Because online brokerages cut out the middleman, the trading fees don’t have to account for a professional’s commission, so you pocket the difference. For example, this year we’ve seen a further reduction in fees and an increase in supporting tools to make self-directed investing easier.
The scoring methodology and the depth of the analysis makes the review the most comprehensive and investor-relevant study in Canada. We left out Interactive Brokers because it is not designed for an average investor, and it simply has not fully Canadianized its offering; Can accord Tenuity Direct (formerly Jitney Trade) as we need more time to assess its post-rebranding services as the past brand was not doing business for most of 2019; and Wealth simple Trade, which has been wrongly labelled by many as an online brokerage firm as it only offers a mobile application with limited functionality, resources, account types, product, market information and services expected of a Canadian discount brokerage firm.
No doubt, $0 commissions are attractive, but we do not see why a novice investor would even consider the platform as the cost savings of dollars per trade, in our opinion, is not worth the lack of guidance, education and market depth, to name a few, required by a novice or average DIY investor. Our goal is to provide you with the facts to help you make an informed choice of a potential discount brokerage.
If you already use an online broker and have noticed a change in the relationship or longer wait times for service, don’t feel sorry for them. 1 overall pick in 2018 and runner-up in 2019, Trade Investor has reclaimed the top spot this year with a score of 25 points.
Unfortunately, those advertised fees don’t always tell the whole story, since they might exclude additional charges that can occur when trading. For example, many low-cost firms charge an ECN (Electronic Communication Network) commission fee of $5 to $40 per 100-share trade.
Then there are platform fees for enhanced quote data, which can run investors an extra $30 per month. To get a clearer picture on fees, we analyzed more than 13,000 individual trades using 10 different investor profiles.
Even if you’re a conservative or passive investor, paying a few extra dollars (or pennies, as the case may be) per trade is worth it the service includes access to free tools and resources such as unlimited quotes and depth of data. Even at $10, an average trade of 500 shares of a bank stock could be hundreds of dollars cheaper than with a full-service advisor, so weighing your “extras” is the key.
National Bank also offers competitive equity commissions, interest rates and account fees, but it is less economical for options traders. User experience, also referred to as UX, covers a broad range of factors that influence how it feels for investors to use an online brokerage service.
This includes website/app design, customization features, account management, navigation, notifications and placement of trade orders. We’ve found that independent firms, who have more autonomy in building and designing their sites, are typically leaders when it comes to UX.
Bank-owned firms, on the other hand, tend to overlook the fact that paying a bill and placing a trade are very different experiences. Moreover, their newest designs seem to be less intuitive and more directed at driving cross-sales, instead of improving overall account management, trading experiences and educational content for DIY investors.
Despite an older design, Trade Investor is the UX winner given its breadth of data, ease of both locating and using the information, strong trading experiences, easy-to-find usage policies and wonderful account management tools. Ques trade, our runner-up in UX, has an intuitive online platform with industry-leading customization features and functionality, so investors can tailor their experience to their personal preferences.
It’s also a leader for transactional experiences, making it easy for investors to buy and trade equities, ETFs and options. As regulations changed and fees became more transparent, exchange trade funds (ETFs) became the security of choice.
On the flip side, runner-up National Bank Direct Brokerage is more competitive than Trade with its free offerings: no-commission buying and selling of all North American ETFs (with minor trading restrictions, including a minimum amount of 100 shares, placing non-phone trades and subscribing to electronic statements). The drawbacks, again in direct contrast to Trade, are its research tools and general trading experience.
When an investor decides it's time to buy or sell a security, its price determines the trade contract. Our evaluation considers the overall experience of obtaining relevant market information, which includes the depth of a quote, general market information, analyst views, supporting charts, industry research as well as both fundamental and technical analysis.
Today, an investor can expect superior depth of information for quotes, charting and technical analysis, research, and industry-leading market notifications or alerting. Our market data runner-up, Trade Investor, provides exceptional quote depth and fundamental stock information along with strong interactive charting, technical analysis, and equity research.
With the current sophistication of mobile devices, investors expect to have the same experience on their phones as they would on a desktop or laptop. The days of satisfying mobile users with access to quotes, basic account information and trades are over.
Some progressive online brokers do have a near-full account experience via mobile, offering all the same tools and analysis investors would find on their computers. This platform integration makes the service as robust on a smartphone as it is on a desktop, providing the transactional, account and market data tools and experiences that are missing from most firms’ mobile offerings.
We look for informative public sites that fully explain: what an investor can expect if they become a customer, whether they provide free insight into the markets, what the fees are for various trading level and, most importantly, how the process for opening new accounts works. Potential clients who visit Ques trade’s site will walk away with a full understanding of the service’s promised experience, making it our category winner.
In most cases, online investors are not looking for face-to-face interaction, but rather quick responses regarding both general and secure service questions. It has shown its commitment to clients with a consistent track record of responsive service (typically under four hours) even through the COVID-19 crisis to date.
In addition, Ques trade offers live chat and correspondence via social media for investors who prefer those channels. Runner-up Trade Investor nearly tied with Ques trade for the category’s top spot; both firms are clear and undisputed leaders for customer service in the discount brokerage industry.
Survivor representatives completed a features and functionality questionnaire of nearly 4,000 questions for each firm in the survey, while performing hundreds of typical investor tasks on each individual online platform. Canadian citizens looking to invest online in the stock market have a variety of options.
Online brokers come in different flavors, from deep discount to full service, while others are known for their trading tools or research. When it comes to investing in Canada, the Toronto Stock Exchange (TSX) is most often cited because it is the 12th largest in the world, with nearly $2.25 trillion in total assets, according to Wikipedia.
Whereas Ques trade has the upper hand with its trading platform, Trade provides a more robust stock research center and portfolio analysis tools. While Interactive Brokers is not suitable for casual investors, it leads the industry in international trading and the low-cost commissions professional traders prefer.
As the most expensive broker in our review, TD DirectInvesting offers investors a diverse set of trading tools and research through its Broker and Advanced Dashboard platforms. The broker is noteworthy for its transparent account fees and low trading costs across the board.
Are you opening a taxable account or a Registered Retirement Savings Plan (RESP) ? If you are starting with a regular account, as many investors do, then at least take the time to explore the broker’s RESP offering.
However, if you want to trade complex options, forex, or futures, you will need to do your research ahead of time. For active traders, read the fine print to compare potential service benefits.
Others will grant access to better research tools or offer dedicated customer support. When contacting a brokerage for account -related inquiries, all investors look for fast connection times and helpful representatives to assist them.
For a quick gauge, once you narrow down your selections to two, call both brokerages on the phone and ask them both several questions. Tip, call shortly after the stock market opens if you can, which is traditionally when support is busiest.
Many Canadian banks offer customers the ability to buy and sell shares of stock. However, the costs to trade are almost always more expensive than using a standalone discount online broker such as Ques trade or Trade.
In addition, standalone brokerages offer more comprehensive research and better trading tools. Ques trade is available to all residents of Canada, and charges equity traders $.01 per share, with a $4.95 minimum and $9.95 maximum per trade.