Tag: Qtrade Direct Investing

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Discount Brokerage Deals & Promotions – August 1, 2016

*Updated: Aug. 9th* At the start of August, discount brokerage deals and promotions appear to be in vacation mode.

With a pair of deals that expired at the end of July and one new partner offer that joined the list of promotion, the turnover and activity in offers coming into this month was minimal. While 22 23 offers still provide a lot for DIY investors to choose from, there are some noteworthy Canadian discount brokerages who still continue to sit on the promotional sidelines.

For DIY investors, the good news is that offers are still surfacing. For DIY investors eyeing BMO InvestorLine, their Summer 2016 promotion has been extended out to the end of August. Also entering the deals roster this month is an offer from a partner of Desjardins Online Brokerage, MoneyTalks, who is offering up three free months of their subscription program to Desjardins Online Brokerage clients.

Interestingly, TD Direct Investing held a one-day promotion during July as a “thank you” to clients in which they offered to waive the commission fee for one trade.

While it was positioned as a ‘thank-you’ gesture to TD Direct Investing clients, the move comes against the backdrop of recent technical difficulties which have been aggravating clients. Thus, it will be interesting to see what other promotional activities TDDI is planning and whether the offer of free trades and other deals might help smooth over some of the technical issues that have arisen recently. It is also interesting to see whether any of their competitors will be offering up something similar to existing clients.

With the ramp up to the fall season on the minds of many brokerages, it won’t be too long before more offers start to show up. As always, if there’s anything that we’ve missed that could help DIY investors fetch a better deal, let us know and we’ll post it here.

Expired Deals

Two noteworthy contest offers expired at the end of July from Virtual Brokers and Scotia iTRADE.

Virtual Brokers’ contest for passes to Canada’s Wonderland (or free trades instead) concluded at the end of July.

Scotia iTRADE’s TSX $10,000 shopping spree contest ended in July and along with the contest offer their official transfer fee credit offer also expired. Users who are considering transferring assets to a new Scotia iTRADE account may want to contact the customer service number at 1-888-872-3388.

Extended Deals

Late last month, BMO InvestorLine officially extended their summer 2016 offer to August 31st from the previous deadline of July 31st.  As a reminder this promotion offers new clients between $200 and $1,000 cash back for deposits ranging from $100,000 to $500,000+. See table below for more details.

New Deals

*Updated: Aug. 9th – Virtual Brokers has launched another contest celebrating their 7th anniversary. Both existing or new clients that find a special promo code somewhere on the Virtual Brokers website and enter the code on a new account application will be entered for a draw to win 7 prizes of $500. See table below for more details.*

A new offer that crossed our radar was posted on Desjardins Online Brokerage’s website. The offer is for three free months of Michael Campbell’s Inside Edge investor information service. This service includes content such as interviews with market commentator Michael Campbell, analyst reports and access to bonuses and discounts. The monthly rate for the service is currently $19.95 so this offer translates into a $59.85 value. See table below for more information.

Discount Brokerage Deals

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

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 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, 2016
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive 3 months of commission-free equity trading and a $150 USD/mo credit towards Edge Trader Pro for 3 months. Use promo code sent at sign up to qualify. Be sure to read full terms and conditions for details. $5,000 3 months commission-free equity trading + $150 USD/mo platform fee rebate. 3 months 3 months free trading / Sign up form for promo code available here none
Disnat Disnat is offering new & existing clients up to $500 in commission credits which can be used for up to 6 months. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code Disnat500. See details link for more info. $50,000 $500 commission credit 6 months Disnat $500 Commission Credit Promo August 30, 2016
BMO InvestorLine Open a new qualifying account with BMO InvestorLine, and fund it with at least A) $100,000 or B) $250,000 or C)$500,000 in net new assets and you may be eligible to receive A) $200 cash back, B)$500 cash back or C) $1,000 cash back. Use promo code Summer1000 when signing up to be eligible. Be sure to read the terms and conditions for more details on the offer. A) $100,000 – $249,999 B) $250,000 – $499,999 C) $500,000+ A) $200 cash back B) $500 cash back C) $1,000 cash back Cash back will be deposited the week of Mar. 6, 2017. Summer 2016 Promotion August 31, 2016

Expired Offers
Last Updated: Aug 2 16:45 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 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTrade account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
If you (an existing Virtual Brokers client) refer a friend or family member to open a new account with at least $5,000 you may be eligible to receive $25 cash per referral. For 3 or more referrals Virtual Brokers will add a $50 bonus. Referred individuals depositing either A) $5,000 – $50,000 or B) $50,000+ may be eligible to receive A) $25 or B) $50 cash back. Be sure to read the full terms and conditions carefully for full details. Be sure to read the terms and conditions to this offer carefully for full details. A) $5,000 – $50,000 B) $50,000+ Referrer: $25 per referral; $50 bonus for each 3 or more referrals. Referee: A) $25 B) $50 Cash to be deposited to VB account by August 15, 2016. Cash Referral Program May 31, 2016
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, 2016

Expired Offers
Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc $1,000 $50 commission credit 30 days none none
Last Updated: Aug. 2, 2016 16:30PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Transfer $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 to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $25,000 Transfer Fee Rebate none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo September 30, 2016
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
Transfer $25,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $25,000 Transfer Fee Rebate none
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 Disnat500. See details link for more info. $150 $50,000 Disnat $500 Commission Credit Promo August 30, 2016

Expired Offers
Last Updated: Aug. 2, 2016 16:30 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Credential Direct has partnered with Trend Micro to offer 50% off Trend Micro Titanium Internet Security. Use code “TrendCF” at checkout. n/a Trend Micro Special Offer Code none
National Bank Direct Brokerage is offering a discount of 0.75% on it’s current margin lending rate for new margin accounts for a period of 3 months. In addition, new margin account registrants will receive a commission rate of $6.95 per equity trade. This offer is open to new and existing clients. Use promo code MARGIN2016 when signing up. Be sure to read the terms and conditions for full details. n/a Margin Account Promotion August 31, 2016
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
Virtual Brokers is celebrating its 7th anniversary with an online contest to win one of 7 prizes of $500. Individuals need to find a special promotion code on a specially marked page on their website and enter the code on an application for a new account. This contest is open to new and existing clients. Be sure to read the terms and conditions for full details. $1,000 Virtual Brokers 7th Anniversary August 31, 2016

Expired Offers
Last Updated: Aug 9, 2016 09:50 PT
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Discount Brokerage Weekly Roundup – July 15, 2016

Even when the world appears irrational, markets still move to beat of their own drum. Against a backdrop of turbulent headlines, markets in the US have managed to hit new all-time highs. For DIY investors in Canada, however, it is an interesting moment. As stock prices move higher, this will invariably attract investors back into the mix however most Canadian discount brokerages have yet to ramp up their marketing efforts to capture investor interest. Ironically, it seems that the Canadian discount brokerages are also having trouble timing the market.

In this week’s roundup we take a look at the clues about current DIY investor sentiment that were revealed by one US online brokerage and what that might mean for brokerages heading into earnings season. Next we take a look at one major bank-owned discount brokerage that took a bold move forward in the social media space. From there we’ll recap what investors were talking about on Twitter and in the investor forums.

Sentimental Value

It takes two to tango and also to make a market. In the case of the latter, it’s an ongoing debate between those who think buying is smarter and those who think selling is. One US-based online brokerage, E*TRADE Financial, released the results of its regular survey of ‘experienced investors’ which showed that there many shades of grey between the lines separating buyer from seller.

While not the most scientific of approaches, there was an interesting portrait of the DIY investor that could be painted based on looking at the ‘big picture’ of the data.

For example, it appears that when it comes to trading and markets, most investors associate their sentiment about the markets with the movie title “Dazed and Confused”.  Although this number surged to 40% for Q3 of 2016 (up from 31% in Q2 of 2016), the fact that it has consistently been the top answer since Q3 2015 implies that a fair portion of experienced investors feel this way most of the time.

Another interesting observation is that most of these experienced investors would recommend individual stocks as the best option for friends/family thinking of getting into the markets at this moment. Remarkably, after stocks, equity mutual funds were the most popular recommendation rather than their lower priced counterparts, ETFs. That said, there has been a growing number of investors who seem to think that bonds would make a good investment to get into. When lined up against what’s been happening in the world and with a US election coming in November, this seems to imply that traders have been positioning for the “fear trade” for quite some time.

On the business side for discount brokerages, whether this forecast translates into more or less trading has real consequences. Next week, another US-based online brokerage, Interactive Brokers, will report its quarterly earnings. With markets hitting new all-time highs, volatility from the Brexit vote as well as other election related uncertainty, it will be interesting to see whether the fear of missing out trumps the fear of loss at least for another quarter.

Wanna Chat?

For those who still think that social media is all hype, selfies and food pics, any recent footage from major news events or articles writing about them probably contain or are based on content from social media. Donald Trump also took to Twitter to announce his running mate for Vice President for what it’s worth.

This past week, TD Direct Investing took the bold step of launching a DIY investing Q&A on Twitter that went reasonably well. It was a definite gamble from the big green given the amount of flack it has been catching from the intermittent (but unfortunately too frequent) outages from its flagship trading platform WebBroker. Nonetheless the social experiment was a success in that there were a number of influential Canadian personal finance bloggers/personalities fielding interesting questions about investing (and also because TD emerged relatively unscathed).

We’ve captured the 350+ tweets that were exchanged over the course of the session and presented them below for anyone interested in reviewing the conversation.

Here are the 10 topics that were covered:

  1. Why should someone tackle DIY investing? Is the juice worth the squeeze?
  2. What mistakes did everyone make when they first started DIY investing? What should 1st timers be aware of?
  3. Honestly, how hard is it really to DIY invest? How much reading and math do you have to do?
  4. Where should you get started when it comes to making your first trade?
  5. When is the best time to buy stocks and then sell them?
  6. If you have debt, should you be investing?
  7. How are you investing? In an RRSP, TFSA or other?
  8. Any tips on what to invest in if you want to grow a housing down payment ASAP?
  9. If the market is down in Canada, should you wait to invest until times are better?
  10. What tools do you use to make it easier to build your confidence as an investor?

Overall the chat was an informative session that offered bite-sized pieces of insight into the world of DIY investing. Thematically it appeared that “slow and steady” was the central message of the talk.

It was clear that there were lots of opinions from the various financial bloggers in attendance and it was encouraging to see that at least some individual investors were participating in the conversation too. With most things personal finance, however, keeping the responses brief but informative was a challenge, especially when some of the questions take some length to explain fully. Nonetheless, there were lots of thanks being passed around for the useful information and for the opportunity to bounce questions off the Canadian personal finance community.

At one point, the #DIYInvesting hashtag was noted as “trending” in Canada indicating that this topic floated to upper layers of what was being discussed in Canada at the time the Twitter chat was happening.

Strategically, this was also a very interesting move for TD Direct Investing for several reasons. First, they were able to score some air time by having multiple participants providing answers and participating in the conversation. In fact, this was a great move by TD Direct Investing to change the conversation away from the issues plaguing WebBroker into something more positive and controlled that scores points with prospective and existing customers.

Another reason this was such a strategic win for TD Direct Investing is because they managed to dominate the conversation on the hashtag #DIYInvesting. One of TD Direct Investing’s direct competitors, Scotia iTRADE has also been using this hashtag as part of their marketing efforts however as was clearly seen over the course of the Twitter chat, there were no references to Scotia iTRADE (or any other brokerages). This is not to say that other brokerages can’t or won’t piggy back on the greater awareness of the #DIYInvesting handle, but there is definitely some ground that TD Direct Investing managed to gain at the expense of other brokerages’ attempts to create a conversation around DIY investing.

TD Direct Investing has come a long way on Twitter despite them having their own handle for a relatively short amount of time. For other Canadian discount brokerages who are contemplating how to compete in the digital landscape, this latest move by TD Direct Investing should raise some eyebrows and force everyone else to step up their game. #ShouldBeFun

Discount Brokerage Tweets of the Week

Technology on the fritz seemed to be yet another theme of why DIY investors reach out to online brokerages via Twitter. Could be the massive heat wave in Toronto that got tempers a little shorter than usual. Mentioned this week were Qtrade Investor, Questrade, RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

 

From the Forums

Getting to Know You

For anyone signing up for an online trading account, one of the questions that inevitably comes up is how much trading experience you might have. In this post from reddit’s Personal Finance Canada section, one user was curious as to why that happens.

Wrong Turn

Transferring from one brokerage to another involves quite a bit of paperwork, a bunch of patience and a whole lot of trust that things will go smoothly. Unfortunately for one reddit user, their experience in transferring an RRSP account into Questrade did not go as planned. In this post, find out what happened and how Questrade attempted to help get things back on track.

Into the Close

That’s a wrap on another crazy week. With all of the heavy news here’s something a little more uplifting to close out on. Whatever you happen to get up to this weekend, have some summer fun, stay cool and see you for a fun earnings-filled week next week!

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Discount Brokerage Deals & Promotions – July 1, 2016

*Update July 13* It looks like the ‘brexit’ wasn’t the only big exit to happen this week. Closer to home, the Canadian online brokerage deals and promotions space also saw a number of promotional offers take off, perhaps for the summer, perhaps longer.

The trend towards promotional offers continues to be a volatile one, which isn’t great news for DIY investors. Compared to this point last year, the total number of cash-back and/or commission-free trade offers has contracted significantly – a development we continue to track. Even though the number of offers has contracted, there are still signs that things are evolving. Interestingly, there has been a rise in the number of contest-related promotional offers.

Despite the turnover in offers, the news isn’t all bad.

Virtual Brokers continued its streak of new offers by launching a Canada Day themed promotion that is highly targeted to Ontario, particularly GTA based, DIY investors that have a penchant for roller coasters and funnel cake.

As part of their latest promotion, Virtual Brokers is offering up a raffle for 4 day passes to Canada’s Wonderland for individuals signing up for a new account during July. Alternatively, for those not in the Toronto area, or who’ve outgrown Canada’s Wonderland, there’s an alternate prize for 20 commission-free trades that potential winners can elect to receive.

Another Canadian discount broker, National Bank Direct Brokerage, also appears to be active in promotions space during the summer. Last month they launched an offer for a margin trading account which offers discounted borrowing rates (0.75%) for margin lending as well as discounted commission trading rates ($6.95) for 3 months. The offer is open to new and existing clients signing up for a margin trading account. As we pointed to in a previous weekly roundup, however, here is a lag time for opening an account at National Bank Direct Brokerage because documents need to be submitted by mail. With a possible strike by Canada Post, there could be an additional delay attached to this process.

We’re already hearing whispers of more offers coming this Fall so it will be interesting to see whether brokerages will be getting ahead of the promotional storm or will be taking it easy for July and August. With competition coming from robo-advisors, recent volatility in the markets and also competition from summer weather, brokerages will no doubt have to get very creative to win the attention of DIY investors.

Expired Deals

There were a number of expired offers from June but among them were a couple of big ones.

*Update July 13: Virtual Brokers has updated their website to include the reinstatement of their transfer fee rebate.*

*Update July 8: Desjardins has extended their $500 commission-credit offer*  First, Desjardins Online Brokerage has elected to not extend their long running $500 commission-credit offer. This means that for the time being their best promotional offer is their ‘Broker@ge 18-30’ $50 commission credit.

*Update July 8: Both BMO InvestorLine and Scotia iTrade have extended their refer-a-friend offers* Next, a pair of referral offers also expired at the end of June and as of Canada Day, these offers have yet to be renewed on their respective websites. BMO InvestorLine and Scotia iTrade both had their refer-a-friend offers expire however in the past both of these firms haven’t let these kinds of low-cost promotions lay fallow for too long.

Another offer from Virtual Brokers, the draw for an Apple gift card, also expired at the end of the month and took with it the associated transfer fee rebate.

Extended Deals

*Update July 13: Virtual Brokers has re-posted the transfer fee deal on their website in the terms and conditions section. See table below for more information*

*Update July 8: Three brokerages, Desjardins Online Brokerage, BMO InvestorLine and Scotia iTrade have each extended previously expired offers* At the moment, no deals have been extended.

New Deals

Virtual Brokers was the only Canadian discount brokerage to launch a promotion this month with their Canada Day themed raffle for either a series of 4 day passes to Canada’s Wonderland or 20 commission-free trades. 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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Transfer $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 to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $25,000 Transfer Fee Rebate none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo September 30, 2016
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
Transfer $25,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $25,000 Transfer Fee Rebate none
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 Disnat500. See details link for more info. $150 $50,000 Disnat $500 Commission Credit Promo August 30, 2016

Expired Offers
Last Updated: July 13, 2016 11:30 PT

Referral Promotions

[table id=173/]

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Transfer $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 to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $25,000 Transfer Fee Rebate none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo September 30, 2016
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
Transfer $25,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $25,000 Transfer Fee Rebate none
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 Disnat500. See details link for more info. $150 $50,000 Disnat $500 Commission Credit Promo August 30, 2016

Expired Offers
Last Updated: July 13, 2016 11:30 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Credential Direct has partnered with Trend Micro to offer 50% off Trend Micro Titanium Internet Security. Use code “TrendCF” at checkout. n/a Trend Micro Special Offer Code none
National Bank Direct Brokerage is offering a discount of 0.75% on it’s current margin lending rate for new margin accounts for a period of 3 months. In addition, new margin account registrants will receive a commission rate of $6.95 per equity trade. This offer is open to new and existing clients. Use promo code MARGIN2016 when signing up. Be sure to read the terms and conditions for full details. n/a Margin Account Promotion August 31, 2016
Scotia iTrade Scotia iTRADE is offering a no-purchase entry option to their Stock Shopping Spree contest. There is a limit of one (1) ballot per person using the no purchase required method. Top prize is $10,000 and there are 5 runner-up prizes of $1,000. Be sure to read full contest rules and regulations for eligibility. n/a No Purchase Entry Link . Click here for full contest rules. July 31, 2016
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
Virtual Brokers is offering the chance for individuals who sign up for a new online trading account on the classic commission structure with a deposit of at least $1,000 to win an Apple $500 gift card. Be sure to read terms and conditions for more information. $1,000 Apple Gift Card Promotion June 30, 2016

Expired Offers
Last Updated: July 1, 2016 15:50 PT
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Discount Brokerage Weekly Roundup – June 10, 2016

In an era of robots and algos, and in a business that stresses keeping things unemotional, there are often times for every trader when emotions and humanity creep back into the picture. This was one of those weeks.

From the news of Muhammad Ali’s passing last week to the outpouring of beautiful tributes that came in through the week and the final service today, this week many of his fans, myself included, found it hard to not reflect on the life of such an incredible athlete and humanitarian. Between the heavy sighs, however, was the reminder that markets and money never sleep. And for many traders, the future is always where the focus lies and the next few weeks will be filled with many challenging events to navigate around.

In this week’s roundup we take a look at a milestone in the history of one online brokerage and what they’re giving away to celebrate. Next we take a look at the little changes that one brokerage is making that DIY investors may be interested in keeping a handle on. From there we highlight some upcoming investor education events and round out with a review of the latest chatter on Twitter and across the forums.

CIBC Investor’s Edge Celebrates 25 years

There have never been more choices for Canadian DIY investors looking to trade ETFs commission free than there are right now. Along with Questrade, Virtual Brokers, Qtrade Investor, Scotia iTRADE and National Bank Direct Brokerage, another online brokerage, CIBC Investor’s Edge, has joined the commission-free ETF roster – albeit for a limited time.

To mark their 25th anniversary, CIBC Investor’s Edge is offering clients commission-free ETF trading on nearly 2000 ETFs for 25 trading days. This promotion runs between June 8th and July 13th.The list of eligible ETFs is here and includes many of the most popular Canadian and US ETFs.

In addition to the promotional offer, the CIBC Investor’s Edge website also has a fun little timeline of the 25 years that explains some of the major milestones for Investor’s Edge over that time.

source: screenshot from CIBC Investor’s Edge website

Despite all the fanfare, however, even celebratory balloons can have strings attached and this offer is no different. Here are some important notes from the terms and conditions.

First ETFs must be held at least one day to be eligible for commission free status. Second, other charges that could apply to trading an ETF, such as an ECN fee would apply to trading these ETFs. Third, the value of the trade needs to exceed $100 in the currency of the trade. Finally, commission-free ETF trades don’t count as qualifying trades for the active trader program.

For swing traders and those looking for an opportune time to rebalance, the commission-free ETF offer is a compelling one, even if the window to take advantage of it is quite small.

With a significant vote on the fate of Britain in the European Union coming up, rate decisions from the Fed chair and a looming US election, analysts are forecasting more volatility on the horizon, so the timing of this promotion may be considered opportune by some (either to get in commission-free or get out commission-free).

It’s somewhat hard to believe that 25 years has gone by as quickly as it has, and to have witnessed first-hand the impact of the dramatic shift in technology that’s occurred over that time. As Canadian online brokerages contemplate what the next 25 years might look like, there’s a good chance that there will a much greater shift in technology and a very different landscape of players and opportunities.

Better Terms

Sometimes there’s big changes that make the news and sometimes it’s the little things that catch our attention. For those brave (and prudent) enough to venture into the Virtual Brokers terms and conditions page recently, they may also have noted some changes to just how long that document isn’t.

Recently, it appears that Virtual Brokers has streamlined their terms and conditions page by taking the terms and conditions for individual promotions and placing them into the promotions pages.

While it may not seem like that big of a deal, for new or existing clients looking to see what their client agreement looks like with a brokerage, it’s nice not to have to wade through lots of irrelevant information to stay up to date. Now that said, there’s also information that still exists that is not quite current such as the information on transfer fee promos that expired at the end of March (and it’s now mid-June).

Another change to the fine print has seen the expiration date of their commission-free trading offer go from non-existent when it first rolled out to May 31st to now December 31st.

The promotion is three months of commission-free trading (and three months of no platform fees) on their commission-free trading account. In a nutshell, it’s three months of free trading for a deposit of $5,000. Like most other offers, however, there are also strings attached to this one so be sure to read (and take a copy of) the terms and conditions before signing on.

Of course, these fine print changes are something that many brokerages reserve the right to change at any time. There are a few upcoming changes to fees from online brokerages that are noteworthy including fee changes at Scotia iTRADE (set to take effect June 15) and BMO InvestorLine (set to take effect July 1st)

Discount Brokerage Tweets of the Week

Nicer weather outside may not quite have translated into nicer comments for Canadian discount brokerages on Twitter. Mentioned this week were Questrade, Scotia iTRADE and TD Direct Investing (and strangely Snoop Dogg).

Event Horizon

The days keep getting longer, and it’s an exciting week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to technical analysis enthusiasts, and those interested in ETFs in this week’s selection.

June 14

Scotia iTRADE – Active Investing Using ETFs with Horizons ETFs

NBDB – Introduction to Technical Analysis – Oscillators -[Fr]

 

From the Forums

Limited Timing

The recently announced commission-free ETF offer from CIBC Investor’s Edge seems to have one downside – time. In this post from reddit’s Personal Finance Canada section in the recent promotion was discussed by a few folks with some interesting thoughts on how to best approach the new offer.

To Bank or Not to Bank

In this post from RedFlagDeals.com’s investing section, one user asks about the pros and cons of going with either a bank-owned brokerage or an independent brokerage.

Into the Close

Last week the world said goodbye to one of the greatest people of all time, Muhammad Ali. It was a particularly difficult loss for many, myself included, and today was his memorial service. One of the most touching eulogies delivered at the service was that from his long-time friend Billy Crystal. We end the roundup on this bittersweet note with a segment of that speech:

‘But didn’t he make all of our lives a little bit better than they were?

‘That my friends, is my history with a man, and I’ve labored to come up with a way to describe the legend.

‘He was a tremendous bolt of lightning, created by mother nature out of thin air, a fantastic combination of power and beauty.

‘We’ve seen still photographs of lightning bolts, at the moment of impact – ferocious in its strength, magnificent in its elegance.

‘And at the moment of impact, it lights up everything around it, so you can see everything clearly.

‘Muhammad Ali struck us in the middle of America’s darkest night, in the heart of its most threatening gathering storm.

‘His power toppled the mightiest of foes, and his intense light shined on America and we were able to see clearly injustice, inequality, poverty, pride, self-realization, courage, laughter, love, joy and religious freedom for all.

‘Ali forced us to take a look at ourselves. This brash young man who thrilled us, angered us, confused, and challenged us, ultimately became a silent messenger of peace who taught us that life is best when you build bridges between people, not walls.

‘My friends- only once in a thousand years or so do we get to hear a Mozart or see a Picasso or read a Shakespeare.

‘Ali was one of them, and yet at his heart, he was still a kid from Louisville who ran with the Gods and walked with the crippled and smiled at the foolishness of it all.

‘He is gone but he will never die. He was my big brother. Thank you.’

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Discount Brokerage Weekly Roundup – May 20, 2016

Source: Twitter

Even the best investors can be caught off guard by sudden moves in the market. It’s a humbling lesson and usually the tuition for poor risk management isn’t cheap. For Canadian discount brokerages, there are definitely signs in the US brokerage market that the risks for certain brokerages are rising.

In this week’s roundup, we take a deeper look into some interesting moves that took place in the US online brokerage market and what that might mean for Canadian online brokerages as the competition and race for technological supremacy heats up. Next, we take a look at standard online brokerage commission pricing, to see why it’s not exactly an apples-to-apples comparison across the board. From there we’ll take a look at the reactions from DIY investors on Twitter and close out with comments from the online investor forums.

Keep on Surviving

Why is a market so exciting? It settles debates from opposing sides using dollars and cents. The business of being a brokerage is something that we cover regularly in the weekly roundup and this past week there were some interesting developments that are shaping up to make the ‘online brokerage’ marketplace even more exciting.

On the one hand there’s a bullish case to be made with interest rates being telegraphed to rise. For borrowers this isn’t great news but online brokerages are also lenders and as we reported several weeks ago, significant portions of online brokerage revenues come from their margin lending. One of the long time messages Schwab has been trying to communicate to its shareholder base is just how material even small increases in interest rates will be for their financial performance.

On the other hand, there are the bears. Interestingly, the case is not entirely a bearish one considering the source, Thomas Peterffy, CEO of Interactive Brokers. According to a recent interview in the Financial Times, he is forecasting that 80% of brokerages in the US will disappear because of constrained revenues, changing investor habits, compliance costs and advances in technology. So, while this is clearly a bearish call for most of the players on the field, for some, including Interactive Brokers, it may be a self-fulfilling prophecy that they’re left standing after this massive cull.

This is not the first time he has pointed to this data this year either. Peterffy alluded to this point in a recent earnings conference call with an analyst which suggests that this forecast is both a clever marketing pitch to professional brokers that want to lower their cost and a way to showcase the merits of Interactive Brokers’ model of heavy automation. In either case, Interactive Brokerages certainly stands to benefit from brokerages either folding, being gobbled up or deciding to use Interactive Brokers for their platform of choice. Well played IB.

There is, however, one potential ‘canary’ in the Canadian online brokerage coal mine.

Now that Virtual Brokers has changed (i.e. raised) their commission structure and is starting to shift their focus towards ‘value’ rather than price, it may signal that they too are feeling the pinch of the low cost game. Unfortunately for small brokerages like VB, value is a game that the bigger financial brands in Canada have a clear edge over (think bundling of services and convenience).

To compound the challenges facing the independent brokerages they need the scale of client accounts (or trading activity per client) to be large otherwise commission prices need to be lower in order to offset the greater convenience offered by the bank-owned brokerages. The only other viable alternative for non-bank-owned brokerages is to invest in making their product experience exceptional – which is not a small investment in either the people running the brokerage or the technology needed to pull it off.

For Canadian DIY investors, ultimately, the scenario where costs/fees decrease is a good one.

Unfortunately for the non-bank-owned brokerages are now quite vulnerable to being priced out. There’s already proprietary data we’re seeing that shows they’re losing their edge against the banks, and the introduction of robo-advisors certainly doesn’t help matters either.

If the bank-owned brokerages were to drop their standard commission fees down even further, the traditional “low cost” or non-bank owned online brokerages would have a difficult time competing demonstrating yet again that the debate over the best online brokerage may just come down to who’s left standing.

Unpleasant Sur-price

Nobody likes discovering what’s in the fine print, especially after receiving a charge from their brokerage. Yet, despite all of the forms and acceptance of terms and conditions, so many DIY investors get tripped up by the fine print put forward by online brokerages.

Interestingly, this past week there were two examples of two different investors who unfortunately appeared to get dinged for fees they didn’t see coming.

The first was in a post in the Canadian Money Forum in which a Qtrade Investor client was charged $22 commission for a trade they thought should only cost $8.75.  In the second case posted on Twitter, a user was clearly caught off guard by the commission rates.

Of specific interest is the situation of the trade at Qtrade Investor. In this particular instance the individual in question stated they were charged a fee that was generated on top of their ‘commission fee’. As it happens, this fee appears in the “other fees” section of the Qtrade website pricing page where it states that a charge of 1/30th of 1% or (0.00033) of the value of the trade.

Breaking down the math of the trade, the standard rate of $8.75 per trade means that this individual incurred a charge of $13.25 in ECN fees for this trade. In order to generate that level of ECN fee they would have had to have a trade value of $39,750. Now since we know they sold 500 shares of BMO.TO that gives us a trade price of $79.50 (sounds like a good round number limit order price) which turns out to be a plausible price for BMO to have hit on April 12th – so the math checks out (13.25 divided by 0.00033333 = 39,750).

There are a number of interesting things about this scenario.

Perhaps the most fascinating is that this person described themselves as a relatively infrequent trader (<20 trades per year) with a six-figure portfolio. Yet for the surcharge of an extra $13.25 of a $39,750 order, the individual went through the motions of reconsidering their relationship with Qtrade Investor to consider moving their crosstown rival Credential Direct (or others who may offer truly flat pricing). And, not so much because of the $13.25 but as noted by the individual it was “the principle of paying double”.

It is important to mention that, while Qtrade Investor does offer to waive this fee for clients who make over 150 trades/quarter or who have at least $500,000 in assets across all Qtrade accounts, for this investor, the standard pricing rules applied.

From a business perspective, the bigger question is what is it worth to an online brokerage have that client or to try to win them back? The answer to this question is probably why, in some part, many bank-owned brokerages have decided to offer flat commission pricing rather than pass through the ECN charge.

For DIY investors, flat pricing is usually a more favourable option to have than variable pricing and the difference can certainly add up depending on the manner or volume of trade being executed. Flat pricing also simpler and more predictable.

Interestingly, Virtual Brokers is the only non-bank-owned brokerage to offer the flat commission pricing as a standard option. It should be noted that Virtual Brokers does pass through the SEC fee for US securities trades at the rate of $0.0002/share.

Brokerage Standard Commission Price
BMO InvestorLine 9.95 flat
CIBC Investor’s Edge 6.95 flat
Credential Direct 8.88 (not flat)
Disnat Classic 9.95  (not flat)
HSBC InvestDirect 9.88 (not flat)
Interactive Brokers 0.01/share (not flat)
Jitneytrade Variable pricing (not flat)
National Bank Direct Brokerage 9.95 flat
Qtrade Investor 8.75 (not flat)
Questrade 4.95 – 9.95 (not flat)
RBC Direct Investing 9.95 flat
Scotia iTRADE 24.99 (not flat)
TD Direct Investing 9.95 flat
Virtual Brokers 9.99 flat
Note: Flat is defined as no additional charges on the trade (e.g. no ECN fees will be charged)

With flat commission pricing the independent or “low cost” discount brokerages in the Canadian market are now not necessarily less expensive than the bank owned discount brokers. Other fees, such as account administration fees or inactivity fees certainly bear consideration but when looking at flat vs variable cost on a per trade basis – flat makes a compelling case.

Coming back to the bigger issue of changing a brokerage on principle, this example offers an important insight into the value that DIY investors place not only on transparency of fees, but also on clarity and customer choice.

DIY investing does mean that there will be fine print and unfortunately as individual investors, everyone who signs up for an online trading account is responsible to know some of the “quirks” and important conditions for trading through a particular online brokerage.

1/30th of 1% may not seem like much but it was enough to cause one client to take to the internet to voice their displeasure.

The lesson to brokerages seems clear: leave the surprises in price to the stock market and not in the commission structure of those doing the trading.

Discount Brokerage Tweets of the Week

We had a few technical difficulties with the tweets of the week, so only a selection of tweets are shown here. We will update this when we’re able to access the other tweets. In the meantime, there appears to be no shortage of reasons that caused investors to reach out – most notably an outage from TD Direct Investing’s web broker.

From the Forums

The Price of Advice

In this post from Canadian Money Forum, a product that we don’t often hear much about – BMO InvestorLine’s Advice Direct, was mentioned by someone considering the service. Interestingly there was also the mention of bonus trades for InvestorLine to sweeten the deal to the tune of 160 free trades per year. There’s an interesting debate about robo-advisors in there as well. Worth a read.

The Cost of Advice

In this post from reddit, an alleged interaction with a Questrade representative stating that someone should over contribute on their TFSA sounded alarms with other readers and also with Questrade community reps who replied. An interesting example of why it’s always good to trust but verify.

Into the Close

That’s a wrap on another week. Heading into the May long weekend remember that Canadian markets will be closed on Monday. Have a safe and fantastic weekend and for all the Raptors fans, hang in there!

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Discount Brokerage Weekly Roundup – May 6, 2016

Source: Twitter

Crisis and opportunity. For traders it’s often two sides of the same coin. The human toll of the tragic events in Fort McMurray are impossible to quantify however for those seasoned veterans of markets who can only watch in disbelief at this surreal disaster, the scale and impact of these wildfires are what need to be traded around – which means speculators are trying to quantify the impact to oil, the Canadian dollar and the insurance industry. That said, like markets, it is encouraging that because of the bravery of first responders and the steely resolve of those displaced by these unrelenting fires, individuals are looking to the future, patiently awaiting the chance to rebuild.

In this edition of the roundup we’ll take a look at the latest deals and promotions to hit the stands at the outset of the month. Following that, we do a lightning round of small updates at several brokerages which show that the ground is still shifting and highly dynamic. We close out the roundup with chatter on Twitter and in the Canadian investor forums.

Making a Market for Promotions

Even though markets seemed to have had a solid bounce off their February lows, for online brokerage deals, it seems that the case is quite the opposite. The number of deals and promotions from Canadian brokerages has steadily receded so that heading into a new month we’ve now spotted 17 advertised promotional offers.

Despite a couple of brokerages flashing bearish signals on offering DIY investors deals, the great thing about competitive markets is that there are other brokerages who are bullish, and as a result, the next few months should have some really interesting changes start to take shape.

Since March, it appears that Questrade and Scotia iTrade in particular have turned bearish on deals. After years of promotional activity that typically resulted in a new offer every few weeks, these firms have been noticeably more quiet – perhaps too quiet. In such a dynamic space, sometimes it not what players do but what they don’t that raises eyebrows. In this case, such a longstanding practice of headline grabbing offers suddenly pulling back is sign that something is definitely up.

In contrast, Virtual Brokers has decided to pick up its promotional pace in 2016. They head into May with a contest driven promotion ($500 Apple gift certificate prize draw) and more recently they’ve also teamed up with 5i Research to provide special access to this newsletter/information service to VB’s clients whose balances are greater than $4,000 (this is being marketed directly to existing clients for the moment although it is open to new clients).

Another brokerage that stepped back into the promotional arena this month was National Bank Direct Brokerage. In NBDB’s case, they are once again sponsoring the Horizons Exchange Traded Funds “Biggest Winner” ETF trading competition. The simulated trading competition involves contestants trading Canadian ETFs to see who can have the best performance over the 6-week competition. Top prize for the ‘biggest winner’ is $7500.

Incidentally the contest sponsorship coincides with National Bank Direct Brokerage’s commission-free ETF offer (for Canadian ETFs only), so the contest promotion has some overlap with the free ETF promotion as well.

Overall, the number of actively advertised deals has declined since the start of the year, owing in large part to the retracement of Questrade in this space.

That said, certain brokerages are running unadvertised marketing campaigns to select clients and there are already brokers that have signaled a pickup of deals activity heading into the fall.

While brokerages may not be too enthusiastic about dishing out free trades or cash-back incentives, the challenge of attracting new clients and standing out from one another still remains. It looks like the strategy across multiple brokerages is to stay away from price drops and focus on the value added experience (i.e. getting additional research or getting promotional items).  The fact there are several brokerages actively running contests as part of their incentive program could be signs of an early trend emerging.

Whatever the route that brokerages choose to take, the reality of attracting new clients while staying ahead of the competition has only gotten more complex. The notion that you have to ‘give to get’ is one that will remain true for brokerages, so it will be interesting to see who does the giving and what form those gifts take.

Lightning Roundup

This week there were a number of small developments across the online brokerage space. Though they might be small, however, they do highlight that this space is still a dynamic one, even heading into the second half of spring.

Qtrade Shifting the Focus

In an interesting shift of messaging on the front end of their website, Qtrade Investor has replaced their now-expired deal announcement with an image focusing on the customer service aspect of dealing with Qtrade.

Source: Screenshot of Qtrade Investor website

The choice of what to make front page news on a company’s website homepage is a deliberate and important one. In Qtrade’s case, the focal point on good service is one they most likely want to ensure gets equated with their brand.

This is another in a series of front-facing improvements Qtrade has made so it is interesting to see what this evolves into.

Interactive Brokers Trading Metrics

Interactive Brokers once again released their trading and company metrics for April. While there were mixed performances across different metrics, what continued to show consistency is their account growth. On a month over month basis, client accounts grew by 1% but on a year over year basis, this figure was +15%.

Interactive Brokers continues to attract more clients than they lose, a sign that traders are still stepping up to the plate. Looking a little deeper, they are continuing to maintain their dominant position with highly active traders with the average number of trades per client estimated at 444/year.

The Digital Transition

One of the biggest advantages that bank-owned brokerages have enjoyed over the non-bank owned brokerages has been the fact that there is the convenience of a physical branch to go into. That notion of convenience, however, is clearly becoming increasingly digital.

An area in which that has become particularly evident has been in investor education. Specifically, in looking at the educational events provided by TD Direct Investing, there has been a noticeable shift away from doing in-person/live events and towards doing online webinar style events.

Here are two images comparing the educational events across Canada from 2014 and that same picture heading into May 2016. It is interesting to note that there are more in-person events taking place in BC than there are in Ontario, despite the population size difference. Further, there are now fewer (if any) in person events in Quebec and regions outside of Ontario, Alberta and BC. For what it’s worth, TD Direct Investing also does in person events (such as their Tastytrade event in Toronto last fall) which are bigger in scale and offer much more of a spotlight on their brand than perhaps the network of small educational seminars could offer.

Source: Screenshot TD Direct Investing Seminars Page

Interestingly, looking at other educational event providers at the bank-owned brokerage level, Scotia iTrade tends to hold almost all of their educational events as online webinars while their in person events are largely as a sponsor of Larry Berman’s educational ‘road show’.

National Bank Direct Brokerage, on the other hand, does not tend to do large/big name events and tends to concentrate their efforts primarily in Quebec. Over time they’ve shifted from being mostly in-person events to now about an even split between online and in-person events.

The reality of busy people today is that technology exists to give investors the convenience of webinars rather than forcing them to commute and coordinate being in a room to listen and learn. Although this transition has clearly taken some time to manifest, the trend towards digital transition in financial services is evident and there’s really no going back from here. As everything around consumers gets more and more digital, the expectation that banks and online brokerages demonstrate leadership and agility with technology will be key to their survival. It is perhaps why Scotiabank announced a mindboggling spend of $275M to upgrade their technological infrastructure. The technology arms race has already begun so it will be interesting to see how and where online brokerages continue to digitize going forward.

Discount Brokerage Tweets of the Week

It looks like customer service in the digital age includes being able to connect on Twitter. Online brokerages that had their customer service skills tested included BMO InvestorLine, CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTrade, TD Direct Investing and Virtual Brokers.

From the Forums

As they say in the markets, sometimes the volume thins out. This week in the forums discount brokerages weren’t making waves. Nonetheless, there were a few ripples in the water.

Questrade vs Wealthsimple

The battle of the brokerages has now spilled over into the robo-advisor arena. This post from reddit’s personal finance Canada section is a great example of what might be facing brokerages with and without their own robo-advisor service.

Mutually E-xclusive

In this post, also from reddit’s personal finance Canada section, there was an interesting example of an individual seeking some direction on how to access the TD e-series low cost mutual funds and the kinds of information they encountered along the way.

Into the Close

It’s been an incredibly tough week for the folks in Fort McMurray. While we typically hope for sunnier skies for the weekend, here’s hoping that Fort McMurray gets the rain and relief it needs.

Amidst the tragedy and fear, there are tremendously courageous folks who are going above and beyond the call of duty to help. Thank you to all the good Samaritans and first responders for their efforts and for Canadians for being Canadian when it counts the most.

On a slightly different and more positive note, here’s a great reminder of what Canadians know about one another when it comes to rising to the occasion.

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Discount Brokerage Weekly Roundup – April 29, 2016

It’s hard to believe but here we are at the end of April. For some, it’s a sprint to the tax filing deadline. For sports fans, it’s been a lottery filled week with ‘mathletes’ trying to calculate who pick up prospects in the NFL and NHL. Of course, Canadian discount brokerages know all too well the value of being a first round pick for DIY investors – and they also fortunately know not to tweet embarrassing videos of themselves (at least they haven’t yet).

In this week’s roundup, we take a look at the latest Canadian discount brokerage comparison to see which brokerages ended up gaining accolades. Next, we take a look at a fascinating court case involving a trade gone wrong and a discount brokerage on the bad end of an unhappy trader. From there we cap off this week’s roundup with a look at more unhappy traders in the discount brokerage tweets of the week and close out with chatter from the investor forums.

Comparing Canadian Online Brokerages

This past week, the latest ranking and comparison of Canadian discount brokerages hit the digital news stands as Monysense published its guide to online brokerages (the digital edition of the June issue is now available to digital subcribers). Authored by Dan Bortolotti with research and commentary provided by Glenn Lacoste of Surviscor, this is the fourth year in which Moneysense has collaborated with Surviscor to provide an overview of the Canadian discount brokerage space.

Comparing online brokerages is not an easy task. With more than a dozen providers and so many features to consider, it’s great to have summaries and commentaries to help provide some perspective and hopefully narrow down the research required.

Unlike most of the other rankings and ratings of Canadian discount brokerages, the Moneysense approach tends to segment out top brokerages by key features or by the specific types of investors (e.g. beginner investors) that would find a particular brokerage attractive. In addition to the commentary, they usually also provide a good summary table that organizes a lot of the information DIY investors care about.

This year’s edition of the table has a neat inclusion of robo-advisors ETF services available at three brokerages: BMO InvestorLine, National Bank Direct Brokerage and Questrade (although most of these brokerages would not characterize their service as a “robo-advisor”).

Of course, when it comes to comparing brokerages, the devil is always in the details. And, as a recurring reminder to readers of SparxTrading.com, it’s important when looking at rankings and ratings to try and understand exactly what’s being measured and driving the title of “best online brokerage”.

To that end here are a couple of interesting items that stood out.

First, it was interesting that instead of crowning a “best online brokerage” overall Moneysense chose two categories that distinguish brokerages: either bank-owned brokerages or independent brokerages. The following table shows the breakdown of category winners and honourable mentions.

Category Top Pick Honourable Mention
Getting Started BMO InvestorLine Virtual Brokers
Ease of Use Scotia iTRADE Questrade
Fees & Commissions Questrade Qtrade Investor
Customer Service Qtrade Investor Scotia iTRADE
Reporting & Record Keeping Scotia iTRADE BMO InvestorLine
Market Data TD Direct Investing Credential Direct
Best Overall Bank-Owned Scotia iTRADE BMO InvestorLine
Best Overall Independent Qtrade Investor Questrade

While the distinction between bank-owned and independent does exist, the piece did not really dive into why this was a critical distinction to make.

As a result it was a challenge to get an ‘apples to apples’ view of the online brokerage field especially since both independent and bank-owned brokerages were compared side by side according to particular features.

Another interesting component to the comparison was the reporting of the average time to respond. As was drilled into me by multiple university stats profs, the average alone is not as informative as knowing both the average and standard deviation. Reporting the range and number of attempts at each firm would give a much clearer picture of how consistent that average really is.

Finally, a place in which readers should be cautious with this comparison is in the standard commission fee category.

Given the importance of the standard online commission fee for equity trades to consumers who want to find out how much they would presumably have to pay per trade, the way in which these numbers were reported was slightly confusing.

In particular the standard equity trade for Scotia iTRADE is reported as $9.99 per trade which happens to only be true for individuals whose account is worth at least $50,000. For individuals who do not achieve that threshold, the standard equity commission is at least $24.99 per trade. Unfortunately the “basic” commission at Scotia iTRADE according to this table seems like it is $9.99 (the fact that it is $24.99 is reported in the next row). The fact that a minimum account value is required in order to receive a ‘basic’ value is confusing, especially since it would imply that $50,000 is a ‘basic’ balance. Further, it would mean that HSBC InvestDirect’s commission would be $8.88 per trade at that balance level and not the $9.88.

Another caution is in the choice was to not mention CIBC Investor’s Edge as having the lowest commission structure under the fees & commissions section. At $6.95 flat per trade, this is one of the most competitive standard equity trade commissions available to DIY investors, including those investors making frequent small trades. In particular it is the fact that the commissions are capped (inclusive of ECN fees) that makes CIBC Investor’s Edge (and any brokerage that caps fees) a compelling choice.

While the Moneysense discount brokerage ratings do offer a unique, user oriented overview, it’s clear that there’s lots of information for DIY investors to try and digest when comparing.

Ratings and summaries such as this do help with navigating the maze of data however it is always important to check brokerage fee schedules and the fine print as many of the terms/conditions can’t easily be captured or communicated in one easy view.

Oh no he DI-n’t

If you’ve ever been blown out of a bad trade and/or been on the unfortunate other end of a margin call, it can be about as much fun as a root canal, perhaps less so. Examples abound on Twitter and in forums, however, of traders who’ve had trades go the wrong way on them in a hurry and as a result have to take a significant hit. When it happens, it’s not pretty.

That said, there was an incredibly interesting (for those keenly following the discount brokerage space) case where one trader got caught (or taken) offside and tried to take their online brokerage to court for over $340M in damages.

The brokerage in this case was TD Direct Investing and (sorry for the spoiler) no, the trader was not successful in his attempt to claim anything back for his trades gone wild.

Given the length and detail of the examination and case, there is a trove of interesting stuff in the court filings. For those that don’t want to wade through the 14 thousand words, here are some of the highlights:

First, options trading is risky. And, while risky is a term that is synonymous with trading, it’s important to spell it out: when DIY investors trade, they risk losing their money. And when trading on margin it means that you can lose a considerable amount of it.  For added edutainment, here’s a South Park clip from Margaritaville that nails it:

The trader in this case (Frank Oktay Turkson) got caught offside when a company he had written put options on went belly up (the stock was GTAT). So, while he did manage to get himself a premium of about $14K (and paid a commission of $47.49 USD) the loss more than wiped out any gains he would have received (he also had to pay $43 commission for the assignment). The fact that he had his other securities liquidated to meet the margin call was a rather unpleasant lesson in the powers that brokerages have to ensure that an account is kept within its stated risk limits.

In this case, it was interesting to see it pointed out that ‘discount brokerages’ do NOT provide advice or recommendations on where or how to trade. Discount brokerages simply communicate over and over again in the terms and conditions, and in the sign up forms (account opening documents) that trading involves potential for financial loss and that by opening an online brokerage account, DIY investors accept that they could lose money.

This is even more so the case with options. This was a case where in spite of having gone through the terms and conditions, and having signed that they understood them, a trader got burnt and tried to go after the brokerage for margin call and loss on the position.

One of the most interesting revelations from this court case was that a brokerage has the option to liquidate a margin position whether or not the position is at a loss. This implies that even a high flying gainer on margin can be shut down at the brokerage’s discretion.

If there’s one takeaway it’s that the documentation that brokerages provide at the outset of opening an account basically protects them from having to take responsibility in the case that things go wrong on a particular trade. Discount brokerages are a business and they are not prepared to take on someone else’s risk or subsidize a risky trader with margin.

DIY investors need to be aware that the risks of trading and financial loss are seldom presented with as much excitement or fanfare as the prospect of winning or the ease with which trading can occur. The conversation is definitely in favour of “making money” and how easy it is to trade rather than stating how easy it is to lose money.

Options are especially risky so it is important to be clear on how they work and how to manage the risks associated with them before trading them. Unfortunately for the trader, they had to learn a very expensive and hard lesson that when it comes to DIY investing, it’s every party for themselves.

From the Forums

Counting Potatoes

While the ‘couch potato’ approach to investing is popular with many investors, it’s important to know what buying and rebalancing will cost in terms of trading commissions. In this post from reddit’s Personal Finance Canada section, one investor heeds some handy math when considering RBC Direct Investing for their ETF investing strategy.

Need a Joint?

Wedding season is soon to be upon us. As couples tie the knot they may start to find their finances starting to also get a little more complicated. In this post from Canadian Money Forum, one user asks about a potential joint TFSA with Credential Direct. Find out the interesting feedback that helped shed some light on how TFSA’s work and how to access a spouses account.

Into the Close

That’s a wrap for this week. In case you missed it, today was also International Dance Day and there was a running man challenge, both of which were captured in this football themed video courtesy of ‘Gronk’ of the New England Patriots. That’s a whole lot of meme action to close out the week (triple witching meme?). Enjoy the rollover into May and have a great weekend!

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Discount Brokerage Deals & Promotions – April 1, 2016

People often look at springtime as a chance to clean house. And, for many of Canada’s discount brokerages, that is exactly what they did with the deals and promotions heading into April.

At the outset of this month, there are almost half as few deals being offered as there were throughout March which is a signal that online brokerages are stepping back as the summer season approaches.

Cash Back / Free Trade

Referral Promotions

Transfer Fee Promotions

Contests & Other Offers

 Total
March

15

4

10

4

33
April

6

3

8

4

19

 

The biggest decline was seen in the number of cash back or commission-free trades being offered however at the time of publication, several brokerages, such as Scotia iTrade and Virtual Brokers, still had the expired offers listed on their website raising the prospect of a potential extension from someone.

What is interesting is who has managed to keep a promotion alive through the spring turnover. Specifically, Virtual Brokers’ commission-free trading offer has definitely been on the radar of many deal hunters and the two bank-owned brokerages in the mix, BMO InvestorLine and TD Direct Investing, have much more attention thanks to the exit of so many other players.

There’s a high likelihood that many brokerages will be assessing where they need to go next now that the busy first quarter of 2016 is officially over. With tax return (and for many, tax refund) season now underway, we anticipate that the deals and promotions activity will start to pick up again in April.

For DIY investors, 19 discount brokerage deals on the table still means that there are still lots of options to consider, however with any deal be sure to read the fine print to know exactly what strings are attached.

Expired Deals

The list of expired  Canadian discount brokerages deals from last month is quite long. Here’s a quick list of what expired in March:

  • Questrade – Apple Watch ($500 Apple Gift Card)
  • Scotia iTrade – Free Trade Offer
  • Scotia iTrade – Refer a Friend
  • Virtual Brokers – RRSP 2016 Promotion
  • Credential Direct – Cash back offer
  • Questrade – 3 months free trading
  • Questrade – 3 months unlimited trading
  • NBDB – $500 or $1000 commission credit
  • HSBC InvestDirect – 30 commission-free trades

Extended Deals

Only one discount brokerage at the start of the month extended an existing offer. Desjardins Online Brokerage kept their $500 commission credit alive for another month extending the deadline for this offer out to April 30, 2016.

New Deals

No new deals to announce at the beginning of April.

Discount Brokerage Deals

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

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 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, 2016
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive 3 months of commission-free equity trading and a $150 USD/mo credit towards Edge Trader Pro for 3 months. Use promo code sent at sign up to qualify. Be sure to read full terms and conditions for details. $5,000 3 months commission-free equity trading + $150 USD/mo platform fee rebate. 3 months 3 months free trading / Sign up form for promo code available here none
BMO InvestorLine Open a new qualifying account with BMO InvestorLine, and fund it with at least A) $100,000 or B) $250,000 in net new assets and you may be eligible to receive either A) $200 cash back and 100 commission-free equity trades or B) $600 cash back and 100 commission-free equity trades. Use promo code Spring1600 when signing up to be eligible. Be sure to read the terms and conditions for more details on the offer. A) $100,000 – $249,999 B) $250,000+ A) $200 cash back + 100 commission-free equity trades. B) $600 cash back + 100 commission-free equity trades. 60 days for equity trades. Cash back will be deposited the week of Oct. 10, 2016. Commission rebates will be paid week of Oct. 10, 2016. Spring 2016 Promotion May 31, 2016

Expired Offers
Open and fund a new account at TD Direct Investing with at least A) $25,000; B) $50,000 or C) $100,000+ and you may be eligible to receive up to A) 50; B) 100 or C) 200 commission-free trades. Be sure to read terms and conditions for full details. A) $25,000 – $49,999 B) $50,000 – $99,999 C) $100,000 A) 50 commission-free trades B) 100 commission-free trades C) 200 commission-free trades 60 days Commission-free Trading Offer April 15, 2016
Disnat Disnat is offering new & existing clients $500 in commission credits which can be used for up to 6 months. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code Disnat500. See details link for more info. $50,000 $500 commission credit 6 months Disnat $500 Commission Credit Promo April 30, 2016
Last Updated: May 9 9:45 AM

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTrade account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade March 31, 2016
If you (an existing Virtual Brokers client) refer a friend or family member to open a new account with at least $5,000 you may be eligible to receive $25 cash per referral. For 3 or more referrals Virtual Brokers will add a $50 bonus. Referred individuals depositing either A) $5,000 – $50,000 or B) $50,000+ may be eligible to receive A) $25 or B) $50 cash back. Be sure to read the full terms and conditions carefully for full details. Be sure to read the terms and conditions to this offer carefully for full details. A) $5,000 – $50,000 B) $50,000+ Referrer: $25 per referral; $50 bonus for each 3 or more referrals. Referee: A) $25 B) $50 Cash to be deposited to VB account by August 15, 2016. Cash Referral Program May 31, 2016
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 after 45 days (subject to conditions). BMO InvestorLine Refer-a-Friend June 30, 2016

Expired Offers
Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc $1,000 $50 commission credit none none none
Last Updated: May 1, 2016 21:30 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Transfer $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 read terms and conditions for full details. $150 $25,000 Commission-free trade promo April 15, 2016
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 info (1-800-567-3343) none
Transfer $25,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $25,000 Transfer Fee Rebate none

Expired Offers
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 Disnat500. See details link for more info. $150 $50,000 Disnat $500 Commission Credit Promo April 30, 2016
Qtrade Investor will reimburse your transfer fee up to $150 when transferring a balance of $10,000 or more. For reimbursement, please mail or fax a copy of your statement from the transferring institution that shows the transfer charge to Qtrade Investor at 604.484.2627 and indicate your Qtrade Investor account number. $150 $10,000 Transfer Fee Rebate April 29, 2016
Last Updated: May 1, 2016 21:30 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Credential Direct has partnered with Trend Micro to offer 50% off Trend Micro Titanium Internet Security. Use code “TrendCF” at checkout. n/a Trend Micro Special Offer Code none
Disnat Desjardins Online Brokerage 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
Open a new account with Questrade with at least $2,000 and you may be eligible to receive free tax software and the platinum bundle package form H&R Block. Use promo code HRBLOCK2016 when signing up to qualify. Read the terms and conditions for full details. $2,000 H&R Block Promo April 15, 2016
Last Updated: May 1, 2016 21:30 PT
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Discount Brokerage Weekly Roundup – March 18, 2016

If you were like most folks this week, getting adjusted to the one hour less made things feel a little bit foggy. Of course, if you’re following what’s happening with the US elections, candidates are taking all kinds of swings at one another as the contest for presidency heats up. Here in Canada, discount brokerages, while keeping it polite, are nonetheless starting to raise the stakes with one another in a big way this week.

In this week’s roundup we start by first looking at one brokerage’s continued pursuit of mobile trading with the launch of their latest smartwatch trading app. Next we take a look at a small brokerage that seems poised to make a big splash in the deals and promotions pool with a newly launched offer. The event horizon makes a comeback this week and we round out with the latest comments from DIY investors on Twitter and forums.

Watching the Markets

This week Scotia iTrade unveiled their latest upgrade to their mobile trading experience: an Apple watch based app. Their latest addition to the mobile trading suite, which includes smartphone and iPad versions, enables Apple watch users to take a pulse of what’s going on in the markets as well as within their own portfolio.

While the Scotia iTrade Apple Watch app does not let users actually trade from the watch, it does enable users to get updates on balances, monitor watchlists and keep an eye on market activity. Given the dependency of the Apple Watch on the iPhone, however, the full set of trading features available on the iPhone app offers users much more functionality should they need it.

In celebration of their new release, Scotia iTRADE also held a mobile day at their investor centre in downtown Toronto.

Canadian online discount brokerage Scotia iTrade tweeting about their new Apple Watch trading app.

When considering the mobile trading landscape, Scotia iTrade is certainly not alone in their pursuit of the smartphone and now smartwatch space.

Most Canadian discount brokerages have some kind of dedicated app or specific mobile site to accommodate smartphone users. In terms of smartwatches, however, there are three online brokerages that have Apple Watch apps specifically built for DIY investors, and two bank-owned brokerages who’ve bundled some of their online investing functionality into their overall banking app.

The three Canadian online brokerages with Apple watch trading apps are:

  • Interactive Brokers
  • Qtrade Investor and
  • Scotia iTrade

What is interesting about the online trading experience on mobile is that the smartwatch is typically limited to providing alerts and updates. In that sense, its role is mainly to monitor what’s going on.

With the Apple Watch in particular, because it is tethered to the iPhone, how an online brokerage’s iPhone-based trading app functions is something individuals interested in these products should also consider.

In the table below, it is particularly noteworthy that almost all Canadian online brokerages, whether they are bank-owned or are independent, have ranked poorly in terms of user reviews. The best rated online brokerage iPhone trading app, based on client reviews from the Apple App Store, turns out to be Qtrade Investor with 4.5 out of 5 stars (based on only 23 reviews). At the other end of the spectrum, Questrade’s IQ app garnered only a 1.5 out of 5 stars and it was based on the highest number of ratings (463) received by any online brokerages’ mobile app.

Online Brokerage Overall Star Rating* # of Ratings Support for Apple Watch
BMO InvestorLine 2 63 No
CIBC Investor’s Edge 2.5 133 No
Interactive Brokers 2.5 179 Yes
Questrade iQ 1.5 463 No
Qtrade Investor 4.5 23 Yes
Scotia iTrade 3 105 Yes
Virtual Brokers 2.5 10 No
Notes * based on all versions

What stands out in looking at these user ratings is actually how unfavourable consumer ratings are of the mobile experience provided by Canadian online brokerages.

In sharp contrast to the muted ratings received by most Canadian discount brokerages, was the rating of robo-advisor, WealthSimple’s mobile app, which received a glowing 4.5 star rating (based on 51 ratings).

As financial services firms cross the threshold from just being about services to really incorporating technology (ie. Fintech) as part of the service experience, the gap between the incumbent online brokerages and the new entrants into the wealth management space is starting to widen.

For added proof, one need not look further than US online brokerage Robinhood, whose mobile-first design approach has earned them incredibly positive design and user-experience recognition and a 4.5 star rating across 10,107 ratings.

So, while being able to get updates on the market might be nice, there is still a heavy reliance on the smartphone app trading experience and as such, there is clearly lots of work that many Canadian online brokerages need to do in order to win the hearts, minds and design accolades of the newer players in the space.

Virtual Brokers Goes All In on Trading Deal

For savvy traders, patience and timing are a virtue. In this case of deal watchers, this past week Virtual Brokers has launched a monster offer that has, surprisingly, not yet garnered much attention. We suspect that might change quite soon.

Earlier this week Virtual Brokers launched a promotion that offers 3 months free of their $150 USD/mo Edge Trader Pro trading platform which is part of their commission-free trading plan. The minimum deposit to qualify for this offer is $5,000.

What is remarkable about this offer is that it is actually one of the most aggressive free trade offers seen to date.

By signing up for this offer, it appears that an individual would be able to trade commission-free for 3 months with a deposit of $5,000. This seems to be the case since Edge Trader Pro is a required to qualify for the commission-free trading plan, however since the platform fee of $150 USD/mo would be waived, individuals could then trade commission-free (equities only and ECN fees/admin fees/handling fees still apply) for the period of the promotion. At least that’s what the terms and conditions of this offer seem to suggest.

Historically, the only brokerage that has consistently offered 3 months of commission-free trading has been Questrade however for to qualify for 3 months of commission-free trading, an individual would have to pony up a deposit of at least $100,000. Another interesting observation on Virtual Brokers’ latest deal is that there is no deadline stated in the terms and conditions despite it being marketed as a limited time offer.

A little more math, however, puts this offer into further context as to why it is such a big deal.

With 3 months of fees waived, the annual spend for being on the commission-free trading plan with a reasonably standard application-based trading platform totals $1350 USD which breaks down to $112.50 per month (for 12 months). For traders of US equities this works out to about 11 trades per month at the standard commission of $9.95 + any ECN fees or special handling fees – a threshold that many active traders can easily hit.

So, many folks might be wondering what the catch is. For starters, to stay on this program, whether on purpose or by accident will still cost $150 USD/mo once the free trial period expires. What this means is that individuals should carefully consider whether this is the right fit for their trading needs. Another important detail in the terms and conditions is that the $150 USD/mo applies to the Edge Trader Pro platform only, the data plan for which might not really be enough for most very active traders. Finally, Virtual Brokers reserves the right to change the offer at any time during the process, so users need to ensure they monitor the terms of the offer for any modifications that may arise.

With all of the above in mind, how this plays out for other Canadian discount brokerages will be very interesting. Virtual Brokers’ latest offer feels like someone going ‘all in’ at the poker table. One thing is certain, however, and that is that Virtual Brokers’ latest deal will finally uncover how serious other Canadian brokerages are about acquiring the most coveted tier of client: the active trader.

Event Horizon

Spring is in the air, and it’s an exciting week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to options enthusiasts and those interested in risk management. Technical analysis and registered accounts round out this week’s selection.

March 22

NBDB – Stop Orders: A Winning Solution Worth Knowing – [Fr]

Scotia iTRADE – Introduction to Candlestick Charts with Pro Market Advisors

March 23

TD Direct Investing – Building Wealth Through Registered Accounts

TD Direct Investing – Introduction to Investing in Options

March 24

Scotia iTRADE – Introduction to Index Options with Montreal Exchange

Tweets of the Week

This week’s tweets show once again that clients are increasingly turning to Twitter as a customer service touch point for brokerages big and small. Mentioned this week were BMO InvestorLine, Questrade, RBC Direct Investing, Scotia iTRADE and TD Direct Investing.

From the Forums

Eminent Domain

Well, this is not one you see everyday. In this post from Reddit’s personal finance Canada section, one disgruntled Virtual Brokers user decided to leave after receiving a warning regarding the domain name being used to access streaming quotes (from Quotemedia). Worth a read as more than one individual came across the same issue.

Plan B

Having an employer group RSP plan is a great perk, however savvy investors know that sometimes there are ways to stretch their investment dollar further. In this post from the Reddit personal finance Canada section, one investor wanted to know if it was possible to get the best of both worlds by taking advantage of Questrade’s commission-free ETF buying. Find out what other people had to say about their own experiences trying to do the same.

Into the Close

With spring just around the corner, and St. Paddy’s that just passed, green seems to be the theme heading into the weekend – especially if you managed to be the lucky winner of an increasingly large lotto jackpot. Of course if you’re still betting against Canadian Vancouver real estate, with the recent interest rate announcements in the US, you might be inclined to see red for a while longer. Regardless, have a great weekend and strap in for a wild start to the spring next week!

via GIPHY

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Discount Brokerage Weekly Roundup – March 4, 2016

While much of Canada (save for the Wet Coast) has been digging out from under piles of snow, it seems like Canadian stock markets have also managed to dig themselves out from underneath the recent avalanche of bad news. For Canadian discount brokerages, the turn in the markets has been a welcome relief, and they’re gearing up to try and ‘make it rain’ as they head into the next busy stretch in the calendar.

In this week’s roundup, we take a slightly deeper focus on the deals and promotions developments that occurred this week. Specifically, we recap the deals action that unfolded at the outset of the month and highlight one specific brokerage’s launch of a referral program that is the focal point of the second part of the roundup. From there, we’ll take a look at the latest chatter from investors on Twitter – especially in the face of several major network outages, as well as what DIY investors had to say across the forums.

Kind of a Big Deal

With the RRSP contribution deadline now in the rear-view mirror, many brokerages are likely taking a moment to catch their breath before the next big push comes along with tax return season. That break, however, will likely be short-lived.

In the deals and promotions section this month, there are already signs that promotional offers over the next two months will continue at a relatively significant pace, especially from ‘the usual suspects’ Questrade, BMO InvestorLine and Scotia iTrade. Interestingly, it appears that there are also several other brokerages that are stepping up promotional activities.

Heading into a new month, there’ve been a number of interesting developments to report.

The biggest news on the deals and promotions front was that Virtual Brokers launched a refer-a-friend campaign that runs until the end of May. This was an interesting maneuver because the offer itself looks to compete directly with what Questrade has put together for its refer-a-friend campaign (although Questrade’s offer is not a ‘limited time’ promo). More on that in just a moment.

In addition to Virtual Brokers’ deal, Questrade also timed their latest promotion around a tax season theme by teaming up with H&R Block to provide free access to H&R Block’s Platinum tax return preparation software. Rounding out the new promotions heading into March, Qtrade Investor lowered the minimum deposit level amount to have transfer fees covered to $10,000 (for which they’re willing to cover up to $150 in transfer fees).

The introduction of these three offers offsets the two Questrade deals that expired within the first week of March as well as their New Year’s year-long free trade promotion that concluded at the end of February. BMO InvestorLine extended their cash back + free trade promotion out into May, rebranding it as a ‘spring’ promotion instead of a ‘winter’ one.

Another piece of exciting news on the deals and promotions front is that we’ve improved the way deals and promotions are being covered here on SparxTrading.com. With the number and type of offers growing in size and complexity we felt it was time to evolve the deals and promotions section so that deals are easier and faster to research and evaluate.

To that end, there are now four categories of deal types which allows folks researching deals to get a better handle on what kinds of offers are being put forward.

Going forward, the deals section will be divided into four main categories:

  1. Commission Free/Cash Back Offers (11 currently live)
  2. Referral Programs (4 currently live)
  3. Transfer Fee Programs (10 currently live)
  4. Other promotions (4 currently live)

We’ve also reported the deals figures by each category, and, although we don’t expect the referral and transfer fee programs to be as volatile as the commission-free offers or the ‘other’ category, the recent deal from Virtual Brokers might touch off a few more creative responses from other brokerages.

Let us know what you think of the latest update by leaving your comments below.

Friend Zone

One of the most potent sources for new discount brokerage clients is actually other discount brokerage clients. Finance is one of those areas where there is clearly a lot of (well placed) skepticism from consumers towards providers – both big and small. To quote a current US presidential candidate, trust is ‘Yuge’.

The fact that trust ‘trumps’ other factors like low commissions means that online brokerages that don’t have a physical storefront (the way that banks do) are at a strategic disadvantage when clients are doing their homework to figure if these online brokerages are, in fact, trustworthy. Typically, most consumer audiences turn to offline sources, like friends and family as well as the online sources such as traditional media or third party rankings/ratings when trying to figure out whether to go with one brokerage versus another.

Of course, in a world where the line between online and offline are increasingly fusing, the online world has made investors more readily accessible to other investors, which is why social media and investor forums, including the SparxTrading.com forums, are where individuals go to access feedback from other investors.

Screenshot of Questrade’s Group of Refer-a-Friend Program Header Image (source: Questrade.com)

While there are many interesting dimensions to the referral program strategy, what is by far the most interesting angle to this is that companies that create a product or service experience worth bragging about will earn the attention and the business of other clients.

For Canadian discount brokerages, the real marker of whether or not a referral program will actually succeed is the degree to which people stand up and advocate on behalf of a brokerage – especially in the face the naysayers and in the moments where an online investor expresses frustration. Of course, the incentive amount also helps.

Virtual Brokers’ incentive structure is somewhat similar to Questrade’s in that referrers get a $25 cash bonus for each account they successfully refer and a bonus of $50 (on top of the $25) for every third account. A key difference, however, is the amount that the referee receives at either firm. Under Virtual Brokers’ plan, the payout amounts to either $25 or $50 whereas under Questrade, a referee may receive between $25 and $250 depending on the deposit amount.

Screenshot of Virtual Brokers’ Refer-a-Friend Program (source: VirtualBrokers.com)

In an upcoming piece we will be looking at these two programs in much closer detail, however at this point it is worth noting that referral programs are an efficient way to lower the cost of acquiring a new client but they will only really work if the service makes existing clients happy.

Unlike the Questrade affiliate program (which is distinct from their refer-a-friend program), for example, in which anyone can receive a bonus for referring a client to Questrade, the friends and family referral plan from Virtual Brokers explicitly defines that friends and/or family of account holders are the only individuals eligible to take advantage of this offer.

For Virtual Brokers and indeed all online brokerages who are considering referral programs, in order for existing clients to have the enthusiasm to put their own endorsement behind the product experience, there also has to be an extra investment in service levels to make the product worth advocating for as well as time spent to improve public perception. In comparing Questrade to Virtual Brokers in this regard, Questrade has a definite head start.

This latest move will be an interesting test to see whether or not Virtual Brokers can capitalize on its service record to date and if existing clients will be more inclined to step forward to advocate on their own Virtual Brokers experience.

Discount Brokerage Tweets of the Week

This week, the technology gremlins seemed to be all over TD Direct Investing’s WebBroker platform showing that regardless of size, technology can make or break an online trader’s day. Mentioned this week are BMO InvestorLine, Questrade, Scotia iTrade and TD Direct Investing.

Event Horizon

Details for this section were not available at time of publication and will be added when available.

From the Forums

Fee-TFs

What is considered a normal amount for brokerage fees? That was one question asked in this post from Canadian Money Forum by a user curious about whether what they would pay in commissions for ETFs may be too much.

Not So Simple Addition

When setting up an RESP, who should the caregiver be on an account? That was the question asked on reddit by a new parent setting up a new account with Questrade. Read what the community volunteered in terms of their experience with RESP rules & regulations.

Into the Close

That’s a wrap on this week’s roundup. It seems with each passing day there’s more and more coverage of the US presidential candidate Donald Trump. For some entertaining food for thought, here’s this past week’s latest crazy twist in the race. Stay warm and enjoy the rally while it lasts!