12:41 [Comment From Derek: ]How do you know if recommendations and top stock picks of you online broker are not biased? Do some of these discount brokerages recommend companies to get future business with these firms?
12:47 Rob Carrick: Derek, much of the stock research offered by online brokers comes from investment dealer analysts who can, in theory, be biased in their assessments of a particular company. In large part, these invstment dealers are part of the same corporate families as online brokers themselves. So, for example, CIBC Investor's Edge offers CIBC World Markets reports.
CIBC IE has nothing to gain from this relationship, other than providing a service that makes clients happy. That said, you do have to be aware of potential bias in stock research from big investment firms. I don't think this is as much of a problem as it was several years ago, but we do have to be realistic. If an investment dealer does business with a particulary company, it's tough for the dealer's analysts to slag that company in a report.
Want a quick way around this issue of bias? Look for stock research from independent sources such as Morningstar and Standard & Poor's. These firms are strictly in the analysis business and have nothing to gain or lose by being tough on a stock. More and more brokers are offering unbiased research, by the way.
12:47 [Comment From Brian: ]Hi, I currently use RBC Direct Investing, however they, like most other Canadian online brokers, do not allow you to invest in other international stock exchanges. The only firm that allows you to do so is HSBC (and, amongst other options, transact in foreign currency as well as short stocks). I am tentative at this moment to open up an account there since I have rarely heard of any news (positive or negative) from using their online broker. Could you offer some insight into them, as well as to whether all the other Canadian online brokers will offer international market access? Thanks.
12:52 Rob Carrick:
Hi Brian. Offering access to international markets is not a big deal to Canadian investors, so it only has a minor impact on my ranking. I heard a top guy at a big brokerage firm say a year or two that it was looking at adding online access to global markets, but nothing has materialized. Likewise, the old E*Trade Canada never followed its U.S. parent's move into global trading. Brokers are sizing up demand for global access and taking a pass. That said, some investors do want to be able trade directly on exchanges outside North America. For them, HSBC InvestDirect is the only game in town. HSBC is a huge global bank, but you wouldn't know it by InvestDirect. This firm is way behind the leaders in terms of the service it provides. Suggestion: use InvestDirect for global markets and have other assets at a better-ranked firm.
12:52 [Comment From Dwayne: ]If you're looking to create a basket of stocks (12-15) and will make only 2 or 3 trades a month what online brokers have the best rates.
12:55 Rob Carrick: Hi Dwayne. Without knowing how much you have in your account, I'd have to go with Questrade. The minimum commission there is $4.95 and costs top out at $9.95, with ECN and exchange fees possibly adding a little to that. As mentioned earlier in this discussion, most other firms range from $10 to $29, depending on how big your account is. If you figure on making 50 trades a year, take at look at CIBC Investor's Edge -- you can pre-pay $395 annually for 50 trades.
12:59 [Comment From Paul: ]Which online brockerage house has the best bond prices? ie. smallest spreads
12:59 [Comment From Bill: ]When buying bonds at a discount broker, how much must the trade be for, to avoid getting hit badly on the spread or commission?