Best online brokers in Canada for 2020

Canadians have never had more options when it comes to managing their investments, from full-service brokerages and financial advisors, with their often hefty fees, to an emerging crop of robo-advisors offering hands-off, low-cost portfolios. However, many investors want the best of both worlds—low fees and access to a full range of investments—and they prefer to take personal control of where their money goes. For these investors, online brokers remain the best choice. But, among the dozen or so firms serving Canadians, which is the best online broker in Canada for your investing style and needs?

For the seventh year in a row MoneySense has teamed up with Glenn LaCoste, the founder of Surviscor, a firm that analyzes banking and brokerages across North America, to bring you the most definitive ranking of the Best Online Brokers in Canada for 2019. Surviscor’s depth of analysis is unmatched, and has been customized specifically for MoneySense, examining hundreds of experience criteria that go far beyond just price, including customer experience data, various product offerings and mobile capabilities.

What are online brokers?

Online brokers, or discount brokers as they’re also called, operate like traditional brokers, allowing investors to trade everything from stocks, bonds, options and mutual funds, to ETFs and GICs. Unlike traditional brokers, they put investors in the driver’s seat and allow them to buy and sell investments on a do-it-yourself basis for a fraction of traditional commissions.

Boiled down, LaCoste says, all the online brokers can do the same thing—that is, provide quotes, and allow you to buy and sell stocks. Several go above and beyond, though, and that’s what sets them apart.

Go here for our full comparison tool of all 13 online brokers to see how they stack up.

Canada’s best online brokers

* Lower-value options available. See full online broker comparison tool for details.

Here’s a closer look at the top three overall winners.

1. Questrade*

(Source: Questrade)

Open a Questrade account*

You’ve no doubt seen their cheeky ads on TV and across the web. Under the tagline “It’s time to ask tough questions about your money,” the ads feature customers grilling their financial advisors about the low returns and high fees on their accounts before ultimately announcing they’re switching to Questrade*. And the ads appear to be working. Questrade is the fastest-growing online broker in Canada and this year they’re number one in our best broker ranking, bumping Qtrade out of the top spot. This is an online broker that continues to invest and innovate at a time when many of its rivals have stagnated.

Things we like:

• Customization: Questrade gives customers the tools to tailor their trading experience as they want it, such as letting users set “quick entry” values to speed up transactions like market, quantity, type of order and price as well as durations and triggers, while also allowing customers to set some default information for transactions—such as which market to place the trade on—to speed up orders
• Customer service has improved over the last year, while no other broker makes it easier to reach a person when you need to
• Pay no commission when buying ETFs

Needs improvement: Questrade doesn’t have the depth of research available to customers that some other online brokers do

2. Qtrade Investor

(Source: Qtrade)

Last year’s winner, Qtrade, has faced some distractions over the past year as it became part of Aviso Wealth, a wealth management company owned by Desjardins Group, five provincial credit unions Centrals and the Cumis Group. However, despite what was happening behind the scenes, Qtrade continued to innovate, and remains near the front of the pack in our 2019 ranking. While it may not lead in most categories, Qtrade does things well across the board and adapts fast to new advances in the industry.

Things we like:

• Qtrade scores highest in user experience, with a seamless account opening process
• Access to stock research has improved
• Even if they don’t score highest in every category, scores consistently well in all categories

Needs improvement: Their fee structure is decent, but not impressively low

3. TD Direct Investing

(Source: TD Direct Investing)

TD Direct Investing has improved a lot in the past several years, distinguishing itself from the other bank-owned brokers. Many of its innovations draw inspiration from its operations in the U.S., where TD owns and operates the discount broker giant TD Ameritrade, such as its market intelligence offerings like stock market heat maps, how they display market information screens and the data they display.

Things we like:

• Data, data, data. TD Direct Investing offers the richest access to market data and makes it easy to slice and dice it
• An easy to use website and mobile navigation
• TD Direct Investing has superior global trading capabilities for those investors looking to expand their portfolios beyond Canada

Needs improvement: Its commissions are higher than those of our top two picks, sitting at the average-to-high end

Best online brokerage categories

Some online brokers excel in areas that may be important to certain customers. Explore each category below:

• Best online broker for fees
• Best online broker for user experience
• Best online broker for ETFs
• Best online broker for market data
• Best online broker for mobile experience
• Best online broker for initial impressions
• Best online broker for customer service
• More resources
• See our full online broker comparison tool
• Methodology

Best online broker for fees

Over time, fees and commissions can put a serious dent in an investor’s returns, or even turn gains into losses. Online brokers came along as an alternative to expensive traditional brokers with their high fees, and today most online brokers charge between $5 and $10 per trade, a far cry from the $80 to $150 per trade that full-service brokers once charged their clients. But when it comes to fees, Surviscor’s LaCoste urges buyer beware. “What you think is the cheapest isn’t always the cheapest,” he says. For one, the lowest advertised price doesn’t necessarily apply to all orders. In fact a lowest advertised price may only apply to 5% of the public. Secondly, traders need to be aware of what are called ECN fees. These are tiny yet confounding fees from electronic communication networks and exchanges that get passed on to traders in certain types of transactions over and above stated commissions. You can read more about ECN fees and how to avoid them here.  Surviscor takes into account commissions on U.S. and Canadian orders, options, ECN fees and general account fees.

The discount broker scene could see a commission shake-up in the near future. In March 2019 the robo-advisor WealthSimple launched WealthSimple Trade, a zero-commission stock-trading platform. WealthSimple isn’t included in this year’s ranking as it still lacks many of the basic features common at other online brokers, such as RRSP and TFSA accounts. But according to WealthSimple, more than 130,000 people signed up for access to the pre-launch version of its Trade app, so it’s clearly popular, and a price war could be on the horizon.

1. Interactive Brokers 

Interactive Brokers is a new entrant to the ranking this year. The firm stands apart from the crowd with its ultra-low trading commissions of just a penny a share, or a minimum of $1 per transaction. They also offer the cheapest commissions for options traders.

2. Questrade* – Open a Questrade account*

Questrade has the second-cheapest equity commissions, with a $4.95 minimum and a maximum of  $9.95, at rate of 1¢ per share

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Best online broker for user experience

User experience is a critical category, says LaCoste. “Anything that makes an experience better and faster and at the user’s discretion will always make things better from our perspective,” he says. The category encompasses 13 criteria that cover the full range of experiences investors have with online brokers, from ease of customization and design, to account information and management to order placement (including equity, ETF, options, mutual funds, bonds, global equities and alternative orders) to navigation and user protection.

1. Qtrade Investor

As noted above, Qtrade does well in every broad category we looked at. Even though the broker may not come in first place in every category, Qtrade has no glaring holes in their offering. And Qtrade has developed a reputation for quickly adopting the best features from other online brokers.

2. (Tie)

BMO InvestorLine

BMO InvestorLine scores well in this category because of its notifications and alerts and planning tools.

Questrade* – Open a Questrade account*

As described above in the best overall brokers category, when it comes to the experience of placing orders, no broker makes it easier.

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Best online broker for ETFs

At a time of market turbulence, exchange-traded funds remain incredibly popular with Canadian investors; last year, $21 billion flowed into ETFs. These baskets of securities are similar to mutual funds, and range from broad market trackers, like index ETFs, to flavour-of-the-month niche sectors like cannabis ETFs or Esports ETFs (yes, that’s a thing). But unlike mutual funds, they generally come with much lower management fees, and are bought and sold like stocks. (By the way, if you’re looking to research which ETFs are right for you, start with the MoneySense 2019 guide to the best ETFs, as picked by our panel of experts.)

While robo-advisors allow investors to easily choose portfolios of ETFs, they charge additional fees on top of the ETF management fees (MERs). With some online brokers, on the other hand, investors can avoid paying commissions on ETF trades altogether, making them a cheaper alternative.

Avoiding commission fees is definitely important, but it’s not the only thing, as you’ll see below where we present the top three online brokers for ETFs.

1. National Bank Direct Brokerage

National Bank Direct Brokerage stands apart from other online brokers when it comes to ETFs. That’s partly because they have an in-house research team of ETF analysts, but also because they have eliminated commissions for buying and selling all ETFs, the only firm to do so for both sides of a trade. There is a catch—the commissions are waived only on orders of 100 ETF units or more. That’s not such a problem if you were to buy, say, Canada’s most popular ETF, the iShares S&P/TSX 60 Index ETF, which has hovered in the low-$20 range for the last year. But for ETFs trading at $100 or more per unit, the total trade cost climbs into five digits, which is probably more than young investors just starting out will have available.

2. Qtrade Investor

Of all the online brokers we looked at, Qtrade is often near the top in each category, but not quite number one. That’s the case with ETFs as well. Qtrade doesn’t charge a commission to buy or sell units, but this only applies to 100 eligible ETFs, and you may find that some of the most popular ETFs you’re looking for aren’t on the list. Qtrade does well in other areas, such as by producing ETF reports and providing investors with product watch lists to keep them informed.

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Best online broker for market data

The tools and research that Canada’s online brokers provide to do-it-yourself investors has never been better, and continues to improve. Access to timely market research data is critical, and that is one of the metrics Surviscor considered when grading the brokers. Points were also awarded for the brokerages that make it easiest to get quotes fast, and that offer market information, charting features, technical analysis, equity research, portfolio, market notifications and screening tools.

1. TD Direct Investing

TD Direct Investing has held the top spot in this category for many years. They offer best-in-class market information, providing up-to-date snapshots of market movers and the ability to screen those results easily. Investors can visualize how stocks compare to industry peers in terms of fundamentals, and TD offers extensive screening tools with many criteria to chose from. Bonus: TD Direct Investing offers good market notifications and alerts.

2. Qtrade Investor

Qtrade excels in this category because they do well at charting and general quote features, says Surviscor’s Glenn LaCoste. Qtrade also offers very good technical analysis tools.

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Best online broker for mobile access

Having access to your portfolio on the go is critical; but needing a separate app on your phone to do that no longer is. “This category isn’t about who made a better app, it’s about who has the best mobile experience,” says LaCoste. Ideally, an online brokerage website should give you all the same access to tools and analysis on your mobile device as you do on your desktop, but unfortunately for now that is hardly ever the case.

1. Interactive Brokers

This is the first year Interactive Brokers have been included in the rankings. Designed for advisors the retail platform for Interactive Brokers is geared at very active traders. And while other online brokers skimp on features when it comes to the mobile versions of their websites, Interactive Brokers offers all the advantages of the platform they built for professions but on mobile. “What you get online is what you get on the mobile,” says LaCoste.

2. Questrade* – Open a Questrade account*

Questrade offers a mobile app, but they also have a well-designed responsive website that adjusts to any mobile screen and works across all devices.

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Best online broker for initial impressions

This category can be summed up with a question: Which online broker makes it easiest to get set up and start trading? Surviscor looked at things like the onboarding experience for first-time customers, and how intuitive the platforms are.

1. Questrade* – Open a Questrade account*

Questrade gets it. This broker has long been ahead of the curve when it comes to the application process for new accounts. While some brokers still require hand-written signatures and an in-person visit to a branch—where salespeople can pitch you on high-fee funds and other products that will transfer more dollars from your pockets to theirs—everything is digital with Questrade.

2. TD Direct Investing

TD Direct Investing stands apart for the educational resources it offers first-time DIY investors, with webinars and online interactive masterclasses geared to all levels of investors.

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Best online broker for customer service

There have never been more potential ways to interact with your online broker, whether it’s by telephone call and email, or newer alternatives like social media and live digital interactions through chat. Yet for most online brokers, it’s a case of missed opportunity, LaCoste says. All generally offer the basics, like telephone, email and online service forms, but only Questrade has fully embraced new options for customer outreach. In this category, Surviscor also considers response times, which it determines with mystery shoppers who test the brokers to determine how fast they reply. You can see the average response times for each broker on our online comparison tool. Four brokers (including Questrade) cluster around the 10- to 25-hour range, with many other taking several days to respond, or not at all. “In general, the industry is very weak when it comes to service responsiveness after years of being so good at it,” says LaCoste. As a result, three brokers are tied for second place this year (Qtrade, RBC Direct Investing and Interactive Brokers) but have little to distinguish them beyond being faster than most of their rivals to get back to customers.

1. Questrade* – Open a Questrade account*

Hands down, Questrade offers the most options for its customers and potential customers to reach its representatives, and had the quickest average response time to boot, at 10 hours.

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Looking for more information?

You can find detailed reviews of each of the 13 firms on the Surviscor site: just click on the highlighted firm’s name. This list is presented in alphabetical order:

1. BMO InvestorLine
2. CIBC Investor’s Edge
3. Desjardins Online Brokerage
4. HSBC InvestDirect
5. Interactive Brokers
6. Laurentian Bank Discount Brokerage
7. National Bank Direct Brokerage
8. Qtrade Investor
9. Questrade
10. RBC Direct Investing
11. Scotia iTRADE
12. TD Direct Investing
13. Virtual Brokers

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Methodology

The survey methodology is based on MoneySense-specific categories based on Surviscor’s latest mobile and online reviews. There are seven main categories reviewed, with 43 separate criteria, with industry rankings in each based on Surviscor data. Customer service data was logged over a 12 month period ending April 2019.

The MoneySense results are based on a 5-point rating system that awards 5 points to the first-place finisher in a  category, 4 points for second, 3 points for third, 2 points for fourth, and 1 point for fifth place.

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