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Discount Brokerage Weekly Roundup – June 16, 2017

Amazon buying whole foods, meanwhile Sears Canada expressed concerns it would be able to carry on. The law of the jungle is simple: eat or be eaten. This week, Amazon decided to do some eating while Sears Canada let the market know that they’re officially a wounded gazelle. In the highly competitive world that is the Canadian discount brokerage industry, the metaphor is equally applicable, which is why very few players are standing still heading into the summer.

In this week’s roundup we take a broad snapshot of a number of developing stories in and around the Canadian online brokerage space. First, we provide an exclusive look at two interesting pieces of news that came our way this week – one on deals at an independent brokerage and another on new features at one of Canada’s most popular bank-owned online brokerages. From there we take an interesting look at the latest development by one bank-owned robo-advisor making a splash in the social media pool. Next on the docket is a fascinating and evolving story on regulation of online brokerages that could drastically redraw the map for DIY investors and the online trading experience. Finally, we’ll cap this week’s roundup with a larger-than-usual dose of online brokerage tweets, triggered by a significant trading outage.

Virtual Brokers Dealing Themselves In

It’s expected that within the next week or two, Virtual Brokers will be releasing a pair of new offers for Canadian DIY investors. While we can’t report on the full details of what these offers contain, we can say that one will be a cash back offer for new clients that is linked to trading activity and the other is an ETF-based offer which will definitely raise some eyebrows when it goes live.  Stay tuned!

Coming Soon: Enhancements to TD Direct Investing Active Trading Platform Features

Good news is in the works for active traders at TD Direct Investing. There appears to be a few new features due to be released on the horizon, one of which is the ability to cancel all open orders at the click of a button. Another feature in the pipeline to be delivered soon is the ability to access the Active Trader platform directly (without having to go through Webbroker). While they may be incremental improvements, they’re nonetheless a signal that the trading experience at TD Direct Investing continues to evolve and more importantly, provide greater functionality to platform users.

Be on the lookout for an upcoming piece that will take a closer look behind the scenes at how technical features and upgrades get developed and rolled out at TD Direct Investing.

Robo-advisor Gets the Social Treatment

Thursday evening Twitter was abuzz with chatter about online investing from an interesting source: a robo-advisor. Specifically, BMO SmartFolio was in the spotlight as part of a conversation about investing – using the hashtag #investsmart.

Co-hosted by BMO and blogger/writer Lena Almeida (@Listen2Lena), this online event drew quite a crowd (including the president of BMO InvestorLine) – something that many investing chats on Twitter have generally not been able to do. The Q&A session lasted from 8pm to 9pm EST and included giveaways of prepaid Mastercard credit cards – something that likely helped attract, retain and encourage the audience to participate for the duration of the chat.

Here are the questions that were covered (along with engagement stats at the time visible at the time of publishing the weekly roundup):

  • How comfortable are you with online investing? (100 replies, 26 retweets, 41 likes)
  • Why did you start investing? (105 replies, 36 retweets, 43 likes)
  • Do you feel you have to be an expert to invest online? (106 replies, 32 retweets, 39 likes)
  • What are your investment goals for 2017? (66 replies, 26 retweets, 38 likes)
  • Are you an online investor? How is it working out? If not, what’s holding you back? (102 replies, 33 retweets, 43 likes)
  • Is online investing the way to go? What else is an #investsmart question mark for you? (106 replies, 38 retweets, 43 likes)

In between the questions, there were also tips and videos supplied by BMO related to investing online, explaining ETFs and taking a measured approach to financial planning.

Regular readers of the weekly roundup can probably appreciate that there were a number of elements about BMO SmartFolio’s Twitter chat session that stand out as intriguing.

What is perhaps most interesting about this session, this was a very well attended and highly engaging Twitter chat on personal finance (specifically on investing online) generated by a bank-owned robo-advisor.

Compared to Canadian online brokerage Scotia iTRADE’s Twitter chat on sustainable investing held in April (see table below), the BMO SmartFolio session drew a larger and more active audience. Specifically, there were 16x more replies, 6x more retweets and 7x more likes with the BMO session than with the Scotia iTRADE session.

It should be stated that there were lots of differences between these two events so comparisons should be taken with a grain of salt. Even so, on a relative basis, the conversation about online investing generated by BMO SmartFolio was noteworthy.

Likely the combination of a noteworthy personality along with incentives (a shot at a $500 gift card is great reason to tune into a chat about money) helped to get (and keep) the attention of Twitter users. Of course, subject matter also probably had something to do with engagement, as the pattern of questions asked by BMO were directed to the audience (i.e. tell us about you) rather than describing a product feature (as was the case with iTRADE). This more personal tone generated many more personal reactions that provided a window into the attendees’ thoughts and perceptions of online investing.

Scotia iTRADE (#FairTrader) BMO SmartFolio (#InvestSmart)
Question 1 What is Sustainable Investing? Replies: 6
Retweets: 4
Likes: 3		 How comfortable are you with online investing? Replies: 100 Retweets: 26 Likes: 41
Question 2 What is ESG and why does it matter? Replies: 9
Retweets: 5
Likes: 6		 Why did you start investing? Replies: 105 Retweets: 36 Likes: 43
Question 3 Sustainalytics, tell us more about the research behind Scotia iTRADE’s Sustainable Investing Tools Replies: 3
Retweets: 5
Likes: 7		 Do you feel you have to be an expert to invest online? Replies: 106 Retweets: 32 Likes: 39
Question 4 Where can you find more information about Sustainable Investing & ESG? Replies: 6
Retweets: 5
Likes: 7		 What are your investment goals for 2017? Replies: 66 Retweets: 26 Likes: 38
Question 5 Can you tell us how Scotia iTRADE’s Sustainable Investing & ESG tools work? Replies: 6
Retweets: 5
Likes: 7		 Are you an online investor? How is it working out? If not, what’s holding you back Replies: 102 Retweets: 33 Likes: 43
Question 6 Is online investing the way to go? What else is an #investsmart question mark for you Replies: 106 Retweets: 38 Likes: 43
Average Replies: 6 Retweets: 5
Likes: 6		 Replies: 98 Retweets: 32 Likes: 42

 

One of the biggest challenges that robo-advisors face in the Canadian online investing landscape is generating interest and awareness in a product that has to compete between DIY investing services and traditional financial advisors.

The latest move by BMO SmartFolio shows that bank-owned robo-advisors can also successfully leverage social media to engage audiences. It is this point in particular that should demonstrate to the social savvy newer robo-advisors that there is still a lot of “fin” left in fintech and that bank-owned products can and will likely narrow the social media gap.

What a Difference a Recommendation Makes

Since 2014, there’s been an evolving conversation involving Canadian online brokerage industry and their principle regulatory body (IIROC) that could drastically change what DIY investors have come to expect from Canada’s discount brokerages.

While it is a longer story than will be covered here, at the heart of the issue raised by IIROC was how best to proceed on updating its guidance on the notice MR-098 – What Constitutes a ‘Recommendation’? (September 6, 2001). In particular, the view from the regulators appears to be that since 2001, there have been many features that now accompany the online trading experience that go beyond the “order execution only” experience that may have characterized the online trading world in its earlier days. For example, model portfolios, “educational” tools, trading alerts and other features that been developed for DIY investors may, according to regulators, blur the line between being a resource for a DIY investor and recommendation to choose a particular investment.

Most of Canada’s largest and most visible online brokerages have submitted a response to IIROC’s request for comment (IIROC Notice 16-0251) on this matter, including, for example, CIBC Investor’s Edge, Questrade, RBC Direct Investing and TD Direct Investing.  In addition to a written submission, there are also a number of articles that have been written about this issue and, this past week, Morningstar Canada published a video interview (conducted in French) of Laurent Blanchard, President of National Bank Direct Brokerage, describing his thoughts on possible changes to the industry.

In this video, Blanchard provided many points that echoed the comments provided in writing by the online brokerage industry participants – namely that DIY investors access the online brokerage firms because they want to trade or seek out investment opportunities on their own.

It will be interesting to monitor this story further and to see what additional commentary and conversation arise, from all stakeholders. There have been numerous lengthy submissions to IIROC, so observers are keenly awaiting additional information and direction on this matter, which is scheduled for this summer.

While there appears to be a great deal of uneasiness as to what could happen, one thing is for certain, the upcoming decision may have a drastic impact on the Canadian online brokerage space and the kinds of tools and added features DIY investors may have access to when trading online.

Discount Brokerage Tweets of the Week

No doubt about it – when a trading platform falls, everybody hears it. Mentioned this week were Questrade (extensively), RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

Into the Close

That’s a wrap on yet another crazy week. The good news, however, is that summer is just around the corner and even better the weekend is here and with it Father’s Day. So, whether you say it with socks, a tie or some other perfectly dad-appropriate gifts, to all the awesome dads out there (including my own!!), thanks for all of the great things big and small you’ve done and continue to do!

via GIPHY

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Discount Brokerage Deals & Promotions – June 1, 2017

Discount Brokerage Deals

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

*Update: June 27* Summer is the best time for blockbuster movie hits. And, just like these feature productions, this month’s deals & promos section will be filled with big announcements and teasers on offers coming soon from Canada’s online brokerages as well as from SparxTrading.com!

Before getting to the new features and deals, here’s a quick recap of the landscape heading into June.

Although there was lots going on in the background, May was relatively quiet on the deals front. Last month saw 23 promotional offers in play with Qtrade Investor opting to extend their transfer offer until the middle of this month.

Heading into the new month, it seems like June could have more deal turnover and volatility. For example, BMO InvestorLine has an offer set to expire on June 5th (more on that below) as well as another (refer-a-friend) at the end of the month; Qtrade Investor’s transfer fee offer expires June 14th and Desjardins Online Brokerage’s long-standing 1% commission credit promotion is scheduled to conclude at the end of June.

The good news, however, is that there are still many promotional offers for DIY investors (24 at the time of publication) in the market for an online trading account. Better still is the fact that the deals/incentives being put forward are getting more creative. For example, this month Desjardins Online Brokerage has launched their first (at least in recent memory) contest-based program (no purchase required either!) – perhaps in response to the contest by National Bank Direct Brokerage. Also, Virtual Brokers ran a limited promotion in conjunction with their investor education webinar (with the Independent Investor Institute) in which they were offering up 3 months of commission-free ETF trading (buying and selling) for new clients.

Also hinted at last month was the launch of a SparxTrading.com exclusive offer.  This month we’re happy to report the official launch of a commission-credit promotion with an online brokerage coming just around the corner. We’ll provide updates here in the deals section when the promo goes live as well as announce the launch of this new offer on the SparxTrading Twitter account.

Another exciting announcement is the addition of Canadian roboadvisor/digital advisor deals & promotions into our deals section.

The landscape for Canadian online brokerages has evolved and now the automated/digital/robo [product line] is quickly becoming integrated into the suite of services offered by online brokerages.

As such, this month we’re launching coverage of special offers for the digital/roboadvisor services linked to firms that also have a DIY/self-directed investor service. Thus far, this group includes BMO SmartFolio, Questrade Portfolio IQ, National Bank Direct Brokerage’s InvestCube, VirtualWealth (from Qtrade) and a soon to roll out robo-advisor from Credential (name tbd) powered by NestWealth Pro.

While we can’t confirm that more roboadvisor players will be on the way, the announcement today that HSBC is launching a roboadvisor (in the UK), National Bank’s recent investment into NestWealth and the whispers of another Canadian online brokerage on the cusp of a roboadvisor launch, suggests there is still plenty of action left in this space in the near future.

As always, if there are any Canadian discount brokerage deals or promotions that we’ve missed, let us know and we can add them to the list for all deal-hunting DIY investors to be aware of.

Expired Deals

*Update: June 24th – Qtrade Investor’s discounted transfer fee ($10,000 deposit to have transfer fee covered) offer officially closed on June 14th and was not extended. Their transfer fee minimum deposit moves back to $25,000.*

No deals expired heading into June.

Extended Deals

No deals expired heading into June.

New Deals

*Update: June 27th – There’s a new kid on the block for the deals & promotions section, and it likes to do the robot. We’re pleased to launch the new section covering roboadvisors that are linked to or run by Canadian discount brokerages. At the time of publication there are currently four online brokerages affiliated with a roboadvisor (or digital advice) platform. We’ve combined the various offer types, which include cash back promotions, discounted management fees and transfer fee coverage. Scroll down to scan the latest roboadvisor promotions currently available to investors.*

*Update: June 24th – Virtual Brokers made a splash at the outset of summer by launching two big commission-credit offers. The first offers up 20 commission-free ETF trades for new clients. Specifically, this promo offers 20 commission-free ETF trades for either Canadian or USD ETFs. The second promo is another commission-credit offer that rebates $50 for 20 commissionable trades made within a quarter, for up to four consecutive quarters. The deadline for signing up for this promotion is September 30th. See the table below for more details.*

*Update: June 7th – Exciting news! SparxTrading is pleased to announce the launch of our exclusive $88 commission-free trade offer with Questrade. Individuals signing up for a new qualifying online trading account with Questrade and depositing $1,000 or more in net new assets can receive up to $88 in commission credits which can be used towards equity, options and ETF (sells) trades. As far as we can tell, this is the best Questrade commission-credit offer currently available – and as an added bonus, individuals have 60 days to use the commission-free trades (as opposed to the standard 30-day window for current commission-credit offers). See table below for more info.*

*Update: June 5th – BMO InvestorLine has launched their latest promotion, a cash back offer for $1,200 for new or existing BMO InvestorLine clients depositing at least $200,000 in net new assets. In addition to the cash back offer, this promotion includes a 60-day access to their 5-Star program (including a trial of the MarketPro platform) and up to $200 in transfer fees covered from another brokerage. Finally, this offer is also eligible to be used with a refer-a-friend offer currently available to BMO InvestorLine clients meaning that referred individuals can get an extra $50 cash back added onto their bonus. See table below for offer links.*

Although technically not a new account opening offer, Desjardins Online Brokerage is sponsoring a draw for a trip to New York City (from Montreal), accommodation, a special tour of Wall St. and $500 CAD in spending money. Total value of the prize is $3,000 CAD and the contest is open until July 14, 2017. To enter, individuals have to register to receive at least one of several email communications from Desjardins Online Brokerage (notably their D-bulletin) as well as provide their email address, postal code and phone number. So, in terms of entry, it is very quick and straight forward. For full details, see terms and conditions here: https://www.disnat.com/en/wall-street-contest

Lots coming around the corner, check out the weekly roundup for advance notice on two special offers set to drop next week. One (very big offer) from BMO InvestorLine and the other being a SparxTrading.com exclusive promotion. Stay tuned!

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2017
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive a $50 cash back rebate per quarter. To receive the cash back rebate, at least 20 commission generating trades must be made within a specified quarter. Use promo code: CSHBKQTR17 to access this offer. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) per quarter (up to $200 cash back over the total period) To qualify 20 trades must be made within a quarter. $50 cash will be rebated in the following quarter. Eligibility period ends June 2018. For more information, click the terms and conditions here September 30, 2017
Open and fund a new account with Virtual Brokers with a deposit of at least $5,000 and receive cash back commission rebates on the first 20 Canadian or US ETF trades made by September 30, 2017. For commission-free Canadian ETFs use promo code: CADSETF2017 and for US ETFs use promo code: USSETF2017. This offer is open to new clients only. Be sure to read terms and conditions for full details. $5,000 $50 commission rebate (cash back) Trades must be completed by Sept. 30, 2017. Cash rebates will be deposited in Feb. 2018. For more information, click the terms and conditions here September 30, 2017
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatFlex or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo June 30, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least $200,000+ in net new assets and you may be eligible to receive $1,200 cash back. In addition, eligible individuals can receive a 60-day trial of BMO MarketPro and have transfer fees covered up to $200. Use promo code SPARXCASH when signing up for cash back offer. Be sure to read the terms and conditions for more details on the offer. $200,000+ $1,200 Cash back Cash back will be deposited the week of March 12, 2018. Summer cash back offer August 7, 2017
Scotia iTrade Open and fund a new account with Scotia iTRADE with at least A) $25,000; B) $50,000; C) $100,000; D) $250,000; E) $500,000 or F) $1,000,000+ and you may be eligible to receive A) 5,000; B) 7,500; C) 20,000; D) 35,000; E) 50,000 or F) 100,000 scene points as well as 50 free trades. In addition, new clients will also be reimbursed up to $150 in transfer fees. Free trades will be valid for 90 days. Use promo code 17SC when signing up to be eligible. Be sure to read terms and conditions for full details. A) $25,000 – $49,999 B) $50,000 – $99,999 C) $100,000 – $249,999 D) $250,000 – $499,999 E) $500,000 – $999,999 F) 1,000,000+ SCENE Points A) 5,000 B) 7,500 C) 20,000 D) 35,000 E) 50,000 F) 100,000 + 50 Free Trades 90 days Free Movie & Free Trade Promotion July 31, 2017

Expired Offers
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $100,000 or B) $250,000+ in net new assets and you may be eligible to receive A) $200 cash back or 20 commission-free trades; B) $1,000 cash back or 100 commission-free trades. Use promo code SPARXCASH when signing up for cash back offer or SPARXTRADES to be eligible for commission-free equity trade offer. Be sure to read the terms and conditions for more details on the offer. A) $100,000 – $249,999 B) $249,999+ A) Cash back: $200 OR 20 commission-free trades B) Cash back: $1,000 OR 100 commission-free trades. Cash back will be deposited the week of January 8, 2018. Commission-free equity trades are eligible for use up to August 6, 2017. Cash back or Free trade offer June 5, 2017
Last Updated: June 24, 2017 12:50 PT

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTrade account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $50,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period(subject to conditions). BMO InvestorLine Refer-a-Friend June 30, 2017

Expired Offers
Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc $1,000 $50 commission credit 30 days none none
Last Updated: June 1, 2017 21:30 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $20,000 Transfer Fee Rebate none
Transfer $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion. $150 $25,000 Credential Direct Transfer Fee Rebate none
Transfer $25,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $25,000 Transfer Fee Rebate none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo tbd
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatFlex. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo June 30, 2017

Expired Offers
Last Updated: June 24, 2017 12:30 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Credential Direct has partnered with Trend Micro to offer 50% off Trend Micro Titanium Internet Security. Use code “TrendCF” at checkout. n/a Trend Micro Special Offer Code none
Disnat Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information. n/a MoneyTalks Inside Edge Discount none
Disnat Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details. $1,000 Broker@ge 18-30 Promotion none
Scotia iTrade Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details. $1,000 StartRight Free Trade offer none
Open a new account with Virtual Brokers with a deposit of at least $1,000 (for the Classic Commission Account) or $5,000 (for the Commission Free Trading Account) and you may be eligible to receive a one-year subscription to access 5i Research. Use promo code 5iVB2016 when signing up. Be sure to read terms and conditions for full details. $1,000 (Classic Commission Account); $5,000 (Commission Free Trading Account) 5i Research Offer March 31, 2017

Expired Offers
Last Updated: June 1, 2017 21:30 PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $5,000 1 year no management fees SPSF July 31, 2017 SmartFolio New Account Promotion
Cash Back Open and fund a new Investcube account with National Bank Direct Brokerage and deposit with at least A) $10,000; B) $50,000; C)$200,000; or D) $300,000+ and you may be eligible to receive a cash back deposit of either A) $50; B) $200; C) $400 or D) $600. See offer terms and conditions for full details. A) $10,000 B) $50,000 C) $200,000 D) $300,000+ A) $50 cash back B) $200 cash back C) $400 cash back D) $600 cash back CUBE2017 August 31, 2017 Investcube Cash Back Promotion
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
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Discount Brokerage Weekly Roundup – May 5, 2017

Not sure if May got the memo, but it was April that was supposed to get the showers. For many traders, however, this is the month when many of them will be looking to exit the market according to the saying: ‘Sell in May and go away’. While things don’t always go to plan, Canada’s discount brokerages are hoping that nobody rains on their parade, especially with the launch of their summer campaigns on the horizon.

In this week’s roundup we review the latest discount brokerage deals & promotions, including where to find out about a special offer being launched by SparxTrading.com in the coming weeks. From there we look at the latest trading stats from one US online brokerage and how the no-commission trading pricing could reshape the way online brokers operate. Following that story is the profile of a Canadian independent discount brokerage who was recognized for keeping their people happy and motivated. As always, we’ll close out the roundup with a summary of DIY investor tweets as well as a selection of DIY investor forum posts.

Let’s May a Deal

Now that spring has sprung, the weather isn’t the only thing changing. With RRSP season and income tax season now officially over, interest in online brokerages will start to wane until the fall, so Canadian brokerages will start to have to get a little creative to get the attention of DIY investors over the next few months.

With so much happening in the news, it seems that this year investors who are in the markets will be keeping a closer eye on their portfolios in case, you know, nuclear war breaks out. Aside from that unpleasant reality, it appears that Canadian online brokerages are hoping that some creative promotional offers will be good enough to get the attention of the folks who are in the market for an online trading account.

At the start of this month, Scotia iTRADE and National Bank Direct Brokerage were the only two brokerages to advertise new offers for DIY investors. Desjardins Online Brokerage also made headlines in the deals section by extending their existing offer out through the end of June.

In the case of iTRADE, there’s a promotion linked to the SCENE points program where new account registrants to Scotia iTRADE can receive 25 commission free trades plus between either 5,000 and 100,000 SCENE points (depending on deposit levels). The SCENE points can then be redeemed either for free movies or with partner restaurants or retailers where SCENE points are accepted.

Whether the points offer moves the needle with DIY investors is debatable (i.e. are movies really that valuable?) however the fact that there is a promotion and that people might pay attention to the deal might make it worthwhile campaign.

Another offer in the Canadian discount brokerage space comes in the form of a fantasy stock (ETF) picking competition from National Bank Direct Brokerage and Horizons ETFs.

With NBDB being the only Canadian online brokerage to allow commission-free trading on Canadian ETF buys and sells, ETF investors and those who want to learn about investing using ETFs, would find the competition (and the possibility of winning up to $7,500 cash) appealing.

For DIY investors, it appears competition between discount brokerages is still healthy.

There are still at least 23 advertised offers, and based on a number of in-person conversations with Canadian online brokerages, there are several deals and offers in the pipeline – with some being planned for later in May.

Of course, we saved the best news for last. This month, SparxTrading.com will also be launching a special promotional offer for DIY investors that will be sure to get quite a bit of attention. Be sure to stay tuned as we’ll be dropping the news on our Twitter feed first.

Interactive Brokers in a Squeeze

With the rollover into a new month, Interactive Brokers has once again published their trading metrics and provided a unique window into the landscape of online trading.

As we had reported in a previous edition of the weekly roundup, there are some interesting storm clouds brewing in the online brokerage space in the US that make looking at these stats important – especially because they might offer some insights into what may happen in Canada.

To recap, there appears to be a price war in the US online brokerage market in which major players such as Schwab, TD Ameritrade and E*Trade Financial have all drastically cut commission prices. Interactive Brokers, by comparison, reported an average equity commission per trade of about $2.30 and thus has yet to follow suit with some of their competitors.

It is against that backdrop that there are several noteworthy observations about Interactive Brokers’ stats.

First, since Interactive Brokers releases their full set of trading metrics dating back to 2008, it is very interesting to note that they continue to grow their account base. From the start of reporting in January of 2008 to the most recent set of results, accounts at Interactive Brokers have climbed from 97.2 thousand to 410.8 thousand. For those keeping score at home, IB’s accounts have grown four-fold in about nine years. Curiously, however, the crucial metric for online brokerages – Daily Average Revenue Trades (DARTs) – has not grown at the same pace. In 2008, the cleared average DART per Account was  774; in 2017 the YTD average is 382, which is slightly less than half the average in 2008. Granted, 2008 and 2009 were crazy years for volatility and trading, however, it is a curious observation that despite the growth in accounts, trading has not followed suit.

Another interesting stat to compare this against comes from online brokerage Robinhood. Specifically, the growth chart recently reported on their blog which shows that they’ve grown from no accounts in 2015 to over 2 million in 2017 and are now valued at about $1.3B (USD).

Source: Robinhood.com blog screenshot

Robinhood has been increasing its feature set to cater to more active investors (including those that would use margin).

A third interesting development from the past week was the spike in E*Trade Financial’s share price on the whispers that there may be a buyer. Without speculating on who that might be, it is interesting because E*Trade is also caught between its identity as an online brokerage firm that caters well to active traders and one that can service the client base being sought after by TD Ameritrade, Schwab and even Robinhood.

What does this all mean?

What these data points suggest is that Interactive Brokers, which has typically been branded as the ‘active trader’ brokerage of choice, has either been bringing on clients who don’t trade as much as some of their earlier clients have, or if there are active traders in the mix, there hasn’t been the volatility around to get traders really excited. Likely it’s a mixture of both, especially since Interactive Brokers has made the decision to shutter its market making division because it’s been losing money.

Going after a less active trader, however, means competing with upstarts, like Robinhood, who’ve been crushing it from an account growth point of view, as well as going up against bigger players, some of whom are also prepared to go to zero commissions and would still be profitable.

At first blush, Interactive Brokers’ continued account growth, growth in assets and increasing margin balances are good signs. The fact that the active trading segment appears to be stalling, however, reinforces that active traders are hard to come by and are being sought by all sides. In trying to add accounts by bringing on less active traders, Interactive Brokers is moving into a very crowded space, so it will be interesting to see how their metrics, particularly the account growth, behaves with deeper value alternatives now becoming more prominent.

Questrade wins best managed company award

One of the interesting things about a recent visit to the Questrade offices in Toronto is not only the level of security in their offices, but also to see how much they’ve grown and continue to evolve.

Despite the addition of the size of their team, there is something different about Questrade than at the bank-owned brokerages, namely that at Questrade there are lots of ‘younger’ folks on staff.

While it may not seem consequential, it might help to explain how, unlike some of their peers, Questrade has a very pronounced presence on social media – especially on Twitter and in forums. To their credit, there’s a certain authenticity (aka street cred) to the culture of being able to connect with younger investors because so many of their own team would fit the mold of a typical client.

Recently Questrade received (yet again) an award for being a well-managed company. Part of the online brokerage (and financial services) experience entails knowing that who you’re dealing with is doing something right in the people department.

Here’s a video from the President & CEO of Questrade, Edward Kholodenko, which sheds some light on life at Questrade.

It was a rough week for a couple of online brokerages who caught more than a little flak for some technical outages. Of course there were plenty of customer service sirens going off all around. Mentioned this week were CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

 

From the Forums

Insight Scoop

With deals and promotions being a feature of this week’s roundup, we found this post from RedFlagDeals’ investing forum to be interesting. Specifically, it looks at one user’s experience in trying to see if the current BMO InvestorLine deal is a good fit.

Trading Places

There’s usually someone in the forums looking for a little help in understanding the transfer process from one brokerage to another. In this post from reddit’s Personal Finance Canada section, the original poster wanted to know about the process of moving into Questrade from Disnat. It’s an interesting story because 1) it’s not a move you hear about every day 2) it got a few very insightful reactions from some readers 3) it is another example of where Questrade and Qtrade get mistaken for the same brokerage and 4) Disnat’s parent – Desjardins Online Brokerage – purchased Qtrade Investor, so possibility that things could end up going full circle was mildly amusing (at least for the bystanders – and since it wasn’t to Qtrade but to Questrade not actually a case that the original poster would encounter, but someone actually might).

Into the Close

It’s Friday – otherwise known as the day of the week on which all of the crazy, potentially life changing news gets announced.  It’ll be a good weekend to stay indoors and enjoy thinking of being in a galaxy far, far away (where it doesn’t rain so much). Have a great weekend!

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Discount Brokerage Deals & Promotions – May 1, 2017

*Updated: May 19* Now that spring is in full swing, it looks like the deals and promotions section is getting a little spring cleaning of its own. Like the big puffy Canada Goose jackets, there are a number of deals that are getting shelved for the season (or perhaps for good), however there are some exciting new developments to share as well, so you’ll probably want to have a gander.

With the tail end of spring typically slowing down a notch, it appears that brokerages are getting a bit more creative with the offers in play. In addition to the standard cash-back or free trade promotions, there is also an ETF trading contest (with a real cash prize) from National Bank Direct Brokerage as well as a promotion from Scotia iTRADE linked to movie or dining out points. In addition, the offer from Desjardins Online Brokerage, which was scheduled to expire at the end of April, has been extended through to the end of June.

The good news for DIY investors looking for an online trading account is that there is still lots of selection.

The deals and promotions section currently has 23 advertised offers for DIY investors, and with activity already being telegraphed to start the month off, it’s a good sign that brokerages are still interested in competing for new business. A recent edition of the Weekly Roundup pointed out the competition for assets between US online brokerages is heating up, something that may shape how things play out here in Canada as both banks and brokerages will be racing to gather assets.

Also adding some intrigue into the deals and promotions space is the announcement by Desjardins to fully acquire Qtrade Investor, and what that might mean for the space as a whole.

Another new change readers will note is the appearance of Sparx-branded codes in the current BMO InvestorLine offer. Specifically, users can input the code SPARXCASH or SPARXTRADES when signing up for the current BMO InvestorLine promotion. For full transparency, SparxTrading.com will receive a referral payment from BMO for anyone using these codes to open an account.

We’ve also got another offer in the works so check back for updates to our selection of referral offers soon.

As always if there are any offers that we’ve missed and that would be valuable to share with our readers, please let us know in the comments below.

Expired deals

Virtual Brokers was the most active in terms of deal turnover heading into May. They saw three offers (RSP cash back bonus, 2 months free trading bonus, apple gift card draw) expire officially at the time of publication. While it’s no guarantee, recent history has shown Virtual Brokers to come back to the market with an offer a short time after the expiration of another, so stay tuned.

Extended Deals

*Update: May 19 – Qtrade Investor has extended their commission transfer offer to mid-June. See table below for more information.*

Desjardins Online Brokerage’s popular 1% commission rebate offer has been extended until the end of June. Previously scheduled to expire at the end of April, this offer provides up to $1150 in value back to clients (maximum commission credit based on amount transferred is $1000 plus $150 in transfer fees).

New Deals

Scotia iTRADE’s  latest offer was originally telegraphed in the most recent edition of the Weekly Roundup and features a combination of 50 commission free trades plus SCENE points which are good for use either at Cineplex theatres or with partner restaurants or retail outlets. The minimum deposit to qualify for this offer is $25,000 and the highest tier, $1M+ in deposits, lands the highest amount of SCENE points (100,000), which is good for the equivalent of 100 free movies. Commission-free trades are also good for up to 90 days. Read the table below for more information.

National Bank Direct Brokerage is sponsoring the Horizons ETF Biggest Winner contest. This contest enables participants to compete for cash prizes, which are awarded weekly and at the conclusion of the competition. Contestants trade Canadian ETFs to see who can achieve the best performance over the duration of the competition, which runs from May 8th through to June 16th 2017.

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2017
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatFlex or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo June 30, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $100,000 or B) $250,000+ in net new assets and you may be eligible to receive A) $200 cash back or 20 commission-free trades; B) $1,000 cash back or 100 commission-free trades. Use promo code SPARXCASH when signing up for cash back offer or SPARXTRADES to be eligible for commission-free equity trade offer. Be sure to read the terms and conditions for more details on the offer. A) $100,000 – $249,999 B) $249,999+ A) Cash back: $200 OR 20 commission-free trades B) Cash back: $1,000 OR 100 commission-free trades. Cash back will be deposited the week of January 8, 2018. Commission-free equity trades are eligible for use up to August 6, 2017. Cash back or Free trade offer June 5, 2017
Scotia iTrade Open and fund a new account with Scotia iTRADE with at least A) $25,000; B) $50,000; C) $100,000; D) $250,000; E) $500,000 or F) $1,000,000+ and you may be eligible to receive A) 5,000; B) 7,500; C) 20,000; D) 35,000; E) 50,000 or F) 100,000 scene points as well as 50 free trades. In addition, new clients will also be reimbursed up to $150 in transfer fees. Free trades will be valid for 90 days. Use promo code 17SC when signing up to be eligible. Be sure to read terms and conditions for full details. A) $25,000 – $49,999 B) $50,000 – $99,999 C) $100,000 – $249,999 D) $250,000 – $499,999 E) $500,000 – $999,999 F) 1,000,000+ SCENE Points A) 5,000 B) 7,500 C) 20,000 D) 35,000 E) 50,000 F) 100,000 + 50 Free Trades 90 days Free Movie & Free Trade Promotion July 31, 2017

Expired Offers
Last Updated: May 1, 2017 13:00 PT

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTrade account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $50,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period(subject to conditions). BMO InvestorLine Refer-a-Friend June 30, 2017

Expired Offers
Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc $1,000 $50 commission credit 30 days none none
Last Updated: May 1, 2017 13:00 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $20,000 Transfer Fee Rebate none
Transfer $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion. $150 $25,000 Credential Direct Transfer Fee Rebate none
Transfer $10,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $10,000 Transfer Fee Rebate June 14, 2017
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo tbd
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatFlex. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo June 30, 2017

Expired Offers
Last Updated: May 19, 2017 14:00 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Credential Direct has partnered with Trend Micro to offer 50% off Trend Micro Titanium Internet Security. Use code “TrendCF” at checkout. n/a Trend Micro Special Offer Code none
Disnat Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information. n/a MoneyTalks Inside Edge Discount none
Disnat Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details. $1,000 Broker@ge 18-30 Promotion none
Scotia iTrade Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details. $1,000 StartRight Free Trade offer none
Open a new account with Virtual Brokers with a deposit of at least $1,000 (for the Classic Commission Account) or $5,000 (for the Commission Free Trading Account) and you may be eligible to receive a one-year subscription to access 5i Research. Use promo code 5iVB2016 when signing up. Be sure to read terms and conditions for full details. $1,000 (Classic Commission Account); $5,000 (Commission Free Trading Account) 5i Research Offer March 31, 2017

Expired Offers
Last Updated: May 1, 2017 13:00 PT

 

 

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Discount Brokerage Weekly Roundup – April 21, 2017

There’s been lots of sabre rattling in the news recently. While the world is facing specter of war, online brokerages in the US are already in the throes of their own price war. For Canada’s discount brokerages, the storm clouds are still off in the distance but as their counterparts in the US have shown, that could change quite quickly. Of course, it’s not all doom and gloom, and sometimes competition can make winners of us all.

This week’s roundup is the tale of two stories. The first is an epic battle shaping up in the US online brokerage space that highlights just how big the stakes are for winning the war for DIY investing and how that could easily spill over to Canada. The second is the latest chapter in the story of sustainable investing and how one Canadian brokerage’s efforts to bring this to DIY investors might be a catalyst for other brokerages to follow suit. Of course, we have the usual feature of DIY investor chatter on Twitter and from the investing forums.

The Price is Right

With Q1 of 2017 now officially in the books, the details of a sudden commission price drop and the scramble that brokerages had to undertake to meet this new pricing reality have emerged. Specifically, the earnings conference calls from E*Trade Financial, TD Ameritrade and Interactive Brokers from this past week provide a fascinating look at the aftermath of the pricing cuts announced in February and March and how executives at online brokerages are bracing themselves for a potentially massive price war.

Now, there are lots of intriguing details in this most recent set of earnings conference calls, more than we can cover off in a single roundup, however what might be instructive to Canadian DIY investors and Canadian discount brokerages is the fact that prices definitely have room to fall and brokerages should probably prepare for that.

One of the most fascinating scenarios acknowledged by both TD Ameritrade’s CEO Tim Hockey and Interactive Brokers’ founder and CEO, Thomas Peterffy, is that it is possible for major US online brokerages today to be charging nothing on commissions and still be profitable.

While upstart online brokerage Robinhood has shown that it doesn’t take charging commissions for trades to be a success, it is an entirely different matter when the largest online brokerages in the US are contemplating the “nuclear option” for commission pricing.

In the case of TD Ameritrade, Tim Hockey stated the following:

“First of all, the good news is that even if commission rates went to zero tomorrow, we’d still be profitable….So, we reached that critical mass size where we’re fully able to work with the competition in terms of the price structure that seems to make sense.”

Loosely translated, this is a clear signal that TD Ameritrade wouldn’t be afraid to throw the first punch or throw down entirely with other online brokerages, big or small, that would like to lower trading commission pricing.

Interestingly, CEO of Interactive Brokers, Thomas Peterffy, also weighed in on the commission price drops with guarded optimism.

Commission pricing for Interactive Brokers is far below that of its US online brokerage competitors and the latest earnings results show that Interactive Brokers is crushing it when it comes to operating margins, earnings and other metrics. In short, there’s a long way that commission prices at the major US online brokerages would have to fall before Interactive Brokers would feel ‘threatened’ and be forced to react with a pricing change.

With that in mind, what Peterffy said that was so striking was:

“if they really were to cut the commissions to 0 as Schwab, for example, could easily do, I think we would have to go out and explain in advertisements more thoroughly as to what is going on here behind the scenes. Because interestingly enough, they advertise that their commissions now are $4.65 a trade, but you see that their commissions are more like $8 or $9 a trade. So it’s hard to figure what’s happening.”

In effect, Peterffy and Hockey are signaling that the largest players in the US online brokerage industry could take commission pricing to zero even today and still emerge standing. Of course, another interesting thing Peterffy disclosed in his statement is that Interactive Brokers would not take such price drops lying down. In fact, throughout the conference call transcripts as well as in recent investor calls, it is clear that Interactive Brokers is not a brokerage that moves slowly or without purpose.

Interactive Brokers and TD Ameritrade aren’t alone in their call to arms. Of the three brokerages’ conference calls that recently took place, E*Trade Financial’s stood out as having the most pointed ‘fighting words’ and with good reason. According to CEO Karl Roessner, “there is a lot of competition out in the marketplace and a lot of offers, unlike things that we’ve seen in the past, we continue to do what we’re doing to make sure we keep our customers and defend the book.”

In fact, it appears that E*Trade is in full ‘transformation’ mode, mobilizing across a number of different facets of their business to compete even more aggressively in the US online brokerage space. Lacking the scale of either Schwab or Ameritrade, E*Trade is shifting the tone of their brand identity by going ‘back to their roots’. They’ve put a target on the active trader segment and appear to be ready to fight tooth and nail to protect their clients from leaving and win over this highly prized segment from the other brokerages.

While there are no publicly traded online brokerages in Canada that would disclose the level of information that these US brokerage CEO’s have shared, the example of what is happening could be highly instructive for Canadian online brokerages.

Yes, the Canadian market is smaller, moves more slowly than the US and just doesn’t have the same kind of marketing firepower at its disposal that the US online brokerages mentioned above do (TD Ameritrade’s annual marketing budget is $250M US, likely a multiple higher than all the marketing budgets of Canadian discount brokerages combined), but the message is clear: in order to win, you have to grow assets.

All of the US online brokerages are confronting the very real scenario of zero commission trading. For Canadian brokerages, however, the storm clouds are on the horizon. The question on this side of the border now becomes: which of Canada’s brokerages will marshal the resources and marketing efforts required to start gathering assets soon enough?

Environmental Scan

With Earth Day just around the corner, the folks at Scotia iTRADE continued their online push of sustainable investing with a Twitter chat, hosted by Canadian personal finance blogger Tom Drake and featuring a number of other online personal finance and sustainable investing voices.

Lasting just about an hour, the Friday afternoon chat was part marketing, part awareness building of sustainable investing. Naturally, Scotia iTRADE being the organizer of the chat had the messaging and branding locked down and put together a very polished campaign to generate interest and engagement in their latest new product offering.

What was particularly interesting, however, is the number of personal finance/independent investing voices that were also involved as well as the amount of social media (specifically Twitter) coverage that the iTRADE ESG (standing for Environmental, Sustainability and Governance) tool received. Since we first reported the launch of this new feature several weeks ago, we’ve seen steady coverage online of this new investing tool.

Clearly, there’s a well-coordinated effort at work to ensure that people are finding out about this new tool and kudos to the Scotia iTRADE team for bringing the tool to investors and to iTRADE’s marketing efforts to have the communications tools (videos) and content to support explaining what it is and why investors should pay attention.

While it is hard to separate the ‘marketing’ from the content of the Twitter chat, there were 6 questions that host Tom Drake pitched to followers of the hashtag #FairTrader. In case you missed it, we’ve provided the tweets from the session below.

Here are the list of questions tackled during today’s Twitter chat on sustainable investing:

  1. What is sustainable investing?
  2. What is ESG and why does it matter?
  3. Sustainalytics, tell us more about the research behind Scotia iTRADE’s Sustainable Investing tools.
  4. Where can you find more information about Sustainable Investing & ESG?
  5. Can you tell us how Scotia iTRADE’s Sustainable Investing & ESG tools work?
  6. Why may Sustainable Investing or ESG be important to direct investors?

Of the answers provided to this series of questions, perhaps the most succinct was from @BoomerandEcho who stated “Profit doesn’t have to be a dirty word – it’s okay to make money as long as it’s not at the expense of people and planet #FairTrader”

Scotia iTRADE was not the only Canadian discount brokerage to put the spotlight on sustainable investing this month. Earlier in April, Desjardins Online Brokerage published a short article highlighting the exceptional growth in interest in ESG concerns among managed assets and had scheduled (but later canceled) a webinar on ‘investing and the environment’ for April 20th.

Suffice to say, with the visible success and early traction of the ESG tool and sustainable investing buzz on social media, other Canadian discount brokerages will likely (if they haven’t already) take note. Given the competitive nature of the industry, ideas that resonate with investors tend to get replicated at multiple brokerages (e.g. commission-free ETFs).

The irony and good news heading into Earth Day is, that the competition for profits amongst the brokerages will help bring the ESG and responsible investing tools to investors, which will in turn drive a more socially conscious flow of capital.

Discount Brokerage Tweets of the Week

Lots of interesting chatter this week to keep brokerages on their toes. Mentioned this week were CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE and TD Direct Investing.

From the Forums

Can’t Fight the Fee-ling

For better or worse, there are those that enter into the world of DIY investing not fully appreciating that it really is about doing it yourself. In this post, from reddit’s personal finance Canada section, one DIY investor learned the hard way that agreements can be changed and that signing on to be a DIY investor means keeping close watch on what’s happening in their accounts.

That Settles It

Although computers and online trading seem to make things work instantly, the reality of stock trading is that there still has to be a transfer of shares from a seller to a buyer and funds from a buyer to seller. As one investor in this post on reddit found out, when you want to tap into your TFSA by selling some stocks, be sure to budget a few days to let the dust and the trade settle.

Into the Close

That does it for another week. As we hurtle towards May, market technicians are watching for sell signals and will no doubt be pouring over charts this weekend to stake their exits. And speaking of exits, Earth Day is a great reason to exit a building and enjoy the great outdoors (so long as the great outdoors is enjoyable) by cheering for a cause (hockey, basketball, Earth, science, or whatever). Have a great weekend!

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Discount Brokerage Weekly Roundup – April 14, 2017

With markets closed today in observance of Good Friday, investors on both sides of the border can spend their weekend recounting United Airlines memes, legalization of marijuana in Canada and the mother of all bombs. Say what you will about the news, but investors have a lot on their plates to digest – and that’s before sitting down to a long-weekend dinner.

Fortunately, one thing DIY investors won’t have to do this weekend is search for the latest news from Canadian discount brokerages. In this week’s roundup we take a look at movement from two western-Canadian based brokerages. The first is reviving a new deal that might be part of a broader strategy to attract younger investors (even away from other discount brokerages). The second story focuses on changes to user experience brewing at another western Canadian online brokerage and what that might mean for competitor brands. As usual, we have the fan favourites of DIY investor chatter from Twitter and investor forums to close out on.

Qtrade Investor launches new transfer deal

After a small lull in the deals and promotions section this month, a “new” transfer deal has emerged from Qtrade Investor. The deal itself isn’t new per se; it is a reboot of an offer that has shown up from time to time over the past several years.

Still, a deal is a deal. And when it comes to transferring accounts, this latest offer from Qtrade Investor stands head and shoulders above other transfer offers. Specifically, Qtrade Investor is offering to pay the transfer out fees (typically around $150) for a minimum deposit of $10,000. Qtrade Investor normally requires deposits of at least $25,000 in order to rebate a transfer fee from another brokerage, so it is an interesting offer for those on the fence about switching to Qtrade Investor.

Typically, Canadian discount brokerages offer to cover transfer out fees for deposits of at least $25,000. Exceptions to the $25,000 threshold are RBC Direct Investing, who requires deposit of at least $15,000, and more recently National Bank Direct Brokerage, who has lowered their transfer fee coverage threshold to $20,000.

Although Qtrade Investor’s latest promotion is a limited time offer, it appears that there might be additional momentum starting to build amongst brokerages to lower the bar to cover transfer fees.

Of course, the transfer fee coverage game is a tricky one.

At any time, a major player in the market could decide to raise the bar to leave and effectively negate (or cost) other brokerages trying to incentivize clients to switch. Switching fees are not something brokerages actively advertise so once a DIY investor chooses to become a client of an online brokerage provider, the cost to exit isn’t generally part of what they think about. Arguably, however, every investor and trader should consider the cost to exit before agreeing to enter.  In reality, it is unlikely that many investors consider the switching cost as part of the reason to choose a brokerage.

On a side note, Qtrade Investor’s latest promotional offer also appears to visually be appealing to younger, more active individuals (or those who aspire to be). For those who keep a close eye on the ‘imagery’ choices of Canadian online brokerages, there has been a distinct shift in what an investor “looks like”. This includes the visual identity for Qtrade Investor.

Clearly the combination of a lower threshold for switching to Qtrade Investor and some younger, more active characters helping to sell the deal and other features on Qtrade Investor signal a definite interest in appealing to the millennial investor crowd. An interesting (perhaps ironic) question is whether other brokerages can ‘keep up’ with what Qtrade seems to be doing.

Credential Direct signals a digital shift

Hunting around on Easter seems to be a thing that people look forward to. Not so much on websites, however, where hunting around for information generally leads to frustration if not outright abandonment.

This past week we noticed an invitation to complete a survey about the Credential Direct website on the front end which naturally piqued our curiosity.

Specifically, the 10-minute survey stated that it was requesting feedback on a prototype of the website, with the feedback being used to make some informed decisions on how to organize the menus to make them as user-friendly as possible.

The usability questionnaire asked visitors to complete an action based on a scenario/question, such as locating information in the website menu for upcoming webinars. Specifically, it appears that Credential Direct is looking to discover where users are most likely to look for information.

For comparison, the website menu structure is organized into the following top level sections:

  • Why us
  • Pricing
  • Research & Tools
  • Education
  • Forms
  • About Us

The prototype menu structure, however, appears to consist of the following top-level options:

  • Features
  • Fees
  • Knowledge & Support
  • About
  • Partnerships

One of the first things to note is that there are fewer menu items, a sign that some navigation simplification is in order. Secondly, there seems to be a shift away from a ‘hard sell’ to a ‘soft sell’ highlight features instead of telling users ‘why’ they should choose Credential Direct and changing the term ‘pricing’ to ‘fees’.

Another interesting observation stems from the items being included in the ‘Knowledge & Support’  – specifically the inclusion of the categories for popular content, featured content and DIY Investor knowledge.  It’s one thing to create special categories of information, however, it’s another to populate these categories with enough information to warrant making a category in the first place.  These categories seem to suggest that Credential Direct might shift the current set of ‘DIY Investor knowledge’ on markets and investment types for a new home, but perhaps they may also be prepping to include more DIY investor focused content, something that their competitors across the street (quite literally) at Qtrade Investor have been building out.

Although things are still very much in the prototype stage, it’s clear that change is brewing at Credential Direct. One other interesting data point in support of this digital evolution is a tweet from their account (which appears to have been deleted and replaced later by a tweet from the parent Credential Financial account) that suggests that building a better digital experience for wealth management service providers is on the minds of the Credential leadership.

Discount Brokerage Tweets of the Week

What happens when a brokerage popular with social media savvy users has an outage? Read on. Mentioned this week were BMO InvestorLine, Questrade, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

Spot the DI-fference

One of the challenges that the big five Canadian banks have is differentiating themselves to consumers. For those DIY investors thinking of going with a big bank-owned online brokerage (aka direct investing with an online brokerage) the challenge of telling them apart is even trickier. In this post from Reddit’s Personal Finance Canada section, readers weigh in with their experiences on a couple of bank-owned online brokerages.

Getting an Edge

Active traders are always on the look out for ways to shave costs. That said, price isn’t the only factor, there’s also user experience and trade executions that matter. One reader on Canadian Money Forum in this post sought advice from other readers on shifting away from CIBC Investor’s Edge and got some interesting recommendations.

Into the Close

With the combination of playoff hockey and basketball and spring baseball, there’s no shortage of fun distractions heading into the weekend. Of course, there are also lots of not-so-fun distractions to keep an eye on too; however, hopefully you-know-who decides to play golf rather than a real-life version of risk. Have a safe and hoppy Easter weekend!

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Discount Brokerage Deals & Promotions – April 2017

*Updated April 14* Even though this is technically April Fool’s Day, the pullback in deals is no laughing matter. After a very busy March in which there were as many as 35 deals in play, April kicks off with a more modest 24 live deals. The bigger story, however, is recognizing that now might not be the best timing for brokerages to be on the sidelines.

Having compared online brokerage deals & promotions for several years now, there is clearly some seasonality at play. Last year, for example, the transition from March to April saw the deal count drop from 33 to 19.

Discount brokerage deals and promotions typically ramp up at the beginning of a new year and crest heading into the RRSP contribution deadline at the beginning of March, after which things slowly subside.

Coming into 2017, however, it was noteworthy that several online brokerages had launched their major promotional pushes just before the end of 2016, signaling a much fiercer competitive environment for attracting new clientele.

And, although the start of April begins with a major contraction in offers, it is also interesting to see that competitive forces are still at play in the early part of 2017.

While we can’t be certain of the timing of this change, National Bank Direct Brokerage quietly lowered their minimum transfer deposit requirement from $25,000 to $20,000 for individuals to receive a transfer fee credit. The majority of Canadian online brokerages have set the bar at $25,000 to qualify for the transfer fee credit to apply so this move from NBDB might be enough to tip a few competitors to do the same.

Another interesting development at the outset of a new month is absence of special offers listed on the Scotia iTRADE ‘special offers’ page.

Along with BMO InvestorLine, Scotia iTRADE has been a stalwart of the deals race, typically running promotions to attract new clients. Interestingly, the ‘refer-a-friend’ and the ‘Start Right’ offers appear to have been labeled as “programs” (in the Fees section) rather than being listed under the special offers section.  The same is true for their ‘buck-a-bond’ offer, which has been a fixture of previous special offer sections.

The restructuring of Scotia iTRADE’s deals could be a consequence of the new website organization but for DIY investors looking for an incentive, this change has made it less clear that there are offers available.

On the surface, it seems that running offers/promotions when DIY investors are in the market for opening an account makes sense. It’s why retailers concentrate their efforts around big shopping dates in the calendar year. Unlike retail, however, the reality is that DIY investors, especially those on the margins, might be driven more by the investment climate than by seasonal deadlines.

With our own internal data showing steady DIY investor interest, markets trading at all-time highs and economic forecasts flashing green, there’s a case to be made that there’s no better time for brokerages to be offering up more promotions rather than less. If investors are coming back to the markets, it will be interesting to see just how long brokerages are going to sit this opportunity out. Stay tuned.

Expired Deals

*Update: April 3 – BMO InvestorLine has retired their winter promotion and replaced it with a new offer (see below).*

There were 12 deals that expired at one point or another during March. Here’s a list of the deals that didn’t make it into April (as of April 1st):

  • CIBC Investor’s Edge – Cash back promotion
  • Credential Direct – Cash back promotion
  • HSBC InvestDirect – 50 commission-free equity trades
  • National Bank Direct Brokerage – Cash back promotion
  • Qtrade Investor – Cash back promotion
  • RBC Direct Investing – Pay with points promotion
  • Scotia iTRADE – Travel points promotion
  • Scotia iTRADE – Transfer fee promotion
  • Scotia iTRADE – Visa Gift Card promotion
  • TD Direct Investing – 200 commission-free trade promotion
  • Virtual Brokers – $10,000 commission rebate offer
  • Virtual Brokers – 5i Research Subscription Offer

Extended Deals

No deals that were set to expire at the end of March have been extended (as of time of publication).

New Deals

*Update: April 14 – Qtrade Investor is once again offering their transfer promotion which lowers the minimum deposit amount required to qualify for covering transfer fees from $25,000 to $10,000. This is the most competitive transfer fee offer currently available from a Canadian online brokerage. See table below for more details.*

*Update: April 3 – BMO InvestorLine has introduced a very competitive cash back or commission-free trade deal for DIY investors. For deposits of at least $100,000, eligible individuals can receive either $200 cash back or 20 commission-free trades; for deposits of at least $250,000, eligible individuals can receive either $1,000 cash back or 100 commission free trades. According to the terms and conditions for this deal, the eligible account types are cash or margin (individual or joint) accounts, corporate accounts, sole proprietorship accounts, RRSP and spousal RRSP accounts.*

No new deals or promotions to report (as of time of publication).

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2017
Open and fund a new registered account at Virtual Brokers with at least A) $5,000; B) $25,000; or C) $50,000+ in new assets and you may be eligible to receive A) $30; B) $50; C) $100 cash back. Use promo code RRSPCB2017 when signing up. Be sure to read terms and conditions for full details. A) $5,000 – $24,999 B) $25,000 – $49,999 C) $50,000+ A) $30 B) $50 C) $100 Cash back will be deposited just after October 31, 2017 RSP cash back bonus April 30, 2017
Open and fund a new account at Virtual Brokers with at least $5,000 and you may be eligible to receive 2 months of commission-free equity trading and a $250 USD/mo credit towards Edge Trader Pro for 2 months. Use promo code 2MFREE2017 at sign up to qualify. Be sure to read full terms and conditions for details. $5,000 2 months commission-free equity trading + $250 USD/mo platform fee rebate. 2 months 2 months free trading April 30, 2017
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatFlex or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo April 28, 2017
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $100,000 or B) $250,000+ in net new assets and you may be eligible to receive A) $200 cash back or 20 commission-free trades; B) $1,000 cash back or 100 commission-free trades. Use promo code CASH when signing up for cash back offer or TRADES to be eligible for commission-free equity trade offer. Be sure to read the terms and conditions for more details on the offer. A) $100,000 – $249,999 B) $249,999+ A) Cash back: $200 OR 20 commission-free trades B) Cash back: $1,000 OR 100 commission-free trades. Cash back will be deposited the week of January 8, 2018. Commission-free equity trades are eligible for use up to August 6, 2017. Cash back or Free trade offer June 5, 2017

Expired Offers
BMO InvestorLine Open a new qualifying account with BMO InvestorLine, and fund it with at least A) $100,000; B) $200,000 or C) $300,000+ in net new assets and you may be eligible to receive A) $200; B) $400 or C) $750 cash back. Use promo code PROMO750 when signing up to be eligible. Be sure to read the terms and conditions for more details on the offer. A) $100,000 – $199,999 B) $200,000 – $299,999 C) $300,000+ Cash back bonus A) $200 B) $400 C) $750 Cash back will be deposited the week of November 6, 2017. 2017 Winter Campaign *Expired* April 2, 2017 *Expired*
Last Updated: April 22, 2017 01:00 PT

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 – $9,999 B) $10,000 – $24,999 C) $25,000 – $49,999 D) $50,000 -$99,999 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTrade account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $50,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period(subject to conditions). BMO InvestorLine Refer-a-Friend June 30, 2017

Expired Offers
Open a new account (TFSA, Margin or RRSP) and receive $50 commission credit . Use promo code: kdkfnbbc $1,000 $50 commission credit 30 days none none
Last Updated: April 1, 2017 14:30 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees $135 $15,000 Transfer Fee Rebate Details none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees $135 $20,000 Transfer Fee Rebate none
Transfer $25,000 or more from another brokerage and Credential Direct will cover up to $150 in transfer fees. Use promo code SWITCHME when signing up to qualify for the transfer promotion. $150 $25,000 Credential Direct Transfer Fee Rebate none
Transfer $10,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $10,000 Transfer Fee Rebate May 11, 2017
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more to Virtual Brokers and they may cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo tbd
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatFlex. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo April 28, 2017

Expired Offers
Last Updated: April 14, 2017 23:30 PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Credential Direct has partnered with Trend Micro to offer 50% off Trend Micro Titanium Internet Security. Use code “TrendCF” at checkout. n/a Trend Micro Special Offer Code none
Disnat Desjardins Online Brokerage, in conjunction with MoneyTalks, is offering 3 months of the “Inside Edge” investor information service to Desjardins Online Brokerage clients. Use promo code DESJ2016 during checkout to qualify. Be sure to read full terms and conditions for more information. n/a MoneyTalks Inside Edge Discount none
Disnat Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details. $1,000 Broker@ge 18-30 Promotion none
Scotia iTrade Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details. $1,000 StartRight Free Trade offer none
Open a new account with Virtual Brokers with a deposit of at least $1,000 (for the Classic Commission Account) and you may be eligible to win a $250 gift card to the Apple store. Use promo code 250AGC2017 during sign up to be eligible. Residents of Quebec are not eligible for this contest. Be sure to read terms and conditions for full details. $1,000 (Classic Commission Account) $250 Apple Gift Card Draw April 30, 2017
Open a new account with Virtual Brokers with a deposit of at least $1,000 (for the Classic Commission Account) or $5,000 (for the Commission Free Trading Account) and you may be eligible to receive a one-year subscription to access 5i Research. Use promo code 5iVB2016 when signing up. Be sure to read terms and conditions for full details. $1,000 (Classic Commission Account); $5,000 (Commission Free Trading Account) 5i Research Offer March 31, 2017

Expired Offers
Last Updated: April 1, 2017 14:30 PT
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Discount Brokerage Weekly Roundup – March 10, 2017

For many families, the reality of March break is about to set in. What it means is that, while there may be a change in pace, the word ‘break’ doesn’t quite mean the same to the parents as it does to the kids. Unfortunately for everyone though, there is no break from the mania that is Trump coverage. And, for online brokerages and DIY investors in the US and possibly here in Canada, there is the very real possibility that there are still more waves to be made when it comes to DIY investing.

In this week’s roundup, we recap a couple of interesting stories from the SparxTrading blog roll. Specifically, we look at the escalating commission-fee price war between major US online brokerages, the evolving regulatory landscape for investment product/service providers and how these events may shape Canadian DIY investing in the near term. Next, we look at how Canadian discount brokerages are approaching online security and what DIY investors should be doing to better protect themselves online. As is usual fare, we’ll also be looking at the tweets from DIY investors and close out with chatter from the Canadian investor forums.

Fee-ling the Pinch: US Online Brokerage Fee Wars and the Fiduciary Duty Rule

Turn on the TV, surf the internet, open a newspaper and the one thing dominating the news cycle is Trump. For DIY investors, in the US and potentially here in Canada, however, there are a pair of stories that are probably worth tuning into more closely.

In this week’s blog post, we examine the latest explosive fight between giants in the online brokerage space in the US and the fallout from a price war. But there’s more to the story than just a simple race to the bottom. There’s also the likely possibility that the largest players, such as Schwab, smell blood and sense an opportunity to gain ground on their much smaller (but still sizable) peers.

Here’s a quick recap. US online brokerage fees and commissions have been on the chopping block since last year, in part prompted by competitive dynamics and the announcement from the Department of Labor’s new fiduciary duty rule, which was slated to come in to effect next month, in April. That rule could bring financial advisors into conflict of interest with their clients as it sets higher standards demanding advisors act in the best interest of their clients and not their own or their firm’s.

The tumble in commissions and fees for the biggest asset management firms such as Fidelity, Blackrock, Vanguard and Schwab also impacted their stock prices. Stock prices have waivered since the fees war escalated, and new EPS estimates were impacted by the millions lost in fees from cost cuts hovering at the 30% mark in plenty of cases.

Fidelity, for example, dropped its online stock trading fees by a whopping $3, costs sit now at $4.95/trade. And a few days ago, Schwab lowered its base trade commission to match Fidelity after already lowering its prices in February; other brokerages have followed suit including TD Ameritrade and E*Trade Financial. Firms are saying the price wars are just part of doing business, but Blackrock, at least, acknowledged that their fees were dropping in response to the DOL’s impending fiduciary rule.

For Canadian DIY investors, and discount brokerages, there are several important lessons.

First, Canadian Securities Administrators (CSA) are considering setting similar standards for financial advisors here in Canada. While there is a lack of consensus between provincial regulators as to exactly what a ‘best interest standard’ would look like, recent admissions by TD Bank staff that they put profits and performance ahead of client best interests may accelerate the timetable and will to push these standards into being.

Second, larger online brokerage players are in a very strategic position to benefit from this rule and they can essentially force smaller online brokerages into a very challenging position by lowering standard commission pricing. In other words, the US online brokerage market is an interesting playbook for any large, competitive bank-owned brokerage to emulate.

Finally, although the US and Canadian markets may be different, there are still fundamental economic forces at play. Canadian DIY investors will, like their US investor counterparts, be drawn to better perceived value. One of the reasons Schwab has been able to withstand (and in some cases instigate) a fee drop is because beyond lowering commissions on trading, they’ve also expanded the selection of commission-free ETFs, introduced a robo-advisor service and provided other advisory services to clients.

For the full analysis on how the fee wars and regulatory shifts could influence the Canadian online brokerage marketplace, click to read the blog here.

Online Security for Canadian DIY Investors: How to Stay Safe While Trading Online

As part of Fraud Awareness Month, we continue our look into how DIY investors can better inform and protect themselves about online fraud when trading online.

In our most recent blog post, we take a deeper dive into the world of online brokerage security guarantees and what they do (or don’t) cover and what they require DIY investors to do to qualify.

Fraud is kind of a big deal

Fraud has grown to epic proportions in the last decade, becoming a local, national and international security concern. Worldwide costs of cybercrime are estimated to run between $375 billion and $575 billion annually. In Canada, recent survey results show that companies here lose an average of about $6 million with every data breach.

For Canadian discount brokerages, there hasn’t been any major public, large scale breach that’s made headlines. Rather than become a news story, however, the financial services industry has started – albeit slowly – to adopt a variety of good practices to keeping clients safe. One such approach that is favoured by many in the tech community is two factor authentication (TFA).

Two factor authentication essentially ads an extra step to the traditional user name and login in which a security code (or secondary ID source) is used to confirm identity. Interestingly, only a handful of Canadian discount brokerages do offer this, but it is increasingly getting attention from IT departments across the Canadian brokerage community as a feature which could offer a more robust approach to security.

Details matter

Like most insurance policies, the devil is in the details. For Canadian online brokerages offering up a security guarantee, we found it particularly interesting that there were many different approaches and instructions given to DIY investors regarding online security.

Aside from some of the more well-known preventative measures, such as not sharing a password with another person or using a public computer to log into a trading account, there were other measures, such as ensuring you have an up to date anti-virus, logging out after every session AND closing the browser or sharing a password with an account aggregator (such as Mint) that could invalidate the security guarantee.

Perhaps the best suggestion to address possible fraud is to regularly and frequently check account status for any suspicious activity. Discount brokerages, such as BMO InvestorLine and RBC Direct Investing, stipulate that clients must report a breach within five business days of receiving a monthly statement. For the buy and hold crowd, this means taking the effort every month to check what’s happened on every statement.

The biggest takeaway from looking at the different online security guarantees offered by Canadian discount brokerages is that the brokerages do put quite a bit of responsibility for security on clients themselves so if the security guarantee is a ‘selling point’ for any brokerage, make the effort to check what’s required to comply before getting going.

Discount Brokerage Tweets of the Week

The conversation on Twitter this week highlighted the special role that it plays as a customer service tool for DIY investors. Mentioned this week were BMO InvestorLine, CIBC Investor’s Edge, Questrade, Scotia iTRADE & TD Direct Investing.

From the Forums

Hard lessons

Some good advice we could all heed out of the forums this week: “Never bet with money you’ll regret losing” sent out to one young investor who lost $6K in the past year with risky investments . . . hopefully a lesson you only learn to learn once . . .

ETF or e-Series

The ever-popular debate continues for DIY investors looking to stretch the most value out of their investment dollar. In this post from RedFlagDeals’ investing forum, users chime in on whether TD e-series or Questrade’s commission-free ETF buying would be the better bet.

Into the Close

Another sure sign of spring being just around the corner: losing an hour of sleep for daylight savings ending. For the traders out there it just means one less hour to wait to get back into the swing of things. Have a great (shortened) weekend!

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Fee-ling the Pinch: US Online Brokerage Fee Wars and the Fiduciary Duty Rule

With all the legal and political battles going on in the US right now, it’s a little hard to keep track. There are, however, a pair of feuds that DIY investors and Canadian discount brokerages may want to keep on their radars, namely the commission price war between US online brokerages and the efforts to rescind the Department of Labor’s (DOL) Fiduciary Duty Rule.

A tale of two fees

For DIY investors, competition between online brokerages is generally a good thing whereas for the online brokerages themselves, it’s not so rosy.

Compared to the Canadian discount brokerage marketplace, the world of US online brokerages is much more competitive. While the standard thesis that competition drives price cuts helps to explain why commission pricing is under pressure in the US online brokerage market, there’s also potentially another strategy related to the Trump view on financial deregulation that some bigger players in the DIY investing space might be hoping to use to their advantage.

Over the past several years, while interest rates have been low and market volatility muted, major players in the online brokerage space have diversified away from relying heavily on trading commission revenues and instead increased the proportion of their revenue that relies on fee-based advisory services, including newer services such as robo-advisors.

The result: certain players, such as Schwab, one the largest of the US online brokerages, now make most of their money from services and fees other than trading commissions. Other brokerages, such as their peers in the space TD Ameritrade or E*Trade Financial, are relatively more dependent on trading commissions.

Thus, the bigger players like Schwab can sway their online brokerage peers into a price war and still emerge a winner because they have the assets and scale to price out their competition.

Making the cut

While the pricing wars on US trading commissions between online brokerages seemed to have subsided for the time being, the carnage on the charts is already clear. Schwab’s price chart looks remarkably untouched by recent price cut announcements, whereas TD Ameritrade has clearly been knocked down a few pegs.

Chart of TD Ameritrade from 3/10/17
Chart from Schwab 3/10/17

Fidelity, one of the three biggest Assets Under Management (AUM) companies (the others being Vanguard and Schwab) led the battle to rock-bottom pricing several months ago by dropping commissions on some of its Blackrock ETFs, among other assets. Fidelity and Blackrock share an ETF alliance where traders can buy certain products, especially ETFs, through either company without paying extra fees. The alliance brought Fidelity in to the ETF game and helps both companies shore up market share against competitor Vanguard Group.

Fidelity continued to lower fees in February and March, slashing $7.95 trade commissions by $3 to $4.95 on online trading stocks and ETFs, then chopping 10 cents from its options pricing contracts, from $0.75 to $0.65. Fidelity manages assets of just below $2 trillion. The play created a domino effect prompting Vanguard and Schwab to quickly follow suit.

The Vanguard Group, with AUM hovering over the $3 trillion USD mark, announced in early 2017 that it was also lowering fees on trading stocks and ETFs. Vanguard had already dropped prices on 35 different funds in December of last year.

Schwab, with $2.6 trillion USD under management, also clearly felt it had to leap into the fray, dropping its prices on trading commissions and index mutual funds, first in early February, lowering its base trade commission to $6.95, and then again to match Fidelity’s hard prune to $4.95.

Screen shot of Schwab’s commission fees (as of 3/10/17)

Schwab now boasts having the lowest fees on trading stocks and ETFs—saying that “technology and scale” have lowered operating costs and allow them to pass savings on to their clients . . . well, maybe . . . but one wonders how much the prize of gathering assets and the possible ‘repeal’ of the US Department of Labor’s new fiduciary rule has to do with it.

One rule to cut them all

The US DOL Fiduciary Duty Rule is intended to ensure that financial advisors act in an investor’s best interest, and avoid conflicts of interest when they give advice on retirement planning and purchase and sale of assets.

Brokers and others who work on commission may be most affected as a potential conflict of interest arises.

At least one AUM firm, Blackrock, has admitted that price drops have been influenced by the impending rule, scheduled to come in to effect on April 10 . . . but just to throw another wrench into the works, President Trump signed a memorandum in February directing the DOL to review its implementation of the fiduciary rule. That likely means it won’t take effect next month anyway. No matter, it seems everyone has jumped into the pool of fee restructuring, whether they wanted to or not.

Other discount brokerages that have lowered costs include TD Ameritrade (AMTD) and E*Trade Financial (ETFC), both announcing cuts to standard commissions.

Unsurprisingly, values of the stocks for the brokerages themselves see-sawed in the past few weeks in response to the plummeting fees.

Could it happen here?

Could a price war on commission fees happen with Canadian discount brokerages? Technically it already has.

Canada had a similar price war in 2014 when standard commissions for trading stocks and ETFs nosedived to $9.95 from $29 for online brokerages once RBC Direct Investing changed its fee schedule. Minimum investments thresholds to qualify for cheap commissions were also dropped for most brokerages at the same time.

The plot twist to the Canadian online brokerage price war story is that Virtual Brokers bowed out of the ultra-low commission pricing competition with Questrade signalling that there may be a floor to what a non-bank owned Canadian online brokerage charges for commission pricing. That said, CIBC Investor’s Edge has had the lowest standard commission pricing ($6.95) amongst major Canadian bank-owned brokerages since 2014 and this hasn’t yet prompted its bank-owned peers to follow suit.

As for the fiduciary rule, Canada may take its cues from spirit of the DOL plan. There has been an undeniable interest in improving the protections for investors in the face of complex financial products and services.

For at least the past five years, the Canadian Securities Administrators (CSA) have been toying with the idea of placing a similar obligation on Canada’s financial advisors by setting a regulatory “best interest standard.” The standard would work to ensure that financial advisors act in the best interest of their clients, have appropriate disclosures regarding sales of assets and funds, and otherwise protect the interests of the investor. That said, there are still disagreements from provincial securities regulators that demonstrate just how controversial the notion of acting in the ‘best interest’ of a client is.

Interestingly, the firestorm surrounding TD Bank this past week put this very topic into the spotlight in Canada with the revelation that staff may have been operating unethically in suggesting or providing financial products or services to bank clients.

Bottom Line

Financial services, and investment services in particular, may have different dynamics in the US and Canada but they nonetheless follow some very basic economic principles.

Competition drives innovation and pricing that favours consumers, however, what also appears to be true is that providers like online brokerages will need to find more creative (and still legal) ways in order to generate profits.

With fees falling fast and furious, and President Trump with pen in hand, until the dust settles it’s hard to say who will win the race to the bottom in US and whether the trend of ‘deregulation’ in the US will be a counterpoint or inspiration to regulators here. Judging by the fallout in this week’s news, however, Canadians are being vocal in backing investor protection.

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Discount Brokerage Weekly Roundup – March 3, 2017

Crazy real estate, crazy IPOs, crazy politics, crazy Oscars, crazy Amazon outages and one very crazy sprint to the RRSP contribution deadline. Not a bad way to ring in the third month of 2017. There’s certainly no shortage of items pulling DIY investors’ attention in every direction this past week and perhaps no coincidence that Canadian discount brokerages are trying to capitalize on the increased attention investors are paying to the market by making some ‘bigly’ moves of their own.

In this week’s roundup we take a look at the latest collection of discount brokerage deals that DIY investors can choose from and how different brokerages are working to stay on the radar of those investors. Next we take a look at the big news story for investors – the Snapchat IPO and whether investors will be over it or all over it.  From there we take a look at the latest online brokerage tweets of the week as well as a couple of interesting posts from the investor forums.

New Deals Roundup

With stock markets flirting with new all-time highs, investor sentiment towards getting into the markets has clearly thawed. Investment capital is flowing again and there’s no better indicator of that than the excitement and hype that was the ‘snapchat’ IPO. Another interesting indicator, however, is the number of Canadian discount brokerages offering up promotions or deals.

Heading into the new month, almost all Canadian discount brokerages, with the exception of two (Interactive Brokers Canada and Laurentian Bank Discount Brokerage) are offering some kind of incentive offer to attract new clients or new assets from existing clients. In total, we’ve spotted 30 deals that are being actively advertised or publicly promoted.

Breakdown of Canadian discount brokerage deals for March 2017.
Breakdown of Canadian discount brokerage deals for March 2017.

While most brokerages offer up the standard transfer fee coverage, this category of deal makes up roughly one third of the offers out there. The rest are a mixture of commission rebate offers, cash back promotions or some other kind of promo.

Although no new deals technically hit the wires at the outset of the month, there was some activity in the final days of February which helped put a little spring in the step of the deals activity heading into March.

The good news from two brokerages came in the form of deal extensions. Both Qtrade Investor and Desjardins Online Brokerage extended their offers a little further into 2017. In the case of Qtrade Investor, their cash back offer was extended to mid-March. For Desjardins Online Brokerage, their popular 1% commission-rebate offer has been extended out to almost the end of April (April 28th).

Scotia iTRADE was the other Canadian discount brokerage to ramp up the deals activity with the launch of their VISA gift card offer that coincided with the launch of their new front-facing website. The deal itself offers between $50 and $500 for deposits ranging from $25,000 to $1,000,000+.

Overall, Virtual Brokers is leading the pack with six different offers in play followed by Scotia iTRADE which is now offering up five. Interestingly, the Scotia iTRADE site special offers section currently is displaying only two offers, however links to the deals (shown in the deals & promotions section tables) do point to the live offer pages.

As we head further into March, however, it won’t be just the number of deals that makes the difference but also the visibility of those offers.

TD Direct Investing, for example, does not have as many deals going as their peers but has increased their advertising presence – including front page newspaper ads and increased online advertising – in a bid to get their deal or brokerage noticed. It will be interesting to see how their counterparts, such as RBC Direct Investing who doesn’t have a commission-free or cash back offer (they do have a ‘points’ related offer for existing RBC clients) or CIBC Investor’s Edge (who does have a very competitive offer) elect to respond in the sprint to income tax refund season.

From the Blog: Oh SNAP! An IPO like no other?

It may have taken a couple years to get here, but the biggest threat to Facebook’s dominance in the social media space successfully IPO’d this past week and now has a market cap of $34B US.  From a startup in 2010 to public company in 2017, Snapchat – or more formally Snap Inc, debuted on Thursday to a very warm reception.

Screenshot from the opening of SNAP at NYSE.

Despite all of the hype leading up to the IPO, there were lots of investors – mainstream investors in particular – that had to wait until shares went live on the open market in order to get a piece of the action.

Only time will tell if this millennial phenom can sustain the imagination of investors, advertisers and the very fickle user base of younger technophiles.

In a blog post this week, we took a look at the lead up to the Snapchat IPO and add a bit more colour to a story that is bound to have investors of all ages debating whether SNAP is a hit or is just hype. Click here to read more.

Fraud Prevention Month

March is the official month of fraud awareness and prevention. For DIY investors, the world of investing can be a dangerous place. From ‘hot tips’ to the threats of being hacked, there are numerous risks that all investors would be wise to understand and properly prepare for.

Stay tuned this week as we launch an interesting comparison of the different fraud protection measures currently in place at Canadian discount brokerages and what DIY investors can do to better protect themselves against fraud – including evaluating the security of their online brokerage.

Discount Brokerage Tweets of the Week

Lots of chatter as DIY investors slid into the RRSP contribution deadline this week. Mentioned were BMO InvestorLine, Questrade, RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

Closing time

Break ups are hard. But for one DIY investor, who chronicled their exit from Virtual Brokers, the process was not as simple as it seemed. Click here to read the reddit post on how it all went down.

Down to the Wire

The procrastinators for RRSP contribution deadlines might be able to relate to this post from reddit’s Personal Finance Canada section. One user who was close to the deadline was looking for a quick route to open an online brokerage account for an RRSP and was considering Questrade but was up against a few hurdles for just how long it would take to get funded. Read on to find out the play by play heading into the contribution deadline.

Into the Close

Well if there was one lesson from this week, it’s to expect the unexpected. Good tip for traders heading into the weekend as chatter of interest rates and more fallout from scandals from the US await. So, on that note, have a great weekend and for a bit of schadenfreude, here’s that Oscar moment that is so hard to watch but so hard not to.