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Discount Brokerage Weekly Roundup – December 5, 2014

It’s hard to believe that December is already here. People tend to get a bit happier, office work tends to become a little bit more lax, fantasy football more competitive and holiday movies a little more epic.  For many of Canada’s discount brokerages, however, before the December slowdown hits, there’s lots of planning and positioning for the year ahead.

In this week’s roundup we take a look at the deals that kicked off the launch into December, review some interesting brokerage trading stats (for the numbers fans), highlight an online bump in the road for one brokerage and finally,we end with a special treat of an announcement for readers of the roundup.

Nice Save

With the start of a new month comes the chance to revisit the activity in the deals and promotions being offered by Canadian online brokerages.

In terms of deals and offers the month started against the backdrop of Black Friday and Cyber Monday. We were curious to see if any brokerage would pitch an offer given the tidal wave of excitement these shopping days generate for bargain hunters. And, in fact, one discount brokerage did step forward into the mix.

Questrade, which ventured into the deals day territory on Boxing Day of last year jumped into Black Friday and Cyber Monday with their discount on trading fees for silver and gold (and what a week to time that around given the volatility in those to precious metals). That promotion runs until the end of December.

The deals and promotions that are currently running for December are largely carried forward from November.  Questrade did launch a promotion at the outset of the month which is running for the duration of December. New offerings aside, this month has a number of deals set to expire by the end of the month. It should be interesting to see which offers get extended or replaced as brokerages move into their busiest season after the holidays.

A quick highlight of the current month’s deals shows 16 offers from 7 different brokerages.  As with previous periods, Questrade, BMO InvestorLine and Scotia iTrade have several offers in play and this month these three brokerages account for 75% of the deals currently on the table.

Interestingly, an offer from RBC Direct Investing which crossed our radar late last month is positioned to compete with many other offers on the market but specifically weighs in close to the BMO InvestorLine Youth Promotion. Both of these offers require no minimum deposit and the length of time to use the commission-free trades is 90 days.

Interactive Brokers’ Trading Cools Down

For those that want to learn more about how the discount brokerage business works, one of the best sources of information is actually the brokerages themselves.  Although none of the Canadian discount brokerages are publicly traded, several major US brokerages are and as such there’s lots of information in their quarterly or annual reports.

In particular, Interactive Brokers (which also operates a subsidiary in Canada) tends to do a great job of laying out its customer trading activity metrics (in aggregate).  For those that are interested in tracking IB’s progress, this link summarizes their latest performance metrics.  There’s some pretty detailed data in there, especially on the number of buys and sells of equities by month as well as the average commission paid by clients for trades.

On their business end of things, while they seem to be growing their account base at a steady clip, the number of trades dipped month over month.  With the recent string of market volatility however, what was interesting to note about their latest earnings figures was the fact that their market making business segment didn’t do as well as many had hoped (yet again), demonstrating even pros can have a rough go at beating the market they’re helping to make.

Outage = Ouchage

For anyone who’s spent a significant time behind a trading window or terminal, there are few things more unnerving than market connection problems.  With so many technology touch points between buyer and seller, it’s remarkable that more doesn’t go wrong than already does.

Unfortunately for Questrade and their clients, this past week saw their online trading platforms go offline just as the markets were whipsawing into an open on Monday. Some months back we reported on TD Direct Investing’s network outage which took down WebBroker for a while.

While Jimmy Kimmel could probably have Questrade on his show to read some of the ‘mean tweets’ that came their way as a result of the outage, the reality for anyone trading online is to be prepared for if/when it happens.

The predictable jammed phone lines, boiling tempers and (at times) helpless feelings of watching the market turn against a position you just can’t get out of (and yes, those that you could have gotten into) characterize these scenarios.

For their part, Questrade handled the crush of Twitter, forum and other online traffic fairly responsively.  They tried, it appears, to keep people updated on Twitter as to the status of the outage.  That said, it leaves a bitter taste to have to be stuck in or locked out of trading but big firms or small are susceptible.

Ultimately, the lesson that many learn is that it’s up to individual investors to identify and control position risks and, have a plan to be ready for when things go haywire, especially when actively trading.  It doesn’t make for a great sales pitch but probably does help account for the fact that disclaimer text on all of the brokerage platforms, data feeds and account opening documentation being as long as it is.

A Sneak Peak

December is shaping up to be a really exciting month here at SparxTrading.com.  Throughout this month (starting next week) we have some amazing content presents lined up for release.  Stay tuned next week and through December as we share some really interesting pieces on 2014 from some special guests.

Event Horizon

Dec. 9 (Tue) Scotia iTRADE – Alternative Investing Using ETFs with Horizons

Dec. 10 (Wed) Scotia iTRADE – Understanding The Greeks with Montreal Exchange

Dec. 11 (Thur) NBDB – Technical Analysis: Oscillators – [Fr]

Dec. 11 (Thur) NBDB – Introduction to Options – [Fr]

 

From the Forums

Do you have that in stock?

It’s not typically a question you would think to ask your online brokerage, however this post from RedFlagDeals.com’s investing forum does raise an interesting point.  While typically not an issue on the long side, those thinking of picking a brokerage because they like to short should consider asking it.

That does it for this week’s roundup.  With holiday music and general Christmas merriment (and mall traffic) in full swing here’s a little intergalactic cheer.  Good luck on your adventures this weekend wherever they may boldly take you!

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Discount Brokerage Deals and Promotions – December 2014

*Updated Dec. 17, 2014*

With the start of December coming on the heels of two of the biggest deals days of the year, the Canadian discount brokerage deals & promotions section is filled to the brim with offers from online brokerages. Unlike the pictures on television or Twitter, however, there was no crush of people attempting to get in on a sale on a brokerage account – although that didn’t stop at least one brokerage from trying to catch the deal-frenzy wave.

Heading into the last month of the year, the deals activity did pick up slightly through November with three updates to the deals pool. Most notably, an offer from RBC Direct Investing was spotted that signals their re-entry into the promotions space until the end of this year.

At the outset of December, it appears that Questrade has continued with its strategy of offering up promotions/incentives that are timely, as they launched a holiday-themed offer alongside several of their existing offers.

Of course, the news wasn’t all cheerful for deals, as a pair of offers from TD Direct Investing and Questrade ended by the time December rolled around as well as the iPad Mini offer from Questrade.

The last month of the year is also a bit of a milestone month for many active offers. There are at least 7 offers that are set to expire by year’s end signaling a potentially exciting start to 2015. That said, there’s still lots of time left for some interesting announcements to be made. So even though we’ve made this list, we’ll be checking it twice, and, hopefully we’ll find something nice.

Expired Deals

The deals that expired coming into December were the monster offer by TD Direct Investing for 200 commission-free trades and Questrade’s 100 commission-free trade offer. Also on the way out (for now) was the iPad Mini deal from Questrade.

Extended Deals

While it was left off the deals section for some time, the Scotia iTrade refer-a-friend deal finds its way back onto the list as the expiration date has been updated/extended until the end of December.

New Deals

*Update: Dec. 17, 2014 – National Bank Direct Brokerage has just announced a huge commission rebate offer of up to $1,000 for deposits of $100,000 or more or $500 for deposits of $20,000 or more.  NBDB has been quiet in terms of deals for several months, however this newly launched promotion is a significant one compared to other offers in the same deposit range.  The offer is open to new and existing clients however according to the terms and conditions, individuals who have participated in any other promotions with NBDB since January 2014 are not eligible.   Also worth noting, the total amount of the rebate includes any transfer rebates (of up to $135) that individuals may take advantage of if switching providers. This means that the amounts remaining (if using the transfer fee rebate) would be at least $365 or $865 (depending on the deposit size). The window for rebates to be applied are subject to a schedule outlined in their terms and conditions, however essentially qualified clients can have trade commissions (stocks, options & ETFs) made within 90 days of opening the account refunded. The terms and conditions are remarkably brief so be sure to read them through if considering this offer. Additional details are in the table below.*

The newest promotion at the outset of the month comes from Questrade in the form of a ‘holiday’ themed offer. Questrade is offering new and existing clients up to 30 commission free trades for a deposit of at least $1,000. The commission-free trades are good for 30 days – just in time for that other season trader’s know comes this time of year – tax loss selling season.

The deals that joined the list of offers mid-month last month included offers from BMO InvestorLine for 5 commission-free trades for using their new mobile app; RBC Direct Investing’s offer (mentioned above) of 20 commission-free trades for a new account opening and finally a cash-back offer by Questrade to compete at the higher deposit levels.

Discount Brokerage Deals

Company Brief Description Minimum Deposit Amount Commission/Cash Offer Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitney and receive access to their preferred pricing package and a massive 45% discount on the Real Tick trading platform. n/a Discounted Commission Rates none For more details click here none
BMO InvestorLine For individuals between 18 and 35 who open a new qualifying account with BMO Investorline, they may be eligible to receive 35 commission-free trades, an eBook on investing and potentially waived account minimum fees. Use promo code “New” when signing up. Be sure to read the terms and conditions for more details on the offer. n/a 35 commission-free trades 90 days Youth Promotion January 5, 2015
Individuals opening a new account with RBC Direct Investing by December 31st may be eligible to receive a commission-rebate on their first 20 trades. Use promo code QC20 or visit the info page link for a valid code. Be sure to read the terms and conditions on this offer. n/a 20 commission-free trades 90 days Full offer information can be found here . For terms and conditions information click here. December 31, 2014
BMO InvestorLine Download the BMO InvestorLine iPad app and you could qualify for up to 5 commission-free trades. This offer is open to new and existing clients and can be combined with other offers. Clients must have a qualifying account in order to be eligible. Read full terms and conditions for details. n/a 5 commission-free trades ($50 max value) 30 days Tablet Trades Promotion January 5, 2015
Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc $1,000 $50 commission credit none none none
Refer a friend to Questrade and when they open an account you receive $100 and they receive $50. To receive this deal you must be an existing client with an equity account and refer a person that does not reside with you and who has not previously opened a Questrade account. $1,000 $50 commission credit (friend) $100 commission credit (referrer bonus) 60 days Refer a friend none
Open a new account (TFSA, Margin or RRSP) by December 30 2014 with a deposit of at least 1,000 and you could be eligible to receive up to 30 commission-free trades with 30 days of opening/funding your account. Use promo code 30trades2014 when signing up. Be sure to read terms and conditions for full details. $1,000 30 commission-free trades 30 days 30 commission-free trades December 30, 2014
Open a new account (TFSA, Margin, RRSP or FX/CFD) and place at least one trade within 60 days of opening and you may be eligible to receive a $50 prepaid Visa card from Questrade. Use promo code VISA50. Be sure to read terms and conditions for full details on this offer $5000 $50 Visa gift card Cards will be mailed within 40 business days of reaching account funding requirement. $50 Prepaid Visa Card Offer December 31, 2014
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 December 31, 2014
Scotia iTrade Open and fund a new Scotia iTRADE account with at least $15,000 before December 31, 2014 and the commissions associated with your first 100 trades placed within 60 days of the date the account is activated and funded are free. Also, the new FlightDesk platform is being offered for free for 60 days. Use promo code HUN-SP. See details link for further terms and conditions. $15,000 100 commission-free trades ($999 value @ $9.99 commission rate) 60 days Scotia iTrade 100 free trades + FlightDesk December 31, 2014
Scotia iTrade Open a new account with Scotia iTrade with either A) $15,000 – $99,999 B) $100,000 – $499,999 or C) $500,000+ and you may be eligible to receive either A)100 free trades or $50 cash B)250 free trades or $250 or C)500 free trades or $500 cash. Accounts must be opened prior to December 31st, 2014. New clients use code: FATD14E for free trades and code: MONF14 for cash back. Existing clients must call client service (1-888-769-3723) to qualify. Be sure to read terms and conditions regarding minimum balance requirements and other details. A)$15,000 – $99,999 B)$100,000 – $499,999 C)$500,000+ A) 100 commission-free trades or $50 cash B) 250 commission-free trades or $250 cash C) 500 commission-free trades or $500 cash For commission-free trades: 180 day limit For cash back: payout occurs by August 31, 2015 Cash back + Free trade offer December 31, 2014
Open a new account and fund it with at least (A) $20,000 or (B)$100,000 and NBDB may provide up to (A) $500 or (B) $1,000 in commission rebates for qualifying accounts. Use promo code “CashBack2015” when signing up. Be sure to read the terms and conditions for eligibility and refund dates. A)$20,000 – $99,999 B)$100,000+ A)$500 commission rebate B)$1,000 commission rebate 90 days (rebate of commissions depends on sign up date and is outlined on terms/conditions) Cash Back Offer March 31, 2015
Open a new account or fund an existing account at CIBC Investor’s Edge with at least A)$25,000-$49,999 B)$50,000 – $99,999 or C)$100,000+ and you may be eligible to receive A)$100 cash back and 25 free trades; B)$200 cash back and 50 trades or C)$300 cash back and 100 free trades. Be sure to read the terms and conditions for full details on this offer. A) $25,000 – $49,999 B) $50,000 – $99,999 C) $100,00+ A) $100 cash back + 25 commission-free trades B) $200 cash back + 50 commission-free trades C) $300 cash back + 100 commission-free trades Cash back payout occurs within 30 days of account funding; Time limit to use commission free trades is 60 days Investors Edge Cash Back and Free Equity Trades Offer February 28, 2015
Disnat Disnat is offering new & existing clients $300 in commission credits which can be used for up to 6 months. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1 800 268-8471 and mention promo code Disnat300. See details link for more info. $50,000 $300 commission credit 6 months Disnat $300 Commission Credit Promo December 31, 2014
Open and fund a new account at Questrade with at least A)$50,000 or B)$100,000 by December 30, 2014 and you may be eligible to receive either A)$100 cash back or B)$250 cash back. Use promo code: CASHBACK250W when opening the account. Be sure to read the terms and conditions for full details. A)$50,000 B)$100,000 A)$100 cash back B)$250 cash back Cash back payout occurs after 60 days. Questrade Cash Back Offer December 30, 2014
BMO InvestorLine If you refer a new client to BMO InvestorLine and they open an account with a)$50,000 – $249,999 or b)$250,000+ the referrer and the referee will both receive cash. The new account must be opened with the referral code specific to the referrer. A) $50,000 – $249,000 B) $250,000+ A) You(referrer): $200; Your Friend(referee): $50 B) You(referrer): $300; Your Friend: $100 Payout occurs after 60 days (subject to conditions). Contact InvestorLine for full terms and conditions. October 30, 2015
BMO InvestorLine Open and fund a new qualifying account at BMO InvestorLine with at least $100,000 in net new assets and you may be eligible to receive $250 cash back and a rebate of commissions on up to 25 trades made within 50 days of opening the account. Use the promo code SMILE when signing up for the account. Be sure to read full terms and conditions for eligibility and further details. $100,000 $250 cash back + 50 commission-free trades (rebated) 50 days (payout for cash back and commission rebate occurs after 6 months) Smile Promotion January 18, 2015

Transfer Fee Deals

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to Credential Direct and they will pay the transfer-out fees up to $150. If you wish to switch out of Credential Direct after 90 days they will waive their transfer out fee. See link for more details. $150 $15,000 Transfer Free Promo December 15, 2014
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer $25,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $25,000 Transfer Fee Rebate none
Qtrade Investor Qtrade Investor will reimburse your transfer fee up to $125 when transferring a balance of $25,000 or more. For reimbursement, please mail or fax a copy of your statement from the transferring institution that shows the transfer charge to Qtrade Investor at 604.484.2627 and indicate your Qtrade Investor account number. $125 $25,000 Transfer Fee Promo none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1 800 268-8471 and mention promo code Disnat300. See details link for more info. $150 $50,000 Disnat $300 Commission Credit Promo December 31, 2014
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Discount Brokerage Weekly Roundup – November 28, 2014

Whether it was landing a great Black Friday deal, or a managing to catch a seemingly impossible pass, this past week has been book-ended by really interesting catches and stuffed with goodies. Discount brokerages this week kept pace with the great catch theme as they hauled in awards and recognition as part of online brokerage ratings season.

In this week’s roundup, we go deep on the rankings and ratings that crossed the tape for DIY investors. Specifically we look at the results from the Globe and Mail’s Online Brokerage Ranking as well as the award for best online brokerage from Morningstar. While ratings were definitely a dominant story, there was also an announcement made by an independent Canadian online brokerage that can help a select few rest a little easier at night. Given the focus of the roundup on ratings and rankings, we’ve elected to add in commentary on the brokerage rankings from the forums and Twitter.

Qtrade Back on Top of Globe’s Online Brokerage Rankings

As one of the most highly anticipated rankings of the year, the Globe and Mail’s 2014 Canadian Online Brokerage Rankings did not disappoint. This year’s results contained a bit of drama, a lot of data and even some interesting decisions.

Of course, when it comes to the discount brokerage rankings the burning question that everyone asks is: “who is Canada’s best online brokerage?”

According to Rob Carrick’s analysis, the best of the bunch is a long time podium finisher and previously dominant name in this ranking: Qtrade Financial.

The drama (or at least what may count as drama in the discount brokerage world) was the close finish between the winner for the previous two years, Virtual Brokers, and first place winner Qtrade as the margin separating the two was quite small. Rounding out the top three was BMO InvestorLine.

As with year’s past, cost was a significant contributor to the scoring of the brokerages covered, however it seems that given the widespread cutting of standard commissions, additional costs are being considered as well as broader features related to opening and owning an online brokerage account.

There was lots to chew on in this year’s rankings (which we cover in an upcoming in-depth look at the rankings) however there were a number of interesting observations we had of this year’s online brokerage rankings.

First, there was lots of data this year that hasn’t previously been available or has been put into the brokerage rankings. There were many more tables (which we’re big fans of) that explained other items like forex costs and margin interest rates. In addition, Rob Carrick also released the completed surveys by each brokerage for users of GlobeInvestor to examine. Finally, there was a ‘decision path’ that was created to help users navigate the maze of questions and features that can help determine a provider.

It was encouraging to see the ratings and rankings to go beyond just the report card style grading of discount brokerages and to enable users to sort by key category. There was clearly a lot of work and data that went into the grading decisions and the presentation this year.  In particular, the decision pathway that, while complex, may enable some users to navigate the evaluation process more efficiently.

That said, it is important to take the rankings with a grain of salt.

The online brokerage rankings and ratings were coming largely from a single (albeit) informed source and as such carry a very subjective element. Another item to keep in mind is that these rankings take a snapshot and grade based on a particular moment in time. The Canadian discount brokerage industry is rapidly evolving and features that might be missing today in a particular brokerage could get addressed between now and the next rankings. Finally, there will likely be a lot of related marketing emerging from the various brokerages based on the results, so it is important to understand how the Globe and Mail online brokerage rankings work. We’ve put together a primer from year’s past which is still largely applicable to this past year.

BMO InvestorLine wins Morningstar Investment Award

This past week there was another group that bestowed the title of “Best Online Brokerage” to a Canadian discount brokerage.

The annual Morningstar Investment Awards took place this past week in downtown Toronto which is where BMO InvestorLine was crowned Canada’s Best Online Brokerage.

As the award may not be as well known as some of the other online brokerage rankings/ratings, here is a quick primer.

In terms of process and selection, the best online brokerage award is designated as a “submission-based” award. What this means is that individual Canadian discount brokerages essentially self-select for participation/evaluation by paying a $1,000 submission fee and preparing answers to a list of questions about their firm. Proceeds from the submission fees collected go to MusicCounts, the charitable foundation partner of the Morningstar event.

For the online brokerage segment, the key questions were grouped under three main categories:

  1. The website
  2. Customer service
  3. Costs

As part of their submission, brokerages were asked to mention how their firm was different than other firms, what the firm has done over the past one to two years and to discuss any strategic area of focus.

A panel of jurors ( in the case this year there were three jurors) evaluates the submissions and establishes three finalists. They then discuss/deliberate the three finalists and ultimately choose a winner who then gets the award.

One of the reasons the process is key to understand is that, unlike other rankings or ratings, the evaluations are not scored or weighted using a point system. Instead the winner of the top online brokerage award comes down to the decision of the jurors. The jurors for ‘best discount brokerage’ this year included:

  • Glenn A. Lacoste, President, Surviscor
  • Jon Purther, President & COO, Corbin Partners Inc.
  • Paul K. Bates, CMA, FCMA, Assistant Professor of Leadership, McMaster Divinity College

Interesting Connections

While the Morningstar award may not be as well known on the rankings circuit as the other online brokerage rankings that are currently available, there is a connection between them and several other Canadian brokerage rankings. Specifically, one of the award judges was Glenn Lacoste, president of Surviscor, produces the Surviscor ‘best online brokerage’ rating as well as helps  Moneysense Magazine to power their online brokerage ratings. This, naturally spurred a bit of curiosity as to whether there would be a connection in the results of the awards from Surviscor and Morningstar.

When looking back at the results over the past 3 years in particular between the Surviscor winners for Best Online Brokerage and the winners for Best Discount/Online Brokerage on Morningstar, we noted that the winner of the Surviscor designation (or at least one of the winners depending on the quarter) had a strong tendency to win the Morningstar designation also.

Year Juror 1 Juror 2 Juror 3 Juror 4 Surviscor Best Online Brokerage Award Winner Morningstar Best Online Brokerage Award Winner
2012 PAUL K. BATES ASSISTANT PROFESSOR OF LEADERSHIP, MCMASTER DIVINITY COLLEGE GLENN A. LACOSTE, PRESIDENT SURVISCOR JON PURTHER PRESIDENT AND COO, CORBIN PARTNERS INC. JONATHAN CHEVREAU, EDITOR, MONEY SENSE Q1 – Qtrade Q3 – Scotia iTrade Qtrade (best discount broker)
2013 PAUL K. BATES ASSISTANT PROFESSOR OF LEADERSHIP, MCMASTER DIVINITY COLLEGE GLENN A. LACOSTE, PRESIDENT SURVISCOR JON PURTHER PRESIDENT AND COO, CORBIN PARTNERS INC. JONATHAN CHEVREAU, EDITOR, MONEY SENSE Q1 – Scotia iTrade Q3 – BMO Investorline BMO InvestorLine (best online brokerage)
2014 PAUL K. BATES ASSISTANT PROFESSOR OF LEADERSHIP, MCMASTER DIVINITY COLLEGE GLENN A. LACOSTE, PRESIDENT SURVISCOR JON PURTHER PRESIDENT AND COO, CORBIN PARTNERS INC. BMO InvestorLine BMO InvestorLine (best online brokerage)
Source: http://www.investmentawards.com/home http://surviscor.com/scorView/Reviews/OnlineDiscountBrokerage/Q3-2012/ http://www.surviscor.com/scorView/Reviews/OnlineDiscountBrokerage/Q1-2013/ http://www.surviscor.com/scorView/Reviews/OnlineDiscountBrokerage/Q3-2013/ #colspan# #colspan#

Given the similarity of focus between the criteria for the Surviscor award as well as for the Morningstar best online brokerage award, it is understandable that there would likely be some degree of concordance between the two in terms of outcomes. What is interesting, however, is that because the Morningstar awards are submission-based, not all brokerages may choose to participate. Morningstar does not publish or release the list of submissions so it is unclear as to how many brokerages actually submitted to participate this year.

The important takeaway for consumers with respect to the rankings and ratings or awards, is that it is important to put the method of evaluation into context. With both the Globe and Mail’s “best online brokerage” and Morningstar’s “best online brokerage” yielding differing results, things can get understandably confusing.

With several firms (including JD Power and Dalbar) also participating in the rankings and ratings of Canadian discount brokerages there will be no shortage of “bests” or “tops” still to come. The process and transparency by which these designations are awarded, however, will ultimately govern the extent to which DIY investors turn to these awards and more importantly, trust them.

Just in Case

Switching gears away from ratings, ravings, and rankings, there was a new feature addition that Virtual Brokers announced earlier this week. Specifically they have added additional coverage on portfolios over and above what the CIPF currently offers (which is $1 million) to the tune of $11 million. As such clients with portfolios up to $11 million can have supplemental insurance coverage of their accounts. The insurance is being provided by Lloyds of London.

From the Forums

Reactions to the rankings and ratings were minimal in the forums. We did find this post related to features referenced from TD Direct Investing as mentioned in the Globe and Mail brokerage ranking.

We’ve also included some reactions from Twitter that map onto the frenzy of ratings/rankings that have taken place over the last few days.

That’s a wrap for this week. For the deal hunters out there, keep your heads up and have a great cyber shopping weekend!

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Discount Brokerage Weekly Roundup – November 21, 2014

What do shows like Big Bang Theory, Dancing with the Stars and Sons of Anarchy have to do with Canadian Discount Brokerages? Well, if you guessed fall ratings then Bazinga!

Finding the right metric to judge the ‘best TV show’ is easier in some respects than finding the “best online brokerage”. As we move into the unofficial ratings season for the brokerages, however, prepare for all kinds of plot twists.

In this week’s roundup, we take a look some of those twists, first by reviewing the latest online brokerage rankings to be published. Next we take a look at the interesting news coming out of the wealth management space with a major move by one online brokerage stepping out of the frying pan and into the fire. Finally we take a quick tour through the investor education events being held in late November and close out with a couple of interesting brokerage-focused forum discussions.

Best Online Brokerage Rankings Kick-Off

For consumers, when evaluating who Canada’s best online brokerage is, it is essential to understand the ranking system used. As we’ve highlighted in the past, there are several rankings and ratings that each measure and define “best online brokerage” or some variation of “best” (like “top” or “#1”) in many different ways.

Surviscor 2014 Rankings of Canadian Online Brokerages

This past week, financial services ratings firm Surviscor released their latest edition of rankings of Canadian online brokerages. BMO InvestorLine ranked the highest according to the Surviscor criteria (earning a score of “90%”), followed by Scotia iTrade (“84%”) and then Credential Direct (77%). As we’ve done with other rankings and ratings of Canadian online brokerages, we drilled down into the the scores and stats for a better picture on what these results tell us.

One of the first things that jumped out was how everyone else did in the rankings. The average score of the group was 68% with the standard deviation coming in at just under 16%. What does all that math mean (no pun intended)?

The rankings for the whole field show there are many companies clustering around the average score. We interpret this to mean that most of these companies are pretty close to one another except for some very clear outliers (to the downside): Laurentian Bank’s discount brokerage and HSBC InvestDirect (which interestingly placed near the top in Dalbar’s rating for client service but near the bottom when evaluated by Surviscor).

When we dropped these two firms from the rankings, the distance between first and last narrowed substantially and the differences between the online brokerages became even less numerically significant. For example, the difference between 3rd place and 8th was a difference of 7%.

With a race this close, small changes in features, especially those that impact the heavily weighted categories within this evaluation could have an outsized effect. For example, account services, cost of services and getting started are collectively responsible for 60% of a firm’s result.

Also, with changes happening constantly taking a snapshot of who the “best” online brokerage is (or was) as of a certain point in time of the year doesn’t necessarily hold true several months down the road.

So, while BMO InvestorLine did score well in this analysis, their victory may be short lived. There are already changes within their own firm as well as with their competitors that could disrupt those results at any moment.

Handling Change

While they were alluding to something big last week via social media, this past week Questrade officially launched their new wealth management division and reconfigured their website in the process.

Questrade has officially added managed wealth into their service mix, and in doing so, has definitely got the attention of brokerages big and small.

There are many angles to this recent announcement that can’t be squeezed into the roundup – so stay tuned for more perspective on Questrade’s recent move. One that stands out is that Questrade has been incredibly busy pulling together information for this launch, which has seen them go on an all out social media blitz on YouTube, Twitter and Reddit.

So, even though the headline here is definitely the shift into a new service line, one of the more curious aspects is their marketing and communications.

Questrade has assembled a lot of videos and content related to their products and services, as well as positioned themselves across many online (and traditional) channels. The scale of this effort is something that even the larger bank-owned brokerages are having trouble contending with.

What this means for online brokerage consumers is that they will likely be seeing Questrade in more places than ever before. The challenge, however, is going to be establishing and communicating what Questrade should now be known for as the shift away from being known for DIY investing exclusively has pitted them against an even wider field of competitors.

Event Horizon

November closes with an flurry of educational events. Enjoy.

Nov 25. (Tue) NBDB – Introduction to technical analysis: Trends – [Fr]

Nov 25. (Tue) Scotia iTrade – Leveraged and Inverse ETFs with Horizons ETFs

Nov 25. (Tue) NBDB – Technical analysis – [Fr]

Nov. 26 (Wed) NBDB – Day Trading – [Fr]

Nov. 26 (Wed) Scotia iTrade – Introduction to Canadian ETFs and ETF Options with Montreal Exchange (online)

Nov. 26 (Wed) TD Direct Investing – Introduction to Fundamental Analysis

Nov. 26 (Wed) Desjardins Online Brokerage (Disnat) – Trading ETFs with Desjardins Online Brokerage

Nov. 26 (Wed) TD Direct Investing – Options as an Income Strategy

Nov. 26 (Wed) TD Direct Investing – Do-It-Yourself Investing for Women

Nov. 27 (Thur) NBDB – Introduction to technical analysis: Supports and resistances – [Fr]

From the Forums

 On Cue

Although this is not one of the most popular comparisons, it was worth mentioning for two reasons. First, it’s an example of brokerages being compared head to head but also of where one brokerage is prepared to venture into so that they can reach those interested in their brand.  Check out this post for an interesting comparison of Questrade vs Qtrade and the comments (and commentators) on each.

Calculated Move

So, it seems like everyone is talking about Robo-advisors.  And, as they start to make their presence felt here in Canada, this post from the reddit personal finance Canada thread showcases one attempt to start comparing them.  Again, it looks like Questrade is all over this Reddit section with their newly released portfolio IQ figures in hand.

That’s a wrap for this week’s roundup.  It’s been an exciting week all around and for those who’ve made it this far, here’s a little treat from 30 Rock’s Tracy Jordan on how to handle this (and every) week ahead.  Have a great weekend!

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Discount Brokerage Weekly Roundup – November 14, 2014

This week has been one of milestones, or as we might say here in Canada, kilometer-stones. Perhaps the biggest stone of all with all of the kilometers or miles behind it was the first ever landing of a probe on a comet hundreds of millions of kilometers away.

Back here on Earth, investors this week apparently also had stars in their eyes. The big news from the US was markets touching new all-time highs, however even a Canadian marketplace, the Canadian Securities Exchange (CSE) crossed the 2 billion shares traded mark within a year; the first time that securities exchange has done so.

Not to be outdone, Canadian discount brokerages also had some technical achievements to marvel and tweet over.

In this week’s roundup we take a look at a new trading platform being launched into the mix by a bank-owned brokerage. Next we look at a marathon effort on social media from another brokerage that has earned them a bit of distinction from their online peers. On the home stretch will be a quick highlight of an article focusing on the power of communal advice. Finally we’ll showcase upcoming investor education events and close out with some investor banter from the forums.

BMO InvestorLine’s New Trading Platform: BMO Market Pro

BMO InvestorLine quietly rolled out their newest platform offering this past week – BMO Market Pro. After months in development it was interesting to see the soft-launch take place for this platform.

So, why a fancy trading platform?  

In a bid to compete with their bank-owned direct brokerage peers, BMO InvestorLine is throwing a more sophisticated order entry interface into their mix to attract and appeal to clients who want the bells and whistles. More importantly, they don’t want their clients who want those features to be wandering elsewhere to get them.

While public details on the platform are few, here are some early details. BMO Market Pro will include real-time data and analysis and also streaming charts with technical analysis studies. For individuals trading 30 times or more in a quarter (i.e. spending about ~$100/month on average in commission costs) or who maintain a balance of at least $500,000 the data fees for this platform are waived.

The trading platform is a very interesting battleground that we mentioned this past summer and with BMO Market Pro, it enables BMO InvestorLine to better compete against a similarly featured Scotia iTrade platform as well as some of the smaller players who rely on platforms as a key selling feature.

If history is any precedent, however, we anticipate a much larger splash to be right around the corner. Hopefully, however, the team at BMO InvestorLine can take a cue from US online brokerage Tradestation’s commercials from a few years ago (see the end of this week’s roundup for the video).

One Small Tweet for Brokerage-Kind

#Props must be given to the social media team at Questrade. Unlike several of their peers on Twitter, Questrade has been quite persistent in their efforts to be visible and relevant on social media.

Although we don’t typically report it, it is something we monitor. And, the reason that we mention it here is that they’ve done something that is worth commenting on out loud. Images from Questrade’s twitter feed are showing a lead up to a ‘special announcement’ on Nov. 17th.

The lead up itself is noteworthy as it takes the combination of personality and medium in an interesting direction. Equally interesting is that this announcement could be in line with earlier hints from Questrade’s CEO and posts on the Questrade blog as well as a lot of hype about advisors (and robo-advisors) of late.

What does it all mean?

While just speculation at this point, the addition of a wealth management arm does imply that this could be another area that Questrade is hoping to capitalize on while the interest level in this space continues to heat up. And, they wouldn’t be the first discount brokerage to make such a move.

For some context, the largest brokerage in the US Charles Schwab just announced that they would no longer be reporting monthly trading stats (boo) but as far as optics and brand identity go, they are looking to shift the perception of their business away from discount brokerage and towards wealth management (and full service). They also recently rolled-out robo-advisors in a big way.

The fact that we’re talking about it may be proof enough, however the fact that Questrade has teamed up with a popular Twitter personality means that they may have a little social media comet dust of their own with this next announcement and business direction.

More Than Just Cat Videos

Reddit brands itself as the ‘front page of the internet’ however there is definitely a sense of being an information frontier.

In a special piece we published this past week, we take a look at the growing influence of a popular Reddit thread, Personal Finance Canada (PFC). We also had the opportunity to interview one of the forum’s moderators to get a unique perspective on what draws people into the community space and what motivates the people who run it to keep going. Click here to read the full article.

Event Horizon

There’s lots going on with investor education related events this week, including the Desjardins Online Brokerage Stockscores tour.  Ready, Set, Scroll.

Nov 15. (Mon) Desjardins Online Brokerage (Disnat) – Coast to Coast Stockscores Tour – Edmonton

Nov 17. (Mon) Desjardins Online Brokerage (Disnat) – Coast to Coast Stockscores Tour – Calgary

Nov 17. (Mon) Desjardins Online Brokerage (Disnat) – Coast to Coast Stockscores Tour – Calgary

Nov 18. (Tue) Scotia iTrade – Day Trading with Pro Market Advisors

Nov 18. (Tue) TD Direct Investing – Minimum Volatility Investing

Nov 18. (Tue) TD Direct Investing – Introduction to Technical Analysis

Nov 18. (Tue) NBDB – Managing risk while investing in stock

Nov 18. (Tue) Desjardins Online Brokerage (Disnat) – Coast to Coast Stockscores Tour – Calgary

Nov 19. (Wed) NBDB – Mastering Technical Analysis for Trading Success – [Fr]

Nov 19. (Wed) TD Direct Investing – Introduction to Fundamental Analysis

Nov 19. (Wed) Desjardins Online Brokerage (Disnat) – Coast to Coast Stockscores Tour – Burnaby

Nov 19. (Wed) NBDB – Find trading opportunities using technical analysis

Nov 19. (Wed) Scotia iTrade – Getting Started With ETFs with iShares

Nov 19. (Wed) TD Direct Investing – Investing in a context of rising interest rates – [Fr]

 Nov 19. (Wed) Desjardins Online Brokerage (Disnat) – Coast to Coast Stockscores Tour – Burnaby

Nov 20. (Thur) NBDB – Take advantage of margin accounts – [Fr]

Nov 20. (Thur) TD Direct Investing – Unlocking the Value of your Locked-In RSP

Nov 20. (Thur) Scotia iTrade – Charts and Patterns 101 with AJ Monte

Nov 20. (Thur) Desjardins Online Brokerage (Disnat) – Coast to Coast Stockscores Tour – Surrey

From the Forums

TFSA SOS

This past week in the investor forums was noticeably quieter. That said, here was one particular thread that points to an investor who is opening their first TFSA and decided to ask the community of investors on Reddit for some advice. Click to see what the readers offered up.

Anonymous  Advice

As an add-on to our special on the personal finance Canada thread on reddit, this post on the forum captured the reactions and conversation that surrounded the topic of taking the advice of strangers.  There’s also a cool link in there to a ‘Because Money’ episode.

And that’s a wrap for this week’s roundup.  Congrats for making it through this week and and this roundup! Here’s some fun discount brokerage marketing from the US which may or may not inspire some Canadian brokerages to become a whole lot more entertaining.  Have a great weekend!

 

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Discount Brokerage Deals and Promotions – November 2014

*Updated Nov. 25* November is the month that many bargain hunters wait for all year long. The phenomenon of ‘Black Friday’ has taken on a life of its own with anybody who sells anything trying to ride the wave of deal hunter enthusiasm. Traditionally Canadian online brokerages have avoided the big discount day type of promotion, however last year Questrade jumped into the Boxing Day deal game with their own special promo. Given some of Questrade’s recent hints of upcoming service launches as well as the timing of expiry of an existing offer in late November, this month could herald a number of surprises.

While it is becoming a familiar refrain at the beginning of the month, no ‘new’ deals launched at the outset doesn’t mean that more aren’t coming. Heading into November the theme appears to be extending current offers, with at least 7 offers going to the end of this year if not out into early 2015.

There are offers that we’re already aware of that we’re working to get additional details on so there will be updates to this section you’ll want to check back for soon. In the meantime, let’s dive in.

Expired Deals

Technically speaking, only one deal met this criteria, and it is a familiar one in this section. Scotia iTrade’s “refer-a-friend” offer is posted on their website as having expired (at the time of writing this post) however historically it has yet to be allowed to stay there for too long.

Extended Deals

There were a number of extensions on offers which came mostly from BMO InvestorLine this month. Their young investor (yes up to age 35 is considered young) promotion has been extended through to January 2015 as has their ‘Smile’ promotion. BMO InvestorLine’s refer-a-friend offer has also been extended to October 2015 however the terms/conditions for this offer are only accessible to clients at this time so, although we mention it in our selection below, there won’t be a link to the terms/conditions page.

New Deals

*Update Nov. 22* BMO InvestorLine has launched a promotion to encourage its users to download and try the mobile/iPad app. BMO InvestorLine is offering qualified individuals up to 5 commission free trades within 30 days of downloading the app.  The 5 free trades offer is open to new and existing clients and can be combined with existing offers so it is possible to ‘stack’ this deal on top of another.

*Update Nov. 18* RBC Direct Investing  commission-free trading promotion for new account openings has been added to the mix. Specifically, qualified applicants can receive their first 20 trades (placed within 90days of opening the account) commission-free. See table below for additional details.

*Update Nov. 18* Questrade has also launched yet another deal this month – this time a cash-back offer.  Individuals can receive either $100 cash back or $250 cash back depending on the deposit they place into their account.  Individuals who sign up for this promotional offer will have to maintain the qualifying balance for a period of 6 months. See table below for additional details.

There are no new deals released at the outset of November however the offer from CIBC Investor’s Edge following their price drop was one of the biggest to land on the playing field. Questrade also offered up a $50 Visa gift card which we’re including in this month’s list of promotions. There is also another offer that we know of from a popular brokerage (that we can’t name yet) that we expect to announce as soon as we’ve got confirmation on terms and conditions.

Discount Brokerage Deals

Company Brief Description Minimum Deposit Amount Commission/Cash Offer Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitney and receive access to their preferred pricing package and a massive 45% discount on the Real Tick trading platform. n/a Discounted Commission Rates none For more details click here none
BMO InvestorLine For individuals between 18 and 35 who open a new qualifying account with BMO Investorline, they may be eligible to receive 35 commission-free trades, an eBook on investing and potentially waived account minimum fees. Use promo code “New” when signing up. Be sure to read the terms and conditions for more details on the offer. n/a 35 commission-free trades 90 days Youth Promotion January 5, 2015
Individuals opening a new account with RBC Direct Investing by December 31st may be eligible to receive a commission-rebate on their first 20 trades. Use promo code QC20 or visit the info page link for a valid code. Be sure to read the terms and conditions on this offer. n/a 20 commission-free trades 90 days Full offer information can be found here . For terms and conditions information click here. December 31, 2014
BMO InvestorLine Download the BMO InvestorLine iPad app and you could qualify for up to 5 commission-free trades. This offer is open to new and existing clients and can be combined with other offers. Clients must have a qualifying account in order to be eligible. Read full terms and conditions for details. n/a 5 commission-free trades ($50 max value) 30 days Tablet Trades Promotion January 5, 2015
Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc $1,000 $50 commission credit none none none
Refer a friend to Questrade and when they open an account you receive $100 and they receive $50. To receive this deal you must be an existing client with an equity account and refer a person that does not reside with you and who has not previously opened a Questrade account. $1,000 $50 commission credit (friend) $100 commission credit (referrer bonus) 60 days Refer a friend none
Open a new account (TFSA, Margin or RRSP) by November 20 2014 A) $1000 or B) $10,000 to receive either A) 10 commission-free trades or B)100 commission-free trades. The promo code 100LOWCOM14F must be used at time of account opening. There are many conditions attached to this offer so be sure to read the details link for more information. A)$1,000 B)$10,000 A)10 free trades B)100 free trades 60 days 100 commission-free trades November 20, 2014
Open a new account (TFSA, Margin, RRSP or FX/CFD) and place at least one trade within 60 days of opening and you may be eligible to receive a $50 prepaid Visa card from Questrade. Use promo code VISA50. Be sure to read terms and conditions for full details on this offer $5000 $50 Visa gift card Cards will be mailed within 40 business days of reaching account funding requirement. $50 Prepaid Visa Card Offer December 31, 2014
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
Scotia iTrade Open and fund a new Scotia iTRADE account with at least $15,000 before December 31, 2014 and the commissions associated with your first 100 trades placed within 60 days of the date the account is activated and funded are free. Also, the new FlightDesk platform is being offered for free for 60 days. Use promo code HUN-SP. See details link for further terms and conditions. $15,000 100 commission-free trades ($999 value @ $9.99 commission rate) 60 days Scotia iTrade 100 free trades + FlightDesk December 31, 2014
Scotia iTrade Open a new account with Scotia iTrade with either A) $15,000 – $99,999 B) $100,000 – $499,999 or C) $500,000+ and you may be eligible to receive either A)100 free trades or $50 cash B)250 free trades or $250 or C)500 free trades or $500 cash. Accounts must be opened prior to December 31st, 2014. New clients use code: FATD14E for free trades and code: MONF14 for cash back. Existing clients must call client service (1-888-769-3723) to qualify. Be sure to read terms and conditions regarding minimum balance requirements and other details. A)$15,000 – $99,999 B)$100,000 – $499,999 C)$500,000+ A) 100 commission-free trades or $50 cash B) 250 commission-free trades or $250 cash C) 500 commission-free trades or $500 cash For commission-free trades: 180 day limit For cash back: payout occurs by August 31, 2015 Cash back + Free trade offer December 31, 2014
Open a new account or fund an existing account at CIBC Investor’s Edge with at least A)$25,000-$49,999 B)$50,000 – $99,999 or C)$100,000+ and you may be eligible to receive A)$100 cash back and 25 free trades; B)$200 cash back and 50 trades or C)$300 cash back and 100 free trades. Be sure to read the terms and conditions for full details on this offer. A) $25,000 – $49,999 B) $50,000 – $99,999 C) $100,00+ A) $100 cash back + 25 commission-free trades B) $200 cash back + 50 commission-free trades C) $300 cash back + 100 commission-free trades Cash back payout occurs within 30 days of account funding; Time limit to use commission free trades is 60 days Investors Edge Cash Back and Free Equity Trades Offer February 28, 2015
Open and fund a new account with at least $50,000 at TD Direct Investing and you may be eligible to receive up to 200 commission-free trades plus 60 days of free use of the premium data for the advanced dashboard. Trades must be completed within 60 days. Be sure to read the terms and conditions for full details on this offer. $50,000 200 commission-free trades (or $2,000 of commission rebates – whichever comes first); Advanced dashboard premium data rebate ($87) 60 days to use trades (rebate may be paid by May 30, 2015) Commission-free Trade Offer November 21, 2014
Disnat Disnat is offering new & existing clients $300 in commission credits which can be used for up to 6 months. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1 800 268-8471 and mention promo code Disnat300. See details link for more info. $50,000 $300 commission credit 6 months Disnat $300 Commission Credit Promo December 31, 2014
Open and fund a new account at Questrade with at least A)$50,000 or B)$100,000 by December 30, 2014 and you may be eligible to receive either A)$100 cash back or B)$250 cash back. Use promo code: CASHBACK250W when opening the account. Be sure to read the terms and conditions for full details. A)$50,000 B)$100,000 A)$100 cash back B)$250 cash back Cash back payout occurs after 60 days. Questrade Cash Back Offer December 30, 2014
BMO InvestorLine If you refer a new client to BMO InvestorLine and they open an account with a)$50,000 – $249,999 or b)$250,000+ the referrer and the referee will both receive cash. The new account must be opened with the referral code specific to the referrer. A) $50,000 – $249,000 B) $250,000+ A) You(referrer): $200; Your Friend(referee): $50 B) You(referrer): $300; Your Friend: $100 Payout occurs after 60 days (subject to conditions). Contact InvestorLine for full terms and conditions. October 30, 2015
Open and fund a new account with at least $100,000 at Questrade and execute at least one commissionable trade and you may be eligible to receive an iPad Mini. Use promo code IPADMINI14F. Be sure to read terms and conditions for full details. $100,000 iPad mini (Wi-Fi only, 16 GB) iPad mini will be ordered within 30 days of eligibility criteria being met. Questrade iPad Mini Promo November 30, 2014
BMO InvestorLine Open and fund a new qualifying account at BMO InvestorLine with at least $100,000 in net new assets and you may be eligible to receive $250 cash back and a rebate of commissions on up to 25 trades made within 50 days of opening the account. Use the promo code SMILE when signing up for the account. Be sure to read full terms and conditions for eligibility and further details. $100,000 $250 cash back + 50 commission-free trades (rebated) 50 days (payout for cash back and commission rebate occurs after 6 months) Smile Promotion January 15, 2015

Transfer Fee Deals

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to Credential Direct and they will pay the transfer-out fees up to $150. If you wish to switch out of Credential Direct after 90 days they will waive their transfer out fee. See link for more details. $150 $15,000 Transfer Free Promo December 15, 2014
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer $25,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $25,000 Transfer Fee Rebate none
Qtrade Investor Qtrade Investor will reimburse your transfer fee up to $125 when transferring a balance of $25,000 or more. For reimbursement, please mail or fax a copy of your statement from the transferring institution that shows the transfer charge to Qtrade Investor at 604.484.2627 and indicate your Qtrade Investor account number. $125 $25,000 Transfer Fee Promo none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1 800 268-8471 and mention promo code Disnat300. See details link for more info. $150 $50,000 Disnat $300 Commission Credit Promo December 31, 2014
Transfer $50,000 or more to TD Direct Investing from another brokerage and you may be eligible to receive up to $150 in transfer fee rebates. $150 $50,000 Commission-free Trade Offer November 21, 2014
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Discount Brokerage Weekly Roundup – October 24, 2014

Makeovers seem to be making the headlines this past week. Markets this past week gave investor’s a bit of a portfolio makeover, actress Renee Zellweger got a bit of an extreme makeover and set the internet ablaze and even the Canadian discount brokerage landscape saw (and is about to get) a bit of work done.

In this week’s roundup we take our cues from a Zellweger movie-inspired theme to lead us through the makeover from a major bank-owned online brokerage pricing adjustment. Next we look at earnings from a pair of US brokerages to see what their operation looks like without the makeup on. Finally we’re proud to announce a new community feature from SparxTrading.com that we think will help change the landscape for the better for all DIY investors. Of course, our roundup will be completed by some insightful banter from the Canadian investor forums.

You Didn’t Quite Have Me at Hello

This past week saw an interesting announcement come from BMO InvestorLine regarding their flagship AdviceDirect platform. Specifically, BMO InvestorLine is changing the fee structure and lowering the threshold to participate from $100,000 down to $50,000.

While BMO InvestorLine has tactfully positioned this move as improving ‘accessibility’ the timing and nature of the changes demonstrate that evolutionary axiom: adapt or die.

It has been just over two years since BMO InvestorLine bet big that their unique AdviceDirect platform would meet a need for the “in-between” DIY investors who embrace the lone wolf approach, but still need the “pack” to provide counsel and confidence.

In the wealth management industry of today, however, two years is a long time to go status-quo. The “phone a friend” and flat fee approach of AdviceDirect has faced headwinds of ultra-low MER ETFs and the robo-advisor phenomenon. In fact, the same day BMO InvestorLine announced their changes to AdviceDirect, National Bank Direct Brokerage formally announced their launch of InvestCube service, an automated ETF management solution for DIY investors.

With new tiered pricing, fixed dollar charges and lower thresholds to participate, the new face of AdviceDirect may be more accessible to DIY investors. The challenge in front of BMO InvestorLine, however, is getting Canadian investors to pay attention in an even more crowded marketplace.

Show Me the Money

It’s earnings season for some major US online brokerages and with it comes a chance to ask or answer “how’s business?” Quarterly earnings for E*Trade Financial and Interactive Brokers seem to suggest the answer depends on who you talk to.

On the one hand, there is a ‘good news’ story. Bolstered by higher trade volume, E*Trade saw its third quarter earnings jump more than 31% as well as impressive performance on key metrics such as the number of trades and net new accounts. Interestingly the average commission per trade came in at $11.05 per trade, a number that seems incredibly high relative to Interactive Brokers’ average of $4.21 per trade. Nonetheless, after many years of grinding away at deleveraging their business, the results and market conditions are lining up in their favour. These latest results this represent a third successive earnings win for the US brokerage.

Interactive Brokers, on the other hand, probably provoked a wave of face palms from analysts and shareholders alike. The Q3 EPS tallied in at $0.05 – a far cry from the consensus estimates of $0.23. Among the reasons cited for the miss were some rather hefty losses (~$70M) by their market making segment demonstrating that markets can humble traders of all sizes. On a slightly more positive note for Interactive Brokers, they continued to see growth in the number of accounts (18% y/y) and total daily average revenue trades (DARTs) up 14% over the same period last year.

Help Me Help You

Many Canadians understand that being a DIY investor isn’t simple, but even so, we believe it certainly shouldn’t be prohibitively hard either. What we’ve observed over the few years we’ve been around is that one of the biggest sources of support for investors is actually other investors.

It’s both inspiring and awesome to know that there are lots of great online communities that investors of all experience levels can access to get support, encouragement and perspective on their investing journey.

So, after much research, discussion, caffeine and coding, we’re happy to announce first to the loyal weekly roundup readers that we’re launching a space on SparxTrading.com for the community of online brokerage users. We’ll have the official beta launch link on our Twitter feed so be sure to check our feed over the upcoming week to get the first look.

Ultimately we believe that by making finding and navigating information more efficient, we can improve the experience of being a DIY investor. We hope it will be a platform that will attract like-minded folks to help, support and learn from one another as well as a place to get reliable answers to questions relevant to their online brokerage experience.

Event Horizon

Attention all self-directed investor education and event enthusiasts, learning opportunities are abound. This week’s event horizon features a veritable potpourri of offerings. Sample and enjoy.

Oct. 25 (Sat)

  1. TD Direct Investing – Workshop: Getting Started with Options

Oct. 28 (Tues)

  1. NBDB – Introduction to Call Options
  2. TD Direct Investing – Introduction to Fundamental Analysis
  3. Scotia iTrade – Cash Management Using ETFs
  4. Desjardins Online Brokerage – Maximizing Your Trading Experience

Oct. 29 (Wed)

  1. TD Direct Investing – Understanding Margin & Short Selling
  2. Desjardins Online Brokerage – Portfolio construction using ETFs

Oct. 30 (Thur)

  1. TD Direct Investing – Introduction to Fixed Income
  2. NBDB – Introduction to Put Options

 From the Forums

Just when you thought you were out…

Is too much of a good thing no longer a good thing? In this forum post from Canadian Money Forum, a client of Scotia iTrade is testing the waters for what other investors might suggest as a good alternative. Check out the long list of pros and cons given to the author of the post from a handful of level headed voices.

Clear and present pricing

The impact of regulatory changes to the way brokerages report their fees shines through in this post from the Financial Wisdom Forum. In the post a BMO InvestorLine user details a breakdown of a potential bond transaction and shows that when brokerages are more transparent with pricing, good things can happen.

 

That does it for this week’s roundup. It has been a tough week for Canada. Going into the weekend, the SparxTrading.com team salutes and says thank-you to the brave men and women who, because of their courage and sacrifice, make this country the great nation that it is.

 

Credit: Nathan Denette/CP
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Discount Brokerage Weekly Roundup – October 10, 2014

Whether you’re rolling into the end of the week like a new Tesla or like a slightly battered blue chip, congrats on making it to the Thanksgiving holiday weekend. Even Canadian discount brokerages are getting into the spirit by dishing out a generous helping of interesting stories for DIY investors to tuck into this weekend.

In this week’s roundup, we’ll start with an exciting dish: a deal announced from one of Canada’s largest discount brokerages. You’ll want to sample the sides as well; Dalbar Canada served up a ranking award to a popular Canadian online brokerage. And speaking of rankings, we’ve dished out a big scoop of our special series on J.D. Power & Associates’ 2014 Canadian discount brokerage rankings. Finally, we’ll send you home with a few parting gifts from the forums, if you can make it out the door.

Pass the Greens

It’s official, discount brokerage deal season is here. Just ahead of the long weekend, TD Direct Investing served up a holiday platter of its own. The skinny: it’s a commission free trade offer for those with $50,000 or more. The dish includes a hearty number of commission-free trades, up to 200 (which could be worth up to $2,000 in maximum savings). For extra helpings on the details, check out our discount brokerage deals page.

Let’s Get this Party Started

TD Direct Investing’s latest offering arrives on the heels of the recent move by CIBC Investor’s Edge, who officially slashed their standard trading commission rates to $6.95. TD’s response mirrors one  from earlier this year when they lowered standard pricing to $9.99 per trade in response to RBC Direct Investing’s radical price drop.

The price war between Canadian discount brokerages is on and collateral damage is likely intended. While self-directed investors are reaping the rewards,  discount brokerages without a big deal or low standard fees are on the clock and will need more than Pepto-Bismol to deal with the “agita”.

Undo that Belt Buckle, It’s Dessert Time

We’re rolling out the roundup sweet table with a piece of our special series pie. This week’s confection features our first installment of the review of the 2014 J.D. Power & Associates’ Canadian discount brokerage rankings.

The article explored how investor satisfaction is measured and why that matters for those who use the rankings when evaluating potential brokerages. Also baked into our special series are some fascinating investor satisfaction insights into price and perception. Don’t forget to save room for part 2 which is coming around the corner.

Making a Statement

This past week saw Questrade take the top spot amongst several Canadian discount brokerages for the quality of their investor statements as evaluated by Dalbar Canada.

The evolution of the Canadian financial regulatory landscape has meant that brokerage firms are increasingly being required to disclose critical information about fees and charges for the services they provide.When it comes to statements, however, there is a unique opportunity to provide clients with additional information that may be of value.

It was in this light that Questrade’s investor statements stood out amongst their peers earning  a “very good” designation for their efforts  – the only Canadian discount brokerage of those evaluated to do so.   The discount brokerages that had their statements evaluated as part of this year’s study included:

  1. BMO Investorline
  2. CIBC Investor’s Edge
  3. HSBC InvestDirect
  4. Questrade
  5. TD Direct Investing
  6. RBC Direct Investing
  7. Scotia iTrade

As online brokerages continue to navigate their way through the new low-commission price environment, they will inevitably turn their attention to details big and small to improve customer experience. And, the attention they pay to great client experiences might just be the statement that speaks the loudest to consumers.

From the Forums

Fee Fight Fo Funds

Discount brokerages aren’t the only financial players locked in a heated price war.  ETF providers north and south of the border are also battling one another on fees much to the delight of DIY investor portfolios everywhere.  This past week one of the big stories for do-it-yourselfers was ETF provider Vanguard lowering their fees on many of their already low commission ETFs.   Forums were abuzz and we’ve compiled the threads here for easy reading:

  1. Canadian Money Forum – “Vanguard Canada lowers fees on 11 ETFs”
  2. Financial Wisdom Forum – “Vanguard Canada Cutting Fees”
  3. Reddit Canadian Personal Finance – “Vanguard Canada cuts ETF fees across the board”
  4. RedFlagDeals’ Investing Forum – “Vanguard drops fees on 11 of its Canadian ETFs”

Extra Stuffing

Who doesn’t like a great deal? Although this thread didn’t get much attention, it did contain an interesting comparison between the promotions currently underway at CIBC Investor’s Edge and Scotia iTrade. Readers get an extra nugget of information about forex conversions that is likely to get some folks grinning wider.

That does it for this week’s roundup.  Don’t “fur”get that Canadian markets will be closed on Monday for the holiday weekend. Hopefully the only trading this weekend will be great stories, fantasy sports picks and great recipes.  Have a safe and enjoyable weekend!

 

 

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Discount Brokerage Deals and Promotions – October 2014

*Updated October 9, 2014*

Savvy traders understand that there’s always a bull market somewhere.  Even though the recent pull back in the major stock markets and indices suggests investors may be cooling off, Canadian discount brokerages have a different idea, especially when it comes to promotions.

We began last month with a brief lull in the number of offers pitching 50 or more free trades.  Halfway through September, however, that changed dramatically when Scotia iTrade launched one of its largest offers to date: 500 commission-free trades (or $500 cash back) for deposits of $500,000 or more.   This was a unique offer (which we detailed in an article here), because it signaled a decisive shift by Scotia iTrade to get the attention and assets of investors with substantial portfolios.

The deals on the calendar at the start of the month arrived in late September and look to be around until at least the end of the current month if not longer.  A noteworthy transfer deal also showed up from Credential Direct, a sign that they too may be stepping up their efforts at competing with other Canadian brokerages.

Expired Deals

The end of September saw 2 deals from Questrade expire: their Cash Back Promo and RESP Offer.

Extended Deals

The deal that got extended this past month was Questrade’s 100 free trade offer with a new deadline of October 30th.

New Deals

*Update Oct. 9, 2014: The deals are heating and this time one of Canada’s largest discount brokerages, TD Direct Investing, has been spotted promoting a commission-free trade offer. For individuals depositing at least $50,000, the full offer includes up to 200 commission-free trades (maximum rebate of $2,000),  a rebate for their advanced dashboard premium streaming package (maximum rebate of $87) and for those who transfer funds in, coverage for up to $150 of transfer fees. The trades must be placed within 60 days of the account opening in order to be considered eligible for the rebate.  Also, global equity trades are not eligible as part of this offer.

*Update Oct. 6, 2014: As part of their big price drop announcement, CIBC Investor’s Edge has also dropped a major deal into play with their newest offer that combines free trades AND a cash back component too.  Unlike many of the deals we’ve seen before, this is a fairly aggressive offering which certainly got our attention and will likely do the same for consumers and other brokerages.  For starters, a deposit of $25,000 in assets qualifies an individual for $100 cash back and 25 free trades; a deposit of $50,000 – $99,999 qualifies for $200 cash back and 50 free trades; and deposits of $100,000+ qualify for $300 cash back and 100 free trades. Given the different tiers for this offer, CIBC Investor’s Edge is coming out swinging at the other discount brokerages big and small and so we expect some kind of interesting responses to come up in short order.

As was the case last month, this month isn’t starting with any new deals announced as of the beginning of the month.  Midway through September, however, a number of deals did appear.  One of the deals we’ve mentioned already was the Scotia iTrade ‘500 commission-free trade’ offer, however there was also the infamous iPad Mini offer from Questrade which is back again and a transfer fee offer from Credential Direct that showed up.  Specifically, Credential Direct is offering a transfer fee promo where individuals can have the transfer fee rebated if they switch to Credential Direct from another broker (with at least $15,000) and Credential Direct will waive the fee in case that clients wants to ‘switch out’. This offer is something we’ve seen before from Credential Direct however coupled with their recent commission price drop, there is a good possibility that we may see more from them in terms of promotions this upcoming year.

As always we appreciate hearing about and sharing deals that we may have missed.  As a general guideline, deals that we can include directly on our listing have to be open to all potential clients but users may post links to offers in the comments section that might apply to certain readers

Discount Brokerage Deals

Company Brief Description Minimum Deposit Amount Commission/Cash Offer Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitney and receive access to their preferred pricing package and a massive 45% discount on the Real Tick trading platform. n/a Discounted Commission Rates none For more details click here none
BMO InvestorLine For individuals between 18 and 35 who open a new qualifying account with BMO Investorline, they may be eligible to receive 35 commission-free trades, an eBook on investing and potentially waived account minimum fees. Use promo code “New” when signing up. Be sure to read the terms and conditions for more details on the offer. n/a 35 commission-free trades 90 days Youth Promotion October 31, 2014
Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc $1,000 $50 commission credit none none none
Refer a friend to Questrade and when they open an account you receive $100 and they receive $50. To receive this deal you must be an existing client with an equity account and refer a person that does not reside with you and who has not previously opened a Questrade account. $1,000 $50 commission credit (friend) $100 commission credit (referrer bonus) 60 days Refer a friend none
Open a new account (TFSA, Margin or RRSP) by October 30 2014 A) $1000 or B) $10,000 to receive either A) 10 commission-free trades or B)100 commission-free trades. The promo code 100LOWCOM14F must be used at time of account opening. There are many conditions attached to this offer so be sure to read the details link for more information. A)$1,000 B)$10,000 A)10 free trades B)100 free trades 60 days 100 commission-free trades October 30, 2014
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 October 31, 2014
Scotia iTrade Open and fund a new Scotia iTRADE account with at least $15,000 before June 30, 2014 and the commissions associated with your first 100 trades placed within 60 days of the date the account is activated and funded are free. Also, the new FlightDesk platform is being offered for free for 60 days. Use promo code HUN-SP. See details link for further terms and conditions. $15,000 100 commission-free trades ($999 value @ $9.99 commission rate) 60 days Scotia iTrade 100 free trades + FlightDesk December 31, 2014
Scotia iTrade Open a new account with Scotia iTrade with either A) $15,000 – $99,999 B) $100,000 – $499,999 or C) $500,000+ and you may be eligible to receive either A)100 free trades or $50 cash B)250 free trades or $250 or C)500 free trades or $500 cash. Accounts must be opened prior to December 31st, 2014. New clients use code: FATD14E for free trades and code: MONF14 for cash back. Existing clients must call client service (1-888-769-3723) to qualify. Be sure to read terms and conditions regarding minimum balance requirements and other details. A)$15,000 – $99,999 B)$100,000 – $499,999 C)$500,000+ A) 100 commission-free trades or $50 cash B) 250 commission-free trades or $250 cash C) 500 commission-free trades or $500 cash For commission-free trades: 180 day limit For cash back: payout occurs by August 31, 2015 Cash back + Free trade offer December 31, 2014
Open a new account or fund an existing account at CIBC Investor’s Edge with at least A)$25,000-$49,999 B)$50,000 – $99,999 or C)$100,000+ and you may be eligible to receive A)$100 cash back and 25 free trades; B)$200 cash back and 50 trades or C)$300 cash back and 100 free trades. Be sure to read the terms and conditions for full details on this offer. A) $25,000 – $49,999 B) $50,000 – $99,999 C) $100,00+ A) $100 cash back + 25 commission-free trades B) $200 cash back + 50 commission-free trades C) $300 cash back + 100 commission-free trades Cash back payout occurs within 30 days of account funding; Time limit to use commission free trades is 60 days Investors Edge Cash Back and Free Equity Trades Offer February 28, 2015
Open and fund a new account with at least $50,000 at TD Direct Investing and you may be eligible to receive up to 200 commission-free trades plus 60 days of free use of the premium data for the advanced dashboard. Trades must be completed within 60 days. Be sure to read the terms and conditions for full details on this offer. $50,000 200 commission-free trades (or $2,000 of commission rebates – whichever comes first); Advanced dashboard premium data rebate ($87) 60 days to use trades (rebate may be paid by May 30, 2015) Commission-free Trade Offer November 21, 2014
Disnat Disnat is offering new & existing clients $300 in commission credits which can be used for up to 6 months. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1 800 268-8471 and mention promo code Disnat300. See details link for more info. $50,000 $300 commission credit 6 months Disnat $300 Commission Credit Promo December 31, 2014
BMO InvestorLine If you refer a new client to BMO InvestorLine and they open an account with a)$50,000 – $249,999 or b)$250,000+ the referrer and the referee will both receive cash. The new account must be opened with the referral code specific to the referrer. A) $50,000 – $249,000 B) $250,000+ A) You(referrer): $200; Your Friend(referee): $50 B) You(referrer): $300; Your Friend: $100 Payout occurs after 60 days (subject to conditions). Refer A Friend Terms & Conditions October 31, 2014
Open and fund a new account with at least $100,000 at Questrade and execute at least one commissionable trade and you may be eligible to receive an iPad Mini. Use promo code IPADMINI14F. Be sure to read terms and conditions for full details. $100,000 iPad mini (Wi-Fi only, 16 GB) iPad mini will be ordered within 30 days of eligibility criteria being met. Questrade iPad Mini Promo November 30, 2014
BMO InvestorLine Open and fund a new qualifying account at BMO InvestorLine with at least $100,000 in net new assets and you may be eligible to receive $250 cash back and a rebate of commissions on up to 25 trades made within 50 days of opening the account. Use the promo code SMILE when signing up for the account. Be sure to read full terms and conditions for eligibility and further details. $100,000 $250 cash back + 50 commission-free trades (rebated) 50 days (payout for cash back and commission rebate occurs after 6 months) Smile Promotion November 2, 2014

Transfer Fee Deals

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to Credential Direct and they will pay the transfer-out fees up to $150. If you wish to switch out of Credential Direct after 90 days they will waive their transfer out fee. See link for more details. $150 $15,000 Transfer Free Promo December 15, 2014
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer $25,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $25,000 Transfer Fee Rebate none
Qtrade Investor Qtrade Investor will reimburse your transfer fee up to $125 when transferring a balance of $25,000 or more. For reimbursement, please mail or fax a copy of your statement from the transferring institution that shows the transfer charge to Qtrade Investor at 604.484.2627 and indicate your Qtrade Investor account number. $125 $25,000 Transfer Fee Promo none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1 800 268-8471 and mention promo code Disnat300. See details link for more info. $150 $50,000 Disnat $300 Commission Credit Promo December 31, 2014
Transfer $50,000 or more to TD Direct Investing from another brokerage and you may be eligible to receive up to $150 in transfer fee rebates. $150 $50,000 Commission-free Trade Offer November 21, 2014
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Kind of a Big Deal: Scotia iTrade Raises the Stakes for Discount Brokerage Deals

Earlier last week the Canadian discount brokerage landscape saw a massive deal unfold. Scotia iTrade, one of Canada’s bank-owned online brokerages, launched their latest offer: 500 commission-free trades or $500 cash back for deposits of $500,000 (or more). Yes, that’s correct, 500 commission-free trades or $500 cash back.

Aside from the headline grabbing numbers, what arguably makes Scotia iTrade’s most recent deal interesting to highlight is its timing, scope and what it signals to the other discount brokerage players on the field. The message Scotia iTrade seems to be sending to the other players: get ready to play hard ball.

What’s Being Offered

As Scotia iTrade’s promotional machinery kicks into high gear, many online investors (especially if they spend enough time surfing online) will inevitably come across the splashy advertisement with 500 free trades in big bold red letters.

Drilling down into the deal, however, reveals that there are two other tiers of commission-free trade/cash-back offers that investors may be eligible for. The initial tier is for deposits of $15,000 to $99,999 which qualifies individuals for either a cash rebate of $50 or 100 commission-free trades (valued at $9.99 per trade). The next tier is for deposits of $100,000 to $499,999 and offers $250 cash back or 250 free trades.

While the top tier offer is going to raise eyebrows, the other two offer tiers directly challenge offers from both bank-owned brokerages, such as BMO InvestorLine and independent brokerages such as Questrade.

Timing the Market

For much of 2014, the big story amongst Canadian brokerages has been the dropping of the standard commission rate by RBC Direct Investing. Interestingly, although several of their bank-owned brokerage peers quickly followed suit, Scotia iTrade elected not to lower its standard commission fee per trade (which currently sits at a minimum of $24.99 per trade) for those with balances under $50,000.

Instead of lowering their standard commission-price, Scotia iTrade has chosen to look at other strategies to enhance the value of their offering. These moves include lowering their commissions for their most active traders (defined as those who make 150 or more trades per quarter) from $6.99 to $4.99, promoting their ‘loyalty’ program Scotia iClub and widening the eligibility threshold of what it takes to qualify for preferred pricing ($9.99 per trade).

Against this backdrop, the deal currently being offered makes sense with Scotia iTrade’s current strategy of trying to improve the value to clients with higher assets or who are more valuable to the business (such as highly active traders).

While the strategy of not lowering their standard commission fee appears in line with their other moves so far, what is particularly interesting is how this has been received by consumers and industry observers. As we mentioned in our weekly roundup from September 12th, Rob Carrick from the Globe and Mail has made it clear that Scotia iTrade’s performance in this year’s online brokerage rankings will likely be weaker because they are not competing on price (both amount and simplicity) with most of the other Canadian discount brokerages. Also, the latest results from the 2014 JD Power Investor Satisfaction Survey put Scotia iTrade second-to-last, signaling that they are falling behind their peers in terms of client satisfaction.

Thus, the choice by Scotia iTrade to keep their standard pricing intact means they’re going to have to get creative at challenging their competitors, especially for the segment of clients with less than $50,000 in assets.

Chasing the Podium

So, what does this latest deal mean for Scotia iTrade’s potential clients and competitors?

First, it will certainly succeed in getting everybody’s attention. Whether it’s 500, 250 or 100 free trades, Scotia iTrade is trying to wave a big flag on value. Interestingly, they’ve also signed on as sponsors for the World Money Show and co-sponsored Larry Berman’s cross-Canada education tour all of which are taking place this Fall. In order to compete with and perhaps get ahead of the Globe and Mail discount brokerage rankings, Scotia iTrade looks like they’re ramping up their own marketing efforts in a big way.

Second, Scotia iTrade is definitely positioning itself to compete for clients with larger assets. Whether someone will actually pony up $500,000 for $500 or that large number of trades is hard to predict, however landing just one of those clients would represent 10 to 100 times the value of clients being sought after by other brokerages’ incentives. On Scotia iTrade’s part this offer is also strategic in that there are no other advertised offers for clients with this level of assets (other brokerages do have offers for higher portfolio amounts but they aren’t advertising them as widely). As such, Scotia iTrade has created the field for this asset level and now is the only player on it.

Finally, Scotia iTrade’s offer dwarfs the only other advertised offer from a bank-owned online brokerage.

Currently, BMO InvestorLine is the only other bank-owned brokerage that is advertising a promotion for deposits of $100,000 or more. Its offer of 25 commission-free trades or $250 cash back has been topped substantially by Scotia iTrade which is offering 250 free trades or $250 cash back for the same deposit ($100,000). In addition to offering 10 times as many trades, the window of time to use those trades is three times as long (180 days for the iTrade offer vs 50 days for BMO InvestorLine).

Online brokerages such as Desjardins Online Brokerage and Questrade are offering comparable deals to the lower tiers of Scotia iTrade’s offer but at a lower deposit level. More details on these promotions can be found at our discount brokerage deals and promotions section here.

The Bottom Line

On several levels, the timing and scope of Scotia iTrade’s latest offer is an interesting play for investors and competitors alike.

While finding a high value client who would be actively investing/trading to use up the 500 trades would be a great catch for iTrade, it seems that they’re banking on the deal to generate interest and buzz and hopefully people through the online door.

As they head into the Globe and Mail discount brokerage rankings for this year, Scotia iTrade is ramping up its visibility and hoping that, in spite of their higher pricing, investors will look to them for value in the form of promotions and services. With Scotia iTrade pushing this hard, it’s now going to be up to their competitors to decide which brokerage is going to be viewed as second-best.