Tag: Wealthsimple Trade

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Discount Brokerage Weekly Roundup – November 30, 2018

To some, the word boring means something unexciting. For the Elon Musks of the world, however, boring is really exciting. Of course, that second kind of boring requires doing some digging to yield interesting results.

In case you didn’t see this one coming, this edition of the roundup digs deep into an interesting set of developments in the US online brokerage market that, at first blush, might seem small but actually reflect a new playbook for brokerages here in Canada. From there we’ll cruise through some interesting investing-on-auto-pilot-related news as well as present the latest updates from Twitter and what investors where chatting about in the forums.

Thinking Big by Thinking Small

As anyone in Canada who’s ever shoveled a driveway or sidewalk full of snow knows, small changes add up.

A recurring theme that we’ve observed in the online brokerage space is that change is taking place with online brokerages incrementally rather than in a sweeping fashion. With the exception of commission price drops, there hasn’t been an incredibly exciting product or feature that has gotten people talking or investors clamouring to sign up for an online brokerage account.

This month, there were two modest developments that took place among two popular US online brokerages that stood out not so much because they were “big” but rather because they were small yet still reported on.

The first was from Robinhood – the zero-commission online brokerage – which announced that they have developed a new “news filtering” system that rapidly screens and delivers ‘meaningful’ news about stocks or cryptocurrencies that investors are invested in or are watching. This feature was mentioned on not one Robinhood blog, but two. On their primary blog but also on their data team blog. More on that in a moment.

Their new news delivery system is the kind of thoughtful feature that, in theory, should improve the user experience of a DIY investor – especially the active kind. Active investing is interesting in part because it relies on being able to digest a lot of information very quickly and make decisions based on that information.

Even for technical traders who focus primarily on charts understand the value of a good news feed.

Unfortunately plug and play RSS feeds are often unwieldy and embedded news streams are middling at best. Alongside the growth in interest in DIY investing and trading has also come the hyperfragmentation of information sources to the point where it is remarkably difficult for a DIY investor to find fast, reliable (trustworthy) news on particular stocks.

Often times stories are generated about a particular company by bots that report on the movement of a company’s share price or earnings but lack real depth or insight. The sites are also crammed with advertising so the user experience is often terrible without an ad-blocker.

Enter Robinhood’s new news filtering feature. Robinhood has developed a new ‘smart’ filter that incorporates machine learning to intelligently filter out news stories that appear to be generated by bots and can do so incredibly quickly so that online investors can receive relevant information soon after it gets published from its source

A second, less obvious, observation about this feature release is that Robinhood pushed the information out on its company blog as well as on a more specialized company blog that focuses on the ‘nitty gritty’ details of the projects or products they’re working on.

This level of transparency and coverage on seemingly small developments reflects the ‘tech’ approach of fintech.

Technology is constantly improving and iterating, and many technology startups are not afraid to share what they’re working on or talking about the details of what they’ve worked on. So, for Robinhood to push out two blog stories on this feature release reflects that they not only ‘get technology’ but they also understand that telling people about what they’re working on enables the evangelists to stay connected to the brand. The people who love Robinhood have something to read about and are reassured that Robinhood is constantly evolving instead of being a static enterprise.

On the other end of the news spectrum when it comes to reporting market information, TD Ameritrade marked an important milestone in their own content and news feed ambitions – namely the one year anniversary of the launch of their TD Ameritrade Network.

The network consists largely of original market-driven content that now stretches across 14 hours each weekday. Coinciding with the anniversary is the small but important expansion of their network to the Amazon Fire TV platform. In its first year, TD Ameritrade’s network received just over 1.8 million unique visitors. Estimates on the number of Fire TV exceed 19 million monthly users internationally, so the opportunity to expand their content presence is certainly what Ameritrade is banking on.

Interestingly, as part of the press release announcing the update, one of the stats of a survey conducted on behalf of TD Ameritrade revealed that 62% of investors ranked “expert market analysis” as the most important content in financial or market news and that for 14% of investors, irrelevant content is considered a barrier. While these stats reflect US audience dynamics, it is nonetheless interesting to see that filler content or ‘irrelevant’ content can get in the way of people tuning into (or even reading) content.

The takeaway lesson here for online brokerages in Canada is that what counts as “news” in terms of feature developments is likely to be too small for major news outlets to cover. As such, the tendency to wait for a big development means that unless you have your own audience tuning in, very few people are likely to pay attention. Conversely, when technology fails, that WILL get headlines and coverage (see earlier in 2018 for evidence of that). The smarter move, it appears, is to put out smaller pieces of content more frequently.

As Robinhood and TD Ameritrade have both shown, it is possible to sidestep or work in parallel with traditional media by publishing stories about what’s happening, as Robinhood so aptly put it, “under the hood.” In TD Ameritrade’s (and even TD Canada’s) case creating custom video content to compete with traditional news streams is possible and audience growth, while modest in size, is likely prominent when considering who those viewers are and what kind of assets they bring with them.

Trust and transparency in the new world will be defined not so much by the ‘established’ reputation per se but rather the reputation for producing content on a regular basis. Scanning a Twitter or Instagram feed is just one of the due diligence tasks that younger investors are prone to doing since those are the channels they themselves will turn to.

If discount brokerages are able to effectively share that they are working on interesting or new things, then that in and of itself should boost the credibility of their firm as an innovative one. Fortunately, for Canadian (and US) online brokerages, there are likely lots of little improvements being made all the time. Similar to shoveling the snow in the driveway, it’s best to do it in stages rather than wait until its all on the ground to try and dig out from under it.

Lightning Round

No Longer a Tease

This week, the big news from RBC was the public roll out of the InvestEase robo-advice platform. After a year of testing pilots with staff and select groups, the new digital advice service is live. And, to sweeten the deal for individuals to try it out, for anyone who opens an account by March 31st, 2019, the annual management fee of 0.5% will be waived until October 2019 (hooray for new deals!).

Still a Tease

Rumours of Wealthsimple Trade now going live for some users are starting to trickle out. The zero-commission trading option appears to be surfacing for some DIY investors in Canada. Stay tuned as we find more chatter on the platform as it continues its rollout into RSP season.

Penalty Box

As we reported last week, Questrade Wealth Management got dinged by market regulators for violations of the best interest standard as part of its digital advice program Portfolio IQ. This week, the fine Questrade Wealth Management agreed to pay was made public and came out to $2.9M along with $100,000 in associated legal costs. Interestingly, even though there was some news pick up on the story, the response by investors in the forums was largely indifferent.

Discount Brokerage Tweets of the Week

From the Forums

Testing Patience

Yet another DIY investor took to the forums this week enquiring about their index funds performance (or lack thereof) with Tangerine as well as interpreting their dashboard. Check out this thread to see the useful advice offered from other redditors and why being passive requires active effort.

Ease on Fees

The week of Cyber Monday seemed apropos for the launch of RBC’s new robo-advisor, InvestEase.  The reddit Personal Finance Canada forum weighed in on the arrival of InvestEase as well as the introductory promotion. Read more here.

Into the Close

That’s a wrap on a very busy week for investors. Even though Cyber Monday is in the rear view mirror, be sure to keep your deal radar on  as a new month is starting as is the ramp up to RSP season. On top of the offers from online brokerages, it appears that there are still interesting deals cropping up in the market – the best part is the shipping charges and delivery times are much better than a certain postal services. Whatever screen you find yourself at this weekend, stay warm and have fun!

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Discount Brokerage Weekly Roundup – November 23, 2018

Welcome to the Black Friday edition of the weekly roundup! No crazy lineups to fight here however if you were inundated with offers and merchants trying to get your attention, you’re certainly not alone.

In keeping with the spirit of the day, this edition of the roundup has more that you might have bargained for. Specifically we take an in-depth look at the most potent form of attention grabbing media – commercials – being put forward by Canada’s discount brokerages and robo-adivsor firms. With so much going on we’ve also included quick snapshots of important developments and close out the roundup with a look at the investor forums and tweets for the week.

Commercial interest

Heading into RSP season, Canada’s discount brokerages and online investing firms are ramping up their battle for the eyeballs and attention of online investors. This month, we’ve noticed an interesting uptick in video activity among online brokerages and robo-advisors that highlight some interesting trends in the way that online investors are being depicted and the kinds of messages that are being sent their way.

Before diving into the commercials themselves, it’s interesting to get some context. When online trading first launched and for a good portion of its lifespan, the visuals painted a very distinct portrait of ‘fast money’ or ‘action packed’ markets. While this brand of ‘exciting’ pace still exists on financial news stations like CNBC, within the Canadian context the messaging from online brokerages – the conduit into the markets – has shifted to become more about ‘personal finance’ and ‘wealth management’ than the exciting and dynamic world of online trading.

Interestingly, fast money sectors like cryptocurrency and cannabis have emerged in a similar fashion to the ‘dot com’ era, bringing with them the volatility and the lure of getting rich quick. In turn, younger investors have been pulled off the sidelines from late 2017 and through most of this year.

Aside from the catalysts of cannabis and crypto, millennial investors are also interested in messages of purpose, equality, inclusiveness and social responsibility. So, it is interesting to see what the latest crop of commercials/videos from online brokerages and digital advice firms are doing to depict the conversation around ‘money’ and investing.

RBC Direct Investing

We spotted two videos posted to Vimeo that are presented from the perspectives of two different investors – both of whom are women.

The first video tells the story of “Milene”. Her story highlights her approach to investing, what got her started as well as what her goals are as someone who has recently turned 40. The approach of “being boring” is her preferred route to building wealth over the long term.

RBC Direct Investing w/ Milene from Official Pictures on Vimeo.

The second video tells the video of Carrie. At 33, she recounts her path into investing as well as what her experience was like when placing her first trade. Like the first video, Carrie shares her goals with respect to investing and what she hopes it will translate into at retirement.

RBC Direct Investing w/ Carrie from Official Pictures on Vimeo.

There are several interesting points about these videos that provide some insight into the strategy of RBC Direct Investing. The first very interesting thing is that they use the stories and voices of women who work for RBC Direct Investing. This is powerfully authentic and even though it comes from people who work for RBC Direct Investing, there isn’t a direct sell or push to consider RBC DI. This doesn’t sound like a commercial for RBC’s DIY investing solution so much as it sounds like a story of an everyday investor.

In addition to being highly relatable, they’re also very well targeted to people at the age or life stage of the two people featured in the videos. With powerful ad technology in place that enables advertisers to show content to particular users based on their demographic profile (e.g. video advertising through Facebook) this is an especially powerful medium (video) and message.

Last but not least, the production quality on the videos is excellent. The videos are colourful, engaging and feel like a well narrated story rather than a forgettable series of stock photos or footage of people checking their balance from a coffee table.

There’s a good chance that this will be an impactful campaign for RBC Direct Investing and will certainly raise the bar on ‘story telling’ for other online brokerages who are hoping to use video to make compelling stories about personal finance resonate with DIY investors.

Scotia iTRADE

What to rocks, blocks, cards and candy have to do with DIY investing? These childhood staples play a key part in the sentiment that Scotia iTRADE is hoping to connect with. Specifically, the recurring theme in their most recent set of commercials is that “trading” is familiar and almost nostalgic.

Scotia iTRADE Rock from Paul Constantakis on Vimeo.

It is an interesting approach to use childhood as a base around which trading takes place. Perhaps it is to communicate that trading can be a win-win or that trading is something that many of us remember mastering as children. Nonetheless, the messaging is clear about positioning Scotia iTRADE alongside the messaging that ‘there is a trader inside all of us’.

It is encouraging, once again, that there is a visual direction that embraces diversity – both ethnically and with gender, that reflects a more modern and progressive view of what an everyday investor “looks like” and where they live.

Unlike the focal point of RBC Direct Investing, this messaging appears to be targeting traders rather than investors, and evoking the emotion associated with making a winning move.

It’s a tad cynical to read too deeply into the accuracy of the transaction portrayed in the advertisements. For example, there are no intermediaries in the trading portrayed in these commercials. No portions of a caramel are eaten by a broker as commissions, nor are there appendages of a robot or pieces of a plastic block taken by the facilitator. Nonetheless, when it comes to making an emotional connection with active investors and traders, the ‘joy’ of trading is definitely long-standing.

Caramels

Scotia iTrade | Caramels from Marie-Eve Tremblay on Vimeo.

Caramels 2:

Scotia iTrade | Caramels from Marie-Eve Tremblay on Vimeo.

Yellow Piece:

Scotia iTRADE Yellow Piece from Paul Constantakis on Vimeo.

Questrade

Questrade has certainly ramped up its video presence over the past two to three years, with a noticeable uptick in visibility around major sporting events here in Canada. While the ‘online brokerage’ side of their brand hasn’t been in the spotlight nearly as much, their digital advice / roboadvisor now known as Questwealth Portfolios has been receiving a fair bit of coverage.

In terms of what an investor “looks like” in their videos, Questrade is targeting young adult investors. While there is a gender balance that shows a young man and young woman as the investors, the notion that only a woman would be caring for a young baby or that two men should be having a conversation in a board room seem a tad anachronistic and run somewhat contrary to the message that “times have changed.”

Their latest set of Questrade’s videos clearly depict millennial investors telling their financial advisors that ‘times up’ when it comes to paying for investment fees and specifically naming Questrade as the solution. The setting of “the conversation” is in keeping with their recent campaigns that depict that moment when an investor meets with an advisor.

On an emotional level, Questrade’s commercials continue to pass along that uncomfortable and awkward feeling of being privy to watching someone about to lose their job. Some may feel it is deserving however it is a bit of an emotional tight rope to vilify people who charge money for financial services. Nonetheless, these commercials to evoke and provoke responses (especially on social media) so for better or worse they do get people talking about Questrade.

Wealthsimple

This brand was originally not going to be included since these videos were geared, it seems, towards a US audience however they were too compelling a counter-point to not share. That in and of itself is a sign of a winning piece of content however in a broader context, Wealthsimple has been dictating the pace for content among financial service providers for the better part of two years.

With this latest video, Wealthsimple is asserting its identity as a challenger-brand in the financial services space. In fact, when contrasted with any of the videos mentioned above, this video takes a genuinely resonant approach to messages that would connect with millennials who are aware of and passionately advocate for equality and change.

This video takes the emotional impact of finance an order of magnitude deeper to challenge the viewer in a way that the Collin Kaepernick video did for Nike. Wealthsimple takes social responsibility, in this case with regards to pay equity, and weaves it into the conversation about money and demonstrate why they are gaining popularity and mindshare with younger investors.

Wealthsimple “Equal” from Public Record on Vimeo.

Investing in focus

While Canadian online investing firms don’t have the same scale of budgets set aside for marketing and advertising that US online brokerages do, the handful of online brokers and investing firms here that are using video to connect with investors show a more contemporary view of what investors look like and the things that they are interested in. To stand out in a noisy world of content, videos have to be engaging and impactful. Heading into RRSP season and with a bump to TFSA contribution levels,  Canadian online broker commercials are likely going to be more frequent and visible. The real question for online investors though is which will leave a lasting impression.

Important Bits and Pieces

Robo-advisor Comparison

Personal Finance columnist at the Globe and Mail, Rob Carrick, published his comparison of 14 Canadian robo-advisor firms this week. The comparison looks at 18 different parameters of the robo-advisor experience including:

  • Provinces and territories served
  • Minimum account size
  • Types of accounts
  • Annual fees
  • Online account setup capabilities and more

The comparison is also available for download as an excel file for even more detailed analysis and review.

Questrade to Settle with Regulators

Questrade Wealth Management was named in a proposed settlement agreement with the Ontario Securities Commission over a misstep with Questrade’s Portfolio IQ. At issue was a transaction that took place in July 2017 that involved Questrade Portfolio IQ purchasing 8 WisdomTree ETFs. The statement issued by the OSC alleges that Questrade executed the purchase without having done the due diligence to determine if the purchase met the ‘best interest’ standard Questrade is obliged to follow. The statement of allegations that outlines what happened is available here.

TFSA Contribution Limit Rises

The annual contribution limit for TFSAs has been raised to $6,000 for 2019, up from $5,500 in 2018. The total contribution limit for someone who was 18 or older as of 2009 and who has never contributed to a TFSA will be $63,500. Click here for a good primer on the update.

Discount Brokerage Tweets of the Week

From the Forums

Late to the party

A newbie investor took to the forums this week for some advice on getting started in the investment world. Beginning in their late thirties, the thread offers useful information on factors typical at this life stage and as ever, lots of valuable advice and sources for anyone looking to start investing at whatever stage of the game, from ETF’s to help with choosing where to trade.

Conversion Conversation

Earlier this week, a little more news about Wealthsimple Trade surfaced as their forex conversion rates became a topic of discussion. Find out about the rates and what DIY investors had to say about the fees in this post from reddit’s Canadian Investor rates.

Into the Close

That’s a wrap on this week’s action. With a shortened week of trading in the US, things were a little quieter here in Canada than normal. Given the slide that stocks have been on, however, that might have been a good thing. With winter weather ramping up, it’s an ideal time to be huddled over a computer in search of a good bargain or three. Good luck with the bargain hunting in stores and the stock market (it looks like both have some interesting sales)! Have a fantastic weekend!

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Discount Brokerage Weekly Roundup – November 2, 2018

November is here and wow did it ever make an entrance. Stock market and political volatility, the launch of Financial Literacy Month, a new fiscal year for online brokerages and it happens to be the most important milestone in the calendar year for bargain hunters. With so much going on, it happens to be a fitting sentiment for this week’s roundup as there are big moves (and to quote Cardi B) and money moves. Never thought Cardi B would make an appearance here, but it’s been that kind of a week.

This is definitely a marathon edition of the roundup, so it’s worth stating up front, you may want to get comfy. Kicking things off, it’s the start of a new month which means taking a look at the latest discount brokerage deals and promotions as well as a commission-free trading offer that is bound to cause more drama (but less shoe throwing) than a Cardi B encounter with Nikki Minaj. Speaking of bold and provocative characters, the next story dives into the launch of a new website by one bank-owned brokerage looking to reshape its approach to online investors. As always, we’ll supply some DIY investor drama from the discount brokerage tweets as well as look at what people were curious about in the investor forums.

Savings are Coming

Black Friday and Cyber Monday may be what November is famous for, but for Canadian DIY investors, the enthusiasm for deals this month has undeniably spilled over to the online brokerage market. Unlike either of the major shopping days, however, what’s taking shape in the Canadian online investing space is much more profound and longer lasting than the fleeting bargain hunting days.

This month’s discount brokerage deals saw the arrival of what might be the first in a set of responses to commission-free trading by Wealthsimple Trade’s announcement in the summer that commission-fee stock trading is coming to Canada.

Specifically, National Bank Direct Brokerage launched an incredibly aggressive offer for new and existing clients: 50 commission-free trades, which are good for up to a year, as well as a threshold to qualify for the offer of ‘only’ $5,000. While all of the features individually are not unique to online brokerage offers, the combination of these offers is. The only other online brokerage that has a commission-free trade promotion that let’s investors take up to a year to use them is RBC Direct Investing – and that promotion (which also requires a deposit of $5,000) is for 20 trades and is currently targeting healthcare workers.

The first important observation is that commission-free trades could be a popular choice for online brokers to turn to and the way they can deliver more utility (and value) to DIY investors is to give them a long time to use them up.  Normally (and even currently), DIY investors would have anywhere from 30 days to 6 months to use commission-free trade credits, with the most popular range coming in at about 60 days, so having one year do any commission-free trading is comforting.

A second important observation here is the threshold to qualify for the deal. By setting the minimum discount so relatively low, this offer naturally appeals to younger investors or those who are just getting started – or who want to experiment – with online investing. What better way to try out online investing than with a little bit of capital and no commissions to pay for 50 trades?

It’s certainly an interesting move to keep a fixed number of trades as opposed to many of the tiered promotions, which offer additional incentives as the deposit balance grows. In the case of NBDB’s offer, there is no financial incentive per se for bringing a larger deposit.

This month NBDB wasn’t the only online brokerage to use commission-free trading to sweeten the deal for investors, BMO InvestorLine also launched a new series of offers for online investors that combined a tiered cash back component with a commission-free trading component.

In the case of BMO InvestorLine, they’re offering between $100 and $1,000 cash back for deposits ranging from $50,000 to $600,000+. On top of the cash back component, individuals are also being offered 30 commission-free equity trades which are eligible to be used in February and March of 2019 – the precise window of time when activity related to RRSPs ramps up ahead of the contribution deadline.

With some notable online brokerages still on the sidelines, the uptick in value of now live offers will almost certainly increase the stakes and urgency to participate.

Currently, CIBC Investor’s Edge and BMO InvestorLine’s uncontested cash-back offers are giving them considerable exposure to DIY investors keen to open an online investing account. With National Bank Direct Brokerage’s latest aggressive promotion also now in the mix, there will almost certainly be new offers coming from bank-owned brokers that will have to ante up to the value being tabled by other online brokers. As we had mentioned in last week’s roundup, there is a clear signal from the parents of Canada’s bank-owned online brokerages that customer growth is a top priority which means the online brokerage arm could be a way to bring those clients into the brand.

For DIY investors, the bottom line is clearly that Canada’s online brokerages are going to have battle harder for new clients and to hang onto existing ones. This is an ideal time to start kicking the tires on an online investing account for those curious about making a switch or simply opening up a second (or third) online brokerage account. Of course, for valuable clients, it is also an ideal time to be negotiating for better commission or margin rates or better promotional offers for bringing assets to a new (or even existing) brokerage. In other words, don’t be afraid to ask for a better deal, this happens to be a moment where online brokers are much more motivated to make one.

National Bank Direct Brokerage Charts a New Direction with New Website

2018 has been a year of many significant changes at National Bank Direct Brokerage. Earlier this year their parent brand, National Bank, put down some serious real estate roots in Vancouver and the online brokerage unit saw a new president join the team to lead the organization through an important digital transformation in wealth management. After many months (feels like longer for those involved), 2018 has also brought with it a new consumer-facing website at NBDB.

The new front end of the website is a complete overhaul with a much more modern look and feel to it than the previous site. Gone is the rotating slider, information-dense homepage and somewhat utilitarian design of the key information pages.

There’s lots of space in the new National Bank Direct Brokerage website and information is well laid out so users can focus on important elements and sections without being overwhelmed. That kind of user experience consideration on new websites must be par for the course. And, it is definitely built around being more mobile friendly rather than desktop friendly. More on that in just a moment.

One of the most interesting elements of the new website that is pointedly different than other brokerages is the focus on women. That tone is set from the homepage hero image that is bold and confident and extends through the imagery on the top-level menu item landing pages of the website that consists exclusively of women.

The sections in the top-level menu are:

  • Invest with NBDB
  • Start investing
  • Pricing
  • Trends and tips
  • Events

Not only are the pictures well chosen, but they represent a diversity of women. This is a stark contrast to many other online brokerages and certainly a deliberate shift in the visual identity of the “typical” online investor. On that note, the pictures of the ‘male’ investors are also ethnically diverse and inclusive of investors younger and older.

In sum, there is strong visual appeal to the design and branding associated with the new website and it feels not just like a more representative and inclusive design, but a forward-thinking one.

Of course, when it comes to design, the devil is always in the details and for the new National Bank Direct Brokerage website, there are a few (easily fixable) rough edges.

The first is accessibility. In reference to what appears to be a heavily mobile-friendly website design, the contrast on the text on the desktop site menu is not as sharp/legible as it should be for older users nor is the text large enough to easily view. So, it is clearly built for younger eyes to be viewing the site on desktop or geared towards being viewed on mobile – again a preferred device for younger investors.

Another series of user experience rough edges encountered are the links pointing to unintended or non-functional pages. There is a neat feature that NBDB has built to let users determine whether they are beginner or advanced investors by taking a short (3 question) quiz. This interactive element is actually quite exciting to see on an online brokerage website, however, getting to the end of the quiz page yields a couple of unfortunate shortcomings.

The first is that it’s clearly unfinished with both English and French copy appearing in what should just be the English version of the site.

The second is when clicking the “learn more” button, an English user gets taken to a French version of the website (see image below). Although there is a translate option at the top of the page, a user would generally have to know that option exists on a multilingual website and then be motivated enough to hunt for it.

Then there’s just the grammar or spelling nut who will wonder how the footer text suggesting folks “stay tunes” made it through to the live version of the site.

Ironically, younger visitors might think elements like this are NBD (no big deal) especially given how much havoc autocorrect has wreaked on a texting generation but for a bank-owned brokerage and financial services provider, getting the details right matters to building trust and confidence.

In the grand scheme of things, these unfinished or quirky roll out bugs are easily fixed. In an agile world, there is a clearer preference to build and publish things and fix as needed – if there’s one thing that can be relied on, its user feedback to point out where things aren’t up to snuff. Interestingly, however, some of these oversights are on pages that face potential clients rather than actual clients, so the impact to the brand if these get left unaddressed could be more negative than they need to be.

Although there are even more interesting angles to cover about this new website, it is sufficient at this point to say that National Bank Direct Brokerage is signalling that they’re moving in a bolder and more assertive direction, visually and functionally.

Their new website won’t make a lot of waves on its own, however, the visual identity choices will have greater impact on new and existing clients as will their new commission-free trade offer which will more than likely drive a lot of curious traffic to the website. So long as NBDB can quickly close the gaps in the front-end presentation of their site, this new design positions them to resonate with the highly prized younger investor segment as well as other segments, like women investors, who can more readily see themselves as clients. For those reasons, with the roll out of this particular website, National Bank Direct Brokerage is setting themselves apart from some of their slower moving peers.

Discount Brokerage Tweets of the Week

From the Forums

Advice for a Newcomer

A newcomer to investing and to Canada took to the Personal Finance Canada forum on reddit for some advice this week on where to open a TFSA and thoughts on their plan of action for the next 3 years. Check out some interesting discussion points from fellow forum users over questions of timing the market and deciding on long and short-term approaches. Read more here.

Fee Exchange

The questions of fees are always a hot topic in the forums. This DIY investor is looking to cut down on the dreaded mutual fund fee scourge and looks first to switching over to a Robo-advisor. But will paying one fee actually work out to be any cheaper? Read what interesting advice was offered here.

Into the Close

That’s the buzzer on another wild week. Not only were things hectic for traders, there was a lot that we didn’t get a chance to cover in this week’s roundup so stay tuned to SparxTrading over the next few weeks as we shine a spotlight on some really interesting developments we’ve spotted. Fortunately, there’s now an extra hour to get all that extra research and writing in (sounds fun right?). Don’t forget to set your clocks back and to spend the saved hour wisely! Have a great weekend!

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Discount Brokerage Weekly Roundup – October 19, 2018

This fall, the colours of the leaves in Canada were distinctly green as legalization of recreational cannabis officially took effect. There was lots of excitement in the months and weeks leading up to this major milestone. For DIY investors, that has translated into lots of volatility and trading which online brokerages are always happy to receive.

Even though Canada was clearly in the spotlight across the globe this past week, for this edition of the roundup, we shine a spotlight on the US online brokerage space yet again. Earnings for major US brokerages were reported as well as what management at these brokerages had to say about some very weighty issues, so continue reading to get more details on what those reports mean for online investors on both sides of the border. As usual, we have the tweets from DIY investors and a pair of interesting forum posts to share.

Mind on My Money, Money on My Mind

Like all good students of any market, it pays to do your homework. So, when it comes to tracking movement in the online brokerage space, the publicly-traded US online brokerages provide ample reading – especially at this time of year when they publish their quarterly earnings results. Unlike many quarterly earnings calls and discussions in the past, however, there was definitely one event/issue on the minds of analysts and online brokerages alike: zero-commission trading.

While Robinhood was or is perhaps best known for their “zero-commission” trading model, it was the announcement last fiscal quarter by J.P. Morgan that they too will enter the commission free trading game that sent shockwaves through the online brokerage space.

This week it was the shockwave of that announcement and the maneuvering the industry has done in response that appeared in earnings calls (and calls with management) at Interactive Brokers, E*Trade Financial and Charles Schwab.

For many online brokerages, the launch of Robinhood in 2015 and their no-cost trade model certainly raised the notion that trading commissions could go to zero a lot faster than anyone had ever anticipated. Still, Robinhood faced many hurdles and incumbent online brokerages were content with monitoring the situation and reacting accordingly. Fast forward to 2018 and as Robinhood has crossed above six million accounts, which put them at least for a time ahead of E*Trade Financial.

Because there is so much back-story to each of these organizations, it is tricky to distill the path that each has taken to respond to zero-commission trading but the short version is that they will really only entertain a zero-commission model if there is no other choice, and right now, it appears that there are still many options on the table. That said, price reductions for equity commission trading are already on the minds and the financial models of both Schwab and E*Trade. Interactive Brokers, at least for the moment, is content with their pricing structure standing firm for some time.

Just for posterity, it’s important to mention that Q3 of 2018 for publicly traded US online brokerages was a massively profitable one. The number of accounts at Interactive Brokers is at its highest point, DARTS are incredibly strong and the pretax operating margin of 66% is enviably efficient. E*Trade is doing so well that they announced they will be distributing a dividend for the first time and on top having performed a $1B share buyback program in 2018, are also planning to do another in 2019. Schwab saw a net income for the quarter jump of 49% year over year to $923 million, with 1.2 million new accounts opened year to date.

The take away: the major players in the US online brokerage space are extremely well capitalized, have very large war chests, and are highly motivated to defend their market position.

So, how are US online brokerages preparing for a world of declining commission prices? For starters, diversification of service delivery is one key strategy.

If online brokerages aren’t reliant on direct online investing commissions alone then commission revenues have less of an impact. For Schwab, there are digital and in-person advisor services that are generating material revenues. At Interactive Brokers, they are looking to offer more traditional banking-style features like paying high interest on cash balances, direct deposit and a Mastercard tied to an individual’s portfolio account. And, at E*Trade, their corporate services division is bearing significant fruit and enabling them to differentiate relative to their peers.

Diversification for online brokerages also means encouraging or facilitating online investors’ use of higher margin (i.e. more profitable) products, in particular options. In both Interactive Brokers’ and E*Trade’s calls options were specifically cited as a product that, because investors weren’t trading as much, impacted revenues. For Canadian DIY investors, this is especially important because, like the US, options trading in Canada is highly profitable for the Canadian online brokerages, so there is likely going to be more emphasis on enabling and/or training individuals to be able to trade options.

Another strategy to defend against zero commission trading is to go on offence. In this regard, online brokerages have a number of interesting levers to pull.

For example, both Interactive Brokers and Schwab stated that advertising campaigns are going to be key. In fact, founder and CEO of Interactive Brokers, Thomas Peterffy will be looking to have the narrative around commission-free trading to be a net negative for consumers stating:

“So, this is a serious issue for us now that JPMorgan joined Robin Hood offering free trades. We have to take this very seriously as I said. So, we are currently working on commercial to explain to people why that is bad for them, but the fact is that if you look at our [track record] for example, we regularly gain customers, two, three, four customers a day from Robin Hood and I’ve never seen a customer who went from us to Robin Hood.”

Of course, there’s also the use of incentive offers and promotions to try and win over new customers or court them to switch. Not all brokerages are crazy about the use of promos, however, as noted by Walth Bettinger from Charles Schwab who stated:

“That’s always been an area of competition…where incentives are offered to new clients around possible cash or free trades. It’s certainly not something that we necessarily like because it’s not an ideal way to build a long-term relationship with a client. Unfortunately, I would say, in some ways, promotions like that work. And so therefore, as long as they are commonly utilized in the industry, it’s difficult to take a hard stand that we’re not going to have similar types of promotional offers. But they are inconsistent with our long-term approach of building trust-based relationships with clients.”

It’s important to note that despite their traction and growth, firms like Robinhood still have many challenges to overcome.

This week, for example, the co-founder of Robinhood Vlad Tenev appeared on stage at a technology conference hosted by Bloomberg, and struggled with the explanation as to why Robinhood sells its clients order flow. Although there was a response posted on their company blog, the communication around selling order flow is a bumpy topic.

Ironically, also this past week, Robinhood found itself in the spotlight for selling client orders to large market making firms in order to benefit from trade rebates. As such, even though they are doing well, Robinhood cannot really afford to fail or take too many missteps.

For Canadian DIY investors, this offers a very interesting perspective on the various kinds of scenarios that could play out here in Canada once a Wealthsimple Trade goes live or if another commission-free trading player were to enter the market.  Either way, it’s reasonably certain online brokerages in Canada are having the conversation about what can be done and how to avoid taking commission costs to zero. As is playing out in the US, however, Canadian online investors are also likely to see advertising from Canadian brokerages ramp up as well as promotional offers start to get richer. While it will sound good on the surface, DIY investors are soon going to have many more options to choose from so it looks like there will also be a lot more homework for discerning shoppers to have to do.

Discount Brokerage Tweets of the Week

From the Forums

Gateway Trade

The general advice from financial professionals is to never try and time the market. That didn’t stop this curious investor from turning to Personal Finance Canada forum to debate if it would be worth moving out of mutual funds into a lower cost ETF’s at the end of a market cycle. Find out what the forum had to add here.

Puff Piece

For DIY investors it’s important to think about the bigger picture when it comes to personal financial planning. This investor turned to the forums after years of “living recklessly and frivolously” when it came to saving, and now wants to utilize his upcoming funds wisely. Read some interesting advice and opinions in this Personal Finance Canada thread.

Into the Close

That’s a wrap – or roll – on this edition of the roundup. While there may be no shortage of sports drama or political intrigue this weekend, there might be a shortage of weed. Howsoever you choose to relax this weekend, just don’t forget to bring the Doritos!

 

 

 

 

 

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Discount Brokerage Weekly Roundup – October 5, 2018

As with any good Thanksgiving meal, there’s usually a generous helping of something good. In keeping with the spirit of Thanksgiving, we’re dishing out an extra helping of interesting developments in the Canadian online brokerage space. Whatever the equivalent of eating pants are for your brain, we hope you’ve got them on.

In this edition of the roundup, we take a look at a very interesting move by a bank-owned online brokerage to become more accessible to younger investors. From there, we’ll take a look at a perennial crowd pleaser – deals and promotions, including one special offer that we spotted being chatted about online. As a bonus, we continue coverage of the celebratory year from another bank-owned discount broker who dropped some very interesting stats on their business and how it has grown over time. As usual, we’ll dish up the latest conversation starters on Twitter and in the investor forums. Bon appetit!

CIBC Investor’s Edge Launches Student-Friendly Pricing

Getting into DIY investing just got a little cheaper for some investors this past week. CIBC Investor’s Edge rolled out a new pricing structure geared specifically towards students that offer friendlier pricing and account maintenance terms. The new student commission pricing lowers the standard commission per trade to $5.95 from $6.95 and waives the annual $100 fee associated with accounts that have less than $10,000 in them.

While not a novel idea, providing a different pricing tier for students and/or youth does provide some extra incentive to try out a particular brokerage, especially for those new to investing. For CIBC Investor’s Edge, their already low commission rate makes them a natural contender for DIY investors looking to save on commission fees so, for students, who are typically on a budget, this is an attractive option.

One important requirement to qualify for the Investor’s Edge student pricing is that individuals have to open up a CIBC Smart Account for students before they can qualify for the Investor’s Edge student rate. Taken together, the fact that only those with student banking packages can access the student commission rates suggests that Investor’s Edge is looking to build a deeper relationship with this (mostly) younger demographic of client.

Interestingly, starting a banking relationship with CIBC also opens up the opportunity to get other products, such as a credit card, which a recent Rob Carrick article in the Globe and Mail is an important strategic decision that young people (typically post-secondary students) should consider to build a credit history.

While student-friendly pricing may not move the needle right away for CIBC Investor’s Edge in terms of higher commission revenues (except for those riskier clients who like the pot and crypto stocks), the fact this program exists might be enough to tip someone away from a competitor bank-owned brokerage. And, because of the requirements of the student bank account, there is a relatively low cost to using CIBC’s banking services while still getting the convenience associated with a large bank.

For other Canadian online brokerages, it will be interesting to see which of the bank-owned brokerages follows suit. Being friendlier to students and younger investors is one way to maintain a relationship with a key demographic. While user experience is key, at some point it’s hard to ignore the cost for services. So, for the non-bank-owned brokerages, there has to be more value to offset the inconvenience of having a separate funding source for an online trading account.

An example of an online brokerage getting creative in terms of retention is Interactive Brokers. One way they’ve pursued keeping a tighter rein on their clients has been to offer services like direct deposit and credit cards. Although that service is not available to Canadian DIY investors (yet) the reasoning is similar – the goal is to keep clients from trying out (and potentially liking) a competitor brand.

For CIBC Investor’s Edge, they’re hoping that they can build a long-term relationship with a generation in which Tinder is a thing; it will be interesting to see if these new features will have younger DIY investors swiping right to find a good match.

Discount Brokerage Deals & Promotions Update

The fall crop of Canadian discount brokerage deals is looking a little leaner than usual as we head into October. As mentioned a couple of weeks ago, CIBC Investor’s Edge launched an exclusive cash back offer for SparxTrading visitors towards the end of September and as a result, pits them against BMO InvestorLine as the only bank-owned brokerages (for now) with a cash back promotional offer.

This past week, we also had another deal from RBC Direct Investing cross our radar. The offer is for 20 commission-free trades that are good to use for up to one year. Although this offer from RBC Direct Investing is aimed at healthcare professionals, according to several forum users and looking through the terms and conditions, the deal is technically able to be accessed by non-health care professionals.

As we approach the end of the year, there is usually an uptick in activity with respect to TFSA’s and shortly thereafter, RRSPs. An interesting trend at Canadian discount brokerages over the past two to three years is that they are starting sooner in the year with their marketing efforts. The result for DIY investors is not unlike the experience of shopping at Costco where merchandise for Christmas shows up on store shelves in September. Perhaps they’re onto something.

For DIY investors in the market for interesting offers in October, the news is somewhat mixed. On the one hand, there’s strong variety in transfer fee coverage and, interestingly, in referral programs. On the other, previously popular categories such as cash back promotions and commission-free trade deals are leaner. That said, these latter two categories still have some strong offers for DIY investors on the fence about the brokerages offering up the promos.

With the year now in the home stretch and many financial services providers hitting their fiscal year end, the next several weeks will be interesting to watch. There are whispers of new offers coming to market soon and we are still watching out for the Wealthsimple Trade launch to officially start rolling out which may also create a sense of urgency for brokerages to step up with some interesting offers.

BMO InvestorLine Reflecting on 30

There continues to be interesting content emerging from the 30th-anniversary celebration of BMO InvestorLine. Instead of frosting or sprinkles, however, this treat came in the form of interesting data on the online brokerage and how it is reaching DIY investors.

Late last week, the president of BMO InvestorLine, Silvio Stroescu, highlighted some of the milestones and interesting stats associated with the online brokerage and ‘digital advice’ segments of the business (aka SmartFolio). One of those stats had to do with the total number of online brokerage accounts, which was quoted at 400,000. For context, the number of accounts at online brokerages in Canada is typically very opaque, unlike their publicly traded US online brokerage counterparts. So, it is interesting to see them share these stats publicly. Further, it was also interesting to learn about the number of SmartFolio and AdviceDirect clients (5,000 and 4,000 respectively). It is certainly a bold decision to telegraph numbers but it does help put into perspective the scale of how fast the online investing space is changing. Given that the number of accounts at the online brokerage unit was quoted as “over” 400,000 that could represent a much higher number, however for some perspective, the waiting list for Wealthsimple Trade stands at just over 76,000 interested parties and they haven’t even launched publicly yet. While it remains to be seen how many of those interested in this account actually open a trading account (and subsequently use it), there is clearly a competitor brewing in the DIY trading segment.

Another point highlighted by Stoescu that stood out was the bimodal distribution of the online investing demographic. Simply put, there are “younger” and “older” investors who appear to be gravitating towards online investing via the self-directed platform. There is clearly an interest in the younger tier with upgrades planned by TD Direct Investing also referencing this group and the story mentioned above relating to CIBC Investor’s Edge and the launch of student-friendly commission pricing.

Perhaps the most fascinating stat, however, was the reference to the growth of the adviceDirect platform, a service that blends DIY investing with accessibility to support from licensed wealth management professionals. In the period from January to September, they have seen more transfers of accounts worth more than $1 million compared to the past six years since the service launched. While the numbers and specifics are somewhat opaque, it nonetheless points to an interesting level of confidence in the service.

BMO InvestorLine has definitely earned quite a bit of coverage in the roundup for their 30th anniversary, however as a milestone year, it appears that there are reasons to celebrate. What also seems pretty clear, however, is that things are changing in the online investing space quite rapidly. Paradoxically, how old a financial institution doesn’t determine how quickly they will grow nor does it determine how well it will handle the future wave of technology-driven challenges. This alone is proof enough that age is just a number. And, for Canada’s online brokerages, it’s also an instructive lesson on staying agile to keep up with the younger generation of investors.

Discount Brokerage Tweets of the Week

From the Forums

Sow it Begins

How challenging is it to get started with online investing? One “newbie” investor posed an interesting question in this Reddit’s Personal finance Canada thread, drawing a comparison between two well-known passive investing options. Find out where the discussion led, and why so many comments favoured index funds and ETFs.

Mutually Beneficial

An overwhelmed investor took to this Personal Finance Canada forum seeking direction on which mutual fund to invest in. Willing to opt for a more risk tolerant profile, check out the helpful advice that was offered with some useful links too.

Into the Close

That’s a well-seasoned turkey wrap on the cusp of Thanksgiving weekend. This weekend is not really known for self-restraint, so whatever you choose to indulge in, on behalf of everyone here at the SparxTrading.com team, we hope you have a safe and happy long weekend. Just a reminder that Canadian markets are closed on Monday for Canadian Thanksgiving but US markets are open. Have a great weekend!

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Discount Brokerage Deals & Promotions – October 2018

Now that October is here, there are some unbe-leaf-able deals for DIY investors. Corny puns aside, the fall crop of Canadian discount brokerage deals is packed with a great selection of cash back and commission-free trading offers. With the entry of a popular bank-owned brokerage into the deals race, other online brokerages are certain to take notice.

To kick things off for the new month, the official start to the month came with a couple of important deal extensions from BMO InvestorLine, SmartFolio and Desjardins Online Brokerage. Also on the welcome manifest, a cash back promotion from CIBC Investor’s Edge exclusively for SparxTrading.com readers.

Overall, transfer offers and commission-free trade promotions are still the most popular choice for online brokerages. With two very noteworthy names now offering cash back promos, DIY investors looking for a deal will have a couple of strong options to consider from the 20+ deals listed. As with all things related to trading, be sure to look over the fine print and terms of the offers being consider.

Expired Deals

With summer officially in the books, HSBC InvestDirect also packed up and put away their summer commission-free trade promo. Unfortunately for HSBC InvestDirect, this promotion was seriously overshadowed by the announcement from Wealthsimple Trade that commission-free trading was going to launch in Canada. In fact, most commission-free offers are going to have a harder time stacking up against the full commission-free experience being promoted by WealthSimple trade.

Extended Deals

BMO InvestorLine’s cash back promotion has been extended out for yet another month. This past September marks the 30th anniversary of the launch of InvestorLine so we’re glad to see that their cash back promotion also got a chance to enjoy the party just a little bit longer. The new expiry date for BMO InvestorLine’s cash back promotion is October 31st.

Also extended from BMO is the SmartFolio 0.5% cash back promotional offer. Like the BMO InvestorLine extension, the new expiry date for SmartFolio’s promotion is October 31st.

Desjardins Online Brokerage kept its long-running commission credit offer going for one more month. The new deadline for this popular promotion is now October 31st, 2018.

New deals

CIBC Investor’s Edge stepped onto the deals and promotions field in a big way at the end of September by launching an exclusive cash back promotion for SparxTrading.com readers. This offer, which comes with a custom Sparx Trading promo code, is the first major bank-owned online brokerage promotion to carry on well into the new year – a sign that CIBC Investor’s Edge is quite confident in the competitiveness of this cash back offer.

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2018
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatTransfer or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo October 31, 2018
Open and fund a new qualifying account with CIBC Investor’s Edge with a deposit of at least A) $25,000; B) $50,000 or C) $100,00+ and you may be eligible to receive a cash back bonus of A) $100; B) $200 or C) $400. This offer is open to both new and existing clients. Use offer code SPARX18 when opening the account to obtain this offer. Be sure to read full terms and conditions for complete details. A) $25,000 B) $50,000 C) $100,000 A) $100 B) $200 C) $400 Cash back will be deposited on the week of March 24, 2019 for transfers received by December 31, 2018; transfers received after December 31, 2018 but before May 1, 2019 will receive cash back on the week of July 1, 2019. CIBC Investor’s Edge Cash Back Promo March 24, 2019
Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details. $25,000 commission-free trades for 1 month + 1 month of advanced data. 1 month Active Trader Program December 31, 2018
BMO InvestorLine Open a new account or fund an existing account at BMO InvestorLine with new assets worth at least A) $50,000; B) $100,000; C) $300,000 or D) $500,000+ and you may be eligible to receive a cash back reward of up to A) $75; B) $200; C) $500 or D) $1000. Use promo code SPARXCASH when registering to qualify. Be sure to read full terms and conditions. A) $50,000 B) $100,000 C) $300,000 D) $500,000+ A) $75 B) $200 C) $500 D) $1000 Cash back will be deposited the week of April 15, 2019. BMO InvestorLine Summer 2018 Campaign October 31, 2018

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

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 B) $10,000 C) $25,000 D) $50,000 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
If you (an existing Qtrade Investor client) refer a new client to Qtrade Investor and they open an account with at least $1,000 the referrer and the referee may both be eligible to receive $25 cash. See terms and conditions for full details. $1,000 $25 cash back (for both referrer and referee) Cash deposited at the end of the month in which referee’s account funded Refer A Friend to Qtrade Investor none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTRADE account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $5,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $5,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period (subject to conditions). BMO InvestorLine Refer-a-Friend January 2, 2019

Expired Offers
Last Updated: Oct. 1, 2018 22:15 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more into a new HSBC InvestDirect account and you may be eligible to have up to $152.55 in transfer fees covered. 152.55 $15,000 Confirmed via email contact with HSBC InvestDirect Rep. Contact client service for more information. none
Transfer $15,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $15,000 Transfer Fee Rebate none
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees. $135 $15,000 Transfer Fee Rebate Details none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees. $135 $20,000 Transfer Fee Rebate none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo October 31, 2018
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPARXCASH when signing up. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 BMO InvestorLine Summer 2018 Campaign September 3, 2018

Expired Offers
Last Updated: Oct. 5, 2018 17:15 PT

Other Promotions

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

Expired Offers
Last Updated: Oct. 1, 2018 22:15 PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1,000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Cash Back Open and fund a new or existing SmartFolio account with at least $1,000 and you could receive 0.5% cash back up to $1000. Use promo code PROMO1000 when opening a new account. See terms and conditions for full details. This offer can be combined with the refer-a-friend promotion. $1,000 0.5% cash back to a maximum of $1000. PROMO1000 October 31, 2018 SmartFolio Cash Back Promo
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $1,000 1 year no management fees STSF April 30, 2019 SmartFolio New Account Promotion
Cash Back – Referral BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details. $1,000 $50 cash back (referrer) $50 cash back (referee) Unique link generated from SmartFolio required. None SmartFolio Website
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: Oct. 1, 2018 22:15 PT
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Discount Brokerage Weekly Roundup – September 7, 2018

Even though it was technically a short week, it most certainly didn’t feel that way for anyone watching or reporting the news. While none of the online brokerages have pulled many of the stunts on Twitter that this past week has provided, they are doing their fair share of generating headlines, buzz and making a splash online.

In this edition of the roundup, we ring in September with an overview of some very interesting deals and promotions activity from Canadian discount brokerages as well as a look at new areas where brokerages are battling for DIY investors. From there we’ll take a deep dive into a major overhaul of a popular online brokerage’s website, including some interesting design and content strategy choices. As always, we’ll take a tour of what DIY investors and online brokers were up to on Twitter and close out with chatter from the investor forums.

Deals and Promotions Heat Up September

After a quiet start last month, deals and promotions activity at Canada’s discount brokerages has picked up considerably as we enter September. While this month usually signals a return to the markets and heightened trading activity, this year there’s something different brewing, and it’s not a pumpkin spice latté.

Instead, through the month of August and coming out of the gate in September, there’s been a noticeable uptick in discount brokerage deals activity. We’ve seen a new battle ground emerge in the area of referral promotions (more on that in a moment) as well as an online brokerage which typically sits on the sidelines jump back into the deals pool. In addition, there have been references to additional offers which may be coming this month. For DIY investors, it seems to suggest interesting opportunities might be available when shopping around for an online brokerage account.

This heightened level of promotions activity points to what will likely be a fierce contest for DIY investor assets over the coming months. Historically, deals and promotions activity tends to ramp up through October and November in anticipation of “RSP season” – a point in the calendar year in which many DIY investors turn intention into action by opening new accounts. The fact that such drastic moves are being made by online brokerages so early suggests competitive forces at play.

One of the biggest stories in the discount brokerage deals and promotions space this September is BMO InvestorLine’s reduction in the threshold to qualify for their refer-a-friend promo. Specifically, InvestorLine has lowered the threshold to qualify for the referral promotion from $50,000 down to $5,000 while still retaining the $50 cash back for both referrer and referee. This move makes their offer now more accessible than Scotia iTRADE, the only other bank-owned online brokerage to offer a referral promotion.

While it is not clear exactly why BMO InvestorLine chose this point in time to lower their qualifying threshold so substantially, the combination of Wealthsimple Trade launching for Canadian DIY investors and the entry of Qtrade Investor into the referral promotion sandbox are both very recent developments that would, understandably, prompt BMO InvestorLine to shift tactics to account for these competitive forces. Of course, frequent observers of the deals and promotions space would also have noticed that BMO InvestorLine also chose to extend their cash back offer through to the end of September, a sign that perhaps something a bit bigger and bolder is on the drawing board for the fall season.

In terms of strategy, referral promotions for discount brokerages are an interesting battleground.

On the surface, that more online brokerages don’t have them in place is a head scratcher. After all, one of the most influential and least expensive sources of new clients are the family and friends of existing, delighted clients. That said, getting a referral program off the ground and functioning properly, is easier said than done. Competing demands for limited technology resources means that even if the technology exists to manage this initiative, it still requires oversight, management and maintenance – something that invariably requires resources. So, one natural limitation to other online brokerages simply rolling out a referral program is that ‘buy in’ has to be there and business case made, which is why Qtrade Investor jumping into the referral promotion segment is such a big deal and why BMO InvestorLine’s latest move creates even more of a challenge to other brokerages to either match this promotion or leave BMO InvestorLine unchallenged.

With two big announcements in the referral promotions category within a month, however, this appears to be fertile ground for competition. These actions will not go unnoticed by other brokerages and will likely be a catalyst for those discount brokerages on the fence about deploying a referral program of their own to find an effective counter offer.

It is also worth mentioning that time is of the essence for Canadian discount brokerages looking to launch any kind of splashy promotion. Wealthsimple Trade is still not yet widely available which means that nimble online brokerages have a window with which to retain existing and/or attract new customers via some kind of big promotion.

After Wealthsimple Trade does step onto the field, however, it will be interesting to see whether they tackle referral bonuses or promotions altogether. While we’ll just have to wait and see, there’s already evidence they’re willing to leverage referrals.

As one of Canada’s leading fintech firms, Wealthsimple (parent to Wealthsimple Trade) is using a clever strategy of referrals to boost awareness of and interest in Wealthsimple Trade via it’s “waiting list” structure. Anyone wanting early access to their new platform can jump ahead in the line by simply referring more people to sign up. Not only is Wealthsimple Trade (and the parent brand) already active with affiliate programming but they are showing they’re already leveraging it in creative ways.

In the battle for Canadian DIY investors’ attention and share of wallet, the lineup of fall deals is sure to bring a few more twists and turns and some very interesting marketing campaigns. The bottom line for DIY investors, though, is that online trading is about to get much cheaper, more accessible and much more interesting to shop for an account.

Questrade’s New Website is Seriously Chill

This past week, Questrade unveiled a new and improved version of their website. While new website refreshes don’t typically make the kind of splashy headline they once did, the launch is nonetheless an important milestone for the company and reflects a sensitivity to their target demographic as well as a clear shift in the notion of what “investors” look like.

Overall the new website looks and feels more contemporary and built for an Instagram generation. The imagery is more prominent and features a very millennial trope of people ‘living their best lives’ which stands in stark contrast to the extreme emotion that characterized previous versions of the website or the “tough questions” campaign that featured bold text statements.

While there is no avocado toast, there is a notable colour palette of green and white that would make for an insta-worthy post. Ironically, Instagram isn’t really part of the Questrade Wealth Management brand directly (it is part of their careers section though) which is in stark contrast to Wealthsimple which has embraced that channel as part of their social media ecosystem to connect with investors.

To Questrade’s credit, and perhaps picking up on themes from the release of other online investing websites launched not too long ago (such as Credential Direct and Qtrade Investor) Questrade chose to have visually appealing imagery, minimal text and much more room for visitors to focus on something interesting visually as well as important key message. While it is not ‘outstanding’ the important point is that it doesn’t stand out for the wrong reasons.

Another very interesting feature of the imagery choices on the new website is that many of the individuals in the photos skew young. There are almost no images of “seniors” nor of traditional corporate settings but rather young people or young families “living” life. It’s generally difficult to create an emotional experience (especially a positive one) with regards to financial services and it is especially difficult to do so while looking original and authentic. We’ve all seen far too many stock photos of what “finance” looks like, so kudos to the people choosing images for Questrade’s new website.

It is also worth mentioning that “who” an investor looks like has also been given careful consideration. Questrade has made sure to include a more balanced view of women as investors, a welcome evolution from finance/investing websites that, for many years, defined investing in a visual sense, as ‘men only’. Again, Questrade is not unique in this regard and even on their new site there is some room to improve, but they are trending in the right direction when it comes to inclusivity and broadening the definition of what an investor could or should look like.

While website changes are increasingly now the norm, Questrade’s recent website overhaul is a significant visual and design departure from their previous websites, a likely reflection of their own evolution as a wealth management firm and not just an online brokerage.

The changes to the new website haven’t just been visual, however. Structurally, the new website also includes testimonials from (presumably) Questrade clients who’ve said nice things about the brand which also takes its cues from other online brokerages doing something similar.

A curious feature of the new website is that the big ‘content’ sections of the previous website have been moved or removed entirely.

For example, the Questrade community is no longer available (at least on the public facing site) which means that previous content such as newsletters and forum posts are not visible. Also no longer accessible is the Questrade blog as the message below indicated when clicking on a Google link for it. Instead of these sections, users are directed to the ‘resources & support’ section of the new website.

It appears Questrade has moved their educational content into a “support” section and while there are articles about investing topics, navigating this content requires users to click on ‘related’ articles or use the search field rather than being able to access the topics in a more categorical format. For users who browse by topic or who don’t know what they don’t know (and thus don’t know what to search), this structure actually makes it more challenging to consume information and ‘learn’ about investing.

Speaking of content, it also looks like Questrade has started to push out content on social media channels related to investing. Recent posts on Questrade’s Facebook and Twitter feature an informative graphic containing an investment term, something that other online brokerages have also successfully used as part of their social media content mix (such as Interactive Brokers, and once upon a time, Scotia iTRADE).

Admittedly, this was supposed to be a much shorter piece on Questrade’s new website. Responsive websites that render well across multiple screens are now the standard rather than an exception; clean minimalist design that uses generous whitespace and bold imagery is a design choice clearly aimed at reaching and resonating with younger, more visually-inclined users. These are no longer big, innovative leaps.

That said, the fact that many of the changes to the online brokerage space (zero-commission trading notwithstanding) we have observed are evolutionary rather than revolutionary, speaks to a new trend of sorts: zeroing in on the details. In much the same way that the highly competitive world of Formula One racing separates success from failure by minutia of design, so too will changes to the digital experience of online brokerages – including their websites. Going forward, the details will matter more than they have before.

Even with the ingredients of what goes into a contemporary website well telegraphed, how well those elements come together ultimately determines the end user’s experience and Questrade’s new website is the product of a lot of thought and design savvy.

While there are some very intriguing changes around the removal of a blog, forums section and other content items, the ultimate result of Questrade’s redesigned website is that it reflects their ability to be contemporary from a design point of view. This new website has helped to visually reshape the narrative of Questrade from just a ‘direct investing’ firm towards being a holistic wealth management firm that is along for the ride as their clients ‘lead their best life.’

BMO InvestorLine Turns 30

While the parent to BMO InvestorLine is clipping along at a healthy 200 years old, BMO InvestorLine itself is still a spry 30 year-old. We spotted this great image on Twitter that was a great throwback to when ‘mobile trading’ made its debut at InvestorLine. Congratulations to BMO InvestorLine on hitting this milestone. As with any great milestone birthday, there will hopefully be lots of reasons to celebrate (especially for DIY investors)!

Discount Brokerage Tweets of the Week

From the Forums

No Room with Some Views

TFSAs can be tricky business, especially so when you overcontribute. A user in this reddit thread ran into some issues with overcontributing to their TFSA while also experiencing a large loss. Read what options others offered in the shape of damage control including factoring in fees and transfer of funds.

Slow Your Roll

Of the many reasons why Wealthsimple Trade could siphon away business from online brokerages, this reddit post provides a compelling view of consumer sentiment on the new service (especially since it hasn’t even launched yet). In this post, one user thinks that taking the DIY route required going to a popular online brokerage however other readers were quick to weigh in on other options, including staying put with Wealthsimple.

Into the Close

That’s a wrap on another week. Just because it’s Friday, doesn’t necessarily equate to relaxation ahead. Political firestorms seem to be ever present – including in the launch to the new NFL football season. If you haven’t already seen it or heard of it, Nike and Colin Kaepernick are making all kinds of waves. There was a very interesting stat shared by Robinhood (the online brokerage) about the impact of Nike’s move – as well as on their stock. In case you haven’t seen the video, it’s worth a watch below. And, on that note, whatever you find yourself dreaming about this weekend, hopefully it’s bold and exciting!

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Discount Brokerage Deals & Promotions – September 2018

*Updated Sept. 24.* September is officially here. And, along with pumpkin spice everything, the Canadian discount brokerage deals and promotions section is also going to get bold, rich and flavourful. Ok, maybe not that last one, but nonetheless this month is going to shape up to be a very busy one as far as promotions go.

The good news is that we know from a number of different sources, that promotions are on their way this month. The not-so-good news is that we’re not sure exactly when. But sit tight, because as in the stock market where higher prices beget higher prices; when it comes to promotions – more deals lead to more deals.

Kicking off the month, there is nothing crossing the wires as of September 1st. In fact, technically speaking, the expiry of Scotia iTRADE’s promotion (and accompanying transfer offer) at the end of August puts the deals count down by two heading into the new month. Not to worry though. Since it is a long weekend and there is a promotion timed to expire on September 3rd from BMO InvestorLine, there’s a good chance that the return to work and school will bring with it at least one new offering announcement.

Throughout last month, however, there were two very noteworthy deals and promotions developments that are worth highlighting here.

First, Qtrade Investor launched a refer-a-friend promotional offer. This was big news as this program now enables Qtrade to take advantage of their stellar service reputation (which is very helpful when it comes to referral programs) and it positions them to compete directly against the very small group of online brokerages who also have referral bonuses.

The second important deals development last month came from HSBC InvestDirect, which launched a commission-free trading promotion that lasts until the end of September. Of course, no sooner did the HSBC InvestDirect deal make it to their public facing website than Wealthsimple Trade rattle the Canadian discount brokerage space by offering up commission-free trading – period.

In fact, the latest move by Wealthsimple Trade means that a once popular category of “commission-free” trade deals could itself see some important changes.

It’s too soon to tell however Wealthsimple Trade could result in commission-free trade offers evaporating altogether or if some hybrid/better solution comes along. After all, the optics of 30 trades which are good for only 60 days doesn’t quite have the same ring to it as free trades, forever.

What may be a more likely development is that the value or flexibility of commission-free trades might expand or, hopefully, we’ll start to see online brokerages compete more often with cash-back offerings in which case, larger online brokerages have a golden opportunity to outspend their competitors.

The bottom line, September is going to be very interesting for deal-seeking DIY investors, and if the markets continue their push upwards, a rewarding time to be an online brokerage too. That certainly puts a little extra spice on already bold selection of offers.

As always, if there are offers that we haven’t spotted that would be good for other DIY Investors to know about, let us know in the comments section below.

Expired Deals

Scotia iTRADE’s cash back offer for existing clients expired at the end of August. This promotion offered a prepaid Visa card ranging in value from $100 to $1,500 for deposits between $25,000 and $1M+.

Extended Deals

*Update Sept. 5 – BMO InvestorLine has extended the deadline for their current cash back offer to September 30th.*

There are no extensions to report at this time.

New Deals

*Update Sept. 24 – The first new deals of the official fall season have arrived. CIBC Investor’s Edge has launched a cash-back offer exclusively for SparxTrading.com readers. This promotional offer, which runs until March of 2019, consists of a $100, $200 or $400 cash back for opening a new CIBC Investor’s Edge account. Both new clients and existing clients may be eligible for this offer. See table below for more information*

*Update Sept. 5 – This is an exciting development, BMO InvestorLine has lowered the minimum deposit requirement substantially to qualify for their referral offer. The new minimum deposit requirement is $5,000 (reduced from $50,000), which makes it much easier to qualify for a referral bonus. See table below for more information.*

There are no new deals to report at the start of the month. As mentioned above, both Qtrade Investor and HSBC InvestDirect joined the deals roster through the middle of August. Stay tuned, though, as there are several offers in the works scheduled to arrive this September.

Discount Brokerage Deals

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

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Jitney Trade A Sparx Trading exclusive offer! Use the promo code “Sparx Trading” when signing up for a new account with Jitneytrade and receive access to their preferred pricing package. n/a Discounted Commission Rates none For more details click here none
Open and fund a new account at HSBC InvestDirect and you may be eligible to receive up to 30 commission-free equity trades (North American equities only). See terms and conditions for full details. n/a 30 commission-free trades 60 days Click to access HSBC InvestDirect Summer Promotion September 28, 2018
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2018
Disnat Desjardins Online Brokerage is offering new clients 1% of assets transferred into the new account in the form of commission credits (to a maximum value of $1,000). Minimum qualifying deposit is $10,000. To qualify, individuals will have to call 1-866-873-7103 and mention promo code DisnatTransfer or email: [email protected]. See details link for more info. $10,000 1% of assets transferred in the form of commission-credits (max credits: $1,000) 6 months Disnat 1% Commission Credit Promo October 31, 2018
Open and fund a new qualifying account with CIBC Investor’s Edge with a deposit of at least A) $25,000; B) $50,000 or C) $100,00+ and you may be eligible to receive a cash back bonus of A) $100; B) $200 or C) $400. This offer is open to both new and existing clients. Use offer code SPARX18 when opening the account to obtain this offer. Be sure to read full terms and conditions for complete details. A) $25,000 B) $50,000 C) $100,000 A) $100 B) $200 C) $400 Cash back will be deposited on the week of March 24, 2019 for transfers received by December 31, 2018; transfers received after December 31, 2018 but before May 1, 2019 will receive cash back on the week of July 1, 2019. CIBC Investor’s Edge Cash Back Promo March 24, 2019
Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details. $25,000 commission-free trades for 1 month + 1 month of advanced data. 1 month Active Trader Program December 31, 2018
BMO InvestorLine Open a new account or fund an existing account at BMO InvestorLine with new assets worth at least A) $50,000; B) $100,000; C) $300,000 or D) $500,000+ and you may be eligible to receive a cash back reward of up to A) $75; B) $200; C) $500 or D) $1000. Use promo code SPARXCASH when registering to qualify. Be sure to read full terms and conditions. A) $50,000 B) $100,000 C) $300,000 D) $500,000+ A) $75 B) $200 C) $500 D) $1000 Cash back will be deposited the week of April 15, 2019. BMO InvestorLine Summer 2018 Campaign September 30, 2018

Expired Offers
Last Updated: Sep. 24, 2018 22:00 PT

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 B) $10,000 C) $25,000 D) $50,000 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
If you (an existing Qtrade Investor client) refer a new client to Qtrade Investor and they open an account with at least $1,000 the referrer and the referee may both be eligible to receive $25 cash. See terms and conditions for full details. $1,000 $25 cash back (for both referrer and referee) Cash deposited at the end of the month in which referee’s account funded Refer A Friend to Qtrade Investor none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTRADE account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $5,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $5,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period (subject to conditions). BMO InvestorLine Refer-a-Friend January 2, 2019

Expired Offers
Last Updated: Sep. 5, 2018 09:30 PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Transfer $15,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $15,000 Transfer Fee Rebate none
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $135 in transfer fees. $135 $15,000 Transfer Fee Rebate Details none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees. $135 $20,000 Transfer Fee Rebate none
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 $25,000 Transfer Fee Promo none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
Disnat Disnat is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $50,000 into a Disnat account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info. $150 $50,000 Disnat 1% Commission Credit Promo October 31, 2018
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account, by transferring in at least $200,000+ in net new assets and you may be eligible to have transfer fees covered up to $200. Use promo code SPARXCASH when signing up. Be sure to read the terms and conditions for more details on the offer. $200 $200,000 BMO InvestorLine Summer 2018 Campaign September 3, 2018

Expired Offers
Last Updated: Sep. 21, 2018 1:15 PT

Other Promotions

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

Expired Offers
Last Updated: Sep. 1, 2018 12:15 PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1,000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Cash Back Open and fund a new or existing SmartFolio account with at least $1,000 and you could receive 0.5% cash back up to $1000. Use promo code PROMO1000 when opening a new account. See terms and conditions for full details. This offer can be combined with the refer-a-friend promotion. $1,000 0.5% cash back to a maximum of $1000. PROMO1000 September 30, 2018 SmartFolio Cash Back Promo
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $1,000 1 year no management fees STSF April 30, 2019 SmartFolio New Account Promotion
Cash Back – Referral BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details. $1,000 $50 cash back (referrer) $50 cash back (referee) Unique link generated from SmartFolio required. None SmartFolio Website
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: Sep. 11, 2018 09:05 PT
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Discount Brokerage Weekly Roundup – August 31, 2018

If there’s one thing that markets are built for, it’s speculation. Whether or not NAFTA negotiations turn in Canada’s favour or against, the reality is that nobody on either side of the negotiating table is standing still and neither are their respective markets. As the gatekeepers to being able to invest in all of the speculative fervor, online brokerages on either side of the border are showing that they too need to keep moving, and fast, to keep up with the pace of change.

Oftentimes it’s a bigger development that makes the cut for the weekly roundup, however this week there is something interesting afoot, specifically lots of little things. The big story this week seems to be that there are lots of little stories – incremental movements – that appear to indicate online brokerages are positioning for a very busy and eventful final stretch to 2018. There’s quite a bit to unpack, so let’s dive in.

Getting in Some Downtime

One of the biggest stories we’ve been tracking in 2018 is the merger between rivals Qtrade Investor and Credential Direct. While there have been a few signals across the year that this change was coming, there has been a firm deadline telegraphed as to when that official cutover date will be. Specifically, a bulletin posted on the Canadian Securities Exchange website on August 29th indicates that Qtrade Securities Inc. will cease its status as a dealer effective September 7th and a new entity, Credential Qtrade Securities Inc. will commence under the broker code, wait for it, 088.

Of course, another interesting sign that things are publicly moving forward is that both the Qtrade Investor website and the Credential Direct website displayed messages that their sites are unavailable over the Labour Day long weekend. So, while lots of folks might be out enjoying the festivities of a long weekend, there’s no doubt that technical teams and executives at the new parent firm Aviso Wealth will be having a long weekend of sorts ensuring that the transition of systems goes smoothly.

A Close Call

Determining which online brokerage is best is incredibly challenging at the best of times, however with ultra-competitive pricing, loads of features and ever-improving user experience, the differences between discount brokerages aren’t nearly so clear anymore. This past week, US online brokerages were put under the microscope by Kiplinger, which released their latest US online brokerage rankings for 2018.

While TD Ameritrade came out on top, the rankings indicate just how close the top four US online brokerages were to each other, a point which seems to validate the observation about how competitive firms have become. What was very interesting to note, however, is that the bulk of what contributed to the top firms’ scores was not commission pricing. In fact, of all of the categories investigated, commissions and fees was the weakest category among TD Ameritrade, Charles Schwab, Fidelity and E*Trade. Perhaps that bodes well for online brokerages in the looming fee battle.

It was also interesting to note how small the field of online brokerages ranked was relative to the possible options out there. The notable absences of Robinhood or Interactive Brokers could have been interesting to stack up against other brokers especially in the user experience (UX) and pricing categories respectively. It might have also highlighted the fact that while pricing and even UX are big draws for firms like Robinhood, features like tools or advisory service are places where well-established online brokers have a leg up.

Finally, another interesting tidbit from this article was the mention that lesser-well-known US online brokerage Firsttrade has also dropped their commission fees for trading ETFs and stocks down to zero, a move that comes on the heels of JP Morgan’s announcement last week.

Commission-free is the Place to Be

As a segue from the move by Firsttrade mentioned above, there is clearly a shift taking place in the online brokerage industry as a result of a massive announcement by JP Morgan launching zero commission trading via their You Invest platform.

A recent article in Investment Executive which featured comments made by credit rating agency Moody’s, reiterated what many observers of the online brokerage industry also believe, that the impact of reducing commissions is going to have a material impact on the revenues of some online brokers more than others. Also, not everyone is sold on the value of commission-free trading for DIY investors either as this piece from CNBC highlights.

Taking the example of what may transpire in the US, it is not that hard to envision similar concerns for Canadian online brokerages who will be put to the test to see how much lower their commissions and cost structure can go before they tap out of the DIY investing space altogether.

On a side note, Robinhood online brokerage announced this week that they will be offering commission-free trading access to 250 global stocks via trading in American Depository Receipts (ADRs). Select firms such as Nintendo, Adidas, BMW and even Canadian firms will now be available.

 

We will continue to keep a close eye on what’s unfolding in the commission-free trading space. Until this approach to online investing becomes the norm, there’s a good chance it’s going to occupy the spotlight and entice investors to kick the tires on trading commission-free. For a quick catchup, since we reported on the Wealthsimple Trade announcement, we’ve seen the number of folks in the waiting list climb to almost 60 thousand, which for many Canadian online brokerages, represents a lot of existing clients interested in trying out the competition. Stay tuned.

Options trading updates and pricing at CIBC Investor’s Edge

Options trading recently got a little easier at CIBC Investor’s Edge. Clients of Investor’s Edge can now trade options via CIBC’s Mobile Wealth app, with the functionality of options trading available on the full site.

Pricing for options trading continues to remain the same at $6.95 + $1.25 per option contract at the standard price while active traders (>150 trades per quarter) can expect to pay $4.95 + $1.25 per option contract. Interestingly, we noted that the Globe and Mail’s Rob Carrick reported that there may be a lower standard commission pricing of $5.95 per trade coming this fall as part of a promotional offer.

Taken together, the latest moves by CIBC Investor’s Edge are, like many other brokerages, signaling that accessibility to trading platforms and better pricing might offset the costs of staying competitive by enabling trades to be researched and executed more conveniently.

Discount Brokerage Tweets of the Week

From the Forums

The Great Debate

Bank owned brokerage or non-bank-owned brokerage – when it comes to DIY investing and putting your hard-earned investment dollars to work somewhere, the question of where still generates heated discussion. In this thread from Canadian Money Forum, the debate over whether to transition out of Questrade and where to go generated a lot of interesting perspective.

Returns to Sender

Leaving money on the table is a perennial curiousity for many investors. One new investor in this reddit thread wondered whether their investment gains could have been better off/could be better off with a lower fee provider. There’s some interesting math as well as a few noteworthy mentions of providers who cater to less active investors.

Into the Close

There were a lot of investors closing out the week on a high note (thanks to the spike in activity for cannabis stocks). Now that the long weekend has officially arrived, hopefully there’s a chance to kick back and enjoy the last few days of summer. Whether you’re out picking summer fruits, fantasy football picks or moving over servers and websites for DIY investors, have a safe and enjoyable long weekend!

 

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Discount Brokerage Weekly Roundup – August 24, 2018

Where there’s smoke, there’s fire. There’s certainly been no shortage of smoke as fires rage across the country, however, in the online brokerage space, it appears that commissions are definitely smoldering and set to touch off a fire sale in the coming months.

In this week’s roundup, we take a look at a major US-based financial services provider that just went all in on zero-commission trading fees. From there, we provide a quick scan of some small but interesting developments in the Canadian discount brokerage space that crossed our radar in the week. As always, we close out the roundup with interesting chatter from DIY investors in forums and on Twitter.

J.P. Morgan Drives Trading Commissions Down to Zero

Just when you thought that things couldn’t get any wilder in the battle for DIY investors, this past week yet another financial services provider has decided that trading commissions should be a thing of the past.

Unlike last week’s announcement by Wealthsimple Trade to drop online trading commission fees to zero here in Canada, when J.P. Morgan announced this past week that they too would be deploying commission-free trading in US, the publicly traded online brokerages swiftly lost a collective $5.5B in market cap.

J.P. Morgan’s new platform, called “You Invest” offers users 100 free trades in the first year and those who retain at least $15,000 receive 100 free trades per year thereafter. Higher net worth clients are eligible to receive unlimited commission-free trading. Those with less than $15,000 or who use up their commission-free trades will be charged $2.95 per trade, which is about half price of where commissions are generally at the big US online brokerages. In a nutshell, pricing for trading online in the US is set to get much cheaper.

The latest move by J.P. Morgan is bound to redraw the map on online brokerage pricing in the US.

JP Morgan, late to mobile trading, eyes a splash with its new app from CNBC.

On the zero-commission trading side, Robinhood, which up until now enjoyed no competition with commission-free stock trading, is bound to have to get even more creative to build its brand and attract new clients at the blistering pace it has been doing so. With a player that has the size, reputation and reach J.P. Morgan does, Robinhood is facing quite the opponent.

At the other end of the spectrum, the larger online brokerages in the US such as Schwab, TD Ameritrade and E*Trade Financial are also bracing themselves for the inevitable price drop. Interestingly enough, while trading commissions are important, firms such as Schwab and Ameritrade may be better positioned to contend with a ‘zero-commission’ player because they have diversified their revenue streams so that they are not exclusively reliant on trading commission fees. And, for firms like Interactive Brokers, whose fees are already quite low, the impact may not be as drastic.

The conversation surrounding J.P. Morgan’s latest move certainly mirrors many of the same points being made here in Canada regarding Wealthsimple Trade. One of the biggest challenges to the ‘free trading’ platforms is that they have to learn to accommodate and support the active and somewhat active trader. In the case of J.P. Morgan, offering up 100 commission-free trades per year is a signal that they’re interested in the ‘occasional’ or passive investor, however even this tier of investor expects a feature set that helps to navigate the maze of data surrounding stocks and trading.

Investors who are heavily reliant on advanced or sophisticated trading platform features and order types, for example, may take an interest in the zero-commission pricing but will likely not see the same kind of value in a poor or limited trading experience. Free might not be good enough of a value without alerts, watchlists, stop orders and more. What that implies is that there will undoubtedly be a looming battle over user experience and innovation that will come to dominate how DIY investors on both sides of the border assess what makes a ‘good’ choice for an online broker.

Another crucial component to the zero-commission conversation right now is that the right tools and resources need to be made accessible for DIY investors to actually execute trades and generate order flow. If not, there are going to be lots of zombie accounts sitting with idle deposits. For Wealthsimple, there is already a solution to put idle cash to work. For online brokerages, however, they may have to adopt Interactive Brokers’ approach and simply offer to pay interest on cash balances. Of course, building the right content tools and screeners is much easier said than done. Figuring out how to deliver financial content to an audience that is primarily mobile-first will require reimagining how to address a topic like personal finance in a way that is entertaining, accessible and ultimately value added.

Finally, it is important to note that commission price is one of several ways in which online brokerages derive revenue. If trading commissions go down, perhaps other fees will likely rise to offset the drop, or perhaps online brokerages will choose to ‘unbundle’ their service the way that airline carriers or cable providers have, so that DIY investors can tailor what they pay according to what they use. Of course, this also portends the dreaded baggage fee equivalent – let’s hope it doesn’t come to that.

Clearly, commission-free trading is quickly becoming a new force for online brokerages to have to contend with. That said, investors will have to pay in some way shape or form for the ‘free’ trade. Whether it’s through execution efficiency, currency conversion, margin lending, data platforms or any of the host of other charges, it’s important to ask what the “catch” might be, as there almost certainly is one.

Stay tuned as not only are there Canadian online brokerages who will be mounting a challenge to Wealthsimple Trade, but there are now also likely US online brokerages who’ll be figuring out how best to price a response to zero-commission online trading.

Lightning Roundup

Like a good summer salad, here’s a quick and refreshing medley of online brokerage and investing stories that also crossed our radar this (and last) week.

National Bank Direct Brokerage Pushing Benefits

In a highly competitive landscape, loyalty is becoming an ever more valuable commodity among online brokerages. Earlier this month we noted that National Bank Direct Brokerage had posted their “Distinctive Benefits” offer to their home page. Along with cross-town rivals Desjardins Online Brokerage who have also deployed a similar program, other online brokerages (especially bank-owned brokerages) have programs in place for higher net worth DIY investors. What’s changing is that we might start to see more of those programs find their way into the spotlight.

Interesting Offers for Younger Investors

This week there was also an interesting article from the Globe and Mail’s Rob Carrick talking about low-cost online investing services. In particular, it appears that there is a reference to an upcoming (yet to be published) offer by CIBC Investor’s Edge which will lower commissions on ETF trades to $5.95 for post-secondary students, as well as waive administration fees on ‘small’ registered and non-registered accounts.

Also revealing in this article was information on RBC’s digital advice/robo-advisor offering, RBC InvestEase, which is waiving management fees (on the first $10,000) for individuals who sign up for a new account by the end of October.

Scotia iTRADE Moving Quietly with USD Accounts

After a very quiet rollout of their new USD registered account offering, clients of Scotia iTRADE received notice via email that Scotia iTRADE has, in fact, gone live with the USD registered account feature. While we expect there to be much louder and more prominent advertising to come, it looks like coverage on this feature is happening at a very measured pace.

Discount Brokerage Tweets of the Week

From the Forums

Post Before You Leap

There was still lots of chatter this week from forum participants about Wealthsimple. One debt-free user started a discussion on which type of platform he should use to begin his investing journey. Read what others had to say in this Personal Finance Canada reddit thread here.

Mutually Funded

This post from reddit’s Personal Finance Canada Section, offered a number of interesting insights for a young DIY investor who wants to convert their parents’ mutual funds to an e-series. Worth a read for some good, plain language clarification on making the switch.

Into the Close

That’s a wrap on another week. Regardless of what’s happening in politics north or south of the border, markets are powering higher. Seems like the market has more bull than…well you know who. Speaking of good runs, it’s fantasy football season yet again, so if you’re looking to pick even more portfolios, this is prime time to do so. Regardless, with only a few more days left in August and summer nearing the ‘end zone’ be sure to enjoy it and have a wonderful weekend!