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If you’re new to investing, this article is for you! It can be difficult to navigate all the investment platforms, such as online brokers and robo-advisors. Of course, self-directed online investing requires more knowledge than investing at a bank with a financial advisor. But the potential returns, combined with lower management fees, can make a huge difference over the long term.
When it comes to investing online, there are several options and strategies to choose from. For the purposes of this article, we’ll concentrate on investing in the stock market. More specifically, investing in the stock market via an online brokerage platform or a robo-advisor.
An online brokerage platform, also known as an online broker or discount broker, acts as an intermediary between you and the stock markets. To buy or sell shares in listed companies such as Apple or Microsoft, you need an account on a brokerage platform. This is self-directed investing. You will be able to enter your trades (e.g. purchase Apple shares) and receive the shares when your trades are executed by the broker. You can then hold on to your shares and resell them at a profit, depending on your investment strategy.
Another option, for those who prefer to wait before starting with self-directed investing, is to invest online using a robo-advisor. Robo-advisors streamline investment processes by doing everything for you. Based on your investor profile and investment timeline, a robo-advisor can recommend investment portfolios that match your needs, automatically rebalance your portfolio, and reinvest dividends for you.
As a Canadian, you can invest in registered or non-registered accounts.
The main types of registered savings plans are: FHSA, TFSA, RRSP, and RESP. However, there are many others.
Investing your money with a financial advisor at the bank is a good option for those who are new to investing. However, investment choices are generally limited to that bank’s mutual funds and fixed income investments. In addition, these investment products have fairly high management fees in Canada, typically ranging from 2% to 3% on average. Not to mention that most mutual funds under-perform their benchmarks.
On the other hand, investing online using a brokerage platform opens up a wide range of options and investment strategies. If you are a beginner investor, don’t worry, it’s very easy to invest online. Of course, self-directed investing requires more time and knowledge than investing with a financial advisor. However, with basic knowledge of the stock market, an online brokerage mobile app, and an all-in-one ETF that matches your investor profile, you can achieve higher returns than your bank’s mutual funds. In the long term, the difference with the principle of compound interest is enormous.
There are several online brokerage platforms available in Canada, and each one has its own features and functionalities. Depending on your current financial situation and investment strategy, you can choose the one that best suits your needs.
Here are the main features to consider:
User experience is an important element to consider when choosing an online brokerage platform. Ease of use is a top priority for both beginner and experienced investors. Here are some aspects to evaluate:
If need be, don’t hesitate to consult the rating and review sites for these brokerage platforms.
It can be convenient to consolidate all your investments and banking in one place. For example, Wealthsimple offers a high-interest checking account, a Wealthsimple Visa Infinite credit card, managed investments, self-directed investments, a cryptocurrency trading platform, and an online tax filing service (Wealthsimple Tax). All their products and services are available on the same platform, making it easy to manage your finances.
Whether you’re a novice or an experienced investor, the best online investment platform is the one that suits your needs. Based on the features and functions explained in the previous section, you can find and choose the best brokerage platform for you.
Here is a list of the main online brokerage platforms available in Canada. For each of them, we mention the pricing (administration fees, trading fees, etc.), the types of accounts offered, the types of investments, and more.
Wealthsimple is an investment management company that was founded in 2014 in Canada. Today, Wealthsimple has over 3 million clients and holds over $100 billion in assets under management. It offers a diversified range of investment products and services, including:
Wealthsimple is ideal for beginner investors, but it will also appeal to experienced investors. Fun fact: Wealthsimple was the first online brokerage platform in Canada to offer commission-free trading, with no administrative fees or minimum balance required.
To find out more, read our review of Wealthsimple:
Questrade is an investment dealer that opened its doors in 1999. Since then, Questrade has become the largest independent brokerage in Canada. The company manages $30 billion in assets and has been named one of Canada’s Best Managed Companies 12 times.
Whether you’re a novice or an advanced investor, Questrade has the trading platforms and analysis tools to meet your needs. Interesting fact: In 2023, Questrade became the first online broker in Canada to offer the FHSA (First Home Savings Account) to its clients.
To find out more, read our review of Questrade:
National Bank Direct Brokerage (NBDB) is the online broker for National Bank of Canada clients.
*No annual fee if: you are a young investor aged 30 or under, or you maintain assets of $20,000 or more, if you take advantage of a financial program (engineers, teachers, healthcare professionals, business professionals) or if you only have an InvestCube account.
BMO InvestorLine Self-Directed is the online trading platform for Bank of Montreal (BMO) clients.
*No annual fee if: your account balance exceeds $15,000 (non-registered account) or your account balance exceeds $25,000 (registered account). **No trading fees (equities and ETFs) if: you trade among more than 95 ETFs with no commission fees (conditions apply).
Desjardins Online Brokerage (Disnat) is the discount broker of Desjardins Securities (Desjardins).
*No annual fees if: you make 6 or more trades in the past 12 months, your portfolio value is $15,000 or more, you hold a registered plan (except TFSA and FHSA), or you are an investor between 18 and 30 years old. **No annual fee if: market value of your account is $15,000 or more, 125 transactions per year. ***No annual fee if: assets held in all subscriber accounts are $15,000 or more.
CIBC Investor’s Edge is the online broker for CIBC clients. It offers a variety of tools and resources to help you build and manage your investment portfolio. If you’re under 25, you can even negotiate for free under certain conditions.
Non-registered account, RRSP, RRIF, LIRA, LIF: $100/year*.
TFSA, FHSA, RESP: $0
*No annual fee if: your account balance exceeds $10,000 (non-registered accounts) or your account balance exceeds $25,000 (RRSPs, RRIFs, LIRAs and LIFs). **No trading fees (equities and ETFs) for young investors (for more information on pricing for different types of investors: CIBC Investor’s Edge).
For more information, read our CIBC Investor’s Edge review:
Qtrade Direct Investing is an independent online brokerage platform in Canada that was founded in 2021. It allows you to invest in several types of investments, such as equities and ETFs, in several types of accounts. Qtrade is a platform with administration and trading fees, but it allows you to avoid fees if your account meets one of their conditions.
To find out more, read our review of Qtrade Investissement Direct:
RBC Direct Investing is the discount broker for Royal Bank of Canada (RBC) clients.
*No annual fee if: combined assets in all accounts exceed $15,000.
Scotia iTRADE is the online broker for customers of the Bank of Nova Scotia (Scotiabank).
*No annual fee if: total account assets (registered and non-registered) are $25,000 or more or if you make more than 12 commission transactions per year. **Trading fee of $4.99 per transaction (shares and ETFs) if: you make 150 or more transactions per quarter.
To learn more, read our review of Scotia iTRADE:
TD Direct Investing is the online broker for clients of the Toronto-Dominion Bank (TD Bank).
*No annual fee if: your TD Direct Investing account balance exceeds $15,000. **Trading fee of $7.00 per transaction (shares and ETFs) for active investors.
Now that you’ve studied your options and decided which brokerage platform to use, it’s time to start investing online.
Here are the steps to follow:
There’s no better time than today to start your journey into the world of stock market investing. Of course, investing online can seem complicated. But brokerage platforms are now designed for the general public. What’s more, all-in-one ETFs make it possible to invest passively in the stock market at low cost.
As we’ve seen in this guide, there are several online brokerage platforms available in Canada. Each has its own characteristics, so choose one to suit your needs. In particular, check fixed and negotiation costs.
The best online investment site depends on your financial situation and objectives. If you have few financial assets, a platform with no minimum deposit and no administration fees could be a good choice. Conversely, a more comprehensive investment platform might serve you better.
There are online brokerage platforms for investment beginners. For example, Wealthsimple is an easy-to-use platform with no administration fees, no minimum balances and no trading fees.
Canada’s leading trading platforms are all reliable, secure and regulated. When doing your research, check that the platform is regulated by the IIROC and protected by the CIPF.
In Canada, you can invest in the stock market using an online brokerage platform to trade stocks and ETFs yourself, or choose a robo-advisor who takes care of your investments according to your investor profile.
To buy stocks, you need to open an online brokerage account, choose an investment account type (FHSA, TFSA, RRSP, non-registered account, etc.), and fund your investment account. Then start buying shares on the stock market.
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