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2004 Broker Survey | |
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The Globe and Mail's 2004 On-line Broker Report
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Profiles | |
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Click a broker to view contact info, services offered and fee schedules BMO Investorline CIBC Investor's Edge Credential Direct Disnat eNorthern E*Trade Canada HSBC Invest Direct National Bank Discount Brokerage Qtrade Investor RBC Action Direct ScotiaMcLeod Direct Investing TD Waterhouse | |
In his latest annual survey, ROB CARRICK assessed 12 brokers, and handed InvestorLine first place for the third year in a row
Saturday, September 11, 2004
Mr. and Mrs. Mainstream, your on-line brokerage account is waiting.
The Globe and Mail's annual survey of on-line brokers has always focused on middle-of-the-road types who invest more to achieve life goals than to make a quick buck. Now, most brokers are focusing on this market, too.
You can see this in the way that BMO InvestorLine has introduced new model fund portfolios that you can buy in one convenient step, or the way that Credential Direct has added a top-flight financial planning tool, or the way that Qtrade Investor and CIBC Investor's Edge have added on-line bond trading.
Not surprisingly, each of these brokers scored well in The Globe's sixth annual rating. InvestorLine took first place for the third consecutive year by building on its unmatched record of consistent improvement. The always competitive E*Trade Canada was next, followed by a much-improved Credential Direct and Investor's Edge, now a perennial contender after a period years ago as an industry joke.
A dozen brokers were included in this year's rating, which follows tradition in that it focuses exclusively on services offered on-line. All brokers allow clients to trade by phone, but it's over the Internet that clients enjoy the lowest costs, the highest level of control over their accounts and access to tools and various services.
Each broker was evaluated according to five criteria.
Cost: Commissions for stock trades both big and small were given the most weight here, followed by mutual funds fees. Also considered were annual administration fees for registered retirement plans and those annoying inactivity fees for small, non-registered accounts.
The on-line experience. This category looks at how well broker websites provide essential information and guide you to key features such as trading screens and research tools. Top brokers have real-time account updates rather than serving up warmed over data from the previous day's trading.
They also track the book value of your holdings and provide other types of portfolio analysis, including asset allocation or performance.
Tools. The ideal broker would offer analyst research on stocks and funds to help clients who want to validate their own choices and troll for investing ideas, as well as stock-screening tools, fixed income research and financial planning calculators to help clients develop a sensible asset mix. Access to dividend reinvestment plans at no cost looks good, too.
Trading. A wide variety of orders, including limit orders and short selling, is a must for a top score in this category. Other key criteria include the availability of on-line bond trading and the range of information offered on the equity trading and order confirmation screens.
Electronic services. Here, we're looking at the extent to which you can do certain tasks yourself on-line rather than by phone or mail. Examples would be requesting a cheque, moving money in and out of your account, opening an account and reviewing trade confirmation slips and monthly account statements.
BMO InvestorLine
http://www.bmoinvestorline.com
Owner: Bank of Montreal
Overview: Another year, another round of innovation at InvestorLine. In addition to model fund portfolios assembled by independent analyst Ranga Chand, there are tools for tracking account performance that surpass almost all competitors. Add these features to real-time account updates, on-line bond trading and a whistle-clean website and you've got a clear winner.
Caveats: You need $5,000 to start an account; registered education savings plan accounts unavailable.
Cost: 15/25
On-line experience: 21/25
Tools: 17/20
Trading: 24/25
Electronic services: 4/5
TOTAL: 81
GRADE: A
E*Trade Canada
Owner: E*Trade Group
Overview: E*Trade cultivates the image of being a haven for hard-trading stock jocks, and it does deliver on this count with touches like a slick equity-order screen, quotes with market depth and technical stock analysis tools. But mainstream investors can be comfortable here as well thanks to the availability of on-line bond trading, fee-free mutual funds and detailed account updating with real-time data.
Caveats: Endless flogging of Power E*Trade, a service for heavy traders that offers enhanced services and lower commissions. Could use a little more equity research depth, too.
Cost: 17
On-line experience: 20
Tools: 14
Trading: 22
Electronic services: 4
TOTAL: 77
GRADE: B+
Credential Direct
http://www.credentialdirect.ca
Owner: Cdn credit unions
Overview: If cheap commissions and no inactivity fees are a priority, then this in-house broker at many of Canada's credit unions is worth a look no matter with whom you bank. There's more to Credential than low cost, though. A makeover in the past year has added a serious financial planning tool, equity research from Desjardins Securities and a research centre incorporating technical research and investing message boards.
Caveats: No real-time updating of the market value of your account holdings, and no on-line bond trading.
Cost: 22
On-line experience: 17
Tools: 14
Trading: 18
Electronic services: 4
TOTAL: 75
GRADE: B+
Qtrade Investor
Owner: Privately held; Deutsche Bank has a minority stake
Overview: This small independent vaulted ahead of several bank-owned brokers, thanks to a recent website upgrade that added real-time account updates and on-line bond trading.
Caveats: Not much to complain about beyond the bland-looking website, though analyst reports for stocks and funds would be welcome.
Cost: 16
On-line experience: 20
Tools: 13
Trading: 19
Electronic services: 4
TOTAL: 72
GRADE: B
CIBC Investor's Edge
http://www.investorsedge.cibc.com
Owner: CIBC
Overview: This is another broker that has consistently bettered itself over the past few years, most recently by adding on-line trading of bonds and guaranteed investment certificates. If you value analyst research, you'll love the database of CIBC World Markets reports.
Caveats: Lame financial planning tools (better ones are supposed to arrive late this year).
Cost: 15
On-line experience: 19
Tools: 14
Trading: 20
Electronic services: 3
TOTAL: 71
GRADE: B
ScotiaMcLeod Direct Investing
http://www.scotiamcleoddirect.com
Owner: Bank of Nova Scotia
Overview: There's an appealing combination here of reasonable commissions for trading stocks and funds, a deep reservoir of tools and analysis for researching stocks, funds and bonds, plus a pretty good equity-trading platform.
Caveats: Web design is a weak link. Some may wish for a compass while navigating the secure site for clients.
Cost: 20
On-line experience: 12
Tools: 15
Trading: 19
Electronic services: 4
TOTAL: 70
GRADE: B
TD Waterhouse
Owner: Toronto-Dominion Bank
Overview: TD has slipped this year, not because its service has deteriorated in any way but because it hasn't kept up with the competition in terms of adding improvements. What a sad commentary it is that Qtrade has real-time account updates, but TD Waterhouse doesn't. Improvements are on the way.
Caveats: Not in the game as far as technical polish goes; stock-trading commissions on the pricier side. Also, the public website buries key information on fees and commissions.
Cost: 13
On-line experience: 15
Tools: 19
Trading: 18
Electronic services: 4
TOTAL: 69
GRADE: B-
RBC Action Direct
Owner: Royal Bank
Overview: A very crisp new website is on the way and it will go some ways toward assuaging any clients who rightly feel that Canada's largest bank has too long been coasting in the on-line brokerage business. Action Direct has erred in not including real-time account updates in the redesign, however.
Caveats: High stock-trading commissions and the failure to go the distance with its website redesign.
Cost: 13
On-line experience: 15
Tools: 17
Trading: 19
Electronic services: 1
TOTAL: 65
GRADE: C+
National Bank Discount Brokerage
Owner: National Bank of Canada
Overview: A lower-tier bank-owned broker. You could do business with these guys without serious regrets if you were a National Bank of Canada customer who wanted to keep your on-line brokerage account in-house.
Caveats: Lacks the resources of the top players, though there is on-line bond trading.
Cost: 15
On-line experience: 11
Tools: 14
Trading: 17
Electronic services: 3
TOTAL: 60
GRADE: C
HSBC InvestDirect
http://www.investdirect.hsbc.ca
Owner: HSBC Holdings PLC
Overview: Three features help prevent a worse showing -- access to foreign stock markets like Hong Kong, Japan and Britain, a very cool account analysis tool called a Portfolio X-Ray and access to a vast library of Merrill Lynch, Standard & Poor's and HSBC equity research (limited Canadian content, though).
Caveats: Adequate if you just want to buy some stocks and funds.
Cost: 16
On-line experience: 14
Tools: 13
Trading: 14
Electronic services: 1
TOTAL: 58
GRADE: C-
Enorthern
Owner: Northern Financial
Overview: This tiny broker keeps plugging away, even though it doesn't have much to offer clients beyond a minimum $24 stock trade, the lowest in the business.
Caveats: You have to wonder why these guys even bother.
Cost: 17
On-line experience: 13
Tools: 4
Trading: 15
Electronic services: 2
TOTAL: 51
GRADE:
Disnat
Owner: movement des Caisses Desjardins
Overview: Canada's oldest on-line broker is undergoing an extreme makeover this fall, which is good because fossil-like is the phrase to describe the current setup. There's reason to be optimistic about the redesign because Caisse Desjardins has done good work with Disnat Direct, a service for aggressive stock traders.
Caveats: See above.
Cost: 13
On-line experience: 8
Tools: 5
Trading: 13
Electronic services: 1
TOTAL: 40
GRADE: F
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