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Discount Brokerage Weekly Roundup – July 17, 2015

Whether it was tech giant Amazon cutting prices for prime day or the Bank of Canada cutting prime rates, this past week it seems that consumers’ economic engines are in need of a little priming to get them into gear. As Canadian discount brokerages know all too well, cutting prices or rates can only go so far in terms of stimulating interest. At some point, the path to growth requires getting creative.

In this edition of the roundup, we take a Pan American look at how brokerages here and south of the border are creatively approaching staying competitive despite some challenging market conditions. First we’ll take a look at the story of what seems to be powering one the largest online brokerages on the planet even higher. Next, we’ll scan through the social media banter from Canadian brokerages and then look at upcoming education events and what DIY investors were talking about in the forums. Of course, it wouldn’t be a true Pan American edition of the roundup without a questionable choice for a musical close out.

That’s Trillion, with a T (and a rillion)

One of the largest online brokerages on the planet got a little bit bigger this past quarter even against the backdrop of decreased trading activity and stagnant interest rates.

US online brokerage Charles Schwab reported their quarterly earnings this past week and the results are more than a little mind-boggling. In the quarter they managed to attract 280,000 new brokerage accounts (an increase of 16% y/y) and grow their total assets by 6% to $2.54 trillion (USD). By comparison, another popular brokerage in the US, Interactive Brokers, had a total of just over 300,000 total accounts (as of the end of April).

While most observers understand the sheer scale of the brokerage gives them quite a bit of clout in the online brokerage space, it was the recent entry of Schwab into the robo-advisor space that has gotten a lot of attention. After being launched in Q1, their robo-advisory has 39,000 accounts and $3 billion (USD) in assets.

Of course, as with most releases, a little bit of extra digging tends to turn something interesting – such as the following quote from CEO Walt Bettinger stating “we remain committed to expanding existing platforms in areas of strong client demand. We have broadened Schwab ETF OneSource™ to include over 200 commission-free ETFs as of month-end June. Investors can access a wide range of funds from 13 providers and 66 Morningstar categories with zero online commissions.”

What the latest results from Schwab show is that brokerages can get ‘creative’ with products that the investing public is clearly asking for. In this case, commission free ETFs and robo-advisor style management are what seem to be turning heads.

Within the Canadian space, there are already internal committees and groups within the larger bank-owned brokerages actively discussing a strategic opportunity to participate. These results are likely to add more fuel to the fire for the larger brokerage players and that is great news for DIY investors.

Discount Brokerage Tweets of the Week

In this week’s discount brokerage tweets of the week, technology looks to be the Achilles heel for a number of DIY investors and online brokerages. The technology minions don’t seem to care whether it’s a bank-owned brokerage or not, somehow, someway they find the chance to create a bit of mayhem. Mentioned this week were BMO InvestorLine, Questrade, RBC Direct Investing and Scotia iTrade.

Also, we’ve got updated coverage of the Scotia iTrade selfie contest that’s still running. Below is an update which includes this week’s selfie action, most notably from a marketer/promoter looking to drum up more exposure for the contest.

Event Horizon

Even though its summer and school is out, students of the market can always find time to learn. This week there are a number of interesting investor education events on margin trading, options, stock picking and more.

July 21

TD Direct Investing – Understanding Margin & Short Selling

Scotia iTRADE – How To Pick A Stock with Pro Market Advisors

TD Direct Investing – Options as an Income Strategy

July 22

TD Direct Investing – Understanding Margin & Short Selling

July 23

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

TD Direct Investing – Introduction to Technical Analysis

From the Forums

#Whoops

Now that summer is here, there are lots of DIY investors who want to take advantage of the break or the weather to enjoy some time away from the markets. As this post from RedFlagDeals.com’s investing forum shows, however, don’t forget to close out the open orders or bad things can happen.

After Hours

No, it’s not the wild costume and crazy glow stick crowd (although trading outside of normal market hours can be equally as crazy) but after hours trading refers to trades made outside of the normal market hours. In this post also from RedFlagDeals.com’s investing forum, one member wonders aloud about the afterhours and there are a few polite acknowledgements and some strange looks given in return.

Into the Close

That does it for this edition of the roundup. As promised, here is but one of 21 creative earworms that still feel less questionable to indulge in than either Amazon prime day, yet another interest rate cut or Kanye West closing out the Pan Am games. Good luck to the Canadian athletes at the Pan Am games, and good luck keeping these tunes out of your head over the weekend.

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Discount Brokerage Weekly Roundup – July 10, 2015

Source: Twitter (@Sweetfacefergie)

Even though the official kick off to the Pan Am Games was today, in the week leading up to it markets have given traders more than enough diving, hurdles and nail-biting drama for weeks to come. For a handful of Canadian discount brokerages, this week proved to be equally eventful with contests and competitors going at it full swing. It looks like it’s game-on for the brokerages once again.

In this edition of the roundup we kick things off with a look at a major bank-owned brokerage tearing a page out of the Kardashian playbook with their new selfie contest. Next we’ll look at some big news from two Quebec-based discount brokerages that is sure to create a few sparks in that market for years to come. Also we’ll scan through the investor education events and take a look at some really interesting exchanges that took place on Twitter. Finally we cap off the roundup by looking at the forum chatter from DIY investors across Canada and close off with one funny/scary view of this week’s market glitches.

But First, Let Me Take a Selfie

In a quirky bit of timing, not long after the selfie aficionado Kim Kardashian was interviewed about her financial wisdom tips, Scotia iTrade launched their selfie-themed promotion. This latest contest, which runs during the month of July, involves people taking selfies at the recently launched Scotia iTrade investor centre at Scotia Plaza in downtown Toronto. The “eligible winners” will be awarded a movie pass for one (approximate retail value of $13).

While they’re not the first big bank to try and capitalize on the selfie (TD put a twist on it with their ‘housie’ campaign) Scotia iTrade might be the first Canadian online brokerage to run a selfie-themed promo. And, although contests are nothing new, this particular one shows some interesting quirks of mixing the world of personal finance with the worlds of selfies, millennials and Twitter.

Here are a couple of interesting observations.

First, there are the contest’s terms and conditions. At about 2300 words long this is one of the longest scrolling workouts folks are going to have before they fully know what they’re getting themselves into.

Once in the terms and conditions, however, there are some interesting finds such as this phrase: “Take a selfie of yourself at the branch”.

Not only has ‘selfie’ made it into the vernacular of the financial world, the way in which its used is like the Hugh Grant moment in Mickey Blue Eyes (the la Trattoria).

And, while it may seem mildly comical, as it turns out, the details actually matter. According to the Wikipedia definition of a selfie, it is “a self-portrait photograph featuring the photographer”. That would make the following image submitted by @carr71 for the promo technically seem to not count (it looks like a photo of a person that was taken by someone else).

Unfortunately, it looks like @Scotia_iTrade didn’t accept either of @carr71’s submission(s) and she got directed to read those rather lengthy terms and conditions.

With 10 days now gone in July, it looks like the contest has yet to gain significant traction. Of the 3 photos submitted thus far one may not be a selfie, one appears to have been disqualified (not sure why) and one went unacknowledged (at least publicly) so it’s not clear by looking at it if it counts. That’s a tough batting average a third of the way through the contest window.

Of course, figuring out what will or won’t work on Twitter is all about experimentation. Like most things on Twitter, it’s difficult to predict where things will go and the timeline for events to happen. The fact that Scotia iTrade is willing to get creative on social media is a good sign and it should hopefully spur other discount brokerages to flex their creative muscles. We’ll keep watching to see how the contest unfolds.

New Pricing at Desjardins Online Brokerage

After numerous commission price adjustments by Canadian discount brokerages, Desjardins Online Brokerage has updated their standard commission pricing for the active trader-focused Disnat Direct service.

Instead of a standard rate of $19.95 for less active traders (i.e. those who traded less than the 10 trade per month threshold to qualify for lower commission pricing) Disnat Direct account holders can now qualify for the best commission rates of between $5 and $9.95 per trade. Standard options trading has also been adjusted to $1.25 per contract (down from $1.50) and the minimum per options trade is now $8.75.

The actual commission paid still depends on the combination of the volume of shares purchased/sold, the currency of the trade and the price of the stock. This means that there is still some extra effort involved to keep track of what a transaction will cost however for the less active traders, this is definitely a smaller price to pay than the higher upfront fee.

Some other fees were also announced to be changing. The platform fees for individuals not meeting the trading threshold look to be rising by between $5 and $8 depending on the platform (see table below). The new fees are scheduled to take effect on October 1st.

Trading Places

For many professional sports players, the off-season is where the major trades take place. This past week the Canadian discount brokerage space also saw a rather dramatic trade (of sorts) happen.

As mentioned in this article in the Globe and Mail (for subscribers only), the general manager of Desjardins Online Brokerage, Laurent Blanchard, will be leaving Desjardins and assuming the role of president of National Bank Direct Brokerage. Blanchard has been instrumental in working with Desjardins’ online brokerage unit since its early days and had been the general manager since 2012.

The rivalry between NBDB and Desjardins Online Brokerage is amicable but nonetheless present. Both are quite well known within the Quebec market and both have been especially close in the competition for the J.D. Power Investor Satisfaction Survey award over the past several award cycles.

As both firms will now be seeing transition at the top, it should be interesting to see where the competition between these online brokerages goes next.

Event Horizon

July 13

Scotia iTRADE – Trading Weekly Options As An Income Strategy with Sarah Potter

July 14

NBDB – Introduction to Technical Analysis : Supports and Resistances – [Fr]

Scotia iTRADE – Technical Analysis and Seasonal Investing with Horizons ETFs

TD Direct Investing – ETFs 101

July 15

TD Direct Investing – Investing Idea: An Introduction to REITs

Scotia iTRADE – Preparing for Rising Interest Rate Environments with iShares

July 16

TD Direct Investing – Introduction to Investing with Options

Scotia iTRADE – Risk Management Trading with the 1% Rule with AJ Monte

Discount Brokerage Tweets of the Week

This week on Twitter, Questrade continues to field requests for features while the larger bank-owned brokerages were being kept busy with client service questions. What was most interesting, however, were a couple of conversations between traders regarding the pricing and functionality of certain discount brokerages.

From the Forums

The hard sell

For most DIY investors it’s challenging enough to keep Mr. Market from taking back trading gains. In this post from reddit’s personal finance Canada subreddit, it was interesting to note the report of one large bank-owned brokerage deciding to use outbound sales calls to see if users of their discounted mutual funds would consider also using some premium products.

Son of a glitch

This past week has seen a major airline and a major stock exchange have technical difficulties cause some mayhem. For one user of the Financial Wisdom Forum, their online brokerage experience got a little nerve-wracking when they had login difficulties. Check out this post for a great example of the some of the stranger technical difficulties that can occur while trading online and on-the-go.

Into the Close

That’s a wrap for this week’s roundup. With so much going on in the markets (China, Grexits, interest rate hikes, computer glitches and more!) it’s enough to make anybody’s head spin. Thankfully with the sun shining for most Canadians this weekend, there are lots of fun ways to not have to worry about it (at least for a little while) starting first with the big opening to the Pan Am Games in Toronto. Good luck to all the athletes on and off the GTA highways this weekend!

Source: Twitter (@TorontoPolice)
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Discount Brokerage Weekly Roundup – July 3, 2015

With both Canada Day and Independence Day arriving at the beginning of July is the kind of month that should literally come in with a bang. Once the fireworks die down, however, it’s also the time when you can hear the crickets chirping. Oddly enough, this characterizes the Canadian discount brokerages heading into July where, at least on the surface, it seems things have quieted down some.

We continue with the summer edition of the roundup with a quick look at the new deals/promotions lineup for July as well as some interesting news from discount brokerages in the US in terms of trading activity and interesting initiatives for older clients. From there we take a look at upcoming investor education events as well as the week for Canadian discount brokerages on Twitter. Finally, we close out with investor chatter on the forums and an interesting video in honour of the leap second that made July that much later this year.

Deals on Tumbleweed

This past week, the latest selection of discount brokerage deals were posted and things are looking a little, um, spacious.

The downward trend in the number of deals continues heading into July with 14 offers distributed over seven different brokerages. Interestingly a significant chunk of those promotions (six) are from just one brokerage – Questrade.

While summer is typically less busy than earlier portions of the year (such as the lead up to the RSP contribution deadline), the forum chatter continues to show that money doesn’t sleep nor does it take a vacation for the summer. There are still plenty of people out there curious about brokerages and their offerings.

It’s an interesting strategy to pull back going into the summer, especially considering the competitive landscape.

One of the challenges many of the bank-owned brokerages have is how DIY investors will differentiate between these brokerages. In a forum thread on Canadian Money Forum earlier this week, a user by the name of CalgaryPotato nailed it by saying:

“Most of the big banks are pretty similar with their do it yourself investing accounts”

While the discount brokerage rankings might argue otherwise, there’s clearly a growing perception that a bank-owned online brokerage is a bank-owned online brokerage.

With that in mind, it was interesting to see brokerages such as BMO InvestorLine back away from the $100,000+ deposit segment for the moment by retiring a deal geared towards that group and replace that deal link on their homepage with one that describes all of the recent discount brokerage ranking awards they’ve won. That leaves Scotia iTrade as the sole bank-owned brokerage that has a (non-referral) promotion for that segment.

Compared to the past few months, there’s a definite dip in discount brokerage promotion activity at the outset of this month (and it is still early in this month). The fact, however, that a dozen or so brokerages have to find ways to get investors not only to know that they’re out there but also to get excited suggests (and perhaps necessitates) bigger, bolder moves on the promotion horizon.

Interactive Brokers on Data-Driven Roll

With the rollover into a new month, Interactive Brokers has once again published their trading stats for the previous month (June). While Interactive Brokers has historically provided a great deal of information about its trading activity, recently there have been additional disclosures that provide a very interesting window into the world of online trading in the US as well as the inner workings of a discount brokerage.

Although most of their metrics of interest are slightly off last month’s pace, one of the most interesting ones that is up is new accounts. Interactive Brokers gained 18% on a year over year basis and 1% on a month over month basis to come in at 310,000 accounts. While that might pale in comparison to the number of accounts at some of their bigger competitors, those accounts placed an average of 447 (annualized) trades per account which works out to about 37 trades per month. Also interesting to note is their average commission for stock trades is $2.66 with an average order size of 2795 shares. Clearly these aren’t the typical buy and hold types.

On a year over year basis, however, the figures are still fairly impressive: 21% higher trades cleared, 22% higher client equity and 23% higher margin loan balances.

While it is unfortunate for Canadian DIY investors that this kind of transparency and granularity doesn’t exist with discount brokerages here, what these numbers paint a picture of is an online brokerage that continues to grow and win new clients who are active traders.

Rankings and ratings may help the cause of getting attention, but these kinds of figures reflect individual traders voting with their dollars and they have been for some time now.

Protecting Seniors

An interesting article on the potential for fraud or mishandling of seniors’ funds via brokerage accounts highlights the current landscape facing older adult DIY investors in the US are facing.

The groundswell of an aging population combined with the proliferation of technology that makes financial transactions so effortless means that brokerages may find themselves in the position of having to police their client’s trading habits.

The demographic shift has not been lost on the discount brokerage (and wealth management more generally) industry.

About a year ago, BMO InvestorLine published results of a study they commissioned on the rise in wealth transfer that could accompany an aging population. More recently, BMO Wealth Management also published a series of papers on caring for aged parents as further recognition of the impact that aging individuals will have on the financial services requirements of older adults and those who care for them. Also, Canadian Securities Administrators have placed a special emphasis on educating and empowering individuals and especially seniors about recognizing fraudulent investment opportunities.

As more investors start aging, however, the questions being debated now in the US will inevitably come up regarding Canadian investors. Given the extent to which policies in the U.S. tend to shape decisions here in Canada, this will be an interesting issue to follow in the months to come.

Event Horizon

This upcoming week there are a flurry of investor education opportunities. If you’re looking to learn about options, the technical indicator MACD or some basics on options or short selling, check out one of the sessions below.

July 7

NBDB – Introduction to Technical Analysis: Trends – [Fr]

Scotia iTRADE – Trading Options in 3-D with Pro Market Advisors

TD Direct Investing – Chart Smart – Using the MACD

July 8

TD Direct Investing – Introduction to Investing in Options

July 9

TD Direct Investing – Understanding Margin & Short Selling

Discount Brokerage Tweets of the Week

This week on social media there were a number of interesting glitches on data feeds that got the attention of a few DIY investors. Mentioned this week are BMO InvestorLine, Questrade, Scotia iTrade, TD Direct Investing and Virtual Brokers.

From the forums

Dress Rehearsal

Diving into the world of investing head first is something most beginner DIY investors should probably rethink. On the other hand, wouldn’t it be nice to be a total expert before putting real money on the line? Of course folks have to take the plunge at some time, however it is always better to learn the ropes with a safety net in place. In this post from the reddit Personal Finance Canada section, there are a number of interesting suggestions put forward to one reddit user who wanted to get the hang of investing before playing for keeps.

Coming up Short

When it comes to trading online, there’s probably one law that every DIY investor (and perhaps discount brokerage too) should keep in mind: Murphy’s Law. Yes, a healthy dose of paranoia is always in order when considering just how many moving parts there are to executing a trade and just what can go wrong in the process. With that scary prelude out of the way, this post from the RedFlagDeals investing forum highlights what went wrong for one investor trying to go short.

Into the close

That’s a wrap for this week’s discount brokerage roundup. In case you missed it, June was extended by an extra second (the ‘leap second’) and if that doesn’t seem like much, here is something interesting to watch that showcases some spectacular leaps that can happen in much less than a second. Hope you find lots of great reasons to jump for joy this weekend!

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Discount Brokerage Weekly Roundup – June 19, 2015

As June quickly draws to an end, there is something that a lot of the little kids out there may be celebrating or dreading. No, it’s definitely not dinosaurs nor is it Donald Trump announcing his candidacy for US President. Nope, if there’s something that discount brokerages and students can commiserate about at this time of year it is getting report cards.

In this week’s roundup we take a look at some the interesting moves being made by two online brokerages in separate social media spaces. Following that we take a look at a recent report card on mobile trading platforms that was less than flattering for almost all Canadian discount brokerages. Of course, with all the fun that summer entails, we close out the roundup with a quick spin through the upcoming investor education events, discount brokerage tweets of the week (there are some interesting ones in there) and of course the forum chatter. Oh and a cute animal video just for kicks at the end.

The Missing Link

Over the past several weeks, we’ve been tracking some of the interesting developments of brokerages on social media. This past week, social media was again on the radar with two discount brokerages making some important moves on LinkedIn and YouTube respectively.

Earlier in the week, Scotia iTrade announced on LinkedIn that they are winding down their company page on July 6, 2015 and instead publishing company updates and content on their showcase page.

Screenshot from Scotia iTrade LinkedIn page.

For most self-directed investors, there will likely be no noticeable difference between the two however, for Scotia iTrade, the switch may be a lot more noticeable.

With three weeks to go before they switch over, the difference in follower count between the two different pages is almost ten-fold. Scotia iTrade’s soon to be shuttered company page has amassed 1767 followers (at the time of writing) whereas their new showcase page has 143. As a financial services provider, building a community of followers online, especially on social media, is no easy feat.

There are several active competitors on LinkedIn which each have similar content strategies. BMO Wealth Management, Credential, National Bank Direct Brokerage, Qtrade Financial and Questrade are also actively producing and sharing investor focused content. As in the ‘real world’ the social media space is a lot more crowded than it was just a few years ago.

I Screen, You Screen

The other online brokerage ramping up production of investor-focused content is Qtrade Investor. Just this week they officially launched a YouTube account and published their first video – an investor education piece on ‘how to diversify your portfolio beyond Canada.’

While Qtrade Investor is not the only discount brokerage to have a YouTube channel (see table below), their choice to focus on investor education out of the gate is an interesting one. Typically, other online brokerages have been using YouTube to share information about their services, post commercials and a few have actually provided education-only videos.

As with other social media sites, the table below shows that Questrade is out in front by a wide margin on YouTube. They have been on the medium longer, have a larger subscriber base and have more views that the other brokerages combined. That said, they have also produced and released more videos than their peers.

One of the most interesting observations for the data shown in the table is that for the amount of time and resources spent, there aren’t a lot of folks eagerly waiting and watching to see what a brokerage puts out next. And that’s basically the challenge confronting most brokerages when it comes to building content. Most discount brokerages, and financial services providers, are much better at focusing on providing brokerage services than they are at consistently producing content that investors are drawn to.

While Qtrade Investor is likely not the last to step into the social media pool, especially on YouTube, the challenge in front of them will to be to keep things fresh, frequent and most importantly, interesting.

Select Canadian Online Brokerages on YouTube
Brokerage Subscribers Total Views Year Joined # Videos
Questrade 2788 1140720 2007 150+
Scotia iTrade 312 61594 2010 39
Qtrade 2 14 2015 1
Virtual Brokers 70 40518 2010 24

A Platform for Change

This past week BMO InvestorLine’s mobile (i.e. tablet and smartphone) platforms were recognized by financial service rating firm Surviscor as being ‘the best’ amongst the Canadian discount brokerages.

As this was the first year this analysis was performed, it was interesting to note just how far apart first place was from everybody else.

BMO InvestorLine scored a 91% on the ranking whereas 2nd place Scotia iTrade was given a 57%. The company that fared the worst in this ranking was National Bank Direct Brokerage which Surviscor rated at 14%. In fact, the average score for the 11 discount brokerages measured worked out to 42% with a standard deviation of about 22%. For the stats keeners, there’s definitely something strange in the mobile trading neighbourhood.

Surviscor Canadian Discount Brokerage Mobile Trading Ratings
Brokerage iPhone iPad Android SmartPhone Android Tablet BlackBerry Touchscreen Score Rank
BMO InvestorLine B+ A B+ B+ B+ 91% 1
Scotia iTrade C+ B- C+ C+ C+ 57% 2
Questrade C+ C+ C+ B- C+ 54% 3
RBC Direct Investing C+ C+ C+ C+ C+ 51% 4
Qtrade Investor B- C+ B- D B- 49% 5
TD Direct Investing C+ C C C+ C 43% 6
CIBC Investor’s Edge C C C C C 33% 7
Credential Direct B- N/A C+ N/A C+ 25% 8
Virtual Brokers C- C- C- C- C- 25% 8
Desjardins Online Brokerage C+ D- C+ D C+ 21% 10
National Bank Direct Brokerage C D- C D C 14% 11
source: Surviscor

As we’ve mentioned on several occasions with all brokerage rankings and ratings, the importance of understanding what is being measured and the method by which it is measured is key to really understanding what these numbers mean.

In the case of these latest rankings & ratings, it is the presence or absence of certain features and functionality on smartphones and tablets. Exactly what those features were was not elaborated on in the press release or Surviscor site, however, the following “categories” were assessed:

  • Getting Connected
  • Application Design
  • Customer Support
  • Market Intelligence
  • Mobile Transactions
  • Mobile Resources

According to the figures presented, BMO InvestorLine’s app is somewhat of a black swan in the pond of other mobile trading apps. An alternative interpretation would be that there’s something particular about the test construction that is rendering these results. In fact, it may be a combination of the two.

BMO InvestorLine may have a feature-rich app, however individual investors may not consider having all of the features important – especially if the app becomes an intensive user of device resources (i.e. battery life). Surviscor’s assessment, on the other hand, bases the scoring of the mobile experience in large part on what’s available on a brokerage’s full website. As such, some brokerages may be designing their mobile experience to be intentionally different than the full web experience which would, in turn, help account for some of the differences observed between the mobile and desktop website.

In reality, some discount brokerages and DIY investors may believe there are certain features that are better suited to bigger screens. There is only so much filtering, charting or technical analysis one can effectively do with ones thumbs or with swiping. Thus, a distinction should be made between having a feature (which is a yes or no question) and having it work effectively (which is matter of degree).

While it is undeniable that many DIY investors are embracing the ability to stay on top of their investments ‘on the go’ or simply without having to power up a laptop or desktop, exactly what makes for a quality mobile experience, especially for DIY investors, is still a moving target.

Given how fast the definition and technologies associated with “mobile” are changing, it will likely be the responsiveness of brokerages’ IT departments as well as their websites or apps that determines who will lead the pack.

Event Horizon

June 23

Scotia iTRADE – Introduction to Bonds with Scotia McLeod

TD Direct Investing – Understanding Margin & Short Selling

TD Direct Investing – Generating Income in a Low Rate Environment

June 24

Scotia iTRADE – Options Fundamentals with Montreal Exchange

June 25

TD Direct Investing – Introduction to Technical Analysis

#DiscountBrokerage Tweets of the Week

The chatter about and to discount brokerages on Twitter this week featured BMO InvestorLine, Questrade, RBC Direct Investing, Scotia iTrade and brief mention of TD Direct Investing.

From the Forums

Taking an Interest in GICs

With talks of interest rates rising on the horizon, it will be ‘interesting’ to see if/when more folks start asking about GICs. In this post from RedFlagDeals’ forum, one user wants to find out whether a big bank-owned online brokerage or independent brokerage offers direct access.

For Better or Worse

Now that summer is here, RRSP season may be in the rear view mirror but for a lot of folks it also happens to be ‘wedding season’. In this post, from Canadian Money Forum, spousal RRSP contributions are the focal point at one bank-owned online brokerage.

Into the Close

That’s a wrap for this week’s roundup. For all the dads out there, here’s to a very happy Father’s day filled with tools, ties, socks and stocks! (ok maybe not that last one). Have a great weekend – although perhaps not as great as this little rascal.

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Discount Brokerage Weekly Roundup – June 12, 2015

It happened in Toronto. It happened in Vancouver. Transit ground to a halt at the worst possible moments. And, if you read the tweets and forum posts from active investors and traders, it occasionally happens to discount brokerages, major data providers and stock exchanges across the information superhighway. When technology that carries people or financial information goes offline, it seems that the new normal is for people to turn online (are you taking notes #SnoopforCEO?). For many discount brokerages, the issue of how to navigate this tech-fueled new normal filled with hyperconnected ‘millennials’ as well as their expectations of how things ought to run is an all too familiar challenge. Alas, there is no turning back.

In this week’s roundup we try to get things ‘on track’ by first looking at one discount brokerage-sponsored investor challenge that wrapped up and what it means for investors looking to learn about investing. Next, we take a look at an important announcement from the Federal Government on their strategy for improving financial literacy. Following that, we report on the quick scan of the small screen that yielded some interesting segments on ‘guys chatting about investing’ followed by the conversations about DIY investing in the discount brokerage tweets of the week. Finally we close out with the upcoming investor education events, forum chatter and one very cool internet video that highlights the importance of paying attention to the big picture.

And it was supposed to be a slow month…

It Pays to Play

Successfully timing the market has always been met with some degree of skepticism. That’s real life. Still it is a fascinating exercise to observe what happens when contestants using ‘virtual money’ are challenged to perform as best as they can.

This past week, the “Biggest Winner 5” trading competition from Horizons ETFs and National Bank Direct Brokerage announced that Calgarian Daniel Tsang was crowned the champ for netting a 20.99% return over the course of the six-week contest. First prize in this ETF-only virtual stock market challenge was $7,500 followed by the second prize of $2,500 which went to Nancy Kelly of Cobourg, Ontario who reached a healthy 18.68% return.

So what was the secret to scoring the quick wins? According to Howard Atkinson, President of Horizons ETFs, it was the “effective use of leveraged ETFs.” Indeed, when the focus is short term, it is the combination of luck, timing, volatility and leverage that many professional traders recognize govern their fortunes. Of course it also helped that junior’s university fund was not on the line when making some of the big directional bets on oil and natural gas that provided a large portion of the results.

While the prize money and recognition were potent incentives, it was great to see that over 1600 individuals took part, including a continuing trend of increased participation by women investors.

It would have been interesting to see what the average performance was over that time, especially considering the performance of various benchmark indices, as well as what the distribution was of the 20,000 or so trades that were made.

Regardless of the outcome, the good news for DIY investors is that paper trading is a great way to learn and practice different investment strategies. Several discount brokerages such as Interactive Brokers, RBC Direct Investing, and TD Direct Investing (specifically the US Trading Platform aka ThinkOrSwim) even offer practice accounts which can be used to test and learn. That said, the Biggest Winner contest offers up a number of cash prizes which just makes getting it right that much more fun. Congrats to the winners and participants!

Making Financial Literacy Count With #CountMeInCA

This past week the Federal Government formally announced the launch of their National Strategy for Financial Literacy called “Count Me In”.

As has increasingly been the case since 2009, resources are continuing to be committed to improving financial literacy across the general population and specifically to vulnerable populations. While the formal commitment by government agencies has taken time to mobilize, other organizations and individuals have been filling the void.

Fortunately many of the resources have been organized into a database on financial literacy (explained also in the following video).

For quite some time and to this day, however, DIY investors have relied upon Canadian investor forums such as the personal finance section of Reddit, RedFlagDeals, Canadian Investor Forum or the Financial Wisdom Forum as well as sites such as GetSmarterAboutMoney.ca and a host of independent personal finance writers to help navigate the world of investing online.

Discount brokerages have also recognized the need and opportunity in providing investor education on specific areas of interest related to investing. Four of the biggest providers of investor education include Desjardins Online Brokerage, National Bank Direct Brokerage, Scotia iTrade and TD Direct Investing.

Fortunately, the number of resources for learning about investing (as a component to personal financial literacy) continues to grow and with the appointment of a Financial Literacy Leader and the formation of a concrete strategy, it appears even more resources will be mobilized and coordinated to bring the awareness of personal financial literacy into the everyday purview of most Canadians.

Given the high levels of personal debt, irrational housing prices and demographical shifts there is clearly a need and urgency to better educate and empower Canadians to manage their finances wisely.

It comes as little surprise, therefore, that the three primary goals of the National Strategy on Financial Literacy are to help Canadians:

  1. Manage money & debt wisely
  2. Plan & save for the future
  3. Prevent & protect against fraud and financial abuse

For those beginning on their journey into learning about personal finance and investing, or for those who get asked by beginners about some good resources, it is encouraging that in addition to the good books about investing, forums and websites that there are now going to be some better resources to turn to.

To keep track of the latest developments of the “Count me in” strategy, follow the hashtag #CountMeInCA or visit the Financial Consumer Agency of Canada website here.

Channel Surfing

There’s just something about two guys talking about investing – or so it seems that it was the case with a pair of video clips that caught our attention.

The first is a commercial for Interactive Brokers’ new ‘marketplace’ which we mentioned in last week’s roundup. In the commercial there’s an amusingly scenic moment of two guys fishing in a river set to some wholesome ‘folky’ music.

Getting back to the theme of financial literacy, the second clip is from a BNN interview featuring Doce Tomic, President & CEO, Credential Financial discussing financial literacy tips for millennials.

Over the past few years and increasingly over the last few months it seems that “millennials” has become the buzzword of choice to describe a new category of being. Like the Gen Y’s, Gen X’s and Baby Boomers, the millennials have become a talking point, especially in the world of finance, where there has been lots of energy expended trying to understand, cater to and capture the business of this demographic cohort.

The Google Trends graph below shows just how ‘hot’ a topic millennials have become. Interestingly, the stock charts of several companies that cater well to this demographic also seem to follow a similar trend, which may help explain why the discount brokerages and financial services firms are hoping to find the right recipe for connecting to this group very quickly.

#DiscountBrokerage Tweets of the Week

In this week’s tweets, there was an interesting shift in the pattern of the past few weeks. While there were definitely a handful of questions relating to customer service issues, there were a number of not so flattering conversations that Scotia iTrade found themselves the center of. While the social media representative handled the exchanges professionally, it was revealing to see what some of the concerns were with this online brokerage.

Event Horizon

Here are the upcoming investor education seminars and webinars for the week ahead:

June 16

Scotia iTRADE – Volatility – Friend or Foe with Pro Market Advisors

June 17

TD Direct Investing – Technical Analysis – Candlestick Charting

TD Direct Investing – Introduction to Fundamental Analysis

Scotia iTRADE – Building Diversified Portfolios Using ETFs with iShares

June 18

TD Direct Investing – Introduction to Investing in Options

Scotia iTRADE – Charts and Patterns 101

From the Forums

Shorts Weather

In this post from the Canadian Money Forum, one user highlights some of the challenges encountered with going short on a stock at Scotia iTrade. Check out what the community had to say about some of the other alternative discount brokerages mentioned and why having a brokerage that has a big inventory can make the difference on a quick trade.

Interesting Gambit

One of the more popular techniques for exchanging Canadian funds into US funds is via Norbert’s Gambit. This past week there were a couple of interesting threads concerning the importance of keeping track of any interest charges that may be incurred as well as the shift that might be taking place with one bank-owned brokerage now potentially charging a little more to get that done.

Into the Close

That does it for this edition of the roundup. Hard to believe that the middle of June is almost here but with it come the (gasp) finale of Game of Thrones for another season. Of course, there’s lots to do outside but for those that would rather watch other people outside do entertaining things, this tribute to television theme songs is good training for that day you end up on Jeopardy. Have a great weekend!

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Discount Brokerage Weekly Roundup – June 5, 2015

Even though summer is technically still coming, for Game of Thrones fans, winter looks like it’s finally arrived. While Canadian discount brokerages may not have to worry about a horde of the undead or flying dragons, they do have to keep an eye out on each other.

In this week’s discount brokerage roundup, we take a look at the latest battleground for brokerages – deals and promotions – and the newest challenger that has stepped on the field. Next we take an in-depth look at one independent online brokerage that happens to be crushing their account growth numbers and what that might mean for DIY investors in Canada. Following the trend from the last several roundups, we’ll take a look at the latest discount brokerage tweets to see what was lighting up social media before closing out with upcoming investor education events and some enlightening chatter from the investor forums.

Deals updates

With a new month, it’s that time again to check on the deals and promotions being offered by Canadian discount brokerages. While the deal activity seemed like it was going to quiet down heading into summer, June was barely a few days old when the deals and promotions space took an interesting turn.

At the outset of the month there were 15 deals we spotted, with one new offer by Questrade included in that count. By the end of the first week, however, two more deals had joined the list: one from Questrade as well as one from HSBC InvestDirect.

Those offering promotions included the ‘usual suspects’ of Questrade, Scotia iTrade, BMO InvestorLine and Desjardins Online Brokerage, however it was HSBC InvestDirect’s offer that got our attention.

The deal itself is not groundbreaking – it is 30 commission-free (equity) trades that are good for 60 days, something that is similar to what other brokerages have offered. What is noteworthy is the lack of required minimum deposit to qualify and the fact that HSBC InvestDirect has decided run this offer from June through to the end of August as a “summer” promotion, perhaps hinting at deals that may be coming in future seasons.

In terms of activity level for promotions, HSBC InvestDirect has run/advertised very few. Aside from offers that were timed around their win of various Dalbar client service awards, HSBC InvestDirect has largely been on the sidelines with promotions. Clearly something has prompted a change.

Alongside the launch of HSBC InvestDirect’s latest promotion was Questrade’s revival of their Amazon gift certificate offer. Questrade’s addition of yet another promotion means that of all the Canadian brokerages, Questrade is offering the largest number of promotions (7 out 17 that we’re tracking).

Another noteworthy observation was that Virtual Brokers extended their commission-free trade offer until the end of June.

June should prove to be an exciting moment for promotions/deals as just about half of the 17 offers have expiry dates scheduled for the end of this month. If the rest of this month continues at this pace, it seems like a little bit of volatility might be in order – something that may play out in the favour of DIY investors in the market for an online trading account. Stay tuned.

IBKR kicking butt and taking names

As we do from time to time, we keep an eye out as to what is happening in the US space and in particular with what’s happening at Interactive Brokers (since they have a Canadian subsidiary as well).

This past week, it was interesting to see what the US discount brokerages were up to at the recent Sandler O’Neill Global Exchange and Brokerage Conference that took place in New York.

Although there were interesting presentations from E*Trade and TD Ameritrade, as well as some pot shots at the Toronto Maple Leafs making the Stanley Cup finals (apparently even Americans know that factoid about Canada even if they don’t really know our geography ) it was the presentation from Interactive Brokers’ founder & CEO Thomas Peterffy that caught our attention. For those diehard fans/followers of the online brokerage space – the session can be accessed here.

One of the biggest takeaways is that Interactive Brokers has experienced a blistering pace of account and asset growth, and, show no real signs of slowing down. According to their CEO it was a series of long-term commitments to automation that have enabled them to compete so effectively on pricing. Their ambitions extend well beyond the US markets and so it is interesting to see the moves taking place within Canada that will enable them to compete against brokerages here.

Coinciding with their appearance at the Sandler O’Neill Global Exchange and Brokerage Conference was the announcement by Interactive Brokers of the launch of their investor marketplace – something that shows once again that they are looking ahead of the curve. In case you missed it, here’s a commercial from earlier this year, which comically points out how this new feature would speak to investors or advisors.

While it is hard to know what from the US will make its way to Canadian DIY investors, it’s hard to argue with the growth figures of Interactive Brokers.

Within Canada, it appears that Interactive Brokers is chipping away at the DIY investor market. With their recent introduction of registered accounts, it should be interesting to see them start to appear on the major discount brokerage rankings now that this qualifying feature is in place.

On the horizon, however, their new marketplace may offer an integrated way to access advisors, or even robo-advisors, that have captured so much interest of late. All this while staying under the “Interactive Brokers” umbrella.

As the momentum with Interactive Brokers continues to pick up in the US, there is a strong chance that Canadians will start to hear and see them being talked about if not through commercials, then by the growing crowd of traders from the US and internationally who are clearly flocking to Interactive Brokers.

#DiscountBrokerage Tweets of the Week

In this week’s discount brokerage tweets of the week, there were an assortment of vents, apologies and pointed remarks that make the world of DIY investing such a colourful one to follow.

As has been the case over the past several weeks, Questrade continues to be the most active on Twitter amongst the Canadian discount brokerages. Other online brokerages may be online, but as the tweets below show, few of them capture much attention other than when things go awry for clients.

 

Event Horizon

June 8

Scotia iTRADE – Trading Psychology Part 2 with Stefanie Kammerman

June 9

Scotia iTRADE – Sources of Income and Yield Using ETFs with Horizons ETFs

TD Direct Investing – Introduction to Investing in Options

June 10

TD Direct Investing – Introduction to Investing

TD Direct Investing – Options as an Income Strategy

NBDB – International Investing – [Fr]

June 11

TD Direct Investing – Introduction to Technical Analysis 

From the Forums

When is a TFSA not a TFSA

From time to time there have been stories of fabled, almost mythological, balances of TFSAs. The news that the CRA is looking into a limited number of individuals’ “very high” TFSA balances is concerning to DIY investors on a number of levels. In this post from the reddit Personal Finance Canada section, a fascinating discussion of how these balances may have gotten so big and what the CRA may or may not be able to do highlights how important getting clarity on the rules about TFSAs are.

Breaking up is Easy to Do

For many Canadian investors, having a financial advisor is one way to help manage and navigate the complex world of investments and investment products. For the DIY investor crowd, however, there is very little love for the ‘typical’ financial advisory. In this post from the Canadian Money Forum, readers chime in on one individual’s question as to how to go about breaking things of with an advisor they’re just not that into.

Questrade VS RBC Direct Investing

An independent brokerage that advertises low commission prices or a big bank that kicked of the ‘fee-asco’ of falling commission rates. It’s a question many investors wrestle with. In this post from reddit’s personal finance Canada section, there was an interesting debate about the merits and drawbacks of picking one brokerage over the other.

Into the Close

That does it for this week’s roundup. Whether it’s Game of Thrones, the Stanley Cup or a frosty beverage on a patio (or all of the above), however the ice makes its way into your weekend, we hope it keeps you cool!

For those of us who hate to pay fees for seemingly small requests, this is an entertaining real-life example of some batman like drive and applied math in action to beat one airline’s administrative fees.

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Discount Brokerage Weekly Roundup – May 22, 2015

Like some kind of odd celestial alignment, the convergence of shorts weather on a short work week just as the S&P 500 hits a new high and causes yet another squeeze on the shorts. Yup, seems like shorts are the theme for this week’s roundup, and as such, this discount brokerage roundup will try to, um, keep it short.

In this edition of the roundup we take a look at the latest deal launched by one bank-owned online brokerage and why it might be a signal for the upcoming summer discount brokerage deals season. Next we gaze into the tea leaves with some interesting signals from one brokerage’s activity patterns as well as look at one looming threat to brokerages that may turn out to be more sizzle than steak. We’ll also take a look at what the chatter about discount brokerages was like on social media with our new #TweetsOfTheWeek. Finally we’ll take a look at the upcoming investor education events and some very interesting chatter from the investor forums.

Cash (or Free Trade) Me if You Can

Just in time for summer, Scotia iTrade has resurrected their 1,000 free trade/$1,000 cash back offer once again albeit with several twists.

When it first launched in January of 2015, it was the only offer that offered a specific promotion for deposits over $500,000 as well as the largest headline number for a cash back or free trade promotion. At the time the offer consisted of either cash back or commission free trades, and included a trial of the Scotia iTrade platform FlightDesk.

In its latest incarnation, the $1,000 cash back or 1,000 free trade offer now includes a 6 month subscription to the US based KeeneOnTheMarket.com trade alert service for individuals who deposit more than $100,000. As was the case in January, it appears that Scotia iTrade is looking to distinguish its promotions from other brokerages with bigger, bolder numbers of deposits sizes, free trades or cash back and now a stockpicker’s subscription service.

Interestingly, through the remainder of May, they will have several concurrent offers which could offer deal hunters a narrow window to pick the best one of the bunch.

Another noteworthy component to the latest deal from Scotia iTrade is that the offer expires well into September. Many other offers from bank-owned brokerages aren’t set to go that long but it looks like Scotia iTrade has firmly placed their bets on this flagship offer for the rest of the summer.

Finally, there is clearly an interesting spin on this offer that is geared towards active traders of US equities/options. Scotia iTrade continues to court this highly prized segment with their $4.99 active trader commission pricing, platform, service offering and now promotions.

It will be interesting to see if any other bank-owned online brokerage steps up to challenge Scotia iTrade in the active trader segment. The recent fee hikes from the major Canadian banks likely saw long-term investment accounts take some collateral damage with disgruntled clients jumping ship. The priority will likely therefore be on winning back those clients with incentives rather than chasing active traders. Whatever the case, Scotia iTrade has opted step into summer swinging with big headlines that other bank-owned brokerages will have to seriously ante up to beat. Should be an interesting summer.

Starting to Sizzle

Between the major news announcements, there are always some minor blips on the radar that indicate that the Canadian online brokerages are working away on something.

One bank-owned brokerage in particular seems to be finding its way back on to the radar more regularly. CIBC Investor’s Edge has been mentioned several times in recent roundups and stories for rolling out new pricing, promotions and seminars this year – something that was distinctly different from most of 2014. This past week they have yet again changed their homepage imaging and seized upon a timely trend by pitching visitors to their website the benefits of TFSA – something that up until now only Questrade had really picked up the ball on.

source: screenshot from CIBC Investor’s Edge Homepage

While it is still early, it appears that there is a trend amongst Canadian discount brokerages to increasingly focus on the content and design of their sites.

Recently CIBC Investor’s Edge and BMO InvestorLine have been building their respective benches in these areas by looking to hire designers and user experience specialists. BMO InvestorLine recently rolled out their new website front-end along with Desjardins Online Brokerage earlier this year and we’ve had confirmation from several other brokerages they are poised to do the same within the next 6 months. CIBC Investor’s Edge looks like they might be gearing up for some substantial design changes in the not too distant future.

CIBC Investor’s Edge bold commission pricing drop has put them back into minds of many DIY investors as well as their competitors, however their most recent maneuvers might signal that competition on user experience between bank-owned brokerages is going to get even hotter.

Don’t Believe the Hype?

For many DIY investors, the recent spike in attention given to robo-advisors has got more than a few feathers ruffled.

In an interesting story from International Adviser, however, one of the groups singled out as being threatened by the robo-advisor trend may breathe a sigh of relief. The reason: profitability.

While there has been lots of interest on the part of retail investors in these robo-advisors, the article points out the numerous challenges to successfully growing to scale where they can threaten the discount brokerage space. The point, as it is in many industries, is that only the strong will end up surviving. It’s a familiar refrain for discount brokerages who know all too well that success hinges on having a critical mass of clients AND being able to stick out from their competitors. For robo-advisors, the fight is only just beginning and it’s likely to expect discount brokerages won’t be letting them advance unchallenged for much longer.

#DiscountBrokerage Tweets of the Week

This week it looks like Twitter users from Questrade were again having trouble sourcing stocks to short. Given that certain markets are pushing all-time highs, it’s interesting to see a) that so many traders are attempting shorts and b) that Questrade users are encountering challenges shorting. While tweets to and from Questrade dominated the news feed, one user vented about the customer service experience at Virtual Brokers – something that has also been getting attention from other users posting to our forum.

Event Horizon

May 26

NBDB – Introduction to Call Options – [Fr]

TD Direct Investing – Understanding Margin & Short Selling – [Mandarin]

Scotia iTRADE – Options Trading For Beginners with Sarah Potter

May 27

Scotia iTRADE – Options Trading – Building A Collar with Montreal Exchange

TD Direct Investing – Advanced Options

TD Direct Investing – Understanding Margin & Short Selling

From the Forums

Keeping count

There are many reasons individuals may decide to open multiple accounts with discount brokerages. Chief among them are risk management (think eggs in baskets), CIPF protection and special features, one of the drawbacks is keeping them all straight. In this post from the financial wisdom forum, it was pretty interesting to see just how many discount brokerage and banking accounts certain individuals admitted to using.

Small Potatoes

It’s becoming trickier for smaller, inactive investors to park their money at a discount brokerage. In this post from Red Flag Deals, the inactivity fee took one investor at Qtrade by surprise. Check out what the community had to say about their options.

At the Close

That’s a wrap for this week. Remember that US markets will be closed on Monday for Memorial Day so for the US traders it will be a short week. Wherever you happen to be this weekend, hopefully you are blessed with great weather or some wildly entertaining stuff to watch. To help launch you into the weekend on a high note, here’s more great footage of people flying – a Canadian in shorts no less!

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Discount Brokerage Weekly Roundup – May 15, 2015

source: geekalerts.com

When it comes to DIY investing – or any investing, emotion is a lever best-not pulled. For discount brokerages, however, being boring doesn’t get attention and not getting attention means being left out.

In this long weekend edition of the roundup, we’re excited to add a new feature into the mix. First, we take a look at the latest attempts by discount brokerages to get attention, then highlight an upcoming learning event. Next, we roll out something new that will shine a light on something lots of people want to know about Canadian discount brokerages. Following our surprise new piece we’ll take a look at the upcoming investor education events and close out with the investor chatter from the forums and very cool video for the rocketeer enthusiasts.

A better toaster

What happens to an industry where it’s tough to tell one provider apart from another? Toss in a toaster.

Odd as it may sound, toasters and financial services go way back. The idea of tossing in a free toaster to attract new bank clients was popular hook in the 1950’s and, while the idea of attaching an incentive to draw in new business is not new, it’s interesting to see what discount brokerages and banks are doing in 2015.

This past week, promotional juggernaut Questrade launched their latest deal of advertising an Apple Watch to individuals signing up for an account and depositing at least $100,000. For those keeping score at home, this brings the consecutive mentions of the Apple Watch in the weekly roundup to three and the number of deals Questrade runs to more than everybody else.

Of course, digging deeper into the fine print, it appears the offer is actually not for an Apple watch, but rather for an Apple Store gift card worth $500.00. A quick check of the Apple store found the following models of Apple watches:

  • Apple Watch Sport (ranges between $449 and $519 +tax)
  • Apple Watch (ranges between $699 and $1459 +tax)
  • Apple Watch Edition (ranges between $13,000 and $22,000 +tax)

Thus, the clever marketers at Questrade have managed to grab headlines and attention with an item that ranges in price between $449 and $22,000, but really refers to the most basic (but still cool) model of the Apple Watch Sport.

Questrade has largely gone unchallenged by other Canadian online brokerages in offering up Apple products as incentives for new account openings. Recall that Questrade has run with the iPad mini promotion multiple times over the past two years.

In the financial services market, and in the online discount brokerage segment in particular, this is one of those moments where someone has done their marketing homework on “differentiation” and the “halo effect”. So what has Questrade done to make themselves stand out?

The answer is just about everything, and it seems to be working.

Did we notice? (Yep); are we talking about it here (earned media: check), are other DIY investors are talking about it on forums and social media? (more earned media: check) and of course co-branding an online brokerage alongside a brand like Apple with their most buzzworthy product right now probably doesn’t hurt either.

Relative to the other Canadian discount brokerages, Questrade appears to be putting on a little bit of a marketing clinic online. Although the tactics aren’t necessarily new, they are nonetheless effective in attracting attention and, importantly, appealing to emotion.

For DIY investors, especially those looking for online trading accounts for the first time, there is only going to be more marketing coming their way. Competition between brokerages in Canada is fierce and if one brokerage is doing something right, others are sure to follow suit. Where could it end? A look at the Chinese banking sector’s approach is a window into how extreme this incentive game gets with iPhone 6s and Mercedes’ being offered.

It’s important, therefore, to see past the incentives and to reign in the emotion. The most important component of picking a service provider is whether they are a good fit. A good set of questions to always keep asking are:

  1. Do they do what you need them to do?
  2. How well do they do it?
  3. How much are they charging for it?

Through the marketing efforts, all businesses (big and small) hope that a promotion or deal can change how you value their offering. That’s simply a business reality for buyers and sellers.

That said, most folks probably need another screen to look at as much as they need another toaster. The art of marketing, however, is more about want rather than need. And, it is exactly why DIY investors should know what they need before they get something they don’t want.

Options Education Day Returns to Vancouver

If you happen to be in Vancouver at the end of May and are interested in learning about options, the Options Education Day tour is coming to town once again.

The topics on the agenda for this session include:

  • Options fundamentals
  • Four ways to hedge against risk
  • Managing the effects of volatility
  • Understanding put-call parity
  • The road ahead: What’s next for Canadian investors?

A number of discount brokerages will also be on hand as sponsors for this event including:

This event typically sells out ahead of the session so be sure to RSVP early to avoid disappointment. The cost for the day-long session is $45 and includes breakfast, lunch and training materials. Click the following link for more information on Options Education Day Vancouver.

Discount Brokerage Tweets of the Week

As part of our ongoing effort to bring together the fuller picture of what’s going on in and around the Canadian discount brokerage landscape, we are excited to (re)release the discount brokerage tweets of the week.

The format of the tweets of the week has changed somewhat from its earlier incarnation. Instead of featuring what online brokerages themselves are saying, we’ve included the conversations, comments and perspectives of both DIY investors and the brokerages who are on Twitter. The brokerages may be on Twitter directly or as part of their parent company’s customer service team. Several of the bank owned brokerages, in particular TD Direct Investing, RBC Direct Investing, BMO InvestorLine and CIBC Investor’s Edge, handle incoming tweets via their parent bank Twitter accounts.

In this first week, it was interesting to see that brokerages big and small encounter issues with account opening and delays getting things up and running. Of course, what’s equally informative is how fast and how helpful client service teams are on Twitter. This week there are tweets about or to the following discount brokerages:

  • BMO InvestorLine
  • Credential Direct
  • Questrade
  • RBC Direct Investing
  • Scotia iTrade
  • TD Direct Investing

Noticeably absent from the list this week was Virtual Brokers, who’ve been quiet on Twitter since early April.

So, as another first we’ve brought to the Canadian discount brokerage space, here are the curated discount brokerage tweets of the week. #Enjoy!

Event Horizon

May 19

NBDB – Take Advantage of Margin Accounts – [Fr]

Scotia iTRADE – How And When To Use The MACD with Pro Market Adivsors

May 20

TD Direct Investing – Technical Analysis – Advanced Indicators

TD Direct Investing – Introduction to Technical Analysis

TD Direct Investing – Introduction to Investing in Options

TD Direct Investing – Market Outlook

Scotia iTRADE – Getting Started With ETFs with iShares

May 21

TD Direct Investing – Introduction to Fixed Income

Scotia iTRADE – Short Selling with AJ Monte

TD Direct Investing – Introduction to Fundamental Analysis

May 22

Scotia iTRADE – Trading Psychology Part 1 with Stefanie Kammerman

From the Forums

Getting the Party Started Right

Opening an online trading account is still a somewhat involved process. In this post from reddit’s Personal Finance Canada section, one user asks about the initial funding requirements for a Questrade account. Fortunately both the community and a Questrade rep provide a detailed answer.

Leftovers

With many parties slated to take place this Victoria Day weekend, there’s the fun part and then there’s what happens after the party’s over. For most there’s some cleanup involved. In this post, again from reddit’s Personal Finance Canada section, when the party was over for one stock in an investors portfolio there were still two laggard shares left in their account. Check out how the community explained the process of getting rid of them.

Discount on the Potato

It seems fitting heading into a long weekend that the infamous ‘take it easy’ approach of the Canadian couch potato portfolio strategy came up this past week. Specifically, in the RedFlagDeals investing forum, one user asked about whether the couch potato portfolio is something that can be used with Virtual Brokers.

The Closing Bell

That does it for this edition of the weekly roundup. A quick reminder that Canadian markets will be closed on Monday for Victoria Day and will reopen for Tuesday. Here’s some spectacular footage of some awesome technology to propel you into the weekend – cue the rocketman! Have a safe and enjoyable holiday weekend.

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Discount Brokerage Weekly Roundup – May 8, 2015

What a week of wacky data to digest. From May the Fourth being with us, to Cinco de Mayo to the NDP landslide win in Alberta to Deflategate to stocks being called out for being overvalued and the markets going up anyway. It was definitely one of those stranger-than-fiction-headscratchers kind of weeks. Not to be left out, Canadian discount brokerages and DIY investors have a bit of headscratching to do with the release of yet another discount brokerage ranking.

In this week’s roundup, we take a look at the latest MoneySense discount brokerage rankings and attempt to glean what they mean. Next, we shine a light on one discount brokerage that is springing to life with more activity. From there we take a look at some notable developments in the US that are bound to have Canadian discount brokerages starting to be a little bit nervous and giving DIY investors a reason to cheer. As usual, we’ll close out with the upcoming investor education events and some interesting chatter from the forums, including the whisper of a new deal from one bank-owned brokerage.

Because this week’s roundup is a bit longer than usual, here’s the TL;DR version up top:

  • There were lots of discount brokerages crowned as the best discount brokerage in this year’s MoneySense discount brokerage rankings. With so many rankings and ratings providing conflicting signals, consumers should take the title of ‘best discount brokerage’ or ‘best online brokerage’ with several grains of salt.
  • CIBC Investor’s Edge is more active this year. It will be interesting to see what’s coming as they are definitely working on doing more for DIY investors than years past.
  • Commission-free trading might be coming to Canada. US discount brokerage Robinhood just announced they’re going global meaning it’s likely not a question of if so much as when commission-free trading shows up in Canada.

The Latest Best Discount Brokerage Rankings

While the theme song ‘Everything is Awesome’ is both awesome and catchy, it’s not that useful as a decision making tool – especially when trying to choose an online brokerage.

With rankings from the Globe and Mail, JD Power, Dalbar, Surviscor, Morningstar and MoneySense, there is no shortage of ranking information out there. For many DIY investors, and even for discount brokerages too, when so many Canadian discount brokerages are being crowned the ‘best discount brokerage’ the meaning of the word best really becomes challenging to pin down.

This week MoneySense’s latest discount brokerage rankings were spotted, and in them were 7 different winners of different categories, including the title of best overall (the bestest?).

Here are the results according to their latest rankings:

Best Online Brokerage Category Winner Runner Up
Ease of Use BMO InvestorLine Scotia iTRADE
Customer Service Scotia iTRADE Qtrade Investor
Fees and Commissions CIBC Investor’s Edge Credential Direct
Account Information & Reporting BMO InvestorLine Questrade
Educational Resources Desjardins Online Brokerage TD Direct Investing
Market Intelligence TD Direct Investing Scotia iTRADE
Best Overall BMO InvestorLine Scotia iTRADE
source: Surviscor

For consumers, it is important to take a step back and put the results into context to understand what the title of ‘best discount brokerage’ really means from the source that is using it.

One of the first things that stands out with these results is the weight/preference on certain categories.

In this latest series of results, BMO InvestorLine was declared as ‘best overall’ with Scotia iTrade coming in as runner up overall. Looking more closely, BMO InvestorLine took first place in “ease of use” and “Account Information and Reporting”. Scotia iTrade, ranked best at customer service and runner up with “ease of use” and “market intelligence”.

Based on these results, the best overall means that ease of use and account information would likely have to far outweigh customer service and market intelligence, and each of those would have to outweigh the importance of fees and commissions, and educational resources.

Without getting into too much of the logic puzzle, the takeaway is that DIY investors will attach different priorities to different categories as well as define those categories differently than those who composed the rankings. Who decides, after all, what ‘ease of use’ quantifiably means, how to measure it and how much a percentage point of ‘ease of useness’ really amounts to for every DIY investor?

Another thing for consumers to keep in mind is how quickly the rankings can and do change.

Data for the MoneySense rankings were gathered in March and April of 2015 by Surviscor and so it is interesting to compare the customer service category scores in the MoneySense ranking against the results published earlier this year in the customer assessment to see the differences.

In the 2014 Canadian Brokerage Service Level Rankings, Credential Direct (91%) was awarded the top honours followed by Qtrade Investor (90%) and Desjardins Online Brokerage (73%). In that ranking BMO InvestorLine was ranked 8th (with a score of 31%) and Scotia iTrade 4th (with a score of 71%). It is therefore interesting to see Scotia iTrade’s customer service response score in the latest MoneySense rankings surpass Desjardins Online Brokerage, Qtrade Investor AND Credential Direct in that narrow window of time.

And then there are the surprises.

One of the biggest of those surprises was in the cost category in which CIBC Investor’s Edge took top spot followed by Credential Direct. Neither Virtual Brokers, Questrade, Qtrade nor Interactive Brokers appeared at the top of this category which again highlights the importance of the way ‘cost’ is measured and calculated when determining the “winners”.

For DIY investors looking for an online trading account, the bottom line is to take the term “best discount brokerage” with a grain (or several) of salt. There are many different ways to define and measure what that actually means. While the rankings themselves might have a systematic and defined process, the details and motives of that process are what’s most important in establishing the degree to which they are reliable and, ultimately, meaningful.

Where There’s Smoke

After a long winter (especially for the folks east of the Rockies), it’s reassuring to see signs of spring. It’s a fitting metaphor for one bank-owned discount brokerage that may be sprouting back to life. Although it is not a big move, the announcement on CIBC Investor’s Edge’s website about an upcoming webinar from Morningstar Research is the kind of thing that signals that something different is happening.

To put it into context, after a relatively quiet first portion of 2014, CIBC Investor’s Edge has been steadily and more frequently surfacing with pricing changes or promotions.

No doubt they have started to see the increased interest in their online brokerage offering ever since they dropped their standard commission price to one of the lowest amongst their bank-owned peers. That was October. Earlier this year they ran a promotion for commission-free ETF trading. Now they are offering up an investor education webinar.

Even though it is too soon to draw definitive conclusions, it is becoming clear that CIBC Investor’s Edge is stirring. And, that being the case, we won’t be the only ones watching to see what’s going to come next.

Commission-Free Trading in Canada?

For Canadian DIY investors, the entry of online brokerages such as Questrade, Interactive Brokers and Virtual Brokers (and TradeFreedom way back when) offered the first glimpse of a world in which DIY investing could happen at an affordable level.

Fast forward to 2015 and the new normal is a world in which commissions for equity trading has fallen to just under $10 for most brokerages and ETFs are capable of being bought (and sometimes sold) completely commission-free. For DIY investors, it’s a wonderful world. But could it be better?

It’s hard to imagine the race to the bottom on commissions hitting zero however US-based online brokerage Robinhood has promised and delivered on doing just that. While they have been restricting use to the US, something significant happened this week when they announced not only that they received additional investment to the tune of $50M but also that they were going global. Specifically, they’re looking to roll out in Australia.

There are many parallels drawn between the markets here and in Australia. It stands to reason, therefore, that how they roll-out in Australia will definitely be an interesting test-bed for Canada. One this is for certain: nobody likes to see their money go down the drain, no matter which way it spins on the way down.

In addition to landing a hard right hook on pricing, Robinhood appears to be taking a serious jab at established discount brokerages when it comes to user experience.

Last week we noted how other brokerages in the US have Apple watch apps that enable users to review their investments – even TD Direct Investing offers the ability to get an update on balances and stocks. Robinhood, however, has made the leap of building a transactional Apple watch trading app.

One look at their Apple Watch trading app basically summarizes not only how nimble they are within their niche but also that they “get it” when it comes to usability. To paraphrase a bad clickbait headline: this online brokerage designed an app and they totally nailed it.

Although it took the better part of 15 years for pricing to come down meaningfully, many investors are watching a world where zero-commission trading and robo-investing is happening and spreading. And, as it turns out, they are lining up in droves to get it. Recall, this is not unlike how Facebook and every other social phenomenon got traction. A bunch of young people chomping at the bit to use it. Suddenly commission-free trading in Canada doesn’t seem so silly.

Event Horizon

Here are the upcoming investor education events from Canadian discount brokerages:

May 9

Desjardins Online Brokerage (Disnat) – The Secret to Finding Hot Stocks

May 12

TD Direct Investing – Options as an Income Strategy

Scotia iTRADE – Trading Tips Using Active Investing and ETFs with Horizons

TD Direct Investing – Discovering Leveraged and Inverse-Leveraged ETFs, with Horizon ETFs

Desjardins Online Brokerage (Disnat) – Investing With the Stockscores Approach

NBDB – Discover ETFs – [Fr]

May 13

NBDB – Swing Trading Course with Michel Carignan – [Fr] (Paid)

Desjardins Online Brokerage (Disnat) – The Stockscores Approach to Active Trading

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

From the Forums

Deal Whisperer

With a number of discount brokerage deals and promotions in play, one of the popular promotional offerings is the “refer a friend” promotion. In this post from the Financial Wisdom Forum, there are whispers of an improved refer-a-friend deal from BMO InvestorLine that might be on the horizon.

Which brokerage to use for ETFs?

The popularity of ETFs with Canadian investors shows no sign of slowing down. In this post from reddit’s Personal Finance Canada section, it is interesting to review what the thoughts are of different users on which discount brokerage would be best for ETFs.

That’s a wrap for this edition of the roundup. Thankfully it looks like a fantastic weekend to say thanks to all the mom’s out there (including Mother Nature!) and to raise one last toast to Don Draper for many smoke-filled seasons of thought.

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Discount Brokerage Weekly Roundup – May 1, 2015

Getting to the top is one thing, but staying there is another. Heading into the weekend US stock markets, which were previously at new highs, faltered slightly. Elsewhere, hockey fans are watching the good, bad and ugly unfold on the road to the Stanley cup and for boxing fans, the long awaited fight between two of boxing’s biggest names will test whether one will go undefeated or just walk away incredibly wealthy. For Canadian discount brokerages, however, the fight will not be a short one and the competition not so willing to roll over just because summer is coming.

In this week’s roundup, we take a look at which online brokerages continue the slugfest for new clients with the latest discount brokerage deals and promotions. Next, we take a look at one brokerage that has enabled early birds to be able to trade the pre-market. Following that, we take a look at the Apple Watch and whether one online brokerage is really ahead of the curve or just at the party a bit too soon. Finally we cruise through the investor education events and take a look at some interesting DIY investor chatter from the investor forums.

New Deals

Stock markets weren’t the only places to have a pullback going into May. The volume of deals offered by discount brokerages has also dropped off.

At the start of this month, there are 16 deals or promotions being offered by 6 Canadian discount brokerages. Interestingly, 13 of those deals come from just three brokerages: BMO InvestorLine, Questrade and Scotia iTrade.

Compared to February when there were over 25 offers, there is a clear sense that that the ‘rush’ to have a promotion has subsided. That said, those brokerages mentioned above that are offering multiple, concurrent promotions are not likely to slow down their marketing efforts across the summer months. With the MoneySense/Surviscor discount brokerage rankings due out soon and the new TFSA contribution limits recently announced, there are still plenty of reasons for brokerages to be actively campaigning during the late spring/early summer.

Questrade has been the first out of the gate with regards to pushing a TFSA themed promotion however it is unlikely that they will be the only ones doing so for too long. Check out the discount brokerage deals & promotions section for the full details.

Premarket Trading at Questrade

This past week Questrade announced that they will be enabling clients to trade the pre-market sessions as early as 7:30am ET on select US exchanges. With many earnings announcements taking place both before and after the official market hours (9:30am – 4pm), getting into or out of positions at these extended hours can sometimes give traders a jump on the action.

That said, trading in extended market hours is incredibly risky.

The absence of many traders at those times means that pricing on securities is much more volatile and that bid/ask spreads are typically wider. Likely for that reason, Questrade has restricted the eligible order types to “limit orders” with at Good Till Extended Market (GTEM) duration.

Just remember that while the early bird may get the worm, it’s the second mouse that gets the cheese.

Watch and Wait

While CIBC was reported to be the first of the big Canadian banks to release an app for the Apple Watch, TD was able to go one step further and offer their clients the ability to monitor watchlists and get updates on their TD Direct Investing account balance levels. Unfortunately for Canadian DIY investors, that’s as far as functionality goes for now.

With the Apple Watch still on back order and with bugs still being discovered and worked out, it may not be of too much consequence to wait for the dust to settle before seeing the impact of the ultra-small screen on monitoring and managing trading on the go.

Screenshot of TD app for Apple Watch (source iTunes)

In the US, brokerages are still cautiously venturing forward with the Apple Watch technology. A recent piece from Forbes goes through what some of the interfaces look like at larger brokerages in the US such as Schwab and Fidelity. Early feedback seems to be neutral/unimpressed as functionality for trading seems to be tethered to the iPhone, begging the question “why have the watch?” Of course, as any Apple fanatic will testify, “why not” seems to be the more appropriate question.

Event Horizon

May 5

Scotia iTRADE – Playing Both Sides of the Market with Options Straddles and Strangles

TD Direct Investing – Do-It-Yourself Investing for Women

May 6

Desjardins Online Brokerage (Disnat) – How I Day and Swing Trade the Market

Scotia iTRADE – Avoiding Home Country Bias – Constructing Globally Diversified Portfolios With Smart Beta ETFs

TD Direct Investing – Introduction to Investing in Options

NBDB – Tools and Technical Analysis with Michel Carignan – [Fr]

From the Forums

Tax Break

Like that student who prays for a deadline extension around finals, it seems that many last minute tax return filers caught a break as tax filing deadlines were extended for a few more days. That said, this past week there were still comments across the investor forums for individuals expressing frustration at not having the proper documentation from their discount brokerage in a timely fashion.

Peace of Minds

The reality of an increasingly digital world is that convenience often comes at the expense of security. In this post from Red Flag Deals’ investing forum, security measures at different brokerages are put under the spotlight, with only one brokerage standing out as having a robust option in place.

That does it for this week’s roundup. It’s a full weekend for sports fans and a great weekend for the non-sports fans to let the TV do the babysitting. In either case, enjoy the May weather or the Mayweather. Here’s a fun look at the hype behind the great (and most expensive) battle between two boxing legends.