Since I have been investing with dividend growth stocks back in 2009, I have used 6 different Canadian discount brokers (not so discounted back in the day though) and it’s a competitive market out there.
One year one dicount broker is ahead, and the next year it is another discount broker. They catch up to each other and try to outdo each other until they have spent enough money.
Not all discount brokers review is done the same either. It’s often geared towards a new investor with little money rather than a seasoned investor looking for specific features. In the case of a dividend investor, it’s important to understand what you need to be successful with putting your dividend at work for compound growth. The same goes for an index investor looking for dividend ETFs.
While fees are important when you start, other factors become important as your portfolio grows. Below is a breakdown of Canadian discount broker popularity from readers that took the survey.
Choosing a discount broker doesn’t have to be difficult and I have simplified it for you. In fact, I am not choosing the best, you are as few investors have the same requirements !
Discount Brokers Available
While the easiest path to selecting a discount broker is to use the one affiliated with your bank, there are options available with different feature set and cost that may best fit your needs. Be sure to review all of your options.
Discount Broker Requirements
I have tried to simplify the requirements DIY investors look for in a discount broker as outlined below. Use the table down below to see which Canadian discount broker fit your needs.
It’s ok to have multiple discount brokers too as many of my readers have more than one discount broker. Usually, you end up with different accounts at different brokers for various reasons.
- Young Investor – This is for new investors usually under 30 years old.
- ETF Investor – Can you trade free ETFs which is powerful for young investors as they can have no fees in the end.
- Lower Fees – When trading stocks, does it have lower fees than the norm which is many of the Bank discount brokers at approximately $10.
- Dividend Investor – Can you DRIP shares and can you get the DRIP discount.
- USD Investor – If you intend to buy US stocks and convert Canadian dollars to US dollars from time to time.
|Discount Broker||wdt_ID||Young Investor||ETF Investing||Lower Fees||Dividend Investing||USD Investing|
|CIBC Investor's Edge||2||No||No||Yes||Yes||Yes|
|National Bank Direct Brokerage||3||Yes||Yes||Yes||Yes||Yes|
|RBC Direct Investing||6||No||No||No||Yes||Yes|
|TD Direct Investing||8||No||No||No||Yes||Yes|
|Discount Broker||Young Investor||ETF Investing||Lower Fees||Dividend Investing||USD Investing|
The only caveat to choosing a discount broker is whether or not you want easy access from your bank account.
The most popular discount brokers end up being those tied to where the investor banks. This is primarily why the big banks discount brokers are not as competitive in terms of pricing aside from CIBC and National Bank.
Canadian Discount Broker Comparison
The devil is in the details when it comes to comparing the discount brokers but the details are not usually important until you reach the top two candidates from the top 5 criteria above.
For example, does customer support matters? They all have it so it’s there and everyone has their own experience. Just like your love / hate relationship with your mobile provider, the customer support with discount brokers is no different …
What about the user interface? They all provide you with the ability to place a trade and not have great portfolio analytics which is why I have resorted to have my own portfolio tracker.
What about currency conversion using the Nortbert’s Gambit? Well, only RBC Direct Investing does it without reaching out to customer support and ask to journal your shares. Does that mean we should eliminate all others that support it?
Overview of Discount Brokers
Pick your discount broker to serve your needs. Some provide real-time quotes and some don’t (15 minutes delayed) while others provide you with lower trade fees.
Questrade is one of the best to get started but it might not be for intermediate to advanced DIY investors. Definitely one of the cheapest for trades.
Scotia iTrade Review (previously etrade Canada)
Scotia iTrade was my first serious platform through the purchase of etrade Canada. I stuck with it as trading was cheaper than Scotia McLoed and I was not far away from the minimum required holdings for $9.99 per trade. My requirements were minimal and I was satisfied. However, as I grew my portfolio and my investment knowledge, it stopped meeting my needs and I moved on to RBC Direct Investing.
RBC Direct Investing Review
RBC Direct Investing is where my fortune currently resides (if I can call it a fortune :)) … Considering it had the best matches highlighted in my discount broker review, I went with it and reviewed it after I was set up. Six months later, I initiated the transfer of my kids RESP and I can say, one more time, that their service is really good.
BMO InvestorLine Review
If you bank at BMO, BMO InvestorLine is probably your first stop. It’s competitive with the other banks offering.
The darling of all accounts! Computershare is not sexy but it works. It follows the mantra of start early, go slow and stick to your plan.