Best Stock Brokers in Canada

News | Dezember 24, 2020, 11:49 AM | Brought to you by a Guest authorIn 2020, stock trading has experienced something of a renaissance. All it needed was a global pandemic – back in March, COVID-19 forced the world into quarantine. In response, Canadians went hunting for the best Canadian brokers and started trading.

How did this happen? After exhausting our Netflix accounts, we had nothing to do. So, many tuned into BNN Bloomberg or CNBC. There, analysts were hyping the buying opportunity of a lifetime. Blue-chip stocks, including healthcare and biotech giants, were available for 40% off.

Within weeks, Canadian online brokerages added more than a half-million new accounts. Combined with new American investors, stocks began to rise in defiance of every economic indicator. As we speak, the rally continues. To date, the TSX has recouped nearly all its COVID losses. Even more remarkable, the Dow Jones is not only out of its deficit, but it also set new all-time records.

Want in? Of course – but there’s a problem. You have a family, so gambling with your life savings is off the table. In view of this, the best stock broker in Canada is the one that fits your needs. Below, we’ll profile five brokers that accommodate conservative investors.

Which Broker is Best for Canadian Investors?

When it comes to investing, Canadians have never had more choice. However, if you’re searching for the best Canadian discount broker, only a handful will do. Below, we’ve listed five trustworthy brokerages that offer low-fee investments.

1) Qtrade Investor

Many observers pile on the banks for their high fees, and rightfully so. But, because they’ve been around for generations, investors stick with them. For that reason, these investors don’t trust online brokers, as they “lack experience”.

This charge doesn’t apply to Qtrade, though, as they’ve been around for 20 years. They’ve built their business by succeeding where banks fail – by offering responsive, empathetic customer service.

However, Qtrade has largely succeeded due to their low fees. Qtrade Investor does not charge fees on the buying/selling of ETFs or mutual funds. Because of this, many hands-off investors consider Qtrade to be the best stock broker in Canada. Qtrade’s analysts create the investment packages, leaving you free to buy/sell them as you please.

But, what if you want to dabble in trading stocks? Then, you’ll be happy to learn that Qtrade Investor’s fee is below the industry average. With a maximum commission of $8.75 per trade, you’ll pay less for these transactions than on other platforms. Lastly, no matter your motivations, Qtrade’s research resources will be there for you. They provide investors with a wealth of information on industries and individual companies alike. With this information, you'll be armed with the knowledge needed to make informed decisions.

 2) Questrade

No, Questrade is NOT Qtrade – let’s get that out of the way first. However, their similarities don’t stop there. For instance, Questrade launched several months before Qtrade, in the latter months of 1999. From there, however, Questrade differs considerably from its main rival. For starters, they don’t charge annual fees on accounts as low as $1,000. This is a big deal, as most competitors only waive these fees on accounts of $15,000 or more.

Like Qtrade, Questrade does not charge fees on the purchase of ETFs. However, they do charge their customers on the sale of these instruments. Furthermore, Questrade assesses fees on the trading of mutual funds. However, at $9.95, this cost is lower than many banks. Now, Questrade doesn’t have the lowest fees in every category, but they don’t hide it. In finance, transparency is crucial for trust. By being honest about fees and regulations, this firm has garnered considerable respect from investors.

Lastly, when choosing a broker, there’s more to consider than just fees. The user experience also matters – if you don’t understand what you’re looking at, low fees are meaningless. Questrade excels on this metric, as they’ve designed everything from their on-boarding process to their investing dashboard with usability in mind. Consequently, their app likely makes them the best stock broker in Canada for mobile users. So, if you run your life from your smartphone, Questrade might work well for you.

3) Wealthsimple Trade

Questrade has a great mobile app, but many younger investors are using Wealthsimple Trade instead. Why? Let’s cut to the chase – Wealthsimple’s trading fees are nearly non-existent. Whether you’re buying or selling ETFs, mutual funds, or individual shares, you pay nothing.

So, if that’s the case, how do they make money? There are two ways they do this. Firstly, on CAD/USD and USD/CAD FX trades, they charge spreads of 1.5%. Don’t get too upset, though – those margins are lower than their online competition (and are much lower than the banks).

And, secondly, they charge fees for special services. For instance, if you want a paper statement instead of an electronic one, Wealthsimple charges $20. If you require broker assistance, calling one will cost $45. Wealthsimple Trade’s lack of account minimum requirements is another reason they are popular. Investors can start with $50, $100, or whatever they have on hand. This concept is powerful, and has revolutionized investing.

Now, all this sounds amazing, but there’s a catch. Despite their upsides, Wealthsimple Trade lacks the selection of funds and stocks found on platforms like Qtrade. Because of this, more sophisticated investors prefer to trade on other platforms. For everyone else, though, this platform’s lack of fees and account minimums overcomes its weaknesses. Consequently, its 175,000 users consider Wealthsimple Trade to be the best Canadian discount broker.

4) TD Direct Investing

Online brokerages aren’t for everyone. Some prefer the familiar – for these folks, banks are the only entity they’ll ever be comfortable investing with. With that in mind, many consider TD Direct Investing to be the best stock broker in Canada.

Here’s why – the breadth of quality of their market data is remarkable. Nobody should blindly invest in any fund or stock. That’s why some discount brokerages are problematic for most inexperienced investors – they provide limited background information. Not TD – they provide daily and weekly reports on the funds/shares they offer. If something has fundamentally changed in a sector/company, they’ll let you know.

TD Direct Investing’s fees aren’t even that bad. While their fees are higher than their non-bank competition, the gap is less than you would expect. For individual stock trades, they charge $9.99 per transaction. And, surprisingly, they don’t charge mutual fund selling fees – if you hold them longer than 30 days, that is.

Not everything is perfect, though. If your account contains less than $15,000, TD will charge a $25 per quarter maintenance fee. And, at the present moment, their investing dashboard leaves something to be desired. Apart from those quibbles, however, TD Direct Investing is a fine bank-driven platform.

5) BMO InvestorLine

Not a fan of TD? Hold an account with the Bank of Montreal? If you prefer banks and are looking for an alternative to TD Direct Investing, give BMO InvestorLine a try. On fees, they compare favourably to TD. BMO InvestorLine charges a $9.95 commission on stock trades, and have the same annual fee. But, they differentiate themselves from TD Direct Investing on customer service.

Customer care is a sore spot for banks. On this file, however, BMO InvestorLine stands out from their colleagues. In the most recent JD Power Canadian Investor Satisfaction Study, BMO InvestorLine ranked second overall, just behind Questrade. In 2018, BMO ranked first overall. So, if you’re looking for fair fees and industry-leading customer service, BMO InvestorLine is our choice.

There’s a Brokerage Out There That’s Right For You

It’s time your money started working for you. To maximize your efforts, we recommend finding a broker that minimizes fees. In our opinion, the best Canadian discount broker is the one that strikes a balance between low fees and your needs.

Any of the firms profiled above has the potential to be the best stock broker in Canada. The sooner you find one that fits you, the quicker you can get started building a prosperous future.