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moneysense.ca, 2/12/09
Virtual Brokers: A new kid on the discount brokerage block
Virtual Brokers, a new discount broker is taking out full page ads in The Globe and Mail offering trading commissions as low as $6.49 per trade and US dollar denominated RRSP and TFSA accounts. I’m not about to take a chance with a small broker for a few dollars less in commissions but nevertheless, decided to check out the website. Virtual Brokers seem to be geared more to traders because financial instruments available are limited to stocks, options, bonds and debentures. You are out of luck if you want mutual funds or GICs. They have both a per share and per trade commission structure. The per trade commission is $6.49 plus ECN fees.
Virtual Brokers say they offer USD-denominated RRSP and TFSA accounts “so you can keep your cash in US dollars” but the details are skimpy. Note that a RRSP admin fee ($85) and TFSA admin fee ($42.50) are applicable if total household assets is less than $85,000 CAD. I’d be interested to hear if any of you have tried Virtual Brokers.
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moneysense.ca, 2/12/09
Already have accounts at Questrade, so there appears to be no reason to shift over. It just costs more.. Unless, they have an API access and raw data feeds to supply my desire to build an automated trading system which I’d like to run inside an RSP (but thats not really investing).
Interesting…no real “sales” features that would convince me to move over or try them. In fact, they seem to have limited services for their fee structure.
Prediction – they are gone in 12 months or a big bank owns them in 36 months. The owners are probably all just looking to build something that puts pressures on bank margins and get rich selling a money losing operation. Typical Canadian business plan.
The fees for this broker seem high, and the commission rates aren’t even as low as Questrade’s. I have been pretty happy with Questrade, but I really wish they would pay interest on uninvested cash balances.
I agree with the sentiments here. It is hard to start up especially these days when many big banks have some sort of low-commission structure. A $6.49 trade would have made some noise when it was hard to find a broker charging less than $25 but not these days.
If all brokers offered some sort of wash trading even USD denominated registered accounts will be a bit of a non-starter at least for my investing needs.
I’m with Questrade. It works for me as a low-cost tool for basic buying and selling. With ECN fees factored in, I’ve never paid more than $6 for a trade. It would be nice if Questrade paid interest on cash. On the flip side, I’ve never been charged interest when I buy on margin and fund the account the next day.
I’m not sure why they are even bothering – why would anyone switch to VB?
I’m a huge Questrade fan – as are other people. I would think they should be going after the discount market and offer trades that are cheaper than $4.95. There are a number of brokerages in the US that offer trade costs significantly below $5. I don’t know if that would work here.
Their account fees are ridiculous as well – worse than the banks since you need to have so much money to waive them.
Questrade has $5 trade, no account fees and low minimums. If VB (or anyone) can’t beat that then why bother trying?
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Only attraction would be USD TFSA and RRSP…but thats not strong enough really given that you can get your US ETFs and so on in nonreg and fill the TFSA etc. with other stuff.
All of you made excellent points as to why one would probably go with Questrade over Virtual Brokers.
My situation is a little different than yours in that I am an independent Investment Counsellor / Portfolio Manager operating my own private wealth management company. In my case, I manage segregated discretionary accounts and I cannot trade through Questrade as they are not set up to handle licensed ICPMs like myself. So up until VB came along, I had to use any number of the big 6 banks to be the custodian bank for all my registered accounts (ie. RRSP, RESP, TSFA) and the commission structure is in the $25+ range. For my non-registered accounts, I use Interactive Brokers who are in my opinion, the best in terms of cost, execution, technology platform and reporting capabilities. BUT Interactive does not handle registered accounts so that was a problem.
So, in the last few months, I have opened up a number of registered accounts with Virtual Brokers and they have been excellent to deal with. And for my client base, the difference in commission is significant. I also like the fact I get access to a number of well sought after IPOs which the banks hold for their largest and favourite institutional traders. I will also mention that these guys are very motivated to get new business.
Anyway, that’s my two cents…
You folks seem to like questade. Has anyone here experienced itrade and questrade.
I’m considering moving from itrade to questrade. 3 reasons. 1/ itrade’s high USD spread and forced currency conversion in registered accounts 2/ itrade cannot handle two sell orders (high and stop-loss) on a position so I have to watch my portfolio more that I should 3/ very disappointed with customer service. Many of their front line people are poorly trained and I’ve been given a number of opinions, and generalizations instead of fact-based answers–especially for registered accounts.
Appreciate your comments!
@Dan: I’m not a particular fan of Questrade. See the following posts on the subject:
http://www.canadiancapitalist.com/adieu-to-questrade/
http://www.canadiancapitalist.com/questrade-review/
http://www.canadiancapitalist.com/giving-up-on-questrade/
I recently opened my acc with VB and noticed that I am not able to trade on TSX or venture unless I pay for the data streaming for these markets! I called VB and I told him that I want to keep my US market data streaming and I don’t want any data for TSX and venture but I want to be able to trade on all the markets, he told me I need to have the data for the market in order to be able to trade on that market, which is very strange. the only option was to forget about data streaming and get their basic quote based platform.
I checked with interactive broker, and they don’t care if I get data from them or not and I can trade on any market regardless of what data I have.
any comments?
I opened my account at Virtual Brokers almost 7 months ago. I am a high maintenance and demanding client/trader. Here is my 2 cents: I feel these guys focus on our market gaps (products and services), they are small and new but flexible and agile; something you can’t find or expect from big banks or other large-size brokerage firms. I started small with them but now after half a year i moved my positions from three different brokers.
I saved a lot of time and money (on commission and also FX convertion on my RRSP account by using their US RRSP). They provide me low commission, free trading platforms, free technical and fundamental research tools, I am getting alert on my blackberry for new issues, their new screening and alerting tools is something you can’t ignore, I like the way they are treating me over the phone and emails….
P.S. Sam is right if you choose not to pay for data quotes you won’t get streaming data and you have to live with snapshots. I am paying $9/month to get level II streaming data on TSX . Their platform is same as itrade, TradeFreedom & TD Waterhouse. I think all of them are getting their platforms from a same third party. Based on my experience no Canadian brokers can compete with Interactive Brokers’ platform if you are a professional option trader; but if you are not, they are among the best I experienced.
I have had an account with them for sometime. Service is good, cost is low and you get the platform for free (you have to pay for quote fee). so far my experience has been really positive.