The one sure-fire, no-doubt bull market out there right now is the online brokerage business.
Stocks and bonds – who knows if they’re headed up or down? With online brokers, the boom in new account openings that began as the stock markets crashed last fall has kept right on going. An informal canvas of a few firms found that account openings are up in the range of 19 to 26 per cent year over year, and that’s not including the impact of the tax-free savings accounts introduced on Jan. 1. One firm said visits to its public website are up 53 per cent over last year’s level, while online tour traffic is up 40 per cent.
People open online brokerage accounts for lots of reasons, including lower fees, a wide choice of investments, and dissatisfaction with an investment adviser.
What all newcomers to online investing have in common is a need for the kind of guidance they’ll find in Globe Investor’s Online Broker Ranking.
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A dozen firms were evaluated for this 11th annual ranking and the winner for the fourth straight year is Qtrade Investor, an independent firm out of Vancouver with a track record of continuous improvement. Right behind are Credential Direct, BMO InvestorLine and Scotia iTrade.
As always, this ranking is aimed at the mainstream investor who holds stocks or exchange-traded funds and may have an interest in bonds and mutual funds.
Online brokers will take trades over the telephone, but the focus here is strictly on online services because they offer the lowest commissions and best range of tools for choosing investments and financial planning. Here are the ranking criteria:
- Costs: Account fees and mutual funds are considered, but stock-trading commissions get the most focus.
- Trading: How quickly and cleanly can clients place orders for stocks, as well as bonds and funds?
- Customer Satisfaction: Consulting firm Phase 5 contributed this portion of the ranking through the results of a survey of 1,380 online investors conducted in September. Scores are based on answers to six questions related to how happy clients were with their broker and whether they would recommend it to others.
- Tools: The resources a broker offers to help clients choose investments and develop an overall plan. There's an emphasis this year on helping the many newcomers to online investing.
- Account Information: Grades a broker's ability to allow clients to see how their accounts are doing and perform basic account maintenance.
- Website: Security and website utility are the focus here. It's a given that all brokers in this ranking are members of the Canadian Investor Protection fund, which protects client assets in case a firm goes bankrupt for amounts up to $1-million.
*Send feedback to OnlineBrokers@globeandmail.com
Now for the rankings:
#1: QTrade Investor
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qtrade.ca/investor Ownership: privately held Comments: The little independent from out west beats the big boys of Bay Street yet again. The story here is that Qtrade is relentless in scoping out the best innovations of its competitors and nimbly adopting them. With Qtrade, clients make the fewest compromises in terms of their overall online investing experience. Recently, the firm has added more research on stocks and started allowing U.S. dollars to be held in registered accounts so clients can avoid expensive foreign exchange fees. Qtrade does get demerits for, in some cases, charging electronic communications network (ECN) fees in addition to posted commissions. |
