I wanted to try Questrade after the most recent J.D. Power ranking called the 2017 Canadian Self-Directed Investor Satisfaction Study came out. I was surprised that this independent online brokerage finished last in this ranking, so I took on the task of checking it out. Here’s a summary of my experience with a practice account that is better funded than my own! 

Questrade is betting strongly on very generous pricing. We’re talking about only one cent ($0.01) per share, with a minimum fee of $4.95 per trade up to a maximum of $9.95. This is a far cry from the $24.99 charged by Scotia iTrade. (Link to previous text). Where the problem exists, however, is in terms of the “Electronic Communication Networks” fees (ECN fees). Questrade passes these fees onto its customers, unlike many other players in the industry. The independent investor may find it difficult to figure out and to anticipate the cost of the completed trade.

What are ECN fees? This is a fee charged whenever an investor withdraws from the liquidity of the stock market. For example, an investor who buys or sells incomplete lots — a regular lot 100 shares — is withdrawing from this liquidity. The same goes for an order placed on the market, which will be done on the spot. These ECN fees are generally a fraction of a cent for each share traded.

Still in terms of pricing, investors benefit from some interesting things. If you hold more than $5000 in assets with this company, you will then be exempt from the account maintenance fee of $24.95 per quarter. You pay no commission when buying any Canadian or American Exchange Traded Funds (ETFs). The normal commission remains when these same ETFs are sold.

 

Questrade: In test mode!

We first noticed that any investor interested in this discount broker can open a practice account very quickly. It only takes two minutes! You will find yourself with a hefty jackpot of $500,000 CAD and $500,000 USD. There are plenty of fun things to do with it, especially since the account remains active for 90 days!

For what it’s worth, navigation is intuitive. It is easy to make any kind of trade and then see a summary. Unlike other recently tested platforms, the main menu bar is on the left side of the screen and not at the top of the browser. You get used to it quickly. During my trading sessions I used the “Accounts” and Watchlist” tabs the most. The settings icon is at the bottom of this toolbar, which is very useful to customize the interface, its appearance and the default information displayed on the trading screen.

 

Questrade: Things that caught our eye

Place orders quickly: You can click the “bid” or “ask” buttons to quickly place a buy or sell order from the trading screen.

Customizable interface: You can begin with the default interface and then personalize it as you wish by adding side menu bars, gadgets or pop-up windows, for example.

Fully online account opening: Unlike some competitors’ procedures, you don’t need to print and mail any documents. Everything is done online, including your electronic signature. Welcome to 2017!

Portfolio IQ: Robo-advisors are now commonplace. For its part, Questrade has Portfolio IQ, a collection of ETF portfolios available on this discount brokerage platform. Fees range from 0.35% to 0.70% annually, depending on the assets managed by the brokerage. Obviously, at this rate, there are no other fees such as administration fees and trade commissions.

Dual currency accounts: These are available for both registered and non-registered accounts. Investors planning to buy US stocks should do so in a dual currency account as trades are performed in the applicable currency. They will then have a Canadian balance and a US balance in the same account, allowing them to trade on both the Canadian and US markets without worrying about the exchange rate on each purchase, sale or dividend payment.

 

Questrade: Nothing is perfect…

  • ECN fees are bothersome. Traders have the right to know exactly what fees will apply when placing a buy or sell order!
  • In the opinion of some of the users we contacted, Questrade could reply to email requests more quickly.

Questrade: Mobile application

It’s a fact – mobile trading continue to gain ground. According to J.D. Power, the number of investors using mobile technology to make their trades currently account for 63% of all trades, compared to 48% in 2015. Questrade is skilfully surfing this wave and has mobile applications for the iOS and Android environments. However, these were not tested as part of this analysis.

 

Questrade: The last word

As previously mentioned, the J.D. Power “2017 Canadian Self-Directed Investor Satisfaction Study” published in September gave Questrade an overall score of 752/1000. By comparison, we note that Desjardins Online Brokerage, QTrade Investor and BMO InvestorLine took the top three places, scoring 785, 778 and 763, respectively. At first glance, Questrade deserves a better ranking. It also has many innovative features, and we wonder if the interface might have been judged too harshly.

 

Use the code Hardbacon to benefit from $50 trade commission rebate;

or, $10,000 managed free for a year

 

This article was compiled by Hardbacon, which has designed an online broker comparator listing dozens of Canadian online brokers. Hardbacon also helps you save on savings accounts, chequing accounts, credit cards, robo-advisors, life insurance, mortgages and personal loans. If you want to go one step further and take control of your finances, you should download Hardbacon’s mobile app, which links to your bank and investing accounts, helps you plan for your financial goals, create a budget and invest better.

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