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Discount Brokerage Deals & Promotions – July 2020

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

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

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

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

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

Expired Deals

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

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

Extended Deals

No extended deals to report at this time.

New Deals

No new deals to report at this time.

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

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

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

Referral Promotions

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

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

Transfer Fee Promotions

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

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

Other Promotions

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

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

Digital Advice + Roboadvisor Promotions

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

Offers for Young Investors

Brokerage Offer Type Eligible Age Range / Client Segment Offer Description Min. Deposit Expiry Date Link
Student Pricing Clients with CIBC Smart™ Account for students $5.95 per trade and zero annual account fees not required None CIBC Student Pricing
Broker@ge 18-30 18-30 years old investors Benefits: * 5 free transactions (Minimum deposit of $1,000 required) * No inactivity fees * No asset minimum to maintain for free registered accounts * Exclusive events * Disnat Mobile App $1,000 None Broker@ge 18-30
Offers for professionals & Students Students in selected fields of study Professionals and students in the below fields can benefit from a reduced pricing structure: * Engineering students * Legal, accounting and business students * Healthcare students * Health sciences students * Nursing students Benefits: * $5.95 commission on equities * $0 commission on ETFs * $0 annual administration fee not required None NBDB Student Pricing
Young investor pricing 18-30 years old investors Benefits: * $7.75 commissions for stock and ETF trades * No account minimums * No quarterly admin fees min. $50 a month through pre-authorized contributions. None Young Investor Pricing
Waiver of account maintenance fee Clients who have RBC Student account, currently or in the past 5 years. The Maintenance Fee ($25 per quarter) is waived, regardless of the account balance. not required None Zero Account Management Fee
Young Investors Offer Clients below 26 years old Low activity account administration fee and the RSP account administration fee are waived. not required None Young Investors Offer
Zero Account Administration Fee Clients below 26 years old The account administration fee ($24.95 per quarter) is waived. not required None $0 Account Administration Fee
Last Updated: Jun. 30, 2020 16:45PT
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Discount Brokerage Weekly Roundup – June 22, 2020

Summer is officially here. With warmer weather now upon us and progress – albeit slower than anyone would like – in the battle against COVID-19, it appears that there is reason for some cautious optimism. A group feeling particularly optimistic heading into the summer are Canadian discount brokerages. The combination of standard commission rates and higher trading volumes means a rising tide for the fortunes of Canada’s brokerages.

In this week’s edition of the Roundup, we hop back into the saddle after a week away and profile the interesting shift to Canadian online brokerages being candid about the numbers of investors opening accounts. From there, we focus in on the signs of change taking place at a pair of online brokers and the visual shift to become more diverse on their website. As always, we’ll close out the roundup with chatter from the investor forums and on Twitter.

Counting on Numbers: Online Brokerage Activity in the Spotlight

For Canadians, our neighbours to the south are a constant source of news and focus. In covering the online brokerage marketplace in Canada, however, the activities in the US take on an even greater significance. The US online brokerage space – and by extension the activities of retail investors that funnel trading activity through those brokerages – provides an interesting window into the trends impacting investors who choose to trade stocks online.

One of the biggest stories in the online brokerage space that we have been monitoring and reporting on since March of this year has been the spike in investor interest in participating in the stock market.

In what would normally be an environment that would “scare” investors away, the reality of the whipsawing market in hard numbers from US online brokerage shows just the opposite. The volatility in the markets has caused a surge in online investing account openings as well as record trading activity. Even though the word “unprecedented” has been tossed around a lot during the COVID-19 pandemic, the reality is that online brokerages in the US have never really seen this level of interest and activity in their history.

Which brings us to Canada. The news around trading activity among Canadian DIY investors and what that means to Canadian discount brokerages is only starting to trickle through.

Unlike their US counterparts, Canadian online brokerages are not publicly traded – at least not as a pure play, the way Interactive Brokers, Schwab, Ameritrade (which is in the process of being acquired by Schwab), and E*Trade (which is in the process of being acquired by Morgan Stanley) are. Those US online brokerages frequently and regularly comment on their performance, which includes standard key performance indicators (KPIs) on the success or health of the business. Included in those metrics is usually data on trading volume, revenue from trading, and the total number of customers, as well as new customer accounts, in any given period. Because the US online brokerages are publicly traded, they are required to disclose a lot more about their business than private companies are.

In the Canadian online brokerage marketplace, however, things are very different. Online brokers in Canada are normally coy or silent about the hard numbers regarding account openings, trading volume, and revenue generated from trading commissions. But these are not normal times, and the news cycle covering online brokerage activity among retail investors in Canada has a surprisingly high number of online brokerages disclosing information about the numbers of accounts opened and trading volumes – to a degree.

Over the past few weeks, Canadian online brokerages such as BMO InvestorLine, Questrade, Scotia iTRADE, TD Direct Investing, and Wealthsimple Trade have weighed in on the record levels of trading and account openings they have witnessed. This past week, BNN Bloomberg cited numbers from a recent Investor Economics report that showed close to 500,000 accounts were opened in the first quarter of the year here in Canada. The fact that online brokerages or BNN are talking about these numbers at all is highly unusual. However, when diving into the numbers themselves, it is also worth noting that there is no analogous disclosure mechanism in the US that would require or compel an online brokerage in Canada to reveal these numbers. In other words, it’s largely the honour system at play. The operative questions would be why – or at least why now – and what would they stand to gain by putting these numbers “out there”?

One important reason is because the traditional media is putting a spotlight on the issue, it is a great time to get additional exposure without having to dip too far into an advertising/marketing budget. Having a platform like BNN reach out to discuss the state of the markets and the retail investor angle is certainly a great way to gain exposure on a topic that is central to their business. A second reason to start flexing on numbers is to indicate to potential clients the “popularity” of the brand with online investors.

The saying in the stock market is that higher prices lead to higher prices. When it comes to sharing how many online investors call a particular brokerage home, it spotlights an important – and difficult to contest – set of attributes about a brokerage: that they are where people ultimately decide to open accounts. In a muddied world of “best online brokerage” statements, the number of actual online trading accounts that a Canadian brokerage can demonstrate can go a very long way in shaping whether investors feel confident in a particular brokerage.

The forces that have driven online investors to open up online trading accounts – namely uncertainty around the impacts of COVID-19 – are likely to be in place for some time. As such, it will still likely impact the number of newer investors coming into the markets and result in elevated trading volumes. For Canadian online brokerages, that means the forecast for online trading is bullish.

That said, for online brokerages, there is clearly a shift in strategy taking place during these market conditions. From contractions in advertising and incentive offers, to increased conversations about the industry, markets, and their own strengths and success, Canadian discount brokers are once again finding ways to distinguish themselves from one another. That is going to be even more important now that new entrants are coming into the fray and vying for investor attention.

Signs of Change

In addition to the news being heavily focused on the COVID-19 pandemic, there has also been an important focus on diversity, inclusion, and ending discrimination. In the online brokerage world, indeed in the world of financial services, one interesting angle we have observed over the years has been the visual portrayal of an investor.

Historically – and, more precisely, within the past five years – there has been a gradual shift in the way in which the Canadian online brokerage industry has started to think about what an online investor “looks like,” and by extension what that translates into on their websites.

This past week, there were two important visual developments noted at Interactive Brokers and Virtual Brokers.

In the case of Interactive Brokers, the hero image (the primary image that a user who visits a website sees) was replaced: from the iconic Wall Street – or even white male – investor to a professional-looking female. Visually, this is an important shift for Interactive Brokers, whose commercials and imagery have largely leaned into the portrayal of the target client as the active (male) trader. In fact, the images shown below compare what Interactive Brokers had on their website in April and what they have replaced it with just recently. While there is still work to do as far as capturing visual diversity – in particular, ethnic diversity – it was nonetheless commendable to see the change in visual direction, especially at the homepage level.

Another Canadian online brokerage that has taken an important visual direction change is Virtual Brokers. This past week, a new layout on the homepage appeared in which the people profiled look very different from those who were there previously. Below are images from the website (snapshots taken at the end of 2019 and this past week) that show how dramatically different the portrayal of people (DIY investors) now feels, especially in light of the conversation around diversity and inclusion.

While changes to visual imagery or website layouts are generally not something that makes the news, the conversation about being discriminated against or being biased against because of skin colour or gender is a conversation taking place right now. Whether or not the timing of these changes is coincidental or deliberate to what is going on right now with respect to greater awareness of discrimination around the world, looking at these two changes that have taken place through the lens of diversity and inclusion drives home the point that how online brokerages – especially Canadian online brokers – think about DIY investors needs to change. At the very least, leadership (and every level of the organization) should be conscientiously asking, how representative of the Canadian population’s diversity is their brand? Are they truly listening and reflecting the social fabric? Or are they perpetuating biases around who can be an investor or who can be wealthy and what they should look like?

Progress may not always happen quickly or in a straight line, but it is clear when you see it, and these days, we certainly would welcome seeing more of it.

Discount Brokerage Tweets of the Week

From the Forums

Week In, Weak Out?

A Redditor turns to the forum to ask if it’s smarter to invest weekly or biweekly in this post. Fellow users reflect on the negligible impact of such a short timeframe while considering the amount of effort it may take.

Walk in the Park

In this post, a DIY Investor wonders where the best place to “park” their money is while they save for the down payment on a house. Fellow forum users share advice and their past triumphs and missteps in the same journey.

Into the Close

That’s a wrap for the first Roundup of the summer. With many parts of Canada opening up again, hopefully there are lots of opportunities in the days ahead to enjoy some good summer weather (responsibly, of course!). Traders will certainly be treating the markets like a barbeque and keeping an eye on just about everything that’s happening daily. Here’s hoping good news is less than rare this week!

 

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Discount Brokerage Weekly Roundup – June 8, 2020

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

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

Supporting Change

Resolving difficult issues requires both commitment and resolve.

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

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

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

 

Questrade Promotions Take Centre Stage

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

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

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

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

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

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

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

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

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

Discount Brokerage Tweets of the Week

 

From the Forums

DIY or Bust

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

Minimizing Risk of Transfer

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

Into the Close

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

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Discount Brokerage Deals & Promotions – June 2020

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

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

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

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

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

Expired Deals

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

Extended Deals

No extended deals to report at this time.

New Deals

No new deals to report at this time.

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

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

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

Referral Promotions

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

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

Transfer Fee Promotions

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

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

Other Promotions

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

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

Digital Advice + Roboadvisor Promotions

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

Offers for Young Investors

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

For anyone watching any kind of news or social media, it is difficult to fully process what is unfolding in cities around the world. With so many of us in Canada and around the world still under restrictions to stay close to home, the window to the outside world has become a digital one. Despite even greater access to technology and almost limitless amounts of information, collectively we are struggling to make sense of something so senseless.

So, although we will run this edition of the Roundup, the most important story, the one that needs to be heard, will be first. Take a moment to watch it, hear it, and let it sink in. From there we will take a pause, catch our breath, and do our best to continue to move forward. Keep reading for a deep dive into the latest Canadian online brokerage rankings and what they reveal about the state of the industry, including what it needs to get right with the next generation of DIY investors. Finally, we close out with chatter from DIY investors on Twitter and in the financial forums.

George Floyd

Latest Online Brokerage Rankings Show Room for Improvement

If there’s one thing that’s synonymous with the end of the school year, it’s report cards. For Canadian discount brokers, the grades are in from a noteworthy financial services research firm and it’s clear that for many of them, improvement is needed.

Though seemingly straightforward on the surface, online brokerage reviews and rankings are challenging endeavours. So much about rating online brokers depends on how the rankings are defined and what is actually being measured, which is why it is often hard to compare different online brokerage rankings. They simply measure different things about the Canadian discount brokerage industry.

This past week, the financial services research unit of J.D. Power released their annual evaluation of the Canadian online brokerage industry with their Self-Directed Investor Satisfaction Study. Though the name and the study have changed slightly over the 12 years this evaluation has taken place, at its core, it continues to measure “investor satisfaction” and uses that to determine which Canadian discount broker is “best.”

Before diving into this year’s results, it’s worth mentioning a few points about the study itself, to better contextualize what it does (and does not) measure.

The first and probably most important factor to note is that the Investor Satisfaction Study measures just that: investor satisfaction. In this study, investor satisfaction is comprised of seven components:

  1. Account information
  2. Commissions and fees
  3. Firm interaction
  4. Information resources
  5. Investment performance
  6. Problem resolution
  7. Product or service offering

Given that investor satisfaction is somewhat of an abstract concept, it is useful to have these categories in place to help structure how to think about the ultimate question when it comes to any client experience: were clients satisfied with the product or not?

Of course, while it would be nice to get a simple “yes” or “no” answer, the reality is that these are complex concepts and there are things that brokerages do differently, perhaps better or worse than others. Further, how investors interpret things like “customer experience” may be highly subjective and as such make it a challenge to measure. Nonetheless, the scale that the Investor Satisfaction Study is built on is a numerical one that scores all brokerages out of a maximum possible 1,000 points.

With that context in mind, it was interesting to see what the 2020 version of the study uncovered in terms of Canadian DIY investor perspective. More interesting, however, was the comparison of this year’s results to the previous year’s, as it uncovers important differences and shifts in the industry that have taken place since the last time this study was conducted.

At a high level, one of the first things that stands out about the 2020 results is the drop in average investor satisfaction compared to the 2019 study. The average for the industry this year was 717, but last year it was 726 – a sign that the industry did worse when it came to investor satisfaction.

Averages, however, only convey part of the picture. What was also interesting to take note of is that the spread between scores narrowed.

Last year the difference between the best ranked online brokerage (with a score of 753) and the lowest ranked brokerage (with a score of 698) was 55 points. This year, that range dropped to 33. In fact, with the exception of 2019, since 2013 and 2014 (where the range was 64 points) the spread between “the best” and “the worst” in terms of investor satisfaction had been decreasing.

The compression of this range seems to suggest that DIY investors are finding the experience increasingly similar between Canadian online brokerages, a signal that commoditization is taking hold and that online brokerages are not doing nearly enough to differentiate or out-innovate one another.

Nowhere is this more evident in the 2020 results than in how close the top four online brokerages were from one another.

The difference between first (Questrade) and second place (BMO InvestorLine) was five points, and the difference between second (BMO InvestorLine), third (Desjardins Online Brokerage), and fourth place (National Bank Direct Brokerage) was each one point, respectively.

As poorly as the Canadian discount brokerage industry as a whole performed relative to 2019, however, there was one exception. National Bank Direct Brokerage was the only discount brokerage to see a surge in investor satisfaction scores, rising 31 points from 2019 to 2020, and moving from last place in 2019 to fourth place in 2020.

Despite dropping four points on a year-over-year basis, Questrade managed to rise in the rankings from third place last year to take top honours in 2020 with a score of 736. At the other end of the spectrum, Scotia iTRADE ranked last this year, falling to a score of 703.

One online brokerage that stands out as having a significant shift downward is CIBC Investor’s Edge. This popular low-cost online brokerage fell 40 points compared to last year and slipped from a second-place finish to a seventh.

Importantly, not all Canadian online brokers were measured or reported publicly. Popular brands such as Qtrade Investor, Virtual Brokers (soon to be CI Direct Investing), Interactive Brokers, and HSBC InvestDirect did not have data published about their level of investor satisfaction in this year’s results.

So, what’s driving the decrease in investor satisfaction among Canadian DIY investors? One of the biggest areas where Canadian discount brokerages appear to be struggling is website stability and accessibility.

Somewhat shockingly, 46% of DIY investors reporting an issue with an online brokerage chalk it up to a problem with the website, and 29% of investors surveyed were unable to access their online brokerage website at least once during the prior 12 months.

It is difficult to determine how representative the sampling of this survey is for all DIY investors across Canada, but these numbers are concerning, considering that investors put their nest eggs or significant savings in the hands of online brokerages. These results, however, do help to validate the scores of complaints DIY investors have logged on Twitter about Canadian online brokerage websites going down during trading sessions. And, keep in mind, these survey figures were generated prior to the COVID-19-induced market meltdown, which saw unprecedented surges in trading volume and account sign-ups.

Not being able to access a trading account when you’d like to is frustrating enough; however, not being able to do so when market opportunities open up – that certainly leaves an impression.

Perhaps the most intriguing number reported in the online brokerage rankings was that 26% of millennials (or younger) indicated that website inaccessibility has got them thinking about switching brokerages. That’s a huge number in an extremely hard-to-win-over segment.

The rankings from J.D. Power highlight that the Canadian online brokerage space will increasingly face a challenge to escape becoming commoditized. In these latest investor satisfaction metrics, what ultimately separates one online brokerage from another is becoming harder to distinguish.

Perhaps ominously, the relatively slow pace of innovation in this online service leaves the industry exposed to possible disruption by a provider able to deliver the technology piece with greater reliability and at a lower price. This is certainly the case in the US, in which an online brokerage was able to grow to an extraordinary size while lowering the price of commissions to zero.

With so many online brokerages facing technology challenges even when investors weren’t stampeding into and out of markets, the past several weeks have uncovered the limits of customer service and client experience capabilities at many online brokers. And while the news certainly isn’t all bad at Canadian brokerages, the scores show that investors expect online brokers should be doing better.

Discount Brokerage Tweets of the Week

From the Forums

Going All Out

A forum user contemplates breaking from their investment plan and selling everything to avoid the stress of a turbulent market in this post. Fellow DIY investors weigh in by sharing their approaches and thoughts on the temperament it takes to invest.

Where’s the Wealth?

In this post, a Redditor inquires about how illiquid wealth works, and fellow forum users outline the imprecise nature of such wealth and offer helpful analogies.

Into the Close

It almost goes without saying that the start of this new month will begin on uncertain footing. There are many events taking place with very little visibility as to exactly how they will unfold. However, of the things that can be controlled, here’s hoping that readers remember to find ways to be kind, stay informed, and find the courage to dream for and change the world for the better, one action at a time.

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Discount Brokerage Weekly Roundup – May 4, 2020

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

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

Waves of Interest

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

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

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

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

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

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

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

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

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

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

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

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

Deal-ayed Gratis-fication

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

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

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

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

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

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

Discount Brokerage Tweets of the Week

From the Forums

Oh, Canada

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

Speculation Nation

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

Into the Close

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

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Discount Brokerage Deals & Promotions – May 2020

As the saying goes, April showers bring May flowers. After a whirlwind of unexpected changes in the last month, resulting from the global health and economic crises, there appears to be an increase in DIY investor confidence when it comes to stepping back into the markets.

Despite current market volatility, there has been a recent surge in interest and activity from DIY investors. As reported by discount brokerages, trade volumes, account openings, and customer outreach have all increased. In addition, the significant drop in oil prices has prompted even more investors to step out of the darkness to take advantage of the volatility swings.

Even though flowers are blooming all around us – and investor interest has also been flourishing – Canadian discount brokerages have, in contrast, stayed mum about any new promotion activities for May. Perhaps the reason for this is because brokerages are struggling to keep up with the growing call volumes and, for some, subsequent system outages. Or perhaps brokerages are attributing their familiar offerings to another well-known saying: If it ain’t broke, don’t fix it.

Nevertheless, investors who are brave enough to dip their feet into the market waters can scroll on to review the current deals and promotions activity from Canadian discount brokerages this May.

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

Expired Deals

No expired deals to report at this time.

Extended Deals

No extended deals to report at this time.

New Deals

No new deals to report at this time.


Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

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

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

Referral Promotions

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

Expired Offers
Last Updated: Apr. 30, 2020 16:44PT

Transfer Fee Promotions

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

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

Other Promotions

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

Expired Offers
Last Updated: Apr. 30, 2020 16:39PT

Digital Advice + Roboadvisor Promotions

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

Offers for Young Investors

Brokerage Offer Type Eligible Age Range / Client Segment Offer Description Min. Deposit Expiry Date Link
Student Pricing Clients with CIBC Smart™ Account for students $5.95 per trade and zero annual account fees not required None CIBC Student Pricing
Broker@ge 18-30 18-30 years old investors Benefits: * 5 free transactions (Minimum deposit of $1,000 required) * No inactivity fees * No asset minimum to maintain for free registered accounts * Exclusive events * Disnat Mobile App $1,000 None Broker@ge 18-30
Offers for professionals & Students Students in selected fields of study Professionals and students in the below fields can benefit from a reduced pricing structure: * Engineering students * Legal, accounting and business students * Healthcare students * Health sciences students * Nursing students Benefits: * $5.95 commission on equities * $0 commission on ETFs * $0 annual administration fee not required None NBDB Student Pricing
Young investor pricing 18-30 years old investors Benefits: * $7.75 commissions for stock and ETF trades * No account minimums * No quarterly admin fees min. $50 a month through pre-authorized contributions. None Young Investor Pricing
Waiver of account maintenance fee Clients who have RBC Student account, currently or in the past 5 years. The Maintenance Fee ($25 per quarter) is waived, regardless of the account balance. not required None Zero Account Management Fee
Young Investors Offer Clients below 26 years old Low activity account administration fee and the RSP account administration fee are waived. not required None Young Investors Offer
Zero Account Administration Fee Clients below 26 years old The account administration fee ($24.95 per quarter) is waived. not required None $0 Account Administration Fee
Last Updated: Apr. 30, 2020 16:45PT
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Discount Brokerage Weekly Roundup – April 27, 2020

Here we are at almost the end of April and were it not for the intentional reminders as to the date, it certainly feels like the long day continues. Still, the goalposts matter. While dates aren’t moveable, it seems like other goalposts are being moved on DIY investors. Also, on the topic of goalposts, this post has some news of discount brokerages crushing their goals.

In this edition of the Roundup, we review an important development for DIY investors in which leveraged ETFs attached to the oil market have had to do some, um, creative maneuvering to stay liquid even though movement in oil appears to be grinding to a halt. From there, we flow into even more data from the online brokerage space on the scale and scope of activity by DIY investors entering into this market. As usual, we’ve collected chatter from investors online on Twitter and in the investor forums.

Consolidation Offers Little Consolation

There’s no denying it. These are bizarre times for even the most seasoned traders. This past week, with oil prices going negative to the tune of almost -$40 a barrel for WTI, the trading world was turned on its head, and with it, likely scores of DIY investors who sought to take advantage of the volatility swings in the price of oil via leveraged ETFs.

Alas, even the ETF providers could not stomach the volatility and certainly did not ever envision (or provision for) a world in which the price of oil could drop below zero. And yet, this is exactly what happened this past week.

One of the biggest Canadian names in the leveraged ETF plays for oil, Horizons ETFs, temporarily suspended new subscriptions for their BetaPro Crude Oil 2X Daily Bull/Bear products. In addition, the impacted ETFs (HOU/HOD) will no longer be set to double the daily performance of the underlying futures index they were tied to, but will instead correspond to 1X the daily performance. Finally, how they trade futures contracts is changing, with the underlying “roll dates” moving to the secondary futures contract month just 10 days into the primary contract.

Another big name in the leveraged ETF space, Direxion, had already taken measures to dial back their famous 3X leveraged products by 1X to now provide a leveraged exposure of 200% to a select set of indices.

As with the crypto and cannabis craze from 2018, the prospect of making lots of money in a short amount of time naturally pulls in speculators.

Products, such as leveraged ETFs, magnify the already volatile market movements, so “investors” get the possibility to make (or lose) significant returns in a short amount of time with the ease of buying or selling a stock. There is no need for any sophisticated transaction in a futures market: Just enter a ticker symbol with an online brokerage platform and go. Added to that, these leveraged ETFs can be part of a TFSA or RRSP, and the gains (or losses) can offer up the perfect storm of opportunity to grow wealth (or erode it) at a pace that far outstrips salary growth, high-interest savings accounts or even the moves in most individual securities.

It wasn’t just leveraged ETFs in the oil market that suffered catastrophic failures either. The popular United States Oil Fund (ticker USO), which is supposed to track the price of oil, has been decimated by the volatility in oil prices and last week initiated an 8-for-1 reverse stock split (aka consolidation) to boost the price per share.

Like some of its leveraged Canadian counterparts, the futures contract that the fund tracks has been pushed further forward, meaning that investors are betting on the price of oil much further into the future than they have historically with this kind of vehicle. There is some damning commentary coming out of the US for commodity-focused ETFs, and as such the “future” of these kinds of ETFs, especially those focused on oil, is highly questionable. The pessimism on these ETFs in the US market is high and growing, which portends bad news for the Canadian counterparts.

Ultimately, DIY investors interested in making a quick buck may roll the dice with a leveraged ETF without fully understanding the vehicle itself. This puts Canadian online brokerages in a bit of a conundrum. On the one hand, these ETFs generate substantial commission revenue, but on the other, their risk profile is not like that of other ETFs, and clients can be at serious risk of loss.

Some of the more spectacular losses that made the news include Interactive Brokers, which had to take almost a USD $90 million-dollar loss because several clients took heavy losses on their trading account, trading oil future contracts. And, investors in China who were able to trade individual barrels of oil found themselves on the hook for the negative price per barrel, meaning not only did they lose what they invested, they were exposed to the downside as well.

Although Canadian online brokerages are technically order-execution-only entities, the current COVID-19 fueled market conditions show that extreme volatility can take investors seriously offside, especially in some of the most popular products. The drastic maneuvers taken by the ETF issuers highlight the risks that ETFs themselves present to DIY investors – especially if they have leveraged ETFs within their stable. While providing advice on what is or is not an appropriate investment is not something online brokerages want to wade into, perhaps more visible warnings or tools that enable investors to easily discern risks seem like the prudent thing to be doing.

Putting the Pieces Together

There is a recurring theme to the data we’ve been reporting for the past several weeks: Now is a great time to be an online brokerage.

Updates from online brokerages on both sides of the border have been trickling in from various sources, including earnings reports, business updates and posts in various forms of reporting. The numbers continue to paint a picture where retail investors are flooding into the market in record-breaking numbers.

This past week, we learned a bit more about the scope of the DIY investor rush into the online investing market, as well as some insights and perspectives from leaders at several online brokerages who’ve commented on their business and business conditions.

Although we did mention them previously in last week’s Roundup, the largest online brokerage in the US, Charles Schwab, provided their spring business update this past week. This session provided additional colour on the numbers from the recent quarterly release as well as updates on where they’re forecasting for the remainder of the year. Of particular interest in this update was the scale and speed of the new account and asset growth. Schwab added 609K during Q1 of 2020, a 58% increase over the same period in 2019. Similarly, there was a 42% increase in net new assets, clocking in at USD $73.2 billion dollars.

Additionally, there was some interesting colour added to why cash balances were growing to the heightened levels. While during times of volatility, it was expected that cash would increase (e.g. investors may flee to cash for safety), what was curious was that it was more so a result of sales of fixed income assets rather than equities.

Another area that Schwab provided more detail on was the trading volume as well as the increase in volume from customer service touches. Despite the spike in business, the retail call volume was only 16% higher for Q1 2020 compared to Q1 2019. On the digital side, there was a 30% increase in digital logons across both mobile and online. This particular point about increased outreach of clients is interesting to compare against the Canadian experience; assuming that Canadian online brokerages are seeing comparable volume increases for calls, it is remarkable to hear the level of complaints and delays for such a modest spike in call volume. Again, this is simply an assumption based on the US market as a proxy for Canadian discount brokerages, so the increase in Canada could be substantially different.

At the other end of the spectrum of the online brokerage space in the US – at least as far as size and age is concerned – is news from Robinhood. This past week, this “millennial”-leaning online broker appeared on CNBC’s Mad Money and spoke to Jim Cramer about the state of the online investing marketplace and Robinhood’s place against the backdrop of consolidation. While there were several interesting points in this discussion, co-CEO Vlad Tenev shared a list of the top 10 stocks being purchased via Robinhood in March. These included:

  • Inovio
  • Ford
  • American Airlines
  • Boeing
  • Carnival Corp.
  • General Electric
  • Microsoft
  • Disney
  • Aurora
  • Tesla


While the trading volumes (up threefold) in March and the net deposits (up 17x compared to Q4 2019) are largely consistent with what other brokerages in the US have stated, what was perhaps the greatest insight from that interview was that Robinhood, according to Tenev, captured over 50% of new account opens at online brokerages in the US. Yes, that’s not a typo. Despite stumbles at the beginning of March with trading outages, Robinhood managed to secure more account opens than all of the major online brokerages in the US combined.

With all of the data in the US online brokerage space pointing to a phenomenally busy March and Q1, it was refreshing to see some details on the Canadian space shared from BMO InvestorLine president Silvio Stroescu in a great piece from Wealth Professional that appeared last week.

Contained in that commentary on how BMO’s wealth management team has been navigating the crisis, there were also some interesting quantitative components. For example, new account openings trended about three times higher than seasonal peaks in January and February. Daily trading volumes clocked in at two and half times higher than trends, and fund transfers were up to 10 times higher than in the past.

It wasn’t just the quantitative context that was shared either. Insights on the difference in behaviour between millennial investors and “Gen X” was also curious to see and lines up in many ways with what has been playing out in the data from the US online brokerage market. For example, millennial clients “added more cash to their accounts and bought into the market more aggressively than older peers.” In contrast, Gen X and baby boomers sold assets to build up liquidity reserves, something that was also reflected in the Schwab data.

Despite the massive economic shock taking place in countries across the globe, the data from online brokerages in both Canada and the US provides some suggestion as to why stock markets are as high as they are. Clearly there are pools of buyers, many of them younger investors, who are flooding into the stock market to take advantage of the volatility in hopes of picking up stocks that can help them boost their portfolio sizes.

Although many online brokerages have had to learn on the fly as to how to operate remotely and withstand surging demand, for the most part they have been able to do so successfully. For Canadian online brokerages in particular, if the data points from BMO InvestorLine are extended to the industry in Canada as a whole, higher commissions weren’t enough of a hurdle to dissuade many Canadian investors from making record high numbers of trades and thus generating a watershed of earnings for the Canadian discount brokerages.

Given the boost to earnings, it begs the question going forward as to where the added revenues will be deployed to next.

One hint was offered by Stroesco at the end of the piece, where he stated that “In the new context, investors will be seeking and willing to consume more financial advice in their digital travels, with a vested interest and more scrutiny on value created.”

While difficult to pin down exactly where things are going to head to next, the clear signal from across the online brokerage space is that there is a strong endorsement that there are clients still willing and excited to trade, even in the most bizarre of times.

Discount Brokerage Tweets of the Week

From the Forums

Back and Better Than Ever?

An anxious Redditor takes to the forum to pose the question of whether or not this current situation signals a “Great Depression 2.0.” A discussion weighing the current data around COVID-19 and the capital markets against past recessions ensues in this post.

Squaring Up

In this post, a forum user unsatisfied with his money manager’s actions in the lead-up to the COVID-19 pandemic takes to the forums to ask about the possibility of “Shorting the Box.”

Into the Close

The perennial challenge to traders is that data becomes available at the “hard right edge” of the chart. Moving through the upcoming week will be an interesting proposition for DIY investors. On the one hand, the historic movements in the oil market cannot be ignored, and on the other, the stock markets are already pricing in the world moving on. These are bizarre times to be sure, but it looks like the first one returning to working as usual is the “invisible hand” of the market – let’s hope it still has enough sanitizer left to make it through the next week. Stay safe and healthy!

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Discount Brokerage Weekly Roundup – April 13, 2020

For DIY investors, last week’s market bounce is sure to put a spring back into their step, even though stocks are trading well below their levels from just a few weeks ago. Nonetheless, with the fear gauge falling and DIY investors hoping to find treasures in the market, one spoiler to that momentum is that technology and capacity issues are making access to trading online more challenging than anyone wants.

In this edition of the Roundup, we focus in on yet another series of outages and interruptions that took place at Canadian online discount brokerages last week and what that could signal for the industry in the post-COVID-19 era. From there, we highlight a couple of interesting virtual developments set to take place later on in the month that might offer additional guidance on where online brokerages in the US might look to next when trying to navigate the impact that Coronavirus is having on markets. As always, we’ll look to some rather colourful commentary on Twitter and in the investor forums to close things out.

More Outages at Online Brokerages

Markets have continued their volatile dips and surges, and while this past week has seen many stocks rebound, DIY investors yet again have found themselves subject to outages and interruptions of service at Canadian online brokerages.

This time it was a series of outages at CIBC Investor’s Edge, BMO InvestorLine, TD Direct Investing and Wealthsimple Trade that hampered the ability of DIY investors to trade and angered enough of them to the point where they posted their struggles directly onto Twitter.

Last month, there was a feature piece in the Financial Post about Canadian discount brokerages suffering from outages and complaints from active investors who were either sidelined by not being able to log in or trade.

While it is true that technology can occasionally fail, the timing couldn’t be worse. The compounding effects of site outages during heightened volatility, as well as surges in call volume, mean that DIY investors are ultimately left with no viable options other than to wait out whatever interruption or disruption they are facing. A quick scan of the tweets of the week below showcases some of the scarier wait times and frustrations experienced by DIY investors encountering these current trading conditions.

Although there are currently some very major issues taking the spotlight, the recurring issues with uptime and stability will ultimately attract the attention of media and, from there, regulatory agencies. At the very least, DIY investors ought to be aware of what kind of service experience they can expect from an online discount brokerage, not just in terms of wait times or features (like a call back), but also in terms of uptime and platform outages.

The COVID-19 pandemic has shown that governments and industries are capable of moving remarkably quickly when required. With the shift in conversation about COVID-19 starting to move towards describing ‘the new normal’ and life after the peak has passed, there will hopefully be a conversation about better equipping service and systems to contend with surges in traffic and requests. There will undoubtedly be changes that will be put in place and it would be wise for the industry as a whole to use the opportunity to mobilize around continuity and surge protection.

For now, the message to active DIY investors being relayed by the delays and outages is sadly this: beware of your online discount brokerage, it may not be there when you need it. Plan accordingly.

Online Brokerages Navigating COVID-19

When it comes to DIY investing, one of the more interesting things that being a shareholder entails, regardless of size, is the stockholders’ meeting. Of course, now that meeting in person is a non-starter for a variety of companies, the annual general meeting is going online. The combination of investors being sequestered at home and the online availability of these meetings could make for interesting times ahead. At the very least, it may provide a palette cleanser from a binge watch series on Netflix or Amazon Prime.

For the online discount brokerage world, we’ll be keeping an eye on Interactive Brokers, who has their annual meeting on April 23rd, to see what interesting announcements and questions might arise at that time.

Another interesting development coming out of the US will be from the largest online brokerage, Charles Schwab, as they are set to provide their spring business update on April 21st.

Already here in Canada, the largest banks have held their annual general meetings virtually to maintain social distancing protocols. In the Q&A sections, for example, it has been valuable to hear from the senior leadership with regards to the current COVID-19 generated crisis and to get a sense of where their priorities are on a number of key issues.

Discount Brokerage Tweets of the Week

From the Forums

(Mort)Gauging the Market

A Redditor asks whether paying their mortgage faster is better than investing in the current market in this post. Fellow users give their advice on how they should define their goals and the different decisions that they can make with those goals in mind.

Down the Habit Hole

In this post, Redditors discuss how the recent market downturn has impacted their investing habits. Different users lay out their plans and potential outlooks for the coming year.

 

Into the Close

That brings another edition of the Roundup to a close. This one was a little shorter than normal (just like last week!). However, as many Canadian online brokerages are finding their footing with transitioning many systems to remote operation and getting a handle on the flood of interest, we expect more activity to be unfolding in the weeks to come. In the meantime, a deal reached on oil production cuts by OPEC(++) will be yet another reason to expect a volatile week ahead. Have a safe, healthy, and profitable week!

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Discount Brokerage Weekly Roundup – April 6, 2020

April has finally arrived. As much as the year is moving quickly, it simultaneously feels like it is moving incredibly slowly. As with the reality in markets, any bit of information about where things go next with the COVID-19 crisis is highly prized.

In this edition of the Roundup, we wade into the shallow deals and promotions pool to start April – in spite of record online investor interest in trading online. From there, we shine a spotlight on a major Canadian discount brokerage that looks like they will once again shake up the features offered by other online brokers. We close out this edition of the Roundup with highlights from investor forums and chatter from the Twitterverse.

New Month, Familiar Deals

It’s the start of a new month. Not just any month either – the one month in the year that typically starts off with some good humour. Alas, the lack of new discount brokerage deals or promotions to kick off the month is no joke.

Like the markets themselves, there has been a considerable pullback in the number of brokerages participating in the most appealing deals and promotions categories: cash back and commission-free trading offers.

If we were in ‘normal’ times, this situation might not seem as unusual after the post-RRSP deadline push. After all, it is expected that leading into that deadline, investors are already actively thinking about their money and investments.

That said, these are not normal times at all.

Despite what is clearly the grimmest economic picture many of us have ever lived through, for Canadian online brokerages, what should normally have been a very slow period in April has turned into one of the busiest seasons on record.

Likely a result of the unprecedented volatility, many folks self-isolating and therefore working from home, and with only so much streaming content to be viewed, means that there is now attention being put on stocks and trading online in volumes that likely exceed the Great Financial Crisis. What is very different now, however, is the scale and scope of impact to the economy from the measures being taken by countries across the globe to flatten the curve on COVID-19 spreading.

With so many prized stocks now on a literal fire sale, bargain hunting investors have been rushing into the market through the door that is the online brokerage. Normally, when Canadians are this interested in trading stocks, online brokerages ramp up their offers and incentives. To reiterate – these are not normal times – and one clear indicator of that is the lack of promotional offers that have been deployed for DIY investors.

Nobody wants to be seen to be taking advantage of a crisis, however, and the conundrum for Canadian online brokerages is this: do nothing about reducing fees/commissions at this time or lowering barriers for folks getting into the markets, then ‘business as usual’ could be like profiteering. Conversely, launching a promotion that would be talk up getting into the most volatile market ever could seem remarkably tone deaf.

What is becoming clear in the COVID-19 pandemic is that major brands are stepping up to help in whatever ways they can. Apple is stepping up to make 1 million face shields a week. Tesla is building ventilators. Breweries and even Louis Vuitton are making hand sanitizer. As “order execution only” entities, the single best goodwill gesture for Canadian discount brokerages to offer to Canadians would be waiving of commission or administrative fees – especially for low balances or inactivity – and especially to those seeking financial relief.

In these far-from-normal times, a rethink is required on what brands stand for and mean in the face of this collective crisis. Normally a deal or promotion is intended to appeal to new clients. Perhaps this is the moment when it would be appropriate to consider promoting the infectious kindness that shows we’re all in this together and that even small acts of kindness can go a long way.

RBC Direct Investing Takes Trading Quotes to the Next Level

It’s one thing to be making investment decisions in a volatile market – but for many active investors, it’s a must to be able to see where there are areas of demand or supply when trying to fine-tune a decision to buy or sell. The stakes are much higher when actively investing, so getting the most accurate and up-to-date information on market prices are key. Enter the world of streaming and in-depth quotes.

Late last year, RBC Direct Investing enabled free Level 1 real-time streaming price quotes for TSX and TSX Venture equities and ETFs. This past week, RBC DI rolled out what is arguably one of the best data features after real-time streaming Level 1 quotes: free streaming Level 2 quotes for TSX and TSX-V listed stocks and ETFs.

For DIY investors, and the online brokerage space here in Canada, it is hard to overstate the value this brings to investing online.

Level 2 quotes, also known as depth of market, can cost over $100 per month, and while the new feature from RBC Direct Investing does not bring with it a top-tier trading platform, the value here is hard to overlook.

The table below compares the prices per month that streaming Level 2 quotes would cost at comparable online brokerages in Canada and it is evident that this feature is anything but cheap.

Online Brokerage Trades per Month (TPM) or Trades per Quarter (TPQ) to Waive Quote Fees Quote Fees without Activity Waiver
BMO InvestorLine 25 (TPM); 75 (TPQ) $125/mo
Disnat Direct (Desjardins Online Brokerage) 20 (TPM); 60 (TPQ) $95/mo
National Bank Direct Brokerage 100 (TPM); 300 (TPQ) $148/mo
Questrade 81 (TPM); 243 (TPQ) $89/mo
Scotia iTRADE 10 (TPM); 30 (TPQ) $79.95/mo
TD Direct Investing 10 (TPM); 30 (TPQ) $69/mo
Virtual Brokers $99/mo

 

It is important to once again point out, however, that the prices for this streaming data option at other online brokerages referenced above usually come bundled with a sophisticated trading platform with many more bells and whistles for fast trade execution and charting capabilities than does the web experience at RBC DI.

That said, most of those Canadian discount brokerages referenced above waive some, most, or all of the data fee only when a minimum trading activity or asset deposit threshold is reached. So, the standard offering of the RBC Direct Investing streaming Level 2 quote is of particular appeal to investors who don’t mind the web interface and who can’t or don’t want to constantly have to trade to maintain an activity threshold. Of course, spending on commissions to get a “free” data feed doesn’t quite add up as a winning strategy but that is exactly the position DIY investors would be in at most brokerages.

For everyday investors, free streaming Level 2 quotes may or may not be something that is widely accessed, but for those investors who appreciate the added window into areas of potential pricing support or resistance, this is a very useful feature. In particular, as volatility increases in many illiquid stocks and bid/ask spreads widen, placing market orders can end up in overpaying for a security, and placing a limit order without knowing what else everyone is either selling or buying at puts investors at a significant information disadvantage.

While not quite the bombshell of dropping commission prices, RBC Direct Investing has unquestionably raised the bar considerably for other Canadian online brokerages, especially their bank-owned brokerage peers.

The standard web-based browser experience now including streaming Level 2 quotes means that other online brokerages will have to work harder to adjust their value proposition to a somewhat active or sophisticated investor. Even with so much attention being drawn away from online brokerage features these days, it’s safe to say RBC Direct Investing’s position in the online brokerage race just leveled up.

Discount Brokerage Tweets of the Week

From the Forums

The Best Bet

A Redditor puts forward the question of whether anyone is betting against the market in anticipation of a crash in this post. Fellow forum users go back and forth on the merits of buying inverse ETFs and their plans for the coming weeks and months.

The Long Game

A new investor turns to the forum for advice on how to make sound investments for the long term while the market is still reeling from the impact of COVID-19. In this post, Redditors give advice on how to set up the right portfolio and think beyond the immediate market.

Into the Close

Despite the wild swings in the market, the biggest and most important stories that need to be told are the ones of the brave frontline workers putting themselves in harm’s way and fighting COVID-19, or those mobilizing what they can to push back this sweeping contagion. Thank you to everyone fighting the good fight.