Questrade

The Best Online Brokerage in Canada: Questrade Review

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Last Updated on October 8, 2020 by Yetunde Akindele

Questrade, established in 1999, is Canada’s largest independent online-based brokerage platform that offers Canadians a low-cost substitute for investing, trading, and enabling of other financial services not involving banks. The platform offers trading in stocks, mutual funds, no commission exchange-traded funds (EFTs), and option bonds. Questrade also provides access to IPOs (initial public offerings), international equities, guaranteed investment certificates, along with access to precious metal trading.

One key selling point of Questrade is that it offers both Self-directed investing and Managed investing options. This allows you to either be directly in charge of your own portfolio or to make use of the services of Questrade’s team of financial experts. To use Questrade services, you have to register an account on their website or transfer your already existing verified account with a financial intermediary.

Questrade’s vast array of services makes it difficult to restrict it to any demographic. Questrade caters to first time and seasoned investors alike. It is a one-stop solution to people of all financial standing looking to avoid high registration fees, commission, and banks’ restrictions. Questrade provides much-needed flexibility to Canadian investors with substantially lower costs and automated portfolio generation. 

Key Highlights

1.   Reasonable broker fees

Questrade distinguishes itself from its competitors by offering consistently lower fees across all investment types. The platform offers its customers a low fee of $0.01 per share for self-directed investing and management fees starting from 0.25% with managed-investing. This makes Questrade one of the cheapest brokers today. They can afford to charge low fees since they run minimal overhead being a 100% online platform.

Additionally, if you are an active trader, you get a special treatment as well. You get access to Questrade’s exclusive active trader pricing, and rebates.

2. Variety of Investment Accounts

As a DIY investor, you can open a wide selection of investment account with Questrade. This includes tax-sheltered accounts such as RRSPs, RESPs, LIRAs, TFSAs, LIFs, RIFs. Similarly, non-registered tax-deductible accounts such as foreign exchange market accounts and margin accounts can also be opened with Questrade.

3.   Fully digital 

Another plus point for Questrade is that it offers a fully digital experience for those always on the go. It offers two platforms, the mobile and web-enabled version. The mobile platform is constantly in sync with the web platform. However, in order to trade Forex or CFDs (Contract for difference,) you must download the Questrade FX Global app. While they both function practically the same way, you still have to download two separate apps for trading different amenities. 

4.   Highly Secure 

Questrade’s security is practically impenetrable. Secured with TFA (two-factor authorization) pin code that customers have to set up when signing up. Online safety guaranteed by state of the art security systems, Questrade is so confident in its security protocols that they offer 100% reimbursement for unauthorized transactions on your account. Not just this, but customer accounts are also covered by the Canadian Investor Protection Program up to $10 million. 

Services Offered

1.   QuestWealth Portfolios

Questwealth is Questrade’s Robo-advisor directly in competition with WealthSimple. It is basically premade stock portfolios actively managed by financial experts in conjunction with detailed data analysis from AI-enabled software.

Don’t worry, though, Questwealth regularly rebalances your portfolio every time market conditions change. Questwealth portfolios have Questrades signature low fee. Management fees start as low as 0.25%, for equity under $100,000 per annum. If you have total equity above $100,000, then you get to pay management fee starting from 0.20% per annum. Unlike most other brokers that rely solely on algorithms to balance these portfolios, Questwealth has actual human experts watching every move to make sure you get the highest gains with the lowest losses. 

For ETFs managed under the QuestWealth Portfolio, there is a management expense ratio (MER) integrated into each ETF. With this investment option, the fees range from 0.17% to 0.22%. For socially responsible investment SRIs, it ranges from 0.21% to 0.35%.

2.   Self -Trading 

If you’re very confident about your market research and the ability to make split-second decisions, you should try the self-trading method. This is the traditional trading method but digital. It is Questrade’s DIY approach to investing. On the Questrade app, you can constantly monitor stocks by adding them to your wishlist. Similarly, you can open up trade requests right from the app and build your portfolio yourself. When Self-Trading, you can purchase ETFs, Bonds, GICs, precious metals, and International Equities. 

For trading ETFs, you pay $0, but stock trading costs can vary from $4.95 to $9.95. For Bonds or GICs, it is free to trade if you invest a minimum of $5000. However, you may incur some fees if you choose to withdraw the funds earlier than the proposed date. For precious metals like Gold or Silver, there is a $19.95 transaction fee on every trade. Likewise, there is a charge of 1% of the total sum when trading in International Equities at a minimum of $195. 

#Related: Understanding ETFs, what the heck are they?

3.  Market Intelligence

Questrade offers multiple services to help its users make the right informed choice. There is a free research tool that is available in the Questrade software under research. You can use this tool to search for news related to a company. Additionally, this allows you to search by symbols or security names and filter them using metrics like financials and valuations. These tools despite being available for free (more than adequate for most people), you can also have them upgraded for a fee.

4.   Intraday Trader

Intraday Trader is a unique cross-referencing system to find the best choice for you. It uses a pattern recognition system to scan for opportunities in Canadian and US equities markets and matches them against your investment targets. Some of Intraday Trader’s features are free to use, while a live streaming version requires you to purchase a monthly membership

Pros

  • No fees to buy ETFs
  • $10,000 managed for free with first account opening under QuestWealth Portfolio
  • Canada’s #1 low-cost online brokerage platform
  • $50 in free trade on sign up

Cons

  • Inactive account fee

Questrade accounts that see no activity for 3 months and have less than a $1000 cumulative equity will incur a $24.95 charge for inactivity. For individuals aged 25 or younger, this fee is waived off courtesy of Questrade. Questrade claims the charge is to encourage its user to not slack off. 

However, you should also note that if you incurred an inactivity fee in the last quarter, but traded in the current quarter, you are entitled to a rebate up to $24.95. This translates to you not paying the inactivity fee, and the trading still covers for the current quarter as well.

Update: As of October 1st 2020, Questrade no longer charges account inactivity fee for any account type on its platform!

  • Residential status

Services are not available to non-residents.

#Related: Understanding ETFs, what the heck are they?

How To Get Started

Getting started with Questrade isn’t difficult since you only need to fill out the form online. 

Step 1: Create a User ID 

After clicking on the Sign-Up button on the Questrade website, you will be prompted to come up with a username and password for yourself. 

Since this is an account that will probably be worth a lot, I recommend using a phrase and writing it down somewhere. Later you will have to fill out security questions. Don’t use the cliche questions whose answers are posted all over your social media profiles, I would suggest a non-conventional question and write down the answer along with the password. 

Step 2: Fill out personal information 

The next step is filling out personal information, like your full name, email, and marital status. Ensure that you’re filling this out correctly because any mistakes you make here may be carried on. If you choose your marital status as married, you will also have to list down your spouse’s information. This is to comply with government regulations and check if your spouse may be in a controlling position at a company or have insider information. 

Step 3: Fill out employment information

Once you have filled out the personal information form, you will be prompted to add your employment status, the name of the company you work for and, the nature of the work.

Step 4: Financial Information 

You will have to add your estimated net worth, annual income, fixed assets, or liabilities in the financial information panel. With that form filled out, your new Questrade account is ready to use.

Conclusion

Questrade is an amazing service available to Canadian residents. In my opinion, it is currently the best online brokerage offering no fee to buy ETFs, a diverse investment portfolio all at some of the lowest fees currently available in the country. I hope that this review has proved beneficial for you, and helps you see the many benefits of Questrade.

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