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Discount Brokerage Weekly Roundup – March 27, 2015

The award for the biggest comeback this week is not for interest rates. In what can only be described with the best hyperbole ever, it was announced earlier this week that X-files will be coming back, albeit briefly, for a six episode run. Perhaps the famous agents Mulder and Scully have been pulled in to try and decipher exactly when those interest rates will rise or why the departure of Zayn Malik from One Direction “coincided” with a downturn in markets. While they’re on the case, perhaps a greater mystery is what Canadian online brokerages have in store for April as many of them appear to be working on top-secret projects of their own.

In this week’s roundup we do a bit of detective work to investigate the Canadian online brokerage landscape for cues and clues as to what these brokerages are up to. First, we’ll take a look at the upcoming turn into a new month and what that means for the deals and promotions currently set to expire at the end of March. Next we’ll take a look at a brokerage that has never spent a lot of time in the shadows and, is in fact, finding itself increasingly in the spotlight. Another mystery that gets highlighted in this roundup is just how long it takes to get from one brokerage to another. For those looking for closer encounters of the investor education kind, we have a recap of two sessions held this week as well as the upcoming events in the event horizon. Finally, the whispers and chatter from investors in the ‘from the forums’ section are bound get people talking.

Deal Expiry

As March draws to a close, several discount brokerage promotions are poised to expire. Two promotions from BMO InvestorLine have had their deadline dates extended into April. There are, however, still five promotions from other brokerages that are on the chopping block. As of this edition of the roundup, TD Direct Investing’s 200 free trade promotion is poised to expire as we publish (March 27th).

The current deal count is still quite high and it is unlikely that several of the brokerages with offers set to expire will let their promotional strategy go quietly. Desjardins Online Brokerage, for example, has had their $300 commission credit running since October 2012 and even though it is scheduled to expire, they may have to throw it a retirement party given how long it has been around.

Two other online brokerages who have their deals set to expire are National Bank Direct Brokerage and Scotia iTrade. If history is any indicator, the latter may almost certainly renew their ‘refer-a-friend’ promotion and if they do let their headline offer expire, they will almost certainly be looking to be visible with another big number offer. National Bank Direct Brokerage, on the other hand, is historically less active in the deal space throughout the year. That said, it is still a prime season for online brokerages because of individuals looking to invest their income tax refunds.

We’re curious to see what the larger bank-owned brokerages will do and it seems like we’re not the only ones. It looks like the big bank-owned brokerages strategically timed their expiry dates to coincide with one another and perhaps a game of ‘wait and see’ is now underway between the largest players RBC Direct Investing and TD Direct Investing. The former extended its RSP-themed 20 free trade offer to end just after TD Direct Investing’s offer.

Another bank-owned brokerage to watch will be CIBC Investor’s Edge. Their commission-free ETF trading offer is also poised to expire at the end of March. Since their launch of the lowered commission pricing structure last fall, CIBC Investor’s Edge has been running aggressive promotions which have definitely caught the attention of investors looking for an online brokerage account incentive.

One way or another, the sprint to the finish of March will be exciting to watch. Stay tuned.

That’s Them in the Spotlight

For the past few months Questrade has been making some very big waves. From the launch of their Wealth Management division to the barrage of promotional offers and now most recently the official launch of their own line of ETFs, Questrade has been spending a lot of time in the spotlight.

With the launch of their new ETF line, Questrade looks and feels like a very different brand than it did last year at this time when it was “just” a discount brokerage. As of today they are able to proclaim that they are in the online brokerage business, the managed wealth business and also in the ETF business.

While it seems like they’re competing now across a number of different business lines, the fact of the matter is, Questrade appears to be strikingly in tune with millennial and generation Y investors. Questrade understands that in order to succeed as a brand within today’s (and tomorrow’s) world, they have to be present and be interesting.

For Canadian online investors – especially the younger segment, is that if there’s a channel you’re going to be on, they’ll be on it. Questrade has certainly been visible everywhere. From advertisements on BNN as well as online; on social media, in particular on Twitter and also in popular investor forums such as RedFlagDeals and Reddit, Questrade has a noticeable presence. The fact they’re being discussed here instead of their 13 other competitors is also proof that being interesting matters. In the marketing world it’s known as ‘earned media’.

This brings us back to the launch of Questrade’s ETFs this past week. Instead of a standard news release (which they provided), Questrade’s ETF launch got major coverage from an article in Moneysense magazine, they put together a YouTube video with their social media lightning rod Cabbie and they rocked up to the TSX to ring the opening bell (and clap for a really long time) and also hold an investor seminar with investment media personalities from BNN (and coverage in the weekly roundup probably doesn’t hurt either).

Despite all of the wisdom when it comes to investing that there should be little to no emotion involved, when it comes to financial services, there is a part of the decision to pick one provider over another that comes down to emotion. In an online brokerage field where pricing is ultra-competitive, getting people to notice you is hard enough but getting them to like you and talk about you means you not only have to be good but also do something special.

One of the hallmarks of success of US online brokerage pioneer Ameritrade (which was eventually acquired by TD to become TD Ameritrade) was to win ‘mindshare’ in order to win ‘market share’. What Questrade clearly understands is that if investors can spend time thinking about them, then there’s just simply less time to think about everyone else.

Hurry Up and Wait

Every so often after a bad experience with a brokerage, the thought of what else is out there crops up. Switching brokerages, however, is not as easy as it could be in today’s day and age. In last week’s roundup, the Globe and Mail’s Rob Carrick took a look at the issue from a cost point of view. This past week Moneysense Magazine took a look at the issue of switching brokerages from the point of view of how much time and money it takes to make the switch. The results were definitely eye-brow raising.

According to the article, which reported average transfer times between the large Canadian banks and a new entrant to the wealth management space Wealthsimple, the average wait time was 19 days. The speediest of the banks was Scotiabank, completing the transfer in 7 days whereas CIBC took 21 days.

It is important to note that transfers can depend on the complexity of the request. Large/complex portfolios with multiple accounts are likely going to require more effort than smaller ones. That said, it is an important data point for individuals to be aware of if they are thinking of making the switch to budget the time on the way out.

In Case You Missed It

Both TD Direct Investing and Questrade were tweeting away this past week from their respective investor education sessions.

TD Direct Investing held a session with Som Seif of Purpose Investments talking about #AssetAllocation. In case you missed it, the webinar was recorded and archives of it can be accessed here.

Questrade made yet another splash into the investor education (and information) landscape by organizing a forum on investing entitled Investing Trends 2015. The session featured panel members from some of Canada’s most recognizable names and faces from BNN, the Globe and Mail as well as members from the investment industry and tackled many popular topics related to the current investing environment. In case you missed it, below are the highlights captured in tweets from the session on March 26th.

Event Horizon

March will end with a bit of a whimper and April looks to be starting with a bang. We’ll be updating our events calendar shortly however here are some highlights of events coming up next week:

Stockscores Virtual Tour

Desjardins Online Brokerage’s educational partner, Tyler Bollhorn (founder of Stockscores) will be ramping up the investor education webinars in April and May. For more information on the full schedule, click here.

Scotia iTrade will feature a pair of sessions, one on the evolution of indexing and another on options trading. For more details, click here.

From the Forums

Questrade ETFs

Questrade’s new ETFs were on the minds of folks in RedFlagDeals’ investor forum. Click here to find out what DIY investors had to say about the official launch.

Cheap or Cheaper?

One of the recurring questions DIY investors confront is how much time or effort they need to put in to manage a portfolio, and, is it worth it to pay for a discounted product to do on their behalf. The debate on the best way to access TD e-series mutual funds is always a popular one. Click here to see how folks from the Reddit ‘Personal Finance Canada’ thread weighed in.

That’s it for this week’s roundup. We started the roundup on an extraterrestrial note at the outset, so it is fitting that we bring it back down to Earth for the ending. This weekend Earth Hour takes place at 8:30pm local time on Saturday. Whether or not you partake in the lights-out remember we’ve only got one planet to take care of us all (that anyone will officially admit to).

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Discount Brokerage Weekly Roundup – March 20, 2015

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

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

#SocialMediaMatters

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

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

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

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

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

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

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

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

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

House of (Prepaid) Cards

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

Mind the Exit

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

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

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

Event Horizon

March 21:

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

March 24:

TD Direct Investing – Stock Talk

Scotia iTRADE – Options Trading For Beginners with Sarah Potter

TD Direct Investing – Introduction to Investing in Options

TD Direct Investing – Understanding Margin & Short Selling

March 25:

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

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

March 26:

TD Direct Investing – Evolution of Indexing

TD Direct Investing – Introduction to Investing in Options

From the Forums:

TD Waterhouse RRSP

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

To BMO or not to BMO

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

Drip by Drip

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

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

Edited March 21/15

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Discount Brokerage Weekly Roundup – March 13, 2015

It’s Friday the 13th. Tomorrow is Pi Day (3/14). As Jerry Seinfeld might irrationally proclaim, what is the deal with all these numbers?

For DIY investors, however, keeping track of numbers is an integral part online investing.  And, with income tax filing deadlines around the corner, now is time of year that many folks will be reviewing numbers – so long as Netflix isn’t on.

In this week’s roundup, we start with an important message for Fraud Prevention Month regarding binary options.  Next we’ll take a look at some interesting numbers from the US brokerages that might add up to an interesting trend for brokerages here in Canada. Also, we’ll take a look at a recent ‘number themed’ promotion launched by one online brokerage in a very curious case of direct target marketing.  Upcoming investor education events will be next on the list and finally we’ll wind down with some interesting investor forum discussions.

A Bad Option

If you’ve ever tried to Google information on options trading, there’s no doubt that you’ve probably come across ads promoting binary options.  While binary options have evolved rapidly to look and feel like they’re legitimate trading alternatives, the disturbing truth is that they are, at best, gambling sites – many of which are unregulated, offshore companies simply out to separate internet users from their money.

Thankfully, the Canadian Securities Administrators (CSA) issued an important bulletin warning Canadians of the murky world of binary options trading.  Although the bulletin named a large number of websites (37) as attempting to solicit Canadian investors, the list is far from exhaustive.

The lines between investing online and gambling are certainly blurry when it comes to ‘trading/betting’ on short term moves in markets.  In fact, the controversy stirred up by Michael Lewis’ book Flash Boys (which happens to be celebrating its 1-year anniversary) highlights how even the biggest financial institutions and best and brightest minds in quantitative finance are exploiting microsecond advantages. What unregulated operators would do in jurisdictions that give them free reign usually spells trouble for an unsuspecting visitor.

Barron’s Rates Interactive Brokers Best Online Brokerage

When it comes online brokerage rankings, the only number that matters is number one.  Interactive Brokers (US), managed to land first once again in the 2015 ranking by Barron’s Magazine, narrowly beating out online brokerage firms OptionsHouse and TD Ameritrade.

As with other rankings and ratings of online brokerages, it is important to understand how the rankings were devised and what components go into the evaluation.   Barron’s online brokerage ranking is one of the more thorough evaluations of brokerages in the US and, although this makes it of limited value for Canadian brokerages per se, it is interesting to see the features and trends available to US online investors (as well as those investors interested in using an online brokerage in the US).

The following 8 categories were evaluated as part of the ranking:

  1. Trading Experience & Technology
  2. Usability
  3. Mobile
  4. Range of Offerings
  5. Research Amentities
  6. Portfolio Analysis & Reports
  7. Customer Service & Education
  8. Costs

Among those categories, Interactive Brokers had the best showing by far when it came to costs.  While anecdotal, many Canadian DIY investors also state that when it comes to pricing Interactive Brokers is very difficult to beat especially for very active traders.  Active traders are particularly sensitive to cost and it is likely why Interactive Brokers is strategically pursuing this segment of the investor market (not to mention that active investors generate almost 10-fold the revenue of an average investor).

For most DIY investors, cost per trade is and remains to be a major deciding factor when it comes a brokerage so it is interesting to see cost being given equal weight to other items when it comes to scoring.  As with all rankings, the priority that individuals place on the particular features as well as the overall experience ultimately determine the right fit.

A Precise Promotion

While some discount brokerages are looking to selectively target particular types of clients, a recent promotion launched by National Bank Direct Brokerage, takes things to a whole other level – 10 decimal places in fact.

The latest promotion launched by National Bank Direct Brokerage targets engineers as well as engineering students and graduates with a 97.4874371859% discount (yes that’s how it is being marketed).

Instead of paying $9.95 per trade, NBDB is offering 25 trades for $0.25 each for a 3 month period for deposits of $20,000 or more (for engineers and engineering graduates) and 10 trades for $0.25 for deposits of $5,000 or more (for engineering students).  The extremely precise discount offer is good until the end of May.

On a side note, it is interesting that NBDB is looking specifically at this group for a special offer.  There is some anecdotal data regarding the kinds of occupations seen with DIY investors and engineers do tend to be more open to DIY investing.  Whether this particular promotion is connected to that data is speculative, however the precise demographic/occupational targeting may be something other online brokerages might be considering after seeing this kind of promotion.

Change of Guard

In an unrelated story, National Bank Direct Brokerage appears to be looking for a new President.  The outgoing President, Nancy Paquet, whom we interviewed late last year, has now taken on the role of VP Partnership with National Bank.  Interestingly according to the job posting, the new president of NBDB will also act as  VP for National Bank, splitting their time between the two roles.

Strategically, bank-owned brokerages such as National Bank Direct Brokerage, are able to compete by being able to tap into the pool of clients from the banking side and vice versa.  The new President appears to have this as part of the mandate coming in.

National Bank Direct Brokerage isn’t the only online brokerage that is seeing some change at the top.  Vancouver based Qtrade Financial Group saw its CEO Scott Gibner depart officially as of mid January.  Currently Qtrade Financial’s board co-chair Bill Packham is serving as interim CEO.

Event Horizon

Lots of learning options (about options) taking place this week.

March 14 – Scotia iTRADE – Top Global Investment Themes for 2015 – Larry Berman Roadshow (Montreal, QC)

March 15 – Scotia iTRADE – Trading with the Expert with Ziad Jasani 

March 17 – Scotia iTRADE – Basic Option Income Strategies with Pro Market Advisors

March 18 – TD Direct Investing – Introduction to Fundamental Analysis

TD Direct Investing – Introduction to Investing in Options

TD Direct Investing – Introduction to Weekly Options

Scotia iTRADE – Equity Strategies Using ETFs with iShares

March 19 – NBDB – Stop orders: A winning solution worth knowing – [Fr]

Scotia iTRADE – The Power Of The Put Option with AJ Monte

March 20 – Scotia iTRADE – Trading with the Expert with Ziad Jasani

From the Forums

A Superficial Situation

As we move into ‘tax season’ there are all kinds of discussions about some of the tax implications associated with investing.  One of the popular (and important) topics is the superficial loss rule and what that means for investors.  This post from the Canadian Money Forum shows one investor’s experience in navigating through their options and the impact of a superficial loss. Also, here’s another helpful link explaining how this rule works.

Urge to Merge

Having only one discount brokerage account is a reality for some and a dream for others.  While there are various reasons individual investors open up (or end up with) multiple investment accounts, consolidating them means making a commitment to a particular online brokerage.  In this post from the Red Flag Deals investing forum, it was interesting to read the responses to one user’s questions about which brokerage to single out.

That’s a wrap for this week’s roundup.  After a bit of a miserable week for those long markets, oil, the loonie, the weekend might offer a bit of a reprieve.  In keeping with our numbers theme, however, it was a pretty rough week for this groom who saw his wedding end because of a failed math question.   Of course nothing caps off a week like watching 14 silly kids just being. So here’s a more jovial send off.  Enjoy the weekend no matter what you’re counting!

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Discount Brokerage Weekly Roundup – March 6 2015

With daylight savings coming to an end, it’s time to spring forward.  Time is definitely on the minds of many this weekend as we let our smart devices put our microwaves and wall clocks to shame by self-updating, but also because of Apple’s big iWatch reveal on Monday.  Speaking of time, Canadian discount brokerages now have a bit more of it with RSP season now in the rear-view mirror.  The break won’t last too long, however, with tax season gearing up, we think Canadian discount brokerages will also be looking to roll out some big announcements of their own very soon too.

In this week’s roundup we rock up to a new month by taking a quick look at the new Spring line of deals and promotions. Next we check out a discount brokerage that got recognized for its call centre,  take a quick trip through the upcoming investor education events for March and finally cap off with some interesting discussions from the investor forums.

Deals March On

After the frenzy of offers in February, March has definitely slowed down in terms of discount brokerage deals and promotions. In our latest deals & promotions post, we take a look at what was left after the dust settled on the RSP-oriented offers.

Despite 8 deals having expired between the last week of February and first week of March, at least one brokerage extended an offer to the end of the month and two brokerages, Questrade and Qtrade, decided to replace expiring offers with new ones. For those keeping score at home that brings the deal tally to 17 (18 if you count the contest offering from Qtrade) at the time of writing which is considerably less than the 26 or so offers/promotions that showed up for February.

This past week one promotion from HSBC InvestDirect and two from Questrade expired.  RBC Direct Investing has chosen to extend their 20 free trade offer until March 31st, likely to compete directly against TD Direct Investing’s offer that runs until late March.

Look for March to be an interesting month for deals because so many offers are timed to expire at the end of the month.  While the most likely outcome is for offers to start getting extended, we can’t help but think that some sizeable promotions with longer deadlines will make an appearance before month’s end.  For more updates on the latest discount brokerage deals, be sure to check the deals & promotions section through the month.

Scotia iTrade Recognized for Call Center

In an announcement earlier this week, Scotia iTrade’s call center performance was recognized by call center research firm Service Quality Measurement Group (SQM).  The award received by Scotia iTrade was the “Gold” Call Center First Call Resolution (FCR) Best Practice Award. Winners of the “Silver” and “Bronze” for this category of award were Regence BlueCross BlueShield and Canadian Tire Financial Services/Millenium1 Solutions.  (click here to view a list of all the 2014 SQM Call Center Award winners)

The award received by Scotia iTrade is part of a broad set of awards given out by SQM to recognize strengths in key areas of running a call center.  In particular, the recognition for their “performance management system” was evaluated on how their management system (the structure by which Scotia iTrade tracks and measures call center performance) improves key metrics such as first call resolution (i.e. properly answering client questions on the first call) among others.

As with other brokerages who earn distinctions in certain categories, it is important to understand what the award actually means/recognizes and how that measure was determined.  In this case, according to the SQM website, submissions for this best practice award were evaluated by 6 subject matter experts.  Thus, while Scotia iTrade has been recognized for having strong call center client service operations, that does not necessarily translate into a better/worse performance relative to their online brokerage call center peers.

Event Horizon

There are a number of interesting investor education events taking place in March.  Scotia iTrade is holding a number of events in partnership with the Independent Investor Institute (headed by Larry Berman).  TD Direct Investing looks to be placing a focus on options education events.

March 7 – Scotia iTRADE – Trading with the Expert with Ziad Jasani

March 8 – Scotia iTRADE – Top Global Investment Themes for 2015 – Larry Berman Roadshow Markham, ON

March 9 – Scotia iTRADE – Trading with the Expert with Ziad Jasani

March 10 – NBDB – Take Advantage of Margin Accounts – [Fr]

March 10 – Scotia iTRADE – ETF Model Portfolios with Horizons ETFs

March 10 – TD Direct Investing – ETFs 101 – Everything You Ever Wanted To Know About ETFs

March 11 – Scotia iTRADE – Options Trading – A Directional Bias with Montreal Exchange

March 11 – Desjardins Online Brokerage (Disnat) – Options, Indispensable in Today’s Markets

March 11 – TD Direct Investing – Introduction to Investing in Options

March 12 – Scotia iTRADE – Top Global Investment Themes for 2015 – Larry Berman Roadshow Ottawa, ON

March 12 – TD Direct Investing – Introduction to Investing in Options

From the Forums

Bueller, Bueller

Sometimes asking a question to a busy forum such as Red Flag Deals actually nets no replies – even in spite of how many views a post may get.  This is a rare situation but perhaps interesting given the question that was asked regarding BMO InvestorLine’s AdviceDirect product.  BMO InvestorLine has been actively advertising to raise awareness of this product however as this forum post shows, there still might be a ways to go before investors are interested.

Bystander Effect

On the other end of the community wisdom spectrum, this post, also from Red Flag Deals’ investing section, demonstrates that sometimes asking a question instead of doing a little bit of searching first means that either the question isn’t appealing or, as was the case in this post, the question has been answered time and time and time again.

That’s a wrap for this week’s roundup.  With Apple bookending the weekend by with the announcement on Friday that they’re being added to the Dow Jones Industrial Average (and displacing AT&T in the process), and on Monday announcing more details on their iWatch, it seems like a sign of the times we live in. Who we use to communicate with isn’t as compelling as what we use to communicate with. Instead of reaching out and touching someone, it looks like the world is more about reaching out and touching a screen. On the bright side, at least the thing will update itself.

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Discount Brokerage Weekly Roundup – February 27, 2015

Even though it’s still technically winter, it feels like a ‘white dress vs blue dress’ moment. Sure the calendar says it’s the end of February but there’s a major difference between what winter looks like in Vancouver vs Toronto. Regardless of which version of winter DIY investors are riding out, there’s something that everyone can agree on: the competition between Canadian discount brokerages has been undeniably fierce.

In this edition of the roundup, we take a look at deals and promotions poised to expire in and around the RSP contribution deadline; news about one online brokerage getting approval for clearing activities; an assortment of news that DIY investors are going to want to put on their radars and we’ll cap off the roundup with a look across the investor forums.

Sprint to the Finish

If the expiry dates on deals are any indicator of important times in the calendar year, then the run up to the RSP contribution deadline (March 2nd) is by far the most important time for Canadian discount brokerages.

As February closes out, there are at least nine deals/promotions set to expire between February 26th and March 2nd. Here’s the list of offers heading out (or already out):

  1. HSBC InvestDirect – Winter Offer
  2. RBC Direct Investing – Trade Free for 1 Year Offer
  3. BMO InvestorLine – Tablet Promo
  4. Questrade –  MultiLeg Offer
  5. Questrade – Unlimited Trading Offer
  6. Questrade – RSP Promotion
  7. Questrade – Prepaid Visa Offer
  8. Virtual Brokers – RRSP Free Trade Promotion
  9. CIBC Investor’s Edge – Free Trade + Cash Back Promotion

There are also a couple of contests linked to the RSP season (e.g. from Qtrade Investor) that are set to expire March 2nd.

Clearly Questrade has been the most active of any discount brokerage in terms of offering up deals and promotions. As a result, it seems that others have largely followed suit.  The timing of these offers is definitely meant to take advantage of the fact that so many individuals will be thinking about and contributing to RRSPs just ahead of the deadline.

For Canada’s discount brokerages, February 2015 saw the record for highest number of advertised promotions since we’ve been measuring these. We observed at least 24 listed offers (26 if offers not listed on SparxTrading.com are counted). Unadvertised offers as well as ‘negotiated’ deals have been reported by individuals on investor forums too, signaling that even more bonuses and incentives are out there.

There has been a fierce battle between providers in the lead up to the RSP deadline however the deals/promotions are likely to pull back once the dust settles. Click here to view all the deals/promos.

Getting Clearance

Earlier this week, Virtual Brokers announced that their parent company, BBS Securities Inc, was approved for membership with the Canadian Derivatives Clearing Corporation (CDCC).  And, while this doesn’t necessarily impact the experience of most of the DIY clients, this does enable Virtual Brokers to better monetize the process of clearing options transactions.

According to their corporate brochure, the “CDCC, a wholly-owned subsidiary of the Montréal Exchange (MX), acts as the central clearing counterparty for exchange-traded derivative products in Canada.”

As a clearinghouse they coordinate the transaction process and associated settlement tasks. In addition, the CDCC acts as a central counterparty for trades on the Canadian derivatives (e.g. options, futures) markets. A clear explanation of the CDCC can be found on their FAQ page here.

Other Canadian discount brokerages that are members of the CDCC include Interactive Brokers Canada, Questrade, Credential Securities as well as many of the parent brands of the bank-owned brokerages. The full clearing members list is available here.

Given the risks associated with trading derivatives, there is the need for strong controls to be in place.  For most DIY investors that decide to trade in options, in particular Canadian options, many of these risks are controlled at various point through the trading process to the point where they go largely unnoticed.  An interesting overview on the CDCC prepared by Standard & Poors (although it’s a bit dated) can be found here.

Interesting Developments

For those who follow the Canadian markets closely, newer entrants (such as Aequitas) and smaller players (such as the Canadian Securities Exchange) are definitely making headlines.  In terms of the CSE, their recent successes at growing the number of companies listed on their exchange reflects their desire to become a serious contender to a much bigger incumbent.  In another bold move, the CSE has announced the launch of an index, the CSE Composite Index, that now tracks securities listed on that exchange.

There are many interesting features to this index, which is being managed by a German firm Solactive AG, the primary one being the composition of the index.  The CSE Composite Index,  which is made up of 64 listings, has the following sector weightings as of January 30, 2015:

  • Technology: 47.27%
  • Diversified Industries: 25.66%
  • Mining: 16.17%
  • Life Sciences: 7.28%
  • Cleantech: 1.85%
  • Oil & Gas: 1.77%

Like most other indices, the criteria for inclusion can determine what kinds of companies end up comprising the index.  For more detailed information on the new CSE Composite Index, check the information page here.

Changing the Channel

In another big announcement for the financial information landscape in Canada, financial news giant Bloomberg announced that they, in partnership with specialty channel operator Channel Zero, will be launching a Canadian financial news television channel.  Currently BNN (owned by Bell Globe Media) holds an exclusive position in the business television space.

The move by Bloomberg will likely force BNN, which already produces a relatively high quality product, to step up their game.  The Bloomberg brand is very well known and carries not only the weight of its reputation for business news journalism but also the sheer scale of resources to get information on markets locally and internationally.

For DIY investors it will be interesting to see how well the Canadian edition of Bloomberg fairs. There will still be significant business content from the parent Bloomberg channel simulcast so a large amount of US-based news will be streamed through. After all, not every import from the US is guaranteed to succeed (Target anyone?) in Canada – it will take a solid understanding of the viewership in Canada and something genuinely enticing to win the loyalty of BNN viewers.  Either way, it should be an exciting launch.

From the Forums

#OnlineInvestingProblems

In this post from Canadian Money Forum, one user has a particular gripe with the onboarding process with Scotia iTrade. In today’s world of online applications, it seems that doing things the ‘old fashioned’ route of paper forms was the source of grief.  The responses from other members, however, provided some sober insight on how other brokers fare.

Just TFSA No

With registered accounts on everyone’s mind, TFSAs are a natural talking point.  One forum user, however, was curious to know which brokerage would be able to help out with an OTC (Over the Counter) stock for a TFSA. The responses, however, cleared the air on an important point that only approved exchanges (which does not include the OTC/pink sheets) are eligible for TFSAs.  Click here to read more.

Nimoy Tribute

A wagon train to the stars was how Gene Roddenberry promoted and ultimately sold his vision for Star Trek, as a television series, to a group of NBC network executives in the early 1960s.

As readers may know, Leonard Nimoy, who portrayed the iconic character Spock, has passed away. He was 83. The staff at SparxTrading.com is passionate about Star Trek and its vision of a better tomorrow. The roundup wishes to celebrate a life well lived and pay tribute to Mr. Nimoy.

For a nice retrospective, you may be interested in visiting the Star Trek website; NASA also paid tribute to Mr. Nimoy and thanked him for inspiring generations of engineers, scientists and explorers. Finally, here is a simple, yet eloquent video with a wonderful message and we hope the words resonate with you, as they have with us. Live long and prosper.

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Discount Brokerage Weekly Roundup – February 20, 2015

View image on TwitterIt’s not often that a haircut makes the news. For a change, however, it isn’t the haircut that Greece’s debt holders are going to take – this one comes from North Korea’s Kim Jung Un. So, what does a head of hair from a head of state have to do with Canadian discount brokerages (you might be asking)? This past week they’ve both been taking Twitter by storm.

 In this week’s roundup we’ve pulled together an interesting assortment of news and observations from Canadian online brokerages. First, we take an in-depth look at the latest promotional offer to be launched in an already crowded deal space. Next, we piece together something interesting that’s been happening on Twitter and provide an example of how this social media channel is one DIY investors will want to tune into. On the home stretch we’ll take a look at the official launch of one online brokerage’s new website, cruise through the upcoming investor education events and close out with a look at some interesting developments in the investor forums.

 Credential Direct Deals Themselves In

After standing on the sidelines of the discount brokerage deals and promotions melee, Credential Direct has stepped in swinging with their latest offering.  Along with Credential Direct, Questrade also added a pair of promotions, bringing the total number of advertised Canadian discount brokerage deals to 26.

While Questrade’s newest offers means that they retain the title of offering the most promotions of any discount brokerage, seeing Credential Direct step into the deals and promotions space is going to ruffle a few feathers with their competitors.

Credential Direct’s latest promotion, launched earlier this past week, offers new or existing clients either a cash-back or commission credit amount that varies with the size of the portfolio deposit.  While the cash back and commission credit amounts are in line with offers from CIBC Investor’s Edge and Questrade, what sets this offer apart is the deadline to use the trades (only trades used by September 30 are eligible for rebate) and the tiers of deposit.

Previous to the launch of Credential Direct’s latest promotion, only Scotia iTrade had an advertised deal for deposits of $500,000 or more. With this new deal, however, Credential Direct has now joined the relatively few brokerages that are pitching promotions aimed specifically for clients depositing more than $100,000. And, it is in this category that the Credential Direct offer stands out. Credential Direct is offering unlimited commission-free trading (until the end of September) for clients who deposit $500,000 or more whereas a similar deposit from Scotia iTrade would land 500 commission-free trades.

It warrants mentioning, however, that Questrade also has an unlimited commission-free trading offer with a minimum deposit of $50,000. The dramatic difference in deposit amounts for commission-free trading offers means that both Questrade and Credential Direct are going to likely get compared on how well they each cater to the active trader – the most likely kind of client to take advantage of the commission-free trades. For the brokerages not advertising something ‘special’ to clients bringing in bigger deposits (i.e. >$250,000), they will likely have to come up with something noteworthy just to be seen as ‘keeping up’.

#LookAtMeNow

Although discount brokerages being on Twitter is not something new, there is definitely something interesting happening on the social media network.

This month, Credential Direct looks to have officially stepped into the social media space by launching their own Twitter account and TD Direct Investing, one of the largest Canadian bank-owned brokerages, has stepped up their efforts on Twitter.

Most Canadian discount brokerages (and probably many Canadian investors) are still skeptical of Twitter’s utility.  Online brokerages currently on Twitter include Interactive Brokers (although this account is not Interactive Brokers Canada exclusively), Jitneytrade, Questrade, Scotia iTrade and Virtual Brokers. Of that group, it’s fairly clear that Questrade and Scotia iTrade have been the most active for the better part of the past two years.  All that may change, however, now that Credential Direct and TD Direct Investing are stepping in.

In particular, while Credential Direct has just one account, TD Direct Investing appears to be deploying multiple individuals in the service of broadcasting their message. From a user’s perspective, this might make it cumbersome to follow several different TD Direct Investing related Twitter accounts (we’ve made a list which can be subscribed to here) however from the other brokerage’s perspective, this is definitely a cause for worry.

The big question for self-directed investors, however, is ‘so what?’  Does Twitter even matter?  The answer is increasingly ‘yes’. In 2015, Twitter has now become the news, with as many news agencies reporting about what’s happening on Twitter as there are Twitter users tweeting about the news.

Twitter has become one of the ‘go to’ resources for breaking news, a place to vent, and a way to connect.  In a previous piece on discount brokerages on social media, we highlighted that Twitter is a valuable resource to find out about breaking news, outages, deals or new developments even before any of these hit the mainstream media.

For online brokerages, Twitter also is a place where clients come to voice their concerns or, more rarely, sing the praises of great client experience. DIY investors curious about what it is like to deal with client service at a particular brokerage can simply scan the Twitter feed of any of the brokerages (caution: some of the more colourful comments are definitely NSFW) and review the conversations between client and provider.

The latest moves by TD Direct Investing and Credential Direct signal that Twitter is about to become a new arms race. In this battle, victory goes to the most interesting, not necessarily to the biggest player. Questrade was able to pull this off in the lead up to their launch of the wealth management unit. Going forward however, the new entrants and the existing players will have to step up their collective game 140 characters at a time if they want to earn the interest and attention of DIY investors.

TD Direct Investing now Offers Online Trading with the CSE

As a segue from talking about the value of Twitter, this past week showed the value in finding out some valuable information via the social media channel.  This week there were a number of interesting tweets from the TD Direct Investing team about WebBroker (their online trading platform) being able to trade CSE-listed securities.  The reason these tweets are interesting is because there have been no official announcements/news releases from either the Canadian Securities Exchange or from TD Direct Investing on this demonstrating, at least on this occasion, that Twitter can move faster than PR departments sometimes can.  A quick check of the TD helps community forum also confirmed the new development – although even internally there seemed to be some disconnect between features being enabled and front-line staff finding out about it.

With TD now connected to the CSE, the vast majority of Canadian discount brokerages are patched in and DIY investors can trade CSE listed securities directly from their online trading platforms (instead of having to phone in).

Desjardins Online Brokerage’s New Website Launched

As we had reported last week, Desjardins Online Brokerage had scheduled the roll out of their new website before the end of February.  Their new website officially went live on February 18th and, as was mentioned in our preview of the site, it is a major upgrade from their prior site and raises the bar design-wise on most of the other online brokerage sites in Canada.

 

Event Horizon

Here are this week’s learning opportunities, enjoy!

Feb. 21 (Sat) TD Direct Investing – Introduction to Fundamental Analysis

Feb. 23 (Mon) Desjardins Online Brokerage (Disnat) – Discover the Benefits of the TFSA

Feb. 23 (Mon) TD Direct Investing – Market Outlook – Winter 2015

Feb. 25 (Wed) TD Direct Investing – Understanding Margin & Short Selling

Feb. 25 (Wed) Scotia iTRADE – Options Fundamentals with Montreal Exchange

Feb. 26 (Thurs) TD Direct Investing – Understanding Margin & Short Selling

From the Forums

This past week there was a very interesting development in the investor forums.  One of the more popularly discussed brokerages, Virtual Brokers, joined RedFlagDeals and actually responded to a client complaint.  While Questrade has been dutifully covering all kinds of forum/social media ground, this marks a rare occasion that Virtual Brokers has decided to engage with clients on this particular forum.  The topic – whether fractional shares after a reverse split would be issued – is a very interesting discussion in and of itself and is worth a read to see how it played out.

That’s a wrap on this week’s roundup. While the snow packs may be keeping many folks indoors (not so for the lucky West Coasters), there’s a silver lining that at least the Oscars will be on.  Ironically, of course, a lot of interesting reaction and perspective will be able to be seen on Twitter. #GoFigure #HaveAGreatWeekend

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Discount Brokerage Weekly Roundup – February 13, 2015

If Friday the 13th was supposed to be an unlucky day, somebody forgot to tell stock markets.  Heading into Valentine’s Day weekend bullish investors saw fifty shades of green as they pushed markets to a record high close, yet again. Fittingly, Canadian discount brokerages were also out looking for love from DIY investors offering up just about everything but flowers and chocolate.

In this week’s roundup there’s no shortage of excitement to report on.  We start by highlighting the bombshell news from a bank-owned brokerage determined to return to the spotlight. Next we’ll take an exclusive look at one brokerage’s game changing webpage makeover and what that means for other brokerages. Technology is the next treat served up by an independent brokerage and finally we take a look at the award bling one brokerage is now sporting on their homepage.  As always, we’ve also got a tour through the upcoming educational events and the buzz around the investor forums.

CIBC Investor’s Edge Sends Commission Fees on Spring Break

This past week, CIBC Investor’s Edge has, yet again, launched a pricing feature so big that it can’t be ignored.

Specifically they announced that between February 12th and March 31st 2015 they are offering commission-free trading on almost 2000 ETFs to all clients. For perspective, the other Canadian discount brokerages that offer completely commission-free ETF trading clock in at 150 (Virtual Brokers), 60 (Qtrade) and 50 (Scotia iTrade). CIBC’s offer, albeit a limited time one, definitely stands head and shoulders above the other commission-free offers and highlights how creative brokerages are prepared to get now that overall commission prices have fallen.

For CIBC Investor’s Edge the timing of this move is borderline surgical. It is a great incentive for individuals looking to open an online trading account to consider CIBC and is a bonus to anyone who has an account with ETFs to re-balance at little to no cost.  Because the offer extends well beyond the March 2nd RSP contribution deadline, the benefit of commission-free ETFs is still practical.

To boot, there are only a handful of important restrictions and exceptions.  First, the minimum transaction amount is $100.00. Second, many of the popular leveraged ETFs are not eligible for this promotion (sorry double and triple bull/bear fans). Finally, there’s also a minimum holding period of at least one business day.

We’ll be tracking the reaction from this offer as it is bound to make waves with the other bank-owned brokerages and the commission-free ETF crowd.  The only solace for competitor discount brokerages is that this is a limited time offer – for now.

Desjardins Online Brokerage Set to Launch New Website

This past week SparxTrading.com got an exclusive first look at Desjardins Online Brokerage’s soon-to-be-launched new website. While a new website at a Canadian brokerage is noteworthy, many if not most of Canada’s discount brokerage websites are starting to look and feel dated.  Such is the reality of the digital age.

The challenge for many online brokerages is to appear both innovative and stable all at once.  After all, too much change too often and clients can’t keep up. Too little change and a brand goes from being viewed as a laggard to criticized for not keeping up with the times.  With the website being the crucial touch point for both existing and prospective clients, what it looks like and how it functions matter.

What makes Desjardins’ release particularly strategic is that in design and function it has done something bold and distinctive. Their new website positions Desjardins Online Brokerage as particularly astute at considering user experience.  Crucially, individual investors of today will look at online experiences as extensions and markers of client experience.

Previews of the homepage are available in our sneak peek and more images are available at their website here.

Questrade Launches API

Earlier in the week Questrade’s blog announced the release of an API for individuals to develop apps that interface with Questrade’s IQ trading platform.  For the highly technical DIY investor or app developer, this new level of accessing Questrade and its trading engine mean that there are going to be some creative customizations to the platform in the not-too-distant future.

This is a particularly bold step from this online brokerage as they join only a handful of brokerages (Interactive Brokers being another) that enable external applications to interface with their trading platform and/or market data feed.  In the most compelling form, this paves the way for programmatic/algorithmic trading via their platform.

Victory Lap

Just about a month after they were announced as one of the best online brokerages for client service (by Dalbar Canada), HSBC InvestDirect was spotted this past week flashing their awards. Fellow award winner RBC Direct Investing has, curiously, not yet posted something similar.

Screenshot of HSBC InvestDirect website with their Direct Brokerage Service Awards.

Event Horizon Feb. 13, 2015

Feb. 17 (Tues) Scotia iTRADE – Options for Long(er) Term Stock Positions

Feb. 17 (Tues) NBDB – Introduction to Put Options – [Fr]

Feb. 17 (Tues) NBDB – Enhancing Yields and Cash Flow in Your Stock Portfolio

Feb. 18 (Wed) TD Direct Investing – Introduction to Technical Analysis

Feb. 18 (Wed) TD Direct Investing – Options as an Income Strategy

Feb. 18 (Wed) TD Direct Investing – Advanced Indicators

Feb. 18 (Wed) Scotia iTRADE – Investing in Rising Interest Rate Environment with iShares

Feb. 19 (Thurs) TD Direct Investing – Building Wealth Through Registered Accounts

Feb. 19 (Thurs) Scotia iTRADE – Head and Shoulder Patterns with AJ Monte

Feb. 20 (Fri) TD Direct Investing – Introduction to Technical Analysis

From the Forums

CIBC Investor’s Edge Commission-free ETFs Winning with Investors 

New Account RSP bonuses 

Are Level 2 Quotes Worth It?


That’s a wrap for this week’s roundup.  Have a great weekend in spite of what movies you may or may not have to watch.

 

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Discount Brokerage Weekly Roundup – February 6, 2015

Canadian discount brokerages are hitting February at full speed. With a slew of deals, events and the roll out of new features it doesn’t appear like very much will be slowing down the activity at Canada’s brokerages.

In this week’s roundup we cover the ramping up of the new feature launch at one of Canada’s oldest discount brokerages, a highlight reel of deals and promotions to kick off the month, a tour through the educational events taking place in February and finally a new twist on an old favourite in the forums.

On a Roll

Late last year Desjardins Online Brokerage quietly unveiled their conditional order feature. This past week, they were not so quiet any more as the front page of their website announced the presence of this feature and the official roll out to both the Classic and Disnat Direct clients.

According to their website, the conditional order settings available via Desjardins Online Brokerage include:

  • A trade execution triggers one or more orders
  • A trade execution triggers one or more cancellations;
  • An event triggers one or more orders.

Included on the landing page explaining the conditional order types are also three video tutorials (also viewable on YouTube) that provide additional detail on how these order types work and can be used on the Disnat trading platform.

In both the year in review/look ahead article and the video interview with Desjardins Online Brokerage, 2015 was flagged as a year in which a number of new features and upgrades are coming.

Be sure to check out SparxTrading.com next week as we have an exclusive first look at another one of Desjardins’ major new projects for 2015.

New Month New Deals

One of the biggest stories from January was just how many promotional offers were being put forth from Canadian discount brokerages. The competition for consumers has certainly paid off as there are now 21 open offers on our deals page as well as additional special offers and contests not listed.

Just how do the offers stack up? This month the deals picture is somewhat unchanged to last month. The count of offers at each brokerage shows Questrade as the most active in terms of promotional offers with at least seven followed by BMO InvestorLine with four and Scotia iTrade with two. All other brokerages had one offer.

Count of Canadian discount brokerage deals for February 2015

Of all the Canadian discount brokerages Questrade is aggressively pursuing clients as seen in their promotional activity, advertising and outreach efforts in most of the Canadian investor forums, Twitter (and reddit). With ultra-low pricing on their side as well, the other Canadian brokerages are going to have to become much more nimble in order to keep pace.

It’s worth mentioning that Qtrade Investor does have a contest running but was not included in this list because it does not meet the standard criteria for commission rebate/credit or reward.

Also, thanks to a user comment from Kris, we’ve updated the transfer fee promos section to include an offer from CIBC Investor’s Edge that wasn’t posted on their website but was confirmed by their client service reps.

Event Horizon

This upcoming week features a number of free investor education events, with a particular focus on options trading. Click on a link below to find out more information.

Feb. 10 (Tues) NBDB – Introduction to Call Options – [Fr]

Feb. 10 (Tues) Scotia iTRADE – Transitioning to an ETF Portfolio with Horizons ETFs

Feb. 10 (Tues) TD Direct Investing – Introduction to Investing in Options

Feb. 11 (Wed) Scotia iTRADE – Options Trading and Volatility with Montreal Exchange

Feb. 11 (Wed) TD Direct Investing – Advanced Options

Feb. 11 (Wed) TD Direct Investing – Option Strategies for your RSP and TFSA Accounts

Feb. 11 (Wed) TD Direct Investing – Building Wealth Through Registered Accounts

Feb. 11 (Wed) TD Direct Investing – Technical Analysis – Candlestick Charting

Feb. 11 (Wed) Desjardins Online Brokerage (Disnat) – Options Trading Mistakes to Avoid

Feb. 12 (Thurs) NBDB – Learn About Investment Basics – [Fr]

From the Forums

This week’s from the forums section, we’re going to try something a little different. We’ve collected some interesting threads from the past week that are related to discount brokerages. The threads have been summarized in our corresponding community sections. Click on the links below to view them.

That’s a wrap for this weekend. No matter if you have a snow shovel or umbrella to fight the elements, stay out of trouble and see you next week. Of course if you somehow don’t manage to stay out of trouble, here’s a guy who knows some guys.

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Discount Brokerage Weekly Roundup – January 30 2015

It looks like football players aren’t the only ones trying to score big this weekend. Burgers, fries and Candadian discount brokerages are also in the mix. With the frenzy of offers rounding out January, we’re heading into February with over 22 deals and promotions for anyone looking to open up an online trading account. That’s plenty to chew on.

In this week’s roundup we take a look at the issues that got people talking this week – that’s about brokerages not burgers. First we take a look at two different measurements of client service and try to make sense of why they’ve obtained two completely different results. Following that, we’ll take a look at one independent brokerage’s bold voyage into a place they haven’t really been before: online investor education. Finally, with deals & promotions clearly on the minds of investors, we’ve collected an assortment of forum posts for specific online brokerage deals.

Defining Customer Service

As much as online trading doesn’t require directly dealing with a brokerage’s staff, there are a handful of times when it is unavoidable or even required. In spite of technological advances around them, many brokerages don’t have a live chat or don’t rely on that function when it comes to sensitive account information and/or trading instructions.

In last week’s roundup we mentioned that financial service analysis firm, Dalbar, announced the results of their annual evaluation of telephone client service at Canada’s online brokerages. In it both HSBC InvestDirect and RBC Direct Investing earned the “Winner’s Circle” designation for meeting the standard for high quality telephone client service (for our in depth look at the latest results, click here).

This past week another financial service firm, Surviscor, announced their results of an email based evaluation. According to Surviscor’s evaluation, Credential Direct earned a “platinum” designation with a response time of under two hours and Qtrade and Scotia iTrade were awarded “gold” (which reflects an email response time of between two and four hours).

While fast email response may be of interest, what was far more interesting was that both the Dalbar rankings and Surviscor rankings yielded completely different results when it comes to ‘customer service’.  In Dalbar’s evaluation, RBC Direct Investing and HSBC Invest Direct scored the highest of the evaluated brokerages. Conversely in the Surviscor rankings, HSBC Invest Direct placed 9th whereas RBC Direct Investing tied for last place.

For DIY investors, this is undoubtedly a confusing situation. Factor in the headlines and spin doctoring and you have an especially tough time figuring out what these results really reflect.

Take the following examples from recent news releases:

  • “Qtrade Investor takes gold for customer service” (from the news release here)
  • “Credential Direct Named Top Brokerage Firm for Customer Service in Canada” (news release here)
  • “HSBC InvestDirect and RBC Direct Investing both emerged as premier providers in customer service in 2014” (from the news release here)

Then there are the numbers themselves. Although Dalbar only reported the average and the range between highest and lowest (which was 13 percentage points) scores on client service, when compared with the range between Surviscor’s highest and lowest scores (a difference of 83 percentage points) the disparity is hard to ignore.

From the outside, it is puzzling how firms capable of implementing highly sophisticated trading platforms and rank highly on client service on telephones can’t seem to figure out prompt email or vice versa.

The lesson when looking at any of the rankings of online brokerages continues to be that consumers need to be vigilant when it comes to understanding exactly what is being measured and how those measurements are being made. Clearly, in this case, ‘customer service’ isn’t a standard unit of measure the way ‘commission pricing’ may be. Unfortunately, headlines and press releases (and evidently source materials) can yield conflicting definitions of quality customer service.

Event Review

This past week Virtual Brokers held an educational webinar aimed at beginner investors. The session, presented by personal finance author Gail Bebee, was the first in a two-part series and featured an overview of the basics of investing. Given that it was just under an hour long, this presentation did not go into extensive detail on any one topic but instead looked at several topics relevant to investing generally.

Included in the discussion was a breakdown of the different asset classes individuals can invest in; a quick comparison of mutual funds versus ETFs and how to start planning to invest. Bebee spent a bit of time discussing ETFs in particular and highlighted the benefits and potential risks/costs. This webinar was recorded and may be made available for viewing in the near future on VB’s website.

Part two of this presentation will look take a deeper look at how to build a portfolio. For more information on when this session is planned, check our investor education events section.

This upcoming week will feature a number of investor education events. We’ll be updating the events calendar shortly so check back soon for details on February’s selection of investor education opportunities.

From the Forums

The record volume of deals & promotions from Canadian brokerages did not go unnoticed by investors on the popular deals forum RedFlagDeals.com. Below is a list of links related to discussions of deals at each respective discount brokerage:

  • BMO InvestorLine: This deal mentioned by one forum user is actually a special targeted offer. Nonetheless the bonus is for an extra $100 on top of the advertised $300 cash back RSP promotion.
  • Questrade: With so many offers on the go from Questrade, users may have a tough time deciding between free trades, cash back or even an iPad mini. Click here to read what forum users had to say.
  • RBC Direct Investing: With a year to use 20 free trades, RBC DI has got some forum users talking. While not their best offer to date, it is one of the few with such a long expiry date. Click here to read the discussion.
  • TD Direct Investing: This thread discusses the current 200 free trade offer by TDDI.

That does it for this week’s roundup. Heading into the weekend here are a couple of miracle stories to keep you entertained. For those who don’t believe in zombies or that cats don’t have 9 lives, here’s a cat that will make you rethink that.

And finally for the football fans and video gamers. For those that didn’t think they’d see Marshawn Lynch play nice with media ahead of the Super Bowl, it seems like maybe you’re in for a bit of a shock on this fun video.

Go Seahawks!

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Discount Brokerage Weekly Roundup – January 23, 2015

If you’re feeling as deflated as Patriot’s football this week, hopefully the fact that markets ended the week on a bit of a positive note is enough to cheer Friday. And, if recent market movements haven’t got you puzzled enough, at least Miss Universe Canada’s costume has got pundits and social media focusing on something other than the plunging price of oil. Like the beauty pageant contenders, Canadian brokerages are definitely dressing up their offers to score big points with DIY investors.

In this week’s roundup we continue to track January’s storm of deals & promotions, shine a spotlight on the first discount brokerage award of 2015, highlight a newcomer into the investor education space, walk through the investor education events coming up and close out with some timely conversations from the investor forums.

Deals-ja-vu

The race towards the March 2 RSP contribution deadline continues to draw Canadian discount brokerages into an already overcrowded deals game. This past week a typically quiet deal provider, HSBC InvestDirect, jumped into the promotions pool by offering up a commission-free trading offer. While the offer has been officially listed as live since the beginning of the year, it appeared only recently on their website. The timing of the launch was perhaps intended to coincide with the launch of Dalbar Canada’s Direct Brokerage Service Award (see below).

Another promotion also hit the deals wire this past week, this time from BMO InvestorLine. Their previous ‘smile promotion’ campaign ended on January 18th and was promptly replaced by an RSP focused offer of $300 cash back. Check our deals & promotions page for more details on the current open offers from Canadian brokerages.

That’s we in the Spotlight

Dalbar Canada’s 2014 assessment of the service quality at Canadian brokerages was announced this week as part of their Direct Brokerage Service Award. The two online brokerages that received top honours were HSBC InvestDirect and RBC Direct Investing. Dalbar has made a transition away from naming exclusive winners of the award, instead using the “Winner’s Circle” approach in which multiple brokerages can get recognition for their performance on Dalbar’s assessment.

Interestingly the announcement of the award was made on Wednesday and we’ve yet to see mention on either of the two ‘award’ winners’ website. A further point of interest is that both winners this year were also winners last year. Although both RBC Direct Investing and HSBC InvestDirect have claimed top honours in years past, it is unclear how having to share the accolade will shape their messaging around winning the award this year.   For more information on the Dalbar Direct Brokerage Service Award, check out our feature piece here.

Virtual Brokers Stepping into Education

Keeping up with the Jones’ is no easy feat, especially when those Jones’ are other Canadian online brokerages. As mentioned in our special year-in-review series, one of the big focal points for 2015 mentioned by Canadian brokerages was investor education.  Currently six online brokerages are actively providing (or have partnerships in place to provide) investor education. This past week, however, we learned that Virtual Brokers will be joining in the provision of investor education.

As Virtual Brokers works to keep pace with the value-add features provided by other banks and brokerages, one of the areas they’ve lagged has been in investor education. In an interesting move, Virtual Brokers has teamed up with personal finance author Gail Bebee to hold a two-part webinar on investing and portfolio management.

Event Horizon

A light week of educational activities is in the offering.

Jan. 24 (Sat) TD Direct Investing – Introduction to Investing

Jan. 26 (Mon) TD Direct Investing – Market Outlook – Winter 2015

Jan. 27 (Tues) TD Direct Investing – Introduction to Fundamental Analysis

Jan. 28 (Wed) Virtual Brokers – Investing Basics

From the Forums

It’s a Hard Knock Life

Asking lots of questions and doing due diligence before taking on DIY investing is key – as is frequently checking in on your account. This post from the Reddit Personal Finance Canada subreddit highlights one individuals unfortunate ‘surprise’ at having a margin balance.

That’s a wrap for this week’s roundup. Regardless of how far under ice or water certain folks may be (am I right Vancouver?) here’s a neat and strange tale of what can be found even in the most remote of places. Have fun and stay sharp for next week!