Which trading platform is the best? Probably the one that meets your specific needs and goals. Account fees, including possible maintenance fees or management fees, and the interface might be important to some while others might value desktop trading and a wide variety of stocks to choose from. To help you choose the best online broker for your needs, we compare some of the main online brokerages that operate in Canada. Our comparison includes key features, account types, and pricing. Your trust is important to us. That’s why we always do our best to be fair and provide complete and accurate information. To complete your homework, we recommend visiting our competitors’ sites to continue your research.
Overview and pricing of Canadian trading platforms
Online stock brokers were first introduced in Canada in 1996 when TD Bank unveiled WebBroker, Canada’s first online brokerage platform. Since then, there’s been a slow but steady growth of online trading platforms and now, every single one of Canada’s “big six” brick and mortar banks have launched self-directed trading platforms and their accompanying mobile apps. Today, Canadians have more than a dozen online trading platforms to choose from, a fact that makes this a great time for consumers because there’s unprecedented competition bringing trading prices down. But it can make for a tough selection process. To help you decide, we’ve prepared the following table which outlines some of the key differences between seven of the most popular trading platforms in Canada.
| Trading platform | Apple App Store rating | Commission per equity trade | Account Minimum | Mobile/Desktop Trading | Commission-free ETF trading |
|---|---|---|---|---|---|
| BMO InvestorLine | 1.8 stars | $9.95-$29.00 | $15,000 | Both | No |
| CIBC Investor’s Edge | 3.3 stars | $4.95 -$6.95 | $10,000 | Both | No |
| RBC Direct Investing | 3.4 stars | $6.95-$9.95 | $15,000 | Both | No |
| Qtrade Investor | 2.3 stars | $6.95-$8.75 | $25,000 | Both | Yes, for 100 specific ETFs |
| Scotia iTRADE | 1.4 stars | $4.99-$9.99 | $10,000 | Both | Yes, for 49 specific ETFs |
| TD Direct Investing | 4.6 stars | $7.99-$9.99 | $15,000 | Both | No |
| Wealthsimple Trade | 4.6 stars | None | None | Mobile only | Yes, on all trades |
Apple App Store ratings are scored by users. The rating mentioned is the average rate. The best possible rating is five stars. The account minimum listed is the required balance to avoid inactivity fees on non-registered accounts. Buy and sell thousands of stocks and funds with just a few taps, all commission-free. Get started with Wealthsimple Trade.
How trading platforms make money
Nobody decides to open a discount brokerage because they have some altruistic desire to unite people they don’t know with their dream stocks. They do it for the money, and there’s a lot of money to be made in being able to move people’s money to places they can’t move it on their own. The fees mentioned above are, of course, far from the only fee assessed by most brokerages, but will provide one good standard for comparison.
It might surprise you to find out how the bulk of trading platforms’ bottom line is made. It’s easy to imagine it’s from the commissions they charge to trade stocks, or those annoying, unyielding fees that brokerages love to assess if you don’t keep a certain balance in your account or fail to make a minimum number of trades per quarter. However, as programmer Patrick McKenzie points out, about half of brokerages’ revenue comes from net interest, the money brokerages make loaning the cash you leave uninvested in your account to others who are willing to pay them a heck of lot more interest than they’re paying you. According to McKenzie:
“[Brokerages] could literally give away every other service; discount the mutual fund fees to zero, do away with commissions, etc etc, and they would still be profitable.“
So all those fees you pay are just gravy—and one of the reasons why fees can vary so significantly from brokerage to brokerage.Trade stocks with zero commission when you use Wealthsimple Trade. No account minimums, no paperwork, lots of stocks and ETFs — get started here.
About online trading platforms in Canada
Here is a little primer on the seven trading platforms we’ve analyzed in the above chart:
1. Wealthsimple Trade
Wealthsimple Trade is the online trading app created by Toronto-based investment manager Wealthsimple. Wealthsimple Trade, which is mobile-only, debuted in March, 2019 offering unlimited commission-free trades and no account minimums, which immediately set Wealthsimple Trade apart in the market. Since its 2014 founding, Wealthsimple, led by CEO Mike Katchen and majority held by Power Financial, has expanded its base to 175,000 clients across Canada, the United States, and the UK.Buy and sell thousands of stocks and funds with just a few taps, all commission-free. Get started with Wealthsimple Trade.
2. BMO InvestorLine
Founded in 1817, the Bank of Montreal is the fourth largest Canadian bank by assets. BMO launched its self-directed investing service for clients in 1988. Then, in 2000, BMO put its service online.
3. CIBC Investor’s Edge
CIBC Investor’s Edge is the brokerage division of CIBC. According to its official history, CIBC, or the Canadian Imperial Bank of Commerce, was the product of the “largest merger” of chartered banks in Canadian history, a union that took place in 1961 and united The Canadian Bank of Commerce (established 1867) and the Imperial Bank of Canada (established 1875). CIBC has been active in building its brokerage business, acquiring a majority stake in Wood, Gundy & Co. in 1988, then picking up Merrill Lynch & Company’s Canadian retail brokerage business in 2001.
4. Qtrade Investor
Vancouver-based Qtrade has been operating since 2001 and is formally known as Credential Qtrade Securities Inc. Qtrade is a division of Aviso Wealth, which describes itself as an “integrated financial services company, with over $57 billion in assets.” Aviso Wealth is a fairly new company, formed in 2017, a merger of three older independent financial players, the Credit Union Centrals, The CUMIS group, and Desjardins.
5. RBC Direct Investing
RBC Direct Investing is the brokerage division of the Royal Bank of Canada, or RBC, the largest bank in Canada by market capitalization. RBC is one of the oldest banks in Canada. Its roots go all the way back to 1860, when it started as the Merchants’ Bank of Halifax.
6. Scotia iTRADE
Scotia iTrade is Scotiabank’s online brokerage. In 2007, Scotiabank acquired the boutique brokerage TradeFreedom Securities Inc., and the following year bought ETrade Canada from the troubled American startup, ETrade. Though both TradeFreedom and E*Trade were favoured by active investors, iTrade has expanded its business to cater to all clients. Scotiabank was formerly known as the Bank of Nova Scotia, and was founded in 1832.
7. TD Direct Investing
TD Direct Investing is the online brokerage for Toronto Dominion Bank, the largest Canadian bank by assets. The name TD Direct Investing only goes back to 2012, but TD has had a brokerage since 1984, though it was originally called Greenline Investor Services. In 2005, the American discount brokerage Ameritrade acquired TD Waterhouse USA, jointly owned by TD Bank, and the Canadian brokerage kept the name TD Waterhouse, until it rebranded to TD Direct Investing in 2012.
Comparison of supported registered accounts, customer support and security
All the trading platforms we’ve included have a lot of features in common, for instance, every one of them offers paperless account opening and a mobile app. For this reason, we’ve chosen a handful of areas to compare including the types of registered accounts they offer, customer support and security. Here’s an overview of the registered accounts offered by these trading platforms.
| Trading Platform | TFSA | RRSP | RESP |
|---|---|---|---|
| BMO Investorline | Yes | Yes | Yes |
| CIBC Investor’s Edge | Yes | Yes | No |
| RBC Direct Investing | Yes | Yes | No |
| Qtrade Investor | Yes | Yes | Yes |
| Scotia iTRADE | Yes | Yes | No |
| TD Direct Investing | Yes | Yes | No |
| Wealthsimple Trade | Yes | Yes | No |
Customer Support & security of trading platforms
Support and security are vitally important to consider when choosing a trading platform. Support might be more important to those who are less tech-savvy or need a little more help. Security is important too if you don’t want someone else getting their hands on your precious stock. Two-factor authentication or 2FA, as it’s often called, means that when you access your account you’re required to not only know your login and password, but also possess something, like an authentication code sent to your phone. Trading platforms that don’t offer two-factor authentication might not leave you high and dry should your account get hacked, but who needs to even risk such a headache?
| Trading Platform | Human support | Two-factor authentication |
|---|---|---|
| BMO Investorline | Email, phone | Yes |
| CIBC Investor’s Edge | Chat, email, phone | Yes |
| Qtrade Investor | Email, phone | Yes |
| RBC Direct Investing | Chat, email, phone | No |
| Scotia iTRADE | Email, phone | No |
| TD Direct Investing | Chat, phone | Yes |
| Wealthsimple | Email, phone | Yes |
Buy and sell thousands of stocks and funds with just a few taps, all commission-free. Get started with Wealthsimple Trade.
Other trading platforms available in Canada
Since the seven trading platforms above are far from the only available, here’s five more dark horses, arranged alphabetically, that you might want to consider. For simplicity’s sake, we’ve included some information about them including their per trade commission rates.
8. Desjardins Online Brokerage
The brokerage arm of the large hundred-year-old Quebec financial cooperative was founded in 1991, and offers trading platforms for both occasional and active investors.
Per trade commission: $9.95/as low as $5.00 for active traders
9. HSBC InvestDirect
The online brokerage arm of the London-based multinational bank HSBC (the largest bank in Europe) and an offshoot of its HSBC Direct online banking platform.
Per trade commission: $39.00 + 2¢/share US equities; $35.00 + 6 ¢/share CDN Equities; $6.88 per trade with $100,000 balance; $4.88 per trade for 150+ trades per quarter
10. Interactive Brokers
The Canadian branch of Interactive Brokers, the Greenwich, Connecticut based discount brokerage firm was founded by Hungarian-born billionaire Thomas Peterffy. One of the earliest online brokerages, Interactive Brokers has long been favoured by active traders owing to its low trading costs.
Per trade commission: “Flat rate” of $0.01/share with a minimum charge of $1.00 per trade and a minimum activity fee of $10 USD per month (assessed as a fee if the account is inactive any given month.)
11. National Bank Direct Brokerage
The brokerage arm of the National Bank of Canada, Quebec’s largest bank, which is also known as Banque Canadienne Nationale and was founded in 1859. As of July 31, 2019, the National Bank of Canada boasts $276 billion in assets.
Per trade commission: $9.95 per trade regular pricing/6.95 for National Bank of Canada customers/6.95forNationalBankofCanadacustomers/.95 for active traders with 100+ trades per quarter
12. Virtual Brokers
Founded in 2009 as a division of BBS Securities, the Toronto-based Virtual Brokers was the first in Canada to offer commission-free trading.
Per trade commission: Per share commission structure means equity trades will cost between $1.99 and $7.99/$3.99 for active traders with 150+ trades per quarter.
Advantages and limitations of brokers
Stockbrokers aren’t just advantageous, they’re absolutely indispensable if you want to invest by yourself. It might seem like buying stock should be pretty easy to accomplish but here’s not how to do it: show up to almost any public company’s headquarters waving a wad of cash and tell them you won’t leave until they sell you a share of their stock. Using this method will more than likely have you end up in a straight jacket rather than owning a share.
So to buy stock, you need an intermediary that can take your money and convert it to a security and hold that security for you in an account. Fish around in your wallet. Do you have a license to make trades with any securities exchanges? You don’t? Then, you need a broker! Some recognizable “brokers” may not actually be brokers at all. Instead, they might be financial institutions that own or work with a brokerage to get you the same end result: the ability to trade stocks.
Online trading platforms are considered “self-directed” meaning that the companies are legally barred from providing any investment recommendations. If you’re the type who might want a bit more direction in how you invest, and don’t want to spend a fortune, you might instead consider an automatic investing service sometimes called a robo-advisor. Since most robo-advisors invest your money in low-cost exchange-traded funds, they tend to have low fees. Here’s an overview of your options.
| Features | Wealthsimple Invest | Nest Wealth | WealthBar | Justwealth | ModernAdvisor | BMO Smartfolio |
|---|---|---|---|---|---|---|
| Overall Rating (SavvynewCanadians.com) | 4.9/5 | 4.7/5 | 4.7/5 | 4.6/5 | 4.6/5 | 4.5/5 |
| Social Responsible Investing | Yes | No | Yes | No | Yes | No |
| Halal Investing | Yes | No | Yes, but only for clients with a minimum of $100,000 | No | No | No |
| Dividend Reinvesting | Yes | Yes | Yes | Yes | Yes | Yes |
| Minimum Balance to Start Investing | None () | None | $1,000 | $5000 minimum on all accounts aside from RESPs. | $1,000 | $1,000 |
| Auto Depositing | Yes | Yes | Yes | Yes | Yes | Yes |
| Management Fees | 0.5% on $0-$100k and 0.4% for amounts over $100k. | $20 per month for under $75k, $40 per month for $75-$150k and $80 per month for $150k and above. | 0.6% on the first $150,000, 0.4% on the next $350,000 and 0.35% above $500,000. | 0.50% on $0-$500K, 0.40% on investments over $500K. There is a minimum fee of $2.50 per month charged on RESPs with a balance under $25K. | ModernAdvisor Digital fees are as follows: free for 0-$10K, 0.50% on $10K-$100K, 0.40% on $100-$500K and 0.35% on $500K-$1M. ModernAdvisor Personal fees are as follows: 0.89% on 0-$500K, 0.79% on the next $2M, .69% on the next $2.5M and .49% for investments over $5M. While there is no minimum fee charged on the ModernAdvisor Digital plan, there’s a minimum $75/month charge on the ModernAdvisor Personal plan. | The fees are 0.7% on 0-$100K, 0.6% on next $150K, 0.5% on next $250K and 0.4% on $500K and above. In addition, you will be charged $5 per statement for paper statements, $25 per withdrawal for RRSP/RESP withdrawals (not TFSA or RRIF) and $100 for full closure of RRSP or RESP (not TFSA/RRIF) |
| Transfer Fees (to another financial institution) | No | No | No | Yes (a fee of $50 for a partial transfer to another financial institution or $150 for a full transfer out will be charged.) | ModernAdvisor does not charge a fee to transfer an account out but their Custodian, Credential does charge a fee. | Yes ($135 ) |
| Inactivity Fees | No | No | No | No | No | No |
| Financial Advice/Portfolio Review | Yes | Yes | Yes | Yes | Yes (at no extra cost on the ModernAdvisor Personal plan but for a fee of $125 per hour on the ModernAdvisor Digital plan.) | Yes |
| Rebalancing | Yes | Yes | Yes | Yes | Yes | Yes |
| Human Support | Yes | Yes | Yes | Yes | Yes | Yes |
With the exception of order execution only dealers, all registered firms have a suitability obligation. A fiduciary duty to act in the best interest of a client applies only to registered portfolio managers and dealers that are authorized to trade securities on behalf of their clients.
| Features | Robo-Advisors | Human Financial Advisors | Self-Directed/Trading Platform |
|---|---|---|---|
| Fees | Typically under 1% | Typically above 1%. | Low fees, normally per trade. Some offer commission-free trading. |
| Human advice | Often comes with human advice and some access to a financial advisor. Some robo-advisors offer a full financial planning service for high net worth clients. | Offer a full financial plan and can provide advice on your specific situation. | No human advice. |
| Most useful for | A hands-free approach to investing – perfect for people who want help with money management. | Useful for people with a high net worth or a complicated tax situation. | A DIY approach, you have to pick your own stocks. It’s a cheap, no-frills approach to investing. |
| Fiduciary duty when offering advice (putting your interests ahead of their own) | All registered firms have a suitability obligation. This means they have to deal fairly, honestly and in good faith with clients. Order execution-only dealers are the only exception. Registered portfolio managers and dealers that trade securities on behalf of clients have a fiduciary duty to act in the best interest of their clients. | Fiduciary standards are not mandatary. Only licenced advisors or registered portfolio managers are fuduciaries. | No advice offered. |
How to choose an online trading platform
When shopping for online brokers, there are four major considerations you’ll want to weigh. These are value, features, security and reviews.
Value
Though you could buy stocks or ETFs over the phone from humans who could execute your order, the absolute easiest, cheapest way to buy stocks is through an online discount brokerage. Accounts can probably be opened in ten minutes if you have a social insurance number, a home address, and an employer’s address (freelancers fret not—it’s totally A-OK if your office happens to be five feet from your bed.) Since stockbrokers by and large assess fees or commissions in exchange for making trades on your behalf, you’ll want to understand exactly how much you’ll be charged, and how your account balance and trading frequency will affect those commissions. Most online trading platforms will assess a flat per-trade commission fee for any security purchase, big or small, that generally ranges from $5-$10 per online trade. These fees may be higher or lower depending on your account balance and trading habits. Since you’ll need to open a brokerage account in order to trade, you’ll want to read the fine print and decide which suits you best, though below you’ll see that we’ve taken the liberty of going deep into the banks’ account agreements and disclosures and summarized our findings. Pro-tips: If you have a small amount of money to invest, look out for a provider that offers a low minimum investment to open an account. Also, does the brokerage assess any fees beyond trading fees? Trade
Features
Another important question you’ll want to ask yourself is beyond actually executing the trade, what other investment-related services are important to you? Are you reasonably technologically savvy or do you think you’ll need some human handholding in order to help you execute trades? Do you imagine you’ll want to pursue a set-it-and-forget-it strategy of investing—buying a few stocks, mutual funds and/or ETFs or other securities and leaving them alone to grow? Or do you imagine you’ll be trading a lot, even daily, and in need of the kind of research that sophisticated “pro tools” that active traders require? Here’s a litmus test: do you know what “simple moving averages,” “Bollinger bands,” and “stochastics” are? These are a few fairly basic terms for active investors, so if they sound like stuff Dr. Seuss made up, you probably won’t be in need of very advanced research tools (and probably shouldn’t give up your day job yet to become a day trader.)
Security
The most basic thing any stockbroker should offer is peace of mind to know that regardless of your investing acumen, your broker’s not going to disappear with your money. So don’t fall for any online phishing scams or too-good-to-to be true stock offers from random callers. You should seek out a brokerage, not the other way around. (Every broker we compare here is 100% legit, so no need to fret about any of these particular players blowing your investment on bottle service vodka and poker debts.) If your broker is legit, it will almost certainly be a member of the Investment Industry Regulatory Organization of Canada (IIROC) and you will be able to find it on IIROC’s website, though don’t call the police if you don’t see your broker immediately since some brokers do business under separate business names. Contact your broker if you can’t immediately find them. Being an IIROC member should put your mind at ease a bit since all IIROC members are insured under the Canadian Investor Protection Fund (CIPF) so if any one of them becomes insolvent, all their clients will be reimbursed up to a $1,000,000 of their investment. Of course, the CIPF will be no help if you invest poorly and lose most or even all your money.
Reviews
Should you want to do some further reading and have a subscription to the Globe and Mail, their annual ranking of online brokerages might also be worth your time. Since Wealthsimple Trade is the newest arrival in the field of online trading platforms and has not been included in many of the annual surveys, consult other sources, such as user-generated app reviews, or even better, find someone who’s actually traded with it. There are thousands out there already. And remember: If self-directed trading is too risky for your taste, you can still help your money grow with automated investing through a robo-advisor, or even try out a high-interest savings account.
Methodology
The information on this page was originally compiled by Wealthsimple in November 2019 and has since been updated for accuracy. In order to uncover competitor information, we looked at our competitors’ websites, press releases, and third-party sites. The information collected relates to features, accounts, and pricing. The guide is only intended for Canadian investors. It’s important to note that the general information within this guide is not specific to your personal situation. Some brokers requested that we not cover them in our content and those brokers have been excluded.
Reference : https://bit.ly/3aCT1bh