Q4 2006 - Online Discount Brokerage ReviewThe Q406 Online Discount Brokerage Review indicated minor shifts in the top positions in each profile with the traditional progressive firms, like E*Trade and BMO InvestorLine, moving closer to the top tier and the non-progressive firms, like CIBC Investor’s Edge, remaining at the bottom. Surviscor analysts were disappointed with the level of email responsiveness by some firms (see CER results) and the level of education and tools offered by some of the firms. Information, service and decision tools are the essence of online business and should not be ignored.
There have been minimal functional changes by firms in the past six months, as the firms focused on pricing challenges for their more profitable clients. Some of the price war changes were reactionary others were leading edge. The average active online customer is paying 40% less for a similar basket of trades and services than six months ago. Online features, functionalities and service will once again dominate as differentiators in 2007. The reason is that price quickly became a differentiator with E*Trade’s moves and quickly became a non-differentiator as everyone adjusted and reacted. The key is that price is one variable of an online experience. The online users will find out that some firms have great pricing but an inferior online offering the cost effectiveness of the valuable time they spend online.
In the Investor profile, Credential Direct earned four category number one awards, Scotia McLeod Direct Investing earned two and TradeFreedom earned one. Honourable mention goes out to Qtrade who earned four top three category finishes, BMO InvestorLine who earned three and E*Trade Canada who earned two.
In the Trader profile, TD Waterhouse earned three number one category awards, E*Trade earned two, with Questrade and Credential Direct earning one each. Honourable mention goes out to E*Trade and Disnat who both earned five top three category finishes and Qtrade who earned two.
RESULTS:
CRITERIA/CATEGORIES
The Criteria:
Surviscor reviews all Canadian discount brokerage firms including bank-owned and independent firms. Traditional day trading firms are included providing they meet the minimum requirements for inclusion. The Firms are evaluated for the online features and functionality they posses.
The minimum requirements are:
- Transactional capabilities in Canadian and US markets
- Physical location in Canada with minimum registration requirement of 5 provinces
- Ability to establish a registered account
- Minimum account opening balance requirement no greater than $10,000 CDN
| The Main Categories: |
| 1. | Getting Started
The Getting Started category analyses a firm's public domain including its account documentation and application process. |
| 2. | Design and Help Features
The The Design and Help Features category analyses site's ease of use through customization and intergration features and explores the intuitiveness of the site's ability to help a user through all the processes. |
| 3. | Customer Interaction
The Customer Interaction category analyses the various channels and/or formats by which the firm and client are able to communicate. |
| 4. | Market Intelligence
The Market Intelligence category analyses the firm's technical robustness including stock/option/mutual fund quotes; the filtering of watchlists; and the performing of fundamental and technical analysis. |
| 5. | Trading
The Trading category analyses the robustness of the firm's trading technology - ranging from order execution to account management. |
| 6. | Tools and Education
The Tools and Education category analyses the the firm's screening, alerting and selection tools as well as the firm's ability to aid or educate the user through proprietary and/or third party tools. |
| 7. | Commission and Fees
The Commissions and Fees category analyses both the firm's commission structure specific to equity, options, mutual funds, and exchange traded funds as well as it's account fee structure. |
Next Analysis: Q2 2007