(This article originally appeared on The DIV-Net) A few days ago one of my colleagues over at the DIV-Net wrote about online brokerages and using Zecco as low cost provider. As a Canadian, I like the sounds of Zecco’s low costs however we Canadians are not eligible to open an account with them. In this post I would like to talk about a Canadian broker that I have been using to good effect that offers cheap trades – not $0 trades but pretty close.
My primary broker for a long time was the Canadian Shareowner Association. However, due to personal situation reasons I was unable to continue using them as my broker. It was too bad because I liked the fractional share ownership and dividend reinvestment packages they offered. However, it became clear very quick that as my portfolio grew and I wanted to expand my dividend portfolio to stocks outside of the ones they offered to investors, I had to make a choice. My primary concern was commissions. In my opinion, online brokers offer a commodity. What you get from one broker is very similar to what you get from another. There are always little differences such as streaming quotes or a better interface, but for the individual investor who does not trade a lot then the differences are negligible.
With commissions as my guide I decided to go with Questrade. I had experience with them in the past for a small trading account that I had and was impressed. Their customer service was alright (and I must admit has improved since then – 1 year ago) the trades were cheap ($9.95 at the time). However, I recently moved my entire RRSP over to them and the experience has been great. The transfer was done in about 48 hours and I have already made two trades for $4.95 each.
I will be writing more about Questrade here at my blog and will be brutally honest about the experience. It is very easy to switch brokers these days so Questrade needs to ensure they keep up and provide quality service at a low cost. However, I believe that I can safely recommend them as a broker if you are Canadian and looking for a cheaper alternative to the bank run brokerages.