8/18/2019 Qtrade clobbers the competition

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B12 Report on Business The Globe and Mail, Tuesday, Nov. 3, 2009

ONLINE BROKERAGE RANKINGS

Qtrade clobbers the big boysIndependent Qtrade retains the crown for the fourth consecutive year,showing Bay Street that the little out t from out west can be the best

T he one sure- re, no-doubtbull market out there rightnow is the online broker -age business.

Stocks and bonds - whoknows if they’re headed up ordown? With online brokers, theboom in new account openingsthat began as the stock marketscrashed last fall has kept righton going. An informal canvas of

a few rms found that accountopenings are up in the rangeof 19 to 26 per cent year overyear, and that’s not including theimpact of the tax-free savingsaccounts introduced on Jan. 1.One rm said visits to its publicwebsite are up 53 per cent overlast year’s level, while onlinetour traf c is up 40 per cent.

People open online broker -

age accounts for lots of reasons,including lower fees, a widechoice of investments, and dis -satisfaction with an investmentadviser.

What all newcomers to onlineinvesting have in common is aneed for the kind of guidancethey’ll nd in Globe Investor’sOnline Broker Ranking.

A dozen rms were evaluated

for this 11th annual ranking andthe winner for the fourth straightyear is Qtrade Investor, an inde -pendent rm out of Vancouverwith a track record of continuousimprovement. Right behind areCredential Direct, BMO Investor -Line and Scotia iTrade.

As always, this rankingis aimed at the mainstreaminvestor who holds stocks or

exchange-traded funds and mayhave an interest in bonds andmutual funds.

Online brokers will taketrades over the telephone, butthe focus here is strictly ononline services because they of -fer the lowest commissions andbest range of tools for choosinginvestments and nancial plan -ning.

ROB CARRICKrcarrick@globeandmail.com

1 QTRADE INVESTORqtrade.ca/investor

OWNERSHIP : Privately heldCOMMENTS : The little inde -pendent from out west beatsthe big boys of Bay Street yetagain. The story here is thatQtrade is relentless in scopingout the best innovations of itscompetitors and nimbly adopt -ing them. With Qtrade, clientsmake the fewest compromisesin terms of their overall onlineinvesting experience. Recently,the rm has added more re -search on stocks and startedallowing U.S. dollars to beheld in registered accounts soclients can avoid expensiveforeign exchange fees. Qtradedoes get demerits for, in some

cases, charging electronic com -munications network (ECN)fees in addition to posted com -missions.

4 SCOTIA ITRADEScotiaitrade.comOWNER : Bank of Nova ScotiaCOMMENTS : Kudos to Bankof Nova Scotia for keeping al -most all the attributes of the oldE*Trade Canada service intact,including cheap fees that are

available to a wide swath of cli -ents and not just large accounts.Scotia iTrade is light on stuff fornewcomers to online investingand it could really use somedecent portfolio planning toolsand proper reporting of clientinvestment returns. But overallit’s a sharp service for savvierinvestors who know what theywant. Note: Scotiabank plansto combine the moribund Sco -tiaMcLeod Direct Investing withScotia iTrade and there’s a de -gree of uncertainty about howthe changes ahead will unfold.

7 DISNAT (CLASSIC)disnat.comOWNER : Groupe DesjardinsCOMMENTS : A long time ago,Disnat was one of the rst dis -count rms to challenge thehigh commission hegemonyof full-service brokers. It lan -guished for a while under theownership of Groupe Desjar -dins, but the people in chargenow have made steady im -provements to the point whereDisnat now has all the basicscovered and has even triedsomething innovative through

its Disnat GPS (guided portfo -lio strategies) feature. DisnatGPS offers real-time tracking ofa model portfolio maintained bya Desjardins Securities analyst,and it’s a noteworthy exampleof how online brokers can helpget rookie investors up and run -ning.

2CREDENTIAL DIRECTcredentialdirect.com

OWNER : The credit unionsystemCOMMENTS : If only otherbrokers were as open to thehelpful suggestions containedin these annual rankings. Lastyear, a dearth of useful stockresearch was identi ed as aweakness in Credential’s gener -ally very ne all-around service.This year, the rm has addeda useful library of reports fromthe independent analysis rmMorningstar. Cost-wise, Cre -dential isn’t the cheapest rmwhen it comes to trading stocks,but it’s hereby nominated as thebroker least likely to exasperateand impoverish you with sneaky

fees, commissions and such.

5 RBC DIRECT INVESTINGrbcdirectinvesting.comOWNER : Royal Bank ofCanadaCOMMENTS : What’s this? Abank-owned broker among thecost leaders in this ranking? Be -lieve it. RBCDI is pretty standard

on stocks - $28.95 if you have asmall account, $9.95 at if youhave at least $100,000 or tradeactively - but excels on mutualfunds. Pretty much all funds canbe bought commission free, andthere’s a low-fee D-series ofRBC’s own in-house funds forpeople with at least $10,000 toinvest. RBC also has a strongcollection of research tools, andit has video tutorials located in

just the right spot on its tradingscreen. RBC’s homework fornext year: provide something topnotch to show clients how theiraccounts are performing.

8 NATIONAL BANKDIRECT BROKERAGEnbdb.caOWNER : National Bank ofCanadaCOMMENTS : Look, if you’vegot a relationship with NationalBank and you want to keepyour investments with them aswell, then NBDB should workout just ne. If you’re lookingfor the best possible broker foryour needs, there are others toconsider rst. Update from lastyear: having $100,000 in assetsgets you $9.95 stock trades.NBDB also has personalized re -porting of client rates of return.Why don’t all brokers?

3BMO INVESTORLINEbmoinvestorline.com

OWNERSHIP : Bank of Mon-

trealCOMMENTS : This is a rmthat really seems to understandwhat the masses of new inves -tors coming to online brokersneed. There’s a “getting start -ed” corner, a “guided investing”corner and, well, you get theidea. Through its MyLink fea -ture, InvestorLine also does thebest job of helping clients keeptrack of what’s going on in theiraccounts. The drawback withthis rm might be described asa bank mentality that manifestsitself through annoyances likea $50-per-year fee on tax-freesavings accounts (unless you

have at least $100,000 in totalwith the rm), as well as fees tobuy and sell some mutual fundsand an unwillingness to shareBMO Capital Markets stockresearch with those who aren’ttheir bigshot clients.

6TD WATERHOUSEtdwaterhouse.caOWNER : Toronto-DominionBankCOMMENTS : All hail the onlineinvesting world’s most serenemajesty. TD is dominant in itsmarket share, con dent in itsstature and seemingly un -troubled by the innovations ofits competitors. The rm’s newMarkets & Research centresuggests TD isn’t oblivious,though. While other rms scat -ter their market and investmentresearch around, TD focusesit like a laser in one well-organized location. Next orderof business: improve websitenavigation. Useful features aretoo hard to nd.

12HSBC INVESTDIRECTinvestdirect.hsbc.caOWNER : HSBC GroupCOMMENTS : You’re keen totrade stocks online on the HongKong, London, Paris and Frank -furt stock markets? Then Invest -Direct is your broker. Nothingelse at this rm stands out.

Breaking down the brokers

Rank

1

2

3

4

5

67

8

9

10

11

12

Broker

Qtrade Investor

Credential Direct

BMO InvestorLine

Scotia iTrade

RBC Direct Investing

TD Waterhouse

Disnat (Classic)

National Bank Direct Investing

CIBC Investor’s Edge

Questrade

ScotiaMcLeod Direct Investing

HSBC InvestDirect

Costs(/25)

16.0

19.5

15.5

21.0

18.5

14.5

16.0

12.0

15.5

20.0

11.5

16.0

Trading(/25)

21.0

16.5

15.5

17.0

14.0

14.5

13.0

12.0

13.0

11.5

14.5

15.0

Tools(/20)

14.0

12.0

16.0

12.0

18.0

18.5

15.0

13.0

11.0

8.5

14.0

9.5

CustomerSatisfaction

(/15)

11.90

12.34

12.08

12.14

12.34

12.00

12.06

12.17

11.27

12.61

11.62

10.67

AccountInfo.(/10)

10.0

10.0

10.0

5.0

4.5

8.0

7.0

8.5

5.0

4.0

5.0

2.0

Website(/5)

4.5

4.5

5.0

4.5

3.5

2.5

3.0

5.0

4.5

2.0

2.0

3.0

Last Year’sScore

84.1

70.6

76.5

74*

70.3

73.8

62.9

59.4

68.2

56.8

60.1

57.4

*this score applied to E*Trade Canada, which was acquired by Bank of Nova Scotia

THE RANKING CRITERIATRADING

How quickly and cleanlycan clients place orders forstocks, as well as bonds andfunds?

TOOLS

The resources a broker offersto help clients choose invest -ments and develop an overallplan. There’s an emphasisthis year on helping themany newcomers to onlineinvesting.

ACCOUNT INFORMATION

Grades a broker’s ability to al -low clients to see how their ac -counts are doing and performbasic account maintenance.

CUSTOMER SATISFACTION

Consulting rm Phase 5contributed this portion of theranking through the results of asurvey of 1,380 online inves -tors conducted in September.Scores are based on answersto six questions related to howhappy clients were with theirbroker and whether they wouldrecommend it to others.

WEBSITE

Security and website utilityare the focus here. It’s a giventhat all brokers in this rankingare members of the Cana -dian Investor Protection fund,which protects client assets incase a rm goes bankrupt foramounts up to $1-million.

COSTS

Account fees and mutualfunds are considered, butstock-trading commissions getthe most focus.

9 CIBC INVESTOR’S EDGEinvestorsedge.cibc.comOWNER : Canadian ImperialBank of CommerceCOMMENTS : Eleven years ofproducing this ranking havemade it possible to identify

rms that care about providinga great online investing expe -rience and those that strive foradequacy. Investor’s Edge isin the latter group. There areno gaping holes in its service,

just an overall sense that thebases are being covered andnothing more. Best feature:access to CIBC World Marketsreports. Quirky feature: pre-pay your trades at $395 peryear for 50 trades, or $7.90each.

10QUESTRADEquestrade.comOWNER : Privately heldCOMMENTS : There’s someinvestor buzz over Questradebecause of a $4.95 minimumstock trading commission thatapplies regardless of your ac -count size. What people wantto know is, what’s Questradelike aside from the low fees?For mainstream investors, re -search and planning tools arescarce to non-existent, and theweb trading platform seems alittle less comfortable than atsome of the larger rms. Are thecheap trades still a value in thislight? Yes, they are. Note: ECNfees may add to your cost.

11 SCOTIAMCLEODDIRECT INVESTINGscotiamcleoddirect.comOWNER : Bank of Nova ScotiaCOMMENTS : There are tworeasons not to open an accountat SMDI, the rst being that it’stotally lame. A hopeless web -site and expensive stock-trad -ing commissions top the list ofcomplaints. A second reason tosteer clear is that SMDI is goingto be combined with the muchbetter Scotia iTrade in the yearahead. Hasta la vista, baby.

Total(/100)

77.4

74.8

74.1

71.6

70.8

70.0

66.1

62.7

60.3

58.6

58.6

56.2

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