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Scotia iTRADE

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Discount Brokerage Weekly Roundup – February 2, 2018

Welcome to February. Instead of V for Valentine’s it appears that the first V is for volatility. Gravity kicked in very quickly for stock markets this week, as it often does, when supply suddenly outstrips demand. Curiously, for online brokerages, demand continues to be strong, and investor demands continue to increase.

In this Groundhog Day edition of the roundup we recap the week’s developments starting first with the continuing saga of DIY investors trying to navigate outages and client service delays. From there, we shift to happier news, namely the latest deals and promotions to cross the wire from Canadian discount brokerages. Also, we’ll take a look at the latest investor education initiative from a bank-owned online brokerage that may breathe some life into this subdued sector. As always, we’ll scan what DIY investors were talking about on Twitter and in the investor forums.

Deja Queue

It’s somewhat ironic that on Groundhog Day that we’re once again revisiting the news that online brokerages are fumbling in early 2018. As coincidental as the timing is, the movie Groundhog Day has become a popular example of history repeating itself unless things change, and for many DIY investors in Canada, this feels like deja-vu all over again.

For several of Canada’s large bank-owned online brokerages, wait times for phone agents and technical difficulties for trading platforms continue to be high. It has now reached a level that brokerages have taken to posting messages on the front end or the welcome screens on the backend that issues persist.

In monitoring the recent struggles of DIY investors to connect with Canadian online brokerages, one very interesting trend is emerging. Specifically, because online brokerages are either slow to address clients on phone lines or are experiencing multiple platform or feature outages, DIY investors are taking to Twitter to notify members of the media to intervene.

While it’s not without precedent, the pace and magnitude of media personality participation in 2018 is something the Canadian online brokerage industry should be incredibly concerned about. Not only are DIY investors learning to tweet at members of the media about the issues that are occurring, but members of the media are responding.

Last month, the Globe and Mail’s Clare O’Hara published an article that shone a spotlight on the tribulations of DIY investors’ trading platforms going down. Even more intriguing are examples such as an exchange this past week on Twitter between a Scotia iTRADE client and the personal finance writer at the Toronto Star, Ellen Roseman.

From an outsider’s perspective, it appears that escalating client service issues to members of the personal finance media expedited a response.

And this is not an isolated incident. Notifications to anyone and everyone who may listen – including the media, is now something Canadian discount brokerages need to be prepared to handle. If the teams at online brokerages were already overwhelmed, this extra strain certainly doesn’t make things easier.

Of course, the longer it takes the Canadian discount brokerage industry to address response times and stability issues, the louder the complaints will get and inevitably DIY investors will go beyond tagging media and begin approaching regulators to comment or address what’s going on. And, at that point, for online brokerages it may start to feel like a bad dream come true.

Deals and Promotions update

As we profiled last week and in the deals and promotions section, there is a lot of choice when it comes to cash back offers from Canadian discount brokerages. In total, there are eight online brokerages offering a cash back deal and of those, five different online brokerages have the ‘best’ deal (i.e. offer the most cash back) depending on the amount deposited.

For commission-credit offers, however, the field is much smaller and there is a clear difference between the highest offer and everyone else.

Before diving into this month’s top offers, it’s useful to point out that commission credit offers are those for which an online brokerage provides a refund/rebate or credit for the entire trade commission. There are offers from Jitneytrade and Virtual Brokers which do offer discounted commission rates, but those have not been included here.

Another interesting quirk about commission credit offers is that they are generally time-limited. As such, it is important to be clear on how long you have to use the commission credit and when you may receive the rebate/refund for the commissions on those trades if that is the structure of the offer.

Currently there are four online brokerages that offer commission credit promotions. Specifically, BMO InvestorLine, Desjardins Online Brokerage, National Bank Direct Brokerage and Questrade each have offers.

As shown in the table above, when it comes to commission-free trade offers, Desjardins Online Brokerage currently has the most competitive offer for deposits over $10,000.  Although qualifying for Desjardins’ offer begins at deposits of $10,000 (which offers 10 trades), National Bank Direct Brokerage’s offer of 10 commission-free trades is slightly better than Desjardins’ offer of the same amount of trades because the time frame to use the trades is 1 year with NBDB versus 6 months for Desjardins Online Brokerage’s offer.

For deposits of between $1,000 and $10,000, the exclusive Sparx88 offer with Questrade offers up at least 9 commission free trades. Because Questrade has variable pricing, we used the most expensive commission price of 9.95 per trade when estimating the number of commission-free trades available. In the best case of all trades costing $4.95 per trade, however, investors can receive up to 17 commission free trades. Another perk about this specific promotion is that there is a 60-day window to use these trades rather than the standard 30 days.

Whether it is commission-free trades or cold hard cash, the great news for DIY investors is that February 2018 seems to be a fantastic month for promotions when opening up a new online trading account. With close to 30 offers to choose from and a very strong selection, DIY investors are almost certain to get a little something extra for joining a new online brokerage or transferring assets into an existing account.

National Bank Direct Brokerage Offers Options Education

Although investor education has been largely on the backburner for many Canadian online brokerages over the past year, National Bank Direct Brokerage and the Montreal Exchange are putting options education back into the spotlight with a new webinar series.

Starting in mid-February and running through to early June, this six-webinar course will run through the basics of options trading. Topics for this series include:

  • Options fundamentals (Feb. 13th)
  • Option strategies for RRSP & TFSA (Mar. 14th)
  • Options trading: Myths and reality (Apr. 4)
  • Options trading mistakes to avoid (Apr. 25)
  • Options as a hedging strategy (May 16)
  • Options as an income strategy (June 6)

Montreal Exchange also has run options education days in cities across the country for the past few years, as well as provided considerable options education resources so they are seasoned providers of investor education in this space.

For individuals who can’t attend the webinar live, there will be recordings of the session posted to the webpage here.

Even More Passive Investing

This week, Vanguard Investments Canada launched a series of three ETFs that are sure to get the attention of DIY investors interested in simple passive investing strategies. In fact, they already have.

Earlier in the week the Globe and Mail’s Rob Carrick published an article describing the three funds: Vanguard Conservative ETF Portfolio (TSX:VCNS); Vanguard Balanced ETF Portfolio (TSX:VBAL) and Vanguard Growth ETF Portfolio (TSX:VGRO).

With asset allocations baked into a single ETF and with low management costs, the most striking observation made by Carrick was that these products are “simple enough to steal some business away from robo-advisers.”

And, that business, could be stolen by online brokerages. Specifically, online brokerages that offer commission-free ETF trading, such as National Bank Direct Brokerage, or those that offer commission-free ETF buying (Questrade and Virtual Brokers), could stand to benefit the most. The combination of low/no commission fees and simplicity of management mean that online brokerages can market to passive investors with messaging that doesn’t promote someone having to make numerous trades; instead the goal can be asset gathering, which is another way in which online brokerages can generate revenue.

Discount Brokerage Tweets of the Week

Mentioned by Canadian DIY investors were BMO InvestorLine, CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, and TD Direct Investing.

From the Forums

Gimme a reason

It’s not often that we see a post from a DIY investor who wants to switch but just needs to be sold on why. Interestingly, in this post from reddit’s Personal Finance Canada thread, one investor did just that by asking for a reason to switch away from Credential Direct. Even more interesting, however, were the responses on just how to structure an exit to incur the fewest fees.

Quick start

It’s no secret that DIY investors hoping to open an online trading account have encountered delays in the application process that can last for days. According to this post on reddit’s Personal Finance Canada thread, however, there is one online brokerage that happens to be able to speed up the process considerably. Find out who’s getting ahead of their peers in the race to bring new clients on board digitally.

Into the Close

That’s a wrap for another eventful week. This weekend will also likely be just as eventful (especially for sports fans).  After such a rough week in the markets, probably the best chance for cryptocurrency ‘traders’ and cannabis investors to see green is by tuning into the Super Bowl on Sunday or by reaching for the guacamole. Have a great weekend!

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Discount Brokerage Deals & Promotions – February 2018

*Update: Feb. 2/18* The deals and promotions activity at Canadian discount brokerages is almost at full throttle this month.With over 30 advertised deals for DIY investors to choose from, there is no shortage of incentives from brokerages big and small, each trying to sweeten the deal for DIY investors.

Discount Brokerage Deals Quick Nav

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

And, while there were no new deals out of the gate in February, January did welcome to the deals stage offers from Credential Direct, HSBC InvestDirect, National Bank Direct Brokerage and Qtrade Investor. Of particular interest for DIY investors, the cash back, commission-free trade and discounted commission deals are the most popular category of deal being put forward.

With so many offers now available, we summarized which online brokerages were offering the most cash back for registered (TFSA or RRSP) accounts at all Canadian online brokerages. It bears repeating however that most of Canada’s largest bank-owned brokerages are offering more, in dollar terms, than the non-bank owned brokerages are.

Also, interesting from looking at the above breakdown, is that although there is considerable overlap, different Canadian bank-owned online brokerages are clearly targeting specific deposit segments of the DIY investor market.

The bottom line, however, is that this month may be the best time for any DIY investor looking to open an online investing account. While a promotion may not be the primary reason for choosing an online brokerage, the good news is that there is likely to be a bit of a bonus no matter where you choose (almost).

As always, if there are offers that we’ve missed that might be of benefit to Canadian DIY investors, please share in the comments section below.

Expired Offers

*Update: Feb. 2/18: Desjardins Online Brokerage’s 1% commission credit offer has been extended to March 31st, 2018.*

There was only one promotional offer that technically did expire at the end of January and for which the terms and conditions page on the website was not updated at the time of publishing of this post. Desjardins Online Brokerage’s long standing 1% commission credit offer technically expired at the beginning of February. We’ll continue to monitor to see if the official terms of this offer are updated or if a new offer appears in its place. Stay tuned.

Extended Offers

*Update: Feb. 2/18: Desjardins Online Brokerage’s 1% commission credit offer has been extended to March 31st, 2018.*

There were no extensions to report at the outset of the month.

New Deals

There were no new promotions at the outset of February, however there were several offers that came to market through the month of January. Credential Direct and Qtrade Investor both launched cash bonus offers for new and existing clients. Also launching a cash back offer was HSBC InvestDirect. National Bank Direct Brokerage joined the promotional race later in the month with an interesting commission-free trade offer, notable because the timeframe to use the free trades is a lengthy one year.

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2018
Open and fund a new account with Virtual Brokers with at least $5,000 and you may be eligible to receive up to two months of trading at $4.99 per trade (maximum of 15 trades per month). Use promo code 499COM2017 when signing up to qualify. See terms and conditions for full details. $5,000 Up to 2 months of trading at $4.99 per trade (max 15 trades per month) Commissions will be reimbursed after June 30, 2018. For more details, click here March 31, 2018
Open and fund a qualifying account with TD Direct Investing with at least A) $10,000; B) $50,000; C) $100,000; D) $250,000 or E) $500,000+ and place at least 5 commissionable trades within 90 days of account opening and you may be eligible to receive either A) $100; B) $200; C) $300; D) $500 or E) $1,000 in cash back. Be sure to read full terms and conditions for eligibility for this offer. A) $10,000 B) $50,000 C) $100,000 D) $250,000 E) $500,000+ A) $100 B) $200 C) $300 D) $500 E) $1,000 Cash award will be paid to the client before the last day of the month following the conclusion of the qualification period (90 days). #RetireReady Promotion March 1, 2018
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatTransfer or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo March 31, 2018
Open a new account at National Bank Direct Brokerage with at least a) $10,000 or B) $20,000+, and you may be eligible to receive up to A) 10 or B) 25 commission-free trades. For the 10 free trades offer, enter promo code FREE10 and for the 25 free trades offer enter promo code FREE25. This offer is also available to existing clients. Be sure to read terms and conditions for full details. A) $10,000 B) $20,000+ A) 10 commission-free trades B) 25 commission-free trades 12 months Free Trades Campaign April 30, 2018
Open a new account or fund an existing account at Credential Direct with at least A) $15,000; B) $50,000; C) $150,000; D) $500,000 or E) $1M+ and you may be eligible to receive a cash bonus of A) $75; B) $125; C) $200; D) $500 or E) $1,000. For new clients, use promo code CASH2018RSP when applying. Existing clients can access this promotion from the promotions page available on the account backend. A donation equivalent to 10% of the bonus payout will also be made by Credential Direct to Boys and Girls Clubs of Canada. Be sure to read terms and conditions for full details. A) $15,000 B) $50,000 C) $150,000 D) $500,000 E) $1M+ A) $75 B) $125 C) $200 D) $500 E) $1000 Cash will be credited to qualifying investor accounts the week of August 20, 2018 Winter Offer 2018 March 16, 2018
Transfer at least A) $25,000; B) $50,000; or C) $100,000 into a new or existing RRSP, spousal RRSP or TFSA at CIBC Investor’s Edge before March 1, 2018 and you may be eligible for a cash back offer of A) $100; B) $200 or C) $400. Be sure to read terms and conditions for full details. A) $25,000 B) $50,000 C) $100,000 A) $100 B) $200 C) $400 Cash back will be deposited the week of May 4, 2018 (for transfers received by Dec. 31, 2017) or July 3, 2018 (for transfers received after Dec. 31, 2017). CIBC Investor’s Edge Cash Back Promo March 1, 2018
Open a new account with HSBC InvestDirect by transferring in at least A) $25,000; B) $100,000; C) $250,000; D) $500,000 or E) $1,000,000 or more from another Canadian financial institution and execute at least three commission-generating trades by April 30th, 2018, and you may be eligible to receive a cash bonus of up to A) $88; B) $188; C) $288; D) $688 or E) $988. Be sure to read terms and conditions for full details. A) $25,000 B) $100,000 C) $250,000 D) $500,000 E) $1M+ A) $88 B) $188 C) $288 D) $688 E) $988 Transfer-in bonus will be deposited by November 30, 2018. Winter Offer – Transfer-In Bonus March 30, 2018
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) $1M+ and you may be eligible to receive a pre-paid Visa gift card worth A) $50; B) $100, C) $200; D) $300; E) $600 or F) $1200. Use code VISA18 when signing up. Be sure to read terms and conditions for full details. A) $25,000 B) $50,000 C) $100,000 D) $250,000 E) $500,000 F) $1M+ A) $50 B) $100 C) $200 D) $300 E) $600 F) $1200 pre-paid card should arrive by July 31st 2018 Scotia iTRADE offer March 1, 2018
Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details. $25,000 commission-free trades for 1 month + 1 month of advanced data. 1 month Active Trader Program December 31, 2018
Open a new account or fund an existing account with Qtrade Investor with at least A) $50,000; B) $100,000; C) $250,000; D) $500,000 or E) $1M+ and you may be eligible to receive A) $50; B) $100; C) $250; D) $500 or E) $1,000. Be sure to read terms and conditions for full details. A) $50,000 B) $100,000 C) $250,000 D) $500,000 E) $1M+ A) $50 B) $100 C) $250 D) $500 E) $1,000 Cash back will be credited by July 31, 2018. Cash back offer February 28, 2018
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $100,000; B) $200,000 or C) $300,000+ in net new assets and you may be eligible to receive up to A) $200 or 20 commission-free equity trades; B) $400 or 40 commission-free equity trades; or C) $750 cash back or 75 commission-free equity trades. Commission-free trades are good for up to two months. In addition, eligible individuals can receive an extra $50 as part of the refer a friend program. Use promo code SPARXCASH when signing up for the cash back offer or SPARXTRADES when signing up for the commission-free equity trade bonus. Be sure to read the terms and conditions for more details on the offer. A) $100,000 B) $200,000 C) $300,000 A) $200 or 20 commission-free equity trades. B) $400 or 40 commission-free equity trades. C) $750 or 75 commission-free equity trades. Cash back will be deposited the week of Nov. 12, 2018. Commission-free equity trades are good for up to two months. BMO InvestorLine Winter 2018 Campaign April 1, 2018

Expired Offers
Last Updated: Feb. 2, 2018 08:30 PT

Referral Promotions

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

Expired Offers
Last Updated: Feb. 17, 2018 18:30 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 HSBC InvestDirect, and they will pay up to $150 in transfer fees. $150 $15,000 2018 Winter Offer – Transfer-In Bonus March 30, 2018
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 April 30, 2018
Transfer $25,0000 or more to Scotia iTRADE and they cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo March 1, 2018
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo March 31, 2018
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPARXCASH when signing up to also be eligible for cash back offer or SPARXTRADES to be eligible for the commission-free trade offer. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 BMO InvestorLine Winter 2018 Campaign April 1, 2018

Expired Offers
Last Updated: Feb. 17, 18:40 PT

Other Promotions

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

Expired Offers
Last Updated: Feb. 1, 2018 22:00 PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $1,000 1 year no management fees STSF February 28, 2018 SmartFolio New Account Promotion
Cash Back – Referral BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details. $1,000 $50 cash back (referrer) $50 cash back (referee) Unique link generated from SmartFolio required. None SmartFolio Website
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: Feb. 1, 2018 22:00 PT
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Discount Brokerage Weekly Roundup – January 26, 2018

With US markets continuing to push into record territory, everyone appears to revising estimates upwards in terms of where things go from here. Heck, even the folks at Vanity Fair magazine seem to be caught up in the frenzy and were adding digits (and limbs) to superstars. Speaking of new highs and big deals, Canadian discount brokerages are definitely dialed into both, making things very exciting for DIY investors.

In this week’s roundup, we continue coverage of the latest developments on the deals and promotions front with yet another bank-owned online brokerage stepping into the deals melee. From there, we cover one bank’s winning recipe to connect with investors on social media and then look at how one very innovative US online brokerage just changed the game yet again by offering up cryptocurrency trading.

Deals Continue to Roll In

Even as January draws to a close, it appears that deals from Canadian online brokerages are still coming to market. This week, National Bank Direct Brokerage launched a new offer for commission-free trades and took the deal count to 31, with the most popular category of offers now solidly in the cash back or commission-free trade camp.

With so many offers already in the mix, it was interesting to see how NBDB approaches positioning an offer for DIY investors.

The first interesting observation is the long shelf life of the free trades. Unlike many of the free trade promotions, the commission-free trades are good for up to one year from the time the account opened which means that there is no pressure or hurry to use up the trades.

Screenshot from NBDB website

Another interesting angle to this offer is its accessibility. Unlike some of NBDB’s bank-owned competitors, the deposit tiers to qualify for this offer are relatively low. The first deposit tier is $10,000 (which offers 10 free trades) and the top tier is $20,000 (which offers 25 free trades), which is considerably lower than the other bank-owned online brokerages.

Finally, now that National Bank Direct Brokerage has put a promotion forward, the only major bank-owned online brokerage in Canada not advertising a promotional offer is RBC Direct Investing.

2018 it is an interesting time for Canadian online brokerages. Not only is the January through March window the busiest period (arguably) for Canadian online brokerages, this year in particular stands out as “unprecedented” according to a number of bank-owned online brokerages in terms of investor interest and volume.

For DIY investors, the news is great. There are now over 30 offers with a strong selection of cash back and commission-free trade deals to choose from. In fact, with so many offers, now is arguably the best time for a DIY investor to an online investing account as there is a good chance to benefit from one (or more) of these enticing offers.

Talking About #Investing

This past week BMO SmartFolio took to social media as part of a Twitter chat on investing and personal finance organized by BMO and co-hosted with blogger/writer Lena Almeida (@Listen2Lena).

In what appears to be a successful recipe for engaging with Canadian investors online, BMO stuck to a structure it used in September 2017 (for BMO InvestorLine) and in June 2017 (for BMO SmartFolio) for its most recent online chat. As with previous Twitter chats, this inaugural chat of 2018 took place over the span of an hour and featured five main questions about investing and personal finance. To help provide incentive for participation there was also a draw for gift cards (a total of $600) to individuals who responded to the questions posed during the session. Of course, as an added bonus to this format, now that Twitter users have 280 characters to write a response, it was also much easier to share important details in one message.

The angle that this most recent chat took was to challenge audience members to debunk some myths or misconceptions about investing by choosing whether statements/questions were ‘fact or fiction’.  Here were the statements that were posed to audience members this year along with data on the number of replies, retweets and likes for each:

Fact or Fiction Statement Replies Retweets Likes
Most people find investing to be intimidating. 120 37 51
You need to be an expert to invest online like an expert. 103 28 40
You don’t need to have a lot of money to invest it. 118 28 47
You’ve got plenty of time to invest for your goals, you don’t need to think about retirement until your late 40’s 115 36 50
All your investing goals should only be for yourself 139 43 62
Average 119 34 50

 

As it happens, we also collected stats on the previous BMO SmartFolio Twitter chat held in June 2017 (see table below) and so we have an interesting comparison between the two.

Question Replies Retweets Likes
How comfortable are you with online investing? 100 26 41
Why did you start investing? 105 36 43
Do you feel you have to be an expert to invest online? 106 32 39
What are your investment goals for 2017? 66 26 38
Are you an online investor? How is it working out? If not, what’s holding you back 102 33 43
Is online investing the way to go? What else is an #investsmart question mark for you 106 38 43
Average 98 32 42

One of the most interesting observations is that on the questions themselves, the latest Twitter chat got more engagement in terms of replies and slightly more likes and retweets than did the session in June. That, however, only shows part of the story.

For added context, stats shared by BMO stated that this session generated over 9,000 tweets and almost 600,000 people were ‘reached’ during the #investsmart chat which reflects quite a bit of additional interaction between these main questions.

In either case, the participation was solid and indicates that investors and those considering investing, are interested in learning about personal finance online. And, considering the fleeting nature of online attention spans, keeping that many people engaged is no small feat.

In looking at the questions themselves, in this latest Twitter chat, the statement that generated quite a bit of interaction was the final one: “All your investing goals should only be for yourself.” Indeed, in looking through the responses for this Twitter chat there numerous examples of interesting insights shared by attendees about their perspectives on investing.

Overall, it appears that when it comes to promoting awareness and engagement on the topic of investing online, BMO is continuing to strike the right notes with investors. The combination of interesting questions, prize money and solid hosting/moderating means that tuning into chats was a value-added experience for participants – even those that chose to sit on the sidelines.

While the recipe isn’t necessarily a secret, for other Canadian robo-advisors and online brokerages, there’s certainly quite a bit to learn from BMO’s approach to connecting with investors (and would-be investors) online.

Robinhood Gearing Up For Crypto-trading

Perhaps it’s a sign of the times, but it looks like the ability to trade actual cryptocurrencies bitcoin and Ethereum is now coming to US online investors.

Robinhood, the US online brokerage that offers zero-commission trading has dropped yet another zero-commission bombshell by announcing it will offer zero-commission bitcoin and Ethereum trading in the very near future.

Naturally the announcement generated a lot of buzz and, with the recent drop off in bitcoin prices, some skepticism on whether or not Robinhood is late to the party. Clearly things in the crypto world move very quickly.

Despite some Twitter shade, this is undeniably going to force the hand of other online brokerages to consider how they can offer direct trading of these instruments. Meanwhile in Canada, there are still online brokerages still wrestling with online account registration.

It will be interesting to see if any Canadian online brokerages can manage to keep pace with their US counterparts in terms of pricing and speed of innovation.

Already within the span of 2017, many US online brokerages have drastically cut their commission prices to about half the Canadian benchmark of $10 per trade and are still churning out impressive financial results. Robinhood, however, operates at zero commissions for trading and continues to gain momentum in the US.

Since so much of online investing relies on computers, it becomes difficult to defend the position that trade execution should cost what it does here in Canada especially given what the entire industry in the US is now charging. And, with the addition of cryptocurrency trading now in the mix, it seems that the future for Canadian discount brokerages has been very well telegraphed by companies in the US.

The big question now becomes whether a US online brokerage (like Robinhood) will make a move into Canada to leapfrog existing players or will Canadian online brokerages be able to innovate fast enough to defend their market share.

Discount Brokerage Tweets of the Week

If you were looking for compliments about Canadian discount brokerages this week, there’s a good chance you wouldn’t have found them on Twitter. Mentioned by Canadian DIY investors were BMO InvestorLine, CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, and TD Direct Investing.

From the Forums

Conversion Factor

How much can performing Norbert’s Gambit save a DIY investor? In this post from RedFlagDeals.com’s investing thread, one user with $15K to convert gets some help to figure out just how much the maneuver can save them.

Penny Wise

On the theme of counting the dollars and cents associated with investing fees, one user interested in passive investing strategies looked to the internet in this post from reddit for some guidance on choosing passive investing solutions.

Into the Close

Another week, another record market run, another wacky twist in the Trump saga. So goes the news cycle. Fortunately, there’s lots of other wackiness in the news to offer up some laughs and relax over the weekend. Of course, to keep things trading-themed, enjoy the madness that ensued when Nutella in France went on sale (aka real life FOMO).

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Discount Brokerage Weekly Roundup – January 19, 2018

This week has been all about deals. From the frenzied (but futile) deal making to avoid the US government shutting down to the announcement of cities jockeying to make a deal to attract Amazon for a new headquarters, 2018 is already knee-deep in deal making. Also swamped with deals are Canadian DIY investors who now have well over two dozen discount brokerage deals to choose from. Of course, like all deals, it eventually comes down to the details.

In this edition of the roundup we take a deep dive into the deals and promotions up for grabs as two more Canadian discount brokerages joined in the deals frenzy this week. From there we’ll check back in briefly on how the platform outage and client service wait time situation is progressing and as always, we’ll close out with tweets from Canadian DIY investors and a few forum posts on what’s making waves in the investor forums.

Let’s make a deal

Initially this was supposed to be a simple update. Two more Canadian online brokerages, Credential Direct and Qtrade Investor, launched promotions this past week bringing the total number of advertised offers from Canada’s discount brokerages to 30.

Of course, a simple question about how the two deals stacked up against one another led to an excel spreadsheet and things just spiraled from there. What can we say, comparisons are in our DNA – oh and what market junkie hasn’t spent a Friday night or two making excel spreadsheets trying to find a great deal?

So, starting first with the new promotions from Credential Direct and Qtrade Investor. Both of these offers are tiered cash-back promotions which means that with greater deposits come greater cash back amounts.

The table below shows the different deposit tiers for each offer as well as the associated cash back bonus. In comparing the two offers side by side, Credential Direct’s offer has a lower threshold to qualify at $15,000 vs Qtrade Investor’s $50,000. Also, it’s relatively clear that Credential Direct is offering up a much higher cash bonus that Qtrade Investor is for deposit levels all the way up to $250,000. For a ‘narrow’ range of between $250,000 to $500,000, Qtrade Investor does have a slightly better offering ($50 more) and beyond $500,000 the two bonus offers are identical. Perhaps another noteworthy difference is that Credential Direct’s offer expires on March 16th while Qtrade Investor’s expires on February 28th.

Credential Direct Qtrade Investor
Deposit Tier Cash Back Bonus Deposit Tier Cash Back Bonus
$15,000 $75
$50,000 $125 $50,000 $50
$100,000 $100
$150,000 $200
$250,000 $250
$500,000 $500 $500,000 $500
$1M+ $1,000 $1M+ $1000

While on the surface that seems like it might be unsurprising to learn that almost immediately after Credential Direct launched its offer, Qtrade Investor launched theirs, it becomes a bit more interesting when put into context. Specifically, it is interesting because these two brands will be merging into a single online brokerage – likely under the Qtrade Investor brand, which effectively means that clients who choose to open their account with Credential Direct will (eventually) get the benefits of becoming a Qtrade Investor client but will get a much healthier bonus to do so than those opting to go to Qtrade Investor directly.

Now, as mentioned above there are about 30 offers being advertised by Canada’s discount brokerages and with the addition of the promotions by Qtrade Investor and Credential Direct, there are now more cash back (or commission-free or discounted trade) bonuses than there are transfer fee bonuses – a bullish signal that online brokerages are very motivated to bring on new clients.

Interestingly, of the 13 cash back or commission credit/discounted trade offers, 8 of them have a cash back component, which is a lot of choice when it comes to DIY investors shopping around for a new account. To help simplify the comparisons, we evaluated the maximum cash back bonus available at each online brokerage for each deposit tier, meaning that there is now an easy way to view the ‘best’ deal available for a given deposit tier (see table).

Deposit Amount Brokerage with Best Offer
 Brokerage with Best Offer Cash Back Amount
 $1,000 Questrade $25
 $5,000 Questrade $25
 $10,000 TD Direct Investing $100
 $15,000 TD Direct Investing $100
 $25,000 CIBC Investor’s Edge TD Direct Investing $100
 $50,000 CIBC Investor’s Edge TD Direct Investing $200
 $100,000 CIBC Investor’s Edge $400
 $150,000 CIBC Investor’s Edge $400
 $200,000 BMO InvestorLine CIBC Investor’s Edge $400
 $250,000 TD Direct Investing $500
 $300,000 BMO InvestorLine $750
 $500,000 TD Direct Investing $1,000
 $ 1M+ Scotia iTRADE $1,200

Now before pressing too far forward, it is important to mention that Questrade’s cash back bonus offer is only available through their referral key (which can be found on our deals table). Since they have made it easy and accessible to use the referral system to obtain a cash-back bonus, we opted to include them in this list. BMO InvestorLine and Scotia iTRADE also have referral offers which can be stacked on top of an advertised deal so for individuals who are able to secure direct referrals from either BMO InvestorLine or Scotia iTRADE clients, there might be additional bonuses. Accessing these two referral offers does require coordination with existing clients so we’ve excluded those from calculations for that reason.

One of the first things that jump out about the cash-back bonuses is just how many category leaders are from bank-owned online brokerages. Specifically, 11 of the 13 categories have bank-owned online brokerages offering the top cash back bonus with TD Direct Investing offering the highest (or is tied for offering the highest) cash back bonuses in 6 of the 13 deposit tiers identified. CIBC Investor’s Edge is a close second, offering the highest (or tied for offering the highest) in five of the deposit tiers.  Only Questrade’s offer of $25 cash back for accounts of between $1,000 and $10,000 stands out as the only non-bank-owned online brokerage to make this list.

It is worth mentioning that the current promotion for CIBC Investor’s Edge applies only to TFSA and RRSP accounts, not to cash/margin trading accounts. So, depending on the account type being opened, this promotion may or may not be applicable, in which case TD Direct Investing would have the highest cash back bonuses on deposits up to $200,000 and from $500,000 to $1M. Between $200,000 and $500,000, BMO InvestorLine would have the best cash back offering and above $1M, Scotia iTRADE would have the best deposit bonus.

Noticeably absent (so far) from the promotional offer mix have been RBC Direct Investing and National Bank Direct Brokerage, two firms that historically have posted offers for DIY investors. If they do decide to step in, however, the cash back offer bar has clearly been set by their peers.

Clearly this RSP season, bank-owned online brokerages are dominating the promotional offer matrix with cash-back offers. By leveraging their size, they are squeezing out smaller players in the space such as Credential Direct, Questrade, Qtrade Investor and Virtual Brokers, especially in the segment of investors who have $10,000+.

For the smaller players, it’s going to take a combination of innovative offerings, great service, ultra-competitive pricing and some significant marketing investment to compete against the incentives being dropped by the bank-owned online brokerages.

Given the merger of Credential Direct and Qtrade Investor (which itself is owned by Desjardins Online Brokerage) as well as the acquisition of Virtual Brokers by CI Financial, it will be interesting to if these firms start to outspend (or out maneuver) the larger bank-owned online brokerages in promotional offers. For the moment, however, DIY investors will certainly entertain letting the best incentive (i.e. cash) guide their decision.

Outages & Outrage (continued)

First it was fire and fury, then outage and outrage and now, unfortunately, it’s still outage and outrage – and also wait and hate.

Frustration set in again for DIY investors as long telephone wait times at several online brokerages this past week drove clients to once again post pictures of hellishly long wait times.

Catching significant heat yet again was Scotia iTRADE, who received messages from frustrated users forced to wait well over an hour (in some cases a combined 8 hours in a week). In digging a little deeper into the reported wait time messages from clients, we noted that wait times started to surge in December (and there were some long wait times reported as far back as November). This is noteworthy only because the messaging around the reasons why DIY investors are waiting (and waiting) provided by Scotia iTRADE reps on Twitter is that high call volume is “unexpected”.

Scotia iTRADE wasn’t the only online brokerage in the crosshairs of DIY investors this week, however, as BMO InvestorLine suffered a trading platform outage on Tuesday which naturally resulted in a surge of frustrated and angry responses online (see tweets below).

Perhaps the key takeaway from many of the comments is that clients expect more out of a bank-owned online brokerage. There is no distinction between the parent banking brand and the online brokerage arm. So while the banking side of their operations may be functioning well, the service standard has been raised such that expectations around the DIY investing side are now higher.

All of this frustration is not going unnoticed. As we mentioned in the last two roundups, the media is paying attention. This past week a tweet by Rob Carrick inviting DIY investors to share their (horror) stories with the Globe and Mail is again a signal that the Canadian online brokerage space is under a microscope for service delivery, with the bank-owned brokerages getting the bulk of the spotlight.

With the next round of Globe and Mail online brokerage rankings and reviews set to go live, these latest developments will add some interesting colour to the overall assessment of “value” that DIY investors get from choosing between bank-owned online brokerages and the ‘independent’ online brokers.

Discount Brokerage Tweets of the Week

This week, outages and customer service delays continued to plague DIY investors looking to capitalize on the volatility in the markets. Mentioned this week were BMO InvestorLine, CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, and TD Direct Investing.

From the Forums

Unhappy people

Just because a bank-owned brokerage has size on their side, doesn’t mean there won’t be the occasional hiccup. In this market, however, those hiccups get magnified. Going beyond Twitter, this post from RedFlagDeals.com this week shows the ripple effect of BMO InvestorLine’s platform outage on client experience. Also, this post provides additional colour on the phone wait times at other online brokerages.

Something borrowed

Before borrowing funds from an online brokerage, it’s important to understand exactly how it works and what it costs. This post, from reddit’s personal finance Canada thread, walks one Questrade user through the numbers of borrowing from an online brokerage.

Into the Close

Ironically, this edition of the roundup stayed open later than the US government. Not to worry, however, as markets generally shrugged off the closure to power to new highs this week again. All that said, this weekend should be a wacky one on Twitter. Here’s hoping there are great highlight reels from NFL playoff games to tune into instead. Have a great weekend!

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Discount Brokerage Weekly Roundup – January 12, 2018

Twitter is no stranger to controversy or strong language, however when it comes from the commander in grief, well it’s becoming strange to see exactly what shocks us anymore. Speaking of strong reactions on Twitter, several Canadian online brokerages have also been on the receiving end of some strongly worded feedback because of trading platform interruptions and customer service wait times which yet again dominated the DIY investor chatter this week.

Even though Groundhog Day is still some time away, this edition of the weekly roundup will feel a bit like the Bill Murray version (perhaps with less to laugh at). Up first will be an update on some good news for DIY investors – another bank-owned online brokerage stepping into the deals foray. From there we’ll update the latest developments on long telephone wait times and online trading platform outages that continued to plague DIY investors in week two of 2018. And yes, once again we’ll cap off the roundup with lots and lots and lots of DIY investor tweets about Canadian discount brokerages and sprinkle in a couple of forum posts for good measure.

Deals Action

While markets (at least in the US) continue to push to new highs, the momentum in the online brokerage promotions segment also appears to be strengthening heading into 2018. This week, we spotted HSBC InvestDirect jumping into the promotional offer pool with a new tiered cash-back bonus offer.

This latest offering is interesting for a couple of reasons. First, as a bank-owned online brokerage, HSBC InvestDirect is positioned, in theory, to be able to challenge its larger bank-owned brokerage peers.

With standard commission rates at $6.88, there is already financial incentive to consider HSBC InvestDirect and this latest offering only serves to strengthen the timing for those on the fence about HSBC InvestDirect. A promotional offer for anyone looking to open a new account or perhaps transfer an account from a bank-owned brokerage might find this to be just enough incentive to give HSBC InvestDirect a try.

Another interesting element to this offering is that in order to qualify for the cash bonus, one of the important conditions to fulfil is executing at least three commission generating trades. So, at a minimum, individuals will have to spend at least $20.64 ($6.88 x 3) to receive a cash bonus. That’s a steep dent (~23%) for the lowest tier which offers an $88 cash back bonus (which shakes out to a $67.36 bonus).

A final interesting thought on this latest move by HSBC InvestDirect is the timing.

With a firestorm of stories about unhappy clients, long wait times at larger bank-owned online brokerages as well as platform outage issues, HSBC InvestDirect’s latest promotional offer might end up landing them in the media spotlight.

After all, bigger online brokerages – especially the bank owned brokerages, pitch the ‘convenience’ and ‘security’ angle to win over new clients however HSBC InvestDirect can offer many similar banking and investment products and for DIY investing – especially those with relatively straightforward needs – it ultimately comes down to paying less for being able to trade. Offering a deal puts HSBC InvestDirect on our radar and certainly on the radar of anyone now in the market wondering about what else is out there.

Of course, the spotlight isn’t without its risks.

One of HSBC InvestDirect’s biggest differentiators in the online brokerage space in Canada is their ability to let clients trade international securities. And, while commission rates for trading internationally listed securities via HSBC InvestDirect are nowhere close to the cost to trade North American equities, it might be on the list of features that other online brokerages may want to consider introducing into their feature set.

Now that HSBC InvestDirect has stepped into the promotional pool offer heading into RRSP season, there are now only two bank-owned online brokerages that don’t have a special promotional offer on the table: RBC Direct Investing and National Bank Direct Brokerage (both do have transfer fee coverage offers, however).

Given the dynamics in the Canadian discount brokerage space right now, it’s hard to believe that either of these two firms will want to sit out the chance to get the attention of Canadian DIY investors by putting out a better offer than what’s currently available. We’ll be watching.

Outage & Outrage

The long wait times trying to reach Canadian online brokerages by phone continued this week and it appears that patience among DIY investors is wearing thin.

Time spent waiting on the phone to speak to client service representatives continued to be reported as being up to and even longer than an hour with frustrated users taking to social media to express their discontent – often with bitter disappointment and sometimes with screenshots and photos of just how long they’ve been waiting.

With clients from several different online brokerages reporting ultra-long wait times, it’s becoming clear that getting in touch with many online brokerages over the phone right now is going to be a challenge.

Of course, for some users, this is a challenge that they’ve now become accustomed to as phone service wait times appear, at least on the surface, to be woefully unprepared for groundswell of clients looking to have passwords reset, transfers made or other service enquiries handled on the phone at this time of year. Thank goodness the market isn’t crashing right now too.

Combined with the platform outages that occurred at the end of December and beginning of January, and that also appeared again at a couple of online brokerages this week, the customer experience stories are a PR firestorm for Canadian online brokerages.

It was interesting, therefore, to see how Canada’s online brokerages responded to this mini-crisis this past week. In addition to helping provide some answers as to what’s going on, the ways in which the situation has been managed by different online brokerages might actually serve as a proxy for how well-equipped each brokerage is to handle a crisis. Simply put, when things go awry, getting things back on track is an important marker of responsiveness.

Just Fix It

Before getting into what the online brokerages did this week in response to the crisis, it’s helpful to reflect on the sentiment expressed by DIY investors in the hundreds of Twitter message, forum posts and news article comments.

While not unique to online brokerages, job one when it comes to an outage, downtime or a service interruption or delay is to fix it. Bells and whistles come second – actual uptime and trade execution come first. When there’s money on the line, however, the stakes (and emotions) are much higher. History on social media shows that hell hath no fury like a trader scorned so the sooner things are fixed the better.

Fortunately for TD Direct Investing, it appears that WebBroker was more stable this past week however neither RBC Direct Investing nor Virtual Brokers were as fortunate. In the case of RBC Direct Investing, platform interruptions drew the ire of DIY investors on social media yet again.

And in the case of Virtual Brokers, it appears to be bad timing as all platforms are under a microscope and it so happened that Rob Carrick, one of the most influential voices in the online brokerage space in Canada, posted a tweet of VB’s trading interface essentially immobilized.

On the phone wait time front, things appeared this week to still be far from fixed.

Undoubtedly there are frantic conversations taking place about how best to address the telephone wait time issues, however DIY investors expectations are – for better or worse – that things should be fixed, and fast.

It is one thing that consumers may be forced to wait 15 or even 20 minutes however DIY investors on Twitter have reported wait times in the hours, sometimes even being disconnected or hung up on before an issue is resolved. It’s not hard to imagine the frustration levels rising for clients.

Unfortunately for Canada’s bank-owned brokerages, there is very little sympathy or goodwill to be found for these types of service interruptions or delays.

Almost nobody would argue that Canada’s largest banks – who own the online brokerages – don’t have the money to resource an exceptional client experience, or when problems occur that they can resolve them fast. So, it begs the question: how could both technology and wait times be vulnerable to the very thing that online brokerages set out to do, process trades online?

As pointed out time and again by clients, none of the reasons appear quite good enough. If customer service agents are overwhelmed, hire more. If compensation is an issue, pay client reps more and attract more staff.

How could online brokerages not see this kind of scenario coming?

Communicate in Real Time

Perhaps one of the most interesting elements to this outage and wait time story has been the absence of timely communication from online brokerages about what exactly has been happening and what was being done to fix it.

In the early moments of the outages, numerous online traders were asking aloud on Twitter as to what was happening. Unfortunately for many of them, there was radio silence from the brands or at best, scripted responses from client service reps about ‘higher than normal’ call volume or high trading volumes.

What ensued as a result was a tweetstorm of traders and investors who were fed up about being left in the dark. To draw attention to their plight, members of the media were being tagged to force some kind of communication out the online brokerages. From there things snowballed with major news outlets and BNN covering the status and talking about how trading platforms were down for a few days in a row.

While the news stories last week focused primarily on RBC Direct Investing and TD Direct Investing because of the platform outages, there have also been numerous reports of wait times for phone reps that seem off the charts at Scotia iTRADE. Regardless of the issue, however, it wasn’t really until this week that we heard from TD Direct Investing and RBC Direct Investing as to what exactly happened with the platform outages.

Showing Leadership by Taking Ownership

After receiving substantial negative press coverage as well as a firestorm on social media, Paul Clark, President of TD Direct Investing & EVP, TD Bank Group published a note this week apologizing to clients about the downtime on WebBroker essentially stating that trading systems were overwhelmed by the sheer volume of client activity.

Screenshot of message on WebBroker

Clark’s note also spoke to the wait times being encountered by clients attempting to call in to TD Direct Investing by phone, requesting ‘patience’ as TD works through resolving these issues.

What is particularly interesting about the note is firstly that the head of an online brokerage took the time to post a response, and secondly that there were important details on what went wrong, when they went wrong and that TD Direct Investing is working to address the issues.

Most importantly, there was also an apology and an expectation that things should be better.

It was an honest and earnest message that should only come from the top of the brand to let clients and investors know the person in charge is watching. Of course, it is up to clients to decide whether or not the words ring true or hollow, but at the very least the top brass stepped up.

Late Friday, RBC Direct Investing also posted a somewhat similar message, offering up some details on what happened and also apologizing to clients for not meeting the standard that clients expect of them.

Screenshot from RBC DI platform

In the online age, however, these communications have come much later than the events they describe.

The investment world hates uncertainty and so it is somewhat ironic to find the absence of more detailed and timely communication with clients about these issues by the online brokerages. The predictable result is that a lack of details introduces uncertainty as to whether a service provider to deliver on their brand’s promise.

In that light it is interesting that there haven’t been any details provided by Scotia iTRADE – similar to what has been done by TD Direct Investing and RBC Direct Investing – on what has been impacting wait times for clients and what may be in the works to fix it going forward.

What Happens Next?

Faced with the realities of tighter margins, brought on by competition and investor trends, Canadian online brokerages find themselves at a bit of a cross roads.

To compete and win, service, pricing and overall client experience – including the digital/online and telephone experiences, need to be excellent. To do that, they need money however with about a dozen or so online brokerages in Canada and only so many traders and active investors to go around, the margin for error is very small. Charging a premium price for commissions only to fall short when it comes to delivering on trading platform stability or customer service agent availability doesn’t measure up.

The biggest takeaway from these outages and wait times is that the entire space is under a microscope. There are now lots of eyeballs watching to see who slips up or doesn’t deliver and no shortage of outlets looking for a story in case those slip ups happen. It won’t just be DIY investors chiming in on social media anymore; mainstream media and business news outlets will be scrutinizing every step and misstep.

How many investors jump ship as a result of the service experience snafus is hard to say. Canadian DIY investors are patient, perhaps even willing to cut online brokerages some slack for occasional technology hiccups. The real question, however, is how long they’re willing to wait for things to improve before they’ll move? Judging by recent reactions, the answer seems to be not that long.

Discount Brokerage Tweets of the Week

No surprises here. Service delays, outages and frustration are on the menu. Viewer discretion is advised. Mentioned by Canadian DIY investors were BMO InvestorLine, CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, and TD Direct Investing.

From the Forums

Promotions for switching brokerages?

Yup. Though this post on RedFlagDeals.com might be a tad bit self-serving, it was nonetheless interesting to see DIY investors make decisions on online brokerages based on incentives (and how we help make it easier!).

Banking on a better experience

When it comes to telling apart bank-owned online brokerages, sometimes small differences make big impacts. This post from RedFlagDeals.com generated an interesting discussion when comparing CIBC Investor’s Edge to BMO InvestorLine.

Into the Close

So despite all of the negative headlines from this past week, markets seem to be in rally mode – at least in the US. That’s pretty amazing stuff when you consider all that has been said. So, for the traders and investors out there, try to get some rest this weekend, you’re going to need your strength to hang on for the wild ride of the next few weeks. Of course if you’re looking for something really interesting to plan your future trades (and Christmas lists) around, here are some highlights from the recent CES show. Have a great weekend!

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Discount Brokerage Weekly Roundup – January 5, 2018

Happy New Year? Just five days into 2018 and there’s fire and fury making headlines on both sides of the border. Here in Canada, however, the fire and fury have been directly at a handful of online brokerage service experiences including trading platform outages and egregiously long wait times. Did I mention that it is only five days into 2018?

In this edition of the roundup, we’ll kick things off in chronological order since that will offer a brief reprieve of the madness from the past week. First, we’ll take a look at the good news – a new year and new deals from Canadian online brokerages. From there we’ll wade briefly into the melee of the first trading week of 2018 and survey the damage caused by trading outages and long wait times. We’ll wrap this inaugural 2018 roundup with chatter from DIY investors on Twitter and the investor forums. Fair warning, it’s not for the faint of heart.

Happy New Deal

The start of a new year brings with it the promise and hope of a fresh start. For many DIY investors, the new year is also an opportunity to move assets around, either into an existing TFSA or RRSP or poke around for a new online trading account.

This year, more than most in recent memory however, there is also a heightened sense of excitement. The combined forces of cryptocurrency, cannabis and climbing stock markets appear to have prompted DIY investors to step into the stock market in hopes of riding the wave of investing euphoria.

For Canadian DIY investors hunting for an online investing account, the great news is that discount brokerage deals and promotions also started off 2018 with a bang. With about 25 offers being advertised, almost all major Canadian online brokerages have an offer of one type or another to sweeten the pot to join them.

To kick off the month, BMO InvestorLine launched a new cash back & commission-free trade offer to replace their outgoing offer from the end of 2017. In addition, a move midway through December of last year to reduce the minimum deposit required for BMO’s digital/robo advisory service, SmartFolio, from $5,000 down to $1,000 means that BMO has competitive services offerings for individuals who prefer either the DIY or managed investing.

Source: Screenshot of BMO InvestorLine Special Offers page

Also moving aggressively to attract new clients in December and through to March was TD Direct Investing. Their latest campaign launched in December and will be sure to attract the attention of DIY investors looking to a big bank-owned online brokerage account with a very competitive promotion.

The good news for DIY investors is that there are a handful of Canadian discount brokerages who are still on the sidelines who have a compelling incentive to come to market with some bold offers. Further, given some of the heartache caused by trading outages (see below) in the early part of the year, the timing couldn’t be better for certain players to drop some really competitive offerings to capture dissatisfied DIY investors looking to switch or to diversify who they invest with.

2017 Online Brokerage Rankings – Coming Soon

Another interesting piece of news managed to cross our radar in the midst of all of the hubbub this week. A tweet from Rob Carrick indicated that the next Canadian discount brokerage rankings from the Globe and Mail are due to go live on January 20th. The upcoming rankings will be the 19th edition of the rankings and, interestingly, are being released in January rather than the end of the year. With a host of new features from Canadian online brokerages coming to market last year it will be interesting to see which online brokerage gets top honours – especially in light of recent developments and client service issues. If the last online brokerage rankings were any indication, look for the non-bank-owned online brokerages to get a favourable edge. Stay tuned!

Fire and fury

If you’re a Canadian DIY investor, you’ve probably heard about or experienced some of the madness taking place this past week. In the five years SparxTrading.com has covered Canada’s online brokerages and the thousands of tweets from Canadian DIY investors that we’ve covered, the first week of 2018 was simply unprecedented in terms of backlash from investors about trading platforms going down.

To recap, earlier this week both RBC Direct Investing and TD Direct Investing suffered significant interruptions to their trading platforms that resulted in many DIY investors being unable to place trades or access their account details.

Ironically, many investors saw potential profits go up in smoke, as enthusiasm over legalization of recreational marijuana in California translated into substantial trading volume of marijuana stocks on Canadian stock exchanges as markets opened. That increased volume coupled with a rush at the beginning of the new year was, apparently, enough to overwhelm online trading platforms at both RBC Direct Investing and TD Direct Investing.

Unfortunately, however, many investors were left seeing red as they were unable to connect to their trading platforms yet again on the morning of January 4th when marijuana stocks were whipsawed by the news that US Attorney General, Jeff Sessions, had rescinded the Cole memo, effectively throwing the investing community into a panic.

And, if there’s one thing about a panic that DIY investors ought to know, it’s that trying to get on the phone with a trading representative right away is nearly impossible. Cue the frenzy.

What arose from the following tweet was an avalanche of a reaction by DIY investors online.

Hundreds of Canadian DIY investors impacted by the online trading platform outages took to Twitter to alert anyone and everyone who’s anyone in Canadian investing to the situation. Fairly quickly, news of the outage was picked up by the Business News Network followed by major Canadian news outlets including the Globe and Mail, Toronto Star, Financial Post, CBC and CTV.

The reaction online was visceral and the common theme among many of the complaints was simply this: how, given the billions of dollars in resources at the disposal of the parents of the Canadian bank-owned online brokerages, could trading platform outages a) occur in the first place and b) not be resolved quickly?

Putting the reaction of shock aside, there is likely no reason, short of force majeure, that would quell or even satisfy Canadian DIY investors. Even if the root cause could have been communicated, the bottom line was this: when the trades needed to be made, the platform was non-operational. To make matters worse, the backup system of calling into a telephone representative was not able to withstand the swell of volume.  As a result, frustrations mounted as investors were forced to wait in incredibly long (in many cases well over an hour) calling queues. Many simply gave up or had batteries run out.

Again, we’ll come back to the point that we’ve covered thousands upon thousands of Canadian DIY investor tweets and platform outages are nothing new. They’ve happened countless times in the past, to almost all Canadian online brokerages, including to TD Direct Investing’s Webbroker and to RBC Direct Investing.

Never, however, have they managed to garner so much negative attention so quickly.

Keep in mind this was not a market crash (such as the flash crash or a massive unexpected event such as Brexit) so there was really no scapegoat here. Yes, the marijuana sector is incredibly popular, but does the volume of trading orders taking a system down pass the sniff test?

During the Facebook IPO in 2012, for example, there were so many orders placed that NASDAQ systems ground to a crawl. Yours truly had the indescribable angst of helplessly watching a buy order sit in limbo as stock price data danced around. That’s the kind of feeling and story that traders almost never forget.

So yes, even the most technically savvy investing and trading engines are prone to respect the laws of physics, however ultimately NASDAQ was forced to compensate many individuals who were impacted by system’s shortcomings. That a stock exchange would have to compensate individuals and firms impacted by a technology shortfall during an IPO was “unprecedented” – a word that has already been batted about to describe the volume that apparently took down trading platforms.

What happens next is still unfolding. We have yet to hear fully from the online brokerages as to what happened exactly and, perhaps more importantly, whether there is a fix in place to prevent it from happening again. Trading platform functionality has been restored but that is cold comfort to those DIY investors who were negatively impacted by the outages.

For many DIY investors, there have already been offers of free trades as some compensation for the inconvenience. While some investors may find that sufficient, there are many, apparently, who do not. Investors are coming together to demand more – with some even joining a Facebook group to explore their options.

Another angle to this story that hasn’t yet been explored is the extent to which the structural integrity of online brokerages can impact the financial well-being of their clients. If Canadian self-directed investors can’t get into or out of their accounts, can’t access trading data or cannot close out a losing position because of technological outages, there could be a negative impact to their overall financial well-being. The CIPF only kicks in when a firm becomes insolvent, not when technology or architecture fall short.

Specifically, is there a conversation about being ‘too big to fail’ and technology ‘stress tests’ that financial watchdogs and regulators have to have with regards to online investing?

The modern and technologically-reliant trading infrastructure may be wise to institute benchmarks for trade handling – something analogous to the Basel III requirements for capital ratios – to be in place to handle retail investor order flow. Included in that would be a mandate to report trade platform stability,  trading bandwidth load capacity and failover requirements such as telephone representative availability.

Ultimately, the benefits of having many online brokerages in Canada is that DIY investors have choices in who they use. And, the kind of publicity arising from the events over the past week will almost certainly serve as a catalyst for technology upgrades and infrastructure development. Outages on volatile trading days not only hurt investors but also hurt online brokerages by preventing commissions from being collected. There’s clearly a business case in there that suggest that the technology will be repaired quickly. But will that be enough?

Perhaps the open question that will remain to be answered is how and when reputations and confidence in the online trading world will be repaired? With robo-advisors now in the mix, the Canadian online brokerages shouldn’t wait too long to provide solutions. We are, after all, in unprecedented times.

Below are some of the sources of media coverage of the outages at RBC Direct Investing and TD Direct Investing this week:

https://www.ctvnews.ca/video?clipId=1295882

http://business.financialpost.com/news/fp-street/online-brokerage-users-complain-of-glitches-amid-broad-plunge-in-pot-stocks

https://www.bnn.ca/personal-investor-retail-investors-get-the-second-class-treatment-from-td-and-rbc-1.960274

https://www.bnn.ca/td-blames-webbroker-outages-on-unprecedented-trading-volume-1.958969

http://www.cbc.ca/news/business/royal-bank-outages-1.4471629

http://www.cbc.ca/news/business/td-webbroker-website-login-problems-1.4470835

Here is a collection of tweets about the various outages this past week (scroll down to the full list of tweets from the week):


 

Discount Brokerage Tweets of the Week

In the almost three years of collecting DIY investor tweets, this is by far the biggest week yet. Get comfy as this week mentions BMO InvestorLine, Credential Direct, CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, and TD Direct Investing. Also while we usually filter out strong or inappropriate language, this week we’ve opted to allow most of it through to reflect the scope of impact of outages and wait times on DIY investors.

From the Forums

Out in the cold

In this post from RedFlagDeals.com’s investing thread, difficulties regarding access to TD Direct Investing started just before the new year and ratcheted up as outages became more widespread. An informative read on DIY investor experiences as the firestorm evolved.

Hurry up and wait

Another story that we’re tracking is the wait time for phone service at Canadian online brokerages. In this post from RedFlagDeals.com’s investing thread about CIBC Investor’s Edge, one user managed to find other online investors who were encountering longer than usual wait times.

Into the Close

Did I mention that it is only five days into 2018? Hopefully the weekend offers a bit of a break, but with cryptomarkets and the spreading fallout from the other ‘fire and fury’ it seems like there won’t be a whole lot of rest happening. On the plus side, all that worry and furious typing will be one way to stay warm. Have a great weekend!

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Discount Brokerage Deals & Promotions – January 2018

*Update: 1/25* Happy New Year! It seems like the one place in Canada that is still hot this winter is the deals and promotions section for Canada’s discount brokerages. It’s a strong start to 2018 for Canadian discount brokerages, as the official race to the RSP contribution deadline is on.

Discount Brokerage Deals Quick Nav

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

With excitement about marijuana legalization, blockchain and crytptocurrencies as well as stock markets continuing to push higher, there are many reasons DIY investors would be looking into online trading accounts. Fortunately, for those in the market for an RSP or TFSA or even a cash/margin account, there are over two dozen offers now in play.

Leading off the deals news this month is BMO InvestorLine, who upped the ante in the promotional pool with a cash back/commission-free trade offer to start 2018. In addition, BMO’s SmartFolio has also lowered the minimum account deposit threshold to open an account (and thus to qualify) for their waived management fee promotion, from $5,000 to $1,000.

For the new year, almost all of Canada’s major online brokerages have a promotional offer in play. The most common offer online brokerages are putting forward are transfer-fee coverage offers that help pay for the cost of switching discount brokers.

Of course, the most popular category of offers for Canadian DIY investors is the cash back or commission-free trade offer type. Starting off in 2018 there are 9 of these offers to choose from. Four of Canada’s bank-owned online brokerages currently have promotions in this category, with TD Direct Investing having the lowest deposit threshold ($10,000) of this group to qualify for a cash-back promotion.

The best news, however, is that with a few more online brokerages still on the sidelines, there’s lots of momentum and incentive for them to jump into the fray. And, to ensure they get noticed, the deals will have to either stand out or match some of the more competitive offers currently out there.

As always, we’ll continue to monitor the deals activity, however if you find out about an offer that would be of value to our readers, feel free to post it in the comments below.

Expired Offers

There were a couple of offers that expired through December. The first was HSBC InvestDirect’s commission-free trade offer which expired Dec. 15th. The second offer that expired was BMO InvestorLine’s cash back promotion. Not to worry, however, as BMO launched a new deal to replace its outgoing offer (more details below).

Extended Offers

Good news for Questrade fans as an extension was granted for Questrade’s 5 commission-free trade offer to Dec. 31st 2018.

New Offers

*Update: 1/25 – National Bank Direct Brokerage has stepped into the deals and promotions race with an interesting commission-free trading offer. NBDB appears to be targeting investors with lower balances to qualify for this promotion with the first deposit tier (for 10 free trades) being $10,000 and the next tier (for 25 free trades) being $20,000. The bonus for this particular offer is that the commission-free trades are good for up to one year meaning there is no rush to use them up. See the table below for more information*

*Update: 1/17 – Just one day after Credential Direct launched a cash-back offer, Qtrade Investor also went live with a cash-back offer of their own. Qtrade Investor is offering up $50 (for deposits starting at $50,000) to $1,000 (for deposits of $1M+) cash back. This offer is running until Feb. 28th. See table below for more information.*

*Update: 1/16 – Credential Direct is the latest Canadian online brokerage to launch an offer for the RSP season. The promotion is a combination of a tiered cash back offering as well as a bonus of donating cash to a good cause (Boys and Girls Clubs of Canada). Qualifying deposits for this offer start at $15,000 (which offers $75 cash back) and go up to $1 million dollars (which offers $1,000 cash back). See table below for more information.*

*Update: 1/12 – HSBC InvestDirect joined the deals pool this month by launching a new cash back offer. Bonus amounts range from $88 (for a minimum deposit of $25,000) to $988 (for deposits of $1M or more).  The language of this offer is particularly interesting as it stresses the ‘transfer in’ of assets from another Canadian financial institution from “any type of account” – a sign that HSBC InvestDirect may be stepping up its campaign to win market share away from its bigger bank-owned brokerage competitors. See table below for more details.*

To kick off the new year, BMO InvestorLine has upped the ante by offering a cash back or commission-free trade promotion. As this is a tiered offer, the deposit levels start at $100,000 and go up to $300,000+ with the cash back bonuses ranging from $200 through to $750. See table below for more details.

Also worth noting was the introduction TD Direct Investing’s offer in early December. As one of Canada’s largest and most popular online brokerages, the actions of TD Direct Investing are influential in shaping what other online brokerages put forward.

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, 2018
Open and fund a new account with Virtual Brokers with at least $5,000 and you may be eligible to receive up to two months of trading at $4.99 per trade (maximum of 15 trades per month). Use promo code 499COM2017 when signing up to qualify. See terms and conditions for full details. $5,000 Up to 2 months of trading at $4.99 per trade (max 15 trades per month) Commissions will be reimbursed after June 30, 2018. For more details, click here March 31, 2018
Open and fund a qualifying account with TD Direct Investing with at least A) $10,000; B) $50,000; C) $100,000; D) $250,000 or E) $500,000+ and place at least 5 commissionable trades within 90 days of account opening and you may be eligible to receive either A) $100; B) $200; C) $300; D) $500 or E) $1,000 in cash back. Be sure to read full terms and conditions for eligibility for this offer. A) $10,000 B) $50,000 C) $100,000 D) $250,000 E) $500,000+ A) $100 B) $200 C) $300 D) $500 E) $1,000 Cash award will be paid to the client before the last day of the month following the conclusion of the qualification period (90 days). #RetireReady Promotion March 1, 2018
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatTransfer or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo January 31, 2018
Open a new account at National Bank Direct Brokerage with at least a) $10,000 or B) $20,000+, and you may be eligible to receive up to A) 10 or B) 25 commission-free trades. For the 10 free trades offer, enter promo code FREE10 and for the 25 free trades offer enter promo code FREE25. This offer is also available to existing clients. Be sure to read terms and conditions for full details. A) $10,000 B) $20,000+ A) 10 commission-free trades B) 25 commission-free trades 12 months Free Trades Campaign April 30, 2018
Open a new account or fund an existing account at Credential Direct with at least A) $15,000; B) $50,000; C) $150,000; D) $500,000 or E) $1M+ and you may be eligible to receive a cash bonus of A) $75; B) $125; C) $200; D) $500 or E) $1,000. For new clients, use promo code CASH2018RSP when applying. Existing clients can access this promotion from the promotions page available on the account backend. A donation equivalent to 10% of the bonus payout will also be made by Credential Direct to Boys and Girls Clubs of Canada. Be sure to read terms and conditions for full details. A) $15,000 B) $50,000 C) $150,000 D) $500,000 E) $1M+ A) $75 B) $125 C) $200 D) $500 E) $1000 Cash will be credited to qualifying investor accounts the week of August 20, 2018 Winter Offer 2018 March 16, 2018
Transfer at least A) $25,000; B) $50,000; or C) $100,000 into a new or existing RRSP, spousal RRSP or TFSA at CIBC Investor’s Edge before March 1, 2018 and you may be eligible for a cash back offer of A) $100; B) $200 or C) $400. Be sure to read terms and conditions for full details. A) $25,000 B) $50,000 C) $100,000 A) $100 B) $200 C) $400 Cash back will be deposited the week of May 4, 2018 (for transfers received by Dec. 31, 2017) or July 3, 2018 (for transfers received after Dec. 31, 2017). CIBC Investor’s Edge Cash Back Promo March 1, 2018
Open a new account with HSBC InvestDirect by transferring in at least A) $25,000; B) $100,000; C) $250,000; D) $500,000 or E) $1,000,000 or more from another Canadian financial institution and execute at least three commission-generating trades by April 30th, 2018, and you may be eligible to receive a cash bonus of up to A) $88; B) $188; C) $288; D) $688 or E) $988. Be sure to read terms and conditions for full details. A) $25,000 B) $100,000 C) $250,000 D) $500,000 E) $1M+ A) $88 B) $188 C) $288 D) $688 E) $988 Transfer-in bonus will be deposited by November 30, 2018. Winter Offer – Transfer-In Bonus March 30, 2018
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) $1M+ and you may be eligible to receive a pre-paid Visa gift card worth A) $50; B) $100, C) $200; D) $300; E) $600 or F) $1200. Use code VISA18 when signing up. Be sure to read terms and conditions for full details. A) $25,000 B) $50,000 C) $100,000 D) $250,000 E) $500,000 F) $1M+ A) $50 B) $100 C) $200 D) $300 E) $600 F) $1200 pre-paid card should arrive by July 31st 2018 Scotia iTRADE offer March 1, 2018
Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details. $25,000 commission-free trades for 1 month + 1 month of advanced data. 1 month Active Trader Program December 31, 2018
Open a new account or fund an existing account with Qtrade Investor with at least A) $50,000; B) $100,000; C) $250,000; D) $500,000 or E) $1M+ and you may be eligible to receive A) $50; B) $100; C) $250; D) $500 or E) $1,000. Be sure to read terms and conditions for full details. A) $50,000 B) $100,000 C) $250,000 D) $500,000 E) $1M+ A) $50 B) $100 C) $250 D) $500 E) $1,000 Cash back will be credited by July 31, 2018. Cash back offer February 28, 2018
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, with at least A) $100,000; B) $200,000 or C) $300,000+ in net new assets and you may be eligible to receive up to A) $200 or 20 commission-free equity trades; B) $400 or 40 commission-free equity trades; or C) $750 cash back or 75 commission-free equity trades. Commission-free trades are good for up to two months. In addition, eligible individuals can receive an extra $50 as part of the refer a friend program. Use promo code SPARXCASH when signing up for the cash back offer or SPARXTRADES when signing up for the commission-free equity trade bonus. Be sure to read the terms and conditions for more details on the offer. A) $100,000 B) $200,000 C) $300,000 A) $200 or 20 commission-free equity trades. B) $400 or 40 commission-free equity trades. C) $750 or 75 commission-free equity trades. Cash back will be deposited the week of Nov. 12, 2018. Commission-free equity trades are good for up to two months. BMO InvestorLine Winter 2018 Campaign April 1, 2018

Expired Offers
Last Updated: Jan. 25 2018 12:45 PT

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 B) $10,000 C) $25,000 D) $50,000 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTRADE account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $50,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $50,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period(subject to conditions). BMO InvestorLine Refer-a-Friend June 30, 2018

Expired Offers
Last Updated: Jan. 17 2018 15:30 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 HSBC InvestDirect, and they will pay up to $150 in transfer fees. $150 $15,000 2018 Winter Offer – Transfer-In Bonus March 30, 2018
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 $25,0000 or more to Scotia iTRADE and they cover up to $150 in transfer fees. $150 $25,000 Transfer Fee promo March 1, 2018
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo January 31, 2018
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPARXCASH when signing up to also be eligible for cash back offer or SPARXTRADES to be eligible for the commission-free trade offer. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 BMO InvestorLine Winter 2018 Campaign April 1, 2018

Expired Offers
Last Updated: Jan. 12 2018 13:00 PT

Other Promotions

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

Expired Offers
Last Updated: Jan. 2 2018 09:00 PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $1,000 1 year no management fees STSF February 28, 2018 SmartFolio New Account Promotion
Cash Back – Referral BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details. $1,000 $50 cash back (referrer) $50 cash back (referee) Unique link generated from SmartFolio required. None SmartFolio Website
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: Jan. 2 2018 11:45 PT
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Discount Brokerage Weekly Roundup – December 22, 2017

For last minute shoppers, this is it – the mad sprint to the finish line ahead of Christmas next week. Interestingly enough, procrastinating gift-givers weren’t the only ones getting things done this week, as Canadian online brokerages were also busy making news and releasing features heading into the final few days of 2017.

In this holiday edition of the weekly roundup, we look at the latest published Canadian discount brokerage rankings and highlight one online brokerage that has had an eventful 2017 on the rankings podium. From there, we report on a new feature released this week at a non-bank-owned brokerage and report on an interesting promotional offer that crossed our radar from one of Canada’s largest online brokerages. Also worth having a glance at are the DIY investor tweets this week as multiple platform outages and customer service wait times highlight the downside of DIY investing. Finally, we’ll wrap up with a pair of interesting DIY investor forum posts.

Qtrade Investor continues a winning 2017

Qtrade Investor continues to shine in 2017, notching another win in the circuit of Canadian discount brokerage rankings. This past week, Qtrade Investor came out on top of the Surviscor online brokerage ratings and continued what has been a very positive year for recognition and awards in the Canadian online brokerage space..

This past summer, for example, Qtrade Investor won the title of best overall brokerage in Moneysense magazine’s online brokerage review (which were also based on Surviscor’s analysis). And, in September, Qtrade placed a close second place in the J.D. Power Investor Satisfaction Study, just behind Desjardins Online Brokerage, whose parent Desjardins Group also owns Qtrade Investor. While the latest edition of the Globe and Mail online brokerage rankings are still forthcoming, there’s a good chance that Qtrade Investor will continue its strong showing there as well. In 2016, Qtrade Investor also took top honours in that ranking, demonstrating a broad positive performance across several different rankings.

In terms of the latest Surviscor rankings, Qtrade Investor managed to outperform 12 other Canadian discount brokerages across over a number of different criteria including categories related to site functionality, features, pricing and user experience over all.

For Qtrade Investor, notching a score of 90% on the Surviscor rankings put it well out in front of the field.  For the remaining firms in the top 5, however, the race was much tighter. Questrade, which came in second overall, scored 79% while BMO InvestorLine and Scotia iTRADE tied for third place at 77%. RBC Direct Investing, which scored 72%, rounded out the top five. At the bottom of this year’s list was HSBC InvestDirect, which scored 55%.

Another interesting observation was that the big bank-owned online brokerages were relatively close in scoring to one another. The top bank-owned online brokerages in this survey (BMO InvestorLine and Scotia iTRADE) scored 77% while TD Direct Investing, which placed 6th, did so with a score of 70%.  The only outlier for the big Canadian bank-owned online brokerages was CIBC Investor’s Edge, which placed 11th at 59%.

While the percentage differences may seem small, in a hyper competitive and rapidly evolving landscape, every advantage matters. This past year the Canadian online brokerage space underwent some important changes that will make 2018 and beyond a challenge for all providers to maneuver around.

For example, HSBC InvestDirect dropped their commission prices on North American equity trades down to the lowest standard rate of any of the big bank-owned online brokerages ($6.88). Also, just last week, it was announced that Qtrade Investor and Credential Direct would be merging as part of the major merger deal taking place in the Canadian credit union space.

For Canadian DIY investors looking for an online investing account, the awards received by Qtrade Investor offer a compelling set of reasons to consider this discount brokerage. Nonetheless, the data from the latest Surviscor rankings also show that the difference between most of the firms in the top 5 is relatively small. As a result, DIY investors can afford to be picky with an online brokerage or find an online brokerage with whom banking/lending convenience is the deciding factor. Either way, it will be interesting to watch what innovation or new development “online brokerages” would tackle next.

Credit Max from Virtual Brokers

Although the end of 2017 is just around the corner, Virtual Brokers knows that the race between online brokerages is not slowing down any time soon. This past week, they quietly rolled out a new feature called ‘Credit Max’ which enables clients to link their TFSA to their margin account to provide additional buying power when trading.

Similar to Questrade’s “Margin Power”, this new feature by Virtual Brokers is geared towards somewhat active and sophisticated traders who want the benefits of dynamically managing TFSA accounts as well as a margin account.

With VB’s new offer, all of the same risk factors regarding margin trading and leverage still apply. Perhaps the important additional consideration that programs like this require investors to think about, is the fact that the TFSA regulations around contributions and withdrawals also still apply. So, if a position or trade doesn’t work out and assets from a TFSA are needed to cover a losing trade, the additional tracking of one’s TFSA is another layer of complexity to sort through.

That said, it will be interesting to see if this feature spreads to other online brokerages. Already, there are some interesting TFSA-focused features being deployed. The TFSA contribution tracker at Qtrade Investor (also Wealthsimple has a TFSA contribution tracking feature) suggests TFSA may start to grab more of the spotlight at Canadian online brokerages more than either the margin trading or RSP accounts have typically enjoyed.

Deals Updates

This past week an important deal from one of Canada’s largest online brokerages crossed our radar. TD Direct Investing is now offering up a competitive cash-back bonus in hopes of attracting new assets through the ‘RSP season’.

While the threshold to qualify for this promotion is much lower by historical standards (at $10,000) and lower by comparison to deals/promos offered by other bank-owned online brokerages, this deal does come with an interesting twist. In order to qualify for the cash-back bonus, at least five commission-generating trades need to be placed within the first 90 days of the account being opened and funded. What that means is that individuals have to spend close to $50 to see the benefit of the cash-back award.

Although this is not the first discount brokerage deal to have a trading activity threshold requirement, it is interesting to see an offer like this hit the market at this time and from the largest online brokerage in Canada. Ideally, DIY investors would not have to execute trades to qualify for a cash back bonus, however this deal will likely be more enticing to slightly more active investors, which is exactly one of the prized demographics TD Direct Investing are hoping to land as new clients.

As always, the lesson for DIY investors is to read the fine print before committing. Click here to view our latest discount brokerage deals section and to review the offer in more detail.

Discount Brokerage Tweets of the Week

It was a tough week for DIY investors faced with platform outages, and probably an even tough one for the social media teams helping to triage. Mentioned by Canadian DIY investors were BMO InvestorLine, Credential Direct, CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, and TD Direct Investing.

From the Forums

Banking on a Brokerage

The convenience and security of a big-bank owned online brokerage are appealing to many DIY investors. In this post, from RedFlagDeals.com’s investing thread, polls ask community users for their thoughts on the best bank-owned Canadian online brokerage.

Building Wealth

When it comes to learning about building and managing wealth, asking all kinds of questions is a great way to help get insight on sometimes difficult/thorny concepts. In this post from reddit’s Personal Finance Canada thread, one user shares questions about passive investing strategies that many DIY investors typically want to know about. Worth a read for anyone getting started to invest on their own.

Into the Close

Merry Christmas and Happy Holidays. Remember that stock markets are closed Monday (25th) and Tuesday (26th), but crypto markets are very much open. The weekly-roundup will return in the New Year with more exciting coverage of the Canadian online brokerage space. See you in the future!

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Discount Brokerage Weekly Roundup – December 15, 2017

Any fans of Die Hard know that just because it’s Christmas time, doesn’t mean there isn’t room for action to happen. In the online trading space, this also happens to be the case as December has proven itself to be filled with excitement, setting the stage for a very eventful 2018.

In this edition of the roundup, we look at a major merger that took place that will undoubtedly pose a challenge to the big bank-owned online brokerages. Following that story, we continue to cover how cryptocurrency, in particular, bitcoin, trading is making its way into the online brokerage space in the US. As always, we’ll close out by looking at what DIY investors were chatting about on Twitter and in the investor forums.

Joining forces: Merger of Qtrade Investor and Credential Direct

The restructuring of the Canadian discount brokerage industry continues to play out in 2017. Earlier this year (in September) Virtual Brokers’ parent company, BBS Securities, was acquired by CI Financial Corp, a move that added significant resource to the Virtual Brokers brand. And now, this week, there was yet another major structural development in the Canadian online brokerage space with the announcement that Qtrade Investor and Credential Direct would be combining thanks to a massive merger deal between Qtrade Financial Inc, Credential Financial Inc and NEI Investments.

The combined entity, which will be known as Aviso Wealth, will have more than 500,000 clients and manage about $55 billion in assets. With that kind of size, Aviso Wealth will pose a serious challenge to the bank-owned wealth management space. And, in the online brokerage sector, it effectively provides two small players with the kind of resources needed to compete against much larger and better funded competitors.

One of the major drivers behind this transaction was Desjardins Group, who will be a 50% owner of Aviso Group (Desjardins acquired a minority stake in Qtrade Financial in 2013, eventually taking a majority stake), with the other 50% ownership split between the CUMIS Group Ltd and five provincial credit unions.

Bill Packham, CEO of Aviso Wealth explains the merger on BNN

On a fun side note, just over 4 years ago I had a sit down with the head of an online brokerage talking about what might happen with the industry. I speculated at the time that a merger between firms aligned with the credit union network would make sense. Fast forward to 2017 and it makes even more sense for online brokerages to consider creative ways to gain efficiencies of scale, in particular those brokerages that are servicing the credit union networks.

As we referenced in the 2017 online brokerage year in review, technology development is on the minds of leadership at all online brokerages. With falling commission prices and DIY investors demanding more technologically advanced features, scale or massive technological advantage seem to be the only ways in which online brokerages can realistically navigate the future of online investing.

For DIY investors, even though there will be ‘fewer’ online brokerages to choose from, the important difference is that there will now be a brokerage that can operate at significant scale. With scale can hopefully come efficiencies, which in turn, can result in better value for clients.

While the merger is expected to take some time to close (Q1 of 2018 is the target), there are some outstanding issues to resolve from a branding/marketing point of view

For example, Qtrade Investor is very well known for its continuous strong performance on the Globe and Mail online brokerage rankings, as well as in the Surviscor/Moneysense rankings. Changing names or brands at this point might remove them from years of credibility they’ve earned with online brokerage reviews. Credential Direct, by comparison, is less well known, and it would almost certainly make sense to fold the Credential Direct brand into the Qtrade Investor one. Of course, this is all speculative – an entirely new online brokerage entity could emerge to help bring brand recognition and generate excitement over this new merger.

Another interesting angle is what happens to the smaller discount brokerage players (e.g. Questrade) in a space where competitors are now much bigger?

For almost two decades, Questrade has managed to hold its own alongside other larger financial service providers, but with the latest move by Desjardins, Qtrade Investor and Credential Direct, there seems to be a case for Questrade to consider how they can bulk up to navigate the next chapter in online-based wealth management.

We’ll continue to monitor this evolving situation; however, it appears that 2017 was finally the year that the dynamics of the Canadian discount brokerage industry caught up with participants. Whether the larger firms can provide the same service levels at scale that they were able to do as smaller entities is going to be interesting to watch. Larger organizations are notorious for being more complex and thus, slower to respond to changes in the market. Now that Qtrade Investor and Credential Direct are teaming up, they will have to navigate the culture change and manage to strike the right balance between giving clients stability and innovation. Suffice to say, however, they’re no longer going to be considered a ‘small’ online brokerage.

Back to the futures: Interactive Brokers enables bitcoin shorting

Like any good trader knows, don’t fight the market. This past week, Interactive Brokers changed its position from bearish to bullish on enabling clients to short bitcoin futures.

Granted, the official position of the CEO and founder of Interactive Brokers, Thomas Peterffy, is that shorting bitcoin futures would be “suicidal” he nonetheless walked back the restriction for anyone brave (or foolish) enough to do so.

For the first week of bitcoin futures trading, however, it looks like Interactive Brokers benefited handsomely, with close to half of the trading volume being processed through IB. With the CME Group set to launch its own bitcoins futures trading next week, it looks like even more opportunities to trade bitcoin are about to open up.

As we mentioned in last week’s roundup, Interactive Brokers won’t be the only online brokerage in the arena as TD Ameritrade will also enable clients to trade bitcoin futures. For TD Ameritrade clients, the minimum account balance to trade bitcoin futures is $25,000, with margin requirements for trading through TD Ameritrade set at 44%. Margin requirements at Interactive Brokers are also steep. Outright margin for long positions set at 50% of the prior day’s lead month settlement price and short-sellers required to put up an eye-watering five times the value of their futures contract.

With all of the hype surrounding the increase in value of cryptocurrency, a recent post from the Ontario Securities Commission’s Get Smarter About Money site seems timely. Interestingly – but perhaps not surprisingly – in a recent poll they found that 29% of males aged 18-34 had some exposure to cryptocurrency. This is reminiscent of the stock day trading that took place during the dot-com bubble when a lot of young trading ‘geniuses’ were created.

For DIY investors, the rise in bitcoin and other cryptocurrencies has already prompted requests for Canadian online brokerages to start enabling trading of these instruments. Which Canadian online brokerage will be ‘first’ to allow trading in bitcoin/cryptocurrency? It’s difficult to say, however the lessons from what’s happening in the US are going to be instrumental in making the case for trading here in Canada.

Discount Brokerage Tweets of the Week

Mentioned by Canadian DIY investors were BMO Investorline, Credential Direct, CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, and TD Direct Investing.

From the Forums

Beyond the limit

Transferring from one online brokerage to another should be a straight forward process – at least in theory. In practice, this post from reddit’s Personal Finance Canada section, shows how transferring a TFSA account left a negative balance in place and a whole lot of questions. It’s a good read for those considering making a change.

Leftovers

What happens when your balance is too low to trade but still high enough to incur a fee? One user encountered this situation with a low balance in their RSP investing account in this post on reddit’s Personal Finance Canada thread. Find out what (mostly) helpful suggestions were put forward by other readers.

Into the Close

That’s it for another week of action. With markets continuing to push higher and cryptocurrency doing the same, it’s safe to say the only red this Christmas season will be coming from those who are trying to short either of these. Have a great weekend and best of luck fighting the crowds for the last few shopping days before Christmas!

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Discount Brokerage Weekly Roundup – December 8, 2017

If there are two things dominating the headlines the past few weeks, it’s bitcoin (or cryptocurrency) and America. While Canadian DIY investors have a chance to peek around the corner to see what online brokerages have coming in 2018, we also wanted to review what US discount brokerages were up to to see what else might be coming down the pipeline soon.

So, for this edition of the roundup, we take a look state side to note moves this past week by two US online brokerages that could help shape what new trading features could be available to Canadian DIY investors. From there, we’ll provide a snapshot of the latest tweets by DIY investors about Canada’s discount brokerages and we’ll cap off the roundup with highlights from the forums.

Interactive Brokers Hitting its Stride

As part of our exclusive review of Canadian online brokerages in 2017, one of the biggest trends that stood out was that online brokers are locked in a technological arms race. One online brokerage in particular, however, stands out from its peers in the way in which it has built up its business by betting big on technology and automation to lower its operating costs (thereby passing along savings to clients).

Interactive Brokers, parent company to Interactive Brokers Canada, released its monthly performance metrics at the outset of December and according to the numbers, they are having an exceptionally good year. Let’s have a quick look at some of the key numbers on a year over year basis:

  • 795 thousand Daily Average Revenue Trades (DARTs): 9% higher year/year
  • Client equity of $121.6B: 44% higher than prior year
  • 474 thousand client accounts: 25% higher than prior year

For greater clarity, a presentation given earlier this week at the Goldman Sachs US Financial Services Conference illustrates just how dominant Interactive Brokers has become in the US online investing market space:

Why this matters for other online brokerages – and perhaps for traditional financial service providers – is that Interactive Brokers has shown a consistent ability to make its technology work and to keep costs for traders so low that it is a natural contender for DIY investors – especially active ones. As such, their foray into traditional ‘banking’ services could signal the natural evolution of integrated financial services that might encroach on more than just the online investing space here in Canada.

While it’s difficult to extrapolate a straight line into the future, the performance of Interactive Brokers over the past year seems to signal that years of creating a technology driven culture positions them well to compete in the modern-day footrace to become an outstanding online brokerage, especially from the trade execution side.

For Canadian DIY investors, Interactive Brokers Canada is one of two online brokerages that might offer a conduit for innovative services in the online brokerage space in America to migrate north. The other, TD Direct Investing, may look to import ideas developed by TD Ameritrade into the Canadian space.

In either case, however, Interactive Brokers has made a compelling business case for other online brokerages to invest in automation and operational efficiency, and to do so at an accelerated pace.

Interactive Brokers, as well as online brokerage Robinhood, in the US have both demonstrated commission pricing can continue to come down. Another very compelling slide from the Interactive Brokers presentation deck shows how much lower Interactive Brokers’ commissions are for equity and, in particular options trading, relative to their US peers even after a significant commission price cut by the group of online brokerages earlier this year.

The bottom line for Canadian discount brokerages is to figure out how to offer their services faster and less expensively because Interactive Brokers Canada is likely to continue to attract more mainstream attention.

After the addition of RSP and TFSA accounts to Interactive Brokers Canada and the regular feedback from DIY investors to include Interactive Brokers Canada in the highly popular Globe and Mail online brokerage rankings, the combination of low pricing and popularity with DIY investors (at least the most active ones), might bode well for bringing Interactive Brokers Canada into the spotlight alongside the dozen or so other online brokerages regularly included in the review.

Interactive Brokers’ latest trading metrics and recent investor presentation paint a very interesting picture of how they continue to grow market share with active DIY investors – a highly prized segment in the online brokerage market.

Whether IB can disrupt the Canadian marketplace to the same degree that they have in the US remains to be seen, however the combination of global ambition, high degree of popularity with active DIY investors and a major emphasis on technology suggests Interactive Brokers Canada may find itself in the spotlight sooner than their peers would hope.

TD Ameritrade Betting on Bitcoin

One of the most intriguing things about the capital markets is that when there are buyers, there are inevitably people motivated to figure how to sell. Case in point: bitcoin.

The beyond-meteoric rise in the digital currency this year has continued to gain international attention, and likely drawn the interest of traders everywhere to figure out whether or not this would be a worthwhile risk to take on to trade.

And, while many folks (including the founder and CEO of Interactive Brokers) have warned against enabling futures trading of bitcoin, the green light has been given and one online brokerage in the US, TD Ameritrade, appears to be the first to move into the space to enable clients to trade these instruments.

It will be interesting to follow what happens with Bitcoin and in particular the institutions that enable trading of futures of Bitcoin. The fact that online brokerages in the US are now gearing up to participate in the trading of Bitcoin derivatives is, perhaps, a signal that a new product line will be coming soon to online brokerages that have traditionally dealt in equities and options.

We’re definitely keen to monitor this development starting on Sunday and naturally to see how Canadian online brokerages try to keep pace with investor interest (or fever) to participate in the cryptocurrency trading that is gripping the world.

Discount Brokerage Tweets of the Week

There was no shortage of heat coming from Twitter this past week as several Canadian online brokerages faced more than a few unhappy campers when outages and long phone line wait times drove DIY investors online to complain.  Mentioned by Canadian DIY investors were BMO InvestorLine, CIBC Investor’s Edge, Questrade, RBC Direct Investing, Scotia iTRADE, TD Direct Investing and Virtual Brokers.

From the Forums

It’s not easy getting green

Comparing one of Canada’s largest online brokerages (TD Direct Investing) with one of social media’s most popular online brokerages (Questrade) turned up some interesting posts this past week in the DIY investor forums. In this post, from reddit’s Personal Finance Canada thread, one user was looking to get the most mileage on saving fees and asked for the pros and cons of choosing a passive investing strategy at each of the two ‘green’ online brokerages.

Party in the TFSA

While that Miley Cyrus reference is upbeat and generally capture how investors perceive TFSAs, perhaps another song – Wrecking Ball might also describe the downside of TFSA. In this post from reddit’s Personal Finance Canada section, one user gets enlightened on the pluses and minuses of a TFSA when asking about a good online brokerage for TFSAs.

Into the Close

That’s a wrap on this edition of the roundup. This weekend will be a tense one as all eyes will be on what happens next with cryptocurrency. Of course, for a change of pace from fantasy money, there’s also fantasy football playoffs that have started. Best of luck on whichever screens you’re on!