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Discount Brokerage Weekly Roundup – March 30, 2020

For frequent market watchers, a screen is hard to ignore. Information about COVID-19 is flying at investors faster than a souped up Vin Diesel muscle car and coupled with, or perhaps compounded by, stock market volatility means it is hard to know exactly how to navigate the unfolding economic, medical and societal crises. Of course, channeling a little Vin Diesel at this moment means having a steady hand at the wheel, being ready to shift gears and having some strong clichés at the ready.

In this edition of the Weekly Roundup, we drive into a story of how investors who move fast also get furious when systems can’t keep up. Staying on theme, we also look at how one big online brokerage got sanctioned for skirting the rules. As usual, we wave the checkered flag with comments from Twitter and the investor forums. Buckle up!

The Upside of Down(markets)

With markets trying to digest, model and value multiple shocks to the economy, it is no wonder that volatility and uncertainty are at all-time highs. And while many investors are rightfully afraid and panicked by the current market whipsaws, there are nonetheless certain investors piling into the markets in hopes of either making fast money or picking up assets at shockingly low prices.

Although there is no one reliable indicator of a market bottom, one of the requisite ingredients for stocks to reverse fall in price is buyers. And, this is no way to call how the market floor is forming; however, the evidence from multiple online discount brokerages appears to indicate that there is a strong flow of DIY investors who are opening online brokerage accounts on both sides of the border.

A scan through recent Twitter threads and synthesis of news stories reveal that, among the complaints logged in the current market conditions, DIY investors are encountering issues with account opening, funding and getting started. Having tracked the Canadian online brokerage industry for the better part of 8 years now, when complaints about getting an account opened begin to show up on social media, it generally points to FOMO – or fear of missing out – kicking in.

A second line of data that might also be indicative of the activity level of DIY investors in this market is that online brokerage systems become strained under the volume. After the frenzy of the cannabis and crypto craze in early 2019, why system overload is still an issue is a bit of a mystery, but being what it is, the backlog of calls and delays in account opening processing reflects the pace and priority of technical and support system investment.

In fact, this past week, there was a fairly critical article in the Financial Post which highlighted the malaise of DIY investors who reported losing money on trades because of system failures and order-related mishaps at many of Canada’s largest bank-owned and independent online brokerages. Had this been during “normal” times in the market, outages would not be getting the kind of coverage they are, but these are not normal times.

A closer inspection of the complaints being cited in the Financial Post article shows that they were from investors using highly leveraged securities, for example, the Direxion Daily S&P 500 Bull 3X Shares, or those using options trades or who were intent on quickly flipping a trade on a highly volatile cannabis stock. These are not the garden variety buy-and-hold or passive investors, and this confirms the data we’ve published in previous weekly roundups as to which DIY investors were in this market.

There are only a small handful of online discount brokerages with platforms and data packages that are equipped to service clients who want to trade this actively and it is, by all measures, the most ideal time for Canadian online brokerages to step up their efforts in appealing to this group of investors, both in service experience and incentives. It perhaps won’t be too long before offers to attract these investors are launched – however, there is a cruel irony at work.

At the time when these most highly-prized active online investors want to sign up and trade with Canadian discount brokerages, the systems cannot support the volume nor can the client service teams keep pace. It seems that grocery stores aren’t the only place that Canadian DIY investors are going to be forced to wait in line.

To drive this point home even further, it was also remarkable to witness Wealthsimple Trade have to place new clients who had signed up to invest on a waitlist to trade after they’ve signed up to trade. As much as Wealthsimple Trade has earned its current standing as innovative and disruptive to the Canadian wealth management landscape, moments like those observed last week are damming and not-soon-forgotten.

For all of the assurances that Canadian DIY investors are provided as to the safety of their investments, moments of extreme strain on the systems reveal there are still many points of possible failure. While there is already a lot of compliance burden on Canadian online brokerages, when it comes to financial services, the latest in a recurring set of examples points to the need for greater transparency in technical system integrity. System reliability, scalability, and service provision capability are factors that DIY investors are learning that will be crucial to determining which online discount brokerage can best suit their needs.

On the flip side, one way that Canadian online brokerages can avoid having this surge of interest show up where new accounts need to be opened in the height of market volatility is by ramping up their marketing efforts across the year.

If Canadian online brokerages effectively “flattened the curve” of demand or “raised the line” on their own systems through a combination of assertive “always on” marketing campaigns and appropriate investments in scalable technology systems, this kind of system overwhelm could be mitigated. Had the market volatility hit a mere two or three weeks earlier, at the peak of RSP contribution season, the results could have been catastrophic for Canadian DIY investors.

As the world continues to be forced to adapt and learn from the COVID-19 crisis, there will undoubtedly be lessons that Canadian discount brokerages will be learning from as well.

Much Ado about Noting

In one of the more apropos headings to be found in a Weekly Roundup, this one is a play on words from a famous William Shakespeare play in which one of the key arcs happens to be about the consequences of not providing the full picture.

In the Canadian online brokerage world, when it comes to the disclosure to clients of certain key information about their investments, there is no room for playing around.

From about the end of 2013, Canadian regulators at the Investment Industry Regulatory Organization of Canada (IIROC) initiated a revision to the way in which member organizations were to report certain pieces of key information to Canadian investors. Regulators gave member organizations, including Canadian discount brokerages, a long runway of about 3 years to implement changes to the way in which investor statements were organized to ensure that organizations had sufficient time to implement the necessary changes.

Unfortunately for one organization, however, the decision to step offside of a regulatory requirement was met with a harsh rebuke. TD Waterhouse Canada was fined a stunning $4 million dollars (plus almost $30 thousand dollars in legal fees) for its decision to not comply directly with the CRM2 requirements.

There are a number of intriguing angles to this story, but what sticks out is what the calculus of this plan must have been to warrant such an action. It truly begs the question “what were they thinking?” in running afoul of regulators and exposing themselves to the kind of financial penalty they ultimately ended up having to pay.

With any business decision, the risk has to be worth the reward.

Looking at the fascinating details of this particular event, it was clear that the downside of ensuring that the TD Direct Investing was fully compliant within the timeframe laid out by IIROC seems to have suggested that there would have been some messy tax consequences and potential litigation that could have ensued. In short, facing the stern – if not damning – language (see image below) and fine was potentially the better option.

Ultimately, the persistence of a single client that sought information that was legally required from TD Direct Investing was what triggered the avalanche of activity that concluded in the fine and the damaging rebuke. It demonstrates that individual clients do, in fact, have the power to hold their vendors – in this case, online brokerages – accountable.

In the language of the panel’s decision:

“In the modern world where news is distributed almost instantaneously and widely by all forms of media, the reputational aspect has to be taken into account in fixing a sanction. Major financial institutions such as TDW invest large amounts of time and money in promoting their brands. While they may be able to easily afford large fines as a cost of doing business, bad publicity is very bad for business and that in itself provides a strong specific deterrence.”

For a brokerage of the size and repute of TD Direct Investing (TD Waterhouse) to be called out by IIROC is a very big deal and certainly something their peers – and perhaps investors – will take note of.

Discount Brokerage Tweets of the Week

From the Forums

Go with the Flow

Redditors discuss an article from the New York Times of an investor who was rocked by the recent fluctuations in the market in this post. Forum users go back and forth on the impacts of the markets on their own portfolios and investment plans.

The Little Short

A forum user asks how they may be able to short the market and fellow Redditors offer their two cents on the incredible risks involved in this post.

Into the Close

That’s it for another edition of the Roundup. To close out this irony-filled edition, markets also appear to be both fast and furious. While the plot of the unfolding saga in the markets may be hard to follow, there is certainly no shortage of action unfolding a quarter mile at a time.

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Discount Brokerage Weekly Roundup – November 11, 2019

This week more than most, the focus of November is on remembrance. For some (cough cough weed) investors, however, November is about trying to forget and cutting ties with losing stocks. Capitulation typically takes a while to set in. With so many losses accumulating this year for lots of DIY investors, however, this could be a bargain-filled month of investors finally throwing in the towel on non-performing names. Of course, on the other side of the trade, there are still several online brokerages who are not quite ready to throw in the towel.

In this edition of the Roundup, we take a look at the newest discount brokerage deal to cross the wire and what the uptick in activity suggests for the stretch heading into the end of the year. From there, we cover another new feature added by the newest discount brokerage on the block, and what it means for driving change among existing online brokerages. As always, we’ve got an intriguing selection of chatter from DIY investors in the forums and on Twitter to close things out.

Deals Uptick: New Cash Back Offer From CIBC Investor’s Edge Now Live

November is a month that a lot of bargain hunters look forward to. DIY investors, however, don’t have to wait until Black Friday to take advantage of deals coming their way, especially this year. Just a few days into the new month and there is another bank-owned online brokerage that has stepped up to the promotions plate with a competitive cash-back offer for online investors to consider.

CIBC Investor’s Edge has launched a new promotion with cash back offers ranging from $100 (for deposits of $25,000 or more) to $400 (for deposits of $100,000).  Currently there is only one other bank-owned online brokerage, BMO InvestorLine, that is offering cash back bonuses as part of a general campaign. The latest offer from CIBC Investor’s Edge, however, is decidedly more competitive than other cash back offers from Canadian discount brokerages, whether those offers be referral based or public cash back offers.

As can be seen in the table (below) there are currently five Canadian discount brokerages offering up some kind of cash back bonus offer. From the deposit tiers between $25,000 up to $250,000, CIBC is largely unchallenged (for now) with the only alternative offers for a cash back reward being Questrade or Scotia iTRADE via their referral bonus. Even then, CIBC Investor’s Edge is offering, in some cases, more than two times their competitors.

If history is any indicator, we would anticipate seeing other online brokerages start to enter the cash back promotional offer pool with the bulk of offers focusing between $25,000 and $250,000. That said, with millennial investors getting significant focus this year, it would not be surprising to see additional offers come to market for the sub $25K deposit level.

Already at the sub $25K deposit level, four of the five brokerages offering cash back promotions have an offer, however it is remarkable that those are the same four brokerages with cash back referral programs.

With the end of the year fast approaching, it is likely that additional offers will be coming to market. Those stepping onto the field will have to play a fine balance between waiting to see what competitors are offering and getting into the market to be visible when online investors are most actively looking for an online brokerage.

This year in particular, against the backdrop of commission-free trading in the US, it will be interesting to see what the mix of commission-free offers to cash back offers shakes out to be. With two of the big five banks offering up “mass market” offers that are cash back, it would be tough for the bigger remaining players who don’t yet have an offer (e.g. TD Direct Investing or Scotia iTRADE) to come to market with something less appealing. And, for the non-bank-owned online brokerages, this will be a particularly tricky needle to thread. Commission-free trades are less expensive (but also less appealing), however, their pockets are not nearly as deep as their bank-owned competitors.

With markets shrugging off uncertainty or political volatility and pushing into record new highs, strong economic data, and healthy jobs figures, the big picture sentiment seems strong for Canadian investors in many parts of the country to be thinking about saving (and investing) for retirement. That is likely to be an important driver of just how competitive brokerages are willing to be on incentives, especially considering the zero-commission trading train may pull into the station at any time.

The Long Route: Wealthsimple Trade Grinds Away at RRSP Accounts

The classic football film Any Given Sunday has an iconic speech delivered by Al Pacino in which he talks about football being a “game of inches.” In the highly competitive world of online brokerages in Canada, those inches (or centimetres to keep it metric) are also hard to come by in terms of gaining market share. For the newest online brokerage on the block, Wealthsimple Trade, there continue to be signs that it is making progress in its bid to be a serious contender against other Canadian discount brokerages.

One important step that Wealthsimple Trade recently took was the launch of RRSP accounts for DIY investors.

For such an important feature, it has received a remarkably small amount of spotlight on both the Wealthsimple Trade or the Wealthsimple social media channels. One clue as to why that may be the case is because the account feature is not entirely functional in the way it is at most other online brokerages.

The help section of Wealthsimple Trade provided additional details on why that is. Perhaps the most important limitation on the account right now (at least until November 18th) is that money that goes into the RRSP account cannot be withdrawn to a linked bank account. Convenience is a big factor for the target market of Wealthsimple Trade, so a perceived hurdle like this is not something they’d want to highlight (understandably) as it could be the source of a lot of confusion.

Another possible reason why there hasn’t been a lot of noise made yet is because there isn’t the ability to transfer RRSPs from another institution into the Wealthsimple Trade RRSP. As a result, the current pathway to gaining traction for Wealthsimple Trade is to rely on RRSP contributors to: 1. Open a new account with Wealthsimple Trade, and 2. Deposit funds there.  Again, with convenience being an important driver to adoption, having to open up another account with another provider and keep track of money in two different places is just more work than many DIY investors are prepared to put in. With most passive investors capable of accessing commission-free ETF trading at multiple online brokerages, there are just too many other lower friction options out there.

Despite all of the friction points currently in place for Wealthsimple Trade’s RRSP account (and there are a couple more), there is a strong likelihood that these will be addressed or removed entirely in short order. As RRSP season is just around the corner, it is likely that the creative folks at Wealthsimple will find a way to put an optimistic spin on the state of the RRSP account at whatever level of readiness it happens to be at.

Of course, the ace up the sleeve for Wealthsimple (and Wealthsimple Trade) going into RRSP season is that they recently acquired the very popular tax preparation platform SimpleTax. It is not a great leap to be able to see the synergy for Wealthsimple Trade and the tax preparation software, especially at the moment that an individual would be logging any RRSP contribution data or if they have a tax refund they might need to stash somewhere (like a TFSA, RRSP or other investment account).

For now, Wealthsimple Trade remains the underdog in the online brokerage competition in Canada. Even with zero-commission trades, convenience and ease of use are going to be the key areas that the competition can use to pull ahead. That said, other Canadian online brokerages can’t afford to fumble on service or stability any more, and if they do, DIY investors will be asking why they’re paying the fees they are.

Discount Brokerage Tweets of the Week

From the Forums

Low Fees, High Price

In the midst of the announcement from Planswell that they’re shutting down, Redditors engage in a discussion on the downfall of the company and the precarity of robo-advisors in the race to the lowest fees.

If It Ain’t Broke, Don’t Fix It

A Redditor concerned with optimizing his son’s RESP ponders whether or not to move from TD e-Series to Questrade or TD Waterhouse. Fellow forum users weigh in, offering advice about whether or not it’s a necessary change.

Into the Close

These days, it seems like there’s no shortage of vitriol kicking around online. Sadly, we’re at a moment in history when the efforts and sacrifices of those who fought against fascism and totalitarianism have been overshadowed by some who, if they were really students of history, ought to know better. Fortunately, the symbols of those who stood up to the world’s evils can inspire us to do the same and give each of us the strength to make the hard choice to do the right thing. Thank you to the brave individuals who continue to serve, in spirit and in person, this great nation.

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Discount Brokerage Weekly Roundup – January 27, 2017

Sometimes change is good. Sometimes it’s not. Either way for discount brokerages in Canada and the US, change, and more specifically the ability to navigate change, appears to be what will separate the winners from the rest of the crowd.

In this week’s roundup we take a look at the latest digital shift from one of Canada’s largest online brokerages to see how they’re changing elements to keep looking fresh. From there, we take a look at the details from two recent US online brokerage conference calls with a specific eye as to what online brokerages are working on for the future. As usual, we’ll wrap up the roundup with a look at what investors were talking about on social media as well as in the investing forums.

TD Direct Investing Website Gets Refresh

In more ways than one, the new reality for online investors and those that service them is dealing with change. As online brokerages increasingly evolve into technology companies, the need to be agile and responsive is greater than ever before. Their platforms need to keep up with the times, as do all of their websites, social media feeds, mobile apps and so on. More than just the technology, online brokerages also have to keep up with what an online investor looks like – not just those already in the markets, but those who are looking to get in too.

Over the past three years, there has been a noticeable evolution of the websites and marketing at most of Canada’s online brokerages. This month, there has been yet another website enhancement made from Canada’s largest bank-owned online brokerage – TD Direct Investing.

Looking back at the evolution of the TD Direct Investing story, one of the first important changes took place when TD Waterhouse switched to TD Direct Investing in late 2012.

In late 2015, TD Direct Investing then updated the front end of their website, modifying the look and feel of the brand to become more modern, not only in web design terms, but also in portraying what the ‘typical investor’ looks like. As part of a trend amongst the major Canadian banks, looking and feeling more appealing to everyday Canadians meant recognizing the diversity of what Canadians look like and what they support.

Now, in 2017, TD Direct Investing has updated their look and feel yet again in order to appear more modern and harmonize the brand experience the parent brand.

Screenshot of TD Direct Investing website 2017-01-27
Screenshot of TD Direct Investing website 2017-01-27

The front end of the TD Direct Investing section of the TD website, with the scroll features that tells the TDDI story, is remarkably familiar to many robo-advisor websites and borrows design elements that are found on other Canadian brokerage websites that use icons and the scroll-based design.

Clicking through the homepage, there are links that still point to pages that use the previous design standard as well as links that point to the newer look, signaling a gradual transition to a newer look and feel rather than a wholesale change. It is an interesting choice from a design point of view in that users see the old and new imagery and layouts within the same visit.

While the updated design does add an element of change, the key observation is that TD continues to use bold imagery of ordinary looking people. These may be stock images, however there is more thought in their selection that shows they’re conscientious about recognizing a more diverse-looking set of customers. Fortunately, TD Direct Investing is not alone in this regard. This is also true for a couple of TD Direct Investing’s bank-owned brokerage peers – BMO InvestorLine and RBC Direct Investing. With so much divisive rhetoric emerging from the US it’s nice to see Canadian banks being Canadian and embracing the portrait of an online investor as a mixture of men and women, old and young and all shades of skin colour.

On the Line

With markets making new all-time highs and a difficult to predict new president, there’s lots of uncertainty for investors on exactly how they’re going to approach trading this market. To get some insights, it was interesting to review the latest news coming out of US online brokerages’ earnings conference calls as they reported their quarterly earnings and spent time explaining their strategies and vision for 2017 as well as where they see investors headed during these uncertain times.

In the E*trade Financial conference call, one of the interesting priorities for them in the upcoming year will be in marketing. As we had mentioned in a previous weekly roundup, in a hypercompetitive marketplace, in particular in the online brokerage space, an increasing amount of focus will have to be paid to getting client acquisition and retention right. This means undertaking some bold but thoughtful marketing.

The comments made by E*Trade Financial’s CEO Karl Roessner during the most recent conference call certainly highlight that E*Trade will be focused on aggressively onboarding new clients, with the ever-prized active trader segment being of particular interest.

In conjunction with the strategy of acquiring new clients, it appears that E*Trade is also going to be undertaking major branding initiatives and enhancing their digital experience by upgrading their web presence. Like the recent moves observed by TD Direct Investing referenced above, the following quote signals that keeping the digital experience of E*Trade fresh and current is a key component to their marketing plans:

And at the top of a long list of initiatives is the re-launch of our brand. We’ve enjoyed phenomenal brand awareness, and we intend to build on that to reclaim our challenger position in the industry. Expect to see more around mid-year. In the meantime, we are working on updates to our website, including an overhaul to the look and feel, along with improved navigation.

Another conference call from an online brokerage took place this week, this time from TD Ameritrade. While also discussing the results of an integration with Scottrade, there were a number of interesting nuggets on the technology front revealed by TD Ameritrade.

For example, the launch of innovative integrations with Amazon’s Alexa (using the TD Ameritrade skill app) that enable individuals to get stock market updates points to a future where home automation or virtual assistants will meet the world of investing.

In addition, there was also some insight given on the social media monitoring tool, Social Signals, that helps investors look for investment opportunities based on what stocks individuals are talking about online – in particular on Twitter.

One of the most interesting perspectives, however, came from CEO Tim Hockey’s answer on the possible behaviour of retail investors heading into the next few months post-Trump’s election. Specifically, Hockey’s position is that DIY investors will be looking to reposition their portfolios given the new US President’s policies and initiatives. In particular, the comment that investors appear to be moving in a contrarian fashion – pulling money out on the big rallies, signals there’s some skepticism as to the valuation of the US markets and especially in the larger cap names.

While the US online brokerage marketplace is certainly distinct from Canada’s, there is clearly a view towards what the future may hold for the industry in Canada.

With regards to innovation, US brokerages such as TD Ameritrade are clearly developing the next generation of tools that DIY investors can use to monitor and potentially trade with. The race to bring in innovation to the DIY trading world reinforces the observation that online brokerages are going to have to become much more technology based than they already are, which may be easier said than done.

One potentially noteworthy comment by Interactive Brokers’ CEO Thomas Peterffy in their latest conference call probably should serve as a warning to online brokerages. Specifically, Peterffy was asked about why Interactive Brokers took the unusual step of payment of high amount of bonuses to employees at the end of Q4, to which Peterffy responded “It’s a very competitive world.”

Discount Brokerage Tweets of the Week

It was a tough week for online investors caught on the wrong side of a platform outage at Questrade illustrating once again that trading isn’t without its random risks. Mentioned this week were BMO InvestorLine, CIBC Investor’s Edge, Questrade, Scotia iTRADE & TD Direct Investing.

From the Forums

Cut it Out

This past week the firestorm of tweets on Questrade’s platform outage also extended to comments in reddit’s Personal Finance Canada thread in this post. Fortunately, Questrade also stepped in to the discussion to help let people know their options during an outage.

Unpleasant Exchange

In this post, from the investing forum, one user learned the hard lesson about currency conversions at online brokerages – namely that they can get expensive. Read on to find out how others can get around the extra fees related to currency conversions.

Into the Close

That’s a wrap on the first chaotic week of the Trump presidency and a record breaking week on the markets. For those trying to figure out where markets go from here, you may want to take the weekend off and simply remember that the trend is your friend until it ends. For all those celebrating the Lunar New Year  this weekend – happy New Year! And for those looking for something to celebrate – Monday isn’t here for another couple of days, make the most of it!

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Discount Brokerage Weekly Roundup – March 20, 2015

This past week heralded the strangest and rarest of events. No, it wasn’t the solar eclipse or an upset in the NCAA basketball tournament; it was actually the arrival of Spring – in theory.  It was fitting that the lead up into Spring saw a celebration of green for St. Paddy’s day at the beginning of the week and having the markets have a green day to end off the week. The shamrocks and markets weren’t the only green making waves this week, however, as a few ‘green’ discount brokerages were also busy making headlines.

In this week’s roundup, we start by looking at where discount brokerages are stepping up their game 140 characters at a time. Next we take a look at an article about Canadian brokerages and investors with commitment issues – just in time for wedding season. Of course, we’ve got another deal update to add to the list after which we’ll take a look at the upcoming investor education events and close out with a look across the investor forums.


As we reported several weeks ago, the social media presence of Canadian discount brokerages has started to ratchet up. Credential Direct and TD Direct Investing have stepped into Twitter in a noticeable way, joining Questrade, Scotia iTrade and Virtual Brokers.

This past week, however, discount brokerages on Twitter showed yet again that they’re evolving quickly to understand how this medium works and how to be relevant in an increasingly busy online medium.

Both ‘big green’ (TD Direct Investing) and little green (Questrade) were spotted getting some major attention from online DIY investors.

Starting first with Questrade and their “What Are You Investing For” contest. Looking at the number and types of responses that Questrade received from the Twittersphere, this recent promotion signals that people are paying attention to Questrade in a major way.  Of course, for their part, Questrade made it compelling by offering up the prize of an Asus tablet so naturally one might expect more interest than if Questrade simply asked the question without the possibility of a prize. One thing that does stand out, however, is that other brokerages aren’t (yet) doing the same thing.  In fact, when it comes to social media (including forums), there are few corners where Questrade does not have a presence (their career team is even on Instagram).

Another interesting angle in the brewing social media battle can be seen with activity this past week from TD Direct Investing.  Specifically, the power of reach.  Although TD Bank has a massive following on Twitter, TD Direct Investing does not have it’s own central account from which it tweets.  Instead, it has taken the rather unique approach of mobilizing a wide number of its employees to start broadcasting TD Direct Investing content.  This past week, TD Direct Investing held an investor education webinar on swing trading and landed a rather large crowd interested in the topic – almost 8,000 folks. While close to 300 attended the live event, what was interesting were the tweets leading up to, during and after the event.  There were interesting/pun-laden graphics ahead of the event, lots of TD folks tweeting about it, lots of people talking about and compliments dished out after it.

The big questions for most DIY investors comes back down to ‘so what?’ What does it matter if a brokerage is on Twitter or not?

In the case of all the discount brokerages currently on Twitter, they understand that responding to people on the social media channels provides a different kind of convenience and a transparent service that takes time to get right. For younger or more tech savvy users, Twitter is a great way to connect directly with a service provider to get an answer to a query or resolve an issue without having to stray far from a news feed or to use another screen (or, God forbid, the phone).

For DIY investors, whether or not they’re clients of a particular brokerage, the content being pushed out by these brokerages is free and accessible.  In the case of TD Direct Investing, finding out about these kinds of educational events via Twitter can help investors informed in a way that traditional media or Google news don’t quite do.  There’s also a whole other kind of research on client service that is possible now that was never really accessible to investors.  Seeing how each brokerage handles itself in the face of complaints or accolades is how consumers make their judgements.

While it might have taken some time for TD Direct Investing to get on board the #HashtagTrain, now that they are actively creating a presence for themselves, the brokerages already on Twitter will now have to (once again) step up their game. Those brokerages not on social media (and those on ‘autopilot’) have a real challenge ahead to step up.  For DIY investors, that kind of competition between brokerages is likely to result in a whole new level of content and creativity which will probably be worth tuning into, at least for a fleeting moment or two.

House of (Prepaid) Cards

Questrade has launched yet another promotion into its suite of current offers.  On the heels of the expired iPad mini promotion, Questrade has revived and slightly tweaked their prepaid Visa card promotional offer.  In their current offer there are now four gift card denominations (ranging from $50 to $250) that are associated with four tiers of deposit amounts ranging from $5,000 to $100,000.  While deposits are required in order to be eligible, it is also interesting to note that clients are also required to make at least one commission-generating trade in order to qualify for the gift card. Thus, while the face value of the gift card is $50, $75, $100 or $250, be sure to factor in the value of a commission-generating trade which can be anywhere from $4.95 to $9.95 (plus applicable fees).  Click for more details on Questrade’s most recent promotion and other online brokerage deals.

Mind the Exit

One of the considerations when choosing an online brokerage is what happens if or when things don’t quite work out. While most Canadian discount brokerages do impose a ‘transfer out’ fee for clients who ask to have their account transferred to another entity, ironically most brokerages are also willing to pay the transfer fee (of between $135 – $150) for clients transferring money into a new account.  Those most impacted by the transfer fees are individuals with less than $15,000 to $25,000, since these are typical deposit thresholds that individuals must be transferring into a new institution in order to qualify for a transfer fee rebate.

In a recent article (available to paid subscribers) by Globe and Mail personal finance columnist and leading voice on Canadian online brokerages, Rob Carrick, he discusses some of the important considerations about transfer fees that individuals should keep in mind when shopping for an online trading account.

One of the interesting points of the article was that if there is the opportunity to test drive a brokerage account via a free trial, it would offer a better idea of the platform and user experience of navigating the broker’s online interface.

Event Horizon

March 21:

Scotia iTRADE – Top Global Investment Themes for 2015 – Larry Berman Roadshow Niagara Falls, ON

March 24:

TD Direct Investing – Stock Talk

Scotia iTRADE – Options Trading For Beginners with Sarah Potter

TD Direct Investing – Introduction to Investing in Options

TD Direct Investing – Understanding Margin & Short Selling

March 25:

Desjardins Online Brokerage (Disnat) – Trading ETFs with Desjardins Online Brokerage

Scotia iTRADE – Options As A Hedging Strategy Using Call Options with Montreal Exchange

March 26:

TD Direct Investing – Evolution of Indexing

TD Direct Investing – Introduction to Investing in Options

From the Forums:

TD Waterhouse RRSP

Finding the right kind of account to get access to popular investment products is something that can be a tad confusing.  In this post on RedFlagDeals’ investing forum, one user gets a little help from the community when wondering how best to start off with a modest RRSP.

To BMO or not to BMO

Sitting on the fence about a brokerage is a common moment for many DIY investors.  In this post from the Canadian Money Forum, one new investor is looking to map out a path through mutual funds and ETFs and is wondering if BMO InvestorLine is the right option.  Check out the perspective of the other investors when it came to staying on board or jumping ship.

Drip by Drip

Slow and steady wins the race. Using dividends to build wealth over time is a tested strategy that many DIY investors buy into. In this post from Canadian Money Forum, one user wants to know a bit more detail about using DRIPs at Canadian discount brokerages.

That’s it for this week’s roundup.  To cap off the ‘social media’ theme, here is a great story of how spreading the message #OdinBirthday on social media gave one 13 year-old boy an awesome way to start the weekend and a birthday to remember. Enjoy the weekend!

Edited March 21/15

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Exclusive: A Year in Review and Look Ahead from Canada’s Online Brokerages

Pic_Blog_201412_YearInReview_LeadImage_B*Edited Dec. 22/14* What an exciting year to be a DIY investor. As an active observer and commentator on the landscape of Canada’s online brokerages, we’ve seen some dramatic changes this past year. Whether it was reduction in commission pricing, changes in account types or enhancements to platforms, user experience or investor education, 2014 presented no shortage of exciting developments.

With so many online brokerages, DIY investors now enjoy more choice in terms of who they want to end up doing business with and how they want to trade online. The flip side to the benefit of having so much choice, however, is actually keeping up with all of the innovation that’s taking place amongst online brokerages.  Every time a new feature, like a platform or a new order type, comes out, there is a lot of information that goes with it.

In their own words

So, in keeping with our continued efforts to track and structure the information coming from Canadian online brokerages, we thought it would be great if we gave Canada’s online brokerages the opportunity to give investors their own take on 2014 and also to provide everyone with a preview of where 2015 is heading.

We reached out to all the brokerages and were more than pleased with the response we received to participate. Our request was simple. We asked that brokerages provide readers with a recap of 2014, perhaps with milestones or achievements as well as to provide some direction as to what’s around the corner for next year.

What follows is a really interesting (in our opinion) compilation of voices of 8 9 of Canada’s most influential and visible online brokerages – from bank-owned online brokerages to independent brokerages. It is clear from reading these submissions that 2014 was a busy year everywhere. Nobody was standing still. Even more interesting, however, are the hints and previews online brokerages have shared for 2015.

Table 1: Canadian Online Brokerages Participating in the Year in Review

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Click on a logo to read the review of that particular brokerage. #colspan# #colspan#

Getting up to speed

Heading into RRSP deadline season and the first half of 2015, we know that there will be many individuals who are either considering online investing or who are already with a provider and would just like to better understand the landscape of choices that are out there.

This compilation is a great starting point to learn more about each of the providers listed. They are certainly a diverse group of providers which is reflected in the different ways in which each has written their submission. In our opinion, this diversity will become one of the biggest themes for 2015.

With standard commission pricing having dropped significantly across several brokerages, the focal point will turn to standing out. Our view on this is that ‘standing out’ will be achieved by being ‘outstanding’. That means improved service, pricing (yes, we still think there’s room to go lower for some), features and user experience.

We believe that in 2015, Canada’s online brokerages will work even harder to differentiate themselves from one another. And, as was the case in 2014, we are looking forward to tracking these developments and helping our readers make sense of them all as they unfold.

Click the logos above or the page numbers below to read this year’s submissions.

Editor’s Note: We received a submission from CIBC Investor’s Edge after our original publication date and so we have included their submission as part of this series. For functionality purposes, however, we have placed their submission at the end of the series rather than in alphabetical sequence.

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Discount Brokerage Weekly Roundup – October 3, 2014

Leaves and temperatures aren’t the only things falling this time of year.  Apparently markets and commissions at Canada’s discount brokerages are dropping too.  Even though we’re barely into the fall and have just crossed into October, the battle for discount brokerage supremacy is back in full swing after a late summer lull.

For this week’s roundup we’ve raked in some of the most colourful stories starting with a big price drop from a bank-owned brokerage, a long awaited feature launch, a selection of hearty DIY investor-themed stories and interesting stats on retail investor trading activity from a US brokerage.  To close-out the roundup we’ll take a look at what investors were saying in the Canadian financial forums.

If a Commission Price Falls in the Woods…

It most certainly does make a sound.  This past week we reported that one of Canada’s bank-owned online brokerages, CIBC Investor’s Edge, may be lowering their standard commission rate to $6.95 for all clients regardless of trading volume or account size.  While the timing of the move is likely to come in the near future, internal sources suggest it could be announced as early as Monday.

Despite a price drop by RBC Direct Investing to kick-off the year, the latest price drop by CIBC Investor’s Edge takes the competition among discount brokerages to a whole new level.  By substantially beating the current standard commission prices (which are now just under $10 per trade) at most of their bank-owned peers (and some independent brokerages), Investor’s Edge is pushing the other brokerages to go all in on the pricing or step up substantially on service and platforms to justify the cost differential.

Coming this Fall

Even though there have been many dates thrown around for the launch of the long awaited US dollar registered accounts to be implemented at online brokerage giant TD Direct Investing, it appears that the date has finally been narrowed down to several weeks from now (possibly by the end of November).

Early reaction from DIY investors is a mixture of excitement and skepticism. Should it turn out to be “different this time” brokerages that have heavily advertised the USD registered accounts as a selling point (such as Questrade and Virtual Brokers) will have to go back to the drawing board to sway investors from the allure of bank-affiliated convenience and now lower fees.


This past week also saw several articles of interest to the DIY investor crowd come from the Globe and Mail.  The first was an excellent article by Rob Carrick on the tenuous connection between providing financial advice and the selling of financial products.  Carrick does a great job of articulating the challenges of navigating the financial advice landscape and how investors need to be both cautious and skeptical when seeking out financial counsel from an “advisor”.

In keeping with the advice theme, another article from the Globe and Mail on the use of social media, Facebook specifically, for investment advice could be risky for consumers as well as for providers.  We’ve taken a look at social media and investing information previously, however the conclusion is always largely the same: always be careful when taking investment advice from the internet.

Finally, the price war between brokerages also got a bit coverage on the heels of the Qtrade price drop last week.  In this article (available to Globe subscribers only), Qtrade’s CEO Scott Gibner provides a bit of context behind their latest move to try and get ahead of the big banks. Of course as CIBC Investor’s Edge may soon show, Qtrade’s wager may need some recalibration.

The Starter Menu

Starting a new month means that we reset the game clock on the deals activity across the Canadian discount brokerage landscape.  Coming into October the deals and promotions were relatively stable with Questrade shuffling a few deals out the door and bringing other in their place. One notable new entrant into the deals section was Credential Direct who is bringing back their ‘risk-free trial’ offer where they’ll cover the transfer fees (up to $150) for clients who want to switch over.  After 90 days if clients are not satisfied with the move, Credential Direct will waive their exit fee ($125).   Given their recent pricing drop, and that of their regional neighbour Qtrade, it should be interesting to see what other promotions start to emerge as Canada’s online brokerages try to get creative in attracting in new clientele.

Cashing In

Once again Interactive Brokers’ trading figures have been released and they show they’re grinding higher across a number of performance metrics.  Notably, they saw a substantial increase in the number of Daily Average Revenue Trades (DARTs) of 21% (year over year) and 17% (month over month). Trading tends to pick up with market volatility so the spike may be reflective of greater uncertainty with stocks.

Also of interest, the average commission per equity trade of $2.27 and order size of just under 2000 shares.  While not a straight apples-to-apples comparison, looking at the fact that earnings and account growth are positive at Interactive Brokers while commission pricing is very low makes a case for commission pricing continuing to fall here in Canada.

From the Forums

There was quite a bit of discount brokerage related commentary this past week across the Canadian investor forums.  Here is a sampler of some of the interesting posts that we saw pop up in several spots covering the same/similar topics.

TD Direct Investing Launching US Dollar Registered Accounts

This was definitely a big story given the size of TD’s market share of the discount brokerage market.  Here’s a list of several forum threads and the buzz already forming:

CIBC Investor’s Edge Lowering Commission Pricing

Reactions on the Canadian personal finance reddit page as well as the investing thread of Red Flag Deals were generally positive (who doesn’t like to save money?) to the news of a lowered standard commission fee.

Qtrade Lowering Standard Commission Fees

There were a couple of forums that this announcement stirred up.  A particularly insightful thread on the financial wisdom forum is worth a look to see how seasoned investors’ view the latest move by this brokerage.  (There was also a reddit post here)

Phew. That does it for this week’s roundup.  While the week ended on a less flashy note than a George Clooney wedding, a busy week and a weekend always make for a perfect couple – too bad that romance doesn’t last longer. Fantasy sports fans good luck in your hockey drafts, and for non-fantasy sports players, find a way to make this a stunning weekend!

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Discount Brokerage Weekly Roundup – July 25, 2014

As we cruise into the end of July, every trader’s favourite season is drawing to a close. No, it’s not summer but rather earnings season. Depending on which side of an analyst’s estimate a company falls, the news may be great or simply a great disappointment. Regardless, the lesson the market forces everyone to learn over and over again is to keep your expectations realistic.

In this week’s roundup, we look at some of the interesting expectations that Canada’s online brokerages have created and are fanning the flames on. In particular, we take a brief look at 2 fierce competitors and their latest features to be released after which we quickly scan through this month’s expiring deals and round out with an #FTF (From the Forums).

Looking for a Hot Date?

Desjardins Online Brokerage’s new investor education calendar may have several to offer. After receiving a significant makeover, the investor education calendar from Desjardins Online Brokerage launched and is poised to create a bit of a stir across the online brokerage industry. Specifically, with the recent commission price drops across the industry seeming to cool-off, online brokerages will be looking to other components of their business to highlight or improve in a bid to differentiate themselves from one another.

For those discount brokerages that are heavily invested in providing education to online investors (such as National Bank Direct Brokerage, Scotia iTrade and TD Direct Investing) the news probably signals time for some ‘fresher’ thinking when it comes to user experience and investor education.

Read more about the new features of the Desjardins Online Brokerage education calendar here.

It’s All About the Benjamins

National Bank Direct Brokerage has officially joined the ranks of online brokerages that offer US dollar registered accounts. As you can see from a screenshot of their site below, the announcement marks the formal roll out of this account option for RRSP, RESP, TFSA as well as several other popular registered account types.

The ability to have USD registered accounts is a sought after feature with many investors that trade/invest in many US listed securities and who want to avoid some of the steep currency conversion fees imposed by brokerages.

As was reported in February, National Bank Direct Brokerage has been rolling out this feature in phases and with feature how hitting the front of their website, it won’t be long before we start to see more about it and perhaps a response from those brokerages who still don’t offer this account type to investors.

Should They Stay or Should They Go?

With the end of the month just around the corner, there are usually some deals or promotions timed to expire. The two that are currently set to go at the end of this month are the 50/50 offer from BMO InvestorLine and the iPad Mini offer from Questrade. Of the two, the iPad Mini offer has expired once before only to be resurrected. We’ll see which (if either) get a time extension but for the moment both of these deals are scheduled to be in their final days.

From the Forums

This past week across the investor forums saw the usual interesting assortment of questions regarding DIY investing. On the menu for this roundup, we look at where to park cash in a trading account, how Virtual Brokers clients

Cash is king, but where does his highness hangout when not being put to work?

In this post from RedFlagDeals, an investor is looking to squeeze some extra juice out of some cash sitting in their trading account. The community chimes in with some interesting suggestions to try and get that cash to work.

The pricing plan is right

In another thread from RedFlagDeals, the cost of buying and selling ETFs at Virtual Brokers got put under the microscope. Because of their different pricing plans, clients can pick which commission charge works best for a particular trade. Find out what strategies folks ended up suggesting when trading ETFs by clicking the link above.

Lather, rinse, repeat

The ever popular Gambit trade between dual listed stocks was the topic of this post on the Canadian Money Forum. Specifically, a user shared with the community their experience of a bit of sticker shock when trying to do a Gambit in a non-registered account with TD Waterhouse (TD Direct Investing). Fortunately the other forum members chimed in with some helpful tips on how to get it done right.

That does it for this week’s roundup. With the US and Canadian markets (and even Facebook) hitting new highs again, it seems there might be cause to celebrate going into the weekend. Strangely, it seems like Mr. Market and traders don’t exactly know what to expect from one another – kind of like the high five moment gone awry.


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Review: Dalbar Canada’s Direct Brokerage Service Award 2013

For individual investors, shopping for an online trading account often requires doing a fair amount of research and comparison between brokerages.  While commissions & fees are the most important factor investors consider when choosing an account, what it’s like to be a client of a particular brokerage is also something many investors are often curious about.

Dalbar Award For Discount Brokerage Customer ServiceFortunately for self-directed investors, one Canadian research firm (Dalbar Canada) measures client experience for most of the Canadian discount brokerages as part of their direct brokerage service evaluation (DBSE) program.  As part of the DBSE, Dalbar Canada also recognizes the high achievers in their evaluation with their Direct Brokerage Service Award.

Earlier this year, Dalbar Canada announced  the two highest performing brokerages on the DBSE:  RBC Direct Investing and HSBC InvestDirect.

Quick Overview

In our previous two-part series explaining the Dalbar Direct Brokerage Service Evaluation, we looked in detail at how the evaluation takes place including the components that go into defining ‘client experience’ at discount brokerages.   Here is a brief overview of why client experience still remains an important feature to track when comparing discount brokerages.

More than Just Price

With competition amongst online brokerages increasing, many of them (especially bank-owned brokerages) have adopted very similar pricing models.  Thus, comparing discount brokerages by price alone may not provide enough information for potential clients to make a decision. Going forward, shoppers will have to turn to the other features of a brokerage (such as client experiences) in order to evaluate how ‘good’ they believe the fit will be.

For those shopping for an online trading account, the only somewhat reliable ways to find out about client experiences have been through third party research/reviews and/or from other investors via investor forums or friends, family and colleagues.  The Dalbar Direct Brokerage Service Award is therefore unique in its focus on client experience and tries to provide a picture of what clients can expect from a brokerage when connecting via phone or email.

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Discount Brokerage Weekly Roundup – December 27 2013

A Happy New Year TraderAmongst Canadian discount brokerages, it was supposed to be a quiet ride into the end of 2013. Alas, it was not to be. With a Boxing Day promotion launched by one of Canada’s discount brokerages this past week, the competition for Canadian investors officially hit a new high.  This bodes well for self-directed investors going into 2014 as both pricing and services can be expected to improve from discount brokerages looking to gain an edge on one another.   In the final (and shortened) weekly roundup of 2013, we’ll take a look at this latest disruptive deal as well as some of the interesting chatter from investors around the forums and social media.

Questrade Throws a Jab by Offering up a Boxing Day Promotion

Discount brokerages and the holiday season have historically been a poor mix.  Questrade, however, seems to have defied the unofficial tradition amongst discount brokerages to ‘take it easy’ by offering up a Boxing Day promotion.   Specifically, Questrade announced on Boxing Day they are offering up 25 commission-free trades to new accounts depositing at least $25,000.  Moreover those 25 trades are good for all of 2014.  This deal takes aim at a similar offer from RBC Direct Investing, who for a short while, claimed that they were the only discount brokerage offering commission-free trades that lasted a year.  Click here to learn more about the Questrade Boxing Day promotion.

Tweet from Questrade about Boxing Day promotion

From the Forums

While a lot of folks were out comparison shopping the latest TVs and tech toys this past week a handful of folks also were shopping around for discount brokerages.  This week, there is a post that pitted broker vs broker that was of particular interest as well as a lesson one investor got away with learning on the cheap.

RBC Direct Investing vs TD Waterhouse (TD Direct Investing)

Up first was this post on Canadian Money Forum which was a lively debate on the strengths and limitations of a couple of bank owned discount brokerages.

CMF post - RBC Direct Investing vs TD Waterhouse

Fat Finger Trades

Many active traders have at least one bad ‘fat finger’ trade story and can relate to this post from the Red Flag Deals forum.  Although this user managed to get out unscathed, the lesson is an important one for traders to take heed of.


That does it for the discount brokerage weekly roundups for 2013.  Have a safe and happy New Year’s and here’s hoping 2014 is a great year in the markets!

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Discount Brokerage Weekly Roundup – November 8, 2013

The big news everywhere this week was the Twitter IPO.  For many individual investors, accessing the Twitter IPO ahead of public trading meant having to meet specific account requirements laid out by their discount brokerages.  Once TWTR did go live though, the frenzy of buyers helped to propel the opening day price up from $26 to as high as $55.

In a tribute to the debut of TWTR, this week’s roundup will feature discount brokerage news gathered from Twitter.

Financial Literacy Month (#FLM2013)

November (or “Know”vember) is Financial Literacy Month. A couple of discount brokerages are helping to spread awareness and connect investors to educational resources. Parent accounts of National Bank Direct Brokerage (@nationalbank) and Disnat (@DesjardinsGroup) shared the following on their feeds this week:

National Bank Direct Brokerage Tweet

Disnat Tweet

For those interested in following events and information related to financial literacy month on Twitter, keep track of #FLM2013.


#BMO InvestorLine in the Globe and Mail

A piece by the Globe and Mail’s Rob Carrick (@rcarrick)on the adviceDirect product from BMO Investorline got tweeted by the @BMO media team.  Interestingly while the article provides a balanced perspective on some of the merits and drawbacks of adviceDirect, the comments section has some very strong opinions on why adviceDirect seems like it is missing the mark with investors.

BMO Investorline tweet about adviceDirect


Finally, to stay on top of all of the discount brokerages on Twitter, you can access our discount brokerage Twitter channel.

From the Forums

Twitter also had made quite the splash on the Canadian investor forums.  In particular, the investor forum saw a rather large spike in activity around the launch of TWTR this week.  Aside from the Twitter hoopla though, there were also a pair of interesting threads on discount brokerages, specifically on Canadian Money Forum.

Questrade vs Interactive Brokers

In this first post, a new investor is looking to become more active and is wondering whether a platform geared towards active traders, such as Interactive Brokers, is a better choice overall than another low cost option, Questrade.  Fellow investors weighed in to provide some important tips.

Questrade vs. Interactive Brokers

Switching to TD Waterhouse (TD Direct Investing)

Questrade was also the focus of a different investor’s decision making.  In this post, an investor was trying to weigh the pros and cons of having their investment accounts at the same place they do their daily banking (TD), even if it means paying slightly more on commissions.  Hear what the community had to say about the potential move.

TD Waterhouse vs Questrade

That’s it for this week. #TGIF!