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  (Jori Bolton for The Globe and Mail)


(Jori Bolton for The Globe and Mail)

The Globe and Mail's 17th annual online broker ranking Add to ...

It’s not a beauty contest, but the 17th annual Globe and Mail ranking of online brokers does put a lot of emphasis on looks.

The dozen firms in the ranking have converged on cost to a point where sub-$10 commissions for all are near universal. Most firms offer similar levels of research on stocks and exchange-traded funds, and most now offer tools to show how your account has performed since you set it up. Appearance is the biggest differentiator between firms now, and that means big changes in this ranking.

A few firms have upgraded their public and/or client websites recently and it’s now becoming apparent how much better a well-designed website can make the process of choosing and using a broker. Accordingly, the client experience at each firm, including the usability of the website, has taken over from cost as the No. 1 factor in the ranking process.

This year’s overall winner is Virtual Brokers. VB has reclaimed the top spot from Qtrade Investor, now sharing second place with hard-charging Questrade. In third is a name you haven’t seen for a while in the upper echelon of this ranking. It’s TD Direct Investing, which has introduced a strikingly good new client website. The pressure’s now on the other bank-owned firms to catch up.

As ever, this ranking is designed for mainstream investors needing access to a variety of registered accounts and tools for portfolio-building and researching investments. All brokers included here are members of the Canadian Investor Protection Fund (CIPF), which protects account assets of up to $1-million if a firm goes under.

Here’s some more detail on how the brokers are scored:

-The client experience (30 per cent): Much of the emphasis here is on having a clean, easy to navigate website that is simple and engaging to use, even for novices. This category also emphasizes the Web interface for trading stocks, the availability of U.S.-dollar registered accounts and the variety of investments offered online, including low-cost mutual funds, guaranteed investment certificates and investment savings accounts (great for holding cash). We also consider whether there is an option for online advice.

-Cost (25 per cent): Stock-trading commissions get the most weight in this category, with a small penalty applied for charging electronic communication network (ECN) fees for some trades. The availability of commission-free ETFs also has a major influence. Points also go to brokers who have simplified account fees by charging the same amount on all types of accounts and offer easily achievable ways to avoid these charges.

-Account reporting and maintenance (25 per cent): Brokers that score well here use graphics effectively to help you monitor your asset allocation and check how your account has done since you set it up. They also answer client queries by secure e-mail and provide an extensive online archive of account and tax documents.

-Research and tools (15 per cent): This category covers the variety of a broker’s research, financial planning and stock/ETF/mutual fund screening tools. A useful ETF centre is emphasized.

-Innovation (5 per cent): Emphasizes a firm’s recent innovation record, but also considers the long-term.

Broker and final gradeThe Client ExperienceCost Account Reporting & Maintenance Research & ToolsInnovation
BMO InvestorLine
Grade: B

As ever, a strong choice

Good features, obsolete websiteTypical for bank-owned firms in offering stock trades for all at just under $10Aced itFineLosing momentum
CIBC Investor's Edge
Grade: C-

The cheap and cheerful broker

Website letdown, Part Two. And, no US$ RRSPsBest of the banks at a flat $6.95 per stock tradeWay behindGreat varietyOnly on cutting stock commissions
Credential Direct
Grade: C

Middling choice

Fresh new website helps someQuite decentSolid, but not fantasticFineNot so much
Desjardins Online Brokerage
Grade: C-

See above

Good by the standards of years agoBank-likeBehind the competitionStrongNot so much
HSBC InvestDirect
Grade: D

Have heard good reports about the client service

Not goodBank-likeBarely adequateUseful enoughNone
National Bank Direct Brokerage
Grade: C

They should promote InvestCube more

Website letdown, Part TroisBank-likeToken effortStrongThey have their moments, including a robo-like portfolio-building service called InvestCube
Qtrade Investor
Grade: A-

Long a top choice in this ranking

Hardly a detail out of placeGood overall, but they should lose the ECN fees on some stock tradesSolidFineStrong
Grade: A-

They could own this ranking someday

A new website promises to be impressiveLow, but ECN fees may apply; you can buy any ETF commission-freeSolidNot a leader in this one categoryConstant
RBC Direct Investing
Grade: B-

Canada's biggest bank should have a sharper product

Website letdown, Part Four; clients should check out the trading dashboard for a sign RBC can offer a much better user experienceBank-likeReally goodAdequateThey have their moments, like introducing $9.95 stock trades for all in 2014
Scotia iTrade
Grade: B

Good overall, but the pricing of stock trades rankles

A pretty good package, but no US$ RRSPsSome commission-free ETFs available, but this is a high-cost broker for small accounts with commissions topping out at $24.99 Aced itStrongNot much recently
TD Direct Investing
Grade: B+

Big Green is back

Arguably the best client website in this group - they nailed the navigation. A small but smart detail: They refer to buying and selling investments, not tradingBank-likeAced itStrongThe long hibernation is over
Virtual Brokers
Grade: A

The low-cost leader does enough other stuff well to take top spot

The client website is bright and fun to use, and the public site is state of the artSuper cheap; stock commissions as low as a penny a share and all ETFs can be bought commission-freeAdequateImproved to average levelsThey never stop
BrokerForex ComparisonMargin Comparison
Cost in C$ if a client bought $15,000 in U.S. stocks on the morning of Oct. 5, 2015 ($)Here is the markup over the prime rate for mainstream customers (in percentage points)*
BMO InvestorLine19,8501.45
CIBC Investor's Edge19,8601.55
Credential Direct19,9002
Desjardins Online Brokerage19,9381.25
HSBC InvestDirect19,8781.55
National Bank Direct Brokerage19,8701.25
Qtrade Investor19,8333.5
RBC Direct Investing19,8551.4
Scotia iTrade19,6801.25
TD Direct Investing19,6471.55
Virtual Brokers19,7521.5
Here’s a sample page from Virtual Brokers’ sharp new public website. Notice how they’re appealing to a wide variety of investors:

Check out TD Direct Investing’s clean, simple friendly new landing page for clients after they log in:

Here’s Scotia iTrades commissions and fees page. Scotia has not caught up with the trend of flat sub-$10 stock trades for all:

The homepage for RBC Direct Investing’s public website is old school. O-L-D school: Report Typo/Error

Follow on Twitter: @rcarrick

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