The 2024 Globe and Mail Digital Brokerage Ranking: Who rules, and who’s coming on strong
Back in 1984, Toronto-Dominion Bank was the first big bank to open what was then called a discount brokerage.
TD is still the leader in self-directed investing, 40 years later. The duo of TD Direct Investing and the TD Easy Trade app top The Globe and Mail digital brokerage ranking for a second straight year.
Consistently good Qtrade Direct Investing is another strong choice, and National Bank Direct Brokerage is coming on strong as a result of its offer of free trading of stocks and exchange-traded funds. But TD is the best broker for the most investors. Unless other brokers raise their game, TD could be settling in for a long reign at the top.
A big part of 2024 broker ranking flows from this question: Does my broker know it’s me when I log in to monitor my account or make a trade? Am I shown account performance data right up front? Are there updates for my holdings? Do I feel like I’m primed with the information needed to get things done in my portfolio?
TD nails all this and, recently, it’s also been fixing nagging little deficiencies. For instance, it now offers secure e-mail so clients can get answers to questions about their account without resorting to the phone. Online chat is offered for active traders – TD should now extend it to everyone.
One more TD innovation of note is the introduction of digital withdrawals from registered education savings plans. Parents will appreciate this one.
TD Direct still charges a flat $9.99 per stock or ETF trade, a pricing policy that has been around for close to 10 years. Over this time, Wealthsimple, NBDB and Desjardins Online Brokerage have introduced commission-free trading, and others have limited offers of no-cost ETF trading. TD’s response is the Easy Trade app, which offers 50 free stock trades per year and unlimited free trading of TD-brand ETFs. Note: You cannot buy non-TD ETFs through Easy Trade.
As well as commissions and fees, this ranking considers the design of websites and apps for mobile devices, portfolio management tools, resources for researching stocks and ETFs and the process for opening accounts and transferring in money.
Here are notes on the brokers in the 2024 ranking, listed alphabetically:
Owner: Bank of Montreal
Grade: B+
The eternal question to be asked of bank-owned brokers: Is there any reason to deal with them, other than if you’re already a client of the same bank? BMO InvestorLine answers this question in the affirmative with its list of 95 BMO, iShares and Vanguard ETFs that can be traded at no cost. The selection is well-curated in that there are multiple options for building a sound, sensible portfolio. Otherwise, BMO is a well-rounded broker with a flat trading commission of $9.95.
Owner: Canadian Imperial Bank of Commerce
Grade: B
Investor’s Edge has positioned itself as a lower-cost option in the world of bank-owned brokers with a flat trading commission of $6.95. The $3 saving is less of an enticement than features such as a top-notch equity research library with reports from CIBC Capital Markets as well as Thomson Reuters and Morningstar. If you’re a paper person, IE is one of the few brokers that doesn’t charge for paper trade confirmations and account statements. Is there any overlap at all between avid GIC investing and use of mobile apps? If so, IE is right there as a rare broker to include GICs in its app for smartphones.
Owner: CI Financial Corp.
Grade: C
CI Direct Trading clients get access to a fantastic portfolio analytics tool from a third-party provider called Wealthscope that covers performance, fees, risk, income and diversification. If only the rest of CTDI was as good. The website’s a navigational challenge, and the design lacks the vibrancy of leading brokers. Pricing was once the cheapest in the industry, but now it’s low-ish. The app is a better bet than the website.
Owner: Desjardins Group
Grade: C+
Zero commissions, everyone. Also, a good range of equity research and a cleanly-designed app that upgrades the minimalist website.
Owner: HSBC Bank Canada
Grade: C-
InvestDirect’s niche is offering access to 30 global markets with trades that settle in 10 different currencies, including the Canadian dollar. If that interests you, be mindful that parent HSBC Canada has been bought by Royal Bank of Canada and may not last long as an independent entity.
Owner: IBG Holdings LLC
Grade: B+
IB is the most trading-forward of the brokers in this ranking, but the availability of fractional shares suggests some appeal for investors with more of a buy-and-hold approach. Otherwise, IB offers some of the lowest commissions and foreign exchange and margin rates, and it’s an outlier in paying interest on cash balances.
National Bank Direct Brokerage
Owner: National Bank of Canada
Grade: B
NBDB offers zero commissions to trade stocks and ETFs, and a fresh, clean website that includes a library of Morningstar and National Bank Financial equity and ETF research. What you don’t get is the sense that your broker knows who you are when you log in and has pertinent information to show you. Top-tier brokers in this ranking all offer this. Also, oddly given the investing trends of the past year, NBDB does not offer online GIC buying.
Owner: Aviso Wealth
Grade: A-
Qtrade has lived at the top levels of this ranking for ages because it’s always making big and small improvements. Last year, Qtrade was criticized for high minimums on purchases of guaranteed investment certificates. The minimums were then reduced to $5,000. One more recent tweak is the addition of a goal-planning tool that allows clients to set a target amount for a specific financial milestone and then track their progress toward achieving it. The big pluses at Qtrade include one of the most user-friendly websites in this ranking, a good app, commission-free trading of 120 ETFs and a Portfolio Score tool that lets clients drill way down into their portfolios to assess risk, diversification and more.
Owner: Questrade Financial Group
Grade: B+
If you plan to trade mainly on your smartphone, give Questrade a good look because its mobile app is one of the most user-friendly. There’s an easy simplicity to the way to guides investors through a trade that will appeal to new and even experienced investors. Questrade made a bold statement about its commitment to young investors when it launched first home savings accounts (FHSAs) immediately on their official introduction in April, 2023 – other brokers are still catching up (see charts). Pricing at Questrade is mid-market at a minimum $4.95, with electronic communications network (ECN) fees adding to the cost of some trades.
Owner: Royal Bank of Canada
Grade: B-
RBC Direct Investing has done a few things to improve its service in the past while, starting with the introduction of FHSAs ahead other bank-owned brokers. There’s also a new income projection tool that will suit retirees well, a homepage feature showing recent events driving your holdings and the removal of a ban on clients buying high interest savings account ETFs. RBC Direct’s website is an issue, though. It’s old-looking and zero fun to use.
Owner: Bank of Nova Scotia
Grade: B
There’s a 1990s vibe to iTrade’s website, but 10,000 clients are now testing a redesign that will be introduced next year. The iTrade app is quite good and offers reason for optimism about the website. Reasons to do business with iTrade include a strong equity research centre and a menu of 120-plus ETFs that you can trade at no cost. For all other ETF and stock trades, you pay $9.99. The same applies to mutual fund orders.
Owner: Toronto-Dominion Bank
Grade: A
Of all the players covered here, TD Direct Investing has evolved the most from the original digital broker function of providing a platform to buy and sell securities at a lower price than full-service dealers. No, not on price. Where TD excels is in providing the tools needed to manage your portfolio efficiently. If you think your broker is plenty good enough, try opening an account at TD Direct and compare. Just not an FHSA – TD Direct wasn’t offering them as of early 2024, but says they are coming later in the year.
Owner: Ownership includes Power Corp. of Canada
Grade: B+
Wealthsimple is graded here not as an all-around broker, but as a financial tool for Gen Zs and millennials. Commission-free stock trading is a big piece of the story in that clients can build positions in ETFs and stocks with maximum efficiency. There are no trading costs, and fractional shares are available. If you’re a saver with a short time frame and zero tolerance for stock market antics, you can park money in savings and earn 4 to 5 per cent as of mid-February 2024. The cheapness of Wealthsimple fades a bit if you trade U.S. stocks because there’s a $10 monthly fee for keeping U.S. dollars in your account. A workaround is to use Canadian Depositary Receipts, which are TSX-listed versions of popular U.S. stocks that trade in Canadian dollars.
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