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Questrade Financial Group Inc. is continuing to expand its footprint in the financial-services industry with an application for a Canadian banking licence, allowing it to diversify beyond low-cost stock trading for Canadians.

Managing about $9-billion in assets, Questrade is best known for its discount brokerage platform, which it promotes through a series of television advertisements that depict people firing their financial advisers so that they can invest at a lower cost. The company also runs a robo-adviser business – Questwealth Portfolios – which recently cut its management fees to 0.25 per cent, making it the cheapest online portfolio manager in Canada.

Earlier this year, Questrade branched out from its online businesses to acquire a Mississauga-based lending and deposit-taking business, Community Trust Co.

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Now, Toronto-based Questrade has filed an application with government regulators which, if approved, will allow it to operate a division under the name Quest Bank (Banque Quest in French).

Questrade chief executive Edward Kholodenko would not provide details on timing of a new service or on what type of services may be offered to clients.

“The application is just part of a longer-term process that will enable us to explore potential new ways to help Canadians keep more of their money and become more financially successful and secure," he said in a statement to The Globe and Mail.

Being able to take deposits from consumers would allow Questrade to engage people outside of the investing segment, which is proving to be a difficult one to engage the mass affluent population, said Josh Book, founder and CEO of Parameter Insights Inc.

As large U.S. discount brokerages continue to slash fees to zero, diversifying into other product lines will become a growing trend within the online advice sector.

Last year, Canada’s largest robo-adviser, Wealthsimple Inc., launched a savings account in partnership with Equitable bank. The deposits are directly held by Equitable bank, so Wealthsimple is not required to have a banking licence. At the time, Wealthsimple CEO Michael Katchen said he had no immediate plans to apply for a banking licence.

In the United States, fintech startup Robinhood, which offers zero fee trading to investors, applied to become a chartered bank earlier this year – before pulling the application last week. If approved, Questrade will be one of the first online managers to directly hold a bank licence in Canada, Mr. Book says.

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“This allows them to explore more creative way to start a relationship with a broader set of consumers and overcome some of the inertia created by low levels of financial literacy among people,” he said in an interview. “It’s an exciting development for wealth management which we haven’t seen in Canada as yet.”

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