ScotiaMcLeod Direct Investing Review
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.