Tag: Deals

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Discount Brokerage Weekly Roundup – August 31, 2020

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

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

National Bank Direct Brokerage’s New Deal Raises the Stakes

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

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

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

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

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

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

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

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

Weathering the Storm

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

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

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

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

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

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

Discount Brokerage Tweets of the Week

From the Forums

Million Dollar Baby

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

(Un)Steady State

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

Into the Close

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

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Discount Brokerage Weekly Roundup – August 17, 2020

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

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

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

HSBC InvestDirect Launches New Commission-Free Trade Offer

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

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

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

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

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

Just Keep Swimming

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

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

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

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

Wealthsimple Moves Forward on Crypto Trading

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

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

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

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

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

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

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

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

Staying on Brand: CI Direct Investing Continues to Take Shape

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

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

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

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

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

Discount Brokerage Tweets of the Week

From the Forums

Exit Strategy

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

Should I Stay or Should I VGRO?

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

Into the Close

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

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Discount Brokerage Weekly Roundup – August 4, 2020

Dessert-lovers, rejoice! This past week was a great time to enjoy the fruits of investing labour, with tech giant Apple announcing they will be initiating a 4:1 stock split, as well as the tech-heavy Nasdaq pressing into new all-time-high territory.

In this week’s Roundup, we report on the current state of the deals/promotions drought and consider what it may signal for the industry. From there, we continue to look at the role that promotions can play to attract new clients or help hang on to existing ones. As always, we’ve included the highlights from tweets and investor forums.

Striking Out on Deals

In case you needed to be reminded, it’s not still March, and August is (amazingly) here. Time isn’t the only thing that has been distorted this year, however.

For DIY investors, the stock market’s nosedive and subsequent meteoric recovery have all but defied conventional wisdom. And, regardless of why the markets may be continuing to push higher, the reality is they continue to do so. As a consequence, DIY investors are continuing to open new online brokerage accounts at a higher than “normal” pace.

Ironically, after years of facing margin pressure because of rising technology costs and declining revenues from price wars, online brokerages (at least those in Canada) did not seem to be prepared for the surge in interest when it finally came in. Business has been so good at Canadian online brokerages, in fact, that many of the systems serving new customers cannot keep up.

Customer service lines at Canadian online brokerages are painfully slow, and technology platforms have stumbled through the spring and early summer.

The unlikeliest of all casualties amidst this activity: online brokerage deals.

At the outset of August, yet again, there have been no new official mass-market deals launched or offered for online investors that aren’t part of standing offers. While the beginning of a new month offers no guarantee that an online brokerage deal would launch, for the better part of the last decade, the beginning of a month has provided online brokerages the convenient starting point for a promotion. And for most of that time, brokerages seized on that opportunity.

After the conclusion of RSP contribution season (in early March), we have witnessed a steep pullback in the number of online brokerage deals and promotions being offered to DIY investors in Canada. It is no coincidence that this pullback coincided with the record trading levels and interest in opening online brokerage accounts, but it does beg the question: when demand for online brokerage accounts shifts so significantly, what else gets taken off (or put on) the table?

For the moment, Canadian discount brokerages appear to be content with the fact that demand for account openings remains strong enough that incentive offers are not required. Furthermore, promotions would only strain systems further and create additional backlogs for applications for accounts as well as delay the ability to get investors up and trading quickly. Though it sounds counterintuitive, the reality is that there really can be too much of a good thing.

Viewed from a slightly different perspective, however, the lack of deals activity during the past several months might be more a symptom of the lack of scalability of systems than some shrewd calculus to boost earnings. Conversely, the fact that Questrade has retained their cash-back (referral program) promotion and their standing commission-free trading deals implies that they have the technological capability and workflow to support bringing on a high volume of new clients.

In addition to the lack of new deals, there was one deal that officially met an early retirement last month: the referral offer from Qtrade Investor.

Removing a referral offer is an interesting decision on a number of levels. First, this category of deal enables online brokerages to determine how much they are willing to compensate individuals for a referral. Referrals are one of the most potent ways in which financial service providers can earn new business, and as such, it was curious to see Qtrade Investor pull the plug on this offer.

The second reason it was curious to see this promotional offer wind down was because of competition. With the Qtrade promotion now deactivated, this leaves BMO InvestorLine, Questrade, and Scotia iTrade (and, technically, Interactive Brokers) with a referral offer.

It is worth noting that Questrade currently sits unchallenged in terms of deals, so hands down they are getting an unparalleled amount of exposure for commission-free trade and cash-back offerings. For the moment, it appears that online brokerages are pushing their “switch to us” campaigns instead. Ads for TD Direct Investing, one of the largest online brokerages, have already surfaced again.

As distorted as time may be for many, there are (thankfully) hard deadlines for individual investors to contend with – such as the end of the calendar year, which is relevant for TFSAs and capital gains/losses. There is also the next RSP contribution deadline, in March 2021, which may seem far off now but which online brokerages must start early to plan for.

It is unlikely that online brokerages are abandoning incentive offers altogether, heading into the latter portion of their fiscal and calendar years, but there may be a much more cautious tone leading up to the US election (in November) and because of the general market dynamics of late.

More Than Just a Promo

Even though no official new offers were launched for Canadian DIY investors to start the new month, that doesn’t mean there weren’t some interesting developments on the promotions and deals front worth reporting about. In fact, quite the contrary.

One of the most exciting/interesting pieces of news on the promotional front was an article referencing a move by Interactive Brokers in which they telegraphed their intention to give away shares in their company to attract new clients.

Perhaps it is a move akin to Robinhood offering free stock in some big-brand public companies as part of the incentive offer to join Robinhood, but this doesn’t take away from the ability to get on the radar of investors by doing so.

Interactive Brokers’ decision to attempt to provide stock represents, in itself, the confidence in their own share structure and, most importantly, their own brand. Whether it succeeds or falls short of the intended goal, this latest move by Interactive Brokers is a reflection that promotions aren’t just limited to cash-back or commission-free trading – they can also take the form of equity. Though not something commonly done in Canada, with potentially a second online brokerage offering this up in the US, it might represent an interesting way to control the cost of acquisition of new clients while (in the case of Interactive Brokers) adding evangelists who, as shareholders, have additional incentive to see the brand succeed.

While the story about Interactive Brokers in the US prepping to issue shares as part of a new promotion continues, there was another development in the Canadian online brokerage space, with CIBC Investor’s Edge, that also highlights a different way in which promotions are being used.

Over the past two weeks, CIBC Investor’s Edge was in the process of rolling out a new trading platform that proposed to add a significant refresh to the platform’s look and feel, as well as to improve the functionality. Unfortunately, things did not go according to plan.

According to social media posts from Investor’s Edge clients, the rollout of the new trading platform caused significant interruptions to trading, so much so that they issued a blanket commission-free trade offer to all of those account holders who were deemed to have been impacted by the service outages.

An incident of this magnitude at a major (bank-owned) online brokerage is a rare event. However, the fact remains that the duration and magnitude of this impact are likely what drove the decision to waive commission fees for a two-week period.

Although it cannot officially be called “commission-free” trading the same way it is at other brokerages, it nonetheless does establish that one of the options available to online brokerages to generate goodwill with their customers is via commission-free trades. Of course, the premise in that offer is that the platform would be stable enough to enable DIY investors to be able to execute trades.

The takeaway for both Interactive Brokers and CIBC Investor’s Edge is that ultimately, the return on investment for these unique offerings has to be there for the discount brokerage.

In the case of Interactive Brokers, there are not many details available yet, but offering stock is a unique way to achieve a lower client-acquisition cost without directly impacting profits. With respect to CIBC Investor’s Edge, there is clearly an attempt by the brokerage to repair the relationship with clients who were negatively impacted. The math to keep these clients justifies this course of action, but it also flows upstream into investing in the technology to avoid (or minimize the risk of) outages.

From the Forums

Bank of Dad

In this post, a Redditor asks for advice on the best way to teach his young son about investing, using $400 as the starting point. Fellow forum users suggest savings accounts, GICs, RESPs, and the ever-popular “Bank of Dad” – and lament wasting their childhood money on candy and toys instead of learning useful skills for the future.

Neither a Borrower Nor a Lender Be?

A Redditor asks in this post whether it’s a good idea to borrow money to invest in the markets right now. A long and lively discussion ensues, with commenters weighing in on everything from market crashes to midlife crises.

Discount Brokerage Tweets of the Week

Into the Close

With a shortened trading week for investors in Canadian stocks, all eyes for market action are now on the US market. As it happens, there’s all of a sudden a lot more sports around to distract/pay attention to. What this means is that there may be a gradual easing off of market participation by online investors since (SO MANY) sports schedules are intensely packed in. Could that be what finally tops out the market?

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Discount Brokerage Deals & Promotions – August 2020

*Update: August 18* With everything that’s happened over the last few months, 2020 has simultaneously felt like the longest and the shortest year ever. 

Time isn’t the only thing that the COVID-19 pandemic has distorted. Despite the biggest economic shock in memory (and on record), stock markets and retail investor behaviour have also distorted how discount brokerages are viewing promotions at this time. Specifically, the retail investor trading frenzy in stock markets may be directly behind why Canadian online brokerages haven’t felt the need to boost business by adding any new promotions for August. 

In fact, as we head into the latter stretch of the summer, we’ve taken note of further erosion of deals activity. Qtrade Investor, for example, withdrew their referral promotion – a point of particular significance when considering how effective these deal types are when trying to control the cost of acquisition of new clients. 

So, for DIY investors looking for a promotion this August, the current slate of offers represents the “new normal” – at least to start the month. Most of the deals are for transfer fee coverage promotions, and for those looking for commission-free trading offers, Questrade appears to have the spotlight to themselves. 

Scroll down to learn about the current offerings from Canadian discount brokerages. And wherever you happen to be this month, try to stay cool.

As always, we will keep monitoring for new discount brokerage deals and add updates as they appear, so make sure to check back throughout the month.

Expired Deals

Qtrade Investor’s referral promotion expired in July.

Extended Deals

No extended deals to report at this time.

New Deals

*Update: Aug. 18 – For a limited time, HSBC InvestDirect is offering 60 days of free North American online equity and ETF trading, up to a maximum of 60 trades, when you open a new account with them. The offer is set to expire on October 30th, 2020. See the table below for more details regarding the promotion and eligibility. *

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

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

Expired Offers
Last Updated: Aug. 17, 2020 13:20PT

Referral Promotions

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

Expired Offers
Last Updated: Jul 31, 2020 14:35PT

Transfer Fee Promotions

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

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

Other Promotions

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

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

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1,000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Cash Back Open and fund a new or existing SmartFolio account with at least $1,000 and you could receive 0.5% cash back up to $1000. Use promo code PROMO1000 when opening a new account. See terms and conditions for full details. This offer can be combined with the refer-a-friend promotion. $1,000 0.5% cash back to a maximum of $1000. PROMO1000 January 2, 2020 SmartFolio Cash Back Promo
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $1,000 1 year no management fees STSF April 30, 2019 SmartFolio New Account Promotion
Cash Back – Referral BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details. $1,000 $50 cash back (referrer) $50 cash back (referee) Unique link generated from SmartFolio required. None SmartFolio Website
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: Jul. 31, 2020 14:30PT

Offers for Young Investors

Brokerage Offer Type Eligible Age Range / Client Segment Offer Description Min. Deposit Expiry Date Link
Student Pricing Clients with CIBC Smart™ Account for students $5.95 per trade and zero annual account fees not required None CIBC Student Pricing
Broker@ge 18-30 18-30 years old investors Benefits: * 5 free transactions (Minimum deposit of $1,000 required) * No inactivity fees * No asset minimum to maintain for free registered accounts * Exclusive events * Disnat Mobile App $1,000 None Broker@ge 18-30
Offers for professionals & Students Students in selected fields of study Professionals and students in the below fields can benefit from a reduced pricing structure: * Engineering students * Legal, accounting and business students * Healthcare students * Health sciences students * Nursing students Benefits: * $5.95 commission on equities * $0 commission on ETFs * $0 annual administration fee not required None NBDB Student Pricing
Young investor pricing 18-30 years old investors Benefits: * $7.75 commissions for stock and ETF trades * No account minimums * No quarterly admin fees min. $50 a month through pre-authorized contributions. None Young Investor Pricing
Waiver of account maintenance fee Clients who have RBC Student account, currently or in the past 5 years. The Maintenance Fee ($25 per quarter) is waived, regardless of the account balance. not required None Zero Account Management Fee
Young Investors Offer Clients below 26 years old Low activity account administration fee and the RSP account administration fee are waived. not required None Young Investors Offer
Zero Account Administration Fee Clients below 26 years old The account administration fee ($24.95 per quarter) is waived. not required None $0 Account Administration Fee
Last Updated: Jul. 31, 2020 14:45PT

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Discount Brokerage Weekly Roundup – July 13, 2020

With COVID-19 very much in focus, it appears that time is being measured more in phases and case counts than in actual calendar days or traditional time. Despite the uncertainty (or perhaps as a result of it), discount brokerages in Canada find themselves in a unique position to learn from what is happening in the US to plot out the next important steps to take in the second half of 2020.

In this edition of the Roundup, we pull out the telescope to peer into the second half of 2020 and see what interesting data points from investors and online brokerages could provide insights into what to expect from Canadian discount brokerages in the remainder of the year. From there, we recognize the bold decision that one bank-owned online brokerage has taken to include an often-overlooked group and hope that this is the start of a new design choice among brokerages going forward. As always, we’ll wrap up with chatter from DIY investors on Twitter and in the investor forums.

The Next Chapter: Where Might Canadian Online Brokerages Go Next

With the first half of 2020 now well behind us, it’s time to start looking ahead at what trends could impact online brokerages here in Canada and in the US.

It almost goes without saying that the biggest force still at work is COVID-19, followed by the US presidential election.  And, while there is justifiable cause for alarm at the human toll of this crisis, the giant voting machine that is the stock market is placing its bets that though things might be bad, the future (at least for some sectors) stands to be brighter than it is today.

For US online brokerages, the heightened uncertainty in the stock market should translate into continued earnings strength from commissions (for those that charge them), payment for order flow, and margin interest. The historically low interest rates suggest that the cost of borrowing for margin trading (to amplify results) will be, on a relative basis, more affordable. In sum, the macro picture for online brokerages in the US appears to be bullish, as investors continue to wade into the volatility rather than shy away from it.

Among Canadian discount brokerages, the thesis supporting robust performance appears to be similar. Strong trading volumes combined with trading commissions holding steady mean that online brokerages are going to be generating healthy revenues, and for Canadian banks (those that have online brokerage arms), this could be an important bright spot against a backdrop of challenging economic conditions. Across Twitter, the comments over the past few months by Canadian DIY investors reflect heightened enthusiasm for making fast money, as well as the tools/platforms and user experience to facilitate doing so. As such, active trading platforms – along with associated data feed packages – have likely seen record levels of interest, and brokerages that don’t currently have these features in place are likely losing the patience or the business of clients who wish to keep a very tight pulse on the market.

For the better part of this year so far, Canadian online brokerages have been surprisingly quiet when it comes to advertising campaigns or major feature release announcements. As we referenced in last week’s Roundup, it is unlikely that the final half of 2020 will see Canadian brokerages maintain their “wait and see” approach – there are simply too many important opportunities at stake.

Some interesting data out of the US online brokerage market also seems to support the macro case for Canadian brokerages either ramping up advertising to close out 2020 or seriously considering doing so.

One of the first important indicators of this is a recent sentiment survey by E*Trade Financial, released last week. In that survey, it found that in Q3 of 2020, bullishness among DIY investors has increased 34% (13 percentage points) compared to Q2 of 2020. Importantly, over half of investors (51%) believe that markets will rise through the end of the year – a remarkable feat considering how much markets have rallied from their March lows.

Another interesting factor for online brokerages in Canada to consider (though this data point also originated in the US) is a comment regarding online investing made by Interactive Brokers founder Thomas Peterffy in an interview with Bloomberg. Specifically, Peterffy pointed out that even once the pandemic stabilizes, the interest in online investing has likely been sparked in many investors who will want to continue. In other words, the die has been cast for the return and prominence of active online investors. For Interactive Brokers in particular, Peterffy highlighted that unlike with Robinhood, the clients of Interactive Brokers tend to be more sophisticated in nature, with a better understanding of what they want and how to manoeuvre around various market opportunities.

From a macro perspective, the US market heading into the second half of the year will also provide some important information regarding the consolidation of players on the field. On July 21st, online brokerage Charles Schwab will provide their summer update and likely include information about the progress of their acquisition of TD Ameritrade. Incidentally, Interactive Brokers is also announcing their earnings on the same date. The Schwab/Ameritrade merger will create a behemoth in the online brokerage space in the US, something that appears to be necessary to fend off a growing number of competitors. Other deals on the radar in the latter half of 2020 include the acquisition between Morgan Stanley and E*Trade.

On the technology front, it will also be interesting to see what US online brokerages roll out in the near term that may influence how Canadian online brokerages ultimately decide to deploy the historic revenues they are generating from trading activity.

One clear winner for online brokerages in the US has been fractional share trading – something that has ignited interest by younger investors to participate in the stock market in record numbers. Another interesting feature gaining traction is investor-oriented content. Online brokerage Robinhood has clearly put significant effort into their podcast, and it is gaining momentum with their target demographic. Almost all major US online brokerages have robust online/digital content strategies, and the brokerages making outsized gains have clearly demonstrated the value of these during the COVID-19 pandemic. By comparison, online investor content among most Canadian online brokerages is extremely limited, static, and often inaccessible.

Already, Canadian DIY investors on Twitter are calling out Canadian online brokerages for features that exist in the US but do not exist here – whether that be zero-commission trading, fractional shares, innovative technology, or incredible DIY investor content. Seeing as how three of those four options would require massive technology investment or significant revenue erosion, one likely battleground for DIY investors in the next half of 2020 will be in content.

RBC Direct Investing: A More Inclusive Approach

One of the unique consequences of covering the Canadian online brokerage market in detail for almost a decade is that you get to see how the market has evolved over that time. This past week, we spotted a small but important detail on the RBC Direct Investing website that we hope signals a shift in the way in which online investors are depicted.

Specifically, on the RBC Direct Investing website, an image of an individual in a wheelchair was positioned alongside the caption “I Want to Be a Confident Investor.” In the almost-decade-long coverage of the Canadian online brokerage space and the scores upon scores of generic business imagery placed on the front pages of DIY investing websites, it would be difficult to identify at any point the inclusion of a person with a disability on the homepage. It is certainly worth commending RBC Direct Investing for doing so in this case, even though the inclusion is not in the main image (yet). The reality is that persons with disabilities get little to no recognition or acknowledgement in the often “aspirational” imagery associated with online brokerage websites.

For that reason, RBC Direct Investing deserves a significant “hats off” for being (probably) the first major online brokerage in Canada to be more inclusive in their imagery choices, by including a person with a visible disability. Here’s hoping it inspires other online brokerages to do the same.  

Discount Brokerage Tweets of the Week

From the Forums

A Whole New World

A Redditor looking to improve their financial literacy turns to the forum to ask for advice in this post. Forum users offer resources for tackling debt, defining financial goals, and starting to invest.

It’s All Greek to Me

In this post, a first-time investor confused by the variety of ETF options turns to the forum to ask for direction. Fellow Redditors offer advice on how to approach seemingly confusing options and reiterate the merits of keeping it simple.

Into the Close

With another round of earnings season just about to kick off, there are going to be even more numbers in the headlines that traders and investors will have to keep their eyes on. And with little in the way of encouraging news at the moment, here’s hoping for some nice surprises in the earnings and outlooks.

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Discount Brokerage Weekly Roundup – July 6, 2020

Whether it’s the first or fourth of July, where and how you might have celebrated depends in large part on where you happen to find yourself.

In this edition of the Roundup, we keep things short and sweet, like a great helping of soft-serve ice cream. First, we take a peek at the deals and promotions for July and see how they differ from June. Next, we scroll on over to the launch of an updated mobile app for a leading Canadian online broker. As always, there’s lots to ponder from the investor forums as well as from Twitter.

New Month, Same Deals

With the second half of 2020 now officially underway, there are lots of questions investors and online brokerages are asking as far as what the rest of the year holds for investing online. One of the biggest questions is around volatility and whether the trading volumes that were the norm in the first part of the year will continue to feature prominently into the end of 2020.

As has been covered extensively through the Weekly Roundup since March, volatility in stock markets has also pushed up trading volumes to record-breaking levels. The prevailing theory is that the combination of individuals being forced to shelter in place, the absence of sports betting, and the distribution of government support payments have all converged into a perfect storm of retail investors flooding into the market to try to take advantage of some kind of rally in heavily battered stock prices.

The knock-on effect of all of this, however, has been that interest in opening an online trading account at an online brokerage has been so strong that most Canadian online brokerages have opted to shelve their promotions for the summer. In the most important deal categories to DIY investors (cash-back or commission-free trades), Questrade has become the sole online brokerage with active promotions.

Crossing the threshold into the latter half of the year, it is hard to imagine Canadian online brokerages standing on the sidelines for much longer before jumping back into the promotions race.

First, Questrade represents an increasingly tough competitor for other Canadian discount brokerages to defend against. Whether it is in investor forums, TV commercials, or social media, there’s a good chance that new investors looking for an online brokerage are going to run into mentions or even recommendations for Questrade. By leaving Questrade unchallenged, other online brokerages are enabling this already popular brokerage to build market share and attract investors to a conversation about investing.

Second, should any of the factors that caused the rush of investors looking to set up accounts abate, discount brokerages would almost certainly have to aggressively ramp up their marketing efforts – including adding promotions. To further challenge the financial services space as a whole in Canada, several large Canadian banks have also elected to pause their advertising on Facebook. Unless Facebook remedies their enforcement of curbing hate speech, it will be a challenge for online brokers to find a way to scale up their messaging and advertising during COVID-19.

Finally, the end of the year is typically when the ramp-up to RRSP-contribution season starts. Layer in a year in which there is almost certainly going to be a good portion of tax-loss selling and realizing of capital gains, TFSA maneuvering, and more, and DIY investors will be doing a lot more with their accounts through the end of this year. Of course, in order for online investors to want to stick with their current brokerage, it means the service experience at online brokerages has to be very good, and right now, based on comments from Twitter, there aren’t a lot of good customer service stories for Canadian discount brokerages.

It’s clear that nobody can fully predict the scale and scope of how COVID-19 will unfold in Canada or the US. Tied to that uncertainty is the business need to attract new clients via marketing and incentives. As the rest of the economy in Canada starts to fire up again, and people begin to come out of isolation, so too, hopefully, will the Canadian discount brokerage deals.

Teaching an Old App New Tricks – TD Direct Investing Launches Updated App

When mobile investing apps first arrived, they were heralded as the future for individual investors to gain even more freedom when wanting to trade, whether in line at Starbucks or hanging out poolside with a drink in one hand and a phone in the other. Mobile trading was truly going to be the next “big thing” with DIY investing. Arguably, now that apps and being able to do just about everything on a mobile device have become the norm, that sentiment of trading almost entirely by mobile app is closer to the original vision.

In June, TD Direct Investing unveiled the latest updates to their mobile app, which focused on investor education. TD Direct Investing’s mobile app now provides access to their online learning centre, which is filled with content to help investors get up to speed on a number of topics related to investing.

Among the more interesting capabilities is the ability to cast video lessons directly to TV – something that could offer up that perfect balance of autoplay TV series and educational content.

Of course, TD isn’t the only one that has conducted a refresh or added features to their mobile trading app this year. Virtual Brokers and RBC Direct Investing are the others. Thus, it seems like multiple Canadian discount brokerage who haven’t yet worked on improving their current app design/build will be busy figuring out how to build a mobile app for the current world.

With summer now upon us, it is the perfect opportunity both to learn about investing and investments as well as to be out and about. The latest wave of mobile upgrades at TD Direct Investing enables users to do both.

Discount Brokerage Tweets of the Week

From the Forums

Getting Schooled

A soon-to-be student wonders how to make the best of their savings while minimizing post-university debt in this post.

Oh Brother

In this post, a Redditor who has just purchased a house with his brother wonders how equity stake will accumulate in this split-ownership situation.

Into the Close

That’s a wrap on a shortened-week edition of the Roundup. Markets continue to power higher (for now), which means that there are many DIY investors on the sidelines hoping to still get in on the action. Of course, with professional sports starting to come back online, we’re betting we will start to see fewer “traders” and a restart of the world of financial promotions. Oh, and there’s now Kanye to add into the mix.

 

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Discount Brokerage Deals & Promotions – July 2020

*Update: July 28* Summer has finally arrived, and what a strange summer it’s shaping up to be! This word has been used a lot in the last few months, but it continues to be the word of the moment: unprecedented.

With the whole world – and the stock market – venturing into uncharted territory, it’s impossible to know what, exactly, the second half of 2020 holds in store.

Despite ongoing fluctuations in the stock market, online brokerages are continuing to see a high level of interest from DIY investors. Like their US counterparts, Canadian discount brokerages have been opening huge numbers of new accounts. This may explain why several brokerages haven’t felt the need to add any new deals or promotions for the month of July.

Regardless, there are still many ongoing deals and promotions to entice savvy DIY investors. Scroll on to review the current offerings from Canadian discount brokerages.

As always, Sparx Trading will add any updates as they appear, so be sure to check back throughout the month.

Expired Deals

*Update: July 28 – Qtrade Investor’s referral promotion has officially been confirmed as expired. *

BMO InvestorLine ended its cash-back promotion on June 1st.

Extended Deals

No extended deals to report at this time.

New Deals

No new deals to report at this time.

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2020
Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details. $25,000 commission-free trades for 1 month + 1 month of advanced data. 1 month Active Trader Program December 31, 2020
BMO InvestorLine Open a new qualifying account at BMO InvestorLine with new assets worth at least A) $50,000; B) $100,000; C) $250,000; D) $500,000 or E) $1M+, and you may be eligible to receive a cash back reward of up to A) $250; B) $450; C) $800; D) $1,000 or E) $2,000. Use promo code SPARXCASH when registering to qualify. Be sure to read full terms and conditions. A) $50,000 B) $100,000 C) $250,000 D) $500,000 E) $1M+ A) $250 B) $450 C) $800 D) $1,000 E) $2,000 Cash back will be deposited week of December 14, 2020 BMO InvestorLine Cash Back Offer Details June 1, 2020

Expired Offers
Last Updated: Jun. 30, 2020 16:20PT

Referral Promotions

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

Expired Offers
Last Updated: Jul 28, 2020 14:24PT

Transfer Fee Promotions

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

Expired Offers
Disnat Desjardins Online Brokerage is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $10,000 into a Desjardins Online Brokerage account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info. $150 $10,000 Disnat 1% Commission Credit Promo January 8, 2020
Last Updated: Jun 30, 2020 16:35PT

Other Promotions

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

Expired Offers
Last Updated: Jun 30, 2020 16:39PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1,000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Cash Back Open and fund a new or existing SmartFolio account with at least $1,000 and you could receive 0.5% cash back up to $1000. Use promo code PROMO1000 when opening a new account. See terms and conditions for full details. This offer can be combined with the refer-a-friend promotion. $1,000 0.5% cash back to a maximum of $1000. PROMO1000 January 2, 2020 SmartFolio Cash Back Promo
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $1,000 1 year no management fees STSF April 30, 2019 SmartFolio New Account Promotion
Cash Back – Referral BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details. $1,000 $50 cash back (referrer) $50 cash back (referee) Unique link generated from SmartFolio required. None SmartFolio Website
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: Jun. 30, 2020 16:40PT

Offers for Young Investors

Brokerage Offer Type Eligible Age Range / Client Segment Offer Description Min. Deposit Expiry Date Link
Student Pricing Clients with CIBC Smart™ Account for students $5.95 per trade and zero annual account fees not required None CIBC Student Pricing
Broker@ge 18-30 18-30 years old investors Benefits: * 5 free transactions (Minimum deposit of $1,000 required) * No inactivity fees * No asset minimum to maintain for free registered accounts * Exclusive events * Disnat Mobile App $1,000 None Broker@ge 18-30
Offers for professionals & Students Students in selected fields of study Professionals and students in the below fields can benefit from a reduced pricing structure: * Engineering students * Legal, accounting and business students * Healthcare students * Health sciences students * Nursing students Benefits: * $5.95 commission on equities * $0 commission on ETFs * $0 annual administration fee not required None NBDB Student Pricing
Young investor pricing 18-30 years old investors Benefits: * $7.75 commissions for stock and ETF trades * No account minimums * No quarterly admin fees min. $50 a month through pre-authorized contributions. None Young Investor Pricing
Waiver of account maintenance fee Clients who have RBC Student account, currently or in the past 5 years. The Maintenance Fee ($25 per quarter) is waived, regardless of the account balance. not required None Zero Account Management Fee
Young Investors Offer Clients below 26 years old Low activity account administration fee and the RSP account administration fee are waived. not required None Young Investors Offer
Zero Account Administration Fee Clients below 26 years old The account administration fee ($24.95 per quarter) is waived. not required None $0 Account Administration Fee
Last Updated: Jun. 30, 2020 16:45PT
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Discount Brokerage Weekly Roundup – June 8, 2020

Many seasoned investors know that the stock market acts as a giant voting machine on what things are worth. What many people gloss over, however, is the fact that stock markets often start figuring out what something is worth by looking into the future and ignoring what things are worth in today’s dollars. Why this is relevant, especially today, is that despite what is happening now – or perhaps because of it – stock markets are looking at a picture of the future world that is doing better (economically) than it is today. Here’s hoping it’s a better, more prosperous future, for those long overdue that prosperity.

In this edition of the Roundup, out of recognition of the protests against racism and social injustice in general, and the Black Lives Matter cause in particular, we will once again use our platform to provide a moment to educate and engage with a difficult but necessary conversation. From there, we’ll step back into the coverage of Canadian discount brokerages, and how one popular brokerage has the deals stage and spotlight all to themselves at the moment. As always, we’ll wrap up with chatter from DIY investors on Twitter and in the investor forums.

Supporting Change

Resolving difficult issues requires both commitment and resolve.

Taking a stand against the kinds of social injustices that led to the needless death of George Floyd and many others before him requires courage to raise your voice against racist actions and behaviour.

Even though the Weekly Roundup puts online brokerages and DIY investing in the spotlight, there’s no denying that the story that deserves the spotlight is this one.

In order to do our part to help effect change, we encourage readers to take a few minutes to watch a powerful interview with Jane Elliott, an educator who has been working with commitment and resolve to end racism in the United States.

 

Questrade Promotions Take Centre Stage

If there is one theme that 2020 has thrown at DIY investors and online brokerages, it is to be prepared for change. At the beginning of the year, very few people saw the COVID-19 pandemic unfolding the way it did. Fewer still could have predicted the market trajectory over the course of the pandemic – with stomach-turning volatility ultimately leading markets and certain stocks to be in record territory (high and low).

Since the massive stock market declines in March and throughout their subsequent recovery, a regular feature of the Roundup has been monitoring the impact of the surge in volume of trading and volatility to online brokerages. The net takeaway from data in both the US and Canada is that the business of being an online brokerage has never been better – at least from a revenue-generation standpoint. Account openings are at record levels, and with trading volumes up and commission-per-trade also still pushing almost $10 at most major Canadian online brokerages, the earnings for the past three months have likely been as healthy as they’ve been in almost a decade.

One area that hasn’t seen as much action, however, has been the deals and promotions from Canadian discount brokerages. In this month’s section, the biggest story for a change wasn’t what the newest deal was, it’s what it wasn’t.

BMO InvestorLine, one of Canada’s big-five bank-owned online brokerages, has had an active deal of some kind or another – whether cash-back or commission-free trade – for about as long as we’ve been tracking promotional offers. This month, however, on the heels of what was set to be another new offer to replace an expiring cash-back promotion, there was nothing.

Granted, BMO InvestorLine still has their referral promotion and their offer for transfer-fee coverage, but their absence from the new deals of the month is a notable change for the space and is, perhaps, a signal that strong demand by DIY investors for online trading accounts has forced online brokerages to either pause or delay launching promotions. Indeed, from the online brokerage’s point of view, when demand is so strong, incentive offers are less likely to determine whether or not a DIY investor will ultimately choose to open an account.

Interestingly, the withdrawal of BMO InvestorLine from the commission-free trade or cash-back promotion offer section this month means that Questrade is the sole provider of offers in the commission-free trade space – something that is almost unheard of in the history of tracking offers for DIY investors in Canada over the past decade.

How long other Canadian online brokerages enable Questrade to be the sole provider of a promotional offer is a real unknown. It is interesting to note that incentive offers provided by online brokerages are meant to attract the attention of DIY investors. As referenced in last week’s Roundup, the latest rankings on investor satisfaction by J.D. Power suggest that the differences between online brokerages in Canada continue to shrink. As such, what would prompt an online investor to try one brokerage over another might come down to something like a promotional offer. All things being about equal, the better deal appears to be part of the decision-making process and as a result, Questrade stands to be on the winning side of many of the “undecided” DIY investors.

A closer inspection of the comments on social media, in particular Twitter, also highlights the frequency with which Questrade is mentioned as a viable option for DIY investors contemplating which online broker to choose. Thus, competitors to Questrade will be challenged to educate consumers and/or provide a much stronger user experience in order to compete against Questrade on a feature-for-feature basis. Judging by the latest J.D. Power investor satisfaction results, in which Questrade was crowned the top online brokerage in this regard, other Canadian brokerages have their work cut out for them. Not only do promotional offers by online brokerages make sense for simply attracting undecided clients to try out a particular provider, but they also offer a way to shift the value perception in what is a very competitive market without having to undertake a massive technology project or feature release.

In short, it seems like the calculus favours Canadian online brokerages coming to market with deals in the not-too-distant future, and it also seems like until that happens, Questrade will have carved out a market-leading position in the deals-and-promotions space. Given that there are no challengers to them for commission-free trades, then it is safe to say at this point, theirs are the best (and only) online brokerage commission-free deals at this time. So, for Questrade, on top of the recent achievement of best online brokerage from J.D. Power, they are putting even more distance between themselves and the rest of the Canadian online brokerage pack. While large bank-owned brokers may be able to rely on the strength of the banking brand, that will only work to a point. For other brokerages, however, the message is fairly clear: invest heavily either in improving the client experience or in attractive incentives, otherwise it will be incredibly difficult to get the attention of investors without spending a lot to do so.

Discount Brokerage Tweets of the Week

 

From the Forums

DIY or Bust

A Redditor looking to venture into truly DIY investing turns to the forum for insights from fellow forum users in this post. Responses range from suggestions on TFSA contributions to guidance on which online brokerage might best suit them.

Minimizing Risk of Transfer

In this post, a forum user ponders whether in the midst of COVID-19 is a good time to transfer their portfolio. Fellow Redditors weigh in on the myth of timing the market and point to the bigger picture in investing.

Into the Close

That’s a wrap on another edition of the roundup. Markets continue to push higher, and even though the economic news is not as bad as it originally was predicted to be, there are growing warnings by notable investment-industry personalities (including the founder of Interactive Brokers) that prices are starting to become detached from underlying value. In other words, the market appears to be overbought. At a certain level, markets will reach a tipping point; however, in the near term, DIY investors and online brokerages are setting their sights as high as Elon Musk. Here’s hoping that the market-trading autopilots are prepped for the bumpy ride ahead.

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Discount Brokerage Deals & Promotions – June 2020

Just like that, it is now June. The past few months have simultaneously felt like the slowest yet fastest months ever, and it is safe to say that the first half of 2020 has been rather tumultuous.

However, for every bad news story we have heard or read about, there are countless good ones that have emerged. With the second half of the year commencing, and as we inch closer toward the summer season, it is our hope that the world becomes filled with more rays of sunshine – both literal and metaphorical.

In the markets, online brokerages have experienced unprecedented levels of interest, despite market volatility, as new and old investors flock to either open new accounts or increase their trading volumes. With these historic levels of investor interest, Canadian discount brokerages have focused their efforts on servicing clients and have chosen to maintain the same, familiar discount offerings throughout June.

In terms of promotional changes, the biggest news is that BMO InvestorLine is putting their long standing tradition of running a promotion on hold. As such, their cash back deal which is set to expire at the start of this month, will not be replaced by another. That leaves Questrade with a very enviable position in the promotional spotlight (for the time being).

As always, Sparx Trading will add new updates as they appear throughout the month, so be sure to check back regularly.

Expired Deals

BMO InvestorLine is bidding adieu to their cash back promotion. This deal is set to expire at the end of the day on the 1st of June.

Extended Deals

No extended deals to report at this time.

New Deals

No new deals to report at this time.

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2020
Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details. $25,000 commission-free trades for 1 month + 1 month of advanced data. 1 month Active Trader Program December 31, 2020
BMO InvestorLine Open a new qualifying account at BMO InvestorLine with new assets worth at least A) $50,000; B) $100,000; C) $250,000; D) $500,000 or E) $1M+, and you may be eligible to receive a cash back reward of up to A) $250; B) $450; C) $800; D) $1,000 or E) $2,000. Use promo code SPARXCASH when registering to qualify. Be sure to read full terms and conditions. A) $50,000 B) $100,000 C) $250,000 D) $500,000 E) $1M+ A) $250 B) $450 C) $800 D) $1,000 E) $2,000 Cash back will be deposited week of December 14, 2020 BMO InvestorLine Cash Back Offer Details June 1, 2020

Expired Offers
Last Updated: May. 31, 2020 16:20PT

Referral Promotions

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

Expired Offers
Last Updated: May 31, 2020 16:44PT

Transfer Fee Promotions

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

Expired Offers
Disnat Desjardins Online Brokerage is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $10,000 into a Desjardins Online Brokerage account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info. $150 $10,000 Disnat 1% Commission Credit Promo January 8, 2020
Last Updated: May. 31, 2020 16:35PT

Other Promotions

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

Expired Offers
Last Updated: May 30, 2020 16:39PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1,000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Cash Back Open and fund a new or existing SmartFolio account with at least $1,000 and you could receive 0.5% cash back up to $1000. Use promo code PROMO1000 when opening a new account. See terms and conditions for full details. This offer can be combined with the refer-a-friend promotion. $1,000 0.5% cash back to a maximum of $1000. PROMO1000 January 2, 2020 SmartFolio Cash Back Promo
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $1,000 1 year no management fees STSF April 30, 2019 SmartFolio New Account Promotion
Cash Back – Referral BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details. $1,000 $50 cash back (referrer) $50 cash back (referee) Unique link generated from SmartFolio required. None SmartFolio Website
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: May. 31, 2020 16:40PT

Offers for Young Investors

Brokerage Offer Type Eligible Age Range / Client Segment Offer Description Min. Deposit Expiry Date Link
Student Pricing Clients with CIBC Smart™ Account for students $5.95 per trade and zero annual account fees not required None CIBC Student Pricing
Broker@ge 18-30 18-30 years old investors Benefits: * 5 free transactions (Minimum deposit of $1,000 required) * No inactivity fees * No asset minimum to maintain for free registered accounts * Exclusive events * Disnat Mobile App $1,000 None Broker@ge 18-30
Offers for professionals & Students Students in selected fields of study Professionals and students in the below fields can benefit from a reduced pricing structure: * Engineering students * Legal, accounting and business students * Healthcare students * Health sciences students * Nursing students Benefits: * $5.95 commission on equities * $0 commission on ETFs * $0 annual administration fee not required None NBDB Student Pricing
Young investor pricing 18-30 years old investors Benefits: * $7.75 commissions for stock and ETF trades * No account minimums * No quarterly admin fees min. $50 a month through pre-authorized contributions. None Young Investor Pricing
Waiver of account maintenance fee Clients who have RBC Student account, currently or in the past 5 years. The Maintenance Fee ($25 per quarter) is waived, regardless of the account balance. not required None Zero Account Management Fee
Young Investors Offer Clients below 26 years old Low activity account administration fee and the RSP account administration fee are waived. not required None Young Investors Offer
Zero Account Administration Fee Clients below 26 years old The account administration fee ($24.95 per quarter) is waived. not required None $0 Account Administration Fee
Last Updated: May 31, 2020 16:45PT
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Discount Brokerage Weekly Roundup – May 4, 2020

Here we are at the beginning of a new month. If the old adages are to be believed, then May is where we can look forward to flowers, and when investors would typically sell and look to return in the fall. Of course, those would be in normal times, and with many of us still parked at home, the rule book for this May is going to be anything but typical.

In this edition of the Roundup, we continue to digest the numbers on the popularity of online investing being shared and what those numbers help to explain about the current state of online brokerages in Canada. From there we examine the current state of the deals and promotions being offered at the beginning of a new month and speculate on what the “new normal” is shaping up to look like for deals from discount brokerages. As always, there’s a healthy serving of commentary also included from DIY investors on Twitter and in the forums.

Waves of Interest

The big story in the online brokerage space these past two months has been heavily focussed on numbers. Notably, the numbers of DIY investors – be they active traders or first-time investors – who have been jumping into the stock market, in spite of the sharp declines in stock prices and unprecedented volatility.

With the start of a new month, Interactive Brokers has once again released their trading activity metrics, which offer a unique window into the behaviour of investors and the business conditions of online brokerages.

The metrics published by Interactive Brokers show that there were 46 thousand net new accounts opened, an increase of 15% over the prior month and an incredible 461% increase over the same period last year. In fact, there were more online brokerage accounts opened at Interactive Brokers in April than there were in the last six months of 2019 combined.

Digging further into the numbers published in their press release, it is also possible to see magnitude and direction of activity by investors across April and March. For example, there were 7.2 million buy orders compared to 5.64 million sell orders. To put these numbers into context, these are about 2 – 2.5 times higher than the 2019 average in each category.

The growth in new accounts and the surge in trading behaviour provided by Interactive Brokers’ figures puts what’s been happening here in the Canadian discount brokerage space into sharper focus.

Although different in absolute numbers, on a relative basis the flood of new accounts and trading volume implies that Canadian online brokerages had a VERY good past two months in terms of revenue generation and asset gathering. Unlike their counterparts in the US, Canadian discount brokers haven’t dropped their commission rates to zero, so total revenue gained should be substantial.

Indeed, messages from DIY investors on social media about delays in getting new accounts opened, as well as messages on the websites of Canadian online brokerages communicating delays due to higher-than-normal volumes, once again validate the idea that the sheer volume of interest has overwhelmed many service channels.

Out of curiosity about the delays experienced by clients when attempting to reach an online brokerage by phone, we looked at the open job postings for client service reps for the online brokerage arms of a few of Canada’s largest bank-owned brokerages. The surprising finding in this quick scan was that there were only two of the big five banks with active postings for their wealth management (i.e. online brokerage) divisions. Of further interest, at one of these brokerages, the training program is an intensive full-time commitment of 20 weeks. What this implies is that if Canadian online brokerages that are experiencing severe delays in responding to clients haven’t already done so, hiring into the role of client service is going to be a challenge (especially if everyone does it at once), and the turnaround time for a fix is not going to be short.

As has been reported in Roundups in the past few weeks, these unprecedented times in the stock markets and economies have, almost counterintuitively, resulted in a watershed moment for account openings and trading volume.

Canadian online brokerages, despite their higher commission structures, are facing a huge surge in account openings and a revenue windfall from active trading. It remains to be seen which online brokerage in Canada can successfully deliver consistently positive client service at scale and, more importantly, seems interested in prioritizing doing so. A quick scan of the open job postings at Canada’s largest banks shows that, at this point, hiring more customer service agents to assist specifically with the online brokerage segments of their business isn’t a priority.

While deploying more people to assist with growth is one strategy, the numbers from Interactive Brokers – which counterintuitivelyis arguably the online brokerage most committed to automation – have shown that having a highly scalable business structure pays for itself. Their ongoing investment has enabled Interactive Brokers to accommodate and process new accounts at a rate much faster than online brokerages with less automation to their system.

Whether Canadian online brokerages are, at the moment, content to grow at their own pace or are simply unchallenged to do so more quickly, one thing is clear: the longer it takes DIY investors to open accounts when markets present opportunities, the more likely DIY investors will send their assets and trades to an online broker that can execute on this quickly.

Deal-ayed Gratis-fication

Normally, the start of a new month would be the opportune time to recap the deals and promotions being offered by Canadian discount brokerages. These are not normal times, however. With the start of a new month, the deals and promotions being offered by Canadian discount brokerages are largely the same as they were during April.

The current deals-and-promotions landscape for cash-back or commission-free trade offers is dominated by two firms: Questrade and BMO InvestorLine, with the latter being the only big Canadian-bank-owned brokerage to be running a cash-back promotion offer.

The most popular category remains the baseline transfer promotion, which provides reimbursement of transfer-out fees that most online brokerages charge when moving accounts to another provider.

With demand being as strong as it is, and Canadian online brokerages struggling to keep up with processing new account sign-ups, there has clearly been a shift away from most Canadian discount brokerages offering deals or promotions to incentivize DIY investors to sign up for an account. Interestingly, it seems that awareness-based marketing campaigns are being run at the moment, with advertising by TD Direct Investing, Scotia iTRADE and Qtrade Investor showing up on social media feeds.

The takeaway appears to be that while online brokerages are “open for business,” it is not business as usual. At this point, the speed with which an account can be opened and opportunities seized upon takes precedence over the incentives that determine where an online investor turns to – at least for many investors. Translation: FOMO is firmly in control. Of course, commentary by both (and only) Questrade and BMO InvestorLine about the successful rates of account opening may simply be coincidental to their marketing efforts through the big drop and bounce.

As for what happens next from here, it is likely that larger online brokerages enjoy the benefit (and challenge) of being large and don’t have to provide incentives unless they are really interested in capturing market share. For smaller online brokerages, it is clear that this ought to be a time for leaning into the attention that more DIY investors are paying to the space. With online brokerages deferring their promotions, at least for the time being, once things “normalize” from an investing standpoint, it seems like offers could become hyper-competitive. There are still many unknowns on the promotions front, but looking at the big picture, the competition for new customers for financial services and online investing is going to be a lot tougher than it was heading into the COVID-19 pandemic.

Discount Brokerage Tweets of the Week

From the Forums

Oh, Canada

A Redditor asks, “Why should I continue to invest in the Canadian market?” in this forum post. Fellow users rally around the benefits of hedging investments by putting money in the Canadian and US markets and warn the poster to be wary of recency bias.

Speculation Nation

In this post, a user invites the forum to speculate which companies may go bankrupt as a result of the turbulent markets.

Into the Close

For better or worse, stock markets are always forward looking. This week, however, there may not be a lot to look forward to except heightened uncertainty. The math on unemployment figures in Canada and the US is terrible, and as far as plans to “restart” entire economies, it will be anything but smooth. Markets, for now, seem to have digested a lot of very bad news and are priced on the expectations that things will be resolved in some sort of orderly fashion. This week will certainly test that thesis.