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Discount Brokerage Weekly Roundup – July 27, 2018

Summer is in full effect. And, as is typically the case, it’s the time of year when folks work a little harder to tone up or bulk up for the beach. Interestingly enough, it looks like Canadian online brokerages are also taking the summer to get themselves into top form for the months ahead.

In this edition of the roundup, we stay with the summer vibes and keep things brief and easy. We kick off the roundup with an article about one online brokerage taking a measured approach to competing by using content effectively. Next, we dive into the chatter from DIY investors on social media and what investors were talking about in the forums.

CIBC ramps up new digital content

In last week’s roundup, we took a look at how online investor education is evolving at Canadian online brokerages and, in particular, how online content is becoming a key area for online brokerages to differentiate themselves with as well as to deliver value to their clients. And, even though TD Direct Investing is a major force in the space, their bank-owned competitors are not standing still when it comes to content development.

This week we spotted two interesting content pieces on the CIBC Investor’s Edge website which further validate the observations noted in last week’s roundup about the importance of delivering good content.

The first small but still noteworthy development is the release of the latest edition of the CIBC Investor’s Edge newsletter. Long time clients and regular readers of the newsletter will have noticed the changes in format to the newsletter, which were initially rolled out in 2016, as well as to the design of the Investor’s Edge newsletter.

What is especially interesting about this summer edition of their newsletter, however, is that offers interesting content related to investing that is a bit more focused on what DIY investors might be able to use in understanding different investing strategies. Notably, articles in this newsletter focus on options trading basics as well as on momentum investing. Also interesting is the inclusion of a tax planning component that is often overlooked for DIY investors when it comes to ‘educational’ content, other than AT tax time.

Screenshot of CIBC Investor’s Edge website (taken 2018-07-27).

From a content perspective, this investor newsletter is quite well done – short enough to be digestible, but long enough to provide some helpful information. The biggest draw of the newsletter, however, is that it is accessible to non-CIBC Investor’s Edge clients. In this respect among its bank-owned peers, CIBC Investor’s Edge is relatively unique.

CIBC Investor’s Edge produces and publishes a newsletter for DIY investors that is available on the front end of their website (and also happens to be a part of a well curated section of educational/informative materials called the ‘knowledge bank’). This is not what most of their competitors do and as a result, enables Investor’s Edge to compete using educational content in a way that other brokerages aren’t doing.

Another content element that caught our attention was the publishing of an upcoming webinar on RESPs that will be taking place in September. There are two interesting features of this webinar. The first is that it is being offered in English (on September 5th) and in French (on September 20). French language webinars are rarely found outside of typically French-focused online brokerages (Desjardins Online Brokerage or National Bank Direct Brokerage) or occasionally TD Direct Investing.

The second interesting observation is that the timing of the presentation is lined up with the ‘back to school’ point in the calendar as well as the month (September) with one of the highest rates of births in the calendar, which means that the topic is timely to be raising.

Overall, it appears that going beyond the content machine that is TD Direct Investing, there are signs among other online brokerages that there are opportunities to compete effectively and deliver value to DIY investors in the form of value-added content. CIBC Investor’s Edge has shown that it is possible to put together a strong content offering at a reduced pace but still do it well. The next hurdle for Investor’s Edge to overcome is to let DIY investors know these features exist.

Lightening Roundup

Here are a few small but potentially important items that crossed our radar this week.

TD Direct Investing continues to invest in growth

Earlier this week, the Globe and Mail published an article about TD’s plans to boost its wealth management business by hiring about 200 financial advisers to come on board next year. Buried in that article was an interesting reference to ongoing projects and possible features. The first noteworthy mention on the direct investing side was that TD has invested $125M into revamping mobile trading functions and, most importantly, have set the stage for digital/robo-advice.  Another interesting reference was to TD having the appetite to acquire more new clients in the wealth management division, which will undoubtedly get people talking about who TD Direct Investing might consider partnering with or acquiring outright.

Good content on personal finance

Finding good content on the internet, especially those seeking out information on Canadian markets, is generally a challenge. Fortunately there are a handful of reliable and engaging sources from which to do so. Check out this podcast from Canadian Couch Potato which offers an interesting perspective from the Globe and Mail’s Rob Carrick on the landscape for DIY investors in Canada and how he has managed to keep his own personal finance content relevant to changing populations of investors.

Speculation on E*Trade Financial merger

Earlier this week, an interesting article surfaced that looked at the likelihood of TD Ameritrade as being the most likely suitor to acquire E*Trade. While it is all speculative at this point, it is an interesting story to watch unfold because it sets up the business case for a deal being done with E*Trade.

The move in the US may also provide a hint of what’s to come here in Canada. Questrade, like E*Trade, is an established player in a market that has seen substantial merger and acquisitions activity. While the price has to be right, for Canadian DIY investors, the possibility that Questrade ends up being acquired by a larger online brokerage is not as far-fetched of an outcome.

Discount Brokerage Tweets of the Week

From the Forums

Keeping Costs in Check

When it comes to online investing – especially for active investors – trading costs (such as commission) are important to consider. In this interesting post from reddit’s Personal Finance Canada section, one user is trying to ascertain the difference between Interactive Brokers and a different platform to get started.

Slow to Move

While ETFs might be popular with investors, they may not be as popular as they could be. In this post from reddit’s Personal Finance Canada thread, one user sparks an interesting conversation around adoption of ETFs by Canadian investors.

Into the Close

What an end to another crazy week. For Facebook shareholders, it’s been a rough ride and the prospect of having a couple of days to reflect on what went wrong there is undoubtedly welcomed. Of course, in spite of the crazy headlines and stranger-than-fiction stories coming out in the news, markets continue to march upwards. Enjoy the trend while it lasts. Wherever your adventures take you for the weekend, have fun (hopefully in the sun) and make the most of the good weather – as there is undoubtedly a storm brewing on the horizon for DIY investors.

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Discount Brokerage Weekly Roundup – July 20, 2018

There might be no more teachers or no more books, but just because summer’s here, doesn’t mean that lots can’t be learned. In fact, it appears that several online brokerages are banking on the fact that investor education may not be coming from books (or teachers) for much longer.

In this edition of the roundup, we take a look at a slow-moving development that has finally reached an interesting juncture – the end of the in-person seminar for investor education. Find out which bank-owned online brokerage is driving the digital bus. Next, we cover the slow and steady plan for global supremacy in the online brokerage space by one ambitious online broker. As always we’ve got a great selection of DIY investor chatter from the tweets and forums for the past week.

Investor Education Goes Digital

For online traders and investors, especially the DIY kind, there’s always something new to learn when it comes to trading and markets. What has been fascinating to watch over the past several years is how ‘investor education’ has evolved at Canadian online brokerages.

Normally, the Weekly Roundup profiles things that are event-driven, however when it comes to investor education from Canadian online brokerages, the story here is that there has been a slow but noticeable shift away from in person education events to ‘on demand’ and digital content to cater to investors’ needs.

What piqued our interest in revisiting this topic, was TD Direct Investing’s transition away from their previous seminar website towards their new webinar focused one. Specifically, when trying to access TD Direct Investing’s old seminar and webinar site: http://tddirectinvestingseminars.com/ we were repointed to the Investor Education section of the TD Direct Investing website.

Yes, gone is the map of Canada that displayed the number of seminars in different regions around the country and in its place, there is a selection of video content, as well as FAQs, investor terminology and tools and resources.

For those looking to stay sharp or learn about different investing topics, fear not, there is an extensive collection of about 115 webinars available. With so many webinars available, TD has taken an interesting approach to the webinars page by creating filtering and search capabilities and categories of videos are accessible via a ‘hamburger’ menu icon.

The list of webinar categories include:

  • Upcoming & Recent Events
  • Most Popular
  • All Webinars
  • Getting Started
  • WebBroker
  • Advanced Dashboard
  • Thinkorswim
  • Mobile Trading
  • Account Types
  • Investment types
  • Portfolio Management
  • Researching Your Next Trade
  • Chart Tools
  • Options Trading
  • ETFs
  • BNN Money Talk Aftershow

Another interesting feature of these webinars is that many of them are available to Mandarin and Cantonese speakers – something that none of the other Canadian online brokerages’ investor education tools have managed to do.

In fact, in comparing the webinar and recorded investor education video sections of other Canadian online brokerages offering investor education webinars, really the only competitors are Scotia iTRADE, National Bank Direct Brokerage and Desjardins Online Brokerage. Of those, it is only Scotia iTRADE which has taken a highly structured approach with their ‘Knowledge Navigator.’ Even then, the webinar archive for Scotia iTRADE, which is available on YouTube, 66 videos long and not segmented out as extensively as TD Direct Investing has done it.

Of course, we couldn’t talk about TD Direct Investing and digital content without mentioning the Money Talk site, which is by far one of the most comprehensive approaches to finance media published by any Canadian financial services provider – event to the point where it rivals a news channel for in-depth topic coverage.

Why this matters to DIY investing in Canada is because strategically, financial news content (especially video) in Canada is hard to come by – BNN and Bloomberg were once competitors but then joined forces in order to sustainably compete in the Canadian space. On a relative basis, TD’s digital content strategy and implementation is very far ahead of their peers, including and especially in the online brokerage segment, which means TD can keep themselves top of mind to a lot of curious consumers.

DIY investors looking for free, insightful content that on demand and frequently updated can (and might inevitably) turn to TD (and TD Direct Investing) to stay current on market news or to get a pretty decent handle on key topics.

For both the evergreen topics of investing basics and strategies, to the event-driven market moving information, TD (and by extension TD Direct Investing) has successfully made the transition from being a powerhouse in investor education seminars to being dominant in digital content – including educational webinars.

Clearly, TD’s digital content teams are putting on a master class of their own when it comes to content production and it will be genuinely interesting to see how or if other online brokerages can step up to the content challenge.

All Roads Lead to Interactive Brokers

Whether it’s Game of Thrones or Risk, global domination is not a game for the faint of heart. What does that have to do with online investing? Well, interestingly enough, it appears to be the (very) long term vision of Interactive Brokers – specifically of founder and CEO, Thomas Peterffy.

Interactive brokers held their Q2 2018 earnings conference call this week to walk investors through the strong performance of the company and to provide context and ‘colour’ to the direction of the business. Without spending too much time on numbers, perhaps some of the most pertinent are the record high number of customer accounts – up 27% in a year to 542,000.

While the growth streak continues at Interactive Brokers, the part of the conference call that piqued our interest was the following statement made by Thomas Peterffy in which he stated:

“Our introducing broker segment continues to benefit from two major trends, the increasing regulatory burden worldwide and the growth of the new investor class in developing countries. First, in developed and developing markets around the world there are thousands of brokerage firms, some just being newly formed. For a new firm it is almost impossible in terms of time, knowledge, and money to create the compliance processes and technology needed to be in business. For an existing firm new, more onerous regulations constantly come up so an existing broker must either increase its personnel and regulatory cost significantly to comply or come to us. In both cases the brokers optimal choice is to outsource their account opening, order routing, and back office functions to us. That means our platform will be used for the introducing brokers trading, clearing, and custody so what the brokers customers see is a front end with the brokers logo.”

This is a significant position to take for several reasons.

First, especially within a smaller marketplace like Canada, the odds of a new online brokerage setting up shop to seriously compete with existing players is low. In order for that to be true, there would likely have to be some kind of hybrid (which we’ve seen unfold already) with a larger financial services firm essentially providing resources to an online brokerage to compete against a larger firm.

Alternatively, if there were to be a ‘new’ brokerage, in all likelihood, the new brokerage would take care of the customer service while Interactive Brokers would take care of the trade execution. In other words, Interactive Brokers still benefits. Thus, the current Canadian online brokerages are essentially playing a game of chicken with one another to see who may flinch on pricing. What they may not fully realize, however, is that Interactive Brokers has already got pricing in their favour and may come to play a role in the Canadian investing space the way that robo-advisors may start to play an increasingly prominent role in reducing the operating costs for wealth management firms. The key will clearly be technological supremacy which is integral to keeping operating costs low.

Another statement that should concern existing online brokerages (which was also made by Peterffy) is that Interactive Brokers isn’t just going to stay in the ‘online trading’ space. They’ve been steadily widening the scope of their financial services business to include integrated cash management, introduction of a mastercard, bill payment functionality and very soon, payroll direct deposits. According to Peterffy, “This means our customers will have less and less reason to leave our platform to transact any of their financial business.”

Of course, other online brokerages and financial service providers are not going to gingerly stand by, however Interactive Brokers has been living lean for a long time and continue to operate with remarkable efficiency by relying extensively on automation.

With far too many Canadian online brokerages, including several bank-owned online brokerages, still sorting out how to transition to online account opening or have stable, feature-rich, trading platforms, the Canadian space seems particularly fertile ground for disruption. Because of the size of the Canadian market, innovation in the online brokerage segment is slower however it’s clear that Interactive Brokers’ global ambitions and our proximity to the US market, might disruption might happen sooner than anyone had planned for.

Discount Brokerage Tweets of the Week

 

From the Forums

Looking at the Fine Print

Terms and conditions can contain some pretty extraordinary stuff. When it comes to online brokerages, however, one DIY investor, in this reddit post, felt the Questrade terms and conditions attached to the “online security guarantee” were worthy of a second opinion. Find out what the community had to say.

Cents and Sensibility

Having a bank-owned online brokerage account holds a great deal of appeal with online investors. One investor who was somewhat on the fence about going the online brokerage route, asked what fellow DIY investors in the reddit forums, thought about the benefits of a bank-owned brokerage.

Into the Close

That brings another week to a close. For Raptors fans, the word trade has a particularly strong sting to it, however just as in basketball, the markets thrive on trade – so let’s hope the Raptors made the right move. Wherever this weekend takes you (even it if is to San Antonio), have a great weekend!!

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Discount Brokerage Weekly Roundup – July 13, 2018

It’s Friday the 13th and National French Fry Day. Just like a market, depending on your perspective this is either a pretty awesome way to end the week or a fittingly ominous one. One thing is for sure, perception rather than reality drives the bus when it comes to market moves.

In this edition of the roundup, we profile the latest new trading platform to come to market from a Canadian online broker – likely just in time to play the uptick in trading volatility. From there, we take a summer-style approach to interesting news from around the online brokerage world, including shortening of customer service hours, bullish investor sentiments and crypto-currency trading that might inspire a Canadian brokerage or two.

Virtual Brokers Making Waves with New Platform

For most of Canada’s online brokerages, progress, in the near term, will likely be evolutionary rather than revolutionary. We’ve already observed this trend over the past several years in website upgrade/refresh after website upgrade, and a concerted effort by many online brokerages to focus on continuous fine tuning of user experience.

One important incremental change was recently spotted at Virtual Brokers, with the unveiling of a new trading platform, called VB wave.

We first spotted the presence of Virtual Brokers’ new trading platform on their website a few weeks ago and mentioned it on Twitter. Since that time, we’ve gathered a few more details on what has been a rather quiet unveiling of this new product.

VB Wave (1.0) is a desktop-based trading platform that has been developed for Virtual Brokers to be able to cater to active or very active traders. Like most active trading platforms, VB Wave provides a lot of features traders like, including a customizable dashboard that consists of trading charts, market depth, watchlists as well as important account and position details. Users of VB Wave can trade equities and options.

It is worth noting that Virtual Brokers is somewhat unique among Canadian online brokerages in that VB offers a variety (8 in fact) of trading platforms – with several notable professional grade platforms. So, on a number of levels, it is interesting to see the launch of what is a key differentiator to their brand (i.e. another trading platform) emerge so quietly.

One of the reasons for the subdued entry is likely that the platform is still very much at the 1.0 stage. In an industry where users are very quick to note technical difficulties loudly and publicly, the VB team may be playing it safe by getting the feedback from early users.  As such, VB Wave appears to be in an ‘open-beta’ style situation where early users will help in identifying potential issues, bugs or enhancements that might need to be made before the marketing machine fully ramps up

Another interesting angle to the launch of the new platform is where it fits into the VB family of trading platforms. On either side of the new VB Wave, there is VB WebTrader which is a web browser based application that caters to the essential needs of a user. Then, on the active side, there is the application-based PowerTrader Pro which is billed to handle active and professional traders alike.

So where exactly does VB Wave fit in?

Simply put, it appears that VB Wave offers a desktop application experience for active investors or traders. A key area where VB Wave does differ from PowerTrader Pro, however, is in pricing.

VB Wave comes with a monthly platform fee of $75 CAD for standard commission account holders and $150 CAD for users on the commission-free plan. Compare that to the pricing on PowerTrader Pro, which is $250 USD and immediately there is a significant difference. Data fees apply on top of the platform fee so total pricing depends on the desired market data.

Currently, VB Wave is available only to clients on the standard commission plan however when VB Wave officially goes live – which is scheduled for the beginning of September – both commission plans will be supported on the platform.

As part of the initial roll out, there is a promotion that waives (no pun intended) the platform fee until September 1st.

The timing of the launch of VB Wave for the beginning of September also coincides with the time of year when marketing efforts pick up, so there is a good chance DIY investors will hear and see more about this platform then.

In the meantime, it’s a safe bet that VB will be refining and optimizing the platform until things roll out in a major way in September. Fortunately, there will also undoubtedly be some curious active traders who’ll be looking to kick the tires on Virtual Brokers as a result of the new platform, so one way or another, word of the platform is sure to ‘make waves’ this summer.

Lightning Roundup

Like a refreshing summer salad, we’ve got a light but fulfilling mix of interesting developments across the online brokerage space that might be of interest.

Scotia iTRADE Dials Back Client Service Hours

The days might be brighter but when it comes to customer service hours at Scotia iTRADE, it looks like the sun has set on reaching client service reps later on in the day and on the weekend.

Scotia iTRADE announced that as of June 30th their contact centre hours would change from 8am to 9pm ET (Mon-Fri) and 8am – 6pm (Sat) to new hours of 8am to 8pm ET (Mon-Fri).

This shift in client service rep availability is an interesting move, especially in an era where accessibility of a rep is still fresh in the minds of many DIY investors who were caught waiting in long call queues earlier in the year and who were told to try contacting their broker at less busy hours.

US Online Investors Bullish According to E*Trade

Economic and trading indicators can come from all over the place, however an interesting survey from US online brokerage, E*Trade Financial, points to somewhat optimistic investors south of the border.

According to E*Trade’s most recent survey of active investors, US online investors don’t see the current negative news headlines as a reason not to be optimistic about the direction of the stock market.

Bullish sentiment for Q3 was reported at 57%, 5 percentage points higher than Q2 of 2018 (52%). By comparison, however, bullish sentiment was at 68% in Q1 of 2018 and 63% in Q4 of 2017 indicating that while still positive, there’s definitely a pullback in the percentage of folks who see a rise in markets relative to the end of last year.

Robinhood Adds More Coins to Trade for Free

An interesting piece of news for followers of cryptocurrency trading emerged this week as no-commission online brokerage Robinhood added the ability to trade Litecoin and Bitcoin cash into its lineup of tradeable cryptocurrencies.

Robinhood continues to highlight the massive and pronounced appeal of the commission-free trading model, something that might yet be a signal to Canadian online brokerages to consider doing the same.

Discount Brokerage Tweets of the Week

From the Forums

Free trades agreement?

Getting something for nothing often feels too good to be true. In this post from reddit’s Personal Finance Canada, one user managed to not get dinged the usual commission from CIBC Investor’s Edge for purchasing an ETF but couldn’t quite deduce why.

Making money moves

With mo money, comes mo problems – like insurance on said monies. One reddit user queried whether Questrade was an appropriate destination for a large portfolio and received a slew of interesting and generally well-behaved responses.

Into the Close

That’s it for another wild and crazy week. With so much activity happening in Europe this weekend, it’s going to be anything but dull and realistically anything but relaxing. So, if you manage to find a way to take it easy and enjoy the summer weather, good work. For the traders out there, though, it looks like this will be a weekend to start shopping around (and because Prime day is coming up!).

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Discount Brokerage Weekly Roundup – July 6, 2018

There’s no mistaking it, summer is here (for most of Canada) and it’s a scorcher. Of course, for Canada’s discount brokerages, it’s not just the heat that’s causing them to sweat, it’s also the hurried pace they’re moving at to position for what’s shaping up to be a very busy fall season.

In this edition of the roundup, we kick things off with a recap of a hot topic for DIY investors – promotions at Canada’s discount brokerages. From there, we do a lightning round of interesting stories for DIY investors that crossed our radar during this shortened week. To keep things moving, we’ll close out with tweets of the week as well as interesting forum posts.

Summer Deals

With vacations, nicer weather and no looming deadlines for taxes, there aren’t a whole lot of reasons to be thinking about your online investing account. As such, summer is an interesting time for online brokerages to test or launch promotional offers. And, this month didn’t disappoint.

The July crop of discount brokerage deals and promotions are now live and even though the beginning of the month technically started off slowly because of the long weekend, this month is filled with brokerages making interesting moves.

Heading into this month, as we mentioned in a previous roundup, Scotia iTRADE took a measured step back into the deals pool by offering up a cash back promotion targeted at existing clients only.

It was interesting for a number of reasons, most notably because they are a bank-owned online brokerage, they launched an aggressive cash back offer and this offer was extended only to existing clients.

From a strategy perspective it is noteworthy because it seeks to incentivize individuals who have bought into Scotia iTRADE already (i.e. existing customers) and who are presumably happy with them to deepen their relationship. So, rather than spend resources on trying to win over new customers, Scotia iTRADE appears to be dedicating those marketing dollars towards preventing existing customers from considering their competitors.

Another bank-owned online brokerage also made some moves of its own early on in July. BMO InvestorLine launched their newest offer – a tiered cash back incentive that provides rewards of up to $1,000. While there was technically a brief lag between the expiry of BMO InvestorLine’s previous offer (which expired on June 30th) and the launch of the new offer (on July 3rd), for DIY investors, it was likely worth the wait.

Cash back promotions are generally preferred by DIY investors, so at this moment, the online brokerage offers available to the general public are with either BMO InvestorLine or Questrade. And, in comparing the two, they are reasonably close in value.

Which offer has the ‘edge’ comes down to a couple of factors. For instance, whether or not an individual can get a referral bonus of $50 from BMO InvestorLine tips the scales in BMO InvestorLine’s favour. Additionally, the offer from BMO InvestorLine is open to existing clients who bring in additional assets to an existing account whereas the offer from Questrade is for new clients only. Finally, depending on the assets being brought over, either Questrade stands out or BMO InvestorLine does.

What it all boils down to for DIY investors hunting for a new online brokerage account is that there are still interesting offers to consider – especially during the summer months. And, even though the National Bank Direct Brokerage commission-free trading offer has expired at the time of writing this roundup, there are still alternative offers available and there’s a good chance that promotions activities will offer some more summer hits before the season is out – so definitely stay tuned.

Lightning Roundup

Even though it was a ‘short week’ there were still a number of developments in the DIY investor and online brokerage space that are worth mentioning. While we don’t dive into these too deeply, it’s great to see that this space continues to be highly dynamic.

National Bank Direct Brokerage & Horizons Announce Biggest Winner Contest

Even though it was a competition based on fantasy money, one lucky contestant in the Horizons ETFs Biggest Winner competition walked away $7,500 richer. Joel Couture from Levis Quebec managed to take top prize in the competition by finishing with a 16.26% return after six weeks, handily beating the second prize winner who netted $2,500 for finishing with a return of 11.31%. Interestingly, some stats from the competition that the volatility oriented ETFs HOU and HOD (the 2x oil bull and bear ETFs respectively) were among the most popular as was the marijuana ETF, HMMJ. For more information on the contest including the full list of winners and commentary by NBDB, click here.

Senior Unfriendly

An article published in the Globe and Mail by personal finance columnist Rob Carrick highlights an interesting issue that is certain to draw more attention to the way in which DIY investors can be stuck paying more for their portfolios simply because they are older.

At the heart of the matter is that some Canadian discount brokerages don’t have USD registered accounts for RRIFs, which RRSPs must be converted to. While Carrick goes on to cite some intriguing work arounds, the fact remains that brokerages that can make the process much more smoothly will stand out more than those who can’t.

Some Whispers

TD Direct Investing was being whispered about in a few places online this week. Suffice to say we’re printing here because we find it interesting.

First, there was the mention of TD Direct Investing getting new features that older clientele would appreciate, namely in Rob Carrick’s article cited above. Specifically, Carrick stated that TD Direct Investing is actively working on bringing U.S. Dollar RRIFs into reality in late 2018.

TD Diect Investing journaling of trades via webbroker

Another interesting feature to cross our radar was described in a reddit post in which an individual relayed what the TD agent said to them about journaling trades, and that WebBroker would be getting that feature.

Discount Brokerage Tweets of the Week

From the Forums

Small Potatoes

Sound money management is something that needs to happen with any portfolio size. This post, from reddit’s Personal Finance Canada section, offered a number of really interesting perspectives for someone looking to beat the administration fees on an account balance of $1,000.

It Ain’t Easy Being Green

There was lots of chatter this week from forum participants about both TD Direct Investing and Questrade. Among the debate topics was choosing one or the other for a TFSA. Check out this forum post for more details.

Into the Close

Regardless of what you happened to be celebrating this week, for many soccer fans, there is still a lot more celebration on the horizon. It’s a big week in markets next week with interest rate announcements coming out however if you really want to see interest in action, check out any of the sports bars or restaurants where the soccer games are playing. Stay cool and hydrated out there and have a ball this weekend!

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Discount Brokerage Deals & Promotions – July 2018

*Updated: July 5* With lots of sunshine, July’s crop of discount brokerage deals is still in full bloom. That’s great news for DIY investors looking to open online investing account with a Canadian online brokerage. While the cash back offerings still lag the commission-free category, there remains ample opportunity to get a transfer-free bonus when switching online brokers.

As July 1st falls on a holiday (happy Canada Day!) and a weekend, online brokerage websites may not have been updated with the latest deals for July. Not to worry though, we’re keeping a lookout for new deal announcements that might appear after the long weekend.

All told, after an eventful June, the deals and promotions activity in July looks like it will have a few surprises of its own to offer. Early on this month, we’re watching the National Bank Direct Brokerage offer (which is scheduled to expire July 6th) as well as what will transpire with BMO InvestorLine in the first week of July.

Stay tuned and as always, if you spot a deal that would be interesting to fellow DIY investors, please feel free to let us know or leave a comment below.

Expired Deals

It was interesting to see this deal come to market when it did, and we’re certainly sad to see it go, but the RBC Direct Investing commission-free trade promotion expired mid-month in June. The move by the large bank-owned brokerage is a signal that they can still surprise the marketplace.

Another offer that technically expired heading into July was BMO InvestorLine’s cash back and commission-free trade promotion. Since a replacement has not yet been posted to the BMO InvestorLine website at the time of the deals & promotions update, we’ll count this one out. If history is any indicator, however, there may be a pleasant surprise coming very shortly.

Extended Deals

There were no extended offers to report (yet).

New Deals

*Updated: July 5 – BMO InvestorLine launched a new cash back deal this month which is sure to get onto DIY investors’ radars. The tiered offer, which is open to new and existing clients, provides cash back bonuses ranging from $75 (for a $50,000 deposit) to $1,000 (for a $500,000 deposit). Keep in mind that BMO InvestorLine’s offer can be combined with their refer-a-friend promotion which can add an extra $50 cash back to the total reward amount. See table below for more information.*

At the start of July, there were no new offers that we spotted, however heading into this month there were a pair of important offers in June that caught our attention.

The first new offer that showed up in June was from Scotia iTRADE, specifically a cash back (in the form of a gift card) offer that was being marketed to existing clients. Specifically, this deal is open to existing clients as of May 14th, 2018. We’ve added that deal to the table this month as it is worth enquiring about for new clients to see if iTRADE is prepared to match or provide a better offer when signing up.

Another promotion that crossed the deals radar last month was from BMO SmartFolio, who launched a cash back offering. The cash back amounts on this offer ranged from $25 cash back (for a deposit of $5,000) to $1000 cash back (for a deposit of $200,000 or more). See the table below for more details.

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2018
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatTransfer or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo September 30, 2018
Scotia iTrade Open and fund a new account with Scotia iTRADE (or fund an existing account) with at least A) $25,000; B) $50,000; C) $100,000; D) $250,000; E) $500,000 or F) $1M+ and you may be eligible to receive a pre-paid Visa card worth A) $100; B) $200; C) $500; D) $800; E) $1,100 or F) $1,500. Use promo code 18SUM when registering. Be sure to read terms and conditions for more details. NOTE: this offer is open to existing Scotia iTRADE clients only (who were clients prior to May 14, 2018). A) $25,000 B) $50,000 C) $100,000 D) $250,000 E) $500,000 F) $1M+ A) $100 B) $200 C) $500 D) $800 E) $1,100 F) $1,5000 pre-paid Visa card will be awarded by Jan. 31, 2019. iTRADE Summer Promo August 31, 2018
Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details. $25,000 commission-free trades for 1 month + 1 month of advanced data. 1 month Active Trader Program December 31, 2018
BMO InvestorLine Open a new account or fund an existing account at BMO InvestorLine with new assets worth at least A) $50,000; B) $100,000; C) $300,000 or D) $500,000+ and you may be eligible to receive a cash back reward of up to A) $75; B) $200; C) $500 or D) $1000. Use promo code SPARXCASH when registering to qualify. Be sure to read full terms and conditions. A) $50,000 B) $100,000 C) $300,000 D) $500,000+ A) $75 B) $200 C) $500 D) $1000 Cash back will be deposited the week of April 19, 2019. BMO InvestorLine Summer 2018 Campaign September 3, 2018

Expired Offers
Open a new account at National Bank Direct Brokerage with at least 5,000 and you may be eligible to receive up to 25 commission-free trades, good for up to one year. There is also a promotional discounted commission-pricing available within the first year to individuals who use up their 25 trades; trading commissions for the first year are $6.95. Use promo code SPRING 2018 when signing up to be eligible for this offer. This offer is also available to existing clients. Be sure to read terms and conditions for full details. $5,000 25 commission-free trades + $6.95 commission per trade pricing 365 days National Bank Spring Offer July 6, 2018
Last Updated: July 27, 2018 21:45 PT

Referral Promotions

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

Expired Offers
Last Updated: July 1, 2018 14:55 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $15,000 Transfer Fee Rebate none
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees. $135 $15,000 Transfer Fee Rebate Details none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees. $135 $20,000 Transfer Fee Rebate none
Transfer $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion. $150 $25,000 Credential Direct Transfer Fee Rebate none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Contact client service for more information (1-800-465-5463). none
Scotia iTrade Transfer at least $25,000 in new assets to Scotia iTRADE and you may qualify to have transfer fees reimbursed up to $150. $150 $25,000 iTRADE Summer Promo August 31, 2018
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo September 30, 2018
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPARXCASH when signing up. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 BMO InvestorLine Summer 2018 Campaign September 3, 2018

Expired Offers
Last Updated: July 5, 10:00 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Disnat Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information. n/a MoneyTalks Inside Edge Discount none
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: July 1, 2018 18:55 PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $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 $200. 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 $200. PROMO1000 September 4, 2018 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: July 1, 2018 14:55 PT
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Discount Brokerage Weekly Roundup – June 29, 2018

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

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

Making the Highlight Reel

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

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

Acquisitions

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

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

Online Brokerage Reviews – Moneysense magazine

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

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

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

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

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

V for Volatility

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

Uptick in Deals Activity

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

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

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

What’s Coming Up

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

Keeping Currency

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

Platform Leap

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

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

Discount Brokerage Tweets of the Week

 

 

Into the Close

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

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Discount Brokerage Weekly Roundup – June 22, 2018

There are lots of reasons to cheer as summer officially started this week and, of course, its Friday. For Canadian DIY investors, and much of the world really, the news coming out of the US has dominated airwaves. And, while nobody really knows exactly what’s going to happen next, it’s interesting to see how the leaders of online brokerages in the US are positioning themselves in this uncertain environment.

In this edition of the roundup, we take a deep dive into a recent financial services conference in the US that brought together the heads of three large US online brokerages to provide insights into their particular companies and on the space for online investing in general. From there, we’ll tack on the tweets from DIY investors this week as well as some interesting forum posts on two popular online brokers.

Views from the Top: Perspectives from US Online Brokerage Leaders

In early June, many financial services providers gathered in New York City for the annual Sandler O’Neill Global Exchange and Brokerage Conference. The participant list included many notable names from the US online brokerage market, including the leadership from E*TRADE Financial, Interactive Brokers and TD Ameritrade, three of the four largest publicly traded online brokerage trading firms in the US.

As part of the conference, one-on-one interviews with the three US online brokerages were conducted which offered a unique window into what’s going on at each firm – as told by the leadership themselves.

Given their status as public companies, it is a balancing act to reveal something meaningful about what’s taking place either in the industry or in their firm, while being cautious not to let too many ‘secrets’ out of the bag. Suffice to say, it’s also kind of fun to hear how the different leaders communicate and pull it off.

There were a number of themes that emerged from the conversations with Karl Roessner (CEO, E*TRADE Financial), Tim Hockey (President & CEO of TD Ameritrade) and Thomas Peterffy (CEO & Founder, Interactive Brokers) as well as some interesting reveals and hints of things to come.

Of course, the human side of the interactions was also interesting to take note of – specifically the styles of each of the leaders. Before jumping into the details of what we learned, we’ll detour into some observations about the leaders themselves.

In Karl Roessner’s interview, for example, the energy and enthusiasm came through in the cadence and pace of his answers. It seemed to match the overall banner that E*TRADE appears to be marching under, which is a return to their core identity as a leading trading firm. By comparison, Thomas Peterffy was a much more measured speaker which seemed to also match the ‘slow and steady’ approach to continued success achieved by Interactive Brokers. Between the two was Tim Hockey, again another articulate and calculated speaker who seemingly matched the overall arc of where the firm has come from since he came aboard and where it may go under his leadership.

Getting back to important themes and discoveries from the Sandler O’Neill Global Exchange and Brokerage Conference, one of the most prevalent talking points was growth in accounts.

In the case of E*TRADE and TD Ameritrade, recent acquisitions of other trading firms have helped to contribute growth to the number of accounts and client assets. The fact that both of these firms opted to acquire to grow presented some intriguing comparison points.

For example, in acquiring another firm, the timing and nature of the impact to the clients of acquired firm is something that has to be carefully planned for. E*TRADE acquisition of OptionsHouse for $725 million in 2016 as well as the purchase of one million Capital One retail brokerage accounts in January 2018 have added a substantial number of new clients to the organization. In the interview, Roessner stated that to ensure the transition for the Capital One clients goes smoothly, E*TRADE is taking some extra time to get the client experience just right. Of particular interest is the fact that E*TRADE has made a concerted effort to go back to its ‘active trading’ roots for the past two years, however many of the Capital One brokerage account holders are typically not that active, so it should be interesting to see how E*TRADE tackles the challenge of having many more clients that don’t necessarily have the time, confidence or desire to trade actively. One way might be via E*TRADE’s own roboadvisor service – which they call “Core Portfolios.”

TD Ameritrade’s acquisition of Scottrade, which was announced in October 2016 and was finally completed in September 2017 brought the total number of accounts at TD Ameritrade to 11 million. In recounting that transaction, which was the first major acquisition at TD Ameritrade under Hockey’s leadership, it was interesting to hear how Ameritrade had modeled what was going to happen and when they could start to see the impact to clients when the platforms were finally combined (which happened in February 2018). The impact to clients really didn’t take shape right away, it was only after the existing Scottrade clients found themselves using TD’s platforms did they attrition (turnover) rate start to increase. Nevertheless, what was revealing was that once new clients familiarized themselves with the TD Ameritrade platform (Thinkorswim), there was an accompanying lift in the number of trades made by clients.

Also, while on the topic of TD Ameritrade, it was intriguing to hear that Investools, the exceptionally well-designed investor education program offered by TD Ameritrade is being translated to service the Asian markets (China) and that it is going to become an area of even greater focus as Ameritrade looks to pursue getting into the Chinese/Asian investor marketplace.

The growth-by-acquisition strategy was one end of the spectrum and squarely at the other was Interactive Brokers, which has seen incredibly strong growth almost from the get go of becoming a public listing. The interview with Thomas Peterffy was filled with nuggets of information that add depth and context to the IB approach and the realities of being an online brokerage.

 

One of the most interesting takeaways from the Interactive Brokers session is how Peterffy described the ‘ecosystem’ of online brokerages in the US. Namely that TD Ameritrade and E*TRADE clients that outgrow the experience, platform or pricing of these two firms naturally gravitate to Interactive Brokers. In other words, Ameritrade and E*TRADE act as feeders for Interactive Brokers – which is one of the reasons IB has been able to maintain its growth trajectory. Another important contributor to growth for Interactive Brokers has been their international footprint – in particular their longtime presence in Asia (they have been in Hong Kong for about 25 years). The account sizes of the Hong Kong investors rival, on average, those of the US clients.  Perhaps the biggest news that was revealed by Peterffy was that Interactive Brokers will be opening an electronic bank. There are already plans in motion to do so which will enable Interactive Brokers to offer an even broader array of banking services to clients in certain jurisdictions.

The US online brokerage space is always an exciting market to look into because it is dynamic as well as transparent about the kinds of performance metrics and initiatives that impact (or are result of) clients. Canadian discount brokerages, on the other hand, are not as large, do not report the same kind of granularity of data and typically don’t move at the speed and scale of the US online brokerages. Even so, it is worth noting that all the brokerages in the US don’t focus exclusively on order execution only anymore.

The online brokers in the US now include digital/managed advice services (e.g. robo-advisors), banking services and international expansion plans. That each of these US online brokerages have had to diversify their businesses from just online trading is a sign that Canadian discount brokerages are going to compete more heavily with both the banking as well as the managed advice services already in place. It is seemingly ironic that over the span of time that online brokerages have been around, the ‘DIY’ investing world seems to have come full circle as more individuals gravitate towards the managed wealth or digital wealth solutions – perhaps the most convenient is that there are now more one-stop-shopping options to choose from.

Discount Brokerage Tweets of the Week

From the Forums

Weighing in on the Best Online Brokerage

A perennial question among online investors is which online brokerage is best? In this recent post from the reddit Personal Finance Canada threads takes a long look at the pros and cons of Questrade as well as several other online brokerages as viewed by online investors.

Getting Started with TD Direct Investing

As one of Canada’s most popular online brokerages, TD Direct Investing’s recent enabling of online account openings is only going to help speed up the process of getting a new account opened. In this post from reddit’s Personal Finance Canada thread, one user is curious about the online signup and learns some interesting tips from fellow forum users.

Into the Close

That does it for (yet) another eventful week. With uncertainty continuing to grow in markets the upside is that the volatility of the ‘summer’ weather doesn’t quite seem to matter much. If you do find yourself out and about, try to find a way to make it enjoyable! To help get things along, here’s a fun compilation of dance moves – have a great weekend!!

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Discount Brokerage Weekly Roundup – June 15, 2018

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

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

Deals start to sizzle

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

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

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

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

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

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

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

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

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

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

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

Gross is Good

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

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

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

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

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

Discount Brokerage Tweets of the Week

From the Forums

Getting Settled

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

Double Trouble

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

Into the Close

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

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Discount Brokerage Deals & Promotions – June 2018

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

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

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

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

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

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

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

Expired Deals

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

Extended Deals

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

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

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

New Deals

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

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

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

Expired Offers
Last Updated: June 01, 2018 18:55 PT

Referral Promotions

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

Expired Offers
Last Updated: June 1, 2018 18:55 PT

Transfer Fee Promotions

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

Expired Offers
Last Updated: June 1, 18:55 PT

Other Promotions

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

Expired Offers
Last Updated: June 1, 2018 18:55 PT

Digital Advice + Roboadvisor Promotions

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

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

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

Moneysense’s 2018 online brokerage rankings go live

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

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

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

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

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

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

2017 rankings vs 2018 rankings

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

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

This year the following categories were reported on:

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

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

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

Category 2017 2018
Overview + Winner T: Qtrade Investor

H: Questrade

Bank-owned:

T: BMO InvestorLine + Scotia iTRADE

 Qtrade Investor – 22

Questrade – 21

Scotia iTRADE – 14

BMO InvestorLine – 14
ETFs T: Questrade + Virtual Brokers

H: National Bank Direct Brokerage

 National Bank Direct Brokerage – 17

Qtrade Investor – 16

BMO InvestorLine – 13
Mobility + Data Data:

T: TD Direct Investing

H: Qtrade Investor

 Mobile Accessibility:

BMO InvestorLine – 26

Questrade – 14

Qtrade Investor – 10

Data:

TD Direct Investing – 20

Qtrade Investor – 17

RBC Direct Investing – 9
Fees + Services Fees:

T: CIBC Investor’s Edge + Questrade

H: Qtrade Investor + Virtual Brokers

Service:

T: Qtrade Investor

H: Desjardins Online Brokerage

 Fees:

HSBC InvestDirect – 10

Questrade – 10

CIBC Investor’s Edge – 7

Service Interaction:

Qtrade Investor – 8

RBC Direct Investing – 7

Questrade – 6
Initial Impression & UX

(Getting Started – 2017)

 Getting Started:

T: Questrade

H: TD Direct Investing

 

User Experience:

T: Questrade

H: Qtrade Investor

 Initial Impression:

Questrade – 13

Scotia iTRADE – 9

TD Direct Investing – 9

 

User Experience (UX):

Qtrade Investor – 40

Scotia iTRADE – 31

BMO InvestorLine – 30
Reporting & Record Keeping T: BMO InvestorLine
H: Qtrade Investor
Legend: T = Top Pick; H = Honourable Mention

 

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

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

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

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

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

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

What’s interesting about the MoneySense online brokerage rankings?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chatter: Scotia iTRADE possibly launching USD registered accounts this summer

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

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

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

Discount Brokerage Tweets of the Week

From the Forums

Trust Issues

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

Exiting Times

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

Into the Close

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