Tag: Deals

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Discount Brokerage Weekly Roundup – September 1, 2017

Heading into a long weekend where Canadian and U.S. stock markets are closed until Tuesday, certain investors are braving a long gulf of uncertainty. Meanwhile, a new and white-hot market in cryptocurrency continues to burn 24 hours a day, 7 days a week. In the digital era, “money” truly doesn’t sleep. For Canadian online brokerages, it is a brave new world where technology is rapidly changing where and how investors manage wealth, and forcing everyone in the world of money to move ever-faster to keep up.

In this week’s roundup, we look at the latest move by one bank-owned Canadian discount brokerage to disrupt the DIY investing space by offering commission-free ETF trading. From there, we profile the newest promotional offer to cross our deals radar from the robo space looking to leverage a social approach to building their client base. As always, we’ll review which Canadian discount brokerages were active on Twitter and which ones were being talked about by Canadian DIY investors in the forums.

Tipping the balance of power: Commission-free ETF trading gives National Bank Direct Brokerage an edge

This week, National Bank Direct Brokerage redrew the map for the Canadian online brokerage industry by eliminating commissions on ETF buying and selling on both Canadian and U.S. listed ETFs, and in doing so, have likely touched off yet another price war in an already competitive commission marketplace.

The skeptical among us, and in fact most seasoned investors, would be right in asking whether or not this is too good to be true – or at the very least, how National Bank Direct Brokerage expects to make any money. Looking into the details and also putting this latest move into context can shed some light on both those points.

First, is commission-free ETF buying and selling too good to be true?

Well, the good news is commission-free ETF trading is positive – sort of. There are some important details to this new pricing structure that DIY investors should be clear about that clarify exactly the conditions under which NBDB clients can trade ETFs commission-free.

The first, and probably most important, condition for the commission-free trading is that purchases or sales need to be made in 100 unit increments. That means that only online orders of 100 or more units at a time will be considered commission-free. Fractional buys and purchases (or sales) of less than 100 units at a time will be charged at the regular commission rates ($9.95 per trade).

Another important condition is that individuals must sign up to receive all of their documents electronically. In today’s world, it’s not that uncommon to be fully digital, however the onus is on users to ensure that the digital versions of trade confirmations and statements are properly stored.

Finally, other important details that could impact users taking advantage of this offer are that commission-free ETF trades do not count towards active trader pricing activity levels, enable annual administrative fees to be waived nor do they help with getting free or discounted access to trading platforms.

In short, for the average investor – including the long-term passive investor, the ability to trade commission-free ETFs is a significant win.

According to Laurent Blanchard, President of National Bank Direct Brokerage, “More than ever, our aim is to innovate to meet the needs of self-directed investors. It’s our priority and today’s announcement is tangible proof. By saving on commissions, our clients will be able to build their portfolios and grow their wealth. This change benefits all types of investors.”

Yes, executing trades in volumes sufficiently high enough to qualify for zero commission pricing will require more organization and, potentially, a higher balance to take advantage of the offer, but savings on transaction fees are savings nonetheless.  On this last point, however, is where the answer lies as to whether or not NBDB can make money by effectively enabling free trading on ETFs (spoiler alert: they’re able to do it).

By including a minimum amount of 100 units to purchase in order to qualify for commission-free ETFs, there’s a reasonable likelihood that this would appeal to individuals with higher portfolio amounts – especially for passive portfolio holders.  As such, for NBDB, their commission-free ETF program might end up having slightly more appeal to individuals with somewhat larger portfolios than to individuals who are just starting out. Therein lies the value proposition.

Individuals with larger balances may also be looking for convenience in wealth and financial management, which would make National Bank and its constellation of traditional banking, lending and other financial services a natural fit. If individuals have multiple accounts at bank-owned brokerages, for example, there is now an incentive to consolidate at National Bank Direct Brokerage. And, it is that increased integration factor that appears to be an emerging trend for the online brokerage space, with notable examples in the U.S. online brokerages.

Screengrab from National Bank Direct Brokerage website

Two weeks ago, we reported on the move by Interactive Brokers to offer the ‘integrated’ approach to wealth management by linking a credit card into their wealth management mix. E*trade Financial, another US-based online brokerage, also offers chequing accounts and bill payments. On the commission-free trading side, both Robinhood and Merrill Edge have commission-free trading, the latter specifically offering commission-free ETFs.

The takeaway: online brokerages relying solely on commission revenue to survive are an endangered species – increasingly integrated financial and wealth management services will be the model that tomorrow’s online brokerages – bank-owned, credit union owned or otherwise will need to adapt to.  The writing is on the wall for high commission charges for order execution.

In that light, the latest move by National Bank Direct Brokerage is clearly a long-term strategy to get the attention, and hopefully business, of investors with larger portfolios. For those with modest portfolios, NBDB’s latest offer provides room to grow with the upside of occasional commission free trading. The added bonuses of being with a bank-owned brokerage, such as convenience of moving money into and out of banking accounts, might be enough to at least put National Bank Direct Brokerage into consideration.

Whichever way the Canadian online brokerage markets respond from here, the latest move by National Bank Direct Brokerage is reminiscent of the commission price drop from RBC Direct Investing in 2014.

Canadian bank-owned online brokerages are now in a world where a bank-owned brokerage is offering commission-free ETF trading. And, regardless of the conditions associated with the offer, nothing gets the attention of investors like something that sounds like a good deal. A bank-owned brokerage with no-commission trading on ETFs is just that.

Predictions are often perilous, but in this case, recent history offers a lesson for the online brokerage market in Canada: adapt quickly or risk obscurity. The one thing that we can predict is that DIY investors will continue to be the winners.

It pays to have friends: SmartFolio launches cash back Refer-a-Friend offer

Refer a friend programs are a great way for existing clients and their friends or family to mutually benefit from opening a new account. For early adopters in the online portfolio management and robo-advisor space, however, there is now another firm that is rewarding existing clients for referring new clients to them.

This week, BMO Nesbitt Burns’ online portfolio management service, BMO SmartFolio, rolled out a referral program as part of its growth efforts in this increasingly competitive space. The “Refer a Friend” program from SmartFolio offers $50 cash back to both the referring party and the referee.

Within the Canadian online portfolio management and robo-advisor space, there are a handful of firms that offer promotional referral deals which typically include waiving of fees and cash back incentives. What is interesting about SmartFolio’s approach to refer a friend programs, is that the referee’s referral bonus can be combined with an existing ‘mass market’ offer. Currently, SmartFolio is offering the first year of management free on assets up to $15,000, so the new referral bonus for the referee can be used in conjunction with this offer.

Another interesting component of the referral approach with SmartFolio is that they’ve managed to automate (or semi-automate) the process of facilitating a referral. In this referral program, SmartFolio clients get an individualized link that they can share directly with their friends/family. This is an efficient and easy way for both the individual doing the referring and the referee to ensure a bonus is generated. SmartFolio clients also receive an individualized referral code that can be shared with friends/family who would prefer to drop by a BMO branch to open their SmartFolio account.

With BMO InvestorLine, by comparison, the referral method relies on entering an email address of the referring party at the time of new account sign up.  Whenever a manual entry is involved, it typically takes more time and can lead to individuals not entering in correct information which can delay or potentially invalidate a bonus being offered.

Like all promotions, there are some important details to consider.

First, to qualify for the SmartFolio “Refer a Friend” bonus, the referee’s new account must be funded with a minimum of $5,000 and it must be kept open with this minimum amount for at least 90 days. If this is done, the $50 bonus will be deposited by the last business day of the month following the 90-day holding period. Another important condition to be aware of is that SmartFolio clients can get credit for up to 30 referrals per year.

As the competition between Canada’s digital online portfolio management providers (aka ‘robo-advisors’) increases, so too will the incentives in play. BMO SmartFolio’s referral program is a win-win solution for existing clients, new clients and of course for BMO Nesbitt Burns too. The fact that this offer can be combined with the current promo from SmartFolio means that anyone interested in testing the waters with SmartFolio can benefit from someone who has already done so.

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

Discount Brokerage Tweets of the Week

It was a tame week for folks on Twitter, with customer service queries taking the spotlight. Mentioned by Canadian DIY investors were Questrade, RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

Deals on data?

For investors and traders alike, data is crucial to making good decisions. How often, and how quickly one trades or invests can determine whether having level 2 data is a worthwhile investment. In this post from CanadianMoneyForum.com, however, one user is looking to get the best price on some detailed information, and finds some pretty interesting online brokerage options.

Cross border shopping

In this post from reddit’s Personal Finance Canada thread, one user was looking for a little clarification on buying U.S. stocks for their TFSA at CIBC Investor’s Edge. Find out what money saving tips and insights other readers had to offer for a user hoping to save on exchange fees.

Into the Close

That’s a wrap on another eventful week. With the last long weekend of the summer upon us, hopefully you’re in a part of the country that isn’t going to require shoveling snow (amirite Labrador?) . And, speaking of snow, it looks like the Game of Thrones fans will have to find something to occupy their time between now and oh, sometime in 2019 when the next season rolls around. Good thing there’s never a dull moment in the markets.  Except when they’re closed for the holidays. In any case, hope you have a great and safe long weekend whatever you happen to be doing!

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Discount Brokerage Deals & Promotions – September 1, 2017

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

Discount Brokerage Deals Quick Nav

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

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

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

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

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

Expired Deals

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

Extended Deals

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

New Deals

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

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2017
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive a $50 cash back rebate per quarter. To receive the cash back rebate, at least 20 commission generating trades must be made within a specified quarter. Use promo code: CSHBKQTR17 to access this offer. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) per quarter (up to $200 cash back over the total period) To qualify 20 trades must be made within a quarter. $50 cash will be rebated in the following quarter. Eligibility period ends June 2018. For more information, click the terms and conditions here September 30, 2017
Open and fund a new account with Virtual Brokers with a deposit of at least $5,000 and receive cash back commission rebates on the first 20 Canadian or US ETF trades made by September 30, 2017. For commission-free Canadian ETFs use promo code: CADSETF2017 and for US ETFs use promo code: USSETF2017. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) Trades must be completed by Sept. 30, 2017. Cash rebates will be deposited in Feb. 2018. For more information, click the terms and conditions here September 30, 2017
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatFlex or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo December 31, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $100,000 or B) $250,000+ in net new assets and you may be eligible to receive up to A) $300 or B) $750 cash back. In addition, eligible individuals can receive an extra $50 as part of the refer a friend program. Use promo code SPARXCASH when signing up for the cash back offer. Be sure to read the terms and conditions for more details on the offer. A) $100,000 B) $250,000+ A) $300 B) $750 Cash back will be deposited the week of June 11, 2018. Fall cash back offer October 31, 2017

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

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTrade account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $50,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period(subject to conditions). BMO InvestorLine Refer-a-Friend June 30, 2018

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

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $20,000 Transfer Fee Rebate none
Transfer $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion. $150 $25,000 Credential Direct Transfer Fee Rebate none
Transfer $25,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $25,000 Transfer Fee Rebate none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo tbd
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatFlex. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo December 31, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPARXCASH when signing up to also be eligible for cash back offer. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 Fall cash back offer October 31, 2017

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

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Disnat Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information. n/a MoneyTalks Inside Edge Discount none
Scotia iTrade Share a story about a personal finance goal or moment (max 1000 characters) and complete the contest submission form and you may be eligible to win one of three monthly prizes of an Apple Watch Series 2. Contest is open to all Canadian provinces except residents of Quebec. Be sure to read contest terms and conditions for full details. n/a Terms & Conditions available here: Scotia iTRADE #MyMakeItHappen Contest; Entry link available here. October 31, 2017
Disnat Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details. $1,000 Broker@ge 18-30 Promotion none
Scotia iTrade Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details. $1,000 StartRight Free Trade offer none

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

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $5,000 1 year no management fees STSF October 31, 2017 SmartFolio New Account Promotion
Cash Back – Referral BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details. $5,000 $50 cash back (referrer) $50 cash back (referee) Unique link generated from SmartFolio required. None SmartFolio Website
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: Sept. 1, 2017 11:55 PT
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Discount Brokerage Weekly Roundup – August 4, 2017

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

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

The Chart of the Deal

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Scotia iTRADE’s Making Content Happen

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

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

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

Screenshot from Scotia iTRADE #MyMakeItHappen

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

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

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

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

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

Discount Brokerage Tweets of the Week

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

From the Forums

Looking for an online brokerage

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

Too much robo?

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

Into the Close

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

 

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

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Discount Brokerage Deals & Promotions – August 1, 2017

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

Discount Brokerage Deals Quick Nav

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

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

Expired Deals

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

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

Extended Deals

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

New Deals

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

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

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

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

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2017
Qtrade Investor is offering commission-free ETF purchases for all clients (new and existing) for July 2017. See details link for full terms, conditions and pricing. $1,000 commission fees waived on Canadian listed ETF purchases Valid for Canadian listed ETF purchases made in July 2017. For more information, click here July 31, 2017
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive a $50 cash back rebate per quarter. To receive the cash back rebate, at least 20 commission generating trades must be made within a specified quarter. Use promo code: CSHBKQTR17 to access this offer. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) per quarter (up to $200 cash back over the total period) To qualify 20 trades must be made within a quarter. $50 cash will be rebated in the following quarter. Eligibility period ends June 2018. For more information, click the terms and conditions here September 30, 2017
Open and fund a new account with Virtual Brokers with a deposit of at least $5,000 and receive cash back commission rebates on the first 20 Canadian or US ETF trades made by September 30, 2017. For commission-free Canadian ETFs use promo code: CADSETF2017 and for US ETFs use promo code: USSETF2017. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) Trades must be completed by Sept. 30, 2017. Cash rebates will be deposited in Feb. 2018. For more information, click the terms and conditions here September 30, 2017
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatFlex or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo September 30, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $100,000 or B) $250,000+ in net new assets and you may be eligible to receive up to A) $300 or B) $750 cash back. In addition, eligible individuals can receive an extra $50 as part of the refer a friend program. Use promo code SPARXCASH when signing up for the cash back offer. Be sure to read the terms and conditions for more details on the offer. A) $100,000 B) $250,000+ A) $300 B) $750 Cash back will be deposited the week of June 11, 2018. Fall cash back offer October 31, 2017

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

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTrade account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $50,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period(subject to conditions). BMO InvestorLine Refer-a-Friend June 30, 2018

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

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $20,000 Transfer Fee Rebate none
Transfer $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion. $150 $25,000 Credential Direct Transfer Fee Rebate none
Transfer $25,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $25,000 Transfer Fee Rebate none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo tbd
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatFlex. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo September 30, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPARXCASH when signing up to also be eligible for cash back offer. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 Fall cash back offer October 31, 2017

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

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Disnat Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information. n/a MoneyTalks Inside Edge Discount none
Scotia iTrade Share a story about a personal finance goal or moment (max 1000 characters) and complete the contest submission form and you may be eligible to win one of three monthly prizes of an Apple Watch Series 2. Contest is open to all Canadian provinces except residents of Quebec. Be sure to read contest terms and conditions for full details. n/a Terms & Conditions available here: Scotia iTRADE #MyMakeItHappen Contest; Entry link available here. October 31, 2017
Disnat Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details. $1,000 Broker@ge 18-30 Promotion none
Scotia iTrade Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details. $1,000 StartRight Free Trade offer none

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

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $5,000 1 year no management fees STSF October 31, 2017 SmartFolio New Account Promotion
Cash Back Open and fund a new Investcube account with National Bank Direct Brokerage and deposit with at least A) $10,000; B) $50,000; C)$200,000; or D) $300,000+ and you may be eligible to receive a cash back deposit of either A) $50; B) $200; C) $400 or D) $600. See offer terms and conditions for full details. A) $10,000 B) $50,000 C) $200,000 D) $300,000+ A) $50 cash back B) $200 cash back C) $400 cash back D) $600 cash back CUBE2017 August 31, 2017 Investcube Cash Back Promotion
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: Aug. 1, 2017 12:30 PT
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Discount Brokerage Weekly Roundup – July 28, 2017

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

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

CIBC Investor’s Edge rolls out new website

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

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

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

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

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

The new menu breaks the website into the following categories:

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

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

  • Getting Started
  • Benefits
  • Investor Profiles
  • Education Centre

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

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

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

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

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

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

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

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

Lightning Roundup

Deals get a digital boost

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

Questrade ETFs acquired by WisdomTree

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

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

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

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

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

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

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

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

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

Discount Brokerage Tweets of the Week

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

From the Forums

Premier choice

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

Withhold the phone

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

Into the Close

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

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Discount Brokerage Deals & Promotions – July 1, 2017

Happy Canada Day! Like the weather in July, the deals and promotions section is heating up.

The great news for DIY investors heading into the new month is that there are 23 offers or promotions being advertised by Canadian discount brokerages and an additional four when considering the digital advice or robo-advisor promotional offers. Included in this mix are some exclusive offers for SparxTrading.com readers, notably the $88 commission credit offer now available at Questrade that was launched last month.

Discount Brokerage Deals Quick Nav

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

Given what’s going with stock markets, possible interest rate hikes and substantial competition between online brokerages, there definitely seems to be evidence that Canadian discount brokerages are getting bolder and more creative with their offers.

Late last month, for example, Virtual Brokers launched a pair of offers that are likely to get deal savvy shoppers’ attention – especially for those who actively trade. In one of these deals, Virtual Brokers now offers a quarterly commission rebate for up to one year, something that we have not seen before and which, in numerical terms, might appeal to the moderately active trader who is able to meet the trading threshold required.

In addition, at the outset of July, Qtrade Investor has launched a commission-free ETF purchase promotion for Canadian ETFs where, similar to competitors Questrade and Virtual Brokers, the purchase of ETFs (in this case only Canadian ETFs) is commission free.

Although full commission-free trading might still be some time away, the idea is clearly being toyed with by Canadian discount brokerages – especially with Canadian ETFs.

Fundamentally, it is an interesting moment for both DIY investors and Canadian discount brokerages. As markets on either side of the border brace for the coming wave of interest rate hikes, which on the one hand might be beneficial for brokerages but on the other would change the economics of margin trading, and investor sentiment towards equities as an asset class. Fortunately for DIY investors, this will almost certainly make the case for Canadian discount brokerages to start offering bigger and bolder incentives to attract assets and new clients.

Finally, a few exciting housekeeping notes.

Regular readers of the deals & promotions section will note that we’ve included a navigation box at the top of the deals section to help users find information faster. Also, as of last month, we’ve also included coverage of ‘digital advice’ or robo-advisor deals that are offered by or linked to Canadian discount brokerages.

As always if we’ve missed a deal or if you hear of something that other readers may benefit from, let us know!

Expired Deals

At the time of publication, the public links to Credential Direct’s Transfer offer & Special Offer (Trend Micro antivirus) are no longer accessible. Credential Direct recently upgraded their website so we will continue to monitor whether transfer fee promotions are still being offered and update our tables accordingly. For the moment though, we’re not counting them as part of the live offer group.

Extended Deals

Great news on the extension front, there were two great offers that got extended as of the beginning of July.

The first from BMO InvestorLine, is the refer-a-friend offer, which has been extended for another year and now expires at the end of June 2018. This offer is somewhat unique among online brokerages in that it usually can be combined with other offers that clients might qualify for when opening an account. The BMO InvestorLine refer-a-friend offers $50 cash back to both the individual being referred and the ‘friend’ who referred them.

Also extended this month is the Desjardins Online Brokerage 1% commission credit, which has been extended to September 30th. This commission credit offer is one of the most competitive in that it offers up 1% of what clients deposit as a commission credit, up to a maximum of $1000.

New Deals

This is always the most exciting category to cover and particularly so this month as Qtrade Investor has waded into the promotional offer race yet again, this time with a commission-free ETF offer. Specifically, as mentioned above, the limited time promotion enables Qtrade Investor clients to buy any Canadian ETF commission-free. The conditions are fairly simple: the ETF must be Canadian-listed and the minimum order value must be $1,000 (in the currency of the trade).

Finally, while technically not a new deal, it is actually a newly advertised offer. BMO InvestorLine is now advertising their coverage of transfer fees up to a maximum of $200. As such we’ve included the transfer offer as linked to the same deposit conditions as their current summer promotion.

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2017
Qtrade Investor is offering commission-free ETF purchases for all clients (new and existing) for July 2017. See details link for full terms, conditions and pricing. $1,000 commission fees waived on Canadian listed ETF purchases Valid for Canadian listed ETF purchases made in July 2017. For more information, click here July 31, 2017
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive a $50 cash back rebate per quarter. To receive the cash back rebate, at least 20 commission generating trades must be made within a specified quarter. Use promo code: CSHBKQTR17 to access this offer. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) per quarter (up to $200 cash back over the total period) To qualify 20 trades must be made within a quarter. $50 cash will be rebated in the following quarter. Eligibility period ends June 2018. For more information, click the terms and conditions here September 30, 2017
Open and fund a new account with Virtual Brokers with a deposit of at least $5,000 and receive cash back commission rebates on the first 20 Canadian or US ETF trades made by September 30, 2017. For commission-free Canadian ETFs use promo code: CADSETF2017 and for US ETFs use promo code: USSETF2017. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) Trades must be completed by Sept. 30, 2017. Cash rebates will be deposited in Feb. 2018. For more information, click the terms and conditions here September 30, 2017
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatFlex or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo September 30, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least $200,000+ in net new assets and you may be eligible to receive $1,200 cash back. In addition, eligible individuals can receive a 60-day trial of BMO MarketPro and have transfer fees covered up to $200. Use promo code SPARXCASH when signing up for cash back offer. Be sure to read the terms and conditions for more details on the offer. $200,000+ $1,200 Cash back Cash back will be deposited the week of March 12, 2018. Summer cash back offer August 7, 2017
Scotia iTrade Open and fund a new account with Scotia iTRADE with at least A) $25,000; B) $50,000; C) $100,000; D) $250,000; E) $500,000 or F) $1,000,000+ and you may be eligible to receive A) 5,000; B) 7,500; C) 20,000; D) 35,000; E) 50,000 or F) 100,000 scene points as well as 50 free trades. In addition, new clients will also be reimbursed up to $150 in transfer fees. Free trades will be valid for 90 days. Use promo code 17SC when signing up to be eligible. Be sure to read terms and conditions for full details. A) $25,000 B) $50,000 C) $100,000 D) $250,000 E) $500,000 F) $1M+ SCENE Points A) 5,000 B) 7,500 C) 20,000 D) 35,000 E) 50,000 F) 100,000 + 50 Free Trades 90 days Free Movie & Free Trade Promotion July 31, 2017

Expired Offers
Last Updated: July 1, 2017 14:30 PT

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTrade account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $50,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period(subject to conditions). BMO InvestorLine Refer-a-Friend June 30, 2018

Expired Offers
Last Updated: July 1, 2017 14:30 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $20,000 Transfer Fee Rebate none
Transfer $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion. $150 $25,000 Credential Direct Transfer Fee Rebate none
Transfer $25,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $25,000 Transfer Fee Rebate none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo tbd
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatFlex. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo September 30, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPARXCASH when signing up to also be eligible for cash back offer. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 Summer cash back offer August 7, 2017

Expired Offers
Last Updated: July 1, 2017 14:30 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Credential Direct has partnered with Trend Micro to offer 50% off Trend Micro Titanium Internet Security. Use code “TrendCF” at checkout. n/a Trend Micro Special Offer Code none
Disnat Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information. n/a MoneyTalks Inside Edge Discount none
Disnat Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details. $1,000 Broker@ge 18-30 Promotion none
Scotia iTrade Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details. $1,000 StartRight Free Trade offer none
Open a new account with Virtual Brokers with a deposit of at least $1,000 (for the Classic Commission Account) or $5,000 (for the Commission Free Trading Account) and you may be eligible to receive a one-year subscription to access 5i Research. Use promo code 5iVB2016 when signing up. Be sure to read terms and conditions for full details. $1,000 (Classic Commission Account); $5,000 (Commission Free Trading Account) 5i Research Offer March 31, 2017

Expired Offers
Last Updated: July 1, 2017 14:30 PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $5,000 1 year no management fees SPSF July 31, 2017 SmartFolio New Account Promotion
Cash Back Open and fund a new Investcube account with National Bank Direct Brokerage and deposit with at least A) $10,000; B) $50,000; C)$200,000; or D) $300,000+ and you may be eligible to receive a cash back deposit of either A) $50; B) $200; C) $400 or D) $600. See offer terms and conditions for full details. A) $10,000 B) $50,000 C) $200,000 D) $300,000+ A) $50 cash back B) $200 cash back C) $400 cash back D) $600 cash back CUBE2017 August 31, 2017 Investcube Cash Back Promotion
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: July 1, 2017 14:30 PT
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Discount Brokerage Weekly Roundup – June 30, 2017

Not everyone would look forward to turning 150 the way Canada does. That’s simply because us Canadians love to do things our way – including the Canadian discount brokerages and DIY investors. Of course, defining what ‘Canadian’ looks (and trades) like is quickly changing and gladly it looks like most Canadian online brokers are keeping up with the times.

There’s all kinds of excitement in this week’s roundup. Starting first with a shiny new website for one of Canada’s non bank-owned brokerages that showcases a more human approach to the world of finance. From there, at least one Canadian online brokerage decided to celebrate Canada turning 150 by offering up a great deal to DIY investors, because who doesn’t love a deal? Though it’s a tough act to follow, there are also interesting tweets and forum chatter that illustrate Canadians love to talk about DIY investing (and most of them are pretty polite!) in the tweets and forum roundups.

Credential Direct launches new website

It may have taken some time, but Credential Direct has officially rolled out its new website this week. Gone is the dated version of their website, a remnant of the features and priorities of the mid 2000’s and in its place, a modern layout as well as some interesting new features. In their own words, the new Credential Direct site is “simple, smart and so, so pretty” – for the most part we’d have to agree.

Side by side snapshots of Credential Direct’s old and new website.

Having covered (and even participated in) a number of different website upgrades and refreshes from Canadian online brokerages over the past three years, taking on the project of replacing a website is no easy feat.

In 2017, a ‘modern’ website – especially one for DIY investors – has to be aesthetically pleasing and seem ‘contemporary’ on the one hand, but also render and behave well across different screen sizes and consider user interaction that accommodates existing clients as well as possible new clients.

Credential Direct’s new website is clearly a radical overhaul from its predecessor. Aside from some of the more obvious changes, however, there is also a significant branding and messaging evolution that the new website brings with it. With so many drastic changes, there’s lots to speak to. That said, here are a handful of the observations about this updated website that we found to be most interesting.

One of the first things that jumps out about the new website is that the typography and styling of the text has been simplified and harmonized. While that might sound a bit like design-jargon (and it is) the decision to use a consistent colour and font means that the site instantly feels less busy than the version before it. Information is clearer, easier to read and has been broken into “essential” elements. In this case, less is definitely more.

Of course, anyone who has had to design a website knows that there are literally hundreds if not thousands of small decisions to make when it comes to organizing the information.

As we had reported in April, the design decisions, in particular around information organization, were helped along by a survey that helped test how users would interpret different menu headings and information tasks.

In that light, it is interesting to note that the new navigation puts a focus on platforms ahead of pricing, the latter of which is the most influential component of the value proposition for DIY investors. Not that information on pricing is hard to find. For users who scroll, pricing is the first thing under the header image that appears.

Fortunately, most of the information in the new site is easy to find for individuals looking to learn more about the Credential Direct experience, so the menu navigation choice was a curiousity. Of course, it is likely that with the new website, there will also be more measurement and testing, and as such, the new menu ordering is going to evolve based on data rather than being ‘carved in stone’.

Another thing that features prominently is the imagery of the people.

In a savvy design and marketing move, the new website places a strong emphasis on people but then goes a step further to name them and humanize the experience of learning about Credential Direct.

Personas used by Credential Direct to segment DIY investors

Going with pictures of people instead of icons is a bold move, and certainly not without some risks. Credential Direct’s decision to use personas and images that break the mold of what an investor typically looks like, is in keeping with a trend in financial services generally. It is particularly encouraging to see the diversity in imagery choices, with pictures of women investors, investors of different age groups and various ethnicities – something that is a welcome departure from the world of investing imagery in the 2000’s.

In fact, for anyone who’s had to look at thousands of stock photos to decide on what images to use, however, the choices of imagery were also smart and interesting.  Credential Direct’s design team did not fall back on stock photos of individuals with calculators and papers sprawled everywhere struggling to understand their statements. Instead they managed to find everyday people doing everyday things. And, it is unlikely these same photos showing up in other people’s marketing materials, especially online brokerages. Kudos.

Of course, the persona-based approach still breaks the world down into three main categories – novice, intermediate and expert investors. In this case, however, the categories have names and stories. So Susan (novice), Raymond (intermediate) and Nadira (expert) are much more approachable than just category names. Further, clicking into the particular personas, the “features” are branded as the individual’s “favourite features.” In this way, reading about investing with Credential Direct feels more like a story than a sales pitch.

Of course, the website refresh is one in a list of many big (and sometimes small) digitization efforts from Credential Financial (the parent/owner of Credential Direct). For example, a robo-advisor is on the list of things that will be launching – itself no small project. Despite this latest move with the website, and all of the work that went into it, there is still some ground to cover to become ‘cutting edge’.

For example, one of the first hurdles to overcome is the ability to open an account online. Despite the current setup of the website and the efforts they’ve made to simplify the process, individuals looking to open an account with Credential Direct still need to be prepared to print, sign and send paperwork and wait.

The second is carving out a section for promotional offers or deals. Credential Direct’s previous site did have a section for special offers but the new site does not. Given where Credential Direct sits in terms of market share and general awareness, if they’re hoping to grow their client base, promotional offers are almost a must, so it will be interesting to see how and where they call attention to this in their new design.

Finally, there’s investor oriented content. Credential Direct has reorganized much of their existing ‘investor’ content and the new addition of a section called “The Ticker” seems promising, but other Canadian online brokerages – especially close competitors, have fully embraced content production into their offering. Out of the gate, Credential Direct’s first post on their “Ticker” section was dated April 2017 and discussed the launch of their new website. To compete with their peers, Credential Direct will have to find more to say, more often and in more depth.

From a design perspective, the new Credential Direct website does deserve to be called pretty. For DIY investors or traders, however, personality has constantly proven to be more important.

Specifically, ‘personality’ comes in the form of product functionality and bold thinking (aka innovation). The front-end is a good start but it might be secondary to pricing, actual ease of finding the right information and operating an account.

While Credential Direct can feel good about their latest site roll out, the industry around them is moving very quickly. So, when it comes to innovating and getting ahead of their competitors, the thinking and features, like the type and font of their new site, must be bigger and bolder.

Deals preview and updates

With a new month and new deals literally around the corner, there’s already action on the deals front to report.

Qtrade Investor kicks off July deals action by offering up commission-free trading on Canadian ETFs. If it has a familiar feel, National Bank Direct Brokerage tried something similar in 2013 when they offered commission free trading on ETFs, eventually rolling out a permanent commission-free Canadian ETF trading program in 2016.

Screenshot of Qtrade Investor homepage featuring free ETF offer

This offer by Qtrade Investor is yet another commission-free ETF promo that has come to market. Earlier this month, Virtual Brokers launched two new deals, one of which was also a commission-free trading offer for US or Canadian ETFs.

And, while Qtrade Investor is one of five Canadian discount brokerages with some kind of commission-free ETF program (Scotia iTRADE, Questrade, Virtual Brokers and National Bank Direct Brokerage are the others), this latest deal might be a signal that ‘commission-free’ trading continues to take root in Canada. For the moment, it appears to be in the form of ETFs rather than in equities generally but trends seem to be pointing in the commission-free direction.

Another interesting deals update comes from the BMO InvestorLine refer-a-friend program, which will be extended through June 2018. The refer-a-friend program at BMO InvestorLine is unique among Canadian brokerages that offer deals/promotions in that it can usually be combined with other offers as well. For reference, this refer-a-friend promotion offers $50 cash to the referring party and $50 to the new client.

On the downside, with the roll out of Credential Direct’s new website, it appears that the links to previous offers are no longer working, an indication that perhaps these deals are no longer being offered.  The specific offers in question were the ‘special offer’ of a discount for the Trend Micro antivirus software and, more importantly, the transfer fee coverage offer. We will watch to see if one (or both) of these offers were just lost in the shuffle or if they’re going to stage a comeback soon.

Discount Brokerage Tweets of the Week

A quieter week heading into the long weekend, but still enough action to keep things interesting. Mentioned this week were BMO InvestorLine, CIBC Investor’s Edge, Credential Direct, Questrade, RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

RBC Direct Investing vs. Questrade

Bank-owned brokerage or independent? It’s a popular question with DIY investors deciding between the convenience of banking and the pricing of free ETF buying at Questrade. Find out what one DIY investor learned by asking redditors in this post from the reddit Personal Finance Canada thread.

Cross Border Shopping

Norbert’s Gambit, the infamous maneuver to convert currency without having to incur the regular currency exchange fees, was the topic of this post on reddit, where one DIY investor was looking for guidance on how to do this at TD Direct Investing with an interesting fund choice.

Into the Close

That’s a wrap on the week, the month of June and the first half of 2017. Canadian markets are closed on Monday but anyone trading actively in the markets is undoubtedly going to be watching what happens come opening bell in the US. Of course, for those who are actually long on the long weekend, have a safe and fun Canada Day weekend! Cheers to Canada turning 150 in style and to another 150 equally eventful years ahead!

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Discount Brokerage Weekly Roundup – June 23, 2017

With summer officially arriving this week, it also brought with it the longest day of the year. Of course, that is literally what happened on summer solstice, but for some traders (Sears, Home Capital?) and even several online brokerages facing outages, there were also some pretty long days that didn’t feel quite so sunny.

This weekly roundup is filled to the brim with news from Canadian discount brokerages. In this special (and extended) edition, we take a look at the Questrade outage that interrupted so many traders last Friday and what the folks at Questrade were able to share about what happened. From there we take a look at more exciting deals news with the official launch of two deals from Virtual Brokers that are bound to get DIY investors’ and competing online brokerages’ attention. Up next, we take a look at the roll-out of a new trading platform for active traders in what is quickly becoming a very crowded trade. With the finish line in sight, we take a quick look at some of the latest developments in the robo-advisor space in Canada and end off this roundup with some fascinating tweets from Canadian DIY investors.

School of Hard Knocks: Questrade Faces Off Against DDoS Attack

For many DIY investors, and active traders in particular, the idea of ‘risk’ when trading online usually extends to thinking about managing position size. The more paranoid among us might take the extra step to ensure they have a backup plan for connecting to the internet in case their ISP randomly cuts out, print out copies of trades or do some due diligence on their online brokerage account insurance and fraud coverage (e.g. CIPF or more if required).

At a certain point, however, seasoned traders understand that with the increasingly connected technical infrastructure, multiple computer networks talking to each other and a big target on the backs of major financial organizations, there is lots that can go wrong. As such, being in the markets as an online trader is intrinsically risky.

This month, however, there was yet another category of risk that appeared that may require online traders to adjust their calculus of risk – Distributed Denial of Service (DDoS) attacks.

Questrade confirmed on Twitter (and other channels) this past week that they were the target of a DDoS attack on Friday June 16th and it was that attack which was responsible for knock trading platforms and the website offline throughout the trading day. And while having trading systems go offline during trading hours is never good, it didn’t help matters for Questrade’s clients that the DDOS attack also fell on options expiry day – something that seems particularly nefarious.

According to Questrade representatives, although this was a disruptive and hostile cyber-attack, the DDoS was not a hack and no client data was compromised.

When we asked for some additional details of what happened on that day, the Questrade team was obviously cautious about sharing too much, however they did confirm that there were actually multiple DDoS attacks that took place that day. And, while their team was successful at repelling earlier attempts to disrupt access, the subsequent attacks were much larger and increased traffic levels to a point that began to impact service.

Many users took to Twitter and popular investing forums to share their frustration, including several users who shared images of their wait times to deal with customer service agents. Questrade did confirm that “all orders placed across the day were unaffected and executed.”

Of course, this was cold comfort for DIY investors and traders who were left to determine what was happening while positions were open and trade opportunities came and went.

While it is a tough lesson to learn on both sides, the biggest takeaway is that it is possible for a DDoS attack to happen to just about any online organization. True, it would be harder to thwart some configurations (e.g. Cloudflare) rather than others, but the massive DDoS attack in October 2016 that managed to cause outages to sites/services such as Twitter, Netflix and Paypal should serve as a reminder that even the most tech-savvy firms are vulnerable and that the sophistication of attacks continues to evolve as do the protocols put in place to protect against them.

If there is a silver lining for Canadian DIY investors, it is that in Q1 2017 DDoS attacks targeting Canada made up a very small (<1% according to Kaspersky Labs) portion of attacks globally.

Source: Kaspersky Labs

Importantly, according to Kaspersky Labs, the days of the week that are the most likely targets are Saturday and Friday – something that options traders should pay particular attention to come expiry dates.

Whether another DDoS attack could interfere with Questrade or even another Canadian online brokerage (or brokerages) is hard to say. Unlike a hack, DDoS attacks make use of the growing number of internet connected devices, many of which have varying degrees of security, which means that the possibility of increasingly larger attacks is plausible. Understandably, financial services firms are cagey about their security infrastructure. For their part, Questrade has scheduled maintenance and has confirmed that they’ve enhanced protection layers to guard against future disruptions.

That said, a little bit of paranoia can go a long way for active traders. One of the scenarios that online traders should take note of is planning for a full outage and ensuring they have alternate means of communicating with their brokerage. Having their brokerage’s phone number programmed on a phone (or on a post-it note on the monitor) or being able to DM on Twitter (if they have it) seem like reasonable precautions. That and a good luck charm probably wouldn’t hurt either.

Virtual Brokers New Deals Make Waves

As mentioned in last week’s roundup, Virtual Brokers was on the cusp of launching two new promotional offers for DIY investors. This past Thursday, Virtual Brokers officially took the wrapping off their new deals and in doing so, they’ve managed to show that it’s not only the weather that’ll be hot this summer, but the discount brokerage deals action too.

The first promotion from Virtual Brokers is an ETF-focused offer that enables qualifying individuals to trade 20 ETFs (either Canadian or US) commission-free. Specifically, new clients to Virtual Brokers must deposit a minimum of $5,000 and be on the classic commission plan ($9.95 per trade) to qualify. When registering, users must enter the promo code that corresponds to either the commission free US ETF trading or commission free Canadian ETF trading.

Importantly, commissions will be charged at the time the trade is placed but will be rebated to clients in February 2018 provided they meet the eligibility conditions at that time.

Virtual Brokers’ second promotion is a very interesting cash back offer, which rebates $50 every quarter for every 20 trades that are made in that quarter, for up to one year. Again, new clients need to deposit a minimum of $5,000 and will receive rebates on the commissions they incur during the specified intervals.

What makes both of these offers so compelling for DIY investors is the almost unprecedented value being put forward.

In the case of the year-long commission rebate, clients are receiving a $200 cash back offer for 80 trades. At the standard commission rate of $9.99 per trade, that means that for a spend of $799 ($9.99 x 80), there is a rebate of $200 which works out to a 25% discount on trading commissions.

So, while there are deposit and trading hurdles to qualify for the cash back, for somewhat active traders or swing traders, this is essentially a way to get 80 trades at $7.46 flat (i.e. no ECN fees) for a year, plus have the option for commission-free buying of ETFs (which would be required to hold for at least one business day).

Similarly, for those that elect to take the ETF deal, from a ‘value’ point of view, users are getting a rebate of $50 on essentially 20 trades. At the standard commission rate of $9.99 per trade, this also works out to be a 25% discount.

As we had alluded to at the beginning of the June deals report, Canadian brokerages are getting more creative with their offers. In this case, Virtual Brokers put their creative efforts to good use as this is one of the first offers that blends trading minimums and commission rebates over the span of a year.

With lots of time left in the summer months, it will be really interesting to see how other brokerages respond and what kind of ramp-up in promotional activity takes place industry-wide to start winning over DIY investors.

Disnat Direct Launching Market-Q Platform

 

Screenshot from Desjardins Online Brokerage

This past week, Desjardins Online Brokerage began migrating active trading clients away from their Nexxa-based Disnat Direct trading platform onto a sleeker, more modern interface called Market-Q.

If the Market-Q name sounds familiar, it is because it is the same platform that National Bank Direct Brokerage rolled out for active traders in 2014 – albeit with a few enhancements that make the switch from Disnat Direct less disruptive. And, it looks familiar, it is because the trading platform is similar to the one powering BMO InvestorLine’s Market Pro.

Of course, for Desjardins Online Brokerage, especially the active traders, there are a number of upgrades the new trading platform brings, not the least of which is the ability for users to access this platform across devices (read: Mac friendly)

Based on the famous active trader platform, eSignal, Market-Q is incredibly feature rich.

According to the makers of Market-Q (Interactive Data), this platform is described as “A browser-based, real-time, streaming market data desktop terminal for financial institutions, Market-Q can be accessed anywhere via a PC and web browser, with no software download required. Market-Q has custom workspaces, interactive charts, research, option chains, a market depth feature, searchable news, alerts and data export capabilities.”

On the Desjardins Online Brokerage connection, users can monitor up to 500 symbols simultaneously – which really is just the tip of the iceberg when it comes to platform functionality. For active traders, this seriously upgrades the charting, monitoring, position monitoring and trading experience from the previous active trading platform.

Over the next week there are numerous webinars intended to provide an in-depth orientation to the essential features of the platform, including how to set up watchlists, charting, enter and monitor orders as well as navigate the platform generally. Transitioning from the previous platform to the Market-Q configuration is going to be a drastic change so it is great to see that Desjardins Online Brokerage is providing more than just pre-recorded webinars – they’re actually providing numerous training and orientation opportunities where clients (and non-clients) can tune in to learn about the new platform and, importantly, ask questions to a product expert.

Now that both Desjardins Online Brokerage and National Bank Direct Brokerage offer the same advanced platform, it will be even more of a challenge for very active DIY investors to separate these two firms.

That said, for active traders, the good news is that there is yet another top-shelf trading platform on the market.

Ultimately, the ‘trading’ experience – ie functionality, speed of execution, stability and pricing will dictate which platform active traders will turn to.

In a space where ThinkorSwim (TD Direct Investing), Trader Work Station (Interactive Brokers), Power Trader (Virtual Brokers), Market-Q (NBDB & Desjardins Online Brokerage), Market Pro (BMO InvestorLine), Advanced Dashboard (TD Direct Investing) and FlightDesk (Scotia iTRADE) are now battling it out for the active trader segment, it will be up to the marketing teams to determine whether or not they can get the highly demanding active trader segment to pay attention – and ultimately pay for the platform.

Robo Roundup

It’s been an interesting week for Canadian robo-advisors.

The big news this week was the news that WealthSimple is not only peering over the fence to the US but is now also peering further afield into the UK as a possible market to expand into.

Competing in Canada is one thing but the boldness of the WealthSimple franchise to take on two of the largest English speaking markets speaks to their confidence and war chest. Going global is a strategy that’s worked well for Interactive Brokers however there are countless daily updates of firms across the globe pouring money into the robo-advisor space. Case in point, this week Blackrock also managed to raise $33.6M (USD) to expand its push into Europe’s robo-advisor game.

Closer to home, bank-owned robo-advisor BMO’s SmartFolio has expanded its list of supported account types by adding added RRIF (Registered Retirement Income Fund) and spousal RRIF accounts to the menu. With this new addition, there are 8 account types that are supported by SmartFolio with plans to add LIRA and Corporate/Non-Personal accounts on the horizon.

Discount Brokerage Tweets of the Week

It was a bumpy week for many online brokerages with trading interruptions and disruptions getting the attention of investors. Mentioned this week were BMO InvestorLine, Questrade, RBC Direct Investing, Scotia iTRADE and TD Direct Investing.

Into the Close

Sometimes Friday is a marathon, other times a sprint. If you’ve managed to make it through this marathon edition, congratulations! Have a great first weekend of summer and get some relaxation in – it seems like this summer is going to be a wild one.

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Discount Brokerage Weekly Roundup – June 16, 2017

Amazon buying whole foods, meanwhile Sears Canada expressed concerns it would be able to carry on. The law of the jungle is simple: eat or be eaten. This week, Amazon decided to do some eating while Sears Canada let the market know that they’re officially a wounded gazelle. In the highly competitive world that is the Canadian discount brokerage industry, the metaphor is equally applicable, which is why very few players are standing still heading into the summer.

In this week’s roundup we take a broad snapshot of a number of developing stories in and around the Canadian online brokerage space. First, we provide an exclusive look at two interesting pieces of news that came our way this week – one on deals at an independent brokerage and another on new features at one of Canada’s most popular bank-owned online brokerages. From there we take an interesting look at the latest development by one bank-owned robo-advisor making a splash in the social media pool. Next on the docket is a fascinating and evolving story on regulation of online brokerages that could drastically redraw the map for DIY investors and the online trading experience. Finally, we’ll cap this week’s roundup with a larger-than-usual dose of online brokerage tweets, triggered by a significant trading outage.

Virtual Brokers Dealing Themselves In

It’s expected that within the next week or two, Virtual Brokers will be releasing a pair of new offers for Canadian DIY investors. While we can’t report on the full details of what these offers contain, we can say that one will be a cash back offer for new clients that is linked to trading activity and the other is an ETF-based offer which will definitely raise some eyebrows when it goes live.  Stay tuned!

Coming Soon: Enhancements to TD Direct Investing Active Trading Platform Features

Good news is in the works for active traders at TD Direct Investing. There appears to be a few new features due to be released on the horizon, one of which is the ability to cancel all open orders at the click of a button. Another feature in the pipeline to be delivered soon is the ability to access the Active Trader platform directly (without having to go through Webbroker). While they may be incremental improvements, they’re nonetheless a signal that the trading experience at TD Direct Investing continues to evolve and more importantly, provide greater functionality to platform users.

Be on the lookout for an upcoming piece that will take a closer look behind the scenes at how technical features and upgrades get developed and rolled out at TD Direct Investing.

Robo-advisor Gets the Social Treatment

Thursday evening Twitter was abuzz with chatter about online investing from an interesting source: a robo-advisor. Specifically, BMO SmartFolio was in the spotlight as part of a conversation about investing – using the hashtag #investsmart.

Co-hosted by BMO and blogger/writer Lena Almeida (@Listen2Lena), this online event drew quite a crowd (including the president of BMO InvestorLine) – something that many investing chats on Twitter have generally not been able to do. The Q&A session lasted from 8pm to 9pm EST and included giveaways of prepaid Mastercard credit cards – something that likely helped attract, retain and encourage the audience to participate for the duration of the chat.

Here are the questions that were covered (along with engagement stats at the time visible at the time of publishing the weekly roundup):

  • How comfortable are you with online investing? (100 replies, 26 retweets, 41 likes)
  • Why did you start investing? (105 replies, 36 retweets, 43 likes)
  • Do you feel you have to be an expert to invest online? (106 replies, 32 retweets, 39 likes)
  • What are your investment goals for 2017? (66 replies, 26 retweets, 38 likes)
  • Are you an online investor? How is it working out? If not, what’s holding you back? (102 replies, 33 retweets, 43 likes)
  • Is online investing the way to go? What else is an #investsmart question mark for you? (106 replies, 38 retweets, 43 likes)

In between the questions, there were also tips and videos supplied by BMO related to investing online, explaining ETFs and taking a measured approach to financial planning.

Regular readers of the weekly roundup can probably appreciate that there were a number of elements about BMO SmartFolio’s Twitter chat session that stand out as intriguing.

What is perhaps most interesting about this session, this was a very well attended and highly engaging Twitter chat on personal finance (specifically on investing online) generated by a bank-owned robo-advisor.

Compared to Canadian online brokerage Scotia iTRADE’s Twitter chat on sustainable investing held in April (see table below), the BMO SmartFolio session drew a larger and more active audience. Specifically, there were 16x more replies, 6x more retweets and 7x more likes with the BMO session than with the Scotia iTRADE session.

It should be stated that there were lots of differences between these two events so comparisons should be taken with a grain of salt. Even so, on a relative basis, the conversation about online investing generated by BMO SmartFolio was noteworthy.

Likely the combination of a noteworthy personality along with incentives (a shot at a $500 gift card is great reason to tune into a chat about money) helped to get (and keep) the attention of Twitter users. Of course, subject matter also probably had something to do with engagement, as the pattern of questions asked by BMO were directed to the audience (i.e. tell us about you) rather than describing a product feature (as was the case with iTRADE). This more personal tone generated many more personal reactions that provided a window into the attendees’ thoughts and perceptions of online investing.

Scotia iTRADE (#FairTrader) BMO SmartFolio (#InvestSmart)
Question 1 What is Sustainable Investing? Replies: 6
Retweets: 4
Likes: 3		 How comfortable are you with online investing? Replies: 100 Retweets: 26 Likes: 41
Question 2 What is ESG and why does it matter? Replies: 9
Retweets: 5
Likes: 6		 Why did you start investing? Replies: 105 Retweets: 36 Likes: 43
Question 3 Sustainalytics, tell us more about the research behind Scotia iTRADE’s Sustainable Investing Tools Replies: 3
Retweets: 5
Likes: 7		 Do you feel you have to be an expert to invest online? Replies: 106 Retweets: 32 Likes: 39
Question 4 Where can you find more information about Sustainable Investing & ESG? Replies: 6
Retweets: 5
Likes: 7		 What are your investment goals for 2017? Replies: 66 Retweets: 26 Likes: 38
Question 5 Can you tell us how Scotia iTRADE’s Sustainable Investing & ESG tools work? Replies: 6
Retweets: 5
Likes: 7		 Are you an online investor? How is it working out? If not, what’s holding you back Replies: 102 Retweets: 33 Likes: 43
Question 6 Is online investing the way to go? What else is an #investsmart question mark for you Replies: 106 Retweets: 38 Likes: 43
Average Replies: 6 Retweets: 5
Likes: 6		 Replies: 98 Retweets: 32 Likes: 42

 

One of the biggest challenges that robo-advisors face in the Canadian online investing landscape is generating interest and awareness in a product that has to compete between DIY investing services and traditional financial advisors.

The latest move by BMO SmartFolio shows that bank-owned robo-advisors can also successfully leverage social media to engage audiences. It is this point in particular that should demonstrate to the social savvy newer robo-advisors that there is still a lot of “fin” left in fintech and that bank-owned products can and will likely narrow the social media gap.

What a Difference a Recommendation Makes

Since 2014, there’s been an evolving conversation involving Canadian online brokerage industry and their principle regulatory body (IIROC) that could drastically change what DIY investors have come to expect from Canada’s discount brokerages.

While it is a longer story than will be covered here, at the heart of the issue raised by IIROC was how best to proceed on updating its guidance on the notice MR-098 – What Constitutes a ‘Recommendation’? (September 6, 2001). In particular, the view from the regulators appears to be that since 2001, there have been many features that now accompany the online trading experience that go beyond the “order execution only” experience that may have characterized the online trading world in its earlier days. For example, model portfolios, “educational” tools, trading alerts and other features that been developed for DIY investors may, according to regulators, blur the line between being a resource for a DIY investor and recommendation to choose a particular investment.

Most of Canada’s largest and most visible online brokerages have submitted a response to IIROC’s request for comment (IIROC Notice 16-0251) on this matter, including, for example, CIBC Investor’s Edge, Questrade, RBC Direct Investing and TD Direct Investing.  In addition to a written submission, there are also a number of articles that have been written about this issue and, this past week, Morningstar Canada published a video interview (conducted in French) of Laurent Blanchard, President of National Bank Direct Brokerage, describing his thoughts on possible changes to the industry.

In this video, Blanchard provided many points that echoed the comments provided in writing by the online brokerage industry participants – namely that DIY investors access the online brokerage firms because they want to trade or seek out investment opportunities on their own.

It will be interesting to monitor this story further and to see what additional commentary and conversation arise, from all stakeholders. There have been numerous lengthy submissions to IIROC, so observers are keenly awaiting additional information and direction on this matter, which is scheduled for this summer.

While there appears to be a great deal of uneasiness as to what could happen, one thing is for certain, the upcoming decision may have a drastic impact on the Canadian online brokerage space and the kinds of tools and added features DIY investors may have access to when trading online.

Discount Brokerage Tweets of the Week

No doubt about it – when a trading platform falls, everybody hears it. Mentioned this week were Questrade (extensively), RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

Into the Close

That’s a wrap on yet another crazy week. The good news, however, is that summer is just around the corner and even better the weekend is here and with it Father’s Day. So, whether you say it with socks, a tie or some other perfectly dad-appropriate gifts, to all the awesome dads out there (including my own!!), thanks for all of the great things big and small you’ve done and continue to do!

via GIPHY

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Discount Brokerage Weekly Roundup – June 9, 2017

In a slight pause from presidential shenanigans, we kick off this weekend alongside the Canadian Grand Prix rolling into Montreal to celebrate its 50th anniversary. In many ways, the world of elite car racing mirrors the online brokerage space, both here in Canada and especially in the US. Both are subject to constant improvements and the reality is that both require constant adaptation to man and machine to perform incrementally better year after year.

In this edition of the roundup there are both grand prizes and intense competition which create the formula for a very interesting recap. Starting first with some big news in the deals arena, we profile the launch of a custom offer that is bound to get on the radar of the deal hunting crowd in the months to come. From there, we recap the highlights and insights on the US online brokerage landscape from a recent convention that provided some privileged access to the thoughts of leaders of major US online brokerages. To gear down, we’ll take a lap around Twitter track to see what DIY investors had to say about and to Canadian discount brokerages and we’ll wave the checkered flag alongside some forum posts into the close. Start your engines, here we go.

Eyes on the Prize

Great news for DIY investors heading into the summer, not only is the weather hot, but so too are the deals. In what is typically described as the ‘slow’ season for online brokerages, this year it appears that things are a bit different.

Not only are markets (at least in the US) continuing to push record highs, they are doing so in spite of uncertainty with the US presidential state – something that would otherwise leave markets rattled. And, while there are certainly the naysayers saying the rally in stocks has gone well beyond where it should have, the fact remains: prices continue to rise and assets continue to be poured into the markets.

What this means for DIY investors is that despite the looming uncertainties, there is an inevitable pull into participating in the move upwards. While there may be lots (and lots) of bad news, for DIY investors the good news is that Canadian online brokerages are anteing up all kinds of promotional offers to make opening an online trading account more worthwhile.

On that note, the big news this past week was the launch of the SparxTrading.com exclusive offer with Questrade where individuals who sign up for an online trading account can receive up to $88 in commission-credits, which are good for up to 60 days from the point of account opening.

One of the most appealing facets of this offer is that individuals can qualify with a minimum deposit of $1,000. That said, it is important to understand that Questrade does charge inactivity fees (of $24.95 per quarter) if a client’s total assets with Questrade are less than $5,000. Fortunately for Questrade, there are numerous ways to have the ‘inactivity’ fee waived, all of which can be found here.

As far as commission-free trade offers at Questrade, this current offer is one of the (if not the) best offer for individuals interested in a sign-up promotion with Questrade. Since this offer was put together via the Questrade affiliate program, SparxTrading.com may receive a payment for individuals who sign up using the promotion code Sparx88.

Compared to the current (and standard) affiliate offers of $50 in commission credits that are widely available online, however, the $88 commission-credit promo offers DIY investors significantly better value. In addition, the standard term to use the $50 commission-credit offer is 30 days whereas the Sparx88 commission-credit offer is good for 60 days. In short, those looking to open a Questrade DIY investing account will be hard pressed to find a better offer.

Of course, those DIY investors shopping around for an online trading account offer will be pleased to find out that there are also more deals from other brokerages on the horizon. Although we can’t confirm publicly which brokerages are launching offers soon, we can say that there is a high probability that June will have a few more pleasant surprises in store for DIY investors.

Made in Manhattan

Every so often, a window into the inner workings of the online brokerage industry opens up to reveal the fascinating activities that take place behind the scenes. Even more intriguing, however, is when the normally guarded CEO’s of the US online brokerage industry are the ones providing the insights. Admittedly, this next piece is going to appeal to the online brokerage enthusiasts, but there some very noteworthy scenarios that were uncovered.

This past week the Sandler O’Neill 2017 Global Exchange & Brokerage Conference took place in New York City and offered up a unique snapshot of the current state of the online brokerage industry in the US. Interviewed at this year’s conference were CEO’s of three of the largest US online brokerages: Thomas Peterffy (Interactive Brokers), Tim Hockey (TD Ameritrade) and Karl Roessner (E*Trade Financial).

Having the opportunity to listen in on the comments and insights from the respective heads of these US online brokerages offered some clues into where the industry south of the border is heading and what that might mean for Canadian discount brokerages as well as for DIY investors.

While there was certainly a lot of ground that was covered in each of these interviews (which lasted about 25 minutes a piece), there were three main themes that emerged about the landscape for online brokerages in the US.

The first, and widely acknowledged development, was the wave of price drop events that took place earlier this year and the resulting fallout. Specifically, the lowering of commission pricing across the board provided an interesting look at the reactions and responses from each of the respective heads of the interviewed brokerages.

Perhaps most interesting reactions came from Tim Hockey and Karl Roessner, who acknowledged that the increased attention that the pricing war received in the media potentially helped to contribute to more clients engaging with either firm and more new clients coming on board. It seems somewhat counter intuitive that the online brokerages would see lower commission pricing revenue as a positive, but there was a definite spin on the benefits of increased account growth. For Interactive Brokers, low commission pricing appears to have been part of the strategy from the get-go, and as such, Thomas Peterffy seemed to communicate that he will continue in the same direction of focusing on low cost execution, margin and excelling at automation in order to win over new clients.

Stepping back to assess the big picture on pricing, the writing appears to be on the wall for the US online brokerage industry that commission pricing can – and will likely – continue to drop. All three brokerage heads felt that their respective enterprises could withstand pricing drops and that diversification strategies (such as increasing efforts to onboard managed wealth clients) are already in play.

The next big theme discussed by the three brokerage CEO’s interviewed was the role that technology continues to play in the operations of their respective online brokerages as well as what it means for the future of their organizations. In some ways, it seems obvious that an ‘online brokerage’ would rely on technology quite extensively – and while that is true, there appears to be a substantial transformation taking place in financial services to become more ‘tech’ savvy. One example cited by both E*Trade and TD Ameritrade, for example, was the move to a more ‘agile’ workflow structure for technology solutions deployment. A particularly detailed example of this work in action was provided by Tim Hockey, who highlighted a doubling in ‘throughput’ that came from a combination of a 36% increase in agile run projects and 25% increase in budget for technology projects.

What this means for DIY investors is that responsiveness to feature change requests will likely improve and the time for innovative features and user experience enhancements to ‘go live’ will decrease.

Finally, the third major theme that was discussed was the general absence of volatility in the stock market and how that has impacted the online brokerage industry (by a lack of trading). While there were theories advanced as to why this might be the case, what was particularly interesting was that both Thomas Peterffy and Tim Hockey alluded to volatility returning.

In the case of Peterffy, he had mentioned that while algorithmic traders and options traders are currently equipped to handle the current market conditions, an outsized move could potentially displace many of the trading strategies that have done so well in a low volatility environment. From Hockey’s point of view, the ‘reversion to the mean’ case was made in which  volatility would be likely to return to long term historical averages (i.e. the VIX at 12 – 14).  In either scenario, however, online brokerages would stand to benefit from increased trading activity. And, for DIY investors, it is a good reminder that planning a strategy ahead of time for a higher volatility period would be prudent thinking.

Clearly, there was lots of interesting ground covered at the most recent Sandler O’Neill Brokerage Conference. For Canadian DIY investors, one of the key takeaways is that some of the changes in the US are also taking place here in Canada and that service levels as well as pricing can be expected to improve, albeit at a slower pace. When it comes to selecting an online brokerage, however, one of the new markers for making that choice would appear to be how proficient the organization is at managing technological change – since it appears that the only certainty confronting the online brokerage space is the necessity to adapt quickly to changes in technology.

Discount Brokerage Tweets of the Week

This week it looks like the usual suspects were in the spotlight with DIY investors. Mentioned in the tweets (some more angry than others) were CIBC Investor’s Edge, Questrade, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

A Marginal Strategy

The combination of the right online brokerage that can offer the right price and a low cost of capital bears all the hallmarks for a winning strategy. Whether or not the recipe works is another question altogether. That was the basis behind this post from redflagdeals.com’s investing thread in which one user was curious about a passive strategy using Interactive Brokers to pull it off. Worth a read for what the community had to say.

Not Your Average Couch Potato

Planning out investments that take little time and effort can itself take an upfront investment of time and effort. That said, it is time well spent and especially so when creating a detailed post to put in front of the reddit community to have them weigh in on it. Such was the case in this post on a passive strategy that certainly generated a lot of active discussion on the personal finance Canada subreddit.

Into the Close

If you made it this far, congratulations! It’s been an eventful week and even though all of the exciting and mundane news has been ‘trumped’ by the media frenzy, there are still many very interesting things happening across this great planet of ours. Whether you tune into the online world or actually get out and enjoy the great weather, have a great (and tweet free) weekend! Of course if you’re looking for a little inspiration for that weekend drive (or that longshot position), here’s a little video to get you on your way.