Tag: Weekly Roundup

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – January 1, 2016

Happy New Year! Welcome to the first edition of the discount brokerage roundup for 2016. It’s hard to believe that we’re turning the page into another year already but when time flies this fast it must mean that we’re having fun.

With a number of market closures, a gearing down of activity with Canadian DIY investors over the final week of 2015,and probably because everyone is out watching Star Wars, it was an opportune time to look back at all of what’s happened with Canadian discount brokerages in the short span of just one year and muse about what it all means for 2016.

To make it a little easier to navigate all of what happened, we picked the stories that stood out each month and put them together into one super roundup of roundups for 2015.

While it is nowhere near as fun as a hot tub time machine, tardis or a delorian, here is a trip into the most interesting and standout stories from around the Canadian discount brokerage industry for 2015.

January 2015: Questrade Punches Heavier

Questrade stepped into the Canadian ETF provider arena signalling a big move for the small independent brokerage. Questrade would go on to make 2015 a year in which they diversified their business away from just an online brokerage to become a wealth management company offering robo-advisor, ETFs and other managed wealth services. Tack on platform updates and a tonne of promotions month in and month out and Questrade’s start in January was just the tip of iceberg.

February 2015: The Website Update Frenzy Begins

Desjardins Online Brokerage’s launch of their new website unlocked an avalanche of website refreshes from Canadian discount brokerages in 2015. The move from their old website to a more modern, user-focused design signalled a clear shift to the “less is more” model from Canadian brokerages. Five other brokerages would also go on to redesign their websites, and, even though Desjardins’ website did not receive high praise in the Globe and Mail online brokerage rankings, the design and user experience considerations that went into the Desjardins Online Brokerage site were thoughtful and trendsetting for 2015.

March 2015: #SocialMediaMatters

Although it had been a long time coming, one of the most interesting stories of the online brokerage world in Canada was watching TD Direct Investing change the social media game for discount brokerages on Twitter. Unlike every other Canadian discount brokerage (and even many financial services firms) on Twitter, TD Direct Investing undertook the bold move to allow multiple representatives the freedom to tweet instead of having just one solitary voice. Considering the number of people to coordinate, this was a huge risk to take on TD’s part however the gamble appeared to pay off in spades. The pivotal moment when things started to really take off, however, started with their webinar in March. With over 300 live attendees (a headline grabbing number on its own) and thousands more registered, TD Direct Investing’s team could now communicate directly and transparently with DIY investors and with each other all in real time. TD Direct Investing would later go on to have its own Twitter account however no other brokerage, except for maybe Questrade (who has had a 4 year head start over TD on Twitter) has had the kind of impact on social media that TD Direct Investing had in 2015.

April 2015: Keeping it in the Family

For a discount brokerage that built its brand on not charging DIY investors account or inactivity fees, the road to Questrade becoming one that does charge inactivity fees has been a bumpy one. This past April, Questrade made yet another bold move to enable clients the ability to avoid  paying inactivity fee by enabling family members to pool resources and have inactivity fees waived.

While offers to clients in the same household are nothing new, what was interesting about this move was that it offered Questrade yet another feather in its cap of being able to compete with brokerages big and small when it came to client acquisition. Empowering family members with more than just referral bonuses means that the value to customer goes beyond a one time deposit or commission credit. Later through the year, Questrade would also raise its fees, but when the firm goes about making itself more personable online, it’s something that the former ‘no fee’ brokerage can pull off without the kind of backlash it has faced in the past. Well played Questrade, well played.

May 2015: We Sherwood Like Lower Commissions

It’s interesting that one of the biggest developments in the online brokerage space in 2015 came from a non-Canadian brokerage. The firm Robinhood, which many Canadian investors may not have even heard of, offers commission free trading to its clients. Yes, you read that right.

In May 2015, Robinhood announced they’d be going global to bring commission-free trading to countries outside of the US with a first stop to Australia.

Whether or not Canada is a place that Robinhood would consider coming to anytime soon is anyone’s guess however the next wave in commission price drops would almost certainly be triggered by news of Robinhood moving into Canada or of another firm here deciding that commission-free trading is possible.

June 2015: Kicking Assets, Taking Names

Yet again, it was another US-based brokerage that grabbed the spotlight for the most interesting development for the first summer month. In particular, Interactive Brokers (which has a Canadian subsidiary) released stats showing just how well they’ve been crushing it when it comes to asset and account growth. Interactive Brokers is almost a goto name amongst active traders – something that is the envy of online brokerages everywhere.

Their secret? Being better at technology and automation apparently. Regionally, however, Interactive Brokers continued to get frozen out of the brokerage rankings throughout the year so despite being a firm that now caters to less active investors and those seeking registered accounts, their “trader” reputation seems to be working against them. Numbers don’t lie and it seems like they’re anything but concerned about not being ranked by a Canadian ranking as they nailed top spot in Barrons’ 2015 online brokerage ranking.

July 2015: Big Screen Not Enough for the Small Screen

In a bid to spark some interest on social media, the folks at Scotia iTRADE decided to try getting investors into their new investor centre to take selfies. Looking back, it’s safe to say that the contest response was a little underwhelming.

It was, however, interesting to see that the lure of the promise of a free movie ticket wasn’t enough to generate the kind of buzz that a free giveaway normally would on social media. As the only brokerage that has not lowered its standard commission prices to compete with every other Canadian brokerage, Scotia iTRADE is clearly incentivizing clients with larger balances to pay attention. It was not entirely surprising, therefore, to see that the promise of a single movie ticket just couldn’t convince DIY investors to make the trek to the downtown Toronto investor centre during the Pan-Am game HOV restrictions.

August 2015: Solving Problems 140 Characters at a Time

One of the realities of the 2015 world is that when consumers have a problem with a company, social media can be a powerful medium to escalate the issue to a global audience. Until this year, many Canadian discount brokerages who were on Twitter were spared the very long back and forth exchanges that can arise between vocal clients and client service reps. In August, however, a rather interesting conversation took place between Scotia iTRADE and one of their apparent clients. While it started seemingly innocuously, the issue eventually gave way to a weeks long affair. The conversation ended up stretching over a couple of months and involved just one individual and multiple brokerages encouraging Scotia iTRADE’s unhappy client to give a different brokerage a try. It was clearly a standout moment as it signaled just how different the ‘customer service’ model has become and how brokerages have now rethink their approach to resolution. (skip to slide 16 in the tweets of the week for the first tweet in this conversation).

September 2015: The Nail in the High Commission Coffin

It’s hard to define an exact moment when the days of high trading commissions became numbered. When RBC Direct Investing lowered their standard pricing to 9.95 per trade in early 2014, it set off a shockwave that culminated in September of 2015 with HSBC InvestDirect finally conceding to lower their standard commission price to under $10 per trade. While RBC Direct Investing enjoyed the spotlight for ‘going first’ (even though the smaller independent brokerages were already charging less than $10/trade), the spotlight for being last now belongs exclusively to Scotia iTrade. Whether or not the two points are related is hard to say, however September was also the month in which the JD Power discount brokerage rankings were published. The data from those ratings clearly illustrate how tight the race is between Canadian discount brokerages and underscores the challenge facing Scotia iTrade to justify the higher price per trade for certain client segments.

October 2015: Raising the Bar on Investor Education

Providing DIY investors with educational resources and tools is something that only a handful of Canadian online brokerages have fully committed to. Among the Canadian brokerages who do provide investor education, however, TD Direct Investing is a juggernaut of seminars, webinars and content. One of the most interesting developments in 2015 for Canadian brokerages was the shift of TD Direct Investing away from doing lots of in person seminars to focusing on delivering educational content online (usually via webinars). What was particularly game-changing for the brokerage-provided education space, was the event TD Direct Investing held with Tastytrade founder and famous options trader Tom Sosnoff. Nothing quite like this event has been put together (in recent memory) for DIY investors and it illustrates just how much harder it will be for Canadian brokerages to deliver quality, entertaining investor education content now that TD Direct Investing is leveraging a powerful platform (ThinkOrSwim) and a very polished production in Tastytrade.

November 2015: Here Come the Droids

Robo-advisors continued to make big strides with investors in 2015. One of the standout stories from the Canadian brokerage world was the news that BMO may be stepping into the robo-advisor arena in the near future. Already Virtual Brokers and Questrade have either affiliations with or their own in house robo-advisory, however a major bank supporting the robo-advisor model could touch off a whole other layer of competition amongst brokerages. While the adoption and understanding of robo-advisors by Canadian investors is still relatively small, the fact that robo-advisors have gained so much traction within such a short amount of time means that this story is only bound to pick up speed going forward into 2016.

December 2015: A Very Good Year

With the 2015 edition of the Globe and Mail discount brokerage rankings published in December this year, it was interesting to see how all the major online brokerages fared over all the rankings. The focus of Rob Carrick’s review clearly shifted away from price and into the realm of user experience – in particular the websites of Canada’s discount brokerages. SparxTrading collected the results of the big three analyses that typically take place and saw that of all the brokerages, BMO InvestorLine appeared to have a banner year.  Also of interest was the strong showing this year by Questrade and TD Direct Investing. Equally interesting was the consensus view that emerged on HSBC InvestDirect has a lot of ground to make up to compete with other online discount brokerages.

Looking back across the past year of news makers for the weekly roundups, there are certainly names that continuously come up and names who barely get mentioned. In that, there may be a method to the weekly roundup madness after all: Brokerages who are busy doing interesting things, will get typically get covered or mentioned in the weekly roundup. For Canadian discount brokerages heading into 2016, this year is one in which being interesting is going to be more important than ever before and we can’t wait to see what’s going to happen next.

Into the Close

That’s a wrap on the special roundup of roundups for 2015. Our regularly scheduled tweets and events will be back next week. From everyone here at SparxTrading.com, we wish you and your families a happy and prosperous New Year. And, for the traders and DIY investors out there a very profitable year too!

Happy New Year (source: Giphy)

 

Posted on by — 1 Comment

Discount Brokerage Weekly Roundup – December 25, 2015

It’s Christmas Day, and with markets closed there wasn’t a whole lot to do other than enjoy being with loved ones, giving and getting gifts, and for some eager beavers, getting a jump on the upcoming slew of deals and promotions for bigger and better trading monitors. Oh and then there was that beauty pageant thing.

As laughably painful as it was to sit through the ending of the Miss Universe contest, it brought to mind the challenges with crowning a winner in a contest when what’s being measured isn’t entirely clear. For Canadian discount brokerages, even though there may be no tiaras, there’s still the challenge of being crowned number one.

In keeping with the giving spirit, we decided to put together something special for the loyal readers of the end-of-year roundup. While ‘stats’ may not be high up on anybody’s wish list, for DIY investors looking to compare online brokerages, it turns out that stats may be one gift that keeps on giving. For traders, that’s the sign of a great ROI.

Of course in keeping with the roundup tradition, we’ve also got some festive discount brokerage tweets and a musical mashup to send us off into 2016.

Window Dressing

2015 was a big year for many Canadian discount brokerages. With almost all of Canada’s brokerages now offering historically low commission prices for equity trades, the challenge for each discount brokerage has shifted to becoming ‘more valuable’ than their competitors.

Value, like beauty, however is in the eye of the beholder.

It was fitting, therefore, that in 2015 many Canadian discount brokerages opted to start with makeovers to make themselves look brighter and shinier than their former selves and more importantly than other brokerages.

This past year, there were no fewer than six brokerages that either overhauled or significantly changed their website, in the hopes of capturing the attention of a more demanding online user. The more intriguing story, however, is not so much about the cosmetics of the brokerages, but on the consensus (or lack thereof) when it comes to the judges of the competition. Specifically, the three major online brokerage rankings that are available to Canadian DIY investors.

As we’ve discussed on a number of occasions, there are several rankings that typically crown a “best online brokerage” in Canada every year. The three most active and influential voices are the Globe and Mail, JD Power & Associates and Surviscor.

What is important to note is that each of these sources have a different semi-quantitative approach to establish what makes one brokerage better than another. As such, their voices are the ones that many Canadian DIY investors turn to when considering which brokerages to entrust with their investing and trading accounts.

Given their different approaches, however, there are times where these voices agree and times where they don’t. Fortunately for DIY investors, we’ve pulled together the full set of rankings and ratings to show just where they agreed for 2015, where they didn’t and why it matters for choosing an online brokerage in 2016.

Setting the Table

Instead of relying on just one discount brokerage comparison or ranking, below is a table that combines and compares three of the most popular Canadian brokerage rankings for 2015.

In order to make sense of the three comparisons, there are a couple of important things to take note of.

First, we took both the average ranking each brokerage received and also calculated the standard deviation. The reason for calculating both is because averages alone only tell only half the story. For example, a brokerage could score 1st on one ranking but 10th on another. Looking only at the average (which would be 5th) wouldn’t necessarily communicate how far apart the opinions/rankings were. Calculating the standard deviation helps to show the degree of consensus or agreement between the different rankings. The degree to which the “experts” agree or disagree is something that is not easy for DIY investors to track down and put into context which is why we have included this here.

To help make sense of the rankings, the averages and the standard deviations, we’ve also grouped the information into three categories of ‘agreement’: ratings where agreement is high, ratings where agreement is low and ratings where there is some agreement.

In each of the average and standard deviations, we’ve put in a heat map of the scores with colour showing the scale from best (green) to worst (red).

Without further ado, here is what the rankings look like.

Table 1: Combined 2015 Canadian Discount Brokerage Rankings

Places where the rankings agree

One of the most interesting observations of the data is the standard deviation column. What this shows is that there are clearly places where these three different rankings agree (lower standard deviations mean high consensus) and places where they disagree substantially.

Starting first with where they agree the most, it is clear that HSBC InvestDirect is a brokerage that all the rankings felt did not measure up. HSBC InvestDirect came in last, on average, in each of the rankings. Following suit, CIBC Investor’s Edge also seemed to rank consistently lower on each of the major rankings – this despite having one of the lowest commission offerings of brokerages big or small. This is interesting given how much DIY historically have considered pricing and how the rankings may not be factoring this in as heavily going forward.

In terms of who consistently rated the highest, there are clear standouts albeit with somewhat less consensus.

Both Questrade and TD Direct Investing were consistently referenced as strong choices in all three rankings. Thus, even though BMO InvestorLine performed the best amongst all of the 2015 brokerage ratings in terms of average ranking, there is more disagreement about them than the solid 2nd or 3rd place offering that Questrade or TD Direct Investing seem to offer.

In fact, here is an example where the comparison of brokerage rankings using the standard deviations becomes particularly interesting.

Both Qtrade Investor and TD Direct Investing had the same ‘average’ ranking when all the ratings were combined, however they each have very different degrees of agreement between rankings. Qtrade Investor had a rating as high as 2 (out of 12) with the Globe and Mail and as low as 8 (out of 10) with the JD Power Investor Satisfaction ranking. Conversely, TD Direct Investing’s ratings ranged between 3 (out of 10) and 6 (out of 12).

To be clear, this doesn’t mean that TD Direct Investing is necessarily “better” than Qtrade Investor, per se, but it does mean that DIY investors likely have to do more homework to find out more about Qtrade Investor than TD Direct Investing.

Another interesting area where the brokerage rankings agreed for 2015 was with RBC Direct Investing. There was a very high level of agreement that RBC Direct Investing provided an “average” experience when it came to DIY investing.

Places where the rankings disagree

As shown in red in the table, two firms that had the highest level of disagreement between rankings were National Bank Direct Brokerage and Virtual Brokers.

In the case of National Bank Direct Brokerage, they performed the best in terms of “investor satisfaction” on the JD Power survey (1st out of 10) but fared poorly according to both Surviscor and the Globe and Mail ratings. This extreme disagreement is interesting because it highlights the importance of knowing what each ranking is measuring and how they go about trying to measure it. It also makes the average ranking score a less reliable way to find out how NBDB stacks up to the rest of the field.

Looking at Virtual Brokers, there is an equally strong level of uncertainty in the rankings pool as to whether they are “the best” as claimed by the Globe and Mail’s Rob Carrick or near the bottom of the pack as ranked by Surviscor. With only two rankings to rely on, however, there is clearly room for confusion and uncertainty on the part of shoppers looking to choose this brokerage.

As was the case above, this disagreement with NBDB and Virtual Brokers means that more homework is required when considering either as an online brokerage. For DIY investors, it is therefore critical to know what about an online brokerage experience matters or is most important as this will determine whether or not a ranking, positive or negative, is actually relevant.

Qtrade Investor and Scotia iTRADE were also firms that had a high level of disagreement when looking at the combined set of discount brokerage rankings for 2015. In this respect, Qtrade Investor edged out Scotia iTrade, receiving both a stronger average ranking and stronger consensus.

Places where the rankings somewhat agree

In terms of this year’s rankings, this next group falls into the ‘grey area’ when it comes to agreement despite having very different average ranking scores.

Even though BMO InvestorLine had the best overall average score across the three major ratings, the relatively low Globe and Mail review pulled the consensus factor down. To clarify, the Globe and Mail ranking was more of a ‘neutral’ rating however numerically this introduced some uncertainty into the mix.

On the other hand, Desjardins Online Brokerage’s ‘average’ rating in investor satisfaction offset the lower scores from Surviscor and the Globe and Mail.

Finally, for Credential Direct, there were only rankings in the Surviscor and Globe and Mail ratings so investors would again need to probably do more homework to find out what other investors may think.

What does it all Mean?

As comparison shopping for products and services, including online brokerages, becomes more the norm, it’s now possible to use data to better inform those decisions and narrow down the field of choices.

What this series of analyses show, however, is that taking even the average of what the experts are saying doesn’t exactly tell the whole story. Consumers should take the title of “the best online brokerage” with a grain of salt as there is likely another source that disagrees with the claim.

According to the combined average rankings and consensus analysis, multiple rankings saw BMO InvestorLine, Questrade and TD Direct Investing as consistently strong choices in 2015 while HSBC InvestDirect and CIBC Investor’s Edge consistently scored low. Falling consistently in the middle of the pack was RBC Direct Investing.

For the rest of the Canadian discount brokerages, there is less clarity when it comes to rankings which means that more research is required or that these brokerages may need to offer more innovative or value-added incentives to get DIY investors to pay attention.

Ultimately, the good news for most DIY investors is that it is harder to make a poor choice than a good one when choosing an online brokerage. Ratings and pricing aside, it is now up to Canadian brokerages to offer better

Discount Brokerage Tweets of the Week

Into the Close

That’s a wrap on the final roundup of 2015. From everyone here at SparxTrading.com, have a safe and enjoyable holiday season. Here’s musical recap to take you back through 2015 and to get your groove on heading into 2016.

 

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – December 18, 2015

Source: Giphy

With the Canadian dollar and oil prices looking like they’ve been on the wrong end of an imperial destroyer, what was in demand this week was cool technology, light-sabers and a chance to escape to something better. The takeaway lesson that markets always teach traders is that demand is a powerful force when awakened and oversupply a powerful enemy.

Kicking off the roundup this week, we’ll take a look at one Canadian online brokerage that may not have amazing special effects and symphony orchestras, however unveiled their latest attempt to move their website into future at light speed. From there we’ll take a quick look at another discount brokerage who launched a last-minute gift idea for DIY investors. Next we’ll quickly check out the latest banter from investors on Twitter, peruse through the investor education event (singular) and close out with some interesting feedback from investors in the forums.

Because it’s 2015.

With only a few more days left in 2015, one of Canada’s largest bank-owned online brokerages has managed to join the six or so other Canadian discount brokerages who’ve launched new front facing websites this year. It couldn’t have come soon enough.

Just over two weeks ago the Globe and Mail’s online brokerage rankings characterized RBC Direct Investing’s previous website as “O-L-D school.” This past week, however, the old rolled out and the new rolled in.

With the focus of the online brokerage rankings in 2015 shifting heavily towards website experience and the growing pressure from their bank-owned peers updating and upgrading their own websites, RBC Direct Investing clearly had upgrading their website on their radar. That said, given their latest review in the Globe and Mail brokerage rankings and the score in Surviscor’s rankings, it was interesting that the roll out of the new RBC Direct Investing website did not merit more of a response.

Despite the radio silence about the new website, there are several enhancements and design choices that are worth pointing out.

The first, and perhaps most obvious, is that the new website layout is contemporary. What that means is like many of the other websites released by other brokerages this year, RBC Direct Investing’s new site has rearranged information and layouts so things don’t seem as overwhelming as they did previously. In other words, less is more. Sections are more readily divided, text is clearer and it’s easier to focus on the content that’s relevant to a reader.

In line with a more modern layout, another interesting feature is that site is not just responsive, but looks to have been built by taking a ‘mobile first’ approach. The traditional top navigation menu has been removed altogether in favour of a ‘mobile’ style menu in the top left. The items in the menu also mirror the vertical order of the sections of the homepage which is a clear design choice to accommodate users swiping a tablet or smartphone screen rather than scrolling on a mouse.

A rethinking of the organization also means that users have a series of simpler choices to make. This arrangement was not unlike TD Direct Investing’s previous approach as well as BMO InvestorLine’s current strategy of “Tell us who you are and we’ll show you how we can meet your needs”.

Digging a little deeper, however, there is another element to the new RBC Direct Investing website that seems to reflect something unique: a deliberate focus on including women in the imagery. Specifically, the new website places women at the focal point of the featured images and does so on key pages throughout the website (see collage below).

Source: Screenshot RBC Direct Investing website

While it is not unique to see financial institutions, especially the largest Canadian financial services brands, reflect a more diverse and inclusive picture of their clients, RBC Direct Investing’s new site has made some interesting design choices. For example, by placing women in the featured images of both the “beginner investor” and the “experienced investor” pages, the website highlights an important rethinking of what an “investor” looks like. BMO InvestorLine and TD Direct Investing have also done this with their latest redesigns, however RBC Direct Investing’s website stands out as it deliberately places women at the focal point across all three categories that users are choosing from on the homepage i.e. beginner investors, experienced investors and those planning for retirement.

As many of the comments from this past year’s Globe and Mail online brokerage ranking pointed out, user interaction with a new website is highly subjective. That said, how users engage with an online brokerage is going to matter more now to DIY investors than it ever has in the past.

For brokerages, striking the right balance of being “familiar enough” to inspire confidence and “bold enough” to stand out from their peers is rarely easy or cheap. Moreover, online investors of all stripes are savvy enough to detect the difference between a user experience has been thoroughly thought through and one that seems formulaic. The details matter.

Even though much hasn’t been said yet online about the RBC Direct Investing website, the design choices of the site itself will hopefully create a new conversation about what investors can expect from Canadian online brokerages heading into 2016.

Deals Update

With only a few shopping days left till Christmas, it looks like there are still some last minute deals to be had. This past week, National Bank Direct Brokerage stepped back into the deals and promotions race with their latest commission-free trading offer. Specifically individuals opening a qualifying account with at least $20,000 can receive up to $500 in commission credits and those depositing at least $100,000 can receive up to $1,000 in commission credits. See our deals & promotions section for additional details.

Deals activity has been in a holding pattern for most of this month however the new offer by NBDB brings the total number of offers up to 17. It should be interesting heading into the New Year as there are 8 offers set to expire at the end of December. Further, once the holidays are over, the big push to RRSP season will begin so brokerages big and small are sure to kick their promotional activity into high gear. The online brokerages currently putting offers forward are undoubtedly hoping to capture the interest of the keener investors who are doing their homework early.

Event Horizon

Ho-ho-hooray, the holidays are almost here, and there’s one more discount brokerage-sponsored investor education event to squeeze in before Jolly Old Santa makes his appearance. This upcoming session may be of interest to those who are new to investing, and interested in learning about options.

December 22

TD Direct Investing – Introduction to Investing in Options

Tweets of the Week

You’re a mean one, Mr. Glitch

With the latest roll outs from Questrade and TD Direct Investing, there are inevitably some bumps and bruises that DIY investors (and the brokerages) encounter. This past week, the Twitterverse was more quiet however Questrade and TD Direct Investing seemed catch a little bit of extra shade from frustrated users.

From the Forums

No Such Thing as a Free Launch

Star Wars wasn’t the only major release this month. Two popular Canadian online brokerages also launched their own updates and upgrades to their respective web platforms. Here are a couple of great threads that capture the reactions of users to the changes made by TD Direct Investing and Questrade:

Reactions to TD Direct Investing website from the Financial Wisdom Forum here.

Reactions to Questrade’s latest platform upgrade from RedFlagDeals’ forum here.

Battle of the Brokerages

While there may be no light-sabers in this battle, the ongoing debate between value players Virtual Brokers and Questrade was worth a revisit in this post on reddit’s Personal Finance Canada thread.

Into the Close

That’s a wrap for this week’s roundup. Finding a way to adequately punctuate the roundup on such an historic event as the opening of another Star Wars reboot was tough. Especially with winter coming, it was a Stark reminder of Snow in the long range forecast. Enjoy the weekend or ‘geek’end!

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – December 11, 2015

“We’re often led to believe migration is a drain on the country’s resources but Steve Jobs was the son of a Syrian migrant. Apple is the world’s most profitable company, it pays over $7billion a year in taxes–and it only exists because they allowed in a young man from Homs.” – Banksy source: Twitter

Like it or not, the one great lesson that markets continuously teaches its students is that prices reflect some vision of the future and not the present. Of course what makes markets so exciting is the fact that there are so many companies thinking up new ideas and products to bring that future into reality.

For the heads of Canadian discount brokerages, the future of DIY investing is always on their minds. The speed at which they’re able to respond to it or even shape it, however, is what has started to separate those who are known as ‘innovative’ from those deemed to be stagnant.

In this week’s edition of the roundup, we take an in-depth look at one brokerage who has figured out that it will take more than just technology to be able to be a leader in the DIY investor world of tomorrow. Next, we’ll look at the reaction to last week’s Globe and Mail online brokerage rankings from across social media and also take a look at what investors were reacting to this past week on Twitter. Finally, we’ll preview the upcoming investor education events for the week ahead and round out with chatter from the investor forums.

Using the Force

While it may not be quite as big as the release of the new Star Wars movie, the battle for intergalactic supremacy in the discount brokerage world is poised to heat up yet again this weekend. Rolling out this weekend are two major platform updates from Questrade that are sure to bring cheer from DIY investors and rattle the nerves of bank-owned and independent brokerages alike.

Rolling out this weekend will be a highly anticipated set of upgrade to the suite of Questrade trading platforms. Their active trader platform, IQ Edge will see some long sought-after features finally go live and a new web-based trading platform join their bench.

Starting first with the update to IQ Edge, the upcoming refresh will be the third major upgrade to the platform this year taking the release number to 4.2. The major feature to be added is the ability to use conditional orders when placing trades – a feature that many active traders rely on to plan their entry and/or exit points. In fact, Questrade is not the first brokerage in 2015 to roll this feature out nor are they alone in being able to offer this as part of a trading platform. Recall that earlier this year Desjardins Online Brokerage also launched conditional trading into their trading platforms and brokerage platforms, such as the Active Trader and US trading (aka ThinkOrSwim) platforms at TD Direct Investing and Interactive Brokers’ Trader WorkStation have had conditional orders for quite some time.

With each release of Questrade’s IQ Edge, it is clear that they are moving closer to having a trading platform that is as good as if not better than many of the third party platforms currently being offered by other brokerages. And, while there appears to still be features and functionality that users are looking to have built in, Questrade is clearly listening and executing on getting trader-friendly features integrated on a regular basis. This is certainly one area in which they have outshone their larger bank-owned brokerage competitors who seem to be much slower at releasing upgrades to trading platforms.

For less active traders, Questrade is also releasing a browser based platform that is slated to replace (eventually) IQ Essential.

One of the key features being trumpeted for the new online platform is the watchlist. While a watchlist is not a technological marvel, the small changes, such as adding sparklines for a visualization of price trending, is a nice and modern touch. Enabling snap quote refresh of the watchlist is also a much more convenient way to source quotes from the watchlist that aren’t part of a real-time update feed.

Another feature being highlighted is the ability to trade seamlessly across devices. The reality of 2015 and now 2016 is that individual investors would like access to information about their investments as well as the ability to buy or sell them, across any device.

Of course, while all this innovation is exciting, it also creates a challenge for DIY investors and clients. Questrade now has more platforms, they offer more services, and a wider variety of packages than they ever have before. And, while more is usually better, for most consumers, it’s also a challenge to understand exactly what Questrade has to offer.

With all of these choices and changes, as well as the many areas of investing and wealth management that Questrade is now in, their product offering is no longer so simple to understand. Even though Questrade has maintained a very human voice, and has anchored its presence on social media, the reality is that Questrade is now doing more things than it ever has done before.

This tweet, taken from this week for example, shows that there are still folks out there who remember (and think) that Questrade is the no-fee broker when they shed this status several years ago.

For DIY investors, the lesson is that they can expect Canadian brokerages to have to innovate much more quickly in order to compete effectively with one another. While in theory this competition will drive better pricing and products, it will also create a whole new learning curve to stay on top of the changes within their own brokerages.

Without great support and communication to accompany these changes, the intended ‘improvements’ may backfire into user frustration. Fortunately for brokerages such as Questrade and Desjardins Online Brokerage, their individual releases of new features (such as the conditional orders) have been well supported with videos and content describing how these work.

Ironically, it seems that in order to truly succeed at innovation going forward, tech savvy won’t be the magic ingredient. Rather, a very human quality, emotional intelligence, will be needed to help customers navigate the brave new world of online investing.

Tweets of the Week

In addition to the regular overview of the Canadian discount brokerage voices on Twitter, we’ve also collected the reactions to the most recent discount brokerage rankings from the Globe and Mail’s Rob Carrick from Twitter and Facebook.

Here are some of the reactions to the 2015 Globe and Mail online brokerage rankings from across social media:

Here are some comments from Facebook:

Event Horizon

Counting down to the holidays, it’s a festive week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to those who are new to investing, curious about trading strategies, and options enthusiasts. ETFs, technical analysis, and registered accounts round out this week’s selection.

December 15

Scotia iTRADE – Introduction to ETF Strategies with Pro Market Advisors

TD Direct Investing – Introduction to Investing in Options

December 16

TD Direct Investing – Building Wealth Through Registered Accounts

Scotia iTRADE – Placing Your First 10 Trades with Sarah Potter

December 17

Scotia iTRADE – Head & Shoulder Patterns with AJ Monte

December 18

Scotia iTRADE – Active, Passive or Both Strategies with Purpose Investments

 

From the Forums

Limiting Factors

This past week, the Liberals made good on the pledge to lower the TFSA contribution amounts from $10,000 back down to $5,500. In this post from the RedFlagDeals.com investing forum, the discussion from DIY investors highlights some of the initial reactions and perspectives from the price-savvy crowd.

Smorgasbord

In this post from Reddit’s Personal Finance Canada section, a user is looking for a few answers related to moving funds from Sunlife to Questrade as well as other financial planning questions for a newly started position. Worth a read for those curious about employer contributions.

Into the Close

This week has seen so many different versions of the future, from dystopian to fantastic. Heading into the weekend, here’s a glimpse into the distant future as well as a post that signals a chance to finally dream about a better future.

Posted on by — 2 Comments

Discount Brokerage Weekly Roundup – December 4th 2015

Source: Vine

One of the great things about watching professionals in action is just how easy they make things look. If you’re Aaron Rodgers, airing out a game-winning pass with no time left on the clock just seems like a day’s work. While Canada’s discount brokerages don’t have quite the dramatic finishes that the NFL seems to produce, this past week brokerages have had their fair share of unexpected comebacks and champions that make winning look effortless.

This edition of the roundup is chalked full of commentary and perspective on one of the biggest weeks of the year. Kicking off the roundup is the review of this month’s deals and promotions and the signals that brokerages are moving more aggressively into 2016 than ever before. Next we dive into discount brokerage rankings season by looking at the two big names in Canadian brokerage rankings that published their results this week. Finally we take a look at the news and chatter across the discount brokerage space on social media and in the forums. Saddle up, this is going to be a fun ride.

Deals in Play

At the outset of December it looks as if at least two brokerages, HSBC InvestDirect and Questrade, are interested in spreading some holiday cheer in the form of new deals and promotions.

Starting first with Questrade. Late last month they relaunched their popular Apple Watch promotion – which is actually a $500 gift card to the Apple store. While the addition of yet another promotion brings the number of promotions to at least 8, the launch was interesting for two other reasons.

First, with the expiry date of this promotion well into March of 2016, this seems like one of the premiere offers Questrade will be putting forward heading into the coveted “RRSP season”. The timing of this offer just before the Christmas holiday buying season means that it might just be enough to tip someone into considering Questrade as an online brokerage. Further, the value of $500 at the Apple store for a $100,000 deposit makes it a competitive offering at this deposit level.

A second reason this offer is interesting is because Questrade continues to offer more incentives and promotions than any (or almost all) other online brokerages. Going into December, Questrade alone accounted for just about half of all of the promotions being offered. Alongside the offer for the Apple Watch, Questrade is also offering up an iPad Mini promo as well as other commission-free trading promos. For other Canadian discount brokerages, the fact that Questrade has continued to offer the number and diversity of offers should demonstrate that DIY investors are clearly interested in brokerages who are prepared to give in order to receive.

The second online brokerage to get into the giving spirit this month is HSBC InvestDirect. From December through to March 2016, HSBC InvestDirect is offering up 30 commission-free North American equity trades for individuals signing up for a new account. While this is not the first time HSBC InvestDirect has put forward a commission-free trading offer, it is interesting to note that they too have set their expiry date on this promotion well into March and have launched this offer a month before the end of the year signaling that perhaps HSBC InvestDirect is preparing to compete a little harder for new clients than they have in the recent past.

Like most other competitive marketplaces, these moves by Questrade and HSBC InvestDirect will not go unnoticed. The fact that both of these offers stretch well into 2016 are a signal to other brokerages that it is going to be a very competitive RRSP season and that the sooner they can bring interesting offers to market, the better.

BMO InvestorLine Goes for the Three-peat

This past week financial industry ranking firm Surviscor released their updated set of Canadian online brokerage rankings crowning BMO InvestorLine as their choice for top online brokerage yet again. These past few weeks have been good to BMO InvestorLine as they also took the prize for top online brokerage from the Morningstar awards, which are also very similar in structure to rankings/analysis underpinning the Surviscor ratings.

Below is a video from BNN of Surviscor President Glenn LaCoste giving his thoughts on the latest rankings and trends in Canadian discount brokerages.

In terms of scoring, Surviscor’s rating system included some new elements that weren’t present in years past, namely a ‘Service Level Assessment’ as well as a ‘Mobile Accessibility’ consideration.

One of the interesting components about the Surviscor analysis is that it takes into account over 4000 criteria when coming up with the final score. Of course, since those criteria are proprietary it is difficult to know exactly the weights that lead to the scoring.Even so, a look at the distribution of this year’s scores also shows just how tightly clustered most of the brokerages are according to Surviscor’s analysis.

The graph below (a histogram for the stats nerds) shows that most firms in the ranking have a score between 65% and 74%. What stands out when looking at this chart is just how poorly HSBC InvestDirect performed on this analysis compared to the rest of the firms profiled.

Distribution of scores from Surviscor 2015 online brokerage rankings.

At the other end of the spectrum, BMO InvestorLine and Scotia iTRADE scored above most of the other brokerages but relatively close to one another. This is particularly interesting given the fact that standard commission pricing at both firms is very different.

In terms of BMO InvestorLine, standard commission pricing is in line with many other bank-owned brokerages at just under $10. Conversely, Scotia iTRADE’s standard commission pricing is still closer to $25. Thus, commission pricing is only part of what factors into making a firm rank well in these ratings and, according to these rankings, the overall experience between BMO InvestorLine and Scotia iTRADE may be too close for most to notice.

In fact, the scoring shows that according to these rankings, for about 50% of the brokerages, the experience is bound to be “pretty close” to another brokerage.

For DIY investors the take home message to keep in mind when considering the rankings is that these scores represent a snapshot in time. The industry is constantly evolving and so new features or improvements may show up in between ranking cycles which then in turn change the order in which these firms would be ranked. The fact that many discount brokerages are clustered around the same scores show that most firms do a reasonably decent and probably similar job in terms of the criteria measured by the Surviscor rankings, so it seems that personal preference will have a greater role to play for most DIY investors.

That said, these numbers also show that most brokerages are locked in a very tight race with one another. The big challenge in front of the brokerages for 2016 is just how they’re going to start separating themselves from one another.

2015 Globe and Mail Online Brokerage Rankings Released

Of course what would online brokerage rankings season be without the most widely anticipated and longest running ranking of Canadian brokerages?

Earlier today the Globe and Mail’s Rob Carrick published his annual review of twelve of Canada’s most popular online discount brokerages and there were certainly some surprises contained in this year’s rankings.

Starting first with the actual scores. In the 2015 rankings, there was a clear theme that the top three Canadian online brokerages according to Rob Carrick just happened to be non-bank owned brokerages.

Virtual Brokers has once again reclaimed its title as best online brokerage after having lost it last year to Qtrade Investor (who incidentally came in 2nd place this year). Following in third place was Questrade, a firm that has continuously been moving up the rankings for the past few years.

The battle between Qtrade Investor and Virtual Brokers may now be turning into somewhat of a rivalry as both of these firms continue to score well in the Globe’s brokerage rankings only narrowly edging one another out each year for the past 4 years. And, even though Questrade may have placed third, according to Rob Carrick’s comments on this brokerage, they may very well take top spot should they continue at their current pace.

For the bank-owned brokerages, the only bright spot appeared to be TD Direct Investing. With a revamped website and the implementation of long awaited features (such as the US Dollar RRSP account), TD Direct Investing scored the best among Canada’s bank-owned online brokerages with a grade of a B+.

The rest of the pack of bank-owned brokerages, however, seemed to draw less glowing praise, to put it mildly.

Interestingly, for the businesses with the biggest profits (i.e. the Canadian banks), the ability to create exceptional experiences (at least in the view of the rankings) fell far short of what they could do. One of the reasons often cited by industry insiders, is that the online brokerage arms of many banks just don’t get the resources and respect as some of the other banking units. Ironically, for many bank-owned brokerages, the marketing that their parent bank spends to create expectations for consumers tends to backfire when the bells and whistles and attention to product experience don’t make it to the wealth management arm of their business.

Perhaps the clearest case to be made in these results is that the smaller, independent brokerages are able to be more innovative than their bank-owned counterparts. Some might even argue that in order to compete effectively, the smaller players have to innovate to stay relevant.

Innovation, however, is not without its downsides either. With so much of today’s DIY investing experience tied to being online, being first to market or creating a new platform or website is one thing – having it work under normal and even stressful conditions, however, is something completely different. As we’ve seen time and time again this past year, releases of new software platforms, app updates and websites has not been smooth for any brokerage. For smaller brokerages in particular having technology go down (or misbehave) can create a cascading series of frustrations as they neither have the customer service resources nor the communication channels that larger brokers have to mitigate these kinds of scenarios.

In the case of this year’s Globe and Mail online brokerage rankings, however, there seemed to be an especially large component of the analysis, scoring and commentary devoted to the look and feel of brokerage websites. The argument for doing so, according to Carrick, is that commission pricing is no longer the biggest component to differentiating brokerages. Instead, client experience and more specifically, website experience is.

Another interesting observation about this year’s rankings was that they were not as lengthy or detailed as they have been in years passed (including compared to last year’s). While it is purely speculative, a great deal of the shine on DIY investing has been eclipsed by robo-advisors and a significant focus of the personal finance conversation has been about Canadian real estate. Add to that a fairly abysmal year for Canadian equities and it’s clearly been a tough time for DIY investing to get any positive headlines.

Clearly, many of Canada’s discount brokerages have their work cut out for them in 2016. With rankings season now over, the writing is on the wall for the Canadian discount brokerage industry: step up or step back.

The non-bank owned brokerages are going to have to continue to innovate in order to fend off their larger competitors. Large bank-owned brokerages clearly have to work both smarter and harder at becoming seen as leading edge technology firms – something that is tough and expensive to do given their size. Perhaps the clearest message of all, however, is that discount brokerages that are on ‘auto-pilot’ are probably at the biggest risk of making themselves appear obsolete. While it may be tough to rank first in multiple rankings, occupying the basement of multiple rankings is a sign that DIY investors will almost certainly use to stay away.

Event Horizon

Bundle up and hunker down, it’s a busy week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to yield hounds, those who are new to investing, curious about trading strategies, and options enthusiasts. Tax efficient investing, technical analysis, and registered accounts round out this upcoming week’s selection.

December 7

Scotia iTRADE – Dividends, Balanced Portfolios and the Quest for Yields with Larry Berman

December 8

TD Direct Investing – Alternatives to Mutual Funds: Learn What Else Is Out There

TD Direct Investing – Options as an Income Strategy

December 9

TD Direct Investing – The Evolution of Indexing

TD Direct Investing – Technical Analysis – Advanced Indicators

TD Direct Investing – Tax Efficient Investing

December 10

Desjardins Online Brokerage (Disnat) – Discover the Benefits of the TFSA

Scotia iTRADE – Trading The Double Top with AJ Monte

From the Forums

In this edition of the forums sweep we found an update to this post from the RedFlagDeals investing section that highlights what will be a disappointing change for many Norbert’s Gambit fans at one of Canada’s largest brokerages.

Into the Close

That’s a wrap for this week’s roundup. Now that Black Friday and Cyber Monday have come and gone, there still might be a chance to save big. Speaking of big saves, here’s a treat for the Leafs fans and their new goalie Sparks (yep, we already like him) getting into the saving spirit. Have an awesome weekend!

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – November 27, 2015

This past week, many DIY investors have been turning their attention to ways to spend their money rather than to grow it. Although online traders have typically avoided coming to blows with each other over discounted vegetable steamers, online trading is most definitely a fierce battle to get a deal that can be monetized by selling to someone further down the line. Undoubtedly there have been and will forever be expletives hurled at screens of all sizes when orders or trades don’t go as planned. Luckily those screens don’t talk (at least not for the moment).

For Canada’s discount brokerages, this past week they’ve done their best to score some time in the news cycle for much more positive reasons. In this edition of the roundup we take a look at one bank-owned brokerage’s three-peat in the winner’s circle for an online brokerage award. Next we take a look at what a survey from Canada’s largest online brokerage has to say about the future of DIY investing in Canada. We then focus on the latest tweets of the week and gather some interesting investor commentary from the forums.

BMO InvestorLine Crowned Best Online Brokerage by Morningstar

As one of Canada’s most visible bank-owned brokerages, BMO InvestorLine continues to find the awards spotlight. For the third consecutive year, this Canadian discount brokerage was recognized by the Morningstar Canada awards as being Canada’s best discount brokerage.

The ceremony took place on November 25th in Toronto and was an evening that recognized many within the Canadian financial services sector. For DIY investors, the best discount brokerage selection was performed by a committee of members

Morningstar’s Best Online Brokerage award is a submission based award which requires brokerages interested in participating to pay a $1,000 submission fee. According to their selection criteria, the Morningstar award for best online brokerage jurors are particularly interested in knowing the following from participating brokerages:

  1. In what areas have you differentiated your business from that of your peers?
  2. Emphasis should be placed on developments and upgrades introduced within the past 1-2 years.
  3. Your submission should discuss any particular segments of the market targeted by your firm and how these are being reached.

Additionally, the three major categories that the panel of jurors considered were:

  • Online Presence
  • Customer Service
  • Costs

Of note, the Morningstar awards for best online brokerage are structured around several of the criteria used in the Surviscor discount brokerage rankings. Surviscor also helps to provide research and contributes to the MoneySense brokerage rankings. These also happen to be the rankings in which BMO InvestorLine has finished at or near the top of, and so it seems that BMO InvestorLine has maintained their strong showing throughout the year.

For BMO InvestorLine, the third consecutive victory also falls at the third anniversary mark of their advice-direct platform – something that hasn’t garnered nearly the same recognition or attention as their DIY investing arm has.

As we head into the end of the year, there is still one more major brokerage ranking (the Globe and Mail 2015 discount brokerage ranking) to go.

For DIY investors, it will be interesting to compare the results from the Globe’s rankings as they represent a very different approach than the Surviscor/MoneySense/Morningstar rankings. Historically, BMO InvestorLine has also performed well in those rankings however unlike the Morningstar awards, there is no submission fee to be evaluated. With free admission, the field is bound to be more crowded and therefore tougher to outshine.

DIY Investing Gathers Momentum

In spite of all the talk of competition between brokerages, it seems that a recent study commissioned by TD Direct Investing suggests the pool of Canadian DIY investors will continue to expand.

Results of recent survey of 1750 Canadian DIY investors this past September provided a number of compelling insights, many of which are summarized in the infographic below.

Aside from the finding that that the number of investors who are managing at least part of their investments could double within the next 10 years, it was what investors reported was still lacking on the part of the online brokerage providers that might touch off a wave of features in the near future.

One of those items DIY investors reported was that websites are ‘too complex’ to navigate. This is particularly timely given the number of new website releases that have taken place this year, with a handful more in the pipeline. TD Direct Investing also recently revamped their website with a decidedly simpler front end.

Another item that stood out was that only 7% of users polled preferred to use their smartphone for DIY investing. While stats were not provided for tablet users, this number is expected to grow now that the technology, internet connections and user interfaces/apps have matured. There are still features, such as charting and research, which are going to be challenging to do efficiently on a small screen, however the mobile trading experience today is drastically different than it was even just 2 years ago. That said, a quick look at the discount brokerage tweets for the past several weeks would show that that there is a divergence between theory and reality when it comes to mobile trading sites and apps.

For Canadian DIY investors, there is clearly an interest in taking a more hands on approach to managing their financial futures. With the upcoming fee disclosure changes coming to the advisor world and a tough year for Canadian equities, there might be additional momentum towards considering the benefits of DIY investing as investors take a closer look at what their fees are earning them. And, although several brokerages have already undertaken major redesigns of their website in anticipation of the new ways investors are hoping to interact with their products, the biggest challenge confronting brokerages will be to provide experiences to investors that truly meet their diverse needs.

Discount Brokerage Tweets of the Week

This week’s tweets feature a mixture of highs and lows. For DIY investors, the word of the week was ‘frozen’ (trading apps that is) and unlike Elsa and Anna, they did not let it go. Mentioned this week are BMO InvestorLine, CIBC Investor’s Edge, Questrade, Scotia iTrade, TD Direct Investing and Virtual Brokers.

From the Forums

Trading out of the money

As any investor knows, it takes money to make money. Of course, nobody specified exactly whose money it has to take in order to make that next return. In this post from RedFlagDeals’ investing forum, it was interesting to note one DIY investor’s experience trying to trade an RBC Direct Investing account without funds in the source account.

Staying in-formed

Paperwork (and lots of it) is usually synonymous with DIY investing. Of course for anyone trading with US securities this only becomes even more of a challenge. In this post, one user with multiple brokerage accounts at several big brokerages has the onerous task of keeping the regulatory powers that be apprised of their financial and citizenship status.

Into the Close

That’s a wrap for this week’s roundup. Best of luck hunting great deals as cyber Monday promises another day of marketing madness and some great bargains. Of course, one savvy retail experiment shows that even if you promise nothing, people are still willing to pay.

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – November 20, 2015

November is quickly drawing to a close. For many that means its Grey Cup season, and for those south of the border, Thanksgiving and yes, deals galore for Black Friday. While all three may be full contact endeavours, they all seem somewhat tame compared to the upcoming jockeying for title of best Canadian discount brokerage which is soon to be released by the Globe and Mail.

In this week’s roundup we take a look Canadian brokerages pulling out all the stops heading into the release of the brokerage rankings. Starting first with the latest promotion being offered by one brokerage who seems to have a reason to smile come November. Next, we take a deep dive into the latest round of website upgrades by two very different Canadian brokerages and look at what insights judging a book by its cover can actually provide. As usual we’ll take a look at the discount brokerage tweets of the week and cap-off the roundup with a look at the upcoming investor education events and interesting chatter from DIY investors in the forums.

Globe Trotting

November has typically been a good month for Qtrade Investor. For the better part of the past 8 years, Rob Carrick’s rankings of Canadian online brokerages has featured Qtrade Investor as the top or among the top of the Canadian online brokerage providers.

This November, Qtrade Investor seems to be giving new clients a chance to smile, courtesy of the Globe and Mail, as the two have teamed up for a promotion. Launched earlier this month, Qtrade Investor is offering new clients 6 months of free access to Globe Investor (valued at $23.99 per month or $143.94 for the duration of the promotional period).

There are, naturally, a few terms and conditions. Of note is that this offer is available to the first 350 individuals who sign up for a new Qtrade Investor account or until the deadline of November 30th. For full details on this offer, check out their terms and conditions here.

Needless to say, with the next round of discount brokerage rankings expected out shortly, there might be a few more readers of the Globe and Mail seeing familiar names near the top.

Out with the old

As we’ve mentioned several times already this year, 2015 is definitely the year of the website upgrade for Canadian discount brokerages. With November being an award heavy month (most notably the Globe and Mail’s discount brokerage rankings) it seems no coincidence that there was a bit of a sprint on the part of two brokerages to also launch their newest websites before the month was over.

Both Virtual Brokers and TD Direct Investing launched upgrades to their websites, and, even though they are two very different brokerages, they are competing fiercely for clients and to be seen as relevant to the DIY investors of today and tomorrow.

While the changes associated with each new website could fill an article unto themselves, the visual choices each firm has elected to go with provide an interesting angle on the battle to look (and therefore to be judged as being) relevant.

Form follows function

Interestingly, the lesson from the slew of design changes in 2015 has shown that while cosmetic changes are needed, functionality and authenticity are components that clients use to judge the value of a particular brand. Things still have to work otherwise DIY investors will go elsewhere and complain very publicly on their way out– any reading of the weekly roundup of discount brokerage Twitter feeds has made that abundantly clear (especially this week).

Now that commission pricing has become less of a distinguishing factor for most brokerages, DIY investors are naturally going to be left which asking more about other features brokerages have to offer. Of course, with so many brokerages having such similar offerings, ultimately the decisions about which brokerage is best are likely to be swayed by emotion rather than bells and whistles. The question when it comes to these sites and brokerages as brands is who you would feel comfortable having a conversation with; who can you relate to? who would you trust?

In that light, it is entirely understandable that brokerages who want to relate their clients would start to sound and look like their clients. That shift is clearly seen in the images on financial websites. Gone is the stock imagery of people in offices with desks filled with scattered paper and calculators. Replacing them are the button down collars, plaid shirts and the new stock imagery of more everyday looking people in their homes or in a coffee shop on their smart devices.

Net worth vs. a picture’s worth

Looking at the imagery of TD Direct Investing’s website, for example, while they do rely on the familiar images of people with their technology, they have the image of the young woman with the tattoo and the baby that seems to be uncharacteristic for a “big bank”. In fact there is an interesting and diverse mix of people on the TD Direct Investing website page that subtly seems contemporary. There are no big animations, sliders or moving parts. Just clear and simple messaging.

In contrast, is the new Virtual Brokers website. It’s bold, it’s animated and the new site is responsive meaning that it should play nicely with devices from desktops to tablets to smartphones. There’s a lot going on and while it’s definitely a more contemporary website, the usability of the menu and navigation have taken a hit.

What really stands out as different on the new Virtual Brokers site, however, is the imagery on the homepage compared to that of TD Direct Investing. VB’s homepage imagery seem somewhat less reflective of the new ‘normal’ and thus less authentic. To add to their challenges, there still a number of bugs in the new website which will require ironing out (such as the language of the site changing as one navigates via the sitemap).

Fortunately for VB, these are easily remedied and the inner pages of the website look and feel new, improved and much more like the contemporary design VB was intending to put forward. That said, leaving those small but significant details unattended for too long erodes the trust and confidence they need to compete in the financial services space.

Robots are better at being human

Ironically, it is the robo-advisor websites who have put on a more authentic, creative and even human presentation. Wealthsimple’s website, for example, has pictures of people living everyday life and stories of young people coming of age while trying to figure out their financial future. Unlike many of the brokerage websites, the robo-advisors have stuck with the “less is more” philosophy which is in line with having a product that is supposed to be simpler than DIY investing. It’s undoubtedly authentic.

In the end, Canadian online brokerages of all sizes are recognizing that the people reading and interacting with their websites and platforms are also consuming digital information in much more interesting ways. It’s only a matter of time before the brokerage website change cycle has to increase to keep pace with contemporary designs that consumers use as the benchmark of what it means to be innovative. What the online brokerages may not be realizing as quickly as their robo-advisor competitors are is that DIY investors are people first and investors second and the best way to appeal to people is by being authentic and interesting.

Discount Brokerage Tweets of the Week

While ‘Spectre’ is still in theatres and making the James Bond franchise money weekend after weekend, the very real specter of technological glitches are wreaking havoc on online brokerages. This week’s tweets show that the writing’s on the digital wall for brokerages who can’t keep ahead of new technology.

Event Horizon

It’s an exciting week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to options enthusiasts. An estate planning primer rounds out this week’s selection.

November 24

TD Direct Investing – Introduction to Investing in Options

November 25

TD Direct Investing – Estate Planning

Scotia iTRADE – Trading Options Actively with Sarah Potter

From the Forums

Makeover Madness

In this post from RedFlagDeals’ investing forum, users react to the rollout of the new Virtual Brokers website. While mostly positive and in favour of the update, there’s still work that seems like it needs to be done.

Time flies when you’re having funds

For active traders and even occasional investors, having timely information about market pricing of particular equities or options is essential to make wise trading decisions. In this post also from RedFlagDeals, a user asks which brokerages offer real-time quotes to clients as a standard feature.

Into the Close

That’s it for this week’s roundup. While most people are dreading the frost this weekend, here’s one company that is quite happy they found this chunk of ice.  Congrats to those who were fortunate enough to share in the diamond windfall!

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – November 13, 2015

Source: giphy

Fans of Star Wars have probably already seen the trailer to the next episode, The Force Awakens, as the movie is set to be released before Christmas. Undoubtedly one of the most successful movie franchises ever, Disney shareholders are hoping the sci-fi series can also awaken their quarterly earnings well into the future. Interestingly, it seems that Canadian discount brokerages are also banking on robots helping to boost earnings.

In this week’s roundup we take a closer look at the latest move by one of Canada’s largest online brokerage into the ‘robo-advisor’ space and how it is quickly becoming a ‘battle of the bots’.  Next, we’ll highlight some end-of-year milestone dates DIY investors may want to consider to take advantage of some of their portfolio misses. From there we’ll jump into hyperspace through the discount brokerage tweets before easing into investor education events, investor forum chatter and land this ship safely on the close.

Invest Like a … Robot?

In popular culture, there have been positive depictions of robots and artificial intelligence, such as in Star Wars and Star Trek, and there have been the not-so-positive — even apocalyptic — machine scenarios of The Terminator, The Matrix, and the revised Battlestar Galactica saga. In our current world, we’re not on the verge of the machines taking over — yet — but robots, or programmed machinery, have had increasing roles in our society. The Canadian investor space is on the verge of bursting out with its own version of robot functionality.

As we reported earlier this year, the U.S. has already plunged head-first into the world of robo-advisors (portfolio suggestions offered by automated algorithms usually at lower cost than human advisors) with Charles Schwab having attracted billions of dollars in new business as a result of launching its robo-advisor service, Schwab Intelligent Portfolios, which adds to the existing mix of dozens of other robo-advisor services south of the border.

Here in Canada, the robo-advisor space is starting to get crowded, too.

As reported by numerous sources, BMO InvestorLine will be entering the space in 2016 with its new robo-advisor offering, which will add to a number of existing players, including Questrade’s Portfolio IQ, which has already been on the market for some time.

While Virtual Brokers has had an arrangement with independent robo-advisors WealthBar and Wealthsimple, it is signalling a more formal entry of its own into the space. Nest Wealth and ShareOwner are examples of other independent players in the field. According to Motley Fool, there are about 10 robo-advisor services currently in Canada, but BMO’s entry would mark the first foray by a major Canadian financial institution.

So, what does this all potentially mean for Canadian investors?

According to the Financial Post’s Jonathan Chevreau, BMO’s entry would lend a kind of credibility to robo-advisors that the banks gave mutual funds a few years back. Chevreau also reports that independent robo-advisors Wealthsimple and Nest Wealth are excited about the news of BMO’s entry into the field. In the end, robo-advisors provide more choice to investors, especially to a tech-savvy millennial generation looking for low-cost investing alternatives.

So, while the machines aren’t taking over Canadian investing, robotic advisors are set to become a formidable force in the market.

When Losses Are Gains

As the saying goes, there are two unavoidable facts of life: death, and taxes. Unfortunately, not even stocks can avoid that same fate. When a stock (or investment) tanks, however, the news isn’t all bad.

While governments tend not to provide investors with ways to minimize paying some taxes, they do recognize that there is a symmetrical relationship to risk and reward that keeps an economy healthy. Investors need to be compensated for taking a risk and one of the mechanisms the Canadian tax structure has in place to do that is to claim capital losses against capital gains. For DIY investors, that means its time to consider “tax loss selling” as a strategy to optimize their portfolio performance.

If there’s one thing to be said about 2015, it’s that there seems to be plenty of opportunity to use tax loss selling. On all Canadian indices, stocks that were lower after a 52-week period outnumbered those that were higher by 31 percent. For the same 52-week period, the S&P/TSX Composite Index fell by more than 10 percent.

As tempting as it might be to simply dump some of these poorer performing stocks at the last possible moment (while also waiting/hoping for a miraculous turnaround) in order to benefit from tax loss selling, as with all shrewd investing tactics, there needs to be a strategy, as well as a knowledge of the rules.

First, there’s the deadline. Investors who sell their losing stocks on December 31st (the last day of the calendar year) will be out of luck since it takes three business days for a trade to settle, and both Christmas and Boxing Day are statutory holidays. That makes Dec. 24th as the last day investors can actually sell a stock for 2015 tax purposes.

In addition, the government does not grant tax loss selling benefits when a sale results in what’s called a superficial loss. According to the Canada Revenue Agency, this essentially happens when the same asset is purchased, or there’s still a right to purchase, by you or an affiliate within 30 days before or after the sale, or you or an affiliate still own, or have a right to buy that asset, 30 days after its sale.

To still benefit from tax loss selling, and also maintain exposure within a certain sector, such as mining, there are a number of tips and strategies. One option, for example, is to sell one stock and buy another in the same sector: mining. Since it’s not the same asset, it’s not a superficial loss, and still allows you to maintain your desired portfolio diversification/exposure. Using different ETFs that have close compositions is also another way to do this. Whatever the case, be sure to get a head start on identifying which stocks will make it into your portfolio for the start of 2016.

Discount Brokerage Tweets of the Week

Scotia iTrade’s mobile app got an improvement, but it wasn’t all positive as one user was unable to access the new app through their Android device. By using Twitter the user was able to get a quick response and the bug was solved a few days later. This week’s discount brokerage tweets showcase customers using Twitter to provide feedback and complaints directly to brokerages for responses. Making the roundup this week are Scotia iTrade, Questrade, and TD Direct Investing.

Event Horizon

It’s an intriguing week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to both technical analysis and options enthusiasts alike. An introduction to tax-loss harvesting rounds out this week’s selection.

November 16

Scotia iTRADE – Tax Loss Harvesting with BMO Global Asset Management

November 17

TD Direct Investing – Advanced Options

Scotia iTRADE – How and When to Use the MACD with Pro Market Advisors

November 18

Scotia iTRADE – Options Strategies for Beginners with Montreal Exchange

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

November 20

Scotia iTRADE – Charts & Patterns 101 with AJ Monte

From the Forums

From Index funds to ETFs

Every week it’s easy to find a discussion about low cost index funds or ETFs. In this post from the RedFlagDeals investing thread, a user asks for advice on when to switch from index funds to ETFs. The discussion touches on the optimal amount of money to invest in index funds followed by when and how to switch your investment to ETFs.

Index funds through Scotia iTrade?

Investors not investing with TD Direct Investing are looking for alternatives to the popular TD E-series index funds that are available at other Canadian discount brokerages. For those of you curious about what Scotia iTrade has to offer in terms of something similar, this thread on the RedFlagDeals investing thread asks the question.

Into the Close

Since today is Friday the 13th, we hope your superstitions don’t get the better of you. While it may seem like an unlucky day for the major US markets, savvy investors know that money is made on the way up AND on the way down. Whether you’re doing some portfolio pruning this weekend or content to leave it to the robots, we hope you have a great weekend! Of course, with Black Friday just around the corner, it may be more fun to look for places to spend your hard earned gains.

Source: giphy
Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – November 6, 2015

Source: allhabs.net

Some people don’t even refer to this month as November anymore. “Movember” – the trendy moustache-growing period of the year, has now overtaken the second last month of the year all with the aim at raising men’s health awareness, of course, and having a little fun.  As many traders and online brokerage providers know, however, the trend is your friend until it ends.

In this week’s roundup we take a look at the evolving trends in the deals and promotions circuit, with some interesting changes to the deals mix that took place at the start of the month. Next, even though many razors will be on hiatus for November, there is one that seems to apply to Canada’s largest brokerage in their bid to pull ahead of their brokerage peers. In keeping with the roundup tradition, we’ll close out with a look at the tweets from the past week as well as investor education events and some interesting chatter from the Canadian investor forums.

Let’s Make a Deal

It’s a new month and with it comes updates on the status of promotional deals being offered by Canadian discount brokerages, as well as a look at monthly trading activity stats from Interactive Brokers in the US.

Starting first with the deals, Questrade once again leads the online brokerage pack with almost half of the 15 current promotions or deals coming from the alone. Leading the news on the promotional front, Questrade is once again offering an iPad mini 2 for anyone opening an online account by Dec. 31 and funding it with a minimum of $100,000.

Questrade is also still offering contest entrants a chance to win $5,000 towards a professionally-managed RESP, offer ending Jan. 31, 2016, as well as a $50 Amazon.ca gift card for opening a new online account, with at least $5,000 in funding, between Nov. 9 and Dec. 31. Another new Questrade contest involves a chance to win a $5,000 portfolio with Portfolio IQ. This contest opened Oct. 31 and ends on Jan. 31.

BMO InvestorLine is looking to ring in the New Year resolutely with a promotional offer. Anyone opening an account by Jan. 6, with a minimum of $100,000 in assets, is eligible to receive $200 cash back, and 20 trades that are good for use for up to a year. This offer started on Nov. 2. Unfortunately, their youth-oriented offer didn’t fare as well. It expired at then end of October after a very long run through 2015.

Desjardins Online Brokerage is also busy on the promotional side of things with a unique offering of its own. Current and new clients are getting a combined $1,646 discount to enroll in the Power of Options Educational Course from Trade Global. The $995 course is available for $99 under the promotion, and enrollees also get three months access to optionsource.net, a stocks and options advisory service normally priced at $750 for the three months.

On the trade activity front, U.S.-based Interactive Brokers has released its monthly report for electronic brokerage activity. Of note, there were 655,000 daily average revenue trades (DARTs) in October, which is a one-percent drop from September, and a 4-percent drop from last October. Average commission per cleared client order was at $3.70 for the month, which includes exchange, clearing and regulatory fees.

On the Razor’s Edge

Everyone’s heard the expression: simplicity is a virtue, but not everyone’s heard of Occam’s razor, which is a philosophical principle dating back to the 12th century that selects alternatives based on simplicity. So, if you take Occam’s razor to a set of competing options, the simplest one wins.

Translating this principle into practice for online brokerages, however, has not been so simple. Trading platforms for DIY investors have been notoriously challenging to use – either with too many features, which makes them challenging to learn or too few, which inevitably limit the usability for many types of investors. This year, however, there has been a clear focus on improving usability and simplifying the interface investors use to manage their investments and trade online.

TD Direct Investing is the latest brokerage to upgrade their platform with their new TD WebBroker investor platform. The discount brokerage is touting the greater simplicity of the new online design. A primary feature of this new simplified layout is the navigation menu at the top left of the screen. It contains three links that are always readily available — Accounts, Research, and Trading — all with extensive sub-menus viewable with a click, as well as an easy-access Quick Links toolbar menu to the right.

The new WebBroker homepage layout can be personalized, and includes a summary of a client’s accounts, market and real-data updates — available before, during and after trading hours. If you’ve become accustomed to Microsoft Windows’ tile layout, WebBroker provides a similar nifty feature by placing a client’s accounts in tiles that can be scrolled horizontally and selected with a simple click.

In fact, if there’s one thing that stands out with the new homepage layout, it’s just how many features are available on the same page. Scroll down, and a big “Go to Balances” button takes a user to a detailed view of real-time balances for all accounts. Scroll down even further, and an impressive Top Movers section provides an easy-to-see layout of holdings that are experiencing the greatest market value change for the day.

So, if there are a couple of things that stand out with this new layout, it’s that it’s visually more appealing and accessible than the old format, with more features readily available in one location. The new WebBroker also appears to be simpler: streamline navigation, easier access and customizable features.

Discount Brokerage Tweets of the Week

This week’s discount brokerage tweets showcase customers using Twitter to look for answers from brokerages and receive relatively prompt responses. Making the roundup this week are BMO Investorline, Scotia iTrade, Questrade, and TD Direct Investing.

Event Horizon

It’s a busy week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to those who are new to investing, intrigued by technical analysis, and options enthusiasts. An ETF portfolio primer rounds out this week’s selection.

November 9

Scotia iTRADE – Active Investing Strategies with Independent Investor Institute

November 10

TD Direct Investing – Options Fundamentals

Scotia iTRADE – ETF Model Portfolios with Horizons ETF

November 12

TD Direct Investing – Introduction to Investing

Scotia iTRADE – Price Volume Divergence with AJ Monte

From the Forums

Make the switch

There are a growing number of reasons for individuals to move their money from one institution to another. It’s easier than ever to switch your discount brokerage due to the number of promotions for opening accounts and paying transfer fees, you can check them out here. In this post from the Canadian Money Forum, a user is looking to see what benefits or promotions they can get when they move their portfolio to RBC Direct Investing. Another individual asks for an exit strategy for their Tangerine TFSA invested funds in this thread from the RedFlagDeals investing forum.

ETFs coming to TD

For those of you interested in trading ETFs, TD Direct Investing has joined the party. In this post from the RedFlagDeals investing thread, a user informs the community about TD’s plans to offer ETFs in 2016. It’s going to be a great new year for ETF investors!

Into the Close

The theme of the week appears to be change with a new brokerage platform as well as new deals and promotions to accompany a news cycle that included a surprising change in Blue Jays management, a new World Series champion Kansas City Royals, and fresh faces in a federal cabinet yet to be tested with its new duties. It looks like 2015 may have a few more surprises after all.

Source: giphy
Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – October 30, 2015

Source: giphy

Much of Canada is currently experiencing the effects of fall weather: falling leaves, lowering temperatures, and Toronto Maple Leaf’s fans thinking about a Stanley Cup run. As many of Canada’s discount brokerages know, however, while hope may be a good thing, hedging your bets is a necessity.

In this week’s roundup, we’ll take a look at how some of Canada’s largest online brokerages are hedging their bets when it comes providing more features to DIY investors. Of course, deals and promotions are a great way to hedge against the falling commission prices which is what we look at, followed by an eventful week on Twitter. We cap off the roundup with some exciting investor education events and interesting investor forum chatter.

Lending an Invisible Hand

If nothing else, DIY traders believe in capitalism: a market-based system in which companies are rewarded for being more competitive. At this point, the market for DIY investors reads somewhat like a textbook case in competition. With pricing now less of a differentiating factor, the real fun begins with discount brokerages having to get creative to figure out (or finally listen to) what investors want. This week, we take a look at what two bank-owned discount brokerages in particular are doing right now to capture your attention, and ultimately your business.

First, earlier this month, BMO InvestorLine announced a new feature that can benefit the DIY trader, especially during tax season. Specifically, the brokerage has replaced its Activity Report with an enhanced Realized Gain and Loss Report that provides a detailed and customized transaction history and portfolio performance report. Among other things, this new feature will allow InvestorLine clients to export transactions to CSV spreadsheet format, resulting in a much simpler calculation of capital gains and losses when filing returns to the Canada Revenue Agency.

Our second look this week at new features from a discount brokerage also involves simpler calculations from trading activity. That’s what Scotia iTrade aims to achieve for its clients with its added ‘Income Details’ tab on the brokerage’s online platform. With this feature, users can instantaneously access and calculate historical and projected income from equities, ETFs and fixed income securities. Details of any interest paid on cash in an account is also accessible in this new platform.

The competition to provide DIY traders with increasingly enhanced features appears to be proceeding quite nicely, thank you very much, and the beneficiary should be prospective brokerage clients looking for value, and a competitive edge. After all, that’s what capitalism should be all about, isn’t it?

All Good Things Come to …

The fall season represents a transition from the fullness of summer, when life and energy are often at their peak, to the uncompromising cold of winter, where both animal and plant life often slumber until the rise of spring. Of course, for online brokerages, it’s a catch-22. When the weather is good, investors typically don’t want to hunker down and watch the markets – they’d rather be on vacation. With the return of activity of the markets, there’s a scramble to keep up with interest and to get the attention of DIY investors.

While some brokerages are able to selectively put on promotions during the year, others have to (or choose to) offer incentives year-round.

Not surprisingly, old habits are hard to die for Questrade as it leads October with a whopping six promotional offers active during the month. Only two are set to expire at the end of October: the prepaid Visa promo, and the $250 cash back program. BMO InvestorLine is next in line, forgive the pun, with three promotional offers for the month. Sadly, all three are set to expire with the leaves of autumn: youth promotion phase 2, refer a friend, and the 20 free trades with $200 cash back deal. Virtual Brokers is also slated to have one of their student promotions expire.

Of course, there’s nothing to prevent these offers from being extended. In total, and by our count, Canada’s discount brokerages had 17 active advertised promotional deals during October, with only six set to expire by the end of the month.

Luckily for DIY investors, we here at Sparx Trading keep a pulse on who’s doing what with respect to promotions at the discount brokerages, and what’s exactly falling by the wayside as we head into a new month. Be on the lookout as next week as the deals roster is set to change, perhaps quite substantially, as we head into the final stretch of 2015.

Discount Brokerage Tweets of the Week

Technology strikes again. This week’s tweets showcase the hiccups and the completely unexpected events that make DIY investing online a wild ride. Making the roundup this week are CIBC Investor’s Edge, Scotia iTrade, Questrade, Virtual Brokers and TD Direct Investing.

Event Horizon

Fear not, there’s no tricks, just treats in the week ahead for discount brokerage-sponsored investor education events. Here are some upcoming sessions that may be of interest to those who are new to investing, curious about trading strategies, and options enthusiasts. Margin accounts, and a national investment conference rounds out this week’s spooktacular selection.

October 31

Desjardins Online Brokerage (Disnat) – The World Money Show (participating)

November 3

Scotia iTRADE – Stocks Search Selection Strategy with Pro Market Advisors

NBDB – Trading Plan and Investment Strategy for Mid and Short Term Traders – [Fr]

November 4

TD Direct Investing – Understanding Margin & Short Selling

Desjardins Online Brokerage (Disnat) – Protect Your Portfolio Using Options – Preview

From the Forums

It’s not only about price

Competitive forces have leveled the playing field among discount brokerages. In this post from the RedFlagDeals investing thread, people compare the pros and cons between Scotia iTrade and Questrade. We’ve seen big banks decrease their commission rates which results in clients comparing more than just price.

For the passive investor

For those of you that aren’t looking to become active traders and still want to be involved with DIY investing, a great option is passive trading. In this post from the Financial Wisdom Forum a user posts about their lack of interest with active investing. The thread discusses the options for DIY investors that would like to take a more passive approach to investing.

Into the Close

So that’s it for this week’s roundup. Regardless of whether you’re looking for treats from the market, your discount brokerage or simply the candy bar variety, have a happy Halloween!

Source: giphy