Temperatures aren’t the only things rising this summer. Deals and promotions activity looks like it is heating up as commission-free trading has found its way into the larger bank-owned online brokers in one form or another.
With summer just around the corner, it looks like stock markets won’t be the only ones seeing red. Weeks of volatility and sell-offs have been difficult for all but the most seasoned self-directed investors to stomach.
For DIY investors, the news isn’t all bad though. The pullback in stock markets typically means that online brokerages will need to work harder to encourage online investors to open an online trading account, and that means potentially bigger or more attractive incentives.
Although there aren’t any new deals that have launched at the start of the month, leading into June there have been several noteworthy developments in the online brokerage deals and promotions section.
By far, the biggest development last month was the launch of commission-free trading on stocks and ETFs at CIBC Investor’s Edge. This is huge news for younger investors, as well as for competing online brokerages across the board. As the first of the big five bank-owned online brokerages to offer full commission-free trading, it seems like CIBC’s peers will have to consider adjusting their commission rates or young investor offerings.
Fortunately for RBC Direct Investing, their 100 commission-free trade offer is both large enough and long enough in duration to weather this price move by CIBC Investor’s Edge. Perhaps it was fortuitous timing that RBC chose to extend their offer at the beginning of last month, and with this move from CIBC Investor’s Edge, they may consider extending it even further.
There’s no question that the list of commission-free online trading options is growing. TD Direct Investing, via their Easy Trade app, offers 50 commission-free stock trades per year, and National Bank Direct Brokerage and Desjardins Online Brokerage each offer full commission-free trading to investors of all ages. Of course, there’s still Wealthsimple Trade in the mix too.
Against that backdrop, the launch last month by Qtrade Direct Investing of a 50 commission-free trade offer does provide something to online investors looking for a deal when opening an online account, but clearly, the stakes have been raised.
The reality for Canadian online brokerages is that there are only a few months left to make plans for the next RRSP season, and with all the action happening in markets right now, for better or worse, online investors are checking their accounts and wondering if they’re getting great value. It’s one thing to sell a stock into a storm and another to incur a commission charge on a loss.
Wealthsimple Trade’s “free stock” promotion expired on May 31st. This popular promotion has been a windfall for the zero-commission broker, mirroring the performance of US online brokerage, Robinhood, who has a similar (but actually a free stock) program in place.
Another important expired deal was from National Bank Direct Brokerage. Their recent promotional discount on margin rates seemed especially well-timed given the discussion on rising interest rates that is dominating the news cycle right now. It was the first “discount” on margin interest rates we’ve seen in some time, so given the current interest rate environment and volatility in markets, it could make this offer especially attractive to very active or sophisticated investors.
Nothing new to report on this month as far as deal extensions are concerned. The RBC Direct Investing commission-free trade offer is worth watching as it was extended into this month.
No new deals activity to report at the start of the month.