As y’all know, I’ve been a Questrade man for a couple of years now.
It’s not just because I’m in the company’s affiliate program. (You’ll notice this post is free of affiliate links in a lame attempt to try and look impartial) Sure, it’s nice to have the ability to make a few bucks recommending it to prospective investors, but that’s not my only reason for recommending it. I like the company’s low fees, the ability to open an account without having to print off and mail in a gigantic package of 35 different pages of the same crap over and over again, and the fact I can buy or sell stocks on my phone. I like being able to look whether I got the shares I was trying to get earlier in the day, especially now with the time zone difference.
Overall, I’ve had a pretty good experience with the company. But I just couldn’t bring myself to fully move away from Qtrade, the online broker who has held the majority of my cash since 2005(ish), when I first started managing my own stocks. So I had accounts at both.
Just last week, Qtrade DROPPED THE MIC, YO! by offering investors $8.75 flat commissions.
It doesn’t matter how many shares you’re buying.
It doesn’t matter what kind of order it is.
It’s a pretty good deal overall, especially if you do the type of investing I normally do.
Say you’re looking to buy 1,000 shares of MRRM, hopefully before the big run-up on Friday. Shares are currently $3.28 each, so you go to Questrade and put in your order. It costs you the maximum ($9.99), because you’re buying a large number of shares.
With Questrade, any trade between 1 and 495 shares is going to set you back $4.95. Any amount of shares between 496 and 1,000,000 is going to set you back 1 cent apiece, up to a maximum of $9.99. (You can get that maximum down to $6.95 if you’re willing to pay for better access, but that’s pretty much the opposite of what we do here) So if you’re investing in Canadian small-caps like a certain handsome blogger you might know, Qtrade can very easily be the cheaper option.
Should you switch your account to save $1.24 per trade if you’re only trading 2-3 times a quarter? Of course not. That would be dumb. But if you’re like me, who has accounts at both Questrade and Qtrade, suddenly the choice isn’t so cut and dry anymore.
My days of buying just 100 shares of something are largely over. This is because I like to take large, concentrated positions in the stocks that I like, and because the hidden gems hardly ever have a share price over $5 per share. I’m not going to bother spreading out my holdings to 40 different stocks. If I did, I would just buy an ETF.
Qtrade has a few other advantages. Its customer service is regarded to be the best in the business, at least according to the Globe and Mail’s survey of the best brokerage. I’ve only phoned a few times, but I’ve never been put on hold. And since its office is based out of Vancouver, it’s more convenient for when I’m back home in Alberta.
I like Qtrade’s order interface too. It’s simple, easy to use, and fairly minimalistic. I like Questrade’s too, I just like Qtrade’s a little better.
There are some negatives though. Qtrade offers free ETF trades, but it limits investors to a list of about 60 fairly specific ETFs. Sure, you can trade the iShares Japan Fundamental Index ETF (CAD-Hedged) or the iShares Global Water Index ETF for free, except I’m not sure anybody wants to. Questrade, in comparison, offers free purchases of any ETF. You’re just going to pay the normal commission when you sell.
I don’t give two hoots about free ETFs, but you might.
And when it comes to the cheapest trades of all, Virtual Brokers just might beat out both competitors, which offers true $0.01 per share trades with no minimums. If you’re still buying 100 shares of something at a time, you’re only paying $1. If you’re buying 2,000 at a time, you’re still paying $9.99, which isn’t so exciting.
And CIBC Investor’s Edge has just announced $6.95 flat trades for anyone who has $100,000 in either assets with the bank, or a combination of mortgages/debt and assets.
Again, I wouldn’t go and change my account to save a buck or two each time I trade, since I doubt you’re the kind of person who makes multiple trades in a day. But do keep in mind that a bit of a price war has broken out between some of Canada’s largest brokers. If you’re considering a new broker, Questrade is still a good option, but Qtrade has really upped its game. I’m not sure which one I prefer, but Qtrade has done a nice job fixing the one thing that used to be its downfall — high trading costs. Now that it’s cheaper, I’m a pretty satisfied customer.
I’m just wondering if I should consolidate everything and just keep the one account. Thoughts?