In June, a new ranking evaluated 15 online brokerage firms in Canada, placing independent brokers Questrade and Qtrade at the top, followed by Royal Bank of Canada and Toronto-Dominion Bank in third and fourth positions. Wealthsimple and Bank of Montreal were ranked near the lower end of the list.
Despite Questrade’s leading position, the ranking does not imply it is the optimal choice for every investor. Selecting a broker depends on individual priorities and investment styles, as each platform has distinct advantages and disadvantages.
Fees remain a critical factor for many investors. A survey of self-directed investors highlighted costs as their primary consideration, reflecting the impact fees have on long-term returns. This is particularly important for active traders who frequently buy and sell stocks or exchange-traded funds (ETFs), where commissions can significantly reduce gains. This impact is even more pronounced when trading smaller amounts, since flat fees constitute a larger percentage of the transaction.
By contrast, long-term, buy-and-hold investors may place less emphasis on trading fees. For those making only occasional trades, commissions of around $10 should not weigh heavily on their choice of broker.
Trading fees have generally decreased over the past five years, with many brokers now offering commission-free trades on selected ETFs. This shift allows investors to assemble diversified portfolios at minimal cost.
Bank of Montreal is expected to improve its ranking next year after recently eliminating all trading fees on stocks and ETFs—the first among Canada’s Big Five banks to do so. This move may prompt similar actions by other major banks.
The ranking also assessed usability factors including desktop and mobile platform performance, account-opening procedures, market research tools, and portfolio monitoring services. For most investors who are not frequent traders, essential features include comprehensive performance reporting, precise asset allocation breakdowns, detailed income forecasting from interest and dividends, and a straightforward trade execution process.
Additional considerations outside the ranking include costs associated with buying and selling investments in U.S. dollars. Most Canadian online brokers permit holdings in both Canadian and U.S. currencies, helping limit unnecessary currency conversions. However, investors who frequently move funds between currencies should look for brokers with low foreign exchange commissions and support for strategies like Norbert’s Gambit, which can minimize currency conversion fees through dual-listed securities.
Investors eligible for the disability tax credit—approximately 1.1 million Canadians—may prioritize access to a registered disability savings plan (RDSP). Among the brokers reviewed, TD Direct Investing stands out as the only one offering a self-directed RDSP option.
Convenience is another factor to weigh. Using an online brokerage affiliated with one’s primary bank can simplify financial management by consolidating accounts on a single platform, enabling quicker fund transfers and providing an all-in-one view of finances.
With continual improvements in self-directed investing options, investors are encouraged to carefully consider these factors to identify the broker best suited to their individual needs. The latest ranking provides a useful starting point for this evaluation.