The BEST and WORST Canadian Online Brokerage Commissions and Fees Experiences

Desjardins Online Brokerage Provides the Best Online Self-Directed Brokerage Commissions and Fees Experience in Canada

For the second straight year, Desjardins Online Brokerage is our choice for the best overall online brokerage firm when it comes an overall investor commission and fees experience and its Quebec-based rival, National Bank Direct Brokerage, is once again a close second. The reality is if you are looking for low-cost with extras, you can't go wrong with either firm. Making heads or tails of the various online brokerage commission structures is not an easy task. The marketing messaging tend to focus on stocks and ETF commission but what is almost never mentioned are the key components to a self-directed online brokerage that investors must give up to receive the lowest advertised prices.

Our challenge in providing good advice to self-directed investors is to ensure investors see through the advertising noise and understand the real commission and fees experience. The problem can be best explained through the example of the Aurora Borealis phenomena, better known as the Northern Lights, that has been experienced by millions of Canadians in recent weeks. It is like looking up at the sky at midnight and trying to find a planetary star but getting mesmerized by the dancing and colourful northern lights that are providing a spectacular event. Don't let the spectacular event - the fancy advertisements - dismiss the fact that the planet - the real commission - is as clear as day on a clear night with no dancing lights.

Review Headlines

DESJARDINS ONLINE BROKERAGE is #1 Overall

Desjardins Online Brokerage provides investors with ultra-competitive commissions including $0 unrestricted stocks and ETF commissions and a competitive options pricing for all levels of investors. The drawbacks at DOB are high market data cost for the average investor and below-average interest rates.

NATIONAL BANK DIRECT BROKERAGE is a close #2 Overall

National Bank Direct Brokerage also provides investors with ultra-competitive commissions including $0 unrestricted stocks and ETF commissions, competitive options pricing and industry-leading account interest and exchange rates. The drawback at NBDB can be high market data costs for the average investor.

TD EASYTRADE is NOT a $0 Commission Firm

TD Direct Investing has evolved from one of the late 1980's pioneer discount brokerage firms TD GreenLine. To combat a $0 commission rush in Canada, TDDI launched TD EasyTrade, a re-purposed mobile-based platform, to remain competitive instead of offering $0 commissions through its industry-leading TD Direct Investing brand. The reasoning is sound but the pure reality is TD EasyTrade is not a $0 commissions firm despite what the marketing and press coverage may suggest. Sure, offering 50 commission-free trades per year is awesome but limiting those trades to an extremely underwhelming basic platform is the issue. By the way, self-directed is NOT EASY as TD's TV commercials and marketing alludes to.

BMO INVESTORLINE Ranks Last of the Big Banks

BMO InvestorLine ranks #12 overall, last amongst the big bank-owned firms, with high overall stocks, options, and ETF commissions. In lieu of cheaper commissions, BMO InvestorLine awards its profitable and loyal customers with enhanced services and market data.

The Rush to $0 Commissions Appears Over

Never say never, but it appears that the rush to $0 commissions is over and understandably so. The movement started with disruptors in the US that lead to industry-wide changes and then made its way north with Wealthsimple's corporate wealth accumulation strategy. The reality is that these Canadians firms are using a loss leader strategy that involves selling a product or service at a price that is not profitable with the goal to attract new customers or to sell profitable products and services to those customers. Time will tell but there shouldn't be a big rush in 2023.

See the Best and Worst Firms by Investor Profiles

See the Key Lessons

Go to The Bottom Line

2023 Commissions & Fees Experience Rankings

After a busy 2021 and early 2022 of fee alterations and moves to $0 commissions, 2023 is shaping up to be a status-quo commissions environment amongst self-directed online brokerage firms. The few things that are emerging are a resurgence of mutual fund commissions, this time a flat fee instead of the usual $0 fee, and a $0 ETF commission structure at more firms for proprietary firm-based ETFs. Seasoned investors may notice some irony in these recent events as firms have chosen to once again charge for mutual fund transactions while marketing in-house ETF product at $0 to entice investments, a past strategy used to entice investors to invest in firm-produced mutual funds to pad deposits.

Our advice would be for investors to continually source out all available product in the marketplace and transact based on merit and investment growth needs, not solely on commissions. That being said, take a look at the rankings, find your firm, and take some time to seriously question what you may be missing.

In a tightly contested online discount brokerage environment, the smallest differentiation can prove to be the reason for an investor to choose a firm. Our goal is always to go Between the Lines and provide guidance at each level of the marketing campaigns, shedding light on the merits and truths within each firm. For example, a firm that markets a 1 cent per share sounds great but once one considers the minimum commission of $5 it really means that a transaction for between 0 and 500 shares costs $5. It's all perception. The clear advantage is a tight window of 0 to 700 shares and becomes more expensive north of 700 shares.

For more information on the categories reviewed and the depth of review in each category, click Commission Process and Methodology

BEST and WORST by Investor 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 overall standings paint the whole industry with one overall investor profile brush but to get there, the review focuses in on the costs associated through 5 different investor profiles that are based on the number of individual monthly transactions. Home in on your profile to understand the best and worst options.

0 to 4 Monthly Trades

The 0 to 4 monthly trades investor profile represents the first, and very popular, level of self-directed investing. The profile includes newbies and very passive seasoned investors and is determined based on the following commission and fees experiences:

• Stock Commissions
• ETF Commissions
• Account Fees

5 to 9 Monthly Trades

The 5 to 9 monthly trades investor profile represents a very important self-directed investing segment that includes beginners and seasoned investors. The profile is determined based on the following commission and fees experiences:

• Stock Commissions
• Options Commissions
• ETF Commissions
• Account Interest
• Account Fees

10 to 33 Monthly Trades

The 10 to 33 monthly trades investor profile represents the first level of active self-directed investing for seasoned investors. The profile is determined based on the following commission and fees experiences:

• Stock Commissions
• Options Commissions
• ETF Commissions
• Market Data Fees
• Account Interest
• Account Fees

34 to 49 Monthly Trades

The 34 to 49 monthly trades investor profile represents sophisticated self-directed active investors that borderline on day-trading characteristics. The profile is determined based on the following commission and fees experiences:

• Stock Commissions
• Options Commissions
• ETF Commissions
• Market Data Fees
• Account Interest

50-Plus Monthly Trades

The 50-plus monthly trades investor profile is the industry's most profitable segment with pure day-trading characteristics. The profile is determined based on the following commission and fees experiences:

• Stock Commissions
• Options Commissions
• ETF Commissions
• Market Data Fees
• Account Interest

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 designed 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. #TestDriveForSuccess

Key Lessons

The Surviscor 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 lessons to be learned are:

Big Bank-owned Firms Are More Expensive

The bottom line is, If you are a BMO InvestorLine, Scotia iTRADE or RBC Direct Investing customer, you pay more as a self-directed investor. That doesn't mean that these are bad relationships or financial partners, it simply means the numbers don't lie. If you have a plan to start trading consider the difference as a learning fee but if you plan on getting into some serious trading activity, you may want to avoid these firms for your actual transactions.

Play the Easy Game at TD

If you are a seasoned TD Direct Investing customer, you know that you already blessed with superior desktop and mobile platforms for your overall self-directing experience and that the commissions are nothing to write home about. Then, instead of offering main platform commission reductions, or going all out like its US counterpart, TD sent up a smoke-signal that forces you into an inferior mobile platform if you want the commission reductions. Interested in playing the easy game? Our advice is to use the traditional platforms for all your research and account information then simply keep your phone handy and place your first 50 trades a year using the TD EasyTrade mobile app which apparently is very easy with little to offer but trade and watch videos. Once your free trades are in the books, put the app to sleep to save battery life and add a 12-month calendar reminder to remind you of the next free cycle.

Use Multiple Accounts to Carve Out a Cost-effective Experience

Commissions range from $0 to $10 across the industry. Resources, trading screens and account information range from bad to great. The good news is there are little to no yearly account fees across the industry if you throw your firm a small bone here and there, in this case, a trade. The solution is to have accounts at multiple firms and use the more expensive ones for your data and research needs then choose a no-fee brokerage firm to execute trades.

Pay Less - Get Less

Reduced, or $0, commissions come at a cost. The hard task is figuring out where those costs are and can you live with the give-up for the reduced fees. The best, and obvious, Canadian example is Wealthsimple Trade and now perhaps TD EasyTrade can be part of the conversation. The marketing messages emphasize easy as the catch phrase but fail to inform rookie investors that self-directing investing is actually quite difficult, and these platforms only make the hard task more difficult. The bottom line is if you want to pay nothing for a service, in most cases, you will get what you pay for.

Trade and Save

Loyalty arrangements are everywhere, and a major part of most Canadian's lives. The more we spend at coffee shops, on groceries or even travel, the typical arrangement is spend more and save somewhere down the line. Online brokerage commissions and fees are no different. In most cases, more trading leads to better commissions, better data, and even better rates.

Market Data Drives All Investing - Know your Quote

Timing is crucial when it comes to investment decisions and the type of quote an investor receives should not be taken lightly. Investors can always find a free quote for almost any stock on the planet using the internet, but the question becomes, how valid is the quote and its relevance to an immediate stock or ETF purchase? Market data is always worth the cost of acquiring pure knowledge.

FX and ECN Fees - The Elephants in the Room

The fine print is not lost in the online brokerage industry, it is actually in fine form at most brokerage firms. The question becomes, why can't firms be up-front that there could be a significant additional fee in some cases or that FX-foreign exchange fees apply on trades and that buys and sells have a significant rate difference? In the case of ECN fees, they are getting better coverage but are still not obvious at most firms. In terms of FX rates, there continues to be a lack of transparency. In all cases, read the fine print and if you get charged an unknown extra fee, argue the charge, especially is you use mobile platforms where firms do little to help investors with the fine print.

Always remember - You are the Value

Value can be explained in many ways but in the case of online brokerage firms, the self-directed investor is the value, and with 15 firms under review, every investor most likely has better alternatives to consider. Assets under administration, foreign exchange conversions and trading activity are how firms really make money. Know what you have to offer and search for your best deal.

Go to 2023 Commission & Fees Firm Rankings

The Bottom Line - No FREE Lunch

We understand. The message is getting old, and probably tiresome, but we are sticking to our message, especially with the increased presence of online brokerage advertising at levels that haven't been seen in a decade. We have seen all the moves and the smokescreens that typically accompany the message. Online brokers are not lying, they simply aren't telling you everything. You decide.

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 receive. Firms love to strategically omit key information to attract potential investors. #FindTheRightFirm

Explore other Surviscor Online Brokerage Rankings:

Online Brokerage Service Level Experience Rankings

Online Brokerage Desktop Experience Rankings

Mobile Brokerage Experience Rankings