Tag: Questrade

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Online Brokerage Weekly Roundup – April 10, 2022

Change is certainly life’s only constant. And even though, historically, change has been relatively slow to take effect among Canadian online brokerages, when it does show up, the effects tend to endure. As we steer into the season of change, it seems like both the pace and breadth of change are starting to accelerate, with some remarkable developments.

In this (we’ll call it “toddler time-distorted”) edition of the Roundup, we look at an unusual pattern emerging in the deals and promotions activity at Canadian online brokerages and what it could signal for promotions going forward. Next, we highlight a new look that one online brokerage is sporting for spring, and whether it is dressed in what the cool kids are into these days. Finally, we’ll wrap up with some timely topics self-directed investors are chatting about online.

It’s Reining in Deals

And now for something completely different. At least from this month’s deals and promotions activity.

Usually around the start of each month we go through the latest deals and promotions to see what new offers have shown up and whether there are any interesting developments in the ongoing race to garner attention (and assets) from self-directed investors. This month, however, there was a signal of continued unusual activity among the Canadian online brokers that suggests there are some interesting changes coming to the way in which online brokerages create and launch promotions.

Of course, “change” is a relative term, so, before diving into what seems to be evolving with online brokerage deals and promotions, it’s useful to get a sense of what is “typical.”

Although many online investors now know that Canadian online brokerages offer deals and promotions, especially during RRSP season, that hasn’t always been the case. There was a time many years ago that most Canadian online brokerages were reluctant to use promotions and incentives to attract in new self-directed investors. Interestingly, as commission prices began to drop in a meaningful way, roughly around 2014, so too, it seemed did the resistance to trying out using offers to encourage new users to try out a brokerage.

At that time, one of the most active Canadian online brokerages when it came to special offers or promotions was Questrade – who aside from much lower commission prices than their peers – was a constant name to watch because they ran so many promotional offers. The kinds of promotions they ran ranged from various commission-free trade offers to promotions featuring a free iPad.

It was not long after other online brokerages lowered their commission prices, that one of the first big shifts in the deals and promotions activity took place: Questrade stopped offering so many promotions.

Instead of offering so many different promotions, Questrade decided to consolidate their offers and focus their promotional offers on their affiliate program and referral bonuses (and later launching TV ads). Many of the same promotions, such as their five free trades or first month free, are still available today. Regardless of the season – including RRSP season – Questrade’s strategy was still the same when it came to promotions. Namely, stick to their core offers.

It’s difficult to characterize just how significant of a shift that was at the time; however, by the time Questrade did ramp down, other online brokerages, notably BMO InvestorLine, had picked up the practice of regular promotions outside of RRSP season. In fact, since that time, BMO InvestorLine has effectively carried the torch for launching “new promotions” just about every season.

So, if there was one online brokerage in Canada that we did not expect to see a break in promotional cadence, it was BMO InvestorLine. And yet, this month that is exactly what’s taken place.

To be fair, BMO InvestorLine hitting pause on deals is not without precedent. That said, the last time they did so was near the start of the pandemic, when BMO InvestorLine’s unprecedented investor interest overwhelmed systems.

This time, however, there isn’t a rush of investors flooding the systems of BMO InvestorLine with new applicants, which begs the question, what would cause BMO InvestorLine to pause offering an already live tiered cash back promotion at a time when major rivals still have open offers?

It’s difficult to know exactly why, however, it seems that shuttering an active deal is likely the result of something abrupt instead of something planned, especially given the timing being so close to the launch of their latest cash back promotion.

Perhaps the economics of a tiered cash back offer simply don’t work for BMO InvestorLine, or perhaps the costs of running a campaign to acquire new clients exceeded the benefit those clients would bring. The latter point is one of the drivers behind online brokerages typically choosing to launch promotions during RRSP season instead of during the whole year. When online investors are “in market” for a new online brokerage or seeking to park new assets in an account, as is the case during RRSP season, online brokerages want to be as visible as possible.

That said, instead of stopping promotions outside of RRSP season, one of the strategies BMO InvestorLine has employed in the past was to raise the deposit threshold at which an individual investor could qualify for a promotion. Thus, instead of requiring a minimum deposit of $15,000, BMO InvestorLine could raise the minimum deposit to $50,000 so that only those individuals who bring the kind of value BMO is seeking qualify for incentives.

So, though speculative, if costs of a program suddenly get put under the microscope to the point that they lead to a decision to cut loose a promotion in midstream, then a good candidate reason why would be a “cost cutting” program. And for that to take place at BMO InvestorLine, a bank-owned brokerage, that is very interesting timing indeed. If, after all of the years of running this program, something fundamentally has changed (or is about to) for promotions-led acquisition, it does beg the question as to what BMO is encountering now that makes the math for promotions untenable at this time.

Though the online promotion of the deal is now gone, self-directed investors interested in the cash back promotion at BMO InvestorLine may be able to access the offer via customer service touch points (e.g. in branch) on a case by case basis. When a client is of sufficiently high value (what that value is, we don’t yet know), then they might be offered a cash back incentive.

The latest move by BMO InvestorLine to shutter an active offer is a step change for an online brokerage that has almost consistently leaned into “always on” promotions and bears a resemblance to the structural shift in promotional strategy that Questrade undertook many years ago. Unlike that decision, however, BMO InvestorLine does not have the same magnitude of affiliate channels nor social media community support that Questrade had when it decided to shift its promotions strategy.

Instead of being a leader among Canadian bank-owned online brokerages when it comes to promotional activity, it seems BMO InvestorLine is more content to run with the pack. With no other big bank-owned online brokerages currently offering cash back promotions right now, all attention for self-directed investors looking for a cash back deal on a new trading account is being directed to Qtrade Direct Investing.

The bigger consequence to bowing out of the post RRSP season promotions race may not be felt for some time but will almost certainly resurface again next RRSP season. One of the biggest benefits of an always on campaign is to continuously attract attention of investors and to be among the list of names those investors consider when the need for a solution arises. In this case, BMO stepping back simply opens the door to another lesser known or not historically active name to fill that void.

An alternate view is that online brokers may also be more willing to be agile when it comes to promotional activity. A case in point is the current cash back promotion from Qtrade Direct Investing.

Qtrade did something highly unusual at the beginning of this year by revising upward the amount they were willing to offer to new clients. They did not “set it and forget it” with the deal that launched last year but rather saw that their offer was not nearly as competitive as their peers and adjusted accordingly.

The fact that BMO InvestorLine was the only big bank-owned online brokerage in market with a cash back promotion perhaps made them realize they were overspending to acquire new clients. That they were willing to do so mid-campaign is maybe a sign of different kind of structural change: online brokerages are becoming nimbler.

This year alone we’ve seen Qtrade Direct Investing change deal amounts, BMO InvestorLine effectively shut down an already live deal, and RBC Direct Investing move around the expiry date on an unprecedented commission-free trade offer. If there was ever a case for expecting the unexpected, Canadian online brokerages seem to have made it their theme for 2022.

CI Direct Trading Sporting a New Look

Spring seems like the opportune moment for new beginnings. This month, CI Direct Trading, the brand formerly known as Virtual Brokers, officially rolled out their new public-facing website. Gone is the familiar combination of red, black and white, and instead, the new website reflects the last stage in the integration of Virtual Brokers with the CI Financial common look and feel.

While a “new” website isn’t necessarily a big step change, building a new online brokerage website in an ultra-competitive environment does present an opportunity to intentionally lean into the brand identity. Secondarily, for seasoned observers, it offers a glimpse into where the priorities are for a particular provider.

In the case of the new CI Direct Trading website, there are a number of interesting observations to comment on; however, the biggest theme that jumps out is integration.

Unlike Virtual Brokers, which was effectively a standalone online brokerage, CI Direct Trading’s new site was intended to fold the online brokerage into the CI Financial ecosystem. And, at first blush, it appears they’ve done so – perhaps too well.

In fact, in the drive to create a common look and feel between brands, the point at which CI Direct Trading starts and where CI Direct Investing stops is very blurry.

Navigating between the CI Direct Investing and CI Direct Trading is so seamless that as a user, you wouldn’t know where you are unless you look at the logo on the page, and even then, you’d have to really pay attention to the small text under the word “direct” in the logo. Recall that one of the principles of user-centred design is to answer a simple question: am I in the right place? On the new CI Direct Trading website, the answer for DIY investors in particular is unclear.

On a more nuanced note, the decision to use the names “CI Direct Investing” and “CI Direct Trading” is confusing because almost no other online brokerage in Canada uses the term “Direct Trading” in their names. Three big names in the “Direct Investing” space jump out, for example:

  • Qtrade Direct Investing
  • RBC Direct Investing
  • TD Direct Investing

Virtual Brokers used to be a direct competitor to these particular providers; however, CI Direct Investing (rather than Direct Trading) seems like it would be the place where a user would look to find a service similar to Qtrade Direct Investing, TD Direct Investing or RBC Direct Investing. Except, they would be incorrect. CI Direct Investing is more akin to a roboadvisor solution, not a DIY one.

Although it seems like semantics, in reality, the “DIY investor” industry has been undergoing its own identity crisis for the past decade. Ten years ago, the entire space was almost uniformly calling themselves “discount brokerages,” then it shifted to “online brokerages,” and now they are positioning themselves as “direct investing” solutions providers.

Why this matters so much is because when it comes to being found online, something that is exceptionally important in a hypercompetitive environment, individual investors are going to search based on what they know and think is the term they need to use in order to access the category of service providers. When the category shifts, so too does the audience searching for it.

Another interesting theme is that the new website leans heavily into the “less is more” look. There are fewer options and less text as well as clear headings so that there is less information to have to parse through on the front page. From a visual perspective, there is also a heavy presence of mobile screens, a decision that undoubtedly is intended to relate to a generation of “mobile first” traders.

In a tinge of irony, the screenshots of the CI Direct Trading iPhone app show the symbol of a well-known Canadian bank (TD) instead of using the opportunity to have the publicly-traded CI Financial ticker (CIX) on there.

Even in the app store, the Virtual Brokers legacy association is still visible too, a reminder that all brand touch points need to be considered in the rebrand process. Of greater consequence, however, is that the legacy star ratings for the app experience are likely to impact user impressions on the brand. With a 2.5 star rating on the Apple App Store for CI Direct Trading, there is much work to be done to improve the perception of the mobile app as being an enjoyable way to engage with the service, especially with the mobile-first crowd.

When Virtual Brokers was acquired by CI Financial in 2017, it was unclear what direction the popular online brokerage would go in. Fast forward to today, it is now clearer that the successor to VB, CI Direct Trading is offering many of the same features and pricing as Virtual Brokers but is wrapping itself into the CI Financial ecosystem.

It has been a relatively quiet four years since the integration was first announced but now it seems the real work will begin for CI Direct Trading to be able to tell its story to online investors (traders?) and establish its niche in a very crowded field.

If the new design is a signal they’re looking to court a younger generation of investors, simplifying the website is a step in the right direction. Clearly, though, there is much work to be done in the seasons ahead to evoke the same kind of emotion, curiosity, and enthusiasm that their direct competitors have already managed to successfully achieve.

From the Forums

Transferrable Skills

Moving day is always a chore. When it comes to moving mutual funds, however, it’s a problem that needs more than pizza to solve. One reddit user reaches out to the community of investors in this post for some guidance on how to navigate transferring away from Manulife and into a popular online broker.

Under the Influencer

A big theme among online brokerages heading into this year has been investor education. An interesting discussion emerged in this reddit post about seeking out “education” on investing and trading from a relatively well-known Canadian personal finance influencer.

Into the Close

That’s a wrap on another edition of the Roundup. If news among the online brokerage space is anything like the weather in April, it’s going to be a mixed bag of activity throughout the month. For the loyal readers that have managed to make it this far, we’re also going to be sharing more updates in the weeks ahead on the new special SparxTrading Pro and other tools we’ve been working on, so be sure to tune in for sunnier news coming around the corner. Until then, keep your powder and yourselves dry, you never know what might come up as an interesting buy.

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Online Brokerage Weekly Roundup – March 31, 2022

Seasoned traders understand that in volatile situations, sometimes it’s best to sit on your hands. Though that advice would certainly be applicable outside the world of self-directed investing (*cough* Will Smith *cough*), within the world of self-directed investing, activity is tied to profitability, at least for online brokerages. So, it is a fine balance between taking action and being patient.

In this late-in-the-week edition of the Roundup, we check in on an important shift taking place at Canadian online brokerages that will see mutual funds come back into the spotlight for the next several months. Speaking of near term visibility, our next story looks at what one popular US online brokerage is noticing with respect to skepticism on the part of active investors. To close out, we highlight investor chatter about mutual fund commission charges and margin rate questions.

Can’t Fight this Fee-ing Anymore

One of the core tenets of self-directed investing is controlling or minimizing unnecessary costs.

Despite the characterization or popular mythology around self-directed investing as a “fast money” or a high activity endeavour, a significant portion of online investors are not very active and prefer to “take it slow and steady.”  For example, a study on retail investors conducted by the Ontario Securities Commission in 2021 found that 43% of investors surveyed make fewer than 10 trades per year and 31% make 11 to 50 trades per year.

While activity is certainly influenced by what is out there to buy, prevailing opinions also suggest that up-front commissions have a part to play in influencing purchase behaviour. The rise and popularity of the zero-commission trading online brokerage Robinhood provided a dramatic example of this in the US, as has the growth of Wealthsimple Trade in Canada.

As most of us have come to learn, though, there is no such thing as a free lunch.

Despite the reluctance to go to zero commission trading on stocks, Canadian online brokerages are not unfamiliar with the practice of zero commission trading on mutual funds. Unfortunately, for many Canadian online investors, this has resulted in a scenario in which self-directed investors have been paying commissions for things that technically they’re not supposed to be paying commissions for from an online brokerage, namely, advice.

According to data associated with the class action lawsuits that have been launched against Canadian online brokerages, as much as $5 billion dollars in trailing commissions are alleged to have been paid “incorrectly” to online brokerages since 1993.

Though this story has taken a backseat during the pandemic, the timing of the deadline for online brokerages to transition investors into suitable alternative investments is nearing. As such, the response by some online brokerages to start charging commissions on mutual fund trades is surfacing in the news as is the access to previously unavailable mutual funds.

This month, for example, CIBC Investor’s Edge started to charge their standard commission rate, $6.95, to buy or sell mutual fund units. RBC Direct Investing rolled out new pricing this month as well, charging 1% of the gross trade amount up to a maximum of $50 for purchases of mutual funds. On the other end of the spectrum, it’s business as usual with no charge for mutual fund purchases at TD Direct Investing and BMO InvestorLine.

A side benefit of the new regulatory requirements is expanded choice for some online investors at firms like RBC Direct Investing. Previously, and much to the chagrin of self-directed investors, Mawer mutual funds were not available at RBC Direct Investing. As of this month, however, Mawer Investment Management announced that 13 of their funds are available at RBC Direct Investing.

With new regulations governing trailing commissions set to take effect June 1, there are still pockets of uncertainty relating to charges for mutual fund trades. The structural shift in product lines has been taking place over the past two years against the backdrop of the pandemic. However, with a deadline looming, the flurry of activity and announcements from online brokerages early this year suggests they are cutting it a bit close as far as communicating these changes to their clients. Ultimately, that could prompt a customer service risk, especially if there are any big market shocks that set off a surge of requests for contact centre support.

Although fundamentally different in spirit and appeal than individual equities or ETFs, the fact that mutual funds remain a very popular choice for certain DIY investors who do business with bank-owned online brokerages (say, those who might remember or know that REO Speedwagon hit referenced in this section’s title?) means that how individual banks approach the selection and pricing of mutual funds can be a differentiating factor. That is especially important to consider as online brokerages attempt to provision for an influx of younger investors.

There was some further fascinating commentary to that effect provided by Dan Rees, Group Head Canadian Banking, at the recent National Bank Financial Services Conference.

We want people to come for the advice and stay for the performance. So, younger individuals who don’t want to take advice and want to go DIY on their own. Generally speaking, those don’t work out that well, right? That said, we also know that we have sophisticated investors who do want to run their own money as part of managing their overall portfolio, so they may have a relationship with a portfolio manager and run 15% on their own, in our case in an iTRADE account. And we want to support both of those positions.

And I think what you’re going to continue to see, I think, is us introducing more channel options to address the different needs of each of those segments. I would say as a fiduciary, and we are very clear about this with the regulators, we are nervous about the propagation of — you can build your own portfolio and retire 15 years earlier by saving a few dollars on fees. We think it’s a very dangerous message to send to Canadians at a time where they’re very anxious even about their mortgage debt. People should remember, it’s very important for Canadians to get advice on banking, investments, insurance and debt, not just investments. And I think as we begin to see more and more feedback from young Canadians about how are they going to save for a mortgage, save for a house, they have to come in for a conversation on that. They can’t do that on their own around the kitchen table. Historically speaking, it’s not successful.

Another interesting angle to the mutual fund shuffle taking place at online brokerages is that it offers a hint of how commission free trading could be handled at bank-owned online brokerages. A great case in point is TD Easy Trade. The new service allows for 50 commission-free trades of stocks but has limited selection of ETFs to just TD products.

Like “commission free” mutual funds, commission free trading at bank-owned online brokerages is going to have to come with some kind of value capture.

Interestingly, with recent launches by Questrade of Questmortgage, Interactive Brokers with their push into credit cards and Robinhood even launching their cash card, there’s a clear trend of pureplay online brokerages adding some “traditional” banking services, creating what we consider to be a “race to the middle” between fintech firms and incumbent financial services firms.

Stepping Aside: Interactive Brokers’ Clients Prefer to Wait and See

One of the strategic places to pay attention to in the online brokerage market is with active investors. In a world of commission-free trading, it is interesting to ask who would actually pay commissions to an online brokerage for trading services. The answer: Interactive Brokers clients would.

In a short interview on CNBC, founder of Interactive Brokers, Thomas Peterffy, shared some interesting details about the status of cash and margin position for Interactive Brokers’ clients that seemed to suggest that they are atypically not borrowing money nor putting cash into positions. Of note, the typical profile of a customer is also something Peterffy shared, since the profile of assets Interactive Brokers customers has is significantly larger than say, Robinhood customers.

Why this was of particular interest is that, typically, volatile markets are favoured by active traders.

Ahead of periods of heightened uncertainty, Interactive Brokers has served as an interesting harbinger of near-term behaviour. They are typically agile at tightening margin requirements if they foresee risk to their firm. In this case, the conclusion arrived at by Peterffy is that Interactive Brokers clients aren’t buying in this market because they don’t buy the strength of the rally. They are selling, it seems, into strength.

If interest rates rising are a disincentive for margin trading, however, it would suggest that there is limited upside, at least in the near to medium term. The fact that investors that are both knowledgeable about markets and who are prepared to pay for quality trade execution are not seeing a favourable risk/reward seems to paint a cautionary tale at least to that style of investing activity.

The consequence of activity pulling back for stock trading among the most valuable category of online brokerage clients is something that would be difficult to approximate the impact to among Canadian online brokerages; however, it almost goes without saying that it isn’t ideal.

This active group is likely to play a much more prominent role in the planning for online brokerages going forward since they not only typically trade stocks but also options. And, as data has shown, the small category of very active traders (50+ trades per month) can generate substantial revenue (and are prepared to do so) so long as the trading experience is reliable.

Getting those investors to pay attention to online brokerages against a backdrop where there is skepticism on market direction and rising interest rates will be especially challenging. The limited number of Canadian online brokerages that could cater to these active traders appear to have their work cut out for them.

From the Forums

Take a Hike

The headline news is replete with interest rate chatter. Interesting (no pun intended) then that the pace of those rate changes is also in the spotlight and why one eagle-eyed investor in this post noted a rather sharp increase in the margin rates at a popular bank-owned brokerage.  

Fund Times

Chatter around mutual funds at online brokerages is at an unusual high point. Commissions are once again in the spotlight and one question from a Reddit user is certainly indicative of what others are thinking: which online brokerages are now directly charging (or not) for mutual fund purchases and sales.

Into the Close

That’s a wrap on another edition of the Roundup. It’s been a choppy past few days; however, all eyes continue to be fixed on how fast and furious interest rates are going to climb. Whether we can all make the leap to a new normal of interest rates is what everyone is working to figure out.

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Online Brokerage Weekly Roundup – March 22, 2022

Spring has sprung, and with it a renewed focus on growth and optimism for what’s ahead. Interestingly, online brokerages have also embraced a new season now that the RRSP season is over, and this one focuses on active investors.

In this abbreviated edition of the Roundup, we focus on deals and promotions offered by zero-commission online brokerages. Dive into the details of the newest promotions to emerge and what they signal for existing and potentially incoming online brokerages to consider. To wrap things up, we focus on investor commentary related to retirement accounts and slow-moving platforms.

New Deals in Town: Zero Commission Brokerages Continue Using Promotions to Drive Interest

The universe certainly has a sense of balance. When commission-free trading at Canadian online brokerages started to ramp up last year, deals and promotions at those same brokerages quietly faded away.

The break from deals and promotions at these brokerages, however, seems short-lived.

Earlier this month, National Bank Direct Brokerage (NBDB) quietly launched a new promotion offering discounted margin rates to new clients, and in doing so, signaled that despite their market-leading position on commission-free trading in Canada, they’re still prepared to get creative to attract new business.

Hot on the heels of the 2022 RRSP season, the timing of a launch of a new offer is also indicative of a new target audience: active traders. Trading on margin is not something that people thinking about retirement or RRSPs typically consider first, so the timing of this offer to go live after the RRSP season rush makes sense.

National Bank Direct Brokerage is not alone in that reasoning either. Wealthsimple Trade also launched their own limited-time offer aimed at the non-registered account crowd. Although their offer of a “free stock” cash back equivalent is ongoing, the boost to the amount for referrals to 3x the normal amount is clearly intended to generate some buzz.

Offering a promotion to attract new clients is a tricky proposition for a “zero-commission” brokerage.

After all, part of what should keep costs low is the controlled spending on acquiring new assets and customers. That said, when looking at the current group of “zero-commission” online brokerages in Canada, not only is the number of firms small (currently three) but two of the three firms are not well-known across Canada

Uncertainty Begets Volatility

When it comes to choosing an online brokerage, one of the biggest hurdles facing this specific group of zero-commission brokerages will be the uncertainty associated with them.

Unlike the entrenched Big Five bank-owned brokerages or names, such as Questrade and Qtrade that have been around for many years across Canada, the current group of zero-commission brokerages faces an uphill journey to become known and, more importantly, trusted.

A recent quote from Mike Foy, Senior Director of the Wealth Management Practice for North America at J.D. Power sums up the issue:

“Investors are increasingly bombarded by information from numerous sources including social media. We see the single biggest driver of online investor satisfaction with their broker is trust.”

Now that the surge in new retail investors coming to the market has somewhat abated, the challenge to Canadian online brokerages will be to create online investing tools and experiences that cater to this new group of investors and yet-to-be investors. And this is where promotions can offer a tactical advantage.

The latest promotion to launch from National Bank Direct Brokerage focuses on margin interest rates and serves as a good example where zero-commission brokerages can look to in order to attract attention while at the same time keeping costs contained. Although cash back or commission-free trades are welcomed, they’re not the only place that self-directed investors incur fees.

This past RRSP season demonstrated that online brokerages are spending aggressively on cash back promotions to attract new clients. For zero-commission online brokerages, pure cash back promotions are unlikely to be pursued because the costs may be prohibitively high. And as National Bank Direct Brokerage showed, there are now other costs that are up for negotiation.

Active is Attractive

National Bank Direct Brokerage’s focus on margin rates is a clear overture to active investors. The hope, it seems, is that in addition to the zero-commission trading commissions, there are other reasons to consider NBDB for a trial run or even as a separate or additional account.

Unless the direct competitor to NBDB, Desjardins Online Brokerage, follows suit with a similar offer, this latest deal will give National Bank Direct Brokerage an interesting combination of features worthy of a closer look by active self-directed investors.

With interest rates increasingly coming into focus for the next two years, getting a substantial break on higher interest rates for even a short time could be the catalyst that gets online investors talking about National Bank Direct Brokerage once again. And if there’s one sure fire way to achieve greater consideration in the online brokerage segment, it’s through the honest and unfiltered positive commentary of investors.

By lowering their commission prices to zero, National Bank Direct Brokerage has already ignited a conversation among online investors as to why they should pay attention to NBDB. This latest move seeks to steer the conversation once again in favour of this bank-owned brokerage. The key question, however, is who investors will stop talking about now that National Bank Direct Brokerage’s newest promotion is live.

From the Forums

Moving Day

There’s probably a reason that changing financial service providers is deliberately harder than it needs to be. This post from Reddit is fascinating because it highlights the challenges associated from moving accounts from one provider to another, but even more so, because it is a question about moving pension accounts – something that signals there are more than Millennials and Gen Z readers tuning into Reddit for information and guidance.

Not So Fast and Furious

“Time is money” takes on a whole other layer of meaning when it comes to trading online. In this Reddit thread, there is a chorus of complaints from active investors who find one online brokerage’s platform to be moving too slowly for their liking.

Into the Close

That’s a wrap on another Roundup. Although it was a bit of a light week (a March break?) heading into start of spring, “green shoots” are starting to appear in terms of investor education activities. We’re looking forward to the nicer weather and a chance to get out and about more, and we’re not alone. So, it will be interesting to see how the reopening starting to take place will impact the ability of online brokerages to capture and hold attention over the next few months. In the meantime, enjoy the signs of spring!

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Online Brokerage Weekly Roundup – March 1, 2022

What a difference a few days makes. It’s hard not to pay attention to or be thinking about the tragic events unfolding in Ukraine. Despite there being many important turning points with the arrival of March, the one the world is focused on is the end of the conflict in Europe.

For online investors, this war has also shed light on the role that finance plays in the conduct of nations, including during conflicts. In particular, the steady drumbeats of war over the past few weeks have reintroduced uncertainty and volatility back into stock markets – something that could once again challenge online brokerage systems heading into the RRSP deadline.

In this edition of the Roundup, we put commission-free trading into the spotlight, in particular, the launch of a commission-free trading platform by TD. Also, we’re rebooting investor comments, which this week reflect the perennial question around low cost trading and the spillover of politics into choosing an online brokerage.

Easing into Commission-free Trading in Canada – TD Easy Trade

It’s no secret that Canadian self-directed investors are betting on the widespread deployment of commission-free trading among Canada’s discount brokerages. What investors may not have bargained for is what form that commission-free trading experience will take.

Just over a month ago, TD made an interesting move into the commission-free trading world by launching their “Easy Trade” app and offering up 50 commission-free trades per year on that platform. This new investing service replaces the TD GoalAssist platform (launched in 2019) and now offers yet another platform by TD for investors to execute trades on – albeit with limits.

With all the attention that commission-free trading has received, courtesy of its widespread adoption in the US online brokerage market, the launch of Wealthsimple Trade, and the launch of commission free trading at National Bank Direct Brokerage and Desjardins Online Brokerage, it seemed a given that when a larger player moved to provide commission-free trading that others would quickly follow suit and investors would rejoice.

The fact that neither of those seem to have happened yet point to commission-free trading taking a different turn here in Canada.

If a Commission Falls

For some context, let’s rewind to 2014. Commission prices for trading at Canadian discount brokerages (as they were still called) were routinely just shy of $30 per trade ($29+ at TD Direct Investing) when RBC Direct Investing lowered their standard commission pricing to $9.95 per trade. The shockwave was immediate. And it wasn’t very long before most other Canadian online brokers – but especially the bank-owned online brokerage peers – followed suit by lowering their commissions to about the same price (except for Scotia iTRADE which waited until February 2019 to drop from $24.99 to $9.99 per trade).  

The reason was clear: when a big player on the field does something material, expectations change.

Against this backdrop, the latest moves to lower commission pricing by a big name like TD – while clearly garnering attention – haven’t prompted the kind of response that we saw in 2014.

When National Bank Direct Brokerage lowered their commission fees to zero in August 2021, it wasn’t too long until Desjardins Online Brokerage followed suit. Both firms are fierce rivals, and so action was swift.

But since then, we haven’t seen much activity or appetite to lower standard commissions to zero by any other online brokerages, let alone bank-owned brokerages, despite the surge in interest and recommendations by self-directed investors towards National Bank Direct Brokerage and Desjardins Online Brokerage.

Instead, what we have witnessed is Canada’s online brokerages taking a “wait and see” approach to commission-free trading during the RRSP season, offering up a concession, rather than a capitulation.

Heading into this RRSP season, for example, RBC Direct Investing offered up 100 commission-free trades which are good for two years. Both the duration and the magnitude of this offer is higher than in years past. And to boot, this promotion is set to expire at the end of March, well after the deadline for RRSP contributions. In contrast, many other online brokerage promotions are timed to expire at the beginning of March.

Scotia iTrade, on top of running a promotion for RRSP season, has bundled commission-free trades (5 to 10 per year) with their premium banking packages, and BMO InvestorLine now offers limited commission-free trading of ETFs.

Unlike in 2014, the response to TD’s latest move, according to many (many) self-directed investor forum posts and user comments, has been lukewarm. While there is clearly praise for providing a “commission-free” choice for up to 50 trades, there are a number of sticking points – including gripes from some of TD Direct Investing’s very large customer base.

Even though TD Easy Trade is clearly a multipronged response to the challenge of commission-free trading, as well as the “mobile first” mindset of Wealthsimple Trade, the expectations that come with such a successful and financially flush brand as TD are significantly higher.

Early Reactions to TD Easy Trade

Now over a month into the new service, the early response from across the investor forums paints a mixed picture of self-directed investors welcoming the price point but feeling constrained by the limitations of the app (especially around ETF purchases) and inconvenienced by having to separate the TD Direct Investing online brokerage experience from the TD Easy Trade experience.

An area where a bank-owned brokerage cannot be seen to fall short, however, is with convenience. That is the pillar of the value proposition of going with a bank-owned brokerage, and it is one feature younger and older investors agree upon.

In reviewing hundreds of forum, social media, and user comments on TD Easy Trade, aside from the points mentioned above, it was fascinating to see which online brokerages were (and were not) mentioned as alternatives to the new app.

National Bank Direct Brokerage was by far the most frequent alternative (followed by Desjardins Online Brokerage) cited to TD Easy Trade, despite a lack of a “mobile app” experience from National Bank Direct Brokerage (for now). This seems to suggest that investors are still very much conscious of the commission pricing. And although TD’s offering isn’t “unlimited,” many commenters concede that 50 commission-free trades should suffice for most passive investors.

Wealthsimple Trade, while also a part of the discussion, did not fare as high as it likely should considering it is the closest in feature and user experience to TD Easy Trade. Along with commission pricing, access to ETFs was also mentioned. User interface was a part of this discussion; however, the mobile experience – including biometric login – was a pain point for users contemplating on using TD Easy Trade

The “kicker” it seems is the restriction on ETFs – since TD Easy Trade only allows for commission-free trading of TD ETFs. That constraint seemed to open up other brokerages into the discussion, such as BMO InvestorLine as well as Scotia iTRADE.

Names that weren’t mentioned as often, however, were also a sign of shift in value perception among self-directed investors. One name that did not receive as much mention as it typically has prior to the zero commission launch by National Bank Direct Brokerage was Questrade.

This is an important development since Questrade has long been perceived as a low-cost leader. They have also been actively campaigning (including mass media buys) to win over the same clients as Wealthsimple Trade. Based on the conversation, however, Questrade appears to have lost ground to both the commission-free brokerages and is now facing pressure from TD Easy Trade.

And on the topic of campaigning, anyone watching the Super Bowl from Canada also likely saw the barrage of commercials from TD Easy Trade, a move that is a change in tactic from the big bank. Typically content to watch from the sidelines, the big sporting event advertising has been a mainstay of Questrade’s awareness campaigns, but this year TD Easy Trade came out swinging, dwarfing commercial presence of Questrade and BMO.

What People Say Matters

Early adopters of the National Bank Direct Brokerage experience have shown that despite some delays in getting accounts open and funded, overall, the feedback has been positive, especially when people have been posting their savings on commissions per trade. That kind of social proof is compelling, and when done at scale, can carry substantial influence among communities of investors who rely on the experiences of others when making decisions around potential online brokerages to use.

Given the size and prominence of bank-owned online brokerages, however, the expectations to get things right is also higher. There are simply fewer missteps or shortcomings that consumers are prepared to tolerate when Canadian banks are earning record profits.

Anything short of a best-in-class online trading experience begets a wave of complaints. And for a firm like TD, with two million online brokerage account holders, creating a parallel product to TD Direct Investing that has a considerably lower price point definitely ruffled some feathers. So while Canadian online investors may not leave a particular brokerage right away, they are clearly open to exploring other options and giving new entrants the opportunity to win business.

Conclusion

The takeaway for self-directed investors is that there isn’t really one Canadian online brokerage that is hitting all the marks when it comes to the trading experience and commission structures.

In terms of the balance of features and value, our analysis of the most influential Canadian online brokerage rankings shows that according to the reviews, there is more than just price to consider when choosing an online brokerage. And despite commission price clearly playing a role, consumer sentiment in the reaction to TD Easy Trade confirms that features such as commission-free ETFs and convenience weigh heavily. What this likely amounts to for Canadian self-directed investors is multiple accounts with multiple online brokerages.

For online brokerages, the lesson is also clear. Offering zero-commission trading is no guarantee to success; however, it does provide mass market visibility when it comes to being considered. Key features, and, in particular, the feeling of convenience are potentially more highly prized than commission pricing alone.

With our everyday lives increasingly dominated by apps that remove so much friction from the user experience, financial services, and online investing in particular, online brokerages have yet to perfect the delicate balance between keeping things functional and reliable with making the process of managing wealth as easy as possible. Hence, though the naming of the platform was a deft move, Easy Trade has set the bar high for themselves to make the process of managing wealth as a DIY investor – including the entry point investor – feel easy.

From the Forums

Which Online Brokerage is Cheapest?

Although it is a perennial question, whenever the topic of which online brokerage has the lowest cost comes up, it is fascinating to see which online brokerages are mentioned (and those that aren’t). In this recent reddit post, the conversation about low cost brokerages highlights who is top of mind for self-directed investors.

In Case of Emergency Act

Take your pick of political news having economic fallout. With the war in the Ukraine now dominating the headlines, the previous few weeks also showed that when Canada enacted the Emergency Act to deal with “freedom protestors”, financial firms and assets were also in the crosshairs to restore order. In this reddit post, one user wanted to know which online brokerage(s) better aligned with their personal political beliefs.

Into the Close

That’s a wrap on another “catch-up” edition of the Roundup. Suffice to say there is a lot on deck now that we’re at the official start of March and the official end to RRSP season for 2022. In the fullness of time, this seasons results will come to light but in the meantime, like everyone else, we’re watching what’s unfolding in the Ukraine and hoping that peace comes as soon as possible.

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Online Brokerage Weekly Roundup – February 22, 2022

This year more than most, February is a month that embodies competition. From the Super Bowl to the Winter Olympics to the final stretch of RRSP season, there’s no shortage of high drama, stats, scores, and podium finishes. And while there might not be any formal winner declared to RRSP season, the reality is that Canadian online brokerages are battling hard to lock in new clients and assets ahead of the RRSP contribution deadline.

In this reboot to the Weekly Roundup, we took our cues from the biggest sporting events in the world to bring an exceptional edition filled with high degrees of difficulty to compare one of the most influential touchpoints of DIY investors making decisions on which online brokerage to choose: Canadian online brokerage rankings. Grab some snacks (maybe a coffee too), this is going to be a good one – but if you don’t have time, check out the key takeaways below.

Key Takeaways

  • It is increasingly more difficult to distinguish between Canadian online brokerages, let alone to find out which online brokerage is best
  • Different online brokerage rankings (Globe and Mail and Surviscor) ended up with very similar opinions about Canadian online brokerages this year, despite measuring them differently
  • When comparing online brokerage rankings, consistency between rankings provides greater confidence, whereas, inconsistency is a warning that experiences may be variable (aka YMMV)
  • Most online brokerages in Canada are generally OK to meet the needs of most self-directed investors; however, ranking as a best online brokerage means hitting important feature metrics, not just having the lowest commission pricing

Which Online Brokerage is Best? Comparing Online Brokerage Rankings to Find Out

The 2022 RRSP season is on the cusp of wrapping up, and, as in previous years, there has been a predictable surge among self-directed investors to find a new Canadian online brokerage. Unlike in past years, however, this year it seems that competition between Canadian brokerages is even more heated than ever before. And despite that competition (or perhaps a result of it), it is becoming increasingly more challenging to distinguish Canadian online brokerages from one another.

While commission price has historically been a key distinguishing feature for value-conscious self-directed investors to base their decisions on, zero-commission pricing has now gained a foothold among Canadian online brokerages.

Increasingly recognizable names, such as National Bank Direct Brokerage and Desjardins Online Brokerage, and even big players, such as TD Direct Investing, have introduced this pricing outright, or in the case of TD Direct Investing, are taking a phased approach.

The fact that there is more than Wealthsimple Trade – which was the sole zero-commission option for several years – to choose from since the start of this year’s RRSP season also heavily impacted an important touchpoint for the online brokerage industry and consumers alike: Canadian online brokerage rankings.

Online Brokerage Rankings Launch Ahead of RRSP Season

Earlier this month, the 2022 edition of the Globe and Mail’s online brokerage rankings was released, just in time for the peak of the wave of investor interest in online brokerage account opening. Now in its 23rd year, Rob Carrick’s long-running review is hands down one of the most influential online brokerage reviews with Canadian self-directed investors. And in late December 2021, the other big name in online brokerage rankings, Surviscor, released their 2021 online brokerage experience rankings, a comprehensive ranking of online brokerages in Canada based on detailed criteria about the online investing experience.

While it comes as no surprise that in the lead up to the 2022 RRSP contribution deadline two very important Canadian online brokerage reviews have been released, it was surprising to see the degree to which both rankings ended up agreeing with each other.

At Sparx Trading, we don’t rank online brokerages, but we do have a long history reviewing online brokerage reviews. We’ve continuously held the perspective that “the best” online brokerage for Canadian investors is one that suits their particular needs as a self-directed investor.

That said, for self-directed investors who turn to third party reviews for guidance and perspective on which online brokerages are leaders or laggards (or to find out “which online brokerage is best?”), our recommended approach would be to see what different brokerage rankings have to say.

The challenge, however, is that each of these reviews take very different approaches to defining and measuring which online brokerages in Canada are the best, and so it is important to understand what each of these online brokerage reviews measure and how they measure it. But comparing online brokerage rankings is not easy.

From a consumer perspective, there is quite a bit of analysis and more homework/guesswork than most are willing to do, which is why we’ve tried to simplify this in our online brokerage review pages by providing ranking data from different sources alongside information about the brokerages themselves below.

Emerging Convergence

An important trend that we’ve observed with online brokerage rankings in Canada is that the difference between online brokerage ranking scores has been shrinking.

For the past two decades, online brokerage reviews from third party sites and sources have played an important role in helping Canadian self-directed investors understand how to choose an online brokerage, as well as provide recommendations on which Canadian online brokerage is best. That said, the spread between the top and bottom ranked firms has been closing across different reviews, a signal that it is becoming increasingly more difficult to distinguish between online brokerage firms.

While the appeal of these online brokerage rankings is that they offer a quick point of reference for investors to be able to determine which online brokerage(s) are the segment leaders and which are the laggards, there hasn’t been an easy way to compare Canadian online brokerage rankings – until now.

To address this analysis gap and to highlight the trend towards homogenization among online brokerages (i.e. that it is harder to tell online brokerages apart from one another) we wanted to put the latest online brokerage rankings from the Globe and Mail and Surviscor into a format where they could be compared side by side. By doing this, a much clearer picture emerges of where there is consensus from subject matter experts on which Canadian online brokerages are leaders and which are lagging their peers.

Specifically, the most important thing (we think) to pay attention to when comparing online brokerage rankings is where there is agreement and the extent of that agreement, because it demonstrates increased confidence in the experience that self-directed investors can expect from a particular Canadian online brokerage.  

How We Compared Canadian Online Brokerage Rankings

Before diving into a comparison of the two different online brokerage rankings, it is important to provide some context as to how these numbers were generated.

The scoring criteria for the 2022 Globe and Mail online brokerage rankings uses letter grades in combination with +/- components. (For those who wish to take an in-depth look at how the grading system changed over time, you can check out one of our original articles explaining how the Globe and Mail online brokerage rankings evolved from 2002 to 2012.) As in the past, there are multiple criteria that Canadian online brokerages are evaluated on with a final letter grade assigned based on a combination of scoring and impression of the online brokerage (from the perspective of the “average” online investor).

In contrast, Surviscor reports a numerical percentage for their Canadian online brokerage experience rankings. The methodology for their analysis takes a criteria-based approach and measures features that online brokerages do (or do not) have. This year’s online brokerage experience review audited Canadian online brokerages during October and November 2021 and analyzed over 400 criteria in six categories and 27 subcategories.

To enable a fair comparison, we decided to convert the letter grade ranking system used by the most recent Globe and Mail online brokerage rankings, into a numerical system that is used by Surviscor.

Interactive Brokers Canada was analyzed as part of the Globe and Mail’s 2022 online brokerage rankings, whereas Surviscor’s brokerage ranking did not include them. Conversely, Wealthsimple Trade was rated by both firms; however, they were only scored in the Surviscor rankings. In the Globe and Mail online brokerage rankings, Wealthsimple Trade was given an “I” for “incomplete.” As such, both Interactive Brokers and Wealthsimple Trade are not directly comparable in the two different rankings.

The table below contains the raw rankings from both online brokerage reviews. As mentioned above, the online brokerage rankings from the Globe and Mail are reported in the form of letter grades, whereas the rankings of online brokerage experience from Surviscor are reported in percentages:

Canadian Online BrokerageGlobe and MailSurviscor
BMO InvestorLineB+82%
CIBC Investor’s EdgeB-75%
CI Direct TradingB80%
Desjardins Online BrokerageC+76%
HSBC InvestDirectD+66%
Interactive BrokersBn/a
National Bank Direct BrokerageB+69%
Qtrade Direct InvestingA93%
QuestradeB+88%
RBC Direct InvestingB-81%
Scotia iTRADEB91%
TD Direct InvestingA-89%
Wealthsimple TradeI20%
Date of PublicationFeb 4, 2022Dec 20, 2021

To figure out a conversion scale between letter grades and percentage scores, we relied on the grading scheme used by the University of Toronto, since that was the university selected as the “best” post-secondary institution in Canada (according to the most recent Maclean’s rating).

Also, for ease of comparison, we’ve calculated the average score between the two sets of online brokerage rankings, as well as the difference between the scores (in percentage points) to highlight the degree of agreement (or disagreement) between the two different rankings’ results.

What We Found When Comparing Canadian Online Brokerage Rankings

Again, in the interest of a fair comparison, it is important to reiterate that we are comparing two different Canadian online brokerage rankings that measure different aspects of trading online via a Canadian online brokerage.

The Globe and Mail’s online brokerage rankings take the perspective of what the “average” Canadian self-directed investor would typically need or want. By comparison, Surviscor’s rankings measure the “online brokerage experience,” which reflects what their perception of a leading online brokerage experience could look like.

Comparing Rankings

One of the first things that jumps out from the results of this year’s rankings is that averages from the Globe and Mail (75%) are lower than those from Surviscor (81%). Moreover (and for the stats nerds), the standard deviation – or measure of variance of the average – for each set of scores show much more consistency for the Globe and Mail’s online brokerage ranking than for Surviscor’s (7.31% vs 8.88%). It is important to note that the scores for Wealthsimple Trade on Surviscor’s rating (20%) were not included because they were so far below everyone else’s that it would have significantly skewed the analysis.

What these averages and standard deviations point to is that the perception of the overall online brokerage offering for Canadian self-directed investors is generally not bad.

Aside from a couple of outliers – in particular Wealthsimple Trade – an online investor could pick just about any Canadian online brokerage and be OK. Thus, choosing a Canadian online brokerage in 2022 for most individual investors is not a decision to fret over – especially if their needs are fairly straightforward or basic.

Importantly, a low number on these rankings doesn’t necessarily imply a “bad” or poor online brokerage, but rather one that doesn’t meet a full spectrum of user needs based on what else is out there. As such, not all investors will end up wanting or needing all features that are available elsewhere, which might be just fine for those investors.

Another interesting observation right off the bat is that the average score for Canadian online brokerages is lower in the Globe and Mail ranking than it is in the Surviscor ranking. One interpretation is that Rob Carrick is a tougher grader than Surviscor, something that is somewhat of a surprise given the qualitative data and commentary on the online brokerages coming from each ranking. While it is clear what Surviscor’s position is on firms like Wealthsimple Trade, other than that, according to Surviscor’s scores, most Canadian online brokerage firms appear to be faring well (in a relative sense) when it comes to features.

Combined Scores

One of the unique features of analyzing the Canadian online brokerage rankings this way is that it is possible to combine the scores into an average score between the two different rankings. In doing so, not only does this enable readers to more easily compare Canadian online brokerages based on the average alone, but it also highlights where these rankings agree and the extent to which they do.

To be fair and consistent for the analysis on combined scores, Interactive Brokers (which was analyzed only in the Globe and Mail) and Wealthsimple Trade (which was not graded in the Globe and Mail and was a severe outlier in the Surviscor analysis) were not included.

The table below shows the combined average scores from each Canadian online brokerage, as well as the difference (in percentage points) between the two rankings. Firms that had the same average score but lower difference between rankings were rated higher in this analysis, thus it is possible to have a lower average score but place higher because there is greater confidence associated with a particular average.

The scores for the combined rankings ranged from a high of 90% (Qtrade Direct Investing) to a low of 62% (HSBC InvestDirect) with the overall average of the group coming in at 78% and a standard deviation of 7.7%.

With these numbers in mind, the results of the best ranked online brokerages (as well as the worst) take on greater meaning.

In particular, based on the average values and the range of scores alone, Qtrade’s performance is very close to being significantly better than the other firms ranked, falling just three percentage points shy of being two standard deviations better than the average. Conversely, HSBC InvestDirect’s ranking does (barely) cross the threshold into being significantly lower than its peers.

As for the rest of the field, which is essentially every other online brokerage, the experience is generally OK. This could explain the observation that many Canadian self-directed investors don’t feel compelled to switch online brokerages, even in the face of low or zero commission alternatives. Even if costs may be somewhat higher, things are not so materially bad to induce a change. It’s only likely after a negative service interaction (or feature shortcoming) or some significant convenience boost (e.g. consolidating other financial services or very cool feature) that would form the catalyst to change brokerages.

Areas of Agreement

What became clear in comparing these online brokerage rankings is that there were clearly some instances where both sets of reviews arrived at similar conclusions about the performance of a particular online brokerage.

The range of agreement was between 4 and 16.5; however, the latter score (the result of the difference in scoring for Scotia iTRADE) was certainly an outlier. Excluding that from the analysis, the average difference between the Globe and Mail rankings and Surviscor ratings was about 7.15 percentage points with a standard deviation of 2.24.

When including a “confidence” measure, which is really a consistency between rankings measure, the most consistent conclusions were about BMO InvestorLine (average combined score of 80%) and CIBC Investor’s Edge (average combined score of 73%). Rankings for both of these firms were within four percentage points of each other, suggesting that both Surviscor and the Globe and Mail analyses arrived at a similar conclusion about what self-directed investors can expect. In this case, when comparing BMO InvestorLine versus CIBC Investor’s Edge, according to the rankings, BMO InvestorLine would provider higher probability of a better outcome for investors.

Where the confidence measure really impacts the average scoring and ultimate ranking of online brokerages is when the difference between online brokerage rankings is considered high. In this case difference scores of 8 or higher were considered to be an indicator of a “YMMV” (your mileage may vary) for investors in terms of what their own experiences with an online brokerage may be. Several firms fell into this cluster including (in descending order of disagreement):

The most extreme example of disagreement between online brokerage rankings was for Scotia iTRADE, which had a 16.5 percentage point difference. The Globe and Mail’s online brokerage rankings rated Scotia iTRADE at 74.5%, a score that put it in the middle of the pack in terms of grading; however, in the Surviscor rating, Scotia iTRADE earned a 91% rating. According to Rob Carrick’s commentary, the website interface came across as dated but in the Surviscor ranking, the overall online experience was close to exceptional. In short, this is a good example of a firm where consumer experience is likely somewhere between good or excellent, depending on the user.

Other interesting names on the YMMV list were the two online brokerages with zero commission trading: National Bank Direct Brokerage and Desjardins Online Brokerage.

Despite being a “tougher” judge overall, it was the Globe and Mail ranking for National Bank Direct Brokerage (78%) which was higher than Surviscor (69%). The situation was almost the opposite at Desjardins Online Brokerage, which scored higher on the Surviscor ranking (76%) compared to the Globe and Mail (68%). And despite not being captured in the comparison analysis shown above, Wealthsimple Trade is also a zero commission brokerage that did not score well on the online brokerage rankings.

The shift to this low-cost structure for consumers would almost certainly be considered a win, but as these online brokerage rankings clearly show, pricing is just one of many factors that online brokerages need to get right in order to score well on these brokerage rankings. In fact, it appears that when it comes to Canadian online brokerage rankings, each of these aggregate ratings favour the online brokerage offering features and “frills” rather than the most essential online trading experience. Most “average” investors don’t make a significant amount of online trades in a year, so the “value” of zero commission trading might be minimal compared to other features (such as portfolio tracking) that would be of interest.

Conclusions

Online brokerage reviews and rankings have and will continue to play an important role for self-directed investors who are interested in opening an online brokerage account. For Canadian online brokerages, rankings – especially those from the Globe and Mail and Surviscor (as well as from JD Power) – are a particular point of pride, and demonstrate to investors that these online brokerages can meet certain standards of quality that, in turn, should give investors confidence in doing business with them.

While historically there might have been substantial differences between firms, in 2022 it is clear that most Canadian online brokerages are doing an adequate job of providing self-directed investors with the essential functions of being able to trade and track their portfolios online. The customer service wait times, which became a dominant topic of discussion in 2021, were also part of the conversation this year, but what that data also showed is a) improvements have been achieved in most places year over year, and b) customer service channels are, like pricing, only part of what earns good grades in an online brokerage ranking.

Our conversion of the letter grades used in the Globe and Mail’s online brokerage rankings into percentages is not a perfect one-to-one mapping. For that reason, the percentages that we’ve used are at best, a reasonable approximation of what it takes to conduct an apples-to-apples comparison of the different online brokerage rankings that are highly influential during the current RSP season and throughout the rest of 2022. Despite the limitations, the ability to compare different online brokerage rankings does show that firms like Qtrade Direct Investing and TD Direct Investing have earned their way to the top of the list of firms who are providing broadly appealing features and value to Canadian self-directed investors. The fact that there are both strong averages as well as reasonable agreement can give self-directed investors some degree of confidence when trying to decide on a “good” choice for an online brokerage.

That said, the online brokerage rankings are a line of best fit for the “average” or typical investor. And despite some firms scoring lower, it is important to recognize that a “lower” score doesn’t translate necessarily into a firm that doesn’t please its customers. Different features matter to different investors, and as such, firms that didn’t receive much spotlight in these rankings and analysis, in particular Interactive Brokers and Wealthsimple Trade, have passionate users who genuinely enjoy using these brokerages.

Thus, if there is one big cautionary note in relying on the rankings and ratings generated by both the Globe and Mail and Surviscor, is that these ratings reflect the perspectives of the respective entities that developed the rankings. The rankings do not, unfortunately, factor in customer satisfaction or sentiment, which is a highly prized but very difficult factor to get reliable data on.

Nonetheless, much like the Olympics, the competition between Canadian online brokerages is so intense that the difference between a podium finish and being out of the spotlight is small. The gap between the best online brokerage and the rest is closing. Canadian online brokerages who are agile enough to continuously improve, especially in what kind of features they can bring to market, should continue to do well in the rankings. If there’s one important lesson from the world of sport that holds true for Canadian online brokerages, however, it’s to try and eliminate unforced errors, especially once RRSP season is done. The data now exists in an easier format for Canadian online investors to compare online brokerages, but whether or not they’re driven to look it up after RRSP season is a function of how well each online brokerage can perform.

Into the Close

It’s great “two” be back in the thick of things just in time for sprint to the RRSP finish line at the end of February.

There’s lots that’s happened since our pause so we’re looking forward to digging out from the vacation responder emails, as well as reviewing the latest developments taking place with Canadian self-directed investors and online brokerages.

Of course, anyone who’s also had a newborn knows that sleep is a precious commodity, as is family time. So we thank you for your patience as we get back online and promise that there are even more dad joke puns about to make their way into the Roundup from here on out.

Fingers crossed, it’s going to be a nail-biter of a week in more ways than one.

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Discount Brokerage Weekly Roundup – January 6, 2022

Happy New Year and welcome to 2022! The start of a new calendar year is typically the time of year when we all struggle with writing the correct year for a few weeks and then eventually get the hang of (or accept) being in a new place. Ironically, time distortion is a hallmark of a pandemic, and aside from not knowing what day of the week it is (every day is sweatpants day!), it seems that timing was topsy-turvy at online brokerages in Canada and the US. But this is the definition of the new normal, and like markets tend to do, we’re embracing the ability to adapt with the times.

Change is a big theme in this mega-edition of the Roundup. First, we dive into the biggest review of Canadian online brokerages: the Look Back / Look Ahead for 2021/2022. This in-depth look at the latest issue picks out some important themes that impacted Canadian online brokerages and self-directed investors in 2021 and what’s in store for 2022. Next, we recap the year with memes & themes in an epic rundown of the big (and small) stories of 2021. So, in case you missed the past year or simply just need a quick(ish) primer on what happened with Canadian online brokerages in 2021, be sure to read through this ultimate roundup of Roundups. Finally, be sure to get to the end for an important announcement on the schedule changes to the Roundup coming this January.

Online Brokerages Review 2021 & Offer Exclusive Preview of 2022

When given the opportunity and spotlight to speak directly to online investors, what did Canadian online brokerages have to say about an exceptional year and how to build on top of that?

Well, we found out just that in the latest edition of the Look Back / Look Ahead series in which Canadian online brokerage leaders shared their perspectives on the past year, as well as what they have planned for the year ahead.

This year’s edition featured submissions from BMO InvestorLine, Desjardins Online Brokerage, HSBC InvestDirect, National Bank Direct Brokerage, Qtrade Direct Investing and RBC Direct Investing, with senior leaders from each of these firms, sharing unique and intriguing perspectives into how various factors over the past year have influenced the priorities and direction of their respective firms going forward.

On a thematic level, it was clear that one of the biggest challenges and opportunities for the online brokerage industry in Canada was the meteoric rise of retail investor interest in trading stocks online. The stats provided were incredible. Desjardins Online Brokerage, for example, shared that 30% of their user base is between the ages of 18 and 30, and BMO InvestorLine reported nearly 50% of their new clients are under 35. And they’re likely not alone. The huge demographic shift in clients means that online brokerages are working to deliver features and experiences that align more closely with this group – including investor education resources.

Having covered the online brokerage industry in Canada for the past decade, an important theme of this issue we’ve witnessed is effort into investor education gradually recede. When Sparx Trading first launched, at least half a dozen or more online brokerages would regularly hold investor education seminars, webinars, or education-focused events. Gradually, however, as markets moved steadily higher and volatility subsided, interest in education waned, and whether it was supply or demand driven, “investor education” resources began to disappear.

Fast forward to today and it seems we are experiencing a renaissance of investor education based on the feedback from online brokerages, as well as in several of the trends we’ve been tracking throughout the industry. National Bank Direct Brokerage, for example, highlighted the fact they offer Options Play for free to their clients. This digital tool enables clients to simulate and learn about options trading strategies – something that is of growing interest to younger investors, especially coming out of the meme-stock craze of early 2021. At RBC Direct Investing, education is also on the roadmap for 2022 as is building out additional content for investors via the Inspired Investor magazine. And, at the industry giant TD Direct Investing, it is clear that investor-focused content will play an important role given their sizeable investment in building an entire content team that is likely going to be producing content at an unmatched volume.

Of course, the big story for 2021 in the Canadian online brokerage industry was the launch of commission-free trading by National Bank Direct Brokerage in August. Undeniably a surprise for many, the fact that a bank-owned online brokerage with a national footprint would be the first to offer full commission-free trading changed the competitive landscape for larger and smaller players alike. Not long after NBDB lowered their fees, Desjardins Online Brokerage followed suit. With both of these Quebec-based institutions taking trading commissions to zero, clearly commission-free trading is on the minds of self-directed investors and online brokerages alike. When polled about the issue, Canadian online brokerages revealed that they are clearly aware of it and would be looking to enhance value for investors with new features and offers rather than lower prices for trading commissions – at least at this point.

As we round the turn into 2022, however, zero-commission trading looms large. Just ahead of the end of 2021, Mogo Trade announced it had received the official green light to launch its commission-free trading app, and in our special section on commission-free online brokerages, we listed a total of four (including Mogo Trade) that we are currently tracking that are likely to come online either in 2022 or 2023. So, the reality for Canadian online brokerages is that zero-commission trading is coming, as is more competition.

Given the pace of innovation and change that are on the horizon, the Look Back / Look Ahead series provides visibility on which Canadian online brokerages are actively innovating, which firms are working on important infrastructure components, such as client experience, and which firms are clearly capable of doing both.

For self-directed investors, moving from online brokerage to online brokerage is (at least for now) a slow and painful exercise. Consumers would much rather stay where they are; however, without confidence in their online brokerage’s ability to innovate or be competitive on cost or value, alternatives are increasingly present.

Perhaps one of the most compelling stories in 2022 beyond commission-free trading will be a new feature telegraphed in the Look Back / Look Ahead from National Bank Direct Brokerage: paid securities lending.

In addition to offering zero-commission trading, the fact that clients could be compensated for lending their securities out to those seeking to short them lays a strategic foundation for NBDB to not only hang on to clients in a way that other brokerages are not (at least not yet), but it also is a draw for active traders who are looking to source shares for shorting. It’s a feature that currently exists only at Interactive Brokers, which is a signal or validation that active investors are either direct or indirect benefactors of this program. In short (pun intended), our call on National Bank Direct Brokerage in early 2021 appears to continue to play out: they are increasingly going to be an online brokerage to watch as they expand their presence across Canada. Until another major online brokerage in Canada drops their commission pricing to zero or close to it, National Bank Direct Brokerage is going to continue to be a top contender among self-directed investors looking to for a value-oriented online trading experience. Unlike other providers, however, NBDB isn’t waiting around for that to happen – they are clearly positioning themselves well with Options Play and the paid securities lending feature to be an attractive destination for active investors, as well as passive ones, and they’re working towards launching a mobile app which would only deepen the appeal with younger investors.

With 2021 now officially in the books, the Look Back / Look Ahead series is a great opportunity to get a unique perspective from industry insiders on the world of self-directed investing. As it falls on the tenth official year of the launch of SparxTrading.com, it also represents a significant milestone to have been covering the activity in this space to the depth and consistency that we have. Over the course of the decade, it’s been amazing to connect with industry analysts, online brokerage leaders, and self-directed investors to chat all things online investing. Most fulfilling, however, has been getting to be able to level the playing field for DIY investors and help, even in some small measure, make self-directed investing easier and more accessible.

True to the spirit of the Look Back / Look Ahead series, we also took the opportunity to announce the launch of Sparx Trading Pro. While it is still in development, we’re excited to be building something special for the community of users that regularly turn to SparxTrading.com for in-depth insight and analysis of the online brokerage industry. We love analytics and numbers, so a big part of what we hope to introduce is more data on what self-directed investors are interested in, and as a result, help serve as a catalyst to drive innovation.

Finally, on behalf of the entire Sparx Publishing Group organization and SparxTrading.com team, thank you to our loyal readers, visitors, and supporters. We’re amazed that 10 years has flown by, and we’re bullish on where the next chapter in self-directed investing goes from here. Thanks for tuning in!

Themes and Memes: Online Brokerage Highlights from Q2 2021 onwards

April: In with the New

From Qtrade’s new look and new name (Qtrade Direct Investing) to the preview of long sought-after features from Questrade and Wealthsimple Trade, April showered self-directed investors with the promise of new things to come.

The launch of the new brand direction for Qtrade Direct Investing was a huge milestone for this popular Canadian online brokerage. Executing a rebrand is no small feat; however, Qtrade managed to strike the right balance between a connection to what people know it for (i.e. its first name) and what it wants people to know it for. With a bold, new look and energy, it felt like Qtrade was ready to embrace the new landscape of online investing and bring something emotion into what has typically been a conservative brand.

Also looking to stir up some excitement, Questrade telegraphed the launch of a new mobile app – something that they hoped would help them compete more effectively against a design-savvy, mobile-first competitor: Wealthsimple Trade. It wouldn’t actually launch until November (see below) but the hype train on the new mobile app officially pulled out of the station in April.

And speaking of Wealthsimple Trade, new feature releases were a regular occurrence throughout the year, but one big announcement from the zero-commission brokerage was the news that they would be launching US dollar trading accounts. Long the Achilles heel for this very popular brokerage, the final form of the US dollar trading offering from Wealthsimple Trade ended up launching in December (see below).  

May: Statistics and Outliers

Strange, almost by definition, is not normal. For the (fellow) statistics nerds out there, data is a great way to get a handle on what is considered normal and what’s an outlier. This month happened to be filled with DIY investor data from all over the world.

One of the big developments was the online brokerage ranking by Surviscor, which put online brokerage fees into the spotlight. Remarkably, even before going to zero commissions, National Bank Direct Brokerage took the crown of lowest cost provider which is no small feat in a fiercely price sensitive industry.

Another watershed pricing moment came later in the month from popular bank-owned online brokerage BMO InvestorLine. In a calculated move, BMO InvestorLine launched 80 commission-free ETFs, and while they are not the only Canadian online brokerage to offer completely commission-free ETF buying and selling, the move gave both active and passive investors a compelling reason to choose this online brokerage over others (especially bank-owned brokerage competitors).

June: More New Features

Summer is typically the time for big blockbuster movies. Although the silver screens weren’t as busy this past year, DIY investor screens were filled with blockbuster reveals in the summer.

Perhaps the biggest one for Canadian self-directed investors (up until that point) was the launch of fractional share trading by Wealthsimple Trade. This highly-prized feature is something that US online investors were able to have access to from a variety of online brokerages, but for mainstream investors in Canada, Wealthsimple Trade was able to make a huge splash by bringing this trading to the masses in Canada.

The huge news from Wealthsimple Trade essentially overshadowed a lot of other new and newsworthy feature releases that month, including the launch of faster deposit times for Questrade, new advanced trading tools for clients of RBC Direct Investing, and the launch of the Interactive Brokers credit card in Canada.  

July: No Strings Attached

The Robinhood IPO and the opportunity to “buy buy buy” into the game-changing commission-free online brokerage was undeniably one of the biggest stories in the space this past year. By venturing into the public markets, it was possible to look under the financial “hood” to see how this commission-free brokerage managed to grow so rapidly, and, more importantly, how they made their money despite keeping commissions at zero. As it turned out, the prospectus for Robinhood’s IPO made for some fascinating reading.

No stranger to life as a publicly traded online brokerage, however, Interactive Brokers managed to pull off a deft mic drop moment of their own when they waved bye-bye-bye to inactivity fees for their clients worldwide. This included Canadian online investors, so it was a huge win for DIY investors everywhere who, prior to the removal of inactivity fees, were reluctant to have more than their most active accounts with Interactive Brokers. By lowering the friction to stay a customer of Interactive Brokers, this savvy online brokerage turned the math of customer churn on its head and managed to find a way to get customers to stay, even if they needed to step back from active trading for a while.

August: Coming This Fall

Twenty twenty-one was many things, but typical it was not. For that reason, we probably should have known better than to think it would be business as usual – or more appropriately – quiet business as usual. August happened to be an historic month for Canadian online investors because that was the month National Bank Direct Brokerage chose to launch commission-free trading.

Not only did National Bank Direct Brokerage take their commission fees for trading stocks to zero, they simultaneously took the vacation plans for other online brokerage leaders to zero as well.

And, while there wasn’t a story bigger than that, there was one that came close. We spotted and reported on the potential launch of yet another commission-free online broker, FreeTrade, here in Canada. In addition to Mogo Trade, FreeTrade represented yet another online brokerage interested in launching direct trading services in Canada with no commission.

Between the news of National Bank Direct Brokerage and the potential launch of another commission-free online brokerage in Canada, a clear trend is forming, and now it seems only a matter of time before existing big-bank online brokerages follow suit with significant commission rate drops.

September: Adding Up

We had to do a double take when it came to turning double digits. September marked 10 years since SparxTrading.com launched with a mission to level the playing field for online investors and “discount brokerages” as they were then known.

It has been a spectacular journey, and despite a very different landscape for online investors today, it was clear that a resource like Sparx Trading is needed as much now as it was when we first started. We also recognized that to prepare for a very dynamic future in the online brokerage space, we had to make some big changes – starting with a full redesign on the website, and in September, we also added the ability for online investors to research what other people are saying about online brokerages on Twitter and reddit, two areas which saw huge gains in participation by retail investors.  

We weren’t the only ones launching a retail investor sentiment tool, however. As it turned out, TD Direct Investing  launched the TD Direct Investing Index to measure Canadian investor sentiment in the stock market. With several Canadian online brokerages regularly reporting what their clients have been trading, this new feature from TDDI takes things to a whole new level by providing data on demographics and location, as well as sectors.

Of course, when it comes to online investors in 2021, stocks weren’t the only asset class of interest to them. In a stunning pivot (and/or a capitulation to giving people what they want), Interactive Brokers announced they would be enabling cryptocurrency trading to their clients. The big story here is that founder and very public face of Interactive Brokers, Thomas Peterffy, has been an outspoken critic of cryptocurrency for years, and so to see him personally acknowledge the material relevance of cryptocurrency as well as make the feature available to Interactive Brokers clients underscores the trading adage of “not fighting the tape.” Demand for cryptocurrency trading was simply too high despite the potential regulatory peril it could represent. Interactive Brokers was by no means the only big name in the US to adopt or support cryptocurrency trading, but it does signal that there is a sufficiently high level of interest among new and experienced investors in trading this digital asset class.

October: And Another One

And speaking of listening to customers, the launch of the QuestMobile app by Questrade generated a tonne (yes, it felt like the metric kind) of responses from clients and observers who weighed in (pun intended) on the new feature. There are only a handful of examples of feature launches from online brokerages over the past decade that generated so much response online, and the QuestMobile launch ranks high on the list of lightning rod discussion points.

Questrade’s unique success online with DIY investors ultimately became its undoing in this case because so many of its clients were not shy about providing their (negative) feedback on social media and investor forums. Regardless of the merits of the app, the roll-out of a new interface is a highly instructive case study change management, especially in an era of increasingly tech and design savvy clientele.

It seemed fitting in a month often known for trick or treating that a huge treat for self-directed investors was the announcement that (yet) another commission-free online brokerage was looking to formally launch in Canada in 2022. TradeZero, a name familiar to very active traders, indicated their plans to expand globally with Canada being an important jumping off point in that roadmap. Excluding the perennial “are we there yet?” questions about tastyworks coming to Canada, the announcement by TradeZero brought the total number of new online brokerages (new commission-free online brokerages) looking to launch in Canada in 2022(ish) to three. In the decade prior to 2021, the number of commission-free online brokerages that were publicly looking to launch in Canada was exactly Wealthsimple Trade long (we announced this back in 2018).

Finally, October was also the month where Virtual Brokers officially rebranded to CI Direct Trading. It had been just over four years since CI Financial acquired Virtual Brokers in 2017; however, the highly recognizable low-cost online brokerage had clearly been paring back on news and announcements post-acquisition. In an interesting (cryptic?) move in September, Virtual Brokers announced its name would be changing; however, it didn’t specify what it would be changing to. Nonetheless, 2021 brought some answers as to what’s going to happen next with Virtual Brokers / CI Direct Trading, and as we saw through the year, rebranding is big project but does set the stage for some transformative moves.

November: Let the Games Begin

In a month that has now become synonymous with bargain hunting, November didn’t disappoint for DIY investors either. There was a dizzying amount of news to report on but the biggest story for self-directed investors in Canada was the unofficial (but now kinda official) launch of RSP season. While the contribution deadline comes at the beginning of March 2022, the deals and promotions for online trading accounts have now started to appear at the beginning of November, and 2021 was no exception. Some big players in the Canadian online brokerage space came out swinging early, among them, CIBC Investor’s Edge and TD Direct Investing, both of which provided a preview to the highly competitive promotional offers available this season.

Another big theme for this year was in the non-bank-owned online brokerage group launching features to help self-directed investors get started and funded as quickly as possible. Qtrade Direct Investing announced the launch of rapid account opening knocking down the time required to open an online trading account at Qtrade from days to minutes. While getting an account opened quickly is a huge step forward, another big hurdle to clear is account funding. Competitor online brokerages such as Questrade and Wealthsimple Trade worked feverishly in 2021 to address instant account funding (albeit with limited amounts).

On the topic of opening accounts quickly, Robinhood, the poster child for rapid growth in online brokerage accounts, in 2020 and 2021 reported earnings, and for anyone keeping score on their stock price recently, the outlook was not great. Being winter, the phrase “getting ahead of your skis” characterizes the Robinhood story, and the now publicly traded stock has seen a massive sell off in large part because of the stall in momentum from retail investor trading. Specifically, the pull back in options and cryptotrading have clearly hurt the top and bottom lines for this zero-commission brokerage. Beyond the trading in those products, it also appears that after the meme-stock debacle, the “for the people” branding took a significant hit, something that might be keeping newer clients away from considering Robinhood as their online brokerage of choice.

And, speaking of choosing, Interactive Brokers once again reflected that the power of capitalism is ultimately in listening and providing to the market what the market wants. Ironically (or perhaps appropriately), ESG-driven trading is something that Interactive Brokers offers to its clients with the launch of their IMPACT app. Commission-free trading that enables you to make the world better through your investment decisions pretty much nails it for the demographic this app is clearly targeting.

December: Free Fallin’

Even with ice and snow on the ground, it seems like stock markets (and a couple of online brokerages) were doing all the slipping and sliding heading into the end of the year. Yet again, 2021 proved that time distortion and normalcy are not a thing because feature launches and big announcements continued to roll in despite it traditionally being a month when activity among online brokerages gears down for the holiday season.

But the giving season did giveth, or at least asketh to taketh, in the case of Wealthsimple Trade which launched a new subscription-based service. The commission-free brokerage finally addressed (sort of) one of their clients’ biggest pain points, the high cost of trading US-listed stocks by launching access to US currency trading accounts. The devil, however, was in the details, and despite the sizzle on rolling out the feature, there were many important unanswered questions about how converting between currencies would work with the subscription model.

Questrade managed to slide in some interesting new features ahead of the end of the year as well, launching a wonderfully named “RoundUP” service to help make investing digital spare change easier as well as a “cash back” shopping feature in which the worlds of online shopping and online investing collide.

Also, just casually sliding some big news in before the end of the year, Mogo Trade received approval for it to launch its zero-commission online trading platform and opened up the waiting list to be notified of the official go live date.

Finally, we shipped the annual Look Back / Look Ahead series for 2021/2022 in December (see above), and with it we wrapped up what has clearly been an eventful year with insights from Canadian online brokerage leaders. As busy as the year was in 2021, all signs point to even more activity in 2022, with new features continuing to launch, new pricing drops likely to come from existing online brokerages (who haven’t already lowered their prices), some interesting new players on the field, and, naturally, the unknown.

Into the Close

If you’ve made it to this point reading top to bottom, congratulations! Not only are you all caught up on the biggest developments in the online brokerage space for the year, but you’re also well prepared for what’s about to come next in 2022. The start of a new year is often a time for reflection and resolutions, but this new year brings even greater cause for reflection as well as celebration.

After 10 years of publishing the Weekly Roundup from pretty much everywhere life has taken me, there are only a handful of instances where publication has been paused, and they’ve been to tend to the greatest investment anyone can have: family. For that reason, the Weekly Roundup will be going on pause until mid-February.

In the interim, we will continue to be publishing deals and promotions updates, as well as monitoring and sharing interesting content to our Twitter channel and newsletter, so be sure to subscribe to those if you haven’t already done so. Also, we will continue to monitor the online brokerage space for big developments, and like all of life’s great surprises, perhaps don’t be surprised if we drop some interesting posts between now and the return of Roundup.

Until then, Happy New Year, and wishing good health, prosperity, and joy to you and your loved ones for 2022! Here’s hoping we get back to a time where can all fist bump in person again soon.

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Discount Brokerage Deals & Promotions – January 2022

*Updated* Welcome to the first online brokerage deals and promotions update for 2022! January is an exciting month for DIY investors in Canada, as it signals the start of a new contribution window for TFSAs as well as the final sprint to the 2022 RRSP contribution deadline in March.

This year in particular there’s lots for self-directed investors to celebrate. As we covered in our latest Look Back / Look Ahead series, Canadian online brokerages are working on exciting new features for DIY investors. Also worth celebrating is a new class of zero-commission online brokerages readying to launch in Canada.

In addition to celebrating the end of 2021, Canadian self-directed investors can celebrate the fact that all big bank-owned brokerages are well represented in the online broker deals and promotions department. And, despite the several deals that expired at the end of 2021, there is still a lot of choice – especially around cash back promotions. The big story, however, isn’t for individuals with million-dollar portfolios – quite the opposite in fact.

This year, it appears that the battle to attract new clients and assets is heating up for new investors.

Comparing the minimum deposit amounts required to qualify for an offer last year versus this year reveals some dramatic drops. TD Direct Investing, for example, lowered their minimum deposit requirement by 90% compared to last year, and BMO InvestorLine’s latest promotion (see below) lowered the requirement by 70% compared to last year at this time. Finally, Qtrade Direct Investing lowered their minimum threshold by 40% from $25,000 to $15,000. Decreasing deposit minimums aren’t the only signs of heated competition. We’ve also spotted increased bonus amounts surfacing relative to last year. In particular, the latest BMO InvestorLine promo bonus of $150 at the entry point deposit tier is up 50% compared to last year.

With commission-free trading now a reality at multiple Canadian online brokerages, online brokerages are going to have to rethink how they approach deals and promotions. In December, we saw this start to happen with the latest RBC Direct Investing promotion. Their current commission-free trading promotion comes with 100 commission-free trades which are good for up to two years – a record high offer and extremely long period of time to take advantage of it for this online broker.

On balance, the news is great for anyone looking to open an online trading account and get a promotion while doing so. Even existing clients of select Canadian online brokerages will be happier knowing there are promotional offers for depositing additional funds into their account.

With the 2022 RSP contribution deadline coming up quickly, there might be one or two online brokerages willing to launch a new very limited time offer. But realistically, the slate of offers currently available is going to be very difficult to compete against. With a new online brokerage (MogoTrade) in the wings and even more zero-commission online brokerages in the works, the current group of online brokerages is using deals and promotions to go on the offense heading into RSP season.

Expired Deals

This is a busy section this month, potentially busier than needed depending on whether some legacy promotions are actually expired or simply just not updated by the time of publication of this deals update.

First up, HSBC InvestDirect’s commission-free trade offer officially expired into the end of the year. It’s unclear if a new promotion will be launched ahead of the RSP deadline, however, historically HSBC InvestDirect does launch offers throughout the year. It will be interesting to see how they navigate the larger and more aggressive offers from competing online brokerages.

Next, another commission-free trade offer expired at the stroke of midnight on December 31st. Qtrade Direct Investing’s 50 free trade offer officially retired, which isn’t too bad since there is a cash back promotion from Qtrade already in motion.

For those keeping score at home, BMO InvestorLine officially retired their fall cash back promotion and replaced it with an even more competitive one (see below). It’s listed here for tracking purposes.

Questrade is on the list for expired promotions, which is interesting considering that both (technically expired) deals are visible on their website at the time of publication (this also happened last year as well). The two offers are their standing 5 commission-free trade offer (which pales in comparison to other Questrade promotions for commission-free trades) and their Questrade advantage promo (one month of commission-free trading). We’ll monitor their promotions section for updates on these two long-standing offers.

Extended Deals

*Updated January 9: It may have taken a few days to shake off 2021, but the expiry dates of two Questrade promotions have been updated. The two promotions in question: the five commission-free trades offer and Questrade Advantage. The new expiry dates for these promotions are the end of 2022.*

No extensions to promotional offers to report at the moment.

New Deals

It was great to welcome the new year with a BMO InvestorLine promo launch. The latest offer is a tiered cash back offer with incredibly competitive cash bonus in deposit tiers ranging from $15,000 to $499,999. The cash back amounts range from $150 to $2,000, with BMO’s offer leading that of their peers at the $15,000; $50,000 and $250,000 deposit levels specifically.

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Look Back / Look Ahead: A Review of Canadian Online Brokerages in 2021 & Preview of 2022

If there’s one thing that all self-directed investors have in common, it’s that they pay attention to trends. This year, we officially crossed the 10-year mark at Sparx Trading, and if there’s one thing that we can speak to after a decade’s worth of data and analysis, it’s being able to spot trends in the Canadian online brokerage industry. 

Taking stock (pun intended) of the past year and a half, it’s fair to say that we’re living through events unlike anything we’ve ever witnessed before. And yet, one of the most striking features of the Canadian online brokerage industry, even in the face of such dramatic events, is the ability of the Canadian market to sustain firms that move at paradoxically different speeds when it comes to innovation. That world, however, is about to change. 

In this fifth iteration of the Look Back / Look Ahead magazine, it’s abundantly clear that the Canadian self-directed investing industry sits at the cusp of a major transformation. 

From the launch of commission-free trading by National Bank Direct Brokerage, to a structural shift in demographics of investors who entered the online trading world, 2021 was a year that online brokerage executives told us challenged them to establish a new normal when it comes to delivering outstanding experiences for Canadian self-directed investors. 

Drastic change was also prevalent at SparxTrading.com this year. Our choice to completely overhaul our website and lean into refining our brand identity appears to be in line with where leaders in the industry are as well. And we, too, have some incredibly ambitious projects slated for the next year that we can’t wait to share more about, especially the launch of Sparx Trading Pro.

After 10 years of consistently producing content on the Canadian online brokerage landscape, it’s remarkable to reflect on the breadth of audience that we serve. 

Analysts, journalists, executives, enthusiasts, and investors turn to Sparx Trading for in-depth insights and newsworthy developments, as well as puns, gifs, and fun artwork. In today’s parlance, we’ve helped to democratize online investing by providing industry-grade content and insights to all. Today, investors have more technology, platforms, products, providers, and pricing options than they have ever had before, which means our place in the DIY investor ecosystem is even more important today than it was a decade ago when we first launched. 

On behalf of the exceptionally talented Sparx team, I would like to thank our loyal readers, supporters, and, especially, the online brokerage community for 10 years of wonderful memories, and for keeping things interesting. 

Where the next 10 years takes us all, we’re not sure. But we’re excited all the same, especially if where we’re going next won’t need roads. See you in the future!

Click below to learn more about what each individual online brokerage had to say about 2021 and what’s coming up in 2022:

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Discount Brokerage Weekly Roundup – December 20, 2021

Vixen might be a reindeer name, but Vix’n is just what the active traders wanted to see Blitzen and Dash-in around their screens as volatility, like lockdowns, makes a comeback. Screens and markets might be redder than Rudolph’s nose heading into the end of the year, but like all things market related, there are opportunities for good news if you Comet to finding them.

In this I-can’t-believe-we’re-so-close-to-the-end-of-this-hot-mess-of-a-year edition of the Roundup, we spotted new features being launched by one popular online brokerage just in time for the holiday shopping season, and what they could signal for this brokerage, as well as DIY investors. Next, more savings just got deal-ivered as two (big!) new online brokerage promos crossed our radar this week. Finally, a bonus story about a story – we preview the launch of the Look Back / Look Ahead magazine with an overview of what to expect, including some special features we think will drastically shape the industry in 2022.

Cashing In: Questrade Launches Cash Rewards and Roundup Features

At Sparx, we know a thing or two about roundups. So, you can imagine our joy when we noticed a Canadian online brokerage launch a new product line with “roundup” in the name!

Questrade, one of Canada’s most popular online brokerages, quietly rolled out a pair of new “savings” features for existing clients this past week in what looks like an interesting tactic to encourage low-friction asset gathering, while providing clients with additional value for being a Questrade customer.

The first, the RoundUP automatic savings program, is similar to many well-established services that help encourage saving and investing by rounding up dollar amounts on purchases which then get contributed into investments. Think of it like finding the spare change in your actual couch and automatically adding it to your couch potato strategy.

The second is the new Cashback Rewards program. This new feature appears to offer Questrade clients a way to spend their way to savings via cash back rewards from a variety of retailers. Similar to ebates/Rakuten, purchases made at different online merchants will provide shoppers with a cash back bonus for those purchases. The cash back amount can then be deposited directly into a Questrade account automatically.

In either case, these are timely programs to have arrive just before the holidays and when online shopping season hits a crescendo. More strategically, these new features also help Questrade stand out amongst an increasingly commoditized and crowded field of online brokerage service providers.

Despite an initial mixed reaction from investors and skepticism on the part of clients seeking out lower commission rates, this idea from Questrade is quite savvy even if it is not original. Questrade can lean on the successes from similar programs, such as Acorns in the US and Moka (recently acquired by Mogo Financial) in Canada, all of which are built on a premise of small amounts adding up to material gains. Undoubtedly, it is going to play well with the personal finance discussion groups and influencers who recognize that sometimes being disciplined about saving is hard; anything that makes building the habit of saving and investing easier is likely to win support.

One of the early critiques of the Cashback Rewards program is that Questrade has pulled together a list of merchants offering deals that most online investors don’t find compelling. There are a handful of recognizable names and a heavy concentration of shopping mall gift card-linked offers, so the successful uptake of this program will be correlated to the kinds of offers that Questrade can negotiate in. By comparison, rewards programs offered by Canadian financial service providers, such as RBC Rewards, or even like Rakuten, illustrate just how sophisticated these reward programs are.

As we noted in our coverage of Questrade in the soon-to-be-released Look Back / Look Ahead feature magazine, this year Questrade elected not to provide a submission highlighting what they’ve been working on. Nonetheless, there has clearly been activity and new features being brought forward, so it is curious that even with this new program that the rollout has been quiet out of the gate.

It’s clear that Questrade continues to innovate; however, what also is clear is that they are expanding beyond just the online brokerage space – a trend that other online brokerages in the US have demonstrated is necessary to retain clients from having to access other financial service providers for things like credit cards or bill payments. Their acquisition of Community Trust in 2019 helps to explain why Questrade Financial Group is hiring for roles related to digital banking, and even in roles related to their online brokerage site, they are looking to drive growth in the banking side of their business, the clearest signal yet of where they intend to move into next.

Against the backdrop of broader ambitions in the traditional banking and financial services realm, the latest product launch of RoundUP and Cashback Rewards programs seem aligned with a bigger picture to create ongoing relationships with online investors beyond just the world of investing. Tying real world purchases to the online investing accounts through credit cards and bank accounts gives Questrade important insights into spending patterns of their customers, better enabling Questrade to provide support and content (among other things – like mortgages) to clients in a more meaningful way.

And, if moving into the traditional banking offering is part of Questrade’s roadmap, it also stands to reason that the economics of offering commission-free (or lower commission fee) investing options would change. After all, National Bank Direct Brokerage and Desjardins Online Brokerage managed to take a “big picture” approach to what their online investing clients could represent in terms of business opportunities for other lines of business, and if the math made sense to them, it could certainly do so for Questrade.

Deal-ightful News: RBC Direct Investing Promo and Scotia iTRADE Offer Launch

It might have taken some time, but like the thrill of last-minute shopping, promotions from RBC Direct Investing and Scotia iTRADE joined the pool of online brokerage offers this past week.

In terms of the latest promotions, however, there are some noteworthy differences from the trend of cash back offers that have been dominant through the launch of RSP season promos. The biggest difference: the reappearance of commission-free trades.

The latest promotion from RBC Direct Investing is a huge 100 commission-free trade offer, with those trades being good for up to two years. This is by far the biggest commission-free trade deal we’ve seen since a similarly sized one offered by National Bank Direct Brokerage (before they went fully commission free), and both the quantity of those free trades as well as the duration of time that clients could use them make it incredibly competitive. To boot, there is no minimum deposit required to qualify for this promotion, which immediately positions this offer at the top of the list for any online investor seeking out deep value for active trading or doing some major portfolio reorganization. It is impossible to say where exactly things will end up in two years’ time; however, the fact that RBC Direct Investing is willing to extend such a long runway for commission-free trades is perhaps a sign of an experiment playing out in real time. Either way, this is an exceptional offer that other online brokerages (who still charge commissions and even those who don’t) are going to be compared against, especially given RBC Direct Investing’s feature set (in particular real-time data).

While at first blush it may seem like Scotia iTRADE is content to rely on their regular playbook of promotion structure, their latest tiered promotion of cash back or commission-free trades shows that they’ve been doing their homework (and reading the Roundup!) when it comes to strategic deposit amounts.

It helps to view the latest cash back promotion from Scotia iTRADE against its bank-owned brokerage peers to see the deposit levels at which Scotia iTRADE is competing the most aggressively for deposits.

The first tier that jumps out is the minimum deposit level. Scotia iTRADE is the only one of the online brokerages to have minimum of $5,000 for a deposit, and the associated cash back amount of $100 is tied with the only other bank-owned brokerage with a cash back bonus at that deposit tier (TD Direct Investing). In fact, Scotia iTRADE keeps pace with TD Direct Investing’s cash back offer through deposit tiers up to $100,000, after which point Scotia iTRADE’s cash back bonus leaps to $500, matching the leader at that tier, CIBC Investor’s Edge. What delivers bonus value to anyone signing up for the Scotia iTRADE cash back promotion, however, is that those individuals also receive a temporary commission rate of $4.99 per trade (flat!!) – effectively, a 50% discount on the standard commission rate – until the end of July 2022.

As we referenced in prior Roundups, Scotia iTRADE has been quietly going through a “rebuilding” mode, as evidenced by their front-end website refresh and winding down of their Twitter channel. This latest offer reveals some signs of activity, however, and that they are willing to keep pace with peer firms when it comes to trying to attract new clients.

Unfortunately, there is a lot of ground to make up by Scotia iTRADE when it comes to client experience.

A quick look at their Google reviews showcases concerns that have been voiced very publicly online, and as such, as competitive as their offering may be, it may hold greater appeal with existing clients rather than new clients who are learning about this brokerage for the first time.  

The latest launch of new promotions at this point in the calendar year is a great indicator of the high degree of competition between online brokerages. The biggest rush of interest to self-directed investing is likely behind us, however there is greater awareness of trading online (especially among younger investors) and it’s clear that the effect that National Bank Direct Brokerage’s move to zero commission rates has had across the board. While most online brokerages aren’t lowering standard commissions to zero (yet), the commission-free trades are getting more numerous, cash back incentives higher and commission rates dropping (even temporarily). Combined, those factors clearly paint a picture of a world in which pricing for self-directed investing will continue to decline.

Preview: Look Back / Look Ahead Magazine

The end of a calendar year is a fitting time to reflect on the events of the past twelve months, while also casting a gaze forward as to what to look forward to. We’re not alone in that activity, as numerous political and business leaders are taking the time to comment on what they thought the most important developments were for the past year.

This week coming up, the latest issue of Look Back / Look Ahead magazine is set to publish, and included in it are some very insightful perspectives by a cross section of senior leaders of Canada’s online brokerages. In this issue, we asked all participants a series of questions about what investors can expect from their firms, what interesting trends they noted, and in particular, what they see coming in the year ahead.

All Canadian online brokerages that we cover on SparxTrading.com were invited to participate, free of charge, and were given the opportunity to speak directly and freely to Canadian self-directed investors about the challenges and triumphs of 2021.

Naturally, the industry being as competitive as it is, many online brokerages were not going to reveal all of the things they’re working on; however, it was refreshing to see that among all the participants, there were some candid discussions of new features slated to arrive in the new year.

The online brokerages that provided submissions to this year’s issue include:

We also provided coverage of the rest of the field based on what we saw as important and noteworthy developments during the year, and where things could go for those firms in 2022.

Among the big trends that we noted for 2021, multiple online brokerages called attention to the shift in demographics of their client base to a decidedly younger group. Stats vary, but in the order of 20% to 40% of new clients joining online brokerages in Canada this past year were under the age of 35. This has tremendous implications for what online brokerages are focusing on, and we can already see what several brokerages are committing to as a result. One tangible feature that is in focus is investor-oriented content to support new investors.

We also asked about client experience, and how each firm interprets that component of their service offering. While we doubt anyone would talk down their service experience, there were clear and tangible activities shared by online brokerages as to what they intend to do in the area of providing strong service to online investors.

On the topic of zero-commission trading, there were some intriguing answers – especially from the firms that have not yet lowered their commission rates to zero. It’s clearly something that has been discussed, and in fact, will continue to be evaluated as the market continues to evolve.

There were several notable new features coming soon that were discussed by online brokerages in this issue. One, we believe, will be significant (dare we say huge) and will serve as a catalyst for self-directed investors to seriously consider brokerages based on this one big feature. Other features being telegraphed will undoubtedly address certain pain points with mobile and digital experiences that will hopefully contribute to self-directed investors remaining where they are.

Beyond the online brokerages already operating in Canada, we also took a look at the companies that have all provided some indication of interest in launching new online brokerages in Canada in the near future. Names such as Mogotrade, Tradezero, FreeTrade, and, infamously, Tastyworks, are set to make history if they all are able to come to market in such a short amount of time. Realistically, we understand the regulatory process is neither easy nor fast when it comes to launching a new brokerage in Canada; however, none of those firms mentioned are standing still on the issue of going live in Canada as soon as is feasible to do so.

Finally, this issue happens to coincide with the 10th anniversary of SparxTrading.com’s launch. It’s hard to fathom that a decade has gone by, and through that time, we’ve been covering the ups, downs, and sideways of the online brokerage industry in Canada, as well as in the US. We provide some fun behind the scenes snippets of the journey to this point, and in stepping back to look at the bigger picture of the state of the industry, as well as the needs of online investors, we see our role and mission as more important than ever to deliver on. It’s abundantly clear (to us) that we’ve also grown a sizable community of online brokerage industry stakeholders, followers, and online brokerage enthusiasts, and we’re really excited to reveal what we’ve got planned next for this community in 2022.

Be sure to sign up to our newsletter for recaps and updates (including the first look at the magazine) and follow along on our social media accounts for highlights from the Look Back / Look Ahead.  

Thanks to all the firms that submitted and participated in this year’s magazine, as well as to the readers and supporters of Sparx Trading that have helped us make it to year 10, conveniently X in Roman numerals. Here’s to the next X.

Into the Close

At the time of publication, markets are poised for a bumpy start to a shortened holiday week. And, as financial services firms also sound the alarm to retreat and work from home through the winter to ride out the Omicron blizzard, we’re mindful that this is going to be a turbulent week. Volatility is going to be high, so despite travel bans and lockdowns starting to take effect, anyone who is a student of recent history is going to get a chance to witness a rerun of market turmoil and trading activity spikes. For traders, that’s about as bittersweet as it gets at this time of year but all we can do is buckle up, be kind, and hold on. We’ll be publishing the next edition of the Roundup a little later than usual courtesy of the holidays, but between now and then, thank you for joining us this year, and from all of us at Sparx, we wish you and your loved ones a safe and restful holiday season!

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Discount Brokerage Weekly Roundup – December 13, 2021

Inflation isn’t the only reason interest is heading higher at the end of the year. For the online brokerage industry in Canada, it seems that new features and announcements are also grabbing attention and fueling speculation as to what’s next as we head into the new year.

With just a few weeks left in 2021, and some big announcements of our own to report on, the Weekly Roundup is shifting gears into “year-end” mode. To kick things off, we look into the newest big feature drop announced by Wealthsimple Trade and unpack what it means for investors and competitor brokerages heading into RSP season. Next, we launch into rewind mode and review the big milestone developments from earlier this year as a prelude to the launch of our exclusive Look Back / Look Ahead magazine later this week. Finally, we wrap up with DIY investor chatter from the investing forums.

Wealthsimple Trade Launches SaaSy New Subscription

Just in time for the holiday season, Wealthsimple Trade rolled out a brand-new enhancement that has caused quite a stir among Canadian self-directed investors.

Wealthsimple Trade Plus, a new subscription model-based program offered by Wealthsimple Trade, will soon be removing per trade currency conversion and replacing it with a modified currency conversion option, adding in real-time data (though not streaming real-time data), and increasing the amount available for instant deposit to $5,000. The fee for this new service model is $10 per month, up from the current $3 per month being charged for Wealthsimple Trade Premium.

The new Plus program is slated to replace the Wealthsimple Premium plan. Premium is scheduled to be sunset in March 2022.

Like most big new features at Wealthsimple Trade, there’s a waitlist and a gradual rollout plan to contend with. However, despite what is clearly an attempt to address some of the most highly sought-after features by their clients, the early feedback from self-directed investors is mixed.

Arguably, the price tag is a sticking point. Paying $10 per month for a service might seem small; however, among the discount investor crowd, what amounts to an annual fee of $120 (if used through the year) is considered friction. In fact, introducing optional monthly fees at a time when other leading online brokerages, such as Interactive Brokers eliminate monthly fees (coincidentally, at $10 per month), and when competing online brokerages in Canada such as National Bank Direct Brokerage and Desjardins Online Brokerage have lowered their commission rates to zero (while providing access to USD accounts without forced currency conversions), means that the new Wealthsimple Trade Plus offering will have limited appeal.

For some clients of Wealthsimple Trade, this new capability will make financial sense – they can transfer a large dollar amount into USD and pay a one-time conversion fee of 1.5%. What hasn’t been made clear yet is how clients will be able to withdraw the funds, and whether it will have to first be converted back into CAD or if users can link directly to an external USD account. Additional questions have been raised, such as the ability to journal shares for cross listed securities and what will happen for clients with existing USD securities who sign up for Wealthsimple Trade Plus, and most importantly, what happens when a user opts out of the Wealthsimple Trade Plus program?

Of course, the timing of the announcement is certainly convenient given the proximity to RSP season; however, the fact that there is going to be a waitlist and a phased rollout of the new feature means that competing online brokerages have an opportunity to reposition themselves against this new offer. And the longer those questions about the new feature release remain unanswered, the greater the window of opportunity for competitors to provide a more tangible alternative.

The marketing and advertising for and in response to this latest development is sure to be heated. Already one key theme that existing online brokerages seem to be highlighting is “certainty” in what investors have to pay. Flat fees per trade are, arguably, more appealing than variable costs. The biggest test for Wealthsimple Trade, however, appears to be waning sentiment among millennial investors towards the commission-free offering which was once the exclusive domain of Wealthsimple Trade. One of the most influential sources of information for new and existing online investors is reddit, and it appears that National Bank Direct Brokerage and Desjardins Online Brokerage are both getting a lot of “earned media” from DIY investors who are leaving their existing brokerage (including Wealthsimple Trade) outright or redirecting a portion of their investment portfolio to these low-cost options.

Data from Robinhood, arguably, the best bellwether for Wealthsimple Trade, shows a substantial pullback in equities trading and user growth on the platform plateauing. Thus, the limits of design are going head-to-head with pricing, and in the self-directed investing space, while design might count for something, pricing (and features) usually win the day.

This latest move by Wealthsimple Trade will likely not spur existing Canadian online brokerages into action, nor will it likely be a significant catalyst to lower prices. Most Canadian online brokerages already offer the kinds of services (or better) that Wealthsimple Trade is bringing online in the new year.

As such, heading into the busiest stretch of RSP season, we anticipate Canadian online brokerages to step up advertising and awareness campaigns. If not to highlight their own features, then certainly to go on the offense to directly challenge competitors. The timing seems right for a big announcement from an online brokerage, and we’re probably not the only ones thinking that right now either.

2021 Online Brokerage Rewind: Part 1

It’s hard to believe that the end of another wild year is here. Time distortion is in full effect, thanks to the lingering impact that COVID-19 and all of its unwelcomed variants have had on the course of “normal” life. Now that we’re collectively almost two years into the global pandemic, there is clearly a shift – albeit a rocky one – towards a new equilibrium.

In January, a new reality was also thrust upon the online brokerage industry in Canada and across the globe at the beginning of 2021 when meme-stock mania and FOMO took hold and yet another surge of online investors wanting to join the world of trading online overwhelmed many Canadian online brokerages’ systems. Robinhood took centre stage as the zero-commission stock (and option and crypto) trading firm saw unprecedented customer growth and customer angst play out simultaneously.

Of course, all of this took place against the backdrop of a historic riot/coup in Washington, DC, a scene that provided a poignant reminder that even despite the chaos experienced in the real world, stock markets continued to drive higher. Regardless of what happened at the Capitol, capitalism remained intact.

At Sparx Trading, January was also busy (but nowhere nearly as tumultuous). We launched the first ever influencer edition of our Look Back / Look Ahead series, featuring contributions from the most influential folks in the Canadian online brokerage research industry, and hit restart on a long-dormant newsletter program.

Gamestonks continued to be a dominant theme heading into February, and the surge of (noted now as the “rise of”) retail investors grew, shattering trading and new account growth records at all online brokerages in Canada and around the world. The world, it seems, had shifted, and retail investors embraced markets and risk in a way that nobody really saw coming. That fact was laid bare as customer service wait times exploded in Canada just as RSP season was reaching its zenith, and the combination was not pretty. There were anecdotes of multi-hour wait times to get through to client service teams and it was clear that many (many) online brokerages in Canada were simply not equipped to service that level of rapid interest.

Despite the turmoil on the client service channels, the beginning of 2021 saw what would become an overarching theme across the Canadian online brokerage industry for the year: the release of new features. Twenty twenty was an exceptional curveball that all online brokerages had to figure out how to contend with; however, once teams had transitioned to working remotely (itself a phenomenal effort for the financial sector), the work restarted on launching new features. Big bank-owned brokerages, such as BMO InvestorLine and RBC Direct Investing, took the lead with new bells and whistles added into their offering.  

And speaking of shiny new things, the tail end of February saw the beginning of a new chapter in the digital life of SparxTrading.com, as we officially rolled out a new website. The brand-new look and feel of the site as well as the new features, such as an online brokerage deals calculator and new approach to delivering information on deals and promotions, set the stage for a new direction for the site. The big investments in new architecture were not without hiccups though, and behind the scenes we’ve been working hard throughout the year to continuously monitor and improve performance based on user feedback.

The end of the calendar quarter somehow managed to deliver equally headline-grabbing developments. Specifically, we noted on two separate occasions that month that new commission-free trading firms were positioning to come to market in Canada by the end of the year. Easier said than done it seems. Among the big names, Tastyworks, the popular US online brokerage that focuses on options trading, and Mogo Financial, who announced the launch of Mogo Trade, after the acquisition of Moka. Of course, we didn’t know it at the time, but March was also when National Bank Direct Brokerage set the stage for their eventual leap into being the first bank-owned online brokerage in Canada to offer commission-free trading. In March, however, National Bank Direct Brokerage tested the waters by dropping their standard commission rates by about 30% to $6.95 per trade.

There were, of course, many other stories, as well as copious amounts of silly gifs shared in the Weekly Roundups, that we didn’t mention here. To catch up on all of the stories from Q1 of 2021, check out our 2021 archives here, and in case you missed some of the fun artwork, be sure to check out the Sparx Trading Instagram page.

Stay tuned for more updates through the year in the next Roundup, as well as the big launch of the Look Back / Look Ahead magazine!

From the Forums

Fees Squeeze

With the launch of Wealthsimple Trade Plus, inevitably investors are asking whether existing online brokerages are going to drop their fees – even nominally – to offset the slow but steady growth of commission-free trading. In the crosshairs of investors this past week, Questrade, where users on this reddit post debated the current low-cost options for self-directed investing, and challenged the perception of Questrade as a low-cost leader.

On Better Terms

Another week, another interesting thread about the finer points of a popular bonus offer. In this post, reddit users weigh in on the tax treatment of cash back bonus offers, and the perspectives are interesting as they are varied.

Into the Close

That’s a wrap on yet another wild week in the markets. After shrugging off omicron, hot inflation, chip shortages, and crypto crashes, it seems like 2021 is determined to end on a high note. We’re also pretty excited about what’s coming just around the corner with the launch of our Look Back / Look Ahead series for 2021/2022 and to gear down for the holiday season. With so much activity in play, we suspect that January will be an exceptionally busy month, and we’d have it no other way! Have a profitable week!