Canada's BEST and WORST Online Brokerage Commissions and Fees Experiences

Canada's BEST and WORST Online Brokerage Commissions and Fees Experiences

Desjardins Online Brokerage Provides the Best Overall Investor Commissions and Fees Experience in Canada

At first glance, commission and fees structures at various Online Brokerage firms appear to be straight-forward. There are a handful of firms who now offer, or irrefutably claim to, free commissions for investors. Some of these firms fail to let you know that quotes and market data is limited and may be delayed, and in the case of Wealthsimple Trade, that they do not offer all available stocks and ETFs that all the other firms do. There is no dispute that the $0, or free, trade is real, and it exists, but there is more to an online brokerage relationship. Enter the newest firm to claim free, and of course easy investing for beginners, self-directed brokerage industry giant TD Direct Investing. Its new TD Easy Trade platform does provide an investor with $0 commissions, but with certain caveats including a limit of 50 trades per year and the investing must be done through the application. The advertising message from all these firms is always about what they do for free but the reality, or plain truth is, there is always some kind of catch. Trust us when we tell investors, the last thing DIY, or self-directed online investing is, is EASY. #BewareTheAdvertising

Making heads or tails of the various online brokerage commission structures is not an easy task, and not an exercise to be taken lightly. The marketing messaging is always focused on stocks and ETF commissions and annual fees to maintain an account which, in fairness, is a large part of a DIY self-directed online investing relationship. But what is almost never mentioned is the price, timing, and availability of essential market information including timely quotes. Accurate and timely quotes are essential to effective trading and are not usually available without a cost. The question becomes, Is a $0, or $1 to $2 cheaper, commission worth not receiving a real-time quote, and potentially investing with less knowledge than the investor who paid a few dollars more? We would suggest it is not. #DemandTimelyInformation

Desjardins Online Brokerage entered the $0 commissions game in September 2021 and that bold move has propelled them to the number one position for overall commissions in Canada, edging out its provincial rival National Bank Direct Brokerage. The impressive fact for both the firms is that they truly offer free trades with full access to products, services and most importantly, platforms. TD Direct Investing has moved up in the rankings with its January 2022 launch of EasyTrade but the platform and trade activity limitations keep the overall commissions and fees offering far back of the leaders while Wealthsimple Trade's limiting investments hurts its $0 commission picture.

It's time for investors to read between the lines at the $0 commissions firms and understand that there is always a catch. The difficult task is finding them. For example, try and buy Disney at Wealthsimple Trade. It can be traded at every other broker in Canada yet is not available along with many North American ETFs. How is free looking now?

Glenn LaCoste, President and CEO of Surviscor Group


See the Key Findings

See the Lessons Learned

See How We Navigate the Information

Go to The Bottom Line


BEST and WORST Firms by TRADING PROFILES

It is challenging to produce a commission-based ranking when not all firms offer the same breadth of products and service. Firms tend to focus on either trading activity and/or assets under administration when determining trading commissions and associated fees, with the more active investors receiving the best possible commissions and fee structures. The focus in 2022 is to present the findings through 5 different investor profiles that are based on the number of individual monthly transactions.

What are Trading Profiles?

If one removes knowledge from the equation, trade activity becomes the main variable in distinguishing the difference between an investor and a trader. True traders trade like professionals and are also called day traders. Investors are different animals and come in many shapes and sizes, ranging from beginners, who do not trade a lot but are heavily coveted, to very active investors who are referred to as active traders. Active traders are the key to success for most firms and tend to receive the best service, data, commissions, and fees. To best analyze the spectrum of investors, Surviscor looks at 5 distinct activity-based profiles.


See the Overall 2022 Commission & Fees Firm Rankings



Key Facts

The Online Brokerage Commissions and Fees Review, unlike any other North American review, is a unique and in-depth dive into the ins and outs of commissions and fees paid by Canadian passive to active Investors. Some key facts from the review:

  • Trade and Save - Reduced commission and fees for more trading.
  • There are a good number of trading levels offered throughout the industry for an investor to be able to carve-out an ideal customized experience.
  • Data fees can be avoided if an investor is smart.
  • Lack of transparency with Foreign Exchange Rates at most firms.
  • ECN fees are real and should always be considered as they could double or triple the stated base fee
  • Complexity of Commission rules at many firms.
  • Firms who offer LESS for reduced commissions.
  • TD DIRECT INVESTING for not participating in the study and for marketing that Investing is Easy.
  • BMO INVESTORLINE for not participating in the study.
  • WEALTHSIMPLE TRADE's lack of transparency.
  • CG DIRECT minimum account sizes is archaic.

Lessons Learned

Trade for Lower Commissions - Bring Assets for Better Service and Fees

Bank-owned firms love to make customers feel special with household assets incentives, including reduced commissions but mainly special programs with more features and dedicated service. The truth is monthly trade levels continue to be the main variable for reduced commissions and in most cases, come with improved market data, interest rates and foreign exchange rates. #TradeTradeTrade

Test Drive or Simulate Activity for Optimal Commission and Fees Structures

It is hard to cover every possible trade scenario and benchmark them across all firms with each firm incorporating slight variations into their pricing schemes to 'one-up' or differentiate but they really should be studied for the pure impact on an investor. We do our best to cover every aspect of an investor experience coupled with every permutation and combination each firm tries to throw at an investor, but the real test is for an investor to simulate real transactions using different commission structures to find the one that is best suited for them. #TestForSuccess

Know what is Given Up for $0 Commissions

In many cases, firms have lowered base commissions by 5 cents to differentiate from another firm and/or to market the lowest commission. These marketing gimmicks have no real impact if the 5 cents savings means less availability of product, tools, and resources to help a DIY investment decision or better yet, there is the $0 stock and ETF trading firms that do not allow an investor to gain access to all available securities, like Disney and only selected ETFs in the case of WEALTHSIMPLE TRADE. #UnderstandFree

Market Data is Crucial to investing - Know your Quote and its Timing

Timing is crucial when it comes to investment decisions and the type of quote an investor receives should not be taken lightly. No matter where an investor goes on the internet, they can find a free quote for almost any stock on the planet, but the question becomes, how valid is the quote and its relevance to an immediate stock or ETF purchase. Was it a snap quote of the last trade? Was it a delayed quote, and if so, can the screen be refreshed for the most recent price on the order screens? Are order lineups available to make a more informed decision? Market data is always worth the cost of acquiring pure knowledge but in today's world, it may be better from a third-party source then the brokerage firm. #MakeInformedDecisions


2022 Commissions & Fees Experience Rankings

Fees Experience RankOnline Brokerage FirmExperience ScoreRead Company Review
1Desjardins Online Brokerage98 %View Company Review
2National Bank Direct Brokerage96 %View Company Review
3TD Direct Investing83 %View Company Review
4Wealthsimple Trade76 %View Company Review
5HSBC InvestDirect54 %View Company Review
5CIBC Investor's Edge54 %View Company Review
7CI Direct Trading47 %View Company Review
8Qtrade Direct Investing43 %View Company Review
9Scotia iTRADE39 %View Company Review
9RBC Direct Investing39 %View Company Review
9BMO InvestorLine39 %View Company Review
12Questrade37 %View Company Review
13CG Direct33 %View Company Review
14Interactive Brokers Canada20 %View Company Review
15Laurentian Bank Discount Brokerage17 %View Company Review


Navigating the Maze of Information to Expose the Real Stories

In a tightly contested discount brokerage environment, the smallest differentiation can prove to be the reason for an investor to choose a firm. Our goal is to go Between the Lines and provide guidance at each level of the marketing campaigns and shed light on the merits and truths within each firm. For example, a firm markets 1 cent per share with a minimum commission of $5. Sounds great, but that really means that a transaction for 500 shares costs $5 so the advantage is really for a tight window of 500 and 700 shares and becomes more expensive north of 700 shares. #DoTheMath

The Categories and The Process

The Commission and Fees categories explore various trades by instruments and account fees associated with the typical DIY investing experience, focusing on 5 different and unique profiles for each transaction type and account-related fee. The categories are:

STOCK COMMISSIONS

The category explores over 12,600 equity orders, including over 6300 CDN and 6300 US buy and sell orders, at various price and volume levels. ECN fees are applied where applicable.

OPTIONS COMMISSIONS

The sub-category audits 340 option orders, including 170 CDN and 170 US buy and sell orders, at various price and contract levels.

ETF COMMISSIONS

The category explores over 350 ETF orders, including over 175 CDN and 175 US buy and sell orders, assuming 700 shares per order.

MARKET DATA COSTS

The category explores the various market data fees that are charged by firms to provide enhanced market data like real-time quotes, streaming quotes, trading dashboards and enhanced research and tools.

ACCOUNT INTEREST

The category audits both non-registered and registered accounts to gauge both debit and credit interest on $Canadian and $US accounts.

ACCOUNT FEES

The category explores the various account fees including inactivity fees, non-registered and registered annual fees, money movements fees, confirmation and statement fees, investigation fees and closure fees.


THE BOTTOM LINE - NO FREE LUNCH

This is not Surviscor's first rodeo. In fact, Surviscor has been analyzing Online Brokerage firms since the 2000's and has been witness to every new, or altered, commission and fees strategy in the industry. If you follow the 15 years of public-facing Surviscor reviews, or the numerous press interviews, one clear message to investors in always that there is No FREE Lunch in Life, a saying that is more relevant today than ever before. #NoFreeLunchInLife


The Surviscor DISCLAIMER

Surviscor takes the ultimate pride in being tough markers and having zero bias in calling-out any firm for both good, and poor, experiences. Identifying firms that offer best-of-breed, industry-leading products, and services to deserving customers is the mandate. Canadians work hard for their money and having a great Online Brokerage trading partner is not a privilege. Online Brokerage firms do very well by Canadian consumers and should be held accountable to the highest standards of customer experience and cost of services. Do not forget that the consumer holds the cards, not the self-directed brokerage firm. There are many firms, big and small, to choose from. Just be careful of the mixed messages you receieve. Firms love to strategically omit key information to attract potential investors. #FindTheRightFirm


Learn More about other Surviscor Online Brokerage Experiences:

Customer Service Level Experiences: 2022 Online Brokerage Service Level Experience Rankings

Online Brokerage Experiences: 2021 Online Brokerage Experiences Rankings

Mobile Brokerage Experiences: 2021 Mobile Brokerage Experiences Rankings