Zero Commissions for Stocks, ETF's & Options? | General financial discussion | Discussion forum

Dean said

Interesting ⬆❗

I wonder who'll be next (here in Canada), and will this spread to the brokerages that the big banks run (TD WebBroker, etc.)❓  

Dean, you need to switch from TD Direct Investing. Their WebBroker interface looks extremely outdated and clunky. Plus, as pointed out, they (and possibly RBC Direct Investing) are the only brokerage(s) that prohibit trading in a duly authorized publicly-traded security (i.e., PSA).

Apparently, TD Ameritrade Holding Corp.'s stock got hammered 25% yesterday, and was down marginally today, when TD Ameritrade matched Schwab's pricing.

I think the Canadian DBs will resist as long as they can...they'll probably lower their commissions $1-2 per trade on an annual basis and do it in an incremental way.

Still, I do challenge Norman's theory that the Canadian DBs don't do anything for free or have a lot of loss leaders. (He seems certain, for instance, that they're essentially paid kickbacks to offer certain products, which can be true for some mutual fund or mutual fund-like products, but is almost never true in the case of ETFs and stocks--notwithstanding the Commission-Free ETF List programs).

Cheers,
Doug

Save2Retire@55 said
Dean - Big banks will never offer anything free. Any of them offers any free chequing accounts like Tangerine, Simplii, etc? Nope.

But maybe Questrade will be next. Their fee is really low anyway. You buy free ETFs but sell for a cost small cost $4.95 - $8.95 if I recall properly. Haven't traded anything in 2 years. Making enough of Tangerine's Mutual Fund by buying low and selling high! Missed the last high before it started crashing again.  

Questrade is reportedly opening 50,000 accounts per year. Before too long, they will outpace some of the Big 5 bank owned DBs in retail DB AUA (they may already be larger than HSBC InvestDirect and National Bank Direct Brokerage). It's inevitable the banks will have to cut their fees.

TD Ameritrade Holding Corporation (Nasdaq: AMTD) is down 40-50% and the technicals look like it could drop another $6 per share, to $27 USD. TD Bank Financial Group may have to book a significant non-cash charge on their Q4 earnings as they mark to market their controlling 40-45% equity stake in AMTD.

Cheers,
Doug

Disclosure: Despite the market turbulence and competitive disruption, I am long TD, along with CIBC, BNS, and SCB.

Loonie said
Speaking of wealthsimple, I hear they recently acquired SimpleTax somehow, but am not sure of the details.  

Yeah, they did. On the one hand, I am happy for the SimpleTax founders since they won't have to be begging for people to increase their "donations" (which, somehow, they structured as payments so as to be subject to sales tax as opposed to StudioTax, which calls them voluntary payments so to avoid that). It's going to remain as SimpleTax for 2020 (2019 tax year), but after that, I expect it to be rebranded as Wealthsimple Tax (as Wealthsimple SimpleTax is, simply, too redundant). I hope, though, that it will be a rebranding in name only and people will still be able to sign up without going through Wealthsimple's identity and KYC verification as is the case with Wealthsimple Invest, Trade, and Save.

Otherwise, looks like I'll come full circle and use TurboTax Online, which is now available for free, for all personal income tax situations and levels. 😉

So basically, here's what I've used by year (all dates inclusive and by tax year):

previous-1997 - Paper-based tax forms (*did not participate in the tax filing process)
1998-2004 - QuickTax (*did not file myself until 2000, but assisted with doing my parents' taxes in my teens from 1998-2000)
2005-2006 - TaxWiz Deluxe
2007-2013 - Ufile (**2011 tax year was the last year which we purchased a physical CD-ROM)
2014 - GenuTax
2015-present - SimpleTax

Cheers,
Doug

Loonie said
It's an excellent deal for WealthSimple because it gives them access to tons of confidential financial info for tons of people who probably weren't their customers previously. And it likely includes access to previous years' filings as well so that, if you previously used SimpleTax, WealthSimple now knows all about you..
I wouldn't be too keen on that aspect.  

Exactly, Loonie. It's great, if you're the sort of person that deals with Wealthsimple for one or more wealth-based products (Trade, Invest, and/or Save). However, I'm leaning towards, beginning in 2021, moving to TurboTax Online for free.

I suspect TurboTax has lost many clients to SimpleTax, StudioTax, and the like, so they - and possibly even Ufile which has likely seen even greater customer defections - will just make their software free.

Personally, I wish we had the Norway model whereby the CRA presents us with our tax owing, and we pay whatever is owing (or they refund whatever is owed to us).

Cheers,
Doug

Doug, CRA does not know everything we do that results in tax consequences, e.g. CRA has no idea when you sell real estate (e.g. cottage), they're not tied into the provincial land registry systems.

Furthermore in Norway everybody's tax return is a matter of public record, part of Janteloven. That goes directly against our "it's all about me" culture.

AltaRed, CRA likes to suggest all sorts of things, and I don't doubt they use information generally available online, media, etc to investigate areas of high recent risk/activity (e.g. condos, foreign persons, etc) but the point I was making is they are not tied into the various land registry systems so a random sale of real estate by the average person would not come to their attention. It was just an example, another one might be they have no idea what income I've made as a contractor via my consulting or renovation businesses until I report it. Not sure how Norway does it.

I thought that most land registries were already tied in to CRA. Maybe I misunderstood 'intent' versus 'actual in place'.

Personally I agree with this concept. The barn door was wide open and almost certainly was being abused.

Selkirk said

Selkirk said
.
Will Canadian discount brokerages soon follow suit (No Commissions)❓

Apparently ... not anytime soon.

Link ➡ https://www.bnnbloomberg.ca/why-the-brokerage-fee-war-likely-won-t-be-coming-to-canada-1.1352326  

Hi Dean,

Yes, scale is a big part of it. I don't think we'll see $0 commissions in Canada, in part, for that reason. That said, perhaps if there were opportunities to rapidly scale up assets, we might see it; however, the oligopoly in which the "Big 5" banks dominate the brokerage landscape prevents that. Questrade is a likely acquisition target, but the deal will be expensive (minimum $5 billion and probably north of $10 billion, if I had to guess). The rest of the players (Qtrade and Virtual Brokers) are bit players.

Then there's this reason:

Source: FOX Business

The analyst/portfolio manager in the video had the same theory I did: Charles Schwab Corp.'s cutting commissions to $0 was most likely a bid to drive down the TD Ameritrade Corp. stock to a reasonable valuation (still will cost them $26 billion in cash and stock to do the deal).

The Toronto Dominion Bank, as ~44% owner of TD Ameritrade Corp., stands to have an influx of at least $10 billion (USD remember). Any idea how they will redeploy that? Unless they want to make a U.S. bank acquisition, at elevated pricing I'd add, which they'd be loathe to do, I'm not sure what they would buy. Even if they bought First National Financial Corp., the largest non-bank mortgage lender with $110 billion in mortgages under administration, that'd still leave them with at least $8 billion USD to spend.

@AltaRed, do you think TD might be planning a Significant Issuer Bid post-close to buy back a substantial portion of their stock?

Cheers,
Doug

Disclosure: I own TD, BNS, and CM