From real war to trade war, what are either good for? Attention apparently. As provinces and countries trade barbs, online brokerages battling one another have turned to toasting rather than roasting.
It was a very full week for Canada’s discount brokerages so there’s lots to get to in this week’s roundup. First, we dive in with a look at the response to the Globe and Mail online brokerage rankings and how Canada’s online brokers have cleverly found ways to shine a light on their perceived strengths. From there we’ll take a quick look at several important developments that took place this week, including the celebration of International Women’s Day and the possible ramp up to online account openings at one of Canada’s largest online brokers. Also on deck this week is an interview we spotted with an online brokerage CEO. As usual we’ll round out the week with a look at DIY investor tweets as well as comments from the investor forums.
Rank & File
One of the greatest boxers of all times, Muhammad Ali, said ‘it ain’t bragging if you can back it up’. While Ali was certainly no stranger to clever marketing, marketing teams at Canadian online brokerages are no light weights either when it comes to trumpeting their achievements.
Following the release of the Globe and Mail’s Canadian online brokerage rankings, several Canadian discount brokerages have ramped up their marketing efforts, highlighting in particular their status as the best Canadian online brokerage. So, how can everyone be Canada’s best online brokerage?
The short answer is that there are enough different measurements of online brokerages that savvy marketing teams can cherry pick which specific category strength best suits their objectives. Below is a compilation of the online brokerage websites and some display ads that we reviewed this week that had some element of claiming to be ‘the best’ online brokerage in Canada.
|Discount Brokerage||Website||Source of Ranking|
|BMO InvestorLine||2017 Best Mobile Customer Experience||Surviscor, Nov. 2017|
|CIBC Investor’s Edge||MoneySense ranks us #1 in Fees and Commissions||Moneysense (powered by Surviscor), Jun. 2017|
|Desjardins Online Brokerage||“Highest in investor satisfaction with self-directed brokerage firms” in Canada according to J.D. Power||J.D. Power & Associates, Sep. 2017|
|National Bank Direct Brokerage||A study conducted by Surviscor has concluded that we offer the most competitive pricing among direct brokerage firms||Surviscor (date not specified)|
|Qtrade Investor||The Globe and Mail’s best online broker in Canada 2018||Globe and Mail, Feb. 2018|
|Questrade||Canada’s leading non-bank online brokerage||Not specified|
|Scotia iTRADE||Top Bank-Owned Firm|
19th annual review of Canada’s online brokerages by Rob Carrick of The Globe and Mail
|Globe and Mail, Feb. 2018|
|Virtual Brokers||Virtual Brokers takes the #1 spot again in the 18th Annual Globe and Mail Online Brokerage Ranking of 2016||Globe and Mail, Dec. 2016|
As readers will note from the table above, there are at least 8 online brokerages who are making the claim to be the best in some fashion, which brings us back to a topic that we’ve covered extensively at SparxTrading.com – how does one really define what makes an online brokerage the best?
On the front end of an online brokerage’s website, however, recognition awards look great. And, while the details of those awards may not be fully explained or revealed, some DIY investors who may quickly glance at the messaging might consider it enough to see that something has been won even if that award might be out of date.
For example, Virtual Brokers’ website still has the material stating that it came in first in the Globe and Mail ratings from 2016, but does not mention the 2017/18 rankings at all. Conversely, Qtrade Investor has the current rankings specified in the titling and even includes a version of the full Globe and Mail article.
Of course, while text can be highly specific, it is even more interesting to compare the ‘best online brokerage’ award communication visually.
Take the example of a very well-designed graphic for Scotia iTRADE which appeared on their website this past week. The artwork simply states “Top Bank-Owned Firm” and the 19th Annual Online Broker Ranking however it actually doesn’t specify the source. So, while it looks official, it is not an actual seal issued by the Globe and Mail the way that Surviscor or J.D. Power might award a seal.
By comparison, the badge used on CIBC Investor’s Edge website for the MoneySense rankings has a very visible #1 Best Online Brokerages but doesn’t specify that it’s for pricing – that comes later in the text. Interestingly, because CIBC Investor’s Edge and Questrade were both tied for the ‘best pricing’ recognition, Questrade could verbatim claim the same thing.
For DIY investors the takeaway remains: it is important to understand how the results of online brokerage rankings are measured and what they are actually measuring. Clearly, online brokerages are keen on showcasing results and recognition when they do well – and for some brokerages this might be easier to do than others. Nonetheless consumers need to be mindful of looking at the online brokerage provider’s marketing language closely. Ultimately, brands that make bold promises set expectations high and, as a result, they have to back up the hype with follow through.
Financial Firms Celebrate International Women’s Day
This week, International Women’s Day was recognized the world over and a much-needed spotlight was shone on the progress achieved for equality and challenges that still lie ahead. Encouragingly, recognition and participation in this event continues to grow.
To mark the occasion many Canadian financial service firms put together customized content that spoke to the experiences of women in business as well as delivered perspectives on investing. A couple of noteworthy pieces came from BMO as well as from RBC.
BMO had a few items in place for International Women’s Day. Earlier in the week, BMO Wealth Management along with media personality Lena Almeida (@Listen2Lena) teamed up once again for another Twitter session on investing. This session was specifically geared towards highlighting issues and perspectives related to women and investing. As with the sessions previous, this was a very informative and insightful hour-long session that enabled lots of discussion (and featured lots of gifs) on some very interesting questions. We’ve pulled the questions and answers for those who missed it.
In another piece by BMO, which was shared via Twitter, Joanna Rotenberg, Group Head of Wealth Management shared her perspectives on International Women’s Day and where the challenges and opportunities exist for women in a professional setting.
— BMO Harris Bank (@BMOHarrisBank) March 8, 2018
As part of their Inspired Investor content series, RBC Direct Investing also compiled a very interesting collection of perspectives on investing by women investors.
Having women share their own experiences and impressions of investing first-hand provides a powerful and hopefully engaging way in which to make investing – and DIY investing – more accessible to women.
Interview with Questrade’s CEO
This past week, CEO of Questrade appeared on a podcast by Kornel Szrejber of BuildWealthCanada.ca to discuss the world of investing online and where Questrade fits into the Canadian landscape of investment service providers. It was an interesting interview with a broad range of topics covered, however of particular interest to DIY investing followers, was Kholodenko’s perspectives on the competitiveness of the Canadian discount brokerage market. At about the 13-minute mark, he provides his view that competition between Canadian online brokerages is incredibly fierce and that all firms, including Questrade, will be continuously tested to deliver great trading experiences.
TD Direct Investing Rolls Out Online Account Opening
It looks like news of the online account opening feature at TD Direct Investing is starting to percolate. After a bumpy start to 2018, TD Direct Investing appears to be prepping for a larger spotlight to be cast on its online account opening feature.
This week we spotted an article on the TD newsroom site that linked to a sponsored post from a personal finance blogger, David Carlson, who caters specifically to millennials on primarily US-focused content. Carlson’s article provided a walk-through of the account opening process and highlighted some of the noteworthy features, the most important one being the speed with which signups for a TD Direct Investing account can now happen online.
Stay tuned on this story as online account opening will no doubt be an important feature for 2018 that will be the focus of several online brokerages who do not already have this in place yet.
Discount Brokerage Tweets of the Week
Tweets from DIY investors were an interesting mix of technical and user issues as well as a handful of compliments. Mentioned this week were BMO InvestorLine, Questrade, RBC Direct Investing, Scotia iTRADE and TD Direct Investing.
From the Forums
Off to a Balanced Start
Passive investing is very popular with many Canadian investors. It is also a major selling point for robo-advisors. This post, from reddit’s Canadian Investor thread highlights a possible threat to robo-advisors and opportunity for online brokerages who can deliver a ‘robo’ like performance to clients without having them switch.
On the Record
Now that tax time is here, there inevitably questions about when forms and documentation arrive. This interesting post from one online investor highlights the timing that TFSA contributions may take to show up in the CRA’s system. As a result, it is a good reminder that part of the reality of online investing entails keeping organized records.
Into the Close
That’s a wrap on another week. Somehow it seems like sanity is going to prevail, with the pharma-bro getting his comeuppance, diplomacy resurfacing and the Cleveland Browns getting a capable quarter back. Of course, things are still stormy in the weather, the White House and between Alberta and BC so there’s still no shortage of drama to tune into this weekend – just a shortage of an hour. Wherever you happen to find yourself, have a great weekend and don’t forget to “spring forward”!