Since investing in dividend growth stocks in 2009, I’ve used 6 different Canadian discount brokers (though not so discounted at the time) and it’s a competitive market out there.
There is a Dicount broker in front of us in a year and another discount broker in the next year. They catch up and try to outdo each other until they have spent enough money.
Not all reviews of discount brokers are done equal. It is often aimed at a new investor with little money, rather than an experienced investor looking for certain characteristics. In the case of a dividend investor, understanding what you need to successfully use your dividend for compound growth is important. The same goes for an index investor looking for dividend ETFs.
While fees are important to begin with, other factors become important as your portfolio grows. Below is a breakdown of the popularity of Canadian discount brokers among readers who took the survey.
Choosing a discount broker doesn’t have to be difficult and I’ve made it easy for you. In fact, I don’t choose the best you are as few investors have the same requirements!
Discount brokers available
While the easiest way to select a discount broker is to use the one associated with your bank, there are options with different features and costs that best suit your needs. Be sure to review all of your options.
Discount broker requirements
I’ve tried to simplify the requirements DIY investors look for in a discount broker as detailed below. Use the table below to see which Canadian discount broker will suit your needs. It’s okay to have multiple discount brokers too, as many of my readers have more than one discount broker.
- Young investor – This is usually under the age of 30 for new investors.
- ETF investor – Can you trade free ETFs which are of great importance to young investors as they may end up having no fees?
- Lower fees – Does trading stocks have lower fees than the norm many of the bank discount brokers have around $ 10?
- Dividend investor – Can you get DRIP shares and the DRIP discount?
- USD investor – If you intend to buy US stocks and convert Canadian dollars to US dollars from time to time.
The only limitation in choosing a discount broker is whether or not you want easy access from your bank account.
The most popular discount brokers are those tied to the investor’s banks. This is primarily why the discount brokers of the major banks aside from CIBC and National Bank are not as price competitive.
Discount broker comparison
The devil is in the details when it comes to comparing the discount brokers, but the details usually don’t matter until you hit the top two candidates out of the five criteria above.
For example, is customer support important? They all have it, so it’s there and everyone has their own experience. Just like your love-hate relationship with your wireless service provider, customer service at discount brokers is no different …
What about the user interface? They all give you the opportunity to place a trade and do not have great portfolio analysis. That’s why I used my own portfolio tracker.
What about currency conversion using Nortbert’s Gambit? Well, only RBC Direct Investing does this without contacting customer support and logging your stocks. Does that mean we should eliminate all others who support it?
Overview of discount brokers
Questrade is one of the best entry-level options, but it may not suit medium to advanced DIY investors. Definitely one of the cheapest to trade.
Scotia iTrade Review (previously etrade Canada)
Scotia iTrade was my first serious platform by buying etrade Canada. I stuck with it as the trade was cheaper than Scotia McLoed and I wasn’t far from the $ 9.99 per trade minimum inventory. My requirements were minimal and I was happy. However, as I expanded my portfolio and investment knowledge it no longer met my needs and I switched to RBC Direct Investing.
RBC Direct Investing Review
RBC Direct Investing currently has my assets (if I can call them assets :)). Given that it had the best matches highlighted in my discount broker review, I checked it out after I was set up. Six months later I initiated my children’s RESP transfer and I can say again that their service is really good.
BMO InvestorLine Review
When doing banking with BMO, BMO InvestorLine is likely your first port of call. It’s competitive with the other banks.
The darling of all accounts! Computershare isn’t sexy, but it works. It follows the early start mantra, go slow and stick to your plan.