Qtrade once again finished first in the Globe and Mail’s annual ranking of online discount brokers. This is the fifth year running that Qtrade is walking away with the top honours. Rob Carrick, who assembles the annual ranking, writes that Qtrade’s consistent winning record can be attributed to its habit of quickly matching any new feature introduced by a competitor. Case in point? Qtrade quickly matched TD Waterhouse in lowering trading commissions for many clients. RBC Direct Investing (review), BMO InvestorLine (review), TD Waterhouse (review) and Credential Direct (review) round out the top five.
Some interesting tidbits from the Globe and Mail rankings:
- This year’s ranking also included a table (not available in the online version) on how much each broker charges for a foreign exchange transaction. TD Waterhouse charged the lowest by a wide margin. Disnat, Scotia iTrade and Scotia McLeod Direct charged the highest.
- The difference between the lowest and highest after a foreign exchange conversion was as much as $88 on a $2,500 (USD) trade. The most investors would have paid for the equity trade is $29 (US). That suggests that investors who convert currencies frequently should look for a broker that provides the best rates, not the one with the lowest trading commissions.
- It is surprising to me that Questrade consistently scores high in the customer satisfaction category. There must be a lot of satisfied Questraders out there.
- There is one new broker in the survey (Virtual Brokers) and no dropouts from last year’s survey. But Rob Carrick notes that Scotia McLeod Direct will be merged with Scotia iTrade in the months ahead.
I wouldn’t read too much into a broker’s rank and instead pick one that offers most of the features I am looking for. For instance, I’ve held accounts at RBC Direct Investing and TD Waterhouse and like the latter best. Others might find RBC Direct Investing’s US Dollar RRSP, lower cost D-series funds and online GICs more appealing. Pick one that you think will work for you. If it does not work out as you had hoped, you can always transfer your account to another broker at a later date.