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Look out TD Waterhouse, the St. Willibrord Community Credit Union now offers on-line brokerage services.

So does First Calgary Savings, Calgary's largest credit union, and Ubiquity Financial, a tiny on-line banking division of Fraser Valley Credit Union.

Is TD Waterhouse, the bull moose of the on-line brokerage business in Canada, about to be attacked by a cloud of gnats?

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Actually, no. Behind the on-line services at these and other credit unions is a single company called Qtrade Investor.

Based in Vancouver, Qtrade supplies on-line brokerage services to small financial institutions. Go to the St. Willibrord, First Calgary or Ubiquity Financial Web sites and you'll see a link that will take you right to Qtrade's Web site.

Qtrade expects to open its site to the public tomorrow at http://www.qtrade.ca , but don't expect a lot of hoopla.

This is a stealthy operation that is more concerned about signing up credit unions, small banks and financial planning firms than it is in drawing a trickle of individual investors.

A trickle is the best a new on-line brokerage can hope for in a market dominated by bank-owned players, such as Waterhouse, Royal Bank's Action Direct and Bank of Montreal's InvestorLine.

While these giants feed off existing clients at their parent banks, independents such as E*Trade Canada, eNorthern and Canada Invest Direct have to scrape and scuffle for each new customer.

Qtrade is more comparable to the bank-owned brokers than to its fellow independents. So far, the firm has signed up 13 institutions, most of them credit unions but also a Vancouver financial planning firm and Ubiquity Financial. Another 20 or so institutions are in the pipeline, but even without them, Qtrade claims to have developed a pool of 1.5 million potential customers.

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Just as Toronto-Dominion Bank branches are billboards for TD Waterhouse, so are credit union branches a means of publicizing Qtrade. Like the banks do for their on-line brokerages, Qtrade works with credit union staff to help them promote the product with customers.

By marketing its services through other institutions, Qtrade also gets around the name recognition problem faced by independent on-line brokers that are trying to break into the business.

On-line investing requires some trust in your brokerage and it helps if the name is familiar to you. TD Waterhouse, Charles Schwab and E*Trade are familiar names in on-line investing; Qtrade is not.

For the record, Qtrade is a privately held company that last month sold a minority stake to Deutsche Bank, the global financial services company that took over U.S. on-line broker National Discount Brokerage last year.

The success Qtrade has had in signing up credit unions is a testament to the arrival of on-line investing as a basic financial service, as much as anything else.

For example, look at St. Willibrord. This London, Ont.-based credit union has 33,094 owners (credit union clients actually own a tiny piece of the institution) who are already able to their banking on-line.

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"We've had requests from several owners over the years to get into on-line investing," said Harry Joosten, St. Willibrord's vice-president of owner relations. "Some of them are rural farmers doing their own trades and others were dealing with full-service brokers and wanted cheaper trades."

There's no way small banks and credit unions can afford to offer an on-line brokerage of their own. And yet, if they don't, they risk losing client assets to competitors.

Qtrade's product is good enough to have won the business of several credit unions, even though the credit union movement has an in-house on-line brokerage called Credential Direct, http://www.credentialdirect.com .

Still, savvy on-line investors will find Qtrade to be a routine service now, with fees that are no bargain. Clearly, Qtrade isn't going to play the low commission game that Canada Invest Direct did when it opened for business this year with a $22.95 minimum trade.

The minimum on-line commission at Qtrade is at the higher end of the current range at $29. Mutual funds can be bought with no commissions, but there's a $45 redemption fee for no- and front-load funds. Inexplicably, Qtrade also copied TD Waterhouse's $100 annual fee for self-directed registered retirement savings plans with less than $25,000 in assets.

These are early days for Qtrade, so all of this can change.

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In fact, the Qtrade people talk of developing a U.S.-style on-line brokerage, with superior service and resources for clients. Specifically, they plan to introduce first-class tools for researching stocks.

Time will tell whether this is marketing blather or the real goods. What's certain now is that Qtrade is the first, new on-line broker in a while that has a chance of giving the big boys something to think about.

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