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2009 Globe and Mail Discount Broker Rankings

November 4th, 2009 · 25 Comments

For the fourth year running, Qtrade finished first in the Globe and Mail’s ranking of online discount brokers. Credential Direct, BMO InvestorLine, Scotia iTrade and RBC Direct Investing round out the top five. TD Waterhouse missed a spot in the top five in a photo finish.

I’ve held accounts at TD Waterhouse, RBC Direct Investing, Scotia iTrade and Questrade and would rank them in that order. I wouldn’t read too much into a broker’s rank and would instead pick one that offers the features I’m looking for (or at least a nice fat bonus).

Some interesting tidbits from the Globe and Mail column:

  • Qtrade is now offering US dollar RRSP accounts. Either Qtrade has been keeping it quiet or I missed any media coverage on this.
  • Discount brokers are doing roaring business. Rob Carrick, who assembled the rankings, notes that account openings, excluding TFSAs are up in the range of 19 to 26 percent.
  • Scotia Direct is going to be merged with Scotia iTrade (formerly E*Trade Canada), which is not surprising because CIBC and Scotia are still in the bottom of the heap among discount brokers.
  • RBC Direct is the only broker offering lower-fee mutual funds. It is outrageous that discount brokers keep collecting trailers fees, which are supposed to compensate financial advice.

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25 responses so far ↓

  • 1 Gabe // Nov 4, 2009 at 11:51 pm

    I would include TD e-Series Funds offered by TD Waterhouse Discount Brokerage in the “lower-fee mutual funds” category too.

  • 2 Nurseb911 // Nov 5, 2009 at 12:07 am

    Interesting that TD missed out on one of the top spots. Hopefully they’ll lower their fees in an attempt to get back into the top 5 next year :)

  • 3 2009 Globe and Mail Discount Broker Rankings | Canadian Capitalist | discountpools // Nov 5, 2009 at 1:38 am

    [...] link: 2009 Globe and Mail Discount Broker Rankings | Canadian Capitalist Tags: bmo, direct, finished-first, fourth, globe, investor, qtrade, the-fourth, [...]

  • 4 Canadian Capitalist // Nov 5, 2009 at 11:07 am

    @Gabe: Fair enough. But it would be nice if TD also offer MER breaks on its money market fund like RBC does. Also to be fair, discount brokers might not be the only ones at fault here. Mutual fund companies are also loathe to cut trailer fees for DIY investors. Just look at what happened to Questrade and Sprott funds.

  • 5 DG // Nov 5, 2009 at 11:51 am

    I asked qtrade about their USD RRSP accounts and they said…

    “We will have our US currency RSP accounts available in the near future. It will be posted on our website when they are available to be opened. At that time, you will be required to complete a new account application form to open that account.

    You will be able to place US trades in the RSP account without having to convert funds between CAD/USD.

    To deposit funds to the USD RSP account you will have to either buy USD within your Qtrade account, or mail a USD cheque/draft to deposit to the USD account.”

  • 6 Canadian Capitalist // Nov 5, 2009 at 12:11 pm

    @DG: Thanks for checking that out. I was curious why their website made no mention of USD accounts either. Your comment makes it clear why — they are going to offer it soon…

  • 7 Jon D. // Nov 5, 2009 at 12:17 pm

    I think in fact Scotia is Merging all of it’s client base. TradeFreedom (remember them?) clients got an email 2 weeks ago that TF was being merged into iTrade.

  • 8 Adam // Nov 5, 2009 at 2:18 pm

    Off topic note:

    I was sick of having two logins to remember for my Qtrade TFSA\RRSP. I talked to them and by simply sending an email request they consolidated both my RRSP and TFSA into a single login. Now I just select which account I want from a drop down once logged in :)

    End off topic note.

  • 9 Jack // Nov 5, 2009 at 3:10 pm

    I have an account with TD Waterhouse. The only comparison I can make is with my old Ameritrade account that TD took over and converted to TD a few years back. I loved my Ameritrade account. I could do all kinds of things I cannot do with TD – use trailing stop losses (with no cancellation dates), see exactly how each position and portfolio was performing with numerical and percentage ratings, etc. If TD is one of the best, that is a sad comment on the state of discount brokers in Canada.

  • 10 Lance // Nov 5, 2009 at 3:17 pm

    Why isn’t interactive brokers in the mix? Is it because they don’t offer registered accounts?

    Speaking of that, does anyone know if interactive brokers ever intends to offer registered accounts?

  • 11 Canadian Capitalist // Nov 5, 2009 at 3:46 pm

    @Jon: Good point. The number of discount brokers in the Globe rankings is down to 12 in the past year. The one that disappeared: TradeFreedom, which as you note got merged with iTrade. Looks like the same fate awaits Scotia Direct.

    @Jack: I agree with you regarding Ameritrade (I too used to have an account) — they were $9.99 trades when nobody else was and a really good platform.

    @Lance: That’s exactly why. IB does not offer registered accounts, which is why it is not included in these rankings.

  • 12 Greg // Nov 5, 2009 at 5:15 pm

    Very interesting that you would put RBC ahead of questrade. My approach is that I invest to make money. Any fees I pay goes against my primary goal. Questrade so far provides lowest fees, so I’m sticking with that. I’ll admit the rest of the interfaces leave MUCH to be desired (why the hell to do I have to go to a separate site with a separate login to look at the financial history details), but I put up with it. You make a good point though, ultimately it’s what you’re looking for, if you’re contributing small amounts at a time, mutual funds with no purchase fees are the ticket for example. I find RBC’s $29 to purchase stock (for non-high net worth individuals) too excessive.

  • 13 Erick // Nov 5, 2009 at 6:17 pm

    The Questrade interface is a bit clunky and the technical support is “luck of the draw”, but I’m still surprised they didn’t finish higher in the ranking, since they offer two things that most of the others don’t:

    1. USD in RRSP accounts:
    http://www.questrade.com/trading/registered_accounts_usd.aspx

    2. Rebate mutual fee trailer fees:
    http://www.questrade.com/trading/mutual_funds_maximizer.aspx

  • 14 Canadian Capitalist // Nov 5, 2009 at 6:26 pm

    @Greg: I happen to get $9.99 trades at RBC but even if I didn’t, I’ll go with iTrade instead of Questrade. The reason is that I’ve been burned with Questrade and would like to avoid the hassles of dealing with their customer service. I’ve detailed my experiences with Questrade elsewhere — let’s just say that I’ll be happy to pay to avoid dealing with them :)

    @Erick: I do agree that Questrade is very responsive to customer demands. Though I don’t want to open an account with them, I do wish them success. Big brokers typically react to competitors (however small) nipping at their heels. Without them, we’d still be paying $29 trades and chafing under a oligopoly.

  • 15 A Lap Of The Blogs : WhereDoesAllMyMoneyGo.com // Nov 5, 2009 at 7:16 pm

    [...] Canadian Capitalist discusses the Globe’s discount broker survey for 2009. [...]

  • 16 gene // Nov 5, 2009 at 10:37 pm

    Lots of people have said this, but I find it so unfortunate that Qtrade and Questrade have such similar names. Even in a short discussion like this, I get confused over which one is highly regarded (Qtrade) and which is often despised (Questrade). Maybe Qtrade should adopt the motto “We’re the Good Ones!”

  • 17 Canadian Personal Finance Blog » Blog Archive » Random Thoughts: Flip, Flop and Flu // Nov 6, 2009 at 3:28 am

    [...] Canadian Capitalist writes about the 2009 Globe and Mail Discount Broker Rankings, which is interesting, given it doesn’t mention my brokers, but I haven’t had any [...]

  • 18 Igor Katkov // Nov 9, 2009 at 2:58 am

    I’m confused with USD RRSP thing.
    if it’s not a wash-trade, that TD Waterhouse has been practicing for years, how did they manage to get around this law:
    “All cash inside an RRSP must be in Canadian dollars.

  • 19 Canadian Capitalist // Nov 9, 2009 at 11:57 am

    @Igor: There is no law that says all cash inside an RRSP must be in Canadian dollars. It is just that the brokerages are unwilling to offer this as foreign currency transactions are a cash cow. Questrade is the only broker offering some sort of US dollar RRSP and looks like QTrade will also be doing so in the near future.

  • 20 Igor // Nov 9, 2009 at 1:43 pm

    I see, then this post is somewhat wrong

    http://www.investingintelligently.com/2007/11/07/ask-dave-us-dollar-investments-inside-your-rrsp/

  • 21 Canadian Capitalist // Nov 9, 2009 at 5:38 pm

    @Igor: What do you think is wrong in that post? It does mention that not allowing USD RRSP is not a legal requirement — simply that brokers haven’t bothered to allow it.

  • 22 Igor // Nov 9, 2009 at 5:49 pm

    My fault. I read it wrong. Missed “nothing” word :-)

  • 23 Joseph // Nov 11, 2009 at 9:11 am

    I do have question – My funds are mostly in US dollar and I was thinking opening account with US discount brokerage (Charles Schwab). I did a bit research and they do allow Canadian citizens who live in Canada to open an account. Their fees are good as well . It ranges from $7.97 – $12.95 .

    I probably can’t buy Canadian stocks trade on TSX.

    Any downside to opening this account as far as the legality and etc?

  • 24 Steve C // Nov 16, 2009 at 10:44 pm

    It is outrageous that RBC Direct Investing took away their Equity Research about two weeks ago!!!

  • 25 Your Turn: Opening an US Dollar Self-Directed RRSP Account with QTrade | Canadian Capitalist // Jan 12, 2010 at 9:58 pm

    [...] 2010 · No Comments QTrade (a reader shares his experience with the broker here), which consistently earns top honours in Globe and Mail’s annual discount broker rankings, is now offering US-dollar self-directed RRSP accounts. These accounts would allow investors [...]

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