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    Key points

    Well, it’s hard to believe but Christmas is literally just two sleeps away. While DIY investors are either busy looking for a deal, a present or are relaxing from the mayhem that is a shopping mall, it looks like Canadian discount brokerages are taking cues from other businesses and putting up deals for DIY investors […]

    Well, it’s hard to believe but Christmas is literally just two sleeps away. While DIY investors are either busy looking for a deal, a present or are relaxing from the mayhem that is a shopping mall, it looks like Canadian discount brokerages are taking cues from other businesses and putting up deals for DIY investors ahead of Christmas.

    In this holiday edition of the roundup, we’ll keep things short so you can get back to enjoying the festivities. We kick off with news that every investor loves to find out about – a new deal being offered by one of Canada’s bank-owned online brokerages. From there we’ll take a look at the highlights from Q3 of 2016 in the third of our 2016 roundup of roundups. As always, we’ll close out by taking a look at what DIY investors were chatting about on social media and on the investing forums.

    Gift Wrapped Deal

    Just in time for Christmas yet another Canadian discount brokerage is offering up a big gift to DIY investors in the form of a promotion. This past week, National Bank Direct Brokerage crossed our radar with a generous trade rebate offer with a very splashy headline: up to $1000 cash back for individuals signing up for a new account.

    While the headline does grab attention, it is important to unpack the clever advertising from the real picture, so let’s drill down on some of the details of their latest offer.

    Perhaps the most important component to this offer is that it is actually a commission-rebate offer, meaning that individuals who are eligible for this offer can have their trading commissions reimbursed up to the amount stated in the promotion.  Unlike other cash-back offers that provide a payment of a fixed amount up front, this ‘cash back’ occurs after individuals make eligible trades.

    The dollar amount that an individual can get credited depends on the value of the account they open with NBDB. In the case of this offer, there are two deposit tiers, the first ranging between $20,000 and $99,999, for which individuals receive up to $500 in commission rebates; and the second for deposits of $100,000 or more for which individuals can receive up to $1,000 in commission-credits.

    In looking at NBDB’s latest promotion, it is interesting to see who they are positioning to compete with. On the one hand, their offer is very similar in structure to the TD Direct Investing offer – commission rebates marketed as cash-back promotions. Comparing the two offers side by side, NBDB has the lower threshold to qualify versus TD Direct Investing, however for depositors with more than $50,000, TD Direct Investing is offering more in terms of commission rebates. One very important distinction, however, is that the NBDB offer is eligible for 90 days whereas there is a fixed cut-off date for TD Direct Investing’s offer, so TD’s offer becomes more challenging to fully use up the longer individuals wait to take advantage of it.

    The good news for DIY investors is that it appears that online brokerages are once again starting to work harder to try and win new clients – especially heading into the busy RRSP season. Interestingly, this is now the second offer to launch in December (the other was TD Direct Investing two weeks ago) that appears to run until the end of March of next year. This is definitely a bullish signal that bank-owned brokerages are placing their bets early because it will likely motivate both larger and smaller discount brokerages to follow suit.

    Discount Brokerage Roundup Recap from Q3 2016

    #Hashtag You’re It

    TD Direct Investing gets social by hosting their first DIY investing Twitter chat. #FunFact many years ago, SparxTrading  was tweeting live from an Investools seminar and helped get the ball rolling on the TD Direct Investing Twitter presence. Since then, TD Direct Investing, has become a very active on social media. Here is a recap of 350+ tweets we put together that covered their #DIYInvesting Twitter Chat.

    Eye of the Buyer

    Along with the US presidential election race, our eyes were turned stateside to see what was happening with US-based online brokerages and what, if anything, that could mean for Canadian online brokerages. One of the advantages of looking at the US market is that they provide a window into how the online brokerage business works, what challenges they’re facing as an industry and what innovation is taking place. In the case of a couple of July weekly roundups, we learned that Interactive Brokers is crushing it when it comes to profitability per account as well as steady account growth. Anyone watching the space closely can see that they are clearly going to harder to challenge as they grow in size and presence globally. We also learned about consolidation taking place in the US market, with E*trade acquiring OptionsHouse.

    Going Back to School

    Scotia iTRADE got a jump on the competition and back-to-school season by launching a rebranded educational offering for DIY investors. Their Scotia iTRADE U managed to predate the push later on in the year by Virtual Brokers to get into the investor education game. Interestingly, the biggest player in the space, TD Direct Investing, has seen a shift in how and where it is delivering investor education content – choosing to deliver it via webinar rather than run as many in person seminars. Later in 2016, Virtual Brokers would also roll out its new education centre

    Preferred Pricing

    In early September, Qtrade Investor took a big step into the commission-pricing battle by offering up a pricing break on commissions for young investors (where was this when I started investing!). The commission rates for younger investors are $7.75 per trade – down from the standard $8.75. That move by Qtrade Investor certainly helped to put them back on the radar of price sensitive DIY investors and arguably helped to maintain their presence atop the Globe and Mail Online Brokerage Rankings for 2016 which came out in December.

    Discount Brokerage Tweets of the Week

    From the Forums

    Icy Conditions

    If there’s one thing that winter driving reminds traders of, it’s to always keep an eye out for things that can go wrong. Of course, that’s not always possible for active traders who rely on technology to work the way it’s supposed to – especially with stop losses. In this post from Canadian Money Forum, one user’s experience with stop losses not working with bracket orders is definitely a good reminder or lesson to anyone using these order types.

    The People’s Choice

    With the latest results from online brokerage rankings now published, there’s one source that DIY investors consult that provides a very different point of view. In this post from reddit’s personal finance Canada thread, one person asking for who the ‘best online brokerage’ would be, gets a very different answer than either of the two recent rankings crowned.

    Into the Close

    That’s a wrap on the second last weekly roundup for 2016. On behalf of the team, happy holidays to all of our loyal readers. Next week’s edition will be the last of the current format – we’ve got some exciting news and changes coming to planned for 2017. Stay tuned, stay safe and enjoy the time off from trading to do something fun!