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Discussion Starter · #1 · (Edited)

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I have been thinking about this since icon started this great-news thread. I also carefully compared the 2012 (last update) fees to the latest ones and it does not look like they tried to make up the "shortfall" by upping any other fees. This seems a bit out of character for the big banks. Any have any ideas about why they may have done this? Are they trying to fish for clients in Questrade's space? Seems like a rather large move that sets them way above their competition. Usually banks increase fees.

Just the same, I'll take it. :D
 

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By removing the $50k minimum qualification for $9.99 trades, they have definitely checkmated Questrade.
RBC also happens to have a true USD RRSP A/C, which was one of Questrade's big features 2 - 3 years ago.

Add in the fact that not all trades at QT are $4.95 (ECN fees), and the platform fees, and it makes RBC a very compelling alternative even for smaller investors.
 

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i have never understood why the big bank brokers don't go out hell-bent for the youth/novice investor market. Offer em zero-commish-to-buy ETFs. BMO is a natural for this approach, they already have a full suite of house etfs, can't imagine what's stopping em.

as an investor cohort, these new investors would tend to be high maintenance, so their marketing people would have to think up smart ways of organizing them into pods, maybe w mentors or marketing materials such as Pay Off Your Student Debt or Get The TFSA.
 

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"i have never understood why the big bank brokers don't go out hell-bent for the youth/novice investor market."

Totally hp.

Good news from RBC. I need to highlight this on my site and more importantly, act with my feet and leave my brokerage if they cannot get their act together.
 

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Questrade deserves a big round of applause for being a scrappy, aggressive competitor. It was their low commissions (do you remember how TD Waterhouse acquired Ameritrade Canada and immediately jacked up trades from $11 to $30?) that pushed the banks to drop their commissions from $30 to $10 at least for some clients. Questrade was the first out with a USD RRSP and RBC and BMO followed suit.
 

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i don't know if questrade is publicly traded but when i saw this, the first thing that occurred to me was that it was time to dump their stock
this is very good and i cannot believe that tdw won't be answering back
 

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If all major banks follow, Questrade will have to adopt the $0.01 per share $1 min structure. But then how would IB respond?

RBC is good for long term investors but their platform is horrible for aggressive "day" traders. Questrade still has an edge there.
 

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It was their [questrade's] low commissions that pushed the banks to drop their commissions from $30 to $10 at least for some clients.
actually i believe the broker that first dropped its commish below $10 in canada - other than IB - was ETrade (later to be bought by scotia.) Volume-wise ETrade was the nearest competitor to the TD.

after that, the big green was forced to bite the competitive bullet & drop also.

did questrade even exist at that time? if so, had anybody ever heard of them? me, i'd class questrade's influence upon the brokerage community in canada, during those early years, as less than a gnat.

but it's true that they've powered ahead. Now it would be nice if mr kholodenko would conduct an IPO. That way institutions could get a look at their books & feel more confident.
 

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actually i believe the broker that first dropped its commish below $10 in canada - other than IB - was ETrade (later to be bought by scotia.) Volume-wise ETrade was the nearest competitor to the TD.
I think so as well. I was with E*Trade since they first came to Canada. For a bit, they even allowed the sale of F class mutual funds (I still have one).....that is, until they were 'forced' by who knows in the industry to shut that down.
 

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i have never understood why the big bank brokers don't go out hell-bent for the youth/novice investor market. Offer em zero-commish-to-buy ETFs.
I believe the big banks didn't want to be bothered with new/small investors.
I was surprised when Scotia iTrade increased their highest commission tier from $19.99 to $24.95 about 2 years ago, approx. 3 years after acquiring E-Trade.
Prior to that, E-Trade/iTrade had the most competitive pricing for small accounts among the big 5 bank brokerages.

At this time, I believe TDDI and iTrade are the most uncompetitive for small accounts.
TDDI is at $29.99 and iTrade at $24.95
 

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I think so as well. I was with E*Trade since they first came to Canada. For a bit, they even allowed the sale of F class mutual funds (I still have one).....that is, until they were 'forced' by who knows in the industry to shut that down.
I think you and hp are right. I had an account with E*Trade those days and I was paying $20 per trade and E*Trade had lower commish for frequent traders or certain account size.
 

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I believe the big banks didn't want to be bothered with new/small investors.
i agree, the youth/new investor market would be high-maintenance, but that's exactly why i thought that smart marketing people would have to create coping mechanisms & teaching modalities.

the idea is that, long-term, the young/new crowd are going to become their mainstream clients of tomorrow. So it's worth investing a few dollars to attract & serve em right now, i think.

the only other growth strategy the brokers have is to buy each other's clients with higher & higher cash or free trade bribes. Given how fickle online customers are, one could even say "rent" each other's clients.

as for the coping mechanisms with young/new clients, dividing them into pods could help, for example. Like houses or clans in the private schools. Young people today seem to be more tribal than ever, so clustering them might make the business slightly more profitable for the big bank brokers.

pods could be mentored. Certain products - bmo could offer its large house suite of etfs at zero commish for example - could be featured; other products would be left at regular commish.

HC look at all the talented young investors in cmf forum. They are/are going to be fabulous clients. There's no reason for their investing efforts to be handicapped by the big bank brokers; instead the BBBs should be competing to get their business.
 

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i agree, the youth/new investor market would be high-maintenance, but that's exactly why i thought that smart marketing people would have to create coping mechanisms & teaching modalities.
...
HC look at all the talented young investors in cmf forum. They are/are going to be fabulous clients.
Yup, I agree. The BBBs are missing a huge opportunity by being so short-sighted.
I opened my first DIY investing account with $2,000 at E-Trade.
 

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Interesting discussion between hp and HC. I agree hp is right though and perhaps RBC is the first to realize this?

But then again they're not stupid, so it could be a case of them simply grabbing clients from elsewhere? Touch wood, but they could always increase the price again later after they've grabbed the clients. They would retain those who can't be bothered switching back again, esp if the price increases are minor and are still lower than competition.
 
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