripted, and even in an interview within a BMO site, the content delivers an interesting, engaging message (rather than being overly self-congratulatory or a sales pitch for services).

For DIY investors, and for the broader category of ‘online investors’ BMO’s approach to providing the ‘digital advice’ as well as the ‘self-directed’ services is probably a model that will be more widely deployed in the future. Of course, it is also their digital and social media savvy that might spur their competitors to “invest” more in creating more human, and ultimately more interesting, investor experiences.

Discount Brokerage Tweets of the Week

Discount
Brokerage Tweets – Curated tweets by SparxTrading

From the Forums

Voting for (keeping) Change

Savvy investors, no matter what stage they’re at, are always looking to maximize their gains. For beginner investors, however, it can be tricky to know exactly which move makes the most sense for the effort involved. In this post, from reddit’s personal finance Canada thread, one beginner investor is looking to the internet to help choose between Questrade and BMO for a TFSA.

Paid Parking

For many DIY investors thinking about online brokerages, the focus is generally on a lot of things like commissions or platforms, but very seldom does the topic of where to put uninvested cash come up. That said, this week there were two interesting posts about investors getting the best return on ‘dry powder’ – this post from reddit’s personal finance Canada thread looks at what to do with ‘spare’ cash in Questrade while another post, from the Financial Wisdom Forum, provides some insights from a thread on Interactive Brokers.

Into the Close

That’s a wrap on another frenzied week. The spotlight certainly had no shortage of movement this week, however it did land on a very tragic ending to a very inspiration person – Anthony Bourdain. Loss is always a tough note to close out on, but in that there is also the importance of remembering hope and encouraging one another to connect. So, on that note, have a great weekend and if you can, find a way to extend a hand to connect or reconnect with someone, perhaps over a simple meal. It all starts with hello.

“Low plastic stool, cheap but delicious noodles, cold Hanoi beer.” This is how I’ll remember Tony. He taught us about food — but more importantly, about its ability to bring us together. To make us a little less afraid of the unknown. We’ll miss him. pic.twitter.com/orEXIaEMZM

— Barack Obama (@BarackObama) June 8, 2018

Posted on June 1, 2018 by user — Leave a comment

Discount Brokerage Weekly Roundup – June 1, 2018

Even though it was a tough week for hacking scandals, pipeline purchases and provincial politics, none of it mattered because Kim Kardashian visited the US President, J.R. Smith royally messed up game 1 for the Cavs, the US touched off a trade war with Canada and other trading partners. Even for traders who relish in volatility, this summer is going to be one heck of a ride.

In this edition of the roundup we take a look at the latest crop of discount brokerage deals, including a new trend for the summer season. From there we’ll review another emerging trend in the area of investor education topics that online brokerages seem to be more active in. As always, we’ll cue up the latest tweets from DIY investors and review the forum conversations on DIY investing.

Summer Deals

Even though summer is just around the corner, the fact that it is still spring means that the latest online brokerage deals are considered part of the spring crop – at least if you look at the promotional codes of some of the deals.

The latest update to the Canadian discount brokerage deals and promotions section is now live and the good news is there is a strong selection of offers for DIY investors to choose from, especially until the middle of June.

There are a couple of interesting observations to take note of in the deals and promotions section this month. The big news specifically is that National Bank Direct Brokerage has come to market with an offer of commission free trades which are good for up to one year. The other bank-owned brokerage with a similar time frame on their commission-free trade offer is RBC Direct Investing.

This is likely no coincidence. The move by National Bank Direct Brokerage has some similarities to RBC’s offer, notably that time to use the commissions is one year and the minimum deposit is the same ($5,000). That said, there are some differences such as the fact that NBDB is offering five more trades than the RBC Direct Investing offer and NBDB is throwing in a discounted commission rate in the first year for anyone who uses up the 25 commission-free trades.

Another interesting observation is that both BMO InvestorLine and Desjardins Online Brokerage elected to extend their current offers; the latter being exclusively a commission-free trading offer while BMO InvestorLine’s is a combination of cash back and commission-free trades. Unlike the offers from National Bank Direct Brokerage and RBC Direct Investing, however, the time to use the free trades from BMO or Desjardins is significantly shorter.

Two key bank-owned online brokerages coming to market in the summer with similar promotional offers might not signal a trend, but it does point to the market shifting tactics – especially on the length of time for the commission-free trading.

We’re curious as to what will happen at mid-month, as National Bank Direct Brokerage has now clearly upped the ante with a more competitive offering than RBC’s in terms of free trades and incentives after the trades are used up. It begs the question, will RBC call, raise or fold?

From a strategy point of view, the popularity of commission-free offers has opened up an opportunity. Cash-back offers are not as crowded, and as a result, it may be a compelling spot for an aggressive offer to come to market. We know from internal data that there is definitely an appetite for cash-back offers among DIY investors. So, the combination of a lack of competition with those offers coupled with high demand from DIY investors means a cash-back offer can command the spotlight. Currently, BMO InvestorLine and Questrade (through the referral offer) are the only widely available cash-back offers. And, because of the nature of the Questrade offer, it’s only BMO InvestorLine that is widely advertising for theirs, which means they’ve got the digital field to themselves – at least for the time being.

Optional Credit

Even though school has wrapped up (or will very soon) there seems to be an uptick in the investor education activities heading into summer. In particular, it looks like options trading is coming back into focus at several online brokerages.

Last week, the Options Education Day took place in Montreal and there were five online brokerages that sponsored the event.

Three of the five brokerages (National Bank Direct Brokerage, Desjardins Online Brokerage and Interactive Brokers) are all headquartered in Montreal so there was a home field advantage there, but for TD Direct Investing and CIBC Investor’s Edge, it was an interesting event to participate in.

According to the tweet posted on the Montreal Exchange’s Twitter account, there were over 200 attendees that participated which is a great draw for a Saturday session.

In addition to Options Education Day, National Bank Direct Brokerage has been broadcasting their options education video playlist, put together in conjunction with the Montreal Exchange, on their homepage for the past few months. And, coming up at the end of June, CIBC Investor’s Edge is holding a couple of options education webinars in English and French.

Even though we’re not quite over the line to summer, there is already a signal that online brokerages are ramping up their options education partnerships and content. With improved market volatility and some exciting stories coming to the stock markets through the second half of the year, it looks like options education might be a hot spot for new and interesting content.

Discount Brokerage Tweets of the Week

Discount
Brokerage Tweets – Curated tweets by SparxTrading

From the Forums

Interesting problem

Even though trading platforms have made it easy to buy and sell US-listed stocks, actually ensuring that the trade is being structured the way it is intended can sometimes be less intuitive. In this post from reddit’s Personal Finance Canada thread, one user learned the hard way about ensuring that cross border trades get executed and settled with the right currency conversions in place.

Simpler times

DIY investing is supposed to be less expensive but it hasn’t necessarily been a ‘set it and forget it’ experience until very recently. This post, also from reddit, is an interesting look at the alternatives now available for DIY investors who, like the author of the post, are looking to take a simple, low cost approach to investing on their own.

Into the Close

That’s a wrap on yet another wacky week. Fortunately the start of the new month falls on National Donut Day which means everyone wanting to emotionally eat their way into the weekend can feel a little less guilty for doing so. Of course, if you’re thinking to distract your way through the weekend with an Avengers movie, you might want to have some more donuts handy. Have a great weekend!

Literally all the Avengers talking to Star-Lord after THAT moment in “Infinity War.” #NBAFinals pic.twitter.com/S8bJEKHWhi

— Herb Scribner (@HerbScribner) June 1, 2018

Posted on June 1, 2018 by user — Leave a comment

Discount Brokerage Deals & Promotions – June 2018

It’s hard to believe but June is already here, which means summer is right around the corner. While temperatures outside are heating up, the discount brokerage deals and promotions section is gradually warming back up.

Heading into the new month there was a good mix of extensions as well as a new offer from National Bank Direct Brokerage in May that is sure to add some sizzle to the summer shopping season.

Starting first with extensions, two big deals players, BMO InvestorLine and Desjardins Online Brokerage, gave the go ahead for their existing offers to continue (more details below). This is a healthy sign as both of these firms are long time proponents of deals and promotions.

The big news, however, is the offer that crossed our radar from National Bank Direct Brokerage. This offer has a relatively low threshold to qualify ($5,000) and offers 25 commission-free trades which are good for up to one year. If it sounds familiar, it’s because another bank-owned online brokerage, RBC Direct Investing, also has an offer that is currently running to mid-June that offers 20 commission-free trades for a deposit of $5,000. So, in this case, the commission-free trade promotion bid has been raised by NBDB.

Another interesting feature of the offer from National Bank Direct Brokerage is that once the trades are used up (within the first year only), the standard commission charge per trade is only $6.95 which means that there is a trading discount as well as free trades.

With one offer set to expire mid-month (from RBC Direct Investing), it will be interesting to see if it too will get an extension or if there will be another provider currently on the sidelines jump in to the deals and promotions mix to be ready for the building interest in the marijuana legalization ‘buzz’ that is building.

We’ll keep a look out for new offers and if there are any that might be of interest to DIY investors, feel free to let us know in the comments below.

Expired Deals

No expired deals to report at the outset of the month.

Extended Deals

There were two offers that were scheduled to expire at the end of May that have been renewed:

First, Desjardins Online Brokerage has extended their commission credit offer through to the end of September.

Also, BMO InvestorLine extended their combined commission-free trade and cash back offer through to the end of June.

New Deals

While there were no new deals announced on June 1^st, there was a new deal from National Bank Direct Brokerage that did cross the wire late in May. While this deal may technically have been in rotation at the end of April, it is not advertised in the special offers section of the NBDB website; we discovered this add running in rotation on social media and verified that it is active (at the time of publication).

Discount Brokerage Deals

Cash Back/Free Trade/Product Offer Promotions
Referral Promotions
Transfer Fee Promotions
Contests & Other Offers
Digital Advice + Roboadvisor Promotions

Cash Back/Free Trade/Product Offer Promotions

Company	Brief Description	Minimum Deposit Amount	Commission/Cash Offer/Promotion Type	Time Limit to Use Commission/Cash Offer	Details Link	Deadline
	A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package.	n/a	Discounted Commission Rates	none	For more details click here	none
	Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully.	$1,000	$88 commission credit	60 days	Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here.	none
	Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully.	$1,000	5 commission-free trades	60 days	5 commission-free trade offer	December 31, 2018
	Open a new account at National Bank Direct Brokerage with at least 5,000 and you may be eligible to receive up to 25 commission-free trades, good for up to one year. There is also a promotional discounted commission-pricing available within the first year to individuals who use up their 25 trades; trading commissions for the first year are $6.95. Use promo code SPRING 2018 when signing up to be eligible for this offer. This offer is also available to existing clients. Be sure to read terms and conditions for full details.	$5,000	25 commission-free trades + $6.95 commission per trade pricing	365 days	National Bank Spring Offer	July 6, 2018
	Open and fund a new account at RBC Direct Investing with at least $5,000 in net new assets and you may be eligible to receive up to 20 commission-free equity trades which are good for up to one year. Be sure to read terms and conditions for full details.	$5,000	20 commission-free trades	365 days	RBC Direct Investing Commission-free Trades Promotion	June 14, 2018
	Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatTransfer or email: [email protected]. See details link for more info.	$10,000	1% of assets transferred in the form of commission-credits (max credits: $1,000)	6 months	Disnat 1% Commission Credit Promo	September 30, 2018
	Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details.	$25,000	commission-free trades for 1 month + 1 month of advanced data.	1 month	Active Trader Program	December 31, 2018
	Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $50,000; B) $100,000 or C) $300,000+ in net new assets and you may be eligible to receive up to 20 commission-free equity trades plus A) $50 cash back; B) $150 cash back or C) $500 cash back. Commission-free trades are good for up to two months. In addition, eligible individuals can receive an extra $50 as part of the refer a friend program. Use promo code SPRING when signing up. Be sure to read the terms and conditions for more details on the offer.	A) $50,000 B) $100,000 C) $300,000	20 commission-free equity trades AND A) $50; B) $150 C) $500.	Commission-free equity trades are good for up to two months. Cash back will be deposited the week of January 21, 2019.	BMO InvestorLine Spring 2018 Campaign	June 30, 2018
Expired Offers
Last Updated: June 01, 2018 18:55 PT

Referral Promotions

Company	Brief Description	Minimum Deposit Amount	Incentive Structure	Time Limit to Use Commission/Cash Offer Deposit	Details Link	Deadline
	Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements.	A) $1,000 B) $10,000 C) $25,000 D) $50,000 E) $100,000+	$25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back	Cash deposited into Questrade billing account within 7 days after funding period ends (90 days)	Refer a friend terms and conditions Code Number: 476104302388759	none
	If you refer a friend/family member who is not already a Scotia iTRADE account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link.	A) $10,000 B) $50,000+	A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50)	60 days	Refer A Friend to Scotia iTrade	tbd
	If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details.	$50,000	You(referrer): $50; Your Friend(referee): $50	Payout occurs 45 days after minimum 90 day holding period(subject to conditions).	BMO InvestorLine Refer-a-Friend	October 31, 2018
Expired Offers
Last Updated: June 1, 2018 18:55 PT

Transfer Fee Promotions

Company	Brief Description	Maximum Transfer Fee Coverage Amount	Minimum Deposit Amount for Transfer Fee Eligibility	Details Link	Deadline
	Transfer $15,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details.	$150	$15,000	Transfer Fee Rebate	none
	Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees.	$135	$15,000	Transfer Fee Rebate Details	none
	Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees.	$135	$20,000	Transfer Fee Rebate	none
	Transfer $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion.	$150	$25,000	Credential Direct Transfer Fee Rebate	none
	Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150.	$150	$25,000	Transfer Fee Promo	none
	Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details.	$150	$25,000	Contact client service for more information (1-800-465-5463).	none
	Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made.	$135	$25,000	Confirmed with reps. Contact client service for more information (1-800-567-3343).	none
	Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info.	$150	$50,000	Disnat 1% Commission Credit Promo	September 30, 2018
	Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPRING when signing up. Be sure to read the terms and conditions for more details on the offer.	$200	$200,000	BMO InvestorLine Spring 2018 Campaign	May 31, 2018
Expired Offers
Last Updated: June 1, 18:55 PT

Other Promotions

Company	Brief Description	Minimum Deposit Amount Required	Details Link	Deadline
	Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information.	n/a	MoneyTalks Inside Edge Discount	none
	Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details.	$1,000	Broker@ge 18-30 Promotion	none
	Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details.	$1,000	StartRight Free Trade offer	none
Expired Offers
Last Updated: June 1, 2018 18:55 PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor	Offer Type	Offer Description	Min. Deposit	Reward / Promotion	Promo Code	Expiry Date	Link
	Discounted Management	Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link.	$1000	1st month no management fees	KDKFNBBC	None	Questrade Portfolio IQ Promo Offer
	Discounted Management	Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details.	$1,000	1 year no management fees	STSF	April 1, 2018	SmartFolio New Account Promotion
	Cash Back – Referral	BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details.	$1,000	$50 cash back (referrer) $50 cash back (referee)	Unique link generated from SmartFolio required.	None	SmartFolio Website
	Transfer Fee Coverage	Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth.	$25,000	up to $150 in transfer fees covered	None	None	Contact customer service directly for more information.
Last Updated: June 1, 2018 18:55 PT

Posted on May 25, 2018 by user — Leave a comment

Discount Brokerage Weekly Roundup – May 25, 2018

Though this was a short week because of the holidays, there was still a healthy dose of news to digest and trade around. For Canadian online brokerages, the race is on not only to report some of the big news but to put a creative spin on it.

In this week’s roundup we go to both extremes with in-depth analysis of the latest set of online brokerage rankings followed by a small but important revelation of one online brokerages upcoming features on Twitter. As usual we’ll close by taking a look at what DIY investors were chatting about on social media and in forums.

Moneysense’s 2018 online brokerage rankings go live

Earlier this week, MoneySense magazine published the 2018 edition of its Canadian online brokerage rankings. As with past years, Surviscor provided data for the analysis and presented a category-driven approach to presenting which online brokerages were “the best” in each feature measured.

The author of this year’s review was the well-known Canadian personal finance writer, Jonathan Chevreau, who added considerable depth to the commentary and analysis – more so than in previous editions of this article.

At SparxTrading.com, we’re always keen to review the comparisons of online brokerages, so we thought we’d take a deeper look at this year’s MoneySense rankings to get an idea of how DIY investors might be impacted by the ratings and to determine what trends or insights might emerge from the ratings themselves.

Before diving into the results in detail, we thought it would be important to review what was being measured in the MoneySense rankings and how this year’s rankings differ from last year’s.

Historically we’ve observed that there is considerable variation when it comes to Canadian discount brokerage rankings. There can be variation between different ratings of the same discount brokerages within the same year as well as variation between years for the same rankings. For example, the Globe and Mail’s online broker rankings use a different approach than does J.D. Power or Surviscor when evaluating Canada’s online brokerages for cost, service or accessibility.

For the 2018 MoneySense online brokerage rankings, the underlying data comes from Surviscor’s analysis of the online brokerage space, with specific parameters selected for the MoneySense report. The snapshot that the data is based upon comes from 2017, specifically from the 2017 online brokerage rankings conducted by Surviscor. As such, the ‘new’ information in the MoneySense rankings is really in the commentary as well as in some of the detailed category breakdown. The “best overall online brokerage” ranking, however, mirrors the findings published in December 2017.

2017 rankings vs 2018 rankings

To help add more context to this year’s results, we’ve summarized the MoneySense rankings data from last year and this year along with including the scores firms received for the 2018 edition.

The categories that were reported on this year were mostly similar to last year, although there were some notable differences.

This year the following categories were reported on:

Best overall online brokerage
Best discount brokerages for ETFs
Best online brokerages for mobile and market data
Best online brokerages for low fees
Best online brokerages for design and user experience

Interestingly, a category from last year, the ‘best online brokerage for reporting and record keeping’ was not included in this year’s review.

New for this year, however, was the mobile accessibility category which was intended to reflect the importance of mobile experiences to investors. Data for this category came from Surviscor’s 2017 mobile online brokerage review. There was also a name change for the ‘getting started’ category used in 2017 to ‘initial impression’ for 2018.

Category	2017	2018
Overview + Winner	T: Qtrade Investor H: Questrade Bank-owned: T: BMO InvestorLine + Scotia iTRADE	Qtrade Investor – 22 Questrade – 21 Scotia iTRADE – 14 BMO InvestorLine – 14
ETFs	T: Questrade + Virtual Brokers H: National Bank Direct Brokerage	National Bank Direct Brokerage – 17 Qtrade Investor – 16 BMO InvestorLine – 13
Mobility + Data	Data: T: TD Direct Investing H: Qtrade Investor	Mobile Accessibility: BMO InvestorLine – 26 Questrade – 14 Qtrade Investor – 10 Data: TD Direct Investing – 20 Qtrade Investor – 17 RBC Direct Investing – 9
Fees + Services	Fees: T: CIBC Investor’s Edge + Questrade H: Qtrade Investor + Virtual Brokers Service: T: Qtrade Investor H: Desjardins Online Brokerage	Fees: HSBC InvestDirect – 10 Questrade – 10 CIBC Investor’s Edge – 7 Service Interaction: Qtrade Investor – 8 RBC Direct Investing – 7 Questrade – 6
Initial Impression & UX (Getting Started – 2017)	Getting Started: T: Questrade H: TD Direct Investing User Experience: T: Questrade H: Qtrade Investor	Initial Impression: Questrade – 13 Scotia iTRADE – 9 TD Direct Investing – 9 User Experience (UX): Qtrade Investor – 40 Scotia iTRADE – 31 BMO InvestorLine – 30
Reporting & Record Keeping	T: BMO InvestorLine H: Qtrade Investor
Legend: T = Top Pick; H = Honourable Mention

As shown in the summary table, one important change between last year’s report and the 2018 results is the number of discount brokerages being reported in each category.

In the 2017 online brokerage rankings, MoneySense reported the “top pick” and “honourable mention” in each category. This year, however, there are more online brokerages being reported in each category (typically three or four vs two) than last report. As a result, this presents “more data” for DIY investors to sift through when comparing online brokerages. In the best overall online brokerage category, last year this section was split into non-bank-owned online brokerages and bank-owned online brokerages however this year there doesn’t appear to be an explicit distinction being made. Interestingly, the same four institutions from 2017 were in the list of top firms overall in 2018.

Another important change between last year and this year is that there are now also numerical scores being reported. Specifically, the scores (points) earned by online brokerages in each category were reported.

While it was useful on a relative basis to compare brokerages within the same category (e.g. Qtrade Investor received 22 points while Scotia iTRADE and BMO InvestorLine each received 14) it was difficult to tell in an absolute sense how well a brokerage could possibly do in a category (i.e. what was the maximum number of points Qtrade Investor or BMO InvestorLine could’ve earned?).

In addition, the point system for each category was unfortunately not explained so there wasn’t any real context to what receiving 10 points vs 15 points meant. We can assume more points is better, but based on the scoring of best overall, does Qtrade Investor’s score of 22 mean that they are 1.6x better than either BMO InvestorLine or Scotia iTRADE?

Overall, however, the 2018 version of MoneySense’s online brokerage assessment offers readers a detailed look at the state of the online brokerage space with 12 online brokerages getting covered and a reasonable variety of factors that matter to investors – chief among them being pricing.

What’s interesting about the MoneySense online brokerage rankings?

While it likely wasn’t a surprise that Qtrade Investor took home top prize in the 2018 MoneySense rankings, the optics of yet another influential award being received serves to strengthen Qtrade’s perception in the marketplace as one of the premium online brokerages in Canada.

Typically strong performers on the rankings circuit, Qtrade Investor has had an especially strong year for recognition with top spot finishes in the Globe and Mail, Surviscor and now MoneySense as well as a close second place finish with JD Power’s rankings.

As mentioned above, there is considerable variation between rankings and what they’re measuring however Qtrade Investor has managed to score well on all of them, perhaps a strong sign they’re doing more than a few things right. On the MoneySense rankings, there were three categories in which Qtrade Investor placed first: best online brokerage user experience, best online brokerage service interaction and best overall.

It bears mentioning again, that how these categories are defined is very important as are the indicators that are used to measure performance within the categories. For example, what constitutes a strong service experience or effective user experience is likely more subjective than which broker has the lowest trading commission prices or fee structure. Yet, both components go into determining the final score.

So, with that caveat in mind, it was also interesting to note that in certain categories it was easier to see which online brokerages were further ahead than others.

The differences in the best overall online brokerage or brokerage with best mobile accessibility, for example, were very apparent. For example, the category of mobile accessibility, which was new for 2018, shows that BMO InvestorLine is very far ahead of its category competitors, Qtrade Investor and Questrade. Similarly, in terms of user experience (UX) Qtrade Investor scored much higher than either BMO InvestorLine or Scotia iTRADE.

In other categories, the race between brokerages was much tighter. Fees and services, for example, each had relatively close scores that made distinguishing first from third place difficult. ETFs was another category that posed a challenge for brokerages to stand out in.

Considering how important costs and fees are to DIY investor clients, the latest rankings data seems to suggest that when it comes to the lowest cost online brokerages, the differences in pricing are small, and as such, other criteria will be what tilts a decision one way or another when choosing a brokerage.

With prices being where they are for commissions, it is probably worth mentioning that it will be challenging to differentiate on price alone. That said, savvy online brokerages can use this to their advantage. One of the important factors in trading costs for DIY investors is ECN fees. So, highlighting “flat” fee commission pricing versus trades that charge ECN fees will be key to standing out.

For both DIY investors and online brokerages, the challenge in choosing an online brokerage comes down to what else beyond low commission pricing that online brokerages can offer.

Based on the results from the 2018 MoneySense online brokerage rankings, these opportunities might present themselves in the user/digital experience. As we’ve mentioned before, technology is the new benchmark for service – it enables the provision of a consistent experience at an unprecedented scale – something the ‘human’ touch cannot do.

The data from these rankings show that firms like BMO InvestorLine and Qtrade Investor are, at least in the Surviscor analysis, doing much better than their peers in the digital experience. Whether it’s improved navigation or ease of access, if using the product feels simpler, the process of managing your own investments doesn’t feel frustrating which is what DIY investors really value.

Finally, a third interesting observation about the online brokerage landscape in Canada is that aside from Qtrade Investor, it appears that there is a lot of diversity in who has been designated as a top performing firm. A surprise move onto the list by HSBC InvestDirect (best online brokerage for fees) as well as top podium finishes for Questrade, BMO InvestorLine and TD Direct Investing. Of all the category winners, Questrade was the first organization to make a splash on social media. We have yet to see other category winners, including best overall category winner, Qtrade Investor, push something out on these results on their LinkedIn pages (as of the time of publication) or social media. No doubt things are busy in Qtrade’s tent with the merger taking place – which might be a tactical time for other Canadian online brokerages to try and gain mind share.

There were certainly a number of other interesting observations about the online brokerage industry in this year’s online brokerage ranking, however an important takeaway for both online brokerages and DIY investors is that the Canadian online brokerage space is crowded and the market is small. Even so, online brokerages are now locked in a race in which the nimblest providers will survive.

Chatter: Scotia iTRADE possibly launching USD registered accounts this summer

It’s summer blockbuster season. For online brokerages it will be an interesting time with independent online brokerages Qtrade and Credential Direct merging and with plans being made ahead of a typically big fall season.

This week we spotted two mentions of the possibility that Scotia iTRADE is getting USD registered accounts this summer.

The first was a mention in MoneySense magazine that the launch may be coming in the summer, while on Twitter, a representative from Scotia iTRADE mentioned to an individual that USD registered accounts are close to launch.

Discount Brokerage Tweets of the Week

Discount
Brokerage Tweets – Curated tweets by SparxTrading

From the Forums

Trust Issues

Creating efficient tax exposure is just one of several important financial planning strategies DIY investors have to consider. In this post from reddit’s Personal Finance Canada thread, it is interesting to read how one DIY investor’s journey with trying to set up an informal trust at an online brokerage is working out.

Exiting Times

When it comes to standard commission rates, Scotia iTRADE stands out among Canadian online brokerages as the highest. In this post, also from reddit, one client is looking to make an exit and gets a little math to help plan an escape.

Into the Close

That does it for another week. Monday is Memorial Day in the US so there is likely to be lighter trading action in Canada. Although, with the first of a wave of US-based cannabis companies listing on the CSE, lighters won’t be the only things being traded here in Canada. All the best to our US neighbours for a safe & happy long weekend!

Posted on May 11, 2018 by user — Leave a comment

Discount Brokerage Weekly Roundup – May 11, 2018

Eventually spring was bound to show up. And, like the green shoots, flowers and sunshine, it’s a time for change and opportunity. Fortuitously, Canadian discount brokerages are also taking their cues from spring and rolling out some interesting new items for the season.

In this edition of the roundup we take a look at a big bank-owned online brokerage that decided it was time to jump back into the deals pool with a new spring offer. Next, we review a posh new service line for high net worth investors unveiled by one online brokerage which could signal a new front in the competition for DIY investor assets. From there, we get a sneak peek at the roll out of new features from a popular online brokerage. And, to round things out, we’ll review the latest tweets from DIY investors as well as some interesting conversations in the forums.

RBC Direct Investing Launches New Promotion

Even though there was a pullback in online brokerage deals action to start this month, it didn’t take too long for that to change – and in a big way. After a prolonged absence from the spotlight of the deals and promotion section, RBC Direct Investing made a splash by launching a new commission-free trade offer.

It isn’t just the timing of the offer that is bound to get the attention of DIY investors looking for an online investing account.

In addition to launching a new promotion at a time when many online brokerages have decided to take a breather from pitching deals, RBC’s new offer has a very low deposit threshold to qualify ($5,000), has a high number of commission-free trades (20) and the commission-free trades are good for one year from when the account opened. Further, the rebates for the commission charges incurred for these trades takes place within three days and not several months into the future.

All told, for any DIY investor curious about trying out RBC Direct Investing, the timing and incentive to do so are compelling.

Given the size and popularity of RBC Direct Investing, it will be very interesting to see how long their competitors decide to wait on the sidelines. The latest RBC Direct Investing promotion is scheduled to expire in June however there’s no guarantee that the offer won’t be extended – especially if it is popular and can bring in new clients or assets.

Based on our internal data, we note that the big bank-owned online brokerages (especially those with comparable fees) will likely want (or need) to consider how to respond in kind.

For the moment, however, RBC Direct Investing has packaged an offer that puts them atop the deals board for compelling value. And, if there’s one thing investors are always on the hunt for, it’s a good deal. Fortunately, now they know where to find one.

Desjardins Online Brokerage Rolls Out New Prestige Service Perks

At the upper end of the account size spectrum, Desjardins Online Brokerage unveiled new Prestige Service features to the front end of their website.

This new premium offering is geared towards DIY investors who have portfolios starting at $250,000 and higher, and comes in three tiers: Bronze (minimum $250,000), Silver (minimum $500,000) and Gold (minimum $1M).

The new tier, Bronze, offers some of the key features of the prestige experience, such as lower priced commissions on stock trades, transfer fee refunds and no fees for registered or inactive accounts.

Like other ‘premium’ plans at other online brokerages, such as BMO InvestorLine, RBC Direct Investing, Scotia iTRADE, or TD Direct investing, there are perks on pricing or rates.

What is particularly interesting for Desjardins clients of the Prestige program, however, are the perks to receive annual statements of capital gains and losses as well as the inclusion of exclusive client appreciation events.

With the race to gather more assets heating up, competition will inevitably turn to offering better and more compelling features to higher net worth clients.

Stay tuned as the latest offering by Desjardins will undoubtedly raise eyebrows with those trying to put together a premium experience for high net worth DIY investors.

TD Direct Investing Previews New Advanced Dashboard Features

Earlier this week, we spotted a tweet on the TD Direct Investing Twitter feed pointing to a webinar previewing new features that will be rolling out to the Advanced Dashboard trading platform.

The webinar offered a detailed look at the new features and walked through where the changes in the platform will occur (complete with sound effects!). As for when the new updates will roll out, the official line is the next few weeks.

One of the big (and cool) enhancements is the ability to use a ‘traditional’ order entry ticket to place trade orders or use an in-line editing view, which essentially looks and feels like entering an order from a spreadsheet table. So, rather than have to walk through orders one trade ticket at a time, users can have a full-view of multiple securities and quickly configure trades from there.

Other feature enhancements were geared towards decluttering or improving user experience (such as colour coding buy/sell buttons) or improving trading execution tools (such as order settings). Of course, one of the great (but possibly daunting) features is how customizable the workspace is.

Fortunately, very active investors are generally pretty motivated and self-directed when it comes to learning. As such, the walk-through webinar is helpful to orient users to the new features and how they can be used to get the most out of Advanced Dashboard. Especially useful was the Q&A section with webinar host Ryan Massad (of TD Direct Investing) which started at around the 32-minute mark.

Another interesting angle that was mentioned several times during the presentation, was that client feedback was an important driver for the feature enhancements. As part of an interview we did with TD Direct Investing last year, it was neat to learn how user feedback finds its way into the feature enhancement conversations and workflows. This new rollout appears to have been the result of that process and for TD Direct Investing clients, there are numerous paths to submit feedback.

Discount Brokerage Tweets of the Week

Discount
Brokerage Tweets – Curated tweets by SparxTrading

From the Forums

Hunting for Deals

Are online investors hungry for a good deal when opening an online trading account? This week the answer was definitely. In this post, from RedFlagDeals.com, one user was looking for an online brokerage offering the best deal for opening an account and, on reddit in this post, a user was specifically interested in the best offer from Questrade. Spoiler alert, users were pointed to SparxTrading.com’s deals section for the answers to both.

Not So Simply the Best

The ongoing desire to find out which online brokerage in Canada is the best is starting to change. After extensively covering and monitoring the conversation on which discount brokerage is best, it was interesting to read this thread in reddit’s personal finance Canada subreddit in which the notion of a “best” brokerage didn’t matter as much as the “best brokerage for your needs.”

Into the Close

Stick a fork in this week, because it’s done. Yes, another cautiously optimistic week for investors is in the books but by now everyone is primed to be a little bit nervous when things seem ‘calm’. So, enjoy it while it lasts and for everyone fortunate enough to get some sunshine for Mother’s Day, be sure to share that sunshine with the moms in your life!

Posted on May 4, 2018 by user — Leave a comment

Discount Brokerage Weekly Roundup – May 4, 2018

The old trading adage of sell in May and go away clearly did not apply to this week’s market activity. It’s still early enough in the month that anything can happen, however. With the announcement of the end of decades of hostilities between North and South Korea, it’s as good as any segue into the action taking place in the Canadian discount brokerage space.

In this edition of the roundup we check in on the latest updates from an important merger taking place among two online brokerages. Next, we’ll review the latest deals and promotions activity for the beginning of a new month. From there, we’ll take a look at what DIY investors were chatting about on Twitter and in the investor forums.

Credential Direct merger shows signs of progress

After the merger between Credential Direct, Qtrade Investor and NEI Investments to form Aviso Wealth was announced late last year, it wasn’t exactly clear how and when things would unfold. Earlier in April, however, we learned that the merger between the three firms was officially finalized and, as of this week, the Credential Direct website started to direct new and existing clients to the Qtrade Investor product.

As we mentioned in last week’s roundup, the Canadian online brokerage landscape has seen some major moves over the past several months. With acquisitions of Virtual Brokers and Jitneytrade by much larger wealth management firms, as well as this latest merger between Qtrade Investor and Credential Direct, the rest of the year for the Canadian discount brokerage landscape should shape up to be quite interesting. After years of recognition that there were simply too many online brokerages in Canada, the field appears to be narrowing. And, it is likely that there is still further consolidation to come as online brokerages wrestle with staying competitive and profitable at the same time.

While consolidation and removing of an online brokerage from the list of providers might reduce competition, the reality is that Credential Direct was primarily influential in Western Canada and in terms of market share, they were certainly on the small end. As a result, it is unlikely to tip the scales with either investors or among other industry competitors.

According to the Credential Direct website, there will be a transition period over which existing clients will get migrated over to Qtrade’s platform. The target appears to be this coming fall for that to be completed.

That said, it will be interesting to see how the rest of the Canadian online brokerage field responds to what will be a larger Qtrade Investor competitor. Aviso, the parent to Qtrade, will reports having a combined $55 billion in assets under management and over 500,000 clients collectively across the country, so other Canadian online brokerages will have a considerably larger organization to contend with.

It will also be interesting to see where, from a marketing perspective, the Qtrade Investor brand is going to push and what new resources it may have to push with. For example, could pricing or platform improvements be justified given the larger scale? With Credential Direct previously being active on social media, could this be the tipping point to enable Qtrade Investor to wade into the social waters?

For DIY investors, fewer choices may, in this case, provide stronger choices. Without having to allocate resources to competing regionally against Credential Direct, could Qtrade Investor now allocate those resources to better servicing their existing clients? Certainly, for Credential Direct clientele, there will be access to better pricing (in most cases), service and trading experiences.

While Qtrade is likely to become even more of a formidable opponent to the bank-owned online brokerage space, the lesson this merger and additional acquisitions have shown to be true, is that the playbook to surviving the online brokerage space in Canada requires scale. And, the race for new clients and their assets, is almost certainly going to become even more fierce as a result.

May-day Deals Update

The big story in this month’s deals and promotions section is the pullback in offers from Canada’s discount brokers.

After what was an abnormally busy start to 2018, things have definitely quieted down on the deals front with barely more than 20 advertised offers currently in play. Perhaps the greatest concern for DIY investors looking for a bonus to open an account is the general absence of offers in the cash back promotions section.

Currently, BMO InvestorLine is the sole Canadian discount brokerage offering a cash back promotional offer – something that is very unusual considering how competitive the online brokerage space is to acquire new clientele.

All is not lost for investors looking for a cash back promotion, however. DIY investors can also access the Questrade referral offer posted in the deals section but aside from BMO’s offer, the only other way to access a cash back offer at the moment is via referral.

Currently there are three of these offers available from BMO InvestorLine, Questrade and Scotia iTrade. At this point, for new clients looking to open an online investing account, it pays to be extra nice to friends at these brokerages.

Fortunately, there is still the cornerstone offer for coverage of transfer fees available at most brokerages. So, for those looking to try a new provider, that door is certainly open.

Don’t expect the drought to last too long though. It is unlikely that BMO InvestorLine and Questrade will be left unchallenged in the cash back space, especially considering how popular these offers tend to be with folks opening a new account.

With marijuana legalization on the horizon, and the conversation on blockchain still simmering, there are a couple of possible catalysts in play to entice online investors back into the market. Finally, bank-owned brokerages aren’t usually so chivalrous when it comes to ceding market share, so there’s a business case to be made for at least another bank owned brokerage to step back onto the field while it is not so crowded.

We’ll continue monitoring the deals landscape for new movements, but for the time being, only a small number of brokerages are in the deals spotlight, which we’re guessing is totally fine by them.

Discount Brokerage Tweets of the Week

Discount
Brokerage Tweets – Curated tweets by angeloAtSparx

From the Forums

RESP-onding to requests

The Financial Wisdom Forum deserves credit for sharing the news that TD Direct Investing now offers BC residents access to the British Columbia Training and Education Savings Grant (BCTESG) (here is the reference link to TD).

Battle of the Q’s

Questrade or Qtrade? The question is now more pertinent than ever as the narrowing field of online brokerages (that are not bank-owned) casts a spotlight on these two firms. This post from Canadian Money Forum provides some interesting perspectives on both.

Into the close

That’s it for another week. With the world no longer on the brink of war and the economy powering along, even Elon Musk found things a bit…boring. Fortunately for him (and us) there’s plenty of other (cooler) things to be looking at heading into the weekend instead of stock charts. Have a great weekend and #Maythe4thbewithyou.

Posted on May 1, 2018 by user — Leave a comment

Discount Brokerage Deals & Promotions – May 2018

*Update: May 29* There’s an old trader tip that says “buy when it snows and sell when it goes.” Now, it wasn’t too long ago that the snow actually did leave but the arrival of May “should” mean no more snow. Alas, snow wasn’t the only thing disappearing to kick off this month. Several Canadian discount brokerages decided to hang up their promotional skates (for the moment anyway) which has certainly cleared the field for those brokerages actively promoting offers, to continue to post offers to win over new clients and assets.

Discount Brokerage Deals Quick Nav

Cash Back/Free Trade/Product Offer Promotions
Referral Promotions
Transfer Fee Promotions
Contests & Other Offers
Digital Advice + Roboadvisor Promotions

Yes, the big story heading into the new month isn’t who arrived but rather who stepped back. As of the beginning of May, HSBC InvestDirect, National Bank Direct Brokerage and Virtual Brokers all let the clocks on their respective offers run out.

For DIY investors seeking out cash-back promotions, the field is slim, with either Questrade (via their referral offer) or BMO InvestorLine (whose offer also comes with free trades) providing easy to access cash back offers.

Scotia iTRADE and BMO InvestorLine also offer referral promotions with a cash-back component to them however accessing these offers requires more effort that either Questrade’s referral-based cash-back offer or BMO’s standard offer. Side note, BMO InvestorLine’s referral offer can be combined with their current commission-free trading + cash back offer.

It will be interesting to see just how long competitor online brokerages to BMO InvestorLine and Questrade are willing to sit on the sidelines while both firms dominate the deals field unchallenged (at least for now). For the moment, however, the stats are clear: for DIY investors looking for a deal are going to focusing hard on the only brokerages in the spotlight at this point.

Correction: an earlier version of the table that referenced a cash reward of $400 at Questrade for a deposit of $250,000 was incorrect. The current table has been updated with correct information.

Expired Offers

Several offers from Canadian online brokerages expired at the end of April. Virtual Brokers’ transfer fee technically expired, while National Bank Direct Brokerage’s commission-free trading promotion also expired. HSBC InvestDirect’s cash back promotion officially ended after having been extended just a little while longer.

Extended Offers

No offers were extended as of the beginning of May.

New Offers

*Update May 29 – After an interesting little blip in the deals section, National Bank Direct Brokerage is back once again with their commission-free trade offer.

The deal, which is interestingly not posted on their promotions section or in their header slider, is being advertised (and was discovered) on Facebook. In any case, there is a live link to the offer that we’ve included in the table below.

This new offer is similar previous commission-free trade deal of 25 trades which are good for one year except there is also promotional pricing of $6.95 per trade when the 25 trades are used up. This is actually quite a compelling offer for anyone interested in trying out NBDB because they are lowering their standard commission pricing down from $9.95 to where CIBC Investor’s Edge pricing is on a standard basis. So, although this discounted pricing is temporary, it definitely means National Bank Direct Brokerage has one of the most competitive offers out there.

See table below for more information.*

*Update May 7 – After a long absence from the commission-free trade section of the deals section, RBC Direct Investing is stepping back into the mix with a new offer of 20 commission-free trades which are good for up to one year. This is likely to be a popular offer in the category for several reasons. First, the hurdle to qualify for this offer is incredibly low – the minimum deposit required is only $5,000. Second, RBC Direct Investing is part of Canada’s largest bank, which means there’s lots of attention this offer will garner from DIY investors. Last (but not least), there are fewer players on the deals field at the moment which necessarily means this offer will get more exposure. Scroll down to read additional details.*

No new offers to announce at the outset of May.

Discount Brokerage Deals

Cash Back/Free Trade/Product Offer Promotions
Referral Promotions
Transfer Fee Promotions
Contests & Other Offers
Digital Advice + Roboadvisor Promotions

Cash Back/Free Trade/Product Offer Promotions

Company	Brief Description	Minimum Deposit Amount	Commission/Cash Offer/Promotion Type	Time Limit to Use Commission/Cash Offer	Details Link	Deadline
	A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package.	n/a	Discounted Commission Rates	none	For more details click here	none
	Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully.	$1,000	$88 commission credit	60 days	Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here.	none
	Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully.	$1,000	5 commission-free trades	60 days	5 commission-free trade offer	December 31, 2018
	Open a new account at National Bank Direct Brokerage with at least 5,000 and you may be eligible to receive up to 25 commission-free trades, good for up to one year. There is also a promotional discounted commission-pricing available within the first year to individuals who use up their 25 trades; trading commissions for the first year are $6.95. Use promo code SPRING 2018 when signing up to be eligible for this offer. This offer is also available to existing clients. Be sure to read terms and conditions for full details.	$5,000	25 commission-free trades + $6.95 commission per trade pricing	365 days	National Bank Spring Offer	July 6, 2018
	Open and fund a new account at RBC Direct Investing with at least $5,000 in net new assets and you may be eligible to receive up to 20 commission-free equity trades which are good for up to one year. Be sure to read terms and conditions for full details.	$5,000	20 commission-free trades	365 days	RBC Direct Investing Commission-free Trades Promotion	June 14, 2018
	Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatTransfer or email: [email protected]. See details link for more info.	$10,000	1% of assets transferred in the form of commission-credits (max credits: $1,000)	6 months	Disnat 1% Commission Credit Promo	May 31, 2018
	Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details.	$25,000	commission-free trades for 1 month + 1 month of advanced data.	1 month	Active Trader Program	December 31, 2018
	Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $50,000; B) $100,000 or C) $300,000+ in net new assets and you may be eligible to receive up to 20 commission-free equity trades plus A) $50 cash back; B) $150 cash back or C) $500 cash back. Commission-free trades are good for up to two months. In addition, eligible individuals can receive an extra $50 as part of the refer a friend program. Use promo code SPRING when signing up. Be sure to read the terms and conditions for more details on the offer.	A) $50,000 B) $100,000 C) $300,000	20 commission-free equity trades AND A) $50; B) $150 C) $500.	Commission-free equity trades are good for up to two months. Cash back will be deposited the week of January 21, 2019.	BMO InvestorLine Spring 2018 Campaign	May 31, 2018
Expired Offers
Last Updated: May 29, 2018 10:15 PT

Referral Promotions

Company	Brief Description	Minimum Deposit Amount	Incentive Structure	Time Limit to Use Commission/Cash Offer Deposit	Details Link	Deadline
	Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements.	A) $1,000 B) $10,000 C) $25,000 D) $50,000 E) $100,000+	$25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back	Cash deposited into Questrade billing account within 7 days after funding period ends (90 days)	Refer a friend terms and conditions Code Number: 476104302388759	none
	If you refer a friend/family member who is not already a Scotia iTRADE account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link.	A) $10,000 B) $50,000+	A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50)	60 days	Refer A Friend to Scotia iTrade	tbd
	If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details.	$50,000	You(referrer): $50; Your Friend(referee): $50	Payout occurs 45 days after minimum 90 day holding period(subject to conditions).	BMO InvestorLine Refer-a-Friend	October 31, 2018
Expired Offers
Last Updated: May 1, 2018 22:45 PT

Transfer Fee Promotions

Company	Brief Description	Maximum Transfer Fee Coverage Amount	Minimum Deposit Amount for Transfer Fee Eligibility	Details Link	Deadline
	Transfer $15,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details.	$150	$15,000	Transfer Fee Rebate	none
	Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees.	$135	$15,000	Transfer Fee Rebate Details	none
	Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees.	$135	$20,000	Transfer Fee Rebate	none
	Transfer $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion.	$150	$25,000	Credential Direct Transfer Fee Rebate	none
	Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150.	$150	$25,000	Transfer Fee Promo	none
	Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details.	$150	$25,000	Contact client service for more information (1-800-465-5463).	none
	Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made.	$135	$25,000	Confirmed with reps. Contact client service for more information (1-800-567-3343).	none
	Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info.	$150	$50,000	Disnat 1% Commission Credit Promo	May 31, 2018
	Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPRING when signing up. Be sure to read the terms and conditions for more details on the offer.	$200	$200,000	BMO InvestorLine Spring 2018 Campaign	May 31, 2018
Expired Offers
Last Updated: May. 1, 22:35 PT

Other Promotions

Company	Brief Description	Minimum Deposit Amount Required	Details Link	Deadline
	Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information.	n/a	MoneyTalks Inside Edge Discount	none
	Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details.	$1,000	Broker@ge 18-30 Promotion	none
	Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details.	$1,000	StartRight Free Trade offer	none
Expired Offers
Last Updated: May. 1, 2018 22:35 PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor	Offer Type	Offer Description	Min. Deposit	Reward / Promotion	Promo Code	Expiry Date	Link
	Discounted Management	Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link.	$1000	1st month no management fees	KDKFNBBC	None	Questrade Portfolio IQ Promo Offer
	Discounted Management	Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details.	$1,000	1 year no management fees	STSF	April 1, 2018	SmartFolio New Account Promotion
	Cash Back – Referral	BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details.	$1,000	$50 cash back (referrer) $50 cash back (referee)	Unique link generated from SmartFolio required.	None	SmartFolio Website
	Transfer Fee Coverage	Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth.	$25,000	up to $150 in transfer fees covered	None	None	Contact customer service directly for more information.
Last Updated: May 1, 2018 22:45 PT

Posted on April 20, 2018 by user — 1 Comment

Discount Brokerage Weekly Roundup – April 20, 2018

For many sports fans, playoffs are the time of year when things get really exciting. Fortunately, sports fans aren’t the only ones being treated to contests as DIY investors and online brokerages have contests of their own making headlines. Of course some games take longer than others to win and require some creativity to get ahead (amirite Westworld fans?).

In this edition of the weekly roundup, we look at the return of a popular online trading competition that one Canadian online brokerage is putting up big prize money for. Next, we take a look at some recent earnings from a popular online brokerage and what an earnings call revealed about DIY investor sentiment in Q1 as well as some hints to how the online brokerage space is poised to change this year. As usual we’ll be taking the pulse of DIY investors on Twitter and in the investor forums, so be sure to check out what folks were talking about this week.

Biggest Winner Competition is Back

Just in time for the playoff season (and perhaps the end of season), the Biggest Winner competition from Horizons ETFs and National Bank Direct Brokerage is back. Fun fact, Horizons ETFs also is the exclusive ETF sponsor of the Toronto Raptors.

Officially kicking off on May 7^th, this popular contest features healthy cash prizes for top performing participants. The grand prize is $7,500 while the runner up prize is $2,500. There are also six weekly prizes of $500 each which will keep things exciting from week to week over the course of the challenge.

Contestants will have a fantasy balance of $100,000 to start off with and can only trade Canadian ETFs trading on the TSX. The contest runs between May 7^th and June 15^thso the ‘buy and hold’ strategies may not fare as well as those who take a more active approach.

Of course, with market volatility levels being as high as they are, this could make for a very interesting competition – especially given the performance of leveraged ETFs in these conditions.

To keep things interesting, the competition does have some important limits. For example, the maximum allocation of a portfolio in any one ETF is 25% and investors will be charged fantasy commissions at the rate of $9.95 per trade. Also, the maximum limit of trades over the competition is 5,000 which is still a pretty high bar for scalp traders. Of course, it’s fairly onerous to generate that many orders manually but trader types are known to be competitive, so someone just might be able to max out.

Another fun fact, the sponsor of the competition, National Bank Direct Brokerage, actually allows for totally commission free trading (with some conditions) of Canadian and American ETFs, so in this case, reality has an edge over the fantasy world.

For DIY investors looking to have a little fun and learn about investing, this is a great way to do both. And, who knows, it might be possible to win big with a volatile market and lots of ways to play it.

Volatility Rules for Interactive Brokers in Q1

There’s an old farmer’s saying that goes ‘make hay while the sun shines.’ For many investors, the stock market volatility over the start of 2018 has been anything but sunny, however like anything in the markets, there’s always another side to the story. In this case that other side is that with all of this volatility, traders in the US have come back into the market in a big way.

This past week, US online brokerage Interactive Brokers held their quarterly conference call to review and discuss the results from Q1 of 2018. As with most conference calls, there were certainly more than a few nuggets of information that showed how the online brokerage business in faring for Interactive Brokers, but more importantly, where they are looking to next for opportunities and what this means for both investors and Interactive Brokers’ competition.

First things first, the numbers. Compared to the same quarter last year, Interactive Brokers crushed it when it came to revenue, earnings and trading metrics. Suffice it to say that with year over year growth in accounts of 27% (to 517,000), growth in customer equity of 33% (to $129B) and pretax income for brokerage this quarter was 291 million, up 57%. Importantly, both trading commissions and net interest revenue were significant contributors to earnings and the rise in interest rates helped to bolster earnings.

In addition to the strong numbers, there were two other noteworthy observations from the conference call.

First, there appears to be an interesting marketing strategy that looks to be directed to shareholders or stock watchers to become clients of Interactive Brokers. It is something we noted in previous roundup, but the direct nature of pointing out the benefits to being a shareholder as well as a client mean that Interactive Brokers is tapping into an already attentive audience to mobilize more clients.

A second, and perhaps most interesting observation is that Interactive Brokers continues to move towards offering traditional banking services in an effort to encourage clients to bring more assets into Interactive Brokers. Not only did they launch a trading-account-linked Mastercard, they also offer interest on cash balances (over $100,000) of 1.19% which is huge for people who like to keep their powder dry. The biggest reveal in the conference call, however, was when CEO and founder, Thomas Peterffy mentioned that Interactive Brokers would soon be rolling out a direct deposit (through payroll) feature and the ability to pay bills from a client’s trading account. This last feature is significant because it is a direct play on the convenience of having access to trading funds to do everyday financial management without having to transfer money to another institution.

Based on their latest numbers, the combination of Interactive Brokers’ efforts to chase profits but also to mitigate risks has helped them skate through an exceptionally volatile quarter with lots of profits to show for it.

In a world moving quickly towards technologies that are seeking to disintermediate, being an online brokerage is a tricky proposition. To succeed in the online brokerage market of the future, firms will require scale and critical mass – otherwise as Peterffy astutely remarked – other brokerages will turn to Interactive Brokers to handle the order execution and technology while those firms focus on client service and acquisition.

The latest financial results for Interactive Brokers show that the writing is on the wall for all online brokerages – and for the broader financial services sector – that pulling ahead of the pack requires technology and a trading experience that gets clients excited. Interactive Brokers has demonstrated that it can do that while passing on savings to clients, which in turn results in their pockets getting pretty full in the process.

Discount Brokerage Tweets of the Week

An interesting mix of tweets this week. There were the regular client service and technical difficulty tweets, but there were also some interesting hints dropped by Questrade on future features and some great coverage of a financial literacy event (also featuring Questrade). Mentioned this week were BMO InvestorLine, CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, and TD Direct Investing.

Discount
Brokerage Tweets – Curated tweets by angeloAtSparx

From the Forums

Feed Up

Before opening an online brokerage, it’s important to understand how much it will cost to trade there. Unfortunately, for one eager beaver, the FOMO of getting into a hot sector won out over reading through the details of trading costs. This post from reddit’s Personal Finance Canada thread shows how one Scotia iTRADE user is looking for a way to minimize fees on the way out.

The drop on DRIPs

Maintaining healthy skepticism is important to surviving the investing world long term. So, one thoughtful forum user in this post from the RedFlagDeals Investing thread posed a question about the downside to using DRIP investing at Questrade. The responses offered a variety of interesting perspectives.

Into the Close

Seeing that it’s 4/20, it only seems appropriate to end the week on a high note (ba-dum-tsh). Yes there were many green puns today but with recreational marijuana legalization just around the corner here in Canada, investors were also weighing in on prospects for this sector. Of course, once all the smoke finally clears on Friday, there’s a whole weekend of hoping and cheering to get to. Good luck Raptors (and even the Leafs) – it’s a great weekend to get on a roll. Ok I’ll stop. Have a great weekend!!