When it comes to investing, there is a huge ecosystem of brokages available for do-it-yourself investors. In this post, I want to focus on two of the most attractive options for new investors. While there are many more platforms (especially from the big banks), it’s my opinion that the fees charged by these alternatives cannot stand the test against Questrade and Wealthsimple Trade. It is worth noting as well that both of these discount brokerages are covered and governed by IIROC and CIPF, protecting each of your accounts for up to one million dollars in case of bankruptcy.
Questrade is the largest and (self-proclaimed) fastest-growing online brokerage in Canada. It was named Canada’s best online broker in 2019 by Moneysense and offers a wide range of account types including Margin, TFSA, RRSP, and RESP accounts.
Questrade’s fee structure is considerably fair as well as transparent. You can buy and sell at 1c per share with a minimum transaction fee of $4.95 and a maximum of $9.95. This caps off large transactions to a maximum of just under $10. Still, for those not engaging in larger transactions, be aware that the minimum transaction fee of $4.95 might impact your returns more than you’d initially think. On a positive note, there is an exception to the transaction fee when it comes to purchasing ETFs. Questrade allows you to buy ETFs for free; however, selling ETF shares follows the same fee structure as trades with regular stocks.
It has to be said that there is no annual fee but Questrade does have an inactivity fee. This fee is listed as $24.95 per quarter. This fee is waived if you:
A - Keep your total equity with Questrade above $1000, or
B - Place a trade during the quarter, or
C - Deposit $150 in total during the quarter into any one of your accounts or in combination across all of your accounts, or
D - Subscribe to one of their market data packages, or
E - Are 25 or younger
Questrade’s platform can be accessed through your desktop computer as well as your mobile device. I have used the desktop/web interface as well as the mobile app and really enjoy the user experience on both platforms. Furthermore, you can secure your account with 2-factor-authentication, protecting your investments with more than just a password.
Another advantage of the platform is the customer support structure. The options to use webchat, email, or call them makes it comfortable regardless of your personal preference. For general questions, they also have support articles via their website and a helpful Reddit thread.
The biggest downfall I would say with Questrade is that you can’t start trading in your new account until you fund it with $1000. This means you would need to do a bit of saving before you can even start purchasing securities.
Disclaimer: The link to the Questrade platform is an affiliate link. Using this link for the signup will directly benefit the just-dividends blog. I am a satisfied user of Questrade’s platform and would not use and or publish the affiliate link otherwise.
Platform: Wealthsimple Trade
Completely separate from the Roboadvisor of Wealthsimple that you may recognize the name from, Wealthsimple Trade launched in 2019 and currently offers Non-registered Cash, TFSA, and RRSP accounts. At the moment, users are limited to one account per account type and there is no option to open an RESP or Margin account.
Wealthsimple trade offers commission-free trades with no account minimums making it really attractive for someone just starting out.
Wealthsimple Trade is offered only via a mobile platform. The mobile app is intuitive and user-friendly. User support is handled with the help of an extensive FAQ and an online ticket system where users are able to submit a request. At this time, there are no other ways to contact their support.
The biggest concern I have, in addition to the mobile-only platform, is that there is no 2-factor-authentication. 2FA is, in my opinion, an essential feature that mitigates the risks associated with compromised passwords. 2FA is currently on the roadmap for the future but there is no timeline at the point of writing this article.
|Available Platforms||Desktop and Mobile||Mobile-only|
|Account Types||Margin, TFSA, RRSP, RESP||Cash, TFSA, RRSP|
|Trade Commissions||1c per Share (min. $4.95, max. $9.95)
Free by orders for ETFs
|2-Factor-Authentication||Yes||No, but on the Roadmap|
|Support||E-Mail, Phone, Chat||Online ticket system|
The comparison has been done on Feb 8, 2020, with the current information available. Both platforms may change the fees in the future and/or enhance their features.
Which broker would you choose? Do you have ideas for a topic that should be covered in this series? Comment below.
Stay tuned for my next post outlining the most important account types available for Canadian investors.