Tag: Wealthsimple Trade

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – September 3, 2019

The unofficial end to summer is now here, and while it’s poor form to wear white after Labour Day, it seems like white flags and white knuckles are still very much going to be part of the investing experience in the weeks and months ahead.

In this shortened week edition of the Roundup, we take a rather lengthy look at recent developments in the deals and promotions department as well as in the marketing tactics of one bank-owned online brokerage. Not only did they decide to make a big splash in the deals pool just ahead of the long weekend, but they’ve also decidedly put getting friendly with millennials on the top of their to-do list. After those profiles, be sure to stick around for interesting comments and thoughts from DIY investors this past week from Twitter and the investor forums.

Discount Brokerage Deals & Promotions Updates

Even though summer is supposed to be a typically quiet time when it comes to investing, these past few weeks, the stock markets have been dominating headlines. Naturally, how things are going to play out is on the minds of many Canadian DIY investors as well as the online brokerages sitting between investors and the market action.

With the heightened uncertainty, the already challenging job of the online brokerages has become tougher, but as the deals and promotions activity in August has shown, the only choice at this point is to navigate the storm.

Heading into a new month, the big deals & promotions news to start off September are the several new offers from Scotia iTRADE that landed at the end of August. These offers undoubtedly soured some competitors’ long weekend relaxation plans and generated some buzz among Scotia iTRADE’s existing clients as well as new clients.

Like the stock markets, September will also likely see its share of deal volatility. There’s a new offer from BMO InvestorLine expected at the outset of the month and HSBC InvestDirect’s commission-free trade promotion is due to expire at the end of the month. Toss in the ramp-up for many online brokerages to capture interest in TFSAs and RRSPs before the end of the calendar year, and this September is likely to see a few surprises in the deals department for DIY investors.

Of course, while there is still quite a bit of choice for DIY investors looking for a deal when opening an online trading account, the biggest story to watch unfold is the fallout from Scotia iTRADE’s promotional burst.

The first thing to watch out for is the fact that Scotia iTRADE is offering up commission-free trades to existing clients who attend a specific webinar on US dollar positions on the 24th of September. To deepen the intrigue, the webinar is not being advertised (as of the time of publishing) on the public webinar calendar on Scotia iTRADE’s website and thus, may be restricted to existing clients.

For many reasons, Scotia iTRADE offering up commission-free trades to attend a webinar is an important development – not the least of which because it signals a ramp up in the use of incentives to drive client behaviour to objectives other than depositing cash. For many years, commission-free trades were generally available only as account sign up bonuses (or to add assets). And now that they are being used to encourage investors to attend webinars, the door is open to steer them into other behaviours as well. It will be interesting to see whether other online brokers who offer investor education might feel inclined to do the same thing to boost awareness of new feature launches. Additionally, those that do not offer investor education or who don’t have US dollar trading account capabilities need to come up with alternative value drivers somewhat quickly. Further, if this is something Scotia iTRADE continues to do on occasion, other brokerages who don’t follow suit may be perceived as not valuing their clients the way Scotia iTRADE does.

The other big development that Scotia iTRADE initiated with their latest deal is that they’ve lowered their standard commission price from $9.99 to $6.99 per trade for qualified new clients (for a limited time) and thrown in a $50 bonus, all on top of an ultra-low minimum deposit requirement (by Scotia iTRADE’s standards) of $2,500.

After holding out for over five years on a standard commission price drop, this promotion effectively signals a second price drop within a year at the same firm. And, because it is one of the big five bank-owned online brokerages, competitors are sure to take notice.

Typically, in order to get to the $7 commission per trade rate, the volume of activity has to be relatively high (e.g. 150 trades per quarter). So, to both lower the required deposit to qualify for the rate down to $2,500 while also dropping the price of a standard commission fee is a throw-down to the rest of the industry. For DIY investors looking around for an offer they can easily qualify for and benefit from, Scotia iTRADE’s latest will certainly find its way into contention.

The takeaway for DIY investors heading into the end of the year is that competition among Canadian discount brokerages is likely to intensify. Scotia iTRADE has laid out their business case for going after millennial investors – something their counterparts have also signalled an interest in. Millennial or not, investors of all ages are about to benefit from the race to win over newer investors.

Scotia iTRADE’s Living Their Best Life

After some time in cruise control, it appears that Scotia iTRADE, one of Canada’s big-bank-owned online brokerages, is stepping on the gas to pursue a new segment of DIY investors: millennials. Last week, we spotted an interesting series of promotional launches (described above) as well as an event tailored towards engaging with millennials via some serious influencer-driven marketing.

Starting first with a live event, which was billed as a “finance-y event for people who don’t typically go to finance-y events” three young, accomplished, “self starter” figures with large social media (Instagram) followings were recruited to share their views on, and journey with, money and investing.

Included on the panel list were:

  • Brandon Olsen (12.7K Instagram followers)
  • Amy Shio (13.2K Instagram followers)
  • Tristan O’Brien (77.1K Instagram followers)

Peeling back the swanky curtains a bit on this event revealed some interesting observations about how this event came together and who the intended audience was.

The first interesting observation is that this event was produced in conjunction with Bay Street Bull who describe themselves as “a business luxury lifestyle publication for professional men and women.” The nature of their typical content aligned well with the panelists.

Another interesting facet was the decision to post Instagram handles of the panelists rather than other social media channels (such as Twitter) and to elect to not go the route of having an “official hashtag” effectively closed off the event to people who wouldn’t be on Instagram or who didn’t follow Bay Street Bull. This certainly speaks to the desire to focus on reaching a typical millennial audience watering hole online. Other channels are clearly less important to this segment, or at least that’s what’s being implied.

 

Then there is the “self starter” campaign itself. Specifically, the “beginner guide to self-directed investing” brochure created to detail the stories of the abovementioned three self-starters and what they think about investing in general and the Scotia iTRADE experience.

Written in an interview format, the three different perspectives provide a different kind of “testimonial” to using the platform. Again, leaning on the production expertise of Bay Street Bull, the brochure paints a compelling picture of the millennial investor market opportunity, including the often-cited massive wealth transfer that is poised to take place from Baby Boomers to millennials.

Of course, despite talking about the future, the irony here is that millennials know all too well that the internet doesn’t forget.

For Scotia iTRADE, there is a genuine challenge ahead of them to shed the reputation of being the least competitive (from a pricing point of view) option for young investors. Recall that they kept their standard commission rates well above $20 per trade during the five-year period when the rest of the industry had started to lower standard commission rates to under $10. Shedding that kind of reputational drag will undoubtedly require some very big, bold (and potentially costly) overtures. Nevertheless, change has to start somewhere, and this year it has.

From lowering their standard commission fee (finally) to introducing the option for younger investors (under age 26) to have their low activity administration fee of $25 per quarter waived (on balances under $10,000), and now a direct campaign for millennials, there are clearly signs that things are beginning to shift at Scotia iTRADE.

Perhaps the most interesting thing about the launch of the deals and offers for existing clients and for the live event was that almost none of it appeared on the Scotia iTRADE Twitter feed or LinkedIn profile, nor did the promotional offer appear on the Scotia iTRADE website in the special offers section. Instead the deal surfaced via Google search and only after some searching online was the information about the iTRADE event retrieved. All of which begs the question, why keep this under wraps?

Another important consideration in the new millennial charm offensive that will be important to monitor is the degree to which the “influencer endorsement” builds traction with millennial investors. Among the older investors, the partnership with Canadian personal finance/investing celebrity, Larry Berman, worked particularly well for Scotia iTRADE for many years and resulted in many full hotel banquet rooms across Canada. That said, millennials are cut from a different digital cloth. They are savvier when it comes to vetting authenticity and as far as endorsements go, this is an interesting experiment at the intersection of social media marketing and DIY investing.

Ultimately, however, enlisting social media influencers may not prove to be as potent as other strategies.

Robinhood, the US online brokerage, Wealthsimple and Wealthsimple Trade (here in Canada) have also managed to create DIY investor evangelists by going a different route. The recipe, it seems, includes drastically reduced commission costs (or in the case of both online brokerages, zero commission costs) as well as a dramatically improved technology and user experience.

For a campaign strategy that leaned so heavily into a visual medium (like Instagram) to connect with a millennial audience, the hope is that the platform and experience with Scotia iTRADE will follow suit. Reading through the Scotia iTRADE Twitter comments, however, suggests there’s still quite a bit of work to be done (as well as a strange fixation on the large yellow Lego banana from their TV commercials). The hazard for iTRADE is that by setting visual and brand experience expectations without being able to follow through on them runs the risk of further alienating the next generation of DIY investor clients.

While outreach events and lowering the price barriers will put Scotia iTRADE back into consideration with younger investors, what will ultimately get millennials talking about investing on social media and using Scotia iTRADE as an online brokerage is how amazing and easy the experience is on the platform. The one thing that iTRADE needs to start hearing from millennials is “shut up and take my money” – anything short of that and there’s a lot more design and user experience work to be done.

Discount Brokerage Tweets of the Week

From the Forums

Any Port(folio) in a Storm

In light of increasingly unpredictable market fluctuations, one worried investor is looking for advice on “recession-proofing” their portfolio. Read on to find out what fellow Redditors recommend here.

Loony for our Loonie

With the recent publication of the Goldman Sachs prediction on the loonie, Canadian Redditors are up in arms, discussing potential strategies, profits, and economy-wide ramifications in this thread.

Into the Close

That’s a wrap on the shortened week version of the Roundup. It looks like it’s going to be more of the same kind of back and forth rhetoric, as well as precarious talk of recessions, all the while the economic numbers are still pointing to solid growth in Canada. As far as forecasts go, this sounds like things could go up or down or not anywhere or everywhere. Whichever way you’re trading takes you this week, pack some Rolaids and have a profitable week!

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – August 26, 2019

It seems like more and more discussion is taking place around the “R” word. Of course, with stranger things taking place around the world with respect to interest rates, trade wars, and conflicting accounts from economic indicators, it’s tough to make heads or tails of what’s going on. Despite the pervasive and heightened uncertainty, one thing is clear: there’s a lot of forecasting taking place about what may happen next in the stock markets.

In this edition of the roundup, we pile onto the prognostication bandwagon to forecast what online brokerages and DIY investors can expect heading into the last few months of the year. From what online brokerages have already telegraphed to signals of interesting developments, an intriguing picture is forming of the new landscape for online brokerages. As always, we’ve got a healthy serving of DIY investor chatter from Twitter and the investor forums to close things out.

Interactive Brokers Big Bet Gets Bigger

As far back as April of 2019, Interactive Brokers founder and outgoing CEO, Thomas Peterffy, signalled that Interactive Brokers would officially launch something “big” to catalyze growth to their business. That big bet, as it turned out, was the launch of a simulated sports betting platform (launched in July) designed to attract individuals who were a cut above the traditional gambler. Think Moneyball meets Wall Street.

With September now just a few weeks away, the kickoff to the new season of the NFL will also usher in a tsunami of football chatter around trading desks and water coolers across North America. As it happens, the NFL is slated to be added to the lineup of games that users of the Interactive Brokers sports betting simulator can bet on.

Fantasy football (indeed fantasy sports in general) is a wildly popular endeavour. So, it stands to reason that with the influx of interest in the new season of the NFL combined with a platform that offers up the stats and quant geeks of the football world a chance to flex their bulging bell curves, Interactive Brokers may find its pool of potential new clients after all.

Another big catalyst for online brokerages like Interactive Brokers is the market volatility itself.

When markets become uncertain, that’s typically when efficiency in pricing breaks down and when active traders step back into the mix to find compelling trades. So, despite volatility being generally bad news for many investors, for active traders, the volatility is a sign of opportunity.

Combined with lower interest rates, the ability to access margin means that firms like Interactive Brokers could stand to benefit from increased trading activity (and therefore commission revenue). That said, the last time the markets were signalling an increase in volatility, Interactive Brokers pre-emptively raised margin requirements to protect against the sudden swing in prices, a deft move that saved them from considerable margin loan losses while their peer firms unfortunately did not fare as well.

As September nears, we’ll be keeping a close eye on what Interactive Brokers (and other online brokers) will be doing with margin requirements as that may once again prove a definitive canary-in-the-coal-mine.

Stimulus in the Deals & Promotions Section

With the “R” word now making the rounds in major news and business media (as well as the content of several large online brokerages), sentiment among DIY investors towards entering into the markets is undoubtedly going to turn negative.

As it just so happens, September is historically when investing activity picks up again and for many financial services firms (especially online brokerages), this represents the second-last month of the fiscal year. Translation: it’s a great time to boost performance stats for the fiscal year by landing more client accounts.

Financial performance aside, savvy online brokerages understand that in today’s fiercely competitive market for DIY investor assets, it will be important to stand out, especially during the market storm.

One quick way to incentivize investors to pay attention is with a good deal. The seasoned investors will undoubtedly be out looking for compelling deals in the stock market and will also recognize a good offer from an online brokerage if one were to surface. Ironically, central banks won’t be the only ones contemplating how to boost market performance with rate cuts.

Pricing discounts are just one option, however. In the current market climate, one way to soothe the angst of investor uncertainty is with access to good information and market coverage. So, while cash back promotions or commission-free trades are always fan favourites, the ability to stay informed about what’s happening in markets in either real-time or with in-depth coverage would also be value added.

This past week, RBC Direct Investing tackled the thorny subject of trade protectionism in its “Inspired Investor” publication, and TD’s MoneyTalk tried to unpack the possibility of a recession in its most recent episode. Most Canadian online brokerages, however, have been mum on the subject. For those online brokerages who have invested in strong content production programs, now is the time when those investments pay off not only as news sources for their own clients, but also as a mechanism to stand apart from other brokerages (or other content providers) who can’t offer the same degree of insight into market direction.

More Price Disruption Coming

Of course while incentives and promotions are one quick way to get on investors’ radar, the so-called “nuclear option” of getting noticed is to drop commission fees down to zero.

So far, Wealthsimple Trade is the only Canadian online brokerage to offer zero commissions on all trades, with other providers such as Questrade, Virtual Brokers, and National Bank Direct Brokerage offering some kind of commission-free trading on ETFs.

One interesting dark horse that could still shake things up for online brokerages in Canada is Canaccord, whose 2018 acquisition of Jitneytrade could enable them to pursue a maneuver akin to Wealthsimple’s acquisition of the brokerage Canadian ShareOwner Investments Inc., which then enabled Wealthsimple Trade to offer online brokerage services to DIY investors.

In addition to price, there’s also going to have to be a step change in how incumbent Canadian online brokerages connect with clients (and potential clients).

What Wealthsimple’s latest advertising stunt of the tiny stadium in downtown Toronto shows, is that they’re also capable of pushing the envelope for innovation in messaging for wealth management services providers. At the heart of it though is the “perceived value” of what a commission charge gets you. Many large Canadian online brokerages have publicly been called out for struggles with technology stability or scalable customer service access, so the notion that “bigger is better” doesn’t necessarily match consumers comments and reviews online.

The takeaway is that as competition continues to grow for investor assets, so does the likelihood that there will be another major commission pricing announcement from an existing provider. For new entrants into the online brokerage space, unless there’s a quantum leap in trading platform experience, going to zero-commission or using ultra-low commission pricing is likely the path forward.

Regardless of the stock market’s immediate direction and sentiment, Canada’s online brokerages have had to navigate choppy waters before. What is different this time, however, is that there is a strong likelihood that there is a recession on the horizon and considerably more competition to boot. Heading into busier times in the weeks ahead, the advice for Canadian online brokerages is simple: prepare accordingly.

Discount Brokerage Tweets of the Week

From the Forums

Pure and (Wealth)simple

An inexperienced investor collected opinions about Wealthsimple and found out what fellow Redditors like, what types of investments they recommend through this brokerage, and how they use their Wealthsimple accounts. Read the discussion here.

Asset Tripping

Freshly motivated to maximize his returns and concerned about missed opportunities, a Redditor who passively accumulated savings into a TFSA is looking for advice on a more assertive investment strategy.

Into the Close

Savvy investors know that there’s always a bull market somewhere. With headlines the world over fixated on the trade war and uncertainty, sentiment is clearly shifting negative, but with gold perking up and a range of vehicles available to capitalize on volatility, it seems that aside from capital to wade into this storm, it’s going to take the gumption to keep going.

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – August 12, 2019

One of the highlights of any summer barbecue is the dip. Of course, for anyone who’s ever arrived at one a bit too late, often it’s just the dip that’s left. For DIY investors, it seems that the newsies are no longer talking about the market barbecue anymore and instead are focused on the dip.

In this edition of the Roundup, we take a look at a global trend towards commission-free trading that’s taking shape, and what that might mean for Canadian DIY investors (and online brokerages too). From there, we spotted another emerging trend from one online brokerage who knows how to get noticed this summer. As always, we’ve got a great medley of investor chatter and a few spicy tweets to close things out.

Commission-Free Trading Growing Globally

Now that the back to school sales are ramping up, it’s a sure sign that September is just around the corner. Of course, for DIY investors and online brokerages alike, the approach of September is also the time of year when activity starts to pick up again. The competing forces of volatile, tweet-driven behaviour on the one hand and solid economic fundamentals on the other mean that the stock market (and bond market) are becoming decidedly undecided on a direction. In spite of the surrounding uncertainty for the stock market itself, it seems that a clear trend is emerging for existing online brokerages to contend with: zero-commission trading.

This past week, the US online brokerage that has captured the imagination (and loyalty) of millennial investors, Robinhood, announced that they have officially been permitted to launch in the UK.


Robinhood’s intentions to expand globally are no secret. In 2015, for example, we reported their plans to expand to Australia, and there have been signals for a few years that the UK was also on the roadmap for the no-commission discount broker’s expansion plans. It is a clear indication that in the world of commission-free trading, scale matters.

Nonetheless, unlike in the US, Robinhood’s journey to UK won’t be a cake walk.  There are at least three other firms already offering some form of commission-free trading program in the UK: Revolut, Trading 212 and Freetrade, with Trading 212 having had the largest head start since 2018. Even at home in the US, Robinhood is starting to face new competitors, like JP Morgan, stepping up to offer commission-free trading. And, in Australia, there are also firms already offering commission-free stock trading.

In the wake of Robinhood’s latest announcement, it is becoming abundantly clear that zero-commission trading is no longer an anomaly. Rather, it is now a footrace for new entrants to get into the space, disrupt existing players, and potentially get in front of the global expansion plans of Robinhood.

For Canadian DIY investors, Wealthsimple Trade is the closest to zero-commission trading that we can get. And, in some interesting news that crossed our radars at the end of July, they too are bulking up their technology stack to take on the existing Canadian discount brokerage market. Specifically, a news release at the end of July that mentioned Wealthsimple Trade choosing market data technology provider Xignite could be an indicator that real-time trading quotes are actively under development and coming to Wealthsimple Trade soon. Incidentally, Xignite counts Robinhood as one of its customers, so not only is Wealthsimple Trade tearing a page out of the zero-commission provider’s pricing playbook, but also one from the technology side too.

Although there are no plans or mention of Robinhood expanding to Canada (yet), the lesson from across the globe appears to be that even in comparable markets, there can be multiple zero-commission trade providers. While in Canada there is currently just one, the odds favour there being more than one in the foreseeable future.

If existing Canadian online brokerages were not serious about getting in front of zero-commission trading before, there is now growing international evidence and developments here in Canada that suggest rethinking how to compete in a zero-commission world. New brokerages are figuring out how to provide an exceptional online trading experience at little to no commission cost, and the existing ones who already do are looking beyond their own borders for opportunities to grow.

BMO InvestorLine Staying in the Spotlight

If there’s one lesson to take away from the melee that is the US political system, it’s that being talked about is key to staying on the minds of audiences. This past week, we noted yet another interesting profile of BMO InvestorLine surface on a popular investing website, Benzinga. Earlier this summer, we noted that InvestorLine picked up major coverage from the Financial Post, which offered up an exclusive look at the launch BMO InvestorLine’s new trading platform.

With traditional advertising budgets under fire, BMO InvestorLine appears to be shifting tactics by using public relations (PR) as a tool to set the narrative straight on BMO InvestorLine. Going the PR route means that there are likely to be a lot more eyeballs reading the story than if it were just on the company blog. In fact, there were a few posts about BMO InvestorLine’s latest review/interview on social media, which highlights BMO’s strategy to spread the word about their online trading capabilities.

Ultimately, it is great to see people talking excitedly about one (or more) of the Canadian online brokerages. For the moment, BMO InvestorLine appears to be setting the pace of a new PR-driven strategy.  That said, PR is something that each bank-owned brokerage is generally well equipped to compete against, so BMO InvestorLine may not be uncontested for too long.

Even though we’ve noted an uptick in tweeting and advertising activity from TD Direct Investing as well as from Qtrade Investor recently, it will take more than Twitter to connect with investors. BMO’s latest moves on the PR front show that to boost a tweet’s range, it helps to have one of the big financial information provider names get the social media ball rolling (and having many of the employees help by sharing is great for momentum too).

With fall just around the corner, it’s only going to get trickier for online brokers to stand out with just news releases. To get investors’ attention at this point, and to BMO InvestorLine’s credit, Canadian online brokerages need to come out with features or promotions that get people talking, AND be much more active in reporting what’s happening inside of their own shops. Now, if only there were a channel for them to do that on 😉.

Discount Brokerage Tweets of the Week

From the Forums

Mutually Beneficial?

One DIY investor has questions about the advantages of ETFs over mutual funds. See what fellow forum users had to say in this Canadian Money Forum thread.

Starting Small

A DIY investor wants to know if the learning experience of making small, but risky, investments will eventually result in a payoff, and fellow Redditors chimed in with their opinions. Read it all here.

Into the Close

That’s a wrap on another wild week. There’s a lot of information flying around – from trade rumours to cryptocurrency rallies. With interest rates falling in the US (and around the world) and likely here in Canada too, it’s a particularly important moment for online brokerages to consider how investors will react to an ultra-low interest rate environment and pull their money out of savings and into the stock market.

The one story that happens to be gathering steam though is chatter about interest rate cuts and a recession. With just a few more weeks left to enjoy the summer, it might not be a bad time to unplug. Of course, for those strapped into the roller coaster adventure that is the stock market right now, just make sure to keep your arms in the ride and secure your personal belongings. Good luck & stay profitable!

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – August 6, 2019

It’s definitely shorts weather outside as well as in the markets. And, what better way to celebrate a short week (at least for Canadian DIY investors) than with a brief update of what’s moving the needle for online brokerages here in Canada as well as in the US.

In this edition of the roundup, we take a quick look at the latest activity in the discount brokerage deals section that is bound to put a dent in some brokerages’ vacation plans. From there, we look at some important developments in the US online brokerage market that could help paint a picture of the future for Canadian online brokers and DIY investors. As always, we’ll be sure to toss in the latest investor chatter from Twitter and the investor forums.

Deals – Get ’em While They’re Hot

Heading into the long weekend at the beginning of August, we thought activity in the deals and promotions space would likely be on cruise control until closer to September, the month when activity typically picks back up. Instead, DIY investors were treated to a pleasant surprise, as there was one bank-owned brokerage that decided a dip into the deals pool for the month of August.

RBC Direct Investing just kicked off a month-long promotion that frequent watchers of the deals section will be familiar with. The offer is for 25 commission-free trades which are good to use for one full year, and requires a deposit of $5,000.

Like most things market-related, timing is key. It is interesting that the CIBC Investor’s Edge promotion was extended into early August from its original expiry date at the end of July. If Investor’s Edge decides not to extend their existing offer (or replace it), then RBC has the “lion’s share” of the spotlight for commission-free trading offers for the near term. Another brokerage that should be concerned with RBC DI’s latest maneuver is HSBC InvestDirect. Their promotion, which launched in July, offers 30 commission-free trades which are good for use for up to 60 days.

When an online brokerage the size of RBC Direct Investing jumps into the deals pool, they’re going to make a splash. Interestingly, the fact that the deal is set to expire at the end of August means this is a rare window for investors looking for a deal to actually get one from RBC Direct Investing, outside of the usual RSP rush in the late winter/early spring.

For DIY investors, a deal this early from a major online brokerage is a great signal of the level of competition between Canadian brokerages, which makes us believe there are more deals likely coming to market.

Quick Notes from the US Online Brokerages

Not all the news from across the border is acrimonious. In fact, for online brokerages, there are some bright spots in terms of performance updates, concept projects, and big business moves which show that the space is continuing to evolve around tricky macro conditions.

With the start of a new month, Interactive Brokers has published their latest set of performance metrics for July. As has been the case for a number of years now, metrics for the popular online brokerage continue to push higher with latest annual growth figures in client accounts clocking in at 17% and, on average, 276 (annualized) trades per client. Interactive Brokers is clearly managing to attract individuals with a tendency towards active trading. Even more interesting for the brand will be the next several weeks in which the VIX continues to flash volatility is at hand – something that can pull active traders into the mix to compete for big swings in price.

Another big growth story announced at the end of last month came from the largest online brokerage in the US – Charles Schwab – who (for the tidy sum of USD $1.8B) is acquiring about one million of USAA’s brokerage and managed accounts, and will become the exclusive wealth management service provider to USAA.

While these two firms differ substantially in size, they do help provide examples of what options confront the current Canadian online brokerage space in terms of pathways to growth. On the one hand, Schwab’s growth announcement illustrates that when a firm is in the wealth management space and wants to exit it, the bigger players are typically going to have an edge over the smaller firms. For Canadian online brokerages, there definitely seems to be a sentiment to deploy features to keep up with leading brands rather than to push the envelope on innovation. As a result, it is likely that upstarts, like Wealthsimple Trade, can hustle and out-compete existing providers, which in turn may prompt some existing players to exit the space the way USAA did in the US.

Another important takeaway is the power of building a best of breed trading experience and the impact on investors.

Interactive Brokers still has a lot of currency with active traders/investors and continues to grow as a result (see this recent forum post for example). The result of their investment in automation is clearly paying off, as they are able to offer much lower commission per trade pricing than many of their peers and still be a profitable enterprise. By comparison, the no-commission online brokerage, Robinhood, has managed to carve out their own niche with millennial investors, and has layered in paying for additional services as part of their way of balancing being accessible and sustainable. Incidentally, this past week, they also launched a new messaging feature that keeps their platform’s user base informed about important announcements in a way that looks and feels like it belongs within the Robinhood platform. Even more forward looking, TD Ameritrade flashed a sign of what’s to come with DIY investors potentially being able to place trades while driving.

For Canadian online brokerages, the fork in the road to growth is clear. Either win at creating an innovative product that customers rant and rave about, or start buying up other online brokerage providers who may be much slower to innovate. It’s already happening in the US and will almost inevitably happen here.

Discount Brokerage Tweets of the Week

From the Forums

Man or Machine?

No one can deny the relentless level of automation that has taken over the financial world. This has people torn between human advice and robo-advice for managing their investments. See what individuals in this reddit thread have to say about the new age of robo-advisors.

Parent Trap

With the average amount spent raising a single child to adulthood being over $200,000, parents have to budget carefully. The individual in this reddit thread is going the extra mile, trying to set up an RESP for their newborn. Find out what advice fellow readers offered to help avoid the pitfalls of planning.

Into the Close

That’s a wrap on another week’s action in the online brokerage space. Now that August is here, we’re keeping our ear to the ground for what’s likely going to be a very busy fall in the online brokerage space. Perhaps figuratively and literally, the actual ground seems to be a little more palatable to listen to than what’s happening on social media anyway.

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – July 22, 2019

Seems like this summer, there will be more that one Maverick making waves on traders’ screens. The trailer for Top Gun 2 officially dropped this past week and even though we weren’t planning on a sequel, we just felt the need – the need for (a good) read.

In this maverick edition of the Roundup, we provide updates on the new shiny new TFSA account that’s ready to launch one hotshot Canadian online brokerage into the spotlight with a new generation of investors. And, if that wasn’t enough to take your breath away, there’s a look at the performance numbers of one US online brokerage who managed to get on analysts’ radar to figure out where they’re heading next.

Wealthsimple Trade TFSA Now Live for All

Well, that escalated quickly. The launch of Wealthsimple Trade’s TFSA account officially went live this past week, and with it, the timeline for the Canadian online brokerage industry to come up with something equally or more compelling than commission-free trades has also moved up.

In last week’s Roundup, we mentioned that there were rumblings around the DIY investor forums of the TFSA roll out, as well as press coverage of Wealthsimple Trade that happened to coincide with the soft launch of the popular registered account feature. At that time, however, the official word was that the launch would be coming at some point in the next month.

Fast forward a week, and the gloves are now off in a fight between brokerages to win over Canadian DIY investors as newcomer online brokerage, Wealthsimple Trade, opened up access to their TFSA trading account to the masses.

With the official roll out, there is now more information available about Wealthsimple Trade’s TFSA and, importantly, the benefits and current limitations of the account type. The clear benefit to all things Wealthsimple Trade is that trading accounts are commission-free, which now includes the TFSA.

For financially conscientious millennials trying to cut frills and costs, not having to pay trading commissions is not just a deal, it’s ideal. Of course, like most things in life, if it sounds too good to be true, then it probably is, and despite commission-free trading, there are some important caveats to the Wealthsimple Trade TFSA account. One of the big limitations right now is that Wealthsimple Trade’s TFSA does not support transfers into the account. Only deposits from an externally linked bank account will work as a funding source for the TFSA.

This means, for the time being, other Canadian online brokerages still have some time to figure out a game plan to appeal to investors already eyeballing the exits for a Wealthsimple Trade account. And as social media and forum chatter already are showing, the sentiment to move is real.

Of course, it’s not just what’s on the official page that offers some insight into the Wealthsimple Trade TFSA – the Wealthsimple Trade Twitter account is also filled with its share of useful nuggets. For example, while it was already stated that RSP accounts were on the list of features actively being worked on, the telegraphing of USD TFSA accounts was something we did not yet hear about in terms of development, especially considering Wealthsimple Trade makes part of its money from conversion fees.

While we wouldn’t have assumed Wealthsimple Trade to be standing still with their feature development, the mention of USD accounts being “in development” means that one of the major resistance points for joining Wealthsimple Trade is likely going to be removed in the not-too-distant future.

Another cause for concern for online brokerage providers is that DIY investors are clearly excited about the official launch of Wealthsimple Trade’s TFSA. This past week, there has been a significant amount of investor chatter taking place in the investor forums and on Twitter now that this feature is live. Suffice to say, there is nothing that other online brokerages in Canada have done yet this year that has captured the attention of the “digital crowd” the way that Wealthsimple Trade has.

In what is starting to feel like a volleyball game out of a Top Gun movie, it seems that team Maverick has made their move, in denim jeans no less, and now it’s up to Canadian online brokerages to serve something back over the net.

Interactive Brokers Makes a Gutsy Call

With summer in full swing, it seems like everyone is paying a bit more attention to the forecasts. No doubt the volatile weather has something to do with it. Similarly, with the latest earnings season results trickling out of the US online brokerage market, there’s a mixed bag of results highlighting some areas of potential volatility and opportunity in the DIY trading market as a whole.

While earnings reports are typically about “the numbers,” there are also lots of interesting nuggets that management shares about the current and future state of the company that adds considerable colour and context to the numerical performance.

In the case of the latest earnings call from US online brokerage Interactive Brokers, it wasn’t just the numbers from the earnings report that analysts were talking about, but rather, a bold new initiative launched earlier this month that had folks trying to digest exactly what Interactive Brokers is thinking.

Starting first with the numbers. Despite a year over year decrease in revenues of 7.2% and a rise in expenses of 8%, Interactive Brokers still managed to eke out another reasonably strong year. The electronic brokerage segment of the business managed to gain 7% year over year, which on the surface sounds like a win, however when peering under the hood, there are some important flags of weaker trading dynamics that are of particular interest to industry observers.

The primary area of concern is that Interactive Brokers reported a 4% decrease in commission revenue from the year ago quarter – a result explained by lower commissions per trade being executed by their clients. That is even more concerning in the face of the 4% increase in the total number of trades (year over year) and a 19% increase in the number of customer accounts.

The takeaway is that customers aren’t trading the way they used to. Were it not for the interest income, this would have been an even bumpier quarter for the online broker. What this points to (and is something other brokers have had to come to terms with) is that the online brokerage model cannot rely on just trading commissions alone to keep the business afloat. Assets and margin are key revenue drivers that will help buffer earnings at least until trading behaviour shifts. Which leads into the second really interesting thing about the Interactive Brokers earnings call this quarter.

Despite earnings missing expectations, the big topic of conversation by the analysts during the Q&A session with Thomas Peterffy, founder and outgoing CEO of Interactive Brokers, was the recently announced launch of their promotional sports betting platform. Most telling was that 8 out 15 questions from analysts were about the sports betting promotion.

Perhaps the most awkward moments came when Peterffy called out analysts who were questioning the platform as to whether or not they had signed up already (those asking the questions hadn’t yet). One research analyst Macrae Sykes from G. Research, LLC hadn’t yet tested the platform before asking about it to which Peterffy stated “You’re such a disappointment. I was so hoping that you would do that.”

Despite none of the analysts who asked about the platform having actually signed up for or tested the sports betting feature, Peterffy managed to share some very interesting insight into the strategy to tap into the sports betting market for potential new Interactive Brokers clients.

First, as we reported in last week’s Roundup, this initiative is clearly aimed to attract new online trading customers onto the Interactive Brokers platform. Peterffy confirmed this in the earnings call when he stated “driving new brokerage accounts is the primary purpose. I don’t want to speculate about what we may or may not do with this sometime down the road. So right now, our focus is to perfect the platform and drive new brokerage accounts.”

Second, analysts queried why Peterffy felt it would work as a strategy to onboard clients, and ultimately it came down to his experience in dealing with traders on the exchange floor. According to Peterffy, if traders talk about sports betting, it stands to reason that sports bettors might want to kick the tires on investing online.

Buried in that response, however, was probably the most interesting sound bite of the call.

As seen below, Peterffy expects that there could be in the order of millions of accounts that get created at Interactive Brokers as a result of this initiative. And, although he does not provide a timeline for those accounts to be created, it is nevertheless an incredibly lofty goal considering that they currently have just shy of 650 thousand client accounts.

It’s hard to dismiss Peterffy’s track record of success in building Interactive Brokers into the global powerhouse brokerage that it is, and yet there was clearly a lot of uncertainty on the part of analysts asking about the strategy to pursue sports bettors. Their challenge is how to value or model and predict the various scenarios that this kind of move could provide to the business as a whole. Of course, if they had a tough time getting the earnings estimate right this past quarter, they will have an even tougher time trying to track what impact the sports betting platform will have on new client acquisition.

Let’s hope they have better luck actually predicting outcomes of games using the platform, as they will undoubtedly be called to the mat about it on their next earnings call. You can almost bet on it.

Discount Brokerage Tweets of the Week

From the Forums

Free Trade Agreement

It’s finally here. Wealthsimple Trade has now made TFSAs publicly available and in doing so, captured the attention of many investors who now have the option of opening up no-commission registered accounts. Click here to see why this new addition has the Reddit community buzzing.

Weight and See

There’s never one right answer when it comes to creating a long-term portfolio strategy. With a 25+ year investment horizon, there’s always time to take on risk, but does that warrant a 100% asset allocation in equities? Find out what others have to say in this RedFlagDeals thread.

Into the Close

While summer weather is a great time to get outdoors, this week investors will be glued to earnings reports. Of course the hot air this summer might not just be from the weather. Politics and even a dangerous situation bubbling over in the Strait of Hormuz mean that we could all be on the highway to the danger zone. Here’s hoping cooler heads prevail and that you’re able to cruise through this turbulence right.

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – July 15, 2019

When it comes to summer, some people like soft serve and others like their serves to be anything but soft. Ironically, the world of professional sports is just one of the places we’ve found online brokerages wandering into, and certainly not the only place where they’re trying to get into the winner’s circle.

In this edition of the Roundup, we look at one online brokerage’s clever gambit that bettors may want to try their luck at stock trading. From there, we review yet another Canadian discount brokerage that managed to find its way into the media spotlight this month, conveniently ahead of a major feature launch. As always, we’ve served up some sizzling sound bites from DIY investors on Twitter and in the investor forums.

Bettor Safe Than Sorry

Of the many metrics that makes Interactive Brokers stand out relative to its peer firms in the U.S. online brokerage space, one in particular emerges: account growth. Despite the bumps in the market over the past decade, Interactive Brokers has managed to consistently grow its number of net new clients month after month, quarter after quarter, and year after year. It’s a streak that could put a Jeopardy champ like Ken Jennings or James Holzhauer to shame. Like all good things, however, the streak may not last forever, something founder of Interactive Brokers, Thomas Peterffy, telegraphed in the most recent earnings call.

In a strange twist of irony, however, the latest move by Interactive Brokers seems to be inspired somewhat by the same source of success as Holzhauer. As it turns out, Holzhauer is a professional gambler and applied the principles of betting to fundamentally change how Jeopardy has been traditionally played since, well, forever.

Earlier this month, Interactive Brokers announced a rather novel approach to attracting the kind of client that would fit their traditional mold, the speculative investor, by launching a new promotion linked to sports betting. Yes, that’s not a misprint.

As part of a new campaign labelled “bet, learn, win” Interactive Brokers is putting up to $1,000 in commission credits on the line for individuals who sign up for, and place bets on, Interactive Brokers’ new virtual sports betting platform. Again, not a misprint.

The cap on the number of individuals eligible to participate: 2.2 million. Which means that Interactive Brokers is embarking on a massive lead capture program that could help uncover a material number of prospective clients for the online brokerage side of the firm.

Peterffy and Interactive Brokers have spent a lot of time and resources expanding out their financial services ecosystem. Even so, at the heart of their story, they understand active traders, and if there’s one thing that many professional active traders like to do in addition to speculating on markets, it is to bet. On anything. So, it is a calculated venture that individuals who maybe have not yet traded in markets would give it a go after mastering a profitable winning strategy on Interactive Brokers’ sports betting platform. Also, what’s the downside for clients of other online brokerages who might want to give the new virtual platform a go?

Whatever winners win, they get to apply to an Interactive Brokers account in the form of commission credits, up to a maximum of $1,000. The conditions on this promotion are equally interesting. First, while open to just about anyone anywhere (save for a few locations around the world), individuals who are clients of Interactive Brokers prior to June 30th aren’t eligible to apply those winnings for commission credits. This is clearly, then, a play to attract new clients into the Interactive Brokers ecosystem. Next, if you wipe out your virtual sports betting account, you can’t create a new one. So, unlike a lot of other trading simulators, there is no “insert more coins to continue” feature here.

Attracting new clients through the use of stock market simulators is nothing new – in fact just this past week, National Bank Direct Brokerage’s “Biggest Winner” competition in conjunction with Horizons ETFs just wrapped up.

What stands out as remarkable in this case is that Interactive Brokers is: 1. Offering up a promotional offer for commission credits and 2. Directly associating investing/trading with gambling/betting.

In terms of the former, seeing a firm like Interactive Brokers turn to commission credit incentive offers/promotions to attract new clients is a signal that the firm is going to now have to spend more in order to attract new clients to the firm.

Perhaps most interesting, however, is the unequivocal association of investing with gambling. If there has been any kind of taboo in the “marketing” world of investing, it’s to steer clear of any association of investing or trading with gambling. And, in this promotion, it is precisely the activity of gambling that serves as the gateway to trading. The implied message: if you’re really good at gambling, you’re probably good at trading too.

Canadians over the age of 21 who are not already Interactive Brokers clients are eligible to sign up and participate. We even spotted a 604 area code (Vancouver) on the help line numbers, to boot.

No stranger to taking calculated risks, it seems that Interactive Brokers has definitely stacked the odds for success (in the form of attracting new customers) in their favour. As Jeopardy champion Holzhauer would no doubt endorse, approaching the game from a different angle and being willing to make some big bets is one way to get to the winner’s circle.

Wealthsimple Trade in the Spotlight Ahead of TFSA Launch

Two points a trend does not make, but it’s certainly enough to get our curiosity piqued. As we reported on last week, BMO InvestorLine was in the spotlight in the Financial Post, a major financial publication, showcasing the upcoming launch of their new website. Also in the news that week was another online brokerage that is on the minds of many investors (and online brokerages) because of their rock-bottom online trading commissions.

Wealthsimple Trade, the newest online brokerage to step onto the Canadian DIY investing field, was featured in an article (for subscribers only) in the Globe and Mail by Canadian discount brokerage industry expert Rob Carrick.

Unlike the Financial Post coverage piece on BMO InvestorLine, Carrick’s article provided an overview of the newcomer brand, highlighting how it stacks up compared to other Canadian discount brokerages, and what features Wealthsimple Trade currently offers. Also interesting about Carrick’s feature is the reference to the latest J.D. Power & Associates Investor Satisfaction survey comments about vulnerability of the traditional online brokerages to losing millennial clients – especially because of mobile app experience, an area in which Wealthsimple excels relative to many existing brokerages.

One of the interesting things about Wealthsimple Trade is that as of the writing of the Globe and Mail article and this post in the Roundup, registered accounts (like RRSPs and TFSAs) are not fully available. That said, there was chatter on Reddit, as well as an interesting note on the Wealthsimple Trade help page, that indicates that TFSAs are already being rolled out to select clients and that TFSAs will be on track to be fully available at some point in August. RRSPs are still TBD.

For all the features that currently don’t exist at Wealthsimple Trade, the lack of registered accounts is something that has likely held many DIY investors from taking a serious look at the new online broker. That, and a lack of awareness/trust that usually accompanies the new kid on the block.

Nonetheless, they are on the scoreboard, so to speak, with 25,000 client accounts and have a tactical advantage with their user experience on mobile. Millennial investors may not care so much about “historical reputation” as they would about “engaging experiences.”

So, whether it is a coincidence or just great timing, talking about Wealthsimple Trade just ahead of a big feature roll-out is fortuitous. The fact that discussion about this feature showed up on Reddit, a digital channel where Canadian millennials interested in personal finance invariably end up, is a positive signal this feature will be a hit with the target demographic. Of course, with the Globe and Mail also on top of this new player, it seems like older investors will soon catch on to what the cool kids are up to as well.

Discount Brokerage Tweets of the Week

From the Forums

Is Like, 30 Too Old?

These thirty-somethings are contemplating whether or not it’s too late to start an RRSP. Like most individuals, they want to know as much as possible before making such a crucial decision. Click here to see what others have to say.

Ruh- Ruh- Recession?

The yield curve has been inverted for over 30 days now, and this has many people contemplating what precautionary steps to take (if any). For more bearish thoughts, check out this Reddit thread filled with bruised bruins.

Into the Close

That’s a wrap on another week’s worth of action. In spite of the vitriol and political turmoil in the U.S., stock markets powered higher, proving that a steady (invisible) hand continues to steer the ship. Of course, with summer heating up, it’s hard to tell if it’s just the heat or if investors on the sidelines are starting to feel the heat of a little FOMO set in. Regardless, if you’re looking for a bit of shade this summer, apparently that’s going to be easy to find. Stay hydrated & have a profitable week!

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – July 1, 2019

Happy Canada Day! It’s great to be back in the saddle again and happily there’s great news to report since the last update a couple of weeks ago. With U.S. markets touching new highs, summer is off to a strong start. Interestingly, so too are a couple of Canadian online brokerages, to the point where other online brokers may not be getting time off to just kick back and relax because they’re going to be playing catch up.

In this edition of the roundup, we wade back into a much shallower deals pool for July and profile the latest turnover in offers for DIY investors. From there, we take a look at a popular online brokerage ranking that was recently released and highlight a dark horse contender that is showing signs of becoming a mainstream brokerage of choice for more Canadian investors. In keeping with roundup tradition, we cap things off with a dollop of chatter from the investor forums as well as from DIY investors on Twitter.

Deals & Promotions on Cruise Control

With the new month comes the usual check-in on the deals and promotions front. This month, it seems like Canadian discount brokerages are gearing down and preparing for what will likely be a very competitive fall and winter. For DIY investors, it means that the deals and promotions in July are more of a lazy river rather than wild water adventure of savings.

There were no big deals to announce at the outset of the month (although technically it was Canada Day so often times promotional news gets delayed because of holidays), however, it is noteworthy to see who is left on the field with promotions during July.

Unlike RRSP season where practically all Canadian discount brokerages were offering some kind of incentive offer, this month there are just two major bank-owned brokerages with cash back or commission-free trade offers: CIBC Investor’s Edge and BMO InvestorLine. In the case of Investor’s Edge, their commission-free trade offer is set to expire at the end of July, whereas for BMO InvestorLine, their promotion extends through to the very beginning of September. Aside from these two firms, the other two noteworthy firms with offers of commission-free trades are Desjardins Online Brokerage and Questrade.

In terms of cash back offerings, what is particularly interesting is something we had mentioned in a previous roundup regarding BMO InvestorLine, namely that their latest tiered cash back promotion has a much higher minimum deposit requirement than previous offers or peer offers. A minimum deposit threshold of $250,000 prices quite a few investors out of that offer, but does signal that BMO InvestorLine is interested and willing to create incentives for individuals with sizable portfolios to give BMO InvestorLine a try. What is also interesting about the upper level of this offer, namely the $2M+ deposit range, is that there aren’t any competitor offers at this level and it is likely the first time that there is a cash back offer for a deposit of this size. Previously the high-water mark was deposits of $1M+ so anyone bringing over more than that would simply have to make do with the bonus offered at the top end of the tiered range.

For those intent on opening an account with less than $250,000 there are still a couple of strong offers from either Questrade or CIBC Investor’s Edge that offer up free trades or cash back.

That said, even though we are not anticipating a watershed of deals to hit the market this summer, it is hard to imagine the field of Canadian online brokerages allowing only four main players to remain unchallenged until September. The resurgence of interest in Bitcoin, a healthy IPO market, and signs of a “melt up” in the stock markets mean that investors may find another reason to step off the sidelines and into the markets this summer. Further, based on the performance of several online brokerages in the latest MoneySense rankings (see next story), there is now  greater impetus for follow up promotion activity.

For now, however, we’re on the lazy river ride – so best to kick back and relax for as long as possible until the competition picks up again.

Best Canadian Online Brokerages for 2019 Announced

With the return of summer, it’s also time again for the annual MoneySense magazine Canadian online brokerage rankings for 2019. As with previous years, financial services research firm Surviscor provided the analysis for these rankings, and provided seven different categories in which different online brokerages were considered to be “the best online brokerage” for something.

This year, the best online brokerage overall according to these rankings was Questrade, which was a close second in last year’s rankings. While the numerical scores weren’t released this year, it was interesting to note how close the two firms were last year. Interestingly, it wasn’t necessarily who came out on top this year, but rather who entered and exited the top five.

MoneySense Best Online Brokerage Rankings: 2018 vs 2019
Rank 2018 2019
1 Qtrade Investor Questrade
2 Questrade Qtrade
3 Scotia iTRADE TD Direct Investing
4 BMO InvestorLine Interactive Brokers
5 BMO InvestorLine

 

The table above shows the best online brokerages for 2018 compared to the best online brokerages for 2019 and while the selection is largely the same (albeit in a different order), this year saw Scotia iTRADE exit the top group and Interactive Brokers enter. In fact, for the 2019 rankings, Interactive Brokers managed to come in at fourth place, ahead of BMO InvestorLine.

There are two important takeaways from the shift observed in this year’s rankings. First, despite Scotia iTRADE lowering their standard commission rates to the widely adopted ~$9.99 level, they nonetheless were displaced from the rankings by a lower-cost competitor. Second, and perhaps most importantly, Interactive Brokers has now started to become a part of the mainstream investor rankings.

After years of having to sit on the sidelines because it was perceived to be an online brokerage for sophisticated or active investors only, Interactive Brokers Canada is starting to be considered a “mainstream” choice. Although not a whole lot about the Interactive Brokers interface has become any simpler per se, the addition of registered accounts like a TFSA and RSP have made them a viable option for many Canadian DIY investors willing to roll up their sleeves and learn how to navigate the Trader Workstation.

One very interesting observation from this year’s online brokerage rankings is that when it came to designating the best online brokerage for customer service, while Questrade scored first, there was a three-way tie for second between Qtrade Investor, RBC Direct Investing and Interactive Brokers.

Based on historical performance and assessment of customer service, it is nothing short of stunning to see Qtrade Investor in a tie with Interactive Brokers, as the two firms could not have more opposite reputations in terms of client service. In terms of Qtrade Investor, there is a well documented trail of accolades of its commitment to service, and almost the same is true for the absence of “hand holding” service from Interactive Brokers. So, to see both of these firms tie for second best in terms of service will definitely raise eyebrows across the industry.

With the inclusion of Interactive Brokers in the Globe and Mail online brokerage rankings, and now cracking the top five in the MoneySense magazine rankings, it’s becoming clear that the online brokerage field in Canada will have to contend with Interactive Brokers’ feature set and pricing more so than at any time in the past.

For DIY investors looking for assistance in making a decision on which online brokerage is best, these rankings are of mixed value.

On the one hand, there is a short list of five firms that have been considered to be “the best overall,” implying that all things being equal, these firms are not necessarily a bad choice. Conversely, with seven categories of best online brokerage, it highlights how certain brokerages do certain things better than others.

Looking at firms who appeared in multiple categories, to Questrade’s credit, they were either the top or in the top two spots in five of the seven categories. Qtrade Investor also appeared in a top two finish in four categories. Curiously, Interactive Brokers earned a top two finish in three categories compared to TD Direct Investing which earned a top two finish in two categories. Nonetheless, TD Direct Investing outranked Interactive Brokers. This last point is especially relevant when considering the progress Interactive Brokers has made in becoming more of a “mainstream” contender, because it suggests that Interactive Brokers may be very close to a top three (or higher) finish overall unless something very innovative is launched by a competing online brokerage.

For the rest of the online brokerage field that did not achieve a top ranking in one of the seven categories, it appears that there is going to be a challenge to overcome the value propositions already on the table. Change in the online brokerage space is largely evolutionary rather than revolutionary, and even with a zero-commission player on the field in Wealthsimple Trade, there are still other brokerages being considered to be better for fees.

The big picture emerging for DIY investors is that services, features, and value will have to improve at firms not ranked in the top five. Those firms will have to move decisively to win over customers who are starting to hear more and more positive rankings and ratings from firms who previously were “outsiders” like Questrade and Interactive Brokers. We’re very much looking forward to seeing which online brokerages start to step up their game in response to a shifting power structure in the Canadian online brokerage market.

Discount Brokerage Tweets of the Week

From the Forums

Golden Years

A poster on RedFlagDeals seeks advice on ways to help their parents save for retirement in a few years’ time. Click here to see what strategies fellow forum users recommended.

Striking a Rebalance

A newcomer to the DIY investing world has questions about the best way to rebalance a portfolio. See what advice other investors provided in this Reddit thread.

Into the Close

That’s a wrap on the Canada Day edition of the roundup. This will be an interesting week for traders given the holiday for Canadians to kick things off, and the holiday for U.S. Independence Day later on the week. One thing is for sure, there will undoubtedly be fireworks – whether it’s because of what’s going to happen now that the tariff standoff is starting to thaw or because of where Kawhi Leonard decides to go next. Have a great week!

 

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – May 20, 2019

Whether it was the Raptors or Game of Thrones fans, it was good news (mostly) for the North all around on this long weekend. While the popular HBO series has now officially wrapped, it looks like a different video series is starting to command the attention of Canadian investors and the envy of some online brokerages.

In this edition of the roundup, we review a new investor education series produced by a new name in the online investing space that is sure to make waves with millennial investors as well as those online brokerages also hoping to connect with that audience. From there, we review an interesting blip on the growth radar for one popular US online brokerage that could be a sign of clouds brewing on the horizon for the traditional players in the space. As always, we’ve got a great recap of investor chatter with conversations from Twitter and the investor forums.

Battle for Investor Education

Adulting, like investing, can be like, hard. Fortunately, there’s YouTube. And now Wealthsimple. So goes the premise of the latest investor education series to come to market from the best known name in the robo-advice space in Canada.

Although a new investor education initiative from Wealthsimple launched in mid April, it is worth putting the spotlight on this video series because, as mentioned in last week’s roundup, it appears that the battle for the millennial investor’s attention (and wallet) is starting to heat up. And, it appears that one of the key battlefronts will be in the investor education piece.

Like most things that set Wealthsimple apart from most of the established pool of wealth/financial service providers in Canada, this latest video series is a reflection of investor education done “Wealthsimple style.”

Teaching the basics of investing in an easy to follow, engaging format is not easy, but Wealthsimple’s investor education series manages to do just that. That means their content is well designed to resonate with a younger – or beginner – audience by using plain language, humour and keeping things (mostly) brief.

In addition to the content, the delivery is also on point. Host Nicholas Braun (himself a 31-year old) is cast to relate well to the millennial audience, with the right balance of humour and information that makes sitting through a video on investing actually interesting. Rather than dwell on too many facts or theory, the videos lean heavily towards a “how-to” style that is likely familiar to most younger audiences who turn to YouTube to help solve many a life problem.

The series itself is split up into 10 episodes, with 8 out 10 of those episodes taking less than 4 minutes, one taking just under five minutes, and the longest coming in at 8 minutes.

What was especially interesting about this video series is that it very much reflected the Wealthsimple view of the world: that passive investing strategies are a sound way to build wealth.

While it probably is no surprise that they did so, what was interesting about how they went about positioning investing was that it is something to do after attending to other more immediate financial priorities – like focusing on paying down high interest credit card debt and creating an emergency fund, before jumping into investing.

In that way, the message about getting started down the road to investing didn’t come off as pushy or selling something you won’t be ready for, but rather an important milestone to reach after getting one’s financial house in order.

Of course, it wasn’t all entirely selfless, impartial content on how to navigate the stock market. Wealthsimple clearly has skin in the game in turning viewers towards a passive investing solution and does make it a point in latter videos to mention how viewers can achieve investing goals/outcomes by using Wealthsimple’s products, including their Wealthsimple Trade product for those moments when investors want to try their hand at investing directly in a specific company stock.

As with their robo-advice product, this investor education series reimagines what it is like to learn about investing. Instead of the standard powerpoint presentation webinars or low-budget cartoon explainer videos, Wealthsimple has once again set the bar high for other financial service firms to try and match the mix of information and entertainment that these videos deliver, and do so in a way that looks and feels authentic to the audience and the brand.

What is especially important to point out about this investor education series is that almost none of the information delivered is new information about the world of investing, but it is a far cry from the approach that historically (and even currently) characterizes the way other online investing providers approach investor education content.

It will be interesting to see whether this move by Wealthsimple kicks off a trend of younger voices telling others about the “how-to’s” of investing – it might already be happening as we mentioned last week. Of course, there is still an entire cohort of investors who might respond better to an older actor/personality for the same kind of content. In any event, the race is on for just about every Canadian online brokerage to once again put investor education back on their radar if they hope to balance out the narrative on DIY investing. At this point, commercials, cartoons, and long articles aren’t going to cut it any longer.

Canary in the Online Platform

While scanning through the online brokerage news this past week, yet another interesting data point crossed our radar from US online brokerage E*Trade Financial: a remarkable stall in the number of new retail investor accounts.

Last week, we had noted that along with the recent lift in cryptocurrencies, there was news of E*Trade Financial (as well as TD Ameritrade) exploring the ability of clients to trade Bitcoin and Ethereum on their platform in the near future. That was the good news.

The not so great news to cross the wires this week was an important number related to the growth of E*Trade’s retail (aka online brokerage) business in the US last month. As part of a recent update on their performance figures, E*Trade reported a sharp decline in the number of net new retail clients compared to the previous month (-95%) as well as relative to the past year (-84%). The total net new clients to join E*Trade in April worked out to just 1,219 – which on a total retail client base of just under 5.1 million accounts is basically a rounding error (0.02%).

After what appeared to be an incredibly busy March, the volume of new retail online accounts effectively dropped off a cliff and could be a harbinger of headwinds for the US online brokerage space in the face of mounting low or no commission competition and jitters around an inverted yield curve.

Another interesting data point which might support that thesis: the news in April by TD Ameritrade’s CEO that they dramatically reduced their marketing spend because “fish weren’t biting” in the first quarter.

It is against that backdrop that the metrics at Interactive Brokers, specifically around account growth, stand out as interesting. Interactive Brokers’ client base continued to grow at a steady clip, adding 8,200 clients over April. Of course, it should be noted that Interactive Brokers did not report the figures for growth specifically in the US, which would allow for a more accurate comparison with E*Trade’s figures. Also to clarify, E*Trade changed the way in which they counted and reported their client growth metrics, combining banking and online brokerage accounts under the “retail” category – so not all the retail clients listed actually reflect online brokerage customers.

These headwinds come at an interesting time, as the Robinhood IPO on the horizon could see challenges to growing a user base that might be waiting on the sidelines because of macro concerns about being exposed to markets at this time. Conversely, it could be that Robinhood is the cause and benefactor of E*Trade’s drop off in popularity.

It is going to be particularly interesting to see where E*Trade’s client growth numbers trend over the next month or two because of the hot IPO market, and whether that would have been enough to propel new investors into the DIY investing game. If it turns out that even with one of the biggest rosters of IPOs in recent memory can’t coax investors into the market, then it won’t only be US online brokerages that have a problem to contend with – that is something that could very well spill over to Canadian investors. Like the inverted yield curve, it might be a signal of a pullback to come.

While cryptocurrency trading could help to reinvigorate the new client growth figures for E*Trade in the near term, there is definitely something that impacted the pace and enthusiasm of retail investors participating in the markets in April – at least through E*Trade. It might be competition from disruptors like Robinhood and even JP Morgan offering commission-free trading, or it could very well be investors being spooked by uncertainty (or worse) in the markets. Stay tuned.

Discount Brokerage Tweets of the Week

From the Forums

Child’s Play

One forum poster wants to know more about the best way to get their children into DIY investing. See what advice they received on this Canadian Money Forum thread.

Homing in on Strategy

A DIY investor has questions on whether to purchase real estate or invest in ETFs. See what fellow Redditors had to say here.

Into the Close

That does it for another edition of the roundup. Canadian markets have the day off on Monday, but it’s safe to say most traders of crypto and other stories will be looking for trading setups and tuning into what’s happening over the fence in the US markets. The only thing that seems certain in the weeks ahead now is a lot more uncertainty. So, the irony is that while one series of games has ended, another one continues to drag-on.

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – April 29, 2019

The end of April is almost here and for Canadians, that means tax time and deadlines. While some folks are taking their cues from the Game of Thrones and making things dramatic into the finish, it seems like there are also a few interesting cliff-hangers emerging in the deals space heading into May.

In this edition of the Weekly Roundup, we take a look at the state of the deals & promotions space heading into the new month, and what the current deal deadlines portend for Canadian brokerages and investors with a wave of IPOs on the horizon. Next, we dive into yet another story emerging from the US online brokerage space, a signal of a very “interesting” trend emerging at US online brokers that could make its way north of the border. Keeping in the spring spirit, we also have a few online brokerage potpourri stories that caught our attention, which we’ve included in this week’s roundup. As always, we’ll cap things off with chatter from the investor forums and on Twitter.

Deal Countdown

Like anyone watching Game of Thrones, folks tracking the discount brokerage promotions heading into May are asking a similar question: What’s going to happen next? As we move into the new month there are several important promotional offers that are set to expire, and as those deals go, the field of brokerage deals will have thinned out considerably.

On the chopping block at the end of April are offers from HSBC InvestDirect and National Bank Direct Brokerage, followed by a cash back promotion from CIBC Investor’s Edge, which is set to expire on May 2nd.  This contraction in deals will reduce the number of online brokerages offering either cash back or commission free trading deals down to three – BMO InvestorLine, Desjardins Online Brokerage and Questrade.

With both the RSP contribution season and the income tax deadline now behind us, whether or not there are catalysts for DIY investors to be opening online brokerage accounts or stepping into the market hinges on the popularity of the upcoming swell of IPOs, as well as general economic outlook.

In the case of the IPO “frenzy”, there are still some significant names coming to market, like Uber, Pinterest and Slack, which could help drive interest by younger, tech-savvier investors eager to participate in stories of stocks that they are familiar with.

With regards to economic outlook, although there are constant jitters with regards to political and economic stability, the consensus view from economic forecasts as of the past week point to a relatively stable market (sorry inverted yield curve).

For Canadian online brokerages, the macro picture suggests that the biggest catalyst over the summer months will be an especially hot IPO season and a generally favourable economic outlook. Importantly, most of the big stories are going to originate out of the US – something that tactically favours online brokerages that offer US accounts (registered and non-registered). This is a considerable cost savings for those active traders hoping to hitch their wagons to the fast action in the US markets.

With so many big US tech stories racing to the public markets, it would be hard to imagine a scenario in which Canadian online brokerages pass up the opportunity to win over new investors with promotional offers. These are undoubtedly interesting times for the Canadian online investing industry. While online brokerages may not be standing still during the summer months, they are likely going to be especially busy making the most of the IPO wave. So, while we don’t know for sure what’s going to happen next, the upside for Canadian DIY investors is that there’s a good chance deals action will pick up in anticipation.

Taking it to the Bank

It has been a newsworthy past few weeks for US online brokerage Robinhood. The zero-commission online brokerage is yet again on our radar as another story has popped up in April, this time relating to the application by Robinhood to become a chartered bank in the United States.

The way in which Robinhood is angling to offer high interest chequing and savings products is a direct response to their false start on the high interest savings account launch earlier this year. Nonetheless, it looks like they’re undeterred by the long compliance road ahead and are pushing to offer what would traditionally be “banking” services.

Far from a novel idea to offer investors something extra for holding their cash with a brokerage (Interactive Brokers does it and has met with some success in the US), the big picture for online brokerages is that sticking to just order execution is not going to be enough to sustain the business. The bigger lesson for bank-owned brokerages here in Canada is that nobody in the wealth management space is going to be respecting traditional boundaries anytime soon. With robo-advisors now becoming more accepted by mainstream investors, and those same robo-advisors wading into the online brokerage space (ahem Wealthsimple Trade) or online brokerages wading into the robo advice space, the “one stop shop” for wealth and financial management appears to be the model that many of these brokerages will be pursuing.

As such, it feels like it’s not so much a matter of if, but rather when and who will be the first ones in Canada to offer much more competitive interest rates on cash sitting idle (i.e. the “dry powder”).

Of course, opening up the “high interest” account for uninvested cash would almost certainly be a slippery slope. Once one major firm does it, the rest will undoubtedly follow. Whether it follows the model of commission fees being dropped (as RBC Direct Investing did in 2014), like most new feature roll outs in Canada, there will definitely be a “wait and see” if it’s anyone other than a big-bank owned brokerage.

Ironically, for Robinhood, as they continue to pursue offering interest, the consumer interest in the brand will likely grow. In Canada, where the competitive dynamics are slightly different, it would be interesting to see what would happen if one of the smaller online brokerages were to get creative for online investors holding idle cash. One fan theory: Canadian DIY investors would be much more inclined to stick things out rather than transfer brokerages.

Online Brokerage Potpourri

Here are some more quick highlights of items that crossed our radar.

Booking an Interesting Detour

TD Direct Investing is the title sponsor for an upcoming session with two influential voices in the personal finance & investing space: Erin Lowry, author of Broke Millennnial Takes On Investing and personal finance personality Jessica Moorhouse. In addition to doing a sponsored session on investing, it’s also interesting to take note of a paid promotional segment on YouTube in which Moorhouse walks through the TD Direct Investing GoalAssist feature.

With so many millennial eyeballs having moved to YouTube and social media rather than traditional media, this is another example of online brokerages looking to work with & enlist influential voices in the personal finance space to extend their message into harder to reach audiences.

Online Brokerage Summit Highlights

Another interesting industry event that took place earlier in April in Chicago was the annual online brokerage summit held by Trading Central. This year’s event marked the tenth edition of the conference and featured influential voices from the Canadian and US online brokerage spaces. An interesting recap of the event was written by Kathryn St. John from Trading Central and is available here. Among the key themes/challenges cited: the race for the millennial investor. In that light, it seems particularly timely to see events such as the TD Direct Investing sponsorship of a millennial-focused content provider, as well as a general tilt towards making platforms more appealing and accessible to a new “crop” of investors.

Discount Brokerage Tweets of the Week

From the Forums

Pump up the Volume

One new DIY investor wants more information on the significance of ETF trade volume. Forum users on Canadian Money Forum chime in here.

On Borrowed Dime

A DIY investor has questions about borrowing specifically to invest. See what other forum users had to say in this Reddit thread.

Into the Close

Talk about a hard act to follow – the week ahead will certainly be filled with no shortage of reaction to an epic Game of Thrones episode and a record-breaking opening to Avengers Endgame and basketball playoffs. Of course, with winter still sticking around (amirite Calgary?) in different parts of the country, it’s not a bad time to stay indoors. Here’s hoping there will be some warm patches (like GDP in Canada) to look forward to as well as a profitable trading week ahead.

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – April 22, 2019

This edition of the weekly roundup is coming to you from sunny Indio California, home of the Coachella Valley Music Festival aka Coachella. There’s nothing quite like the example of supply and demand in action – and judging by the crowds, lineups for merch and the water refill stations, demand is certainly hot. Ironically, the same can be said about the stock markets recently as crowds of investors rush to find their next big investment and congregate around the headline IPO acts continuously coming to market this year.

So, in keeping with the Coachella theme, here is the “This is America” inspired edition of the weekly roundup. Of course, it’s through the lens of a Canadian DIY investor so we’ve made sure to include the requisite Canadian spin. First up, some interesting Easter eggs were dropped in an earnings call last week from one popular US online brokerage that provide a somewhat challenging picture of the future for the online investing space. Next, we take a look at the flurry of activity taking place at another US online brokerage, and their efforts to make their platform more sticky to mobile users. In keeping with tradition, we’ve also lined up the crowd favourites: tweets from the week and chatter from the investor forums.

Interactive Brokers Earnings Call Drops Hints of Big Things to Come

Like most earnings calls, there’s generally a mix of updates about the financial and operating performance of the company, as well as some perspectives on how the business performed and where they are looking to for future opportunities.

Despite having the traditional structure for the updates to the company as well as taking questions from financial analysts on the call, the latest Interactive Brokers earnings update this past week also had several important ‘Easter eggs’ that offered some insight into the condition of the business and online brokerage landscape, as well as providing some hints about what’s coming up next.

Starting first with some important context around performance: Interactive Brokers has been on a relative tear for the past several years, showing strong growth across all important metrics of their business. In the most recent earnings call, Interactive Brokers shared that their client base has now surpassed 600 thousand accounts, and that their client equity is just about $148 billion, both record highs for the firm.

As successful as a growth story that Interactive Brokers has been, the first nugget revealed is that it appears they’ve hit “peak investor.” The following quote by Nancey Staube – Director of Investor Relations from the earnings transcript explains this development further.

“I must tell you that any way we slice it new account growth at Interactive Brokers over any 12-month period peaked in April 2018 at 27.8% and has been declining since reaching 20.3% in March of 2019. 20.3% would still be very good but annualizing our sequential quarter account growth from the end of December to the end of March shows it leveled off at 16.2%, which is not so good. We would like to see this rate go back to over 20%, but for that we will have to pull a rabbit out of a hat.”

There are a couple of noteworthy takeaways from this quote. First, these account growth figures are relatively strong, especially considering the competitive nature of the US online brokerage space. There are likely many Canadian online brokerages that would love to hit those numbers that Interactive Brokers is stating are problematic, however expectations for their firm run much higher.

Another important takeaway is that being able to hit their prior account growth pace, they would need to “pull a rabbit out of a hat.” That is a drastic characterization of the marketplace conditions in which they are trying to grow and indicates a much tougher road ahead to achieve previous account growth rates. Fortunately, Interactive Brokers is not the kind of online brokerage that stands still when it comes to innovation or features to entice investors to open an account. Their recent deployment of the Portfolio Analyzer and their high interest payments on USD cash balances over $100K are both examples of relatively recent moves that Interactive Brokers has undertaken to attract and retain clients.

In that vein, another interesting insight from the earnings report transcript was that Interactive Brokers IS planning a “rabbit out of a hat” kind of new feature deployment. To manage expectations and competitive advantage, founder and CEO of Interactive Brokers Thomas Peterffy was understandably evasive when it came to details about this new program but what he did say was that this new feature was part of a separate line of business.

Peterffy stated that “For the last nine months, we’ve been working on just such a rabbit that we plan to introduce at a test location near the beginning of the third quarter and in other locations gradually over time. For several good reasons, we are not prepared to say much about the rabbit at this time. We can say it will be a new product development in an area only tangentially related to our traditional business, but if successful would expand the opportunity to grow our customer base.”

Importantly, he used the word “location” to refer to this program which suggests that Interactive Brokers is moving from being almost exclusively online to something that could be accessible in person. Interestingly, and perhaps related, Interactive Brokers’ costs have also been increasing because they have been investing in “client service.” According to their recent earnings statement, the total headcount at Interactive Brokers tallied up to 1,458 – a 16% increase over last year, with “aggressive hiring” taking place in client service (as well as software development and network engineering).

Finally, another very curious comment from their CFO, Paul Brody, was that the aggregate number of shorts being carried for customers has “definitely risen.” It is particularly interesting given the levels the stock markets are currently at, and when combined with the perspective shared on the call that volatility has abated somewhat, it appears that traders are starting to build short positions against the current market. Market timing is notoriously difficult to do, but there appears to be a genuine negative sentiment developing around the latest rally for stocks.

For online brokerages, especially in a low-commission cost environment, achieving a critical mass of clients is key. Interactive Brokers has taken on this challenge to be a world-class online brokerage by going after growth all across the world. Even so, what is telling about the online brokerage space – at least the segment that they wish to play in – is that growth conditions are going to be challenging.

While Canadian DIY investors might represent a relatively small segment of their client base, what is neat about Interactive Brokers is that they tend to roll out new features across their platform for all clients. The recent addition of new services and tools means Canadian online brokerages will need to pay attention to what is possibly coming around the corner from an increasingly influential global online brokerage.

Robinhood and the Pursuit of Trading Happiness

In keeping with the interesting activity in the online brokerage space in the US, after a bit of a hiatus following the stumbled roll-out of the high interest savings account, Robinhood appears to be pressing the gas pedal on new features and important changes. This April, they have published three significant pieces of news relating to new features related to charting and depth of market, as well as announcements of new members of their management team.

While “high interest savings” has now been replaced by “cash management” and is still actively in the works, the two features that stood out that were of particular interest relate to new charting tools available for the mobile experience as well as the depth of market (Level 2).

For a bit of context, Robinhood the US online brokerage is best known for its zero-commission stock trading offering and has grown rapidly since its launch in 2013 to having more than 6M accounts now a part of its platform. It serves as an interesting example for the zero-commission model, something that recently came to Canada through the launch of Wealthsimple Trade.

Even though philosophically Robinhood and Wealthsimple Trade have different starting points, the fact remains that revenues of each firm increase when trading activity increases. Both firms want to attract assets and have clients making trades. To that end, it is interesting to see the features that Robinhood has deployed on its path to monetizing features and experiences while keeping commissions at zero cost.

The first is depth of market. This was likely a frequent request to the client service team so it is great to see this kind of market data rendered in the ultra design-savvy Robinhood environment. Real-time bid/ask information enables active investors to plan where they would like to place their orders and, secondarily, makes for a more engaged experience. Anecdotally, even for less active investors, knowing that there is level 2 information available piques curiousity enough to check to see what interest there is before placing an order.

So, in short, by providing real-time information on market depth, Robinhood has increased the stickiness of their product (it’s hard to look away from blinking lights!). Accompanying this release was the announcement that market research from Morningstar was also being rolled out – yet another feature to encourage clients to spend time in the app rather than outside of it.

Of course, these new features are part of a premium experience, and as such, have been included as part of the subscription-based Robinhood gold program. For the rather affordable rate of $5 per month for access to the premium program, users will be able to access both the research as well as the level 2 information. Additionally, as part of the new Robinhood gold program, users can access the first $1,000 dollars of a margin position interest-free. Amounts over $1,000 will be charged at an annualized rate of 5%.

Another interesting feature just announced is the rollout of improved charting that includes technical indicators and candlestick charts. Once again, this feature enables users to do research on price action on a security and as a result they do not have to leave the app to look elsewhere for technical analysis. Combined with the level 2 data, this offers a very feature-rich experience for more active traders interested in discovering and timing entry and exit points on an investment. It is particularly relevant for the fast moving and volatile world of cryptocurrency trading, something that Robinhood offers on its platform. The technical indicators available as part of this rollout are:

  • Volume
  • Moving Average (MA)
  • Exponential Moving Average (EMA)
  • Relative Strength Index (RSI)
  • Moving Average Convergence Divergence (MACD)

For online investors, the ability to do technical research, charting, and to track depth of market in a mobile is somewhat of a rare animal. Yes, other online brokerages in the US do offer a mobile user experience, however now that Robinhood does too, and does so in their award-winning user interface environment, this means that their competitors need to step up their design game because it now will become a value driver. Having tools and features is not the same as having easy to use and appealing tools and features.

In terms of what the implications may be for Canadian online brokerages, it’s clear that having a commission-free trading competitor is only one part of the online investing experience. Investing in strong design features that make it easy and accessible for users to get onto the platform lowers the barrier for many users and eliminates possible frustration – especially in a mobile environment.

It will be interesting to see what the feedback is on the new feature set from Robinhood. And, assuming these technology experiences are stable and reliable (e.g. how real-time is a price that is being pushed through a mobile internet connection), there’s a great chance that these new components will end up improving design and user experience for active investors who want to invest from anywhere – including from a music festival in the middle of the desert.

Discount Brokerage Tweets of the Week

From the Forums

Hands On

One DIY investor has questions about the highly-customized portfolio they created. Read on for opinions and advice from fellow forum users in this Reddit thread.

RESPect the Process

A poster on RedFlagDeals wants to know more about saving for their children’s future with RESPs, and other forum users chime with answers and clarifications. Read more here.

Into the Close

That’s a wrap on this special edition of the roundup. It’s been a fun way to spend a long weekend but it’s time for the spotlight to turn onto earnings and what seems to be even more big news with waves of IPOs coming to market. Ironically, both Lyft and Uber were the big stars of the show getting people to and from Coachella, so here’s hoping that translates into stellar performances like the ones on the stage! Have a profitable week!