I asked reader Jon if he would be willing to share his thoughts on Scotia Direct, a brokerage with which he is familiar and I am not. Jon wrote back with the following review (Thanks Jon!). You can also check out the reviews of other discount brokers: BMO InvestorLine, Credential Direct, Qtrade, Questrade, RBC Direct and TD Waterhouse.
ScotiaMcLeod Direct Investing (SMDI), the discount brokerage arm of Scotiabank, provides market access to customers through the ScotiaOnline website. SMDI is listed as a account type under the “Investing” tab, similar to an RRSP account or other registered/non-registered accounts.
The main sections on the SMDI website are:
Accounts & Transfers provides history, statements and detailed balances for accounts along with CAD or USD fund transfers.
Quotes & Research is quite extensive if you go beyond the basic window. Initially “baskets” of 10 or less equities can be created to provide real time quotes one basket at a time. Selecting research, charting or alerts brings up the “ScotiaMcleod Research” page, which provides many avenues of research. Charting, screeners, technical alerts, user selected alerts (e-mailed to you on specific items), market reviews, individual stock reports (ScotiaCaptial EDGE reports), FinancialPost research, Morningstar powered mutual fund analysis, fixed-income quotes (orders must be called in) among other options. Lots of options are packed into a small site that can be a bit difficult to navigate. One negative is that since it operates outside the main ScotiaOnline window, it is very easy to be timed out from your session.
To complete any actions, you must return to the Trading section of the main site, which features a simple transaction window for market and limit orders along with order status and fee calculation options. You can also purchase mutual funds in this section. The bloodsucking fee schedule is on par with the big five banks but there are no commissions for mutual fund purchases of their listed funds. It should be noted that market order price of $25.95 does seem a shade lower than most. There is a $100 annual fee for all RRSP accounts under $25k and a $25 annual fee for RESP accounts under $15k. SMDI offered a 2-for-1 rebate during the month of May in the past couple of years to encourage investors to rebalance their portfolio.
The Scotia Investments section is for Scotiabank specific investments such as GICs. The More Features section includes a useful Portfolio modelling tool along with a “Sounding board”, which will send your account information and some responses to a few questions about investment goals to a Scotiabank representative who will provide some guidance for future moves. I’ve never used either tool and cannot comment on them.
SMDI has been my only discount brokerage service, so I cannot compare it with the competition but I can say that as a frugal investor, I’ve avoided using the service due to the fees and focused on my no-fee DRIP holdings. I do plan to use SMDI for my child’s RESP when I get around to opening one (for mutual fund purchases). Of news of late, Scotiabank purchased the privately-held TradeFreedom brokerage and plans to keep it separate including the lower fee schedule. I’m not sure if it’s applicable in the case, but I should disclose I am a BNS shareholder and have family who work for the company.
Bookmark: del.icio.us Digg StumbleUpon
14 responses so far ↓
1 FourPillars // Aug 15, 2007 at 12:05 am
Great review Jon.
Have you considered switching to a cheaper broker since I’m guessing that you think Scotia’s fees are too steep?
Mike
2 Phil S // Aug 15, 2007 at 9:16 am
My previous employer used Scotia McLeod for the Group RSP plan, but we only had access to their mutual funds and it generally wasn’t very flexible (no GICs, no T-bills, no bonds for short term cash - only bond funds). I also found their statements to NOT be very intuitive to read for a first timer. But once you got to understand it the first time, THEN it became easier to understand. When I left my previous employer, I moved all of my funds out of Scotia McLeod and into my own self-directed RSP.
3 Jon D. // Aug 15, 2007 at 10:42 am
Yes, I’ve been looking at Questrade and TradeFreedom for a self-directed RSP account. CC’s review of Quest was insightful, now if we could just get a comparison with TF. But really, as Canadians we should be demanding no-cost options similar to what americans have with Zecco.com and others.
4 Road to Harvard // Aug 15, 2007 at 4:38 pm
Fees are high at most of the Canadian brokerages but I think it can sometimes be beneficial. Although that may sound counterintuitive at first if the large fees prevent you from making rash decisions/making lots of trades they may be beneficial in the long run. Of course the same could be said about adopting the same behavior on less costly accounts but at I thought I’d throw it out there in any event.
5 FourPillars // Aug 15, 2007 at 9:45 pm
Jon - Questrade only charges $5 / trade. Why do you think we should get trades for zero dollars? They have to make some money somewhere?
Mike
6 F. Lynch // Aug 27, 2007 at 6:02 pm
My comment is about TradeFreedom. Over the past 2 weeks there has been a breach in TF’s on-line security. My personal info including my SIN has bee hacked.
TF position is that they have no legal obligation to do anything but they are offering 1 year’s service from a credit bureau to monitor activity of your credit.
I have been a TF client for 18 months and now I regret ever having dealt with them.
7 Canadian Capitalist // Aug 28, 2007 at 7:31 pm
FL: I am sorry to hear that the security breach has affected you (TradeFreedom’s breach was reported in the Globe and Mail today). Short of actually knowing what security precautions are being taken, I don’t know what consumers can do to be sure that their privacy is a top priority.
8 memonika // Sep 7, 2007 at 9:06 pm
I have an account at tradefreedom and my account details were stoten including password and login ID. My other information was also stolen. (SIN, email and so on).
Furthermore there was unauthorized trading also on my account.
I am thinking of taking legal action against tradefreedom.
Anyone else have the same problem or would like to talk and join forces.
memonika@yahoo.com
9 dr.X // Sep 11, 2007 at 8:59 pm
TF is stating that only a few accts got hacked. I am just wondering if this is true. Can a cuurent TF client confirm to me that they have not received the security breach warning letter? If not this is a misrepresentation from their part.
10 aftermidnight // Dec 11, 2007 at 10:00 am
memonika - Tradefreedom is the worst nightmare i have ever seen in a discount brokerage for a multitude of reasons
dr.X Tradefreedom is most likely lying to protect themselves
from further legal action and violation of Privacy Act legislation
i complained to ScotiaBank but they don’t seem to care!
i would like to take legal action against Tradefreedom
perhaps a class action suit is in order i have some legal contacts
this is ScotiaBanks worst investment of all time!
i’m in!
11 Amina // Mar 14, 2008 at 6:03 pm
I know that most people in this forum are most probably more knowledgeable than I am and I apologize but what discount broker is best for getting my first share to begin DRIPping? I am confused and could use some guidance in choosing the proper one to go with - my other needs in the future might be a self-directed RRSP with mutual funds but that will be the extent for now!
12 Traciatim // Mar 14, 2008 at 8:43 pm
Amina: I kind of like ShareOwner Investments if you want free DRIPs with the ability to buy and sell when you like. If you are making yearly, or half/quarter, purchases it will keep your costs very low as well. They only allow you to select from a list of pre-screened securities, so if you want the freedom to trade anywhere it may not be fore you, but it’s worth looking at.
investments.shareowner.com
13 Rob // Jul 15, 2008 at 5:57 pm
Tradefreedom failed to protect my identity and now I am a victim of identity theft!
Crooks are using my SIN and my current address to apply for credit cards. They put my current address as the ‘previous’ address and they insert their address as the new addy.
This is serious. I want to take legal action against Tradefereedom for having incompetent security. They are negligent for failing to secure my information properly.
Please email me if you know of or are interested in taking them to court!! ballbag@shaw.ca
Rob
14 Keith // Aug 15, 2008 at 3:12 pm
Scotia McLeod Online Brokerage - Apparently if you are not physically sitting behind a computer in Canada - they will block access to your online trading. That’s something they never told us about……………….
Leave a Comment