Wednesday, January 7, 2009

Fall 2008 - Online Discount Brokerage Review

For the fifth time in as many reviews, Credential Direct held top honours as the premier online discount brokerage firm for Canadians, according to the newly released Fall 2008 Surviscor analysis. Credential Direct retained both the "overall" and the "investor" top spots for an unprecedented fifth consecutive analysis. Disnat, Desjardins' discount brokerage firm, maintained the top spot in the trader profile for the second consecutive review. The Fall 2008 results identified some shifts in features and functionality changes and less shifts in pricing, which has dominated the changes over the past three reviews. The top Overall and Investor firms are: Credential Direct, Qtrade and BMO InvestorLine. The top Trader firms are: Disnat, E*Trade and TD Waterhouse.

RESULTS:

OVERALL
Rank	Firm	Out of 100
1	Credential Direct	77.28
2	Qtrade	68.62
3	BMO InvestorLine	65.34
4	RBC Direct Investing	65.25
5	TD Waterhouse	64.72
6	E*Trade Canada	63.52
7	Questrade	61.53
8	National Bank Direct Brokerage	57.95
9	Disnat	56.99
10	TradeFreedom	56.89
11	Scotia McLeod Direct Investing	54.84
12	HSBC InvestDirect	54.60
13	CIBC Investor's Edge	52.92
14	Laurentian Bank Direct Brokerage	45.77

The Fall 2008 review introduced an industry approval process for the percentage weightings used in the Surviscor analysis. Each firm was offered the opportunity to comment on the importance of Surviscor's seven main categories by suggesting revised percentages in both the main and sub-categories that exist. The process indicated that the industry and Surviscor view the online discount brokerage industry in Canada the same. The firms suggested that Surviscor drop the importance of email responsiveness, order entry and account information pages and the getting started component of a site. In turn, the firms stated that an increase in the importance of cost (fees and commissions) and market information was in order.

Surviscor is making some usability changes to the website to enhance the user's availability of information. The firm pages have been changed to provide users with the ability to see more firm information, including screenshots and a "what's new" section and allow the user to link to various key area of the firm's site. Firms not participating will simply have a shortened version of the former company page. Surviscor will also introduce an industry firm suggestion tool in the next month. The tool will allow users to the site to complete a short preferences questionnaire and then return a small list of suggested firms that Surviscor would recommend based on the latest scorCard performed.

INVESTOR
Rank	Firm	Out of 100
1	Credential Direct	78.64
2	Qtrade	69.41
3	BMO InvestorLine	66.34
4	RBC Direct Investing	65.54
5	TD Waterhouse	63.32
6	E*Trade Canada	62.00
7	Questrade	60.55
8	National Bank Direct Brokerage	58.32
9	TradeFreedom	55.67
10	Scotia McLeod Direct Investing	55.13
11	HSBC InvestDirect	54.93
12	Disnat	54.63
13	CIBC Investor's Edge	52.94
14	Laurentian Bank Direct Brokerage	46.45

Surviscor decided to once again not include Interactive Brokers, OptionsXpress Canada and Think or Swim in the analysis. Surviscor will work hard with these firms to establish an information page for review and attempt to adjust the current inclusion criteria to allow the firms entrance into the next review. Surviscor performed this analysis with the help of most of the firms in the study. Only CIBC Investor's Edge and Qtrade refused to participate in the analysis process.

TRADER
Rank	Firm	Out of 100
1	Disnat	84.07
2	E*Trade Canada	80.91
3	TD Waterhouse	80.86
4	Questrade	72.84
5	TradeFreedom	70.99
6	RBC Direct Investing	61.93
7	Credential Direct	61.57
8	Qtrade	59.54
9	BMO InvestorLine	53.80
10	National Bank Direct Brokerage	53.71
11	CIBC Investor's Edge	52.70
12	Scotia McLeod Direct Investing	51.48
13	HSBC InvestDirect	50.89
14	Laurentian Bank Direct Brokerage	38.03

CRITERIA/CATEGORIES

The Criteria:
Surviscor reviews all Canadian discount brokerage firms including bank-owned and independent firms. Traditional day trading firms are included providing they meet the minimum requirements for inclusion. The Firms are evaluated for the online features and functionality they posses.

The minimum requirements are:

1. Transactional capabilities in Canadian and US markets
2. Physical location in Canada with minimum registration requirement of 5 provinces
3. Ability to establish a registered account
4. Minimum account opening balance requirement no greater than $10,000 CDN

The Main Categories:
1.	Getting Started The Getting Started category explores the public site for features and functionality available to both the customer and non-customer.
2.	Design and Help Features The Design and Help Features category explores the general online experience of the user and the ability of the firm to provide an easy to use site.
3.	Customer Interaction The Customer Interaction category explores the various customer touch points offered to contact the firm and assist in the opening and day-to-day operations of an account.
4.	Market Intelligence The Market Intelligence category focuses on the informational aspect of all market intelligence available to users.
5.	Trading The Trading category focuses on the online transactional and supporting account information associated with a transaction.
6.	Tools and Education The Tools and Education category focuses on the level of investment and planning tools available to the online user and analyzes the level of supporting education content and features.
7.	Commission and Fees Surviscor analyzes the cost of doing business with the firm by establishing a basket of transactions and activity for an average client account. All firms are analyzed using identical transactions.

Next Analysis: Spring 2009

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