The Globe and Mail Digital Broker Ranking 2022: Is the Zero Commission Revolution Flipping the Script on Who’s the Best?

Three investment firms offered commission-free stock trading in early 2022, and none of them dominate the latest Globe and Mail digital brokerage ranking.

If you are starting out as a do-it-yourself investor or comparing your current broker, you have quite a challenge ahead of you. Zero fees to buy or sell stocks and exchange-traded funds with no fine print is a great appeal for frequent traders. But there’s more to long-term success as a do-it-yourself investor than paying nothing to trade stocks.

You also need tools to ensure your portfolio is built solidly and performing well, research to help you choose investments, and a website and mobile apps that respect you as a client by providing a well-designed platform offer for managing a portfolio.

As so often in this ranking over the years, Qtrade Direct Investing is the broker that does it best. Other brokers beat Qtrade in certain areas like commission costs, but Qtrade’s overall goodness becomes apparent once you sign up and find a nice little dashboard that keeps you up to date on your investments.

Qtrade’s consistently strong performance in this ranking speaks to another of its assets, constant improvement. Other brokers are getting better in spurts as Qtrade keeps making progress.

One broker to keep an eye on is National Bank Direct Brokerage, the first traditional online broker to introduce zero commissions. NBDB is not yet a top-tier broker in this ranking, but it could be heading in that direction based on its recent development.

This year marks a shift in the rankings to include both investment apps and traditional online brokers. Commission-free trading app Wealthsimple Trade is now in the mix, and a few other apps are being evaluated for possible inclusion next year – MogoTrade and TD Easy Trade.

Digital investing means using a mobile app as well as a website to trade and monitor your account. Each broker’s mobile app is rated in this ranking, but the web experience is given more weight as it offers tools not yet available on mobile devices. For example, charts to compare your account performance against benchmark indices over multiple time periods, and analytics that assess your diversification and risk level.

Brokers were also rated on cost, convenience and security, investment experience for clients, and tools for building and monitoring portfolios. Extra weight was given to cost this year because it’s one more differentiator than it’s been in ages.

This year’s ranking includes a rating of each broker’s responsiveness to customer phone calls by investment industry consultancy Dalbar Canada. The recurring problem of blocked phone lines at brokers reminds us that even digital investors need to talk to people from time to time.

Here are the brokers in the ranking 2022, listed alphabetically:

BMO InvestorLine

owner: Bank of Montreal

class: B+

Definitely on the up. The latest improvement is commission-free trading in over 80 exchange-traded funds, including asset allocation funds (a diversified portfolio in a single package) from BMO, iShares and Vanguard. Building a long-term portfolio for free is easy when you buy these ETFs through InvestorLine. BMO’s website has been updated well and is in every possible way better than an older version still available to customers who want it. The BMO mobile app is missing the website zip file.

CIBC Investor’s Edge

owner: Canadian Imperial Bank of Commerce

class: B-

CIBC has long been a top broker for providing clients with equity research and this is truer today than ever. Research from independent analyst firm Morningstar is now all but ubiquitous when it comes to online investing, but CIBC goes further with reports from Thomson Reuters and CIBC World Markets. Otherwise this is a mediocre broker with somewhat cheap commissions of $6.95 per trade.

CI direct trade

owner: CI Financial Corp.

class: B

CI Direct, formerly Virtual Brokers, has slipped from a once held ranking as its cost advantage has been wiped out by the trend towards zero commissions. CI is still a low-cost choice, with trades at 1 cent per share (minimum $1.99 and maximum $7.99) and commission-free buying of ETFs (you pay the usual sales commission). There is also a top notch portfolio analysis tool powered by Wealthscope. Give it a try and you will see investors flying blind without such tools. CI’s mobile app is one of the better ones in this group.

Desjardins online brokerage

owner: Desjardins group

class: C+

Eliminating trading commissions helped Desjardins climb this ranking, but its overall score is capped by a retro site that’s not keeping up with the times. The best brokers in this ranking make investing enjoyable by providing information and tools to their clients. That doesn’t happen here.

HSBC InvestDirect

owner: HSBC Bank Canada

class:D+

With no mobile app and no accounts registered in US dollars, HSBC plants itself in a deep hole in this ranking. Balancing factors are a decent commission of $6.88, some decent portfolio research, and online access to stock markets in Hong Kong, London, Paris, and Frankfurt, as well as Canada and the United States.

Interactive brokers

owner: Interactive Brokers LLC

class: B

Serious traders, give IB a look for a combination of low cost and market research. IB could be where active traders go when they outgrow Wealthsimple Trade.

Direct agency of the National Bank

owner: National Bank of Canada

class: B+

Let’s quickly answer the question you must be asking yourself about NBDB as it is the first online broker to eliminate trading commissions. What compromises do customers have to make in order to achieve this cost advantage? Only one stands out as a potential dealbreaker — a mobile app is still in development and wasn’t available as of early 2022. That shortcoming aside, NBDB is worth a look if you trade a lot and appreciate a clean, modern web interface and loads of equity research.

Qtrade direct investments

owner: Aviso wealth

class: ONE

Qtrade is the broker to check out if you’re wondering why anyone would pay commissions to trade stocks – in this case, a flat $8.75. There is massive amounts of embedded value, starting from the moment you log into your account and see a dashboard second to none to show what you need to know about your portfolio. Qtrade could improve its analyst research and really needs to improve on reporting portfolio performance. But overall, the long run deservedly continues at or near the top of this ranking.

seek

owner: Questrade Financial Group

class: B+

What is it about the “Q” brokers Qtrade and Questrade? Both are characterized by never stopping to make improvements. A big innovation for Questrade recently is Instant Deposit, which allows you to deposit funds, typically up to $3,500 per day, into your account in real time. Questrade has a sharp mobile app and a razor sharp all-business website for clients.

RBC direct investment

owner: Royal Bank of Canada

class: B-

There’s a lot to like here, including a new trading dashboard and powerful tools for goal setting and portfolio performance monitoring. But there’s a general sense of drift at RBC Direct. Much of the online interface looks dated and, worse, it buries the good features so deeply that you could easily forget them. The very good mobile app shows that the lights are still on at RBC Direct.

Scotland iTrade

owner: Bank of Nova Scotia

class: B

Login to your iTrade account and you will see what a top broker would have looked like 10 years ago. Luckily, Scotia says a website and app modernization is coming this year. More precise portfolio analysis would be a nice addition to current standout features like multisource equity research and an income tracker that keeps clients informed of historical and project streams of dividends and bond yields.

TD Direct Investment

owner: Toronto-Dominion Bank

class: ONE-

TD has its critics mainly for long waiting times on the phone. But it offers a cleverly designed, helpful website that feels like a cockpit from which to steer your portfolio. If you do all your trading on a phone, check out TD Easy Trade. This app offers 50 free trades per calendar year and unlimited free trading on TD’s family of ETFs.

wealth easy trade

owner: Wealth simply

class: I

I consider that incomplete, a reflection of the fact that Wealthsimple Trade is a stock trading app and lacks almost all the tools praised by other brokers. But Wealthsimple Trade is also a disruptor in DIY investing – it introduced zero commissions in Canada and opened up investing in stocks to younger investors. Pros of Wealthsimple Trade: zero-cost trading commissions for stocks and ETFs, the availability of fractional shares for some stocks, and a strong mobile app (there’s a desktop version of the app too). Cons: You need a $10 per month upgrade to access US dollar accounts, plus instant deposits up to $5,000 and unlimited price alerts.

Broker under the magnifying glass

Source: Rob Carrick; Online brokerage firms. Audrey Carleton is responsible for data management for the online brokerage ranking.

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