Hustlers, have you ever wondered what truly matters when it comes to Canadian investments? Questrade, the online brokerage powerhouse, has been a trusted name among investors for over two decades. Whether you’re a hands-on investor, a fan of robo-advisors, or simply someone who values low fees, Questrade might be your ideal financial partner. In this comprehensive guide, we’ll uncover everything you need to know to determine if Questrade aligns with your financial goals.
The Questrade Story
In the year 1999, at the dawn of online stock trading, entrepreneur Edward Kholodenko embarked on a mission. Alongside three partners, he co-founded Questrade in Toronto. Their vision was clear: provide do-it-yourself (DIY) investors with a low-cost alternative to Canada’s large banks and brokerages. Despite weathering the dot-com crash, Questrade emerged as the fastest-growing online brokerage in Canada.
Today, Edward Kholodenko, who immigrated to Canada from Ukraine at a young age, continues to lead the company. With over $30 billion in assets under administration and approximately 250,000 new accounts opened each year, Questrade is a testament to its commitment to Canadian investors.
Who’s Questrade For?
Questrade caters to a diverse clientele, from self-directed investors to those who prefer a more hands-off approach. The common thread among its clients is their keen sense of cost-consciousness. Questrade’s investment fees are renowned as some of the lowest in Canada. Moreover, the introduction of the Questrade Edge app targets active traders, providing them with a treasure trove of real-time data and research tools.
Investment Options at Questrade
Questrade offers an array of investment options, empowering DIY investors to open various types of investment accounts online:
- Tax-Sheltered Registered Accounts: Including RRSPs, TFSAs, RESPs, LIRAs, RRIFs, LIFs, and FHSAs.
- Taxable Non-Registered Accounts: Including margin foreign exchange market accounts.
With a minimum account balance of just $1,000 (or $250 for FHSA), you can start buying, selling, and trading investments. Questrade’s offerings encompass stocks, bonds, North American ETFs, mutual funds (including low-cost Series F funds), GICs, options, IPOs, and alternative assets like precious metals, foreign currency (FX), and CFDs.
Questwealth Portfolios: A Robo-Advisor Option
If DIY investing isn’t your preference, Questrade’s Questwealth Portfolios may pique your interest. After opening an account and funding it with a minimum of $1,000, you relinquish the task of choosing your investments. Instead, you’ll answer a series of questions to gauge your risk tolerance, investment goals, and overall approach to money. Based on your responses, Questwealth’s algorithm will construct a portfolio for you—whether it’s aggressive, growth-focused, balanced, income-oriented, or conservative. Each portfolio comprises a diversified mix of low-cost ETFs.
For socially responsible investors (SRI), Questrade offers SRI versions of the Questwealth Portfolios, featuring securities classified as environmentally and socially responsible.
What Does Questrade Cost?
Questrade’s fees vary depending on the service or product you select, as well as your choice of investments (e.g., stocks, mutual funds, ETFs, or options). Nevertheless, opening or closing an account is free, as is transferring your account(s) to Questrade from another financial institution.
Questrade’s commission and management fees are highly competitive:
Fees for Questrade Self-Directed Investing
- ETFs: No commission on purchases; selling an ETF can cost between $4.95 to $9.95 per transaction (plus the ETF’s management expense ratio, set and collected by the funds themselves).
- Mutual Funds: $9.95 per trade.
- Stocks: Purchase and sell commissions range from $4.95 to $9.95 per transaction.
- Bonds and GICs: Minimum purchase of $5,000; early withdrawal fees may apply.
- International Equities: 1% of the trade value, with a $195 minimum.
- IPOs and New Issues: Free to purchase, with a $5,000 minimum.
- Precious Metals: US$19.95 per trade.
- Options: $9.95, plus $1 per contract traded.
Traders can access lower trading fees (known as active trader pricing) on stocks, ETFs, and options by purchasing a premium data package.
Fees for Questwealth Portfolios
- Management Fees: Calculated as a percentage of your total invested amount. Balances under $100,000 pay 0.25% annually, while balances of $100,000 or more pay 0.20% annually.
- ETF Fees: Each ETF in a Questwealth Portfolio has its own MER, ranging from 0.17% to 0.22% (or 0.21% to 0.35% for SRIs).
As an example, a managed portfolio of $50,000 would incur annual fees of approximately $185 to $235 for core Questrade portfolios, or $205 to $300 for SRI portfolios.
Questrade’s Market Data
To empower traders with data-driven decisions, Questrade provides self-directed clients with various free and paid data packages:
- All account holders receive free snap quotes on options, indexes, stocks, and ETFs. This provides real-time bid and ask prices for securities listed on major North American exchanges.
- On the Questrade Edge platform designed for active traders, real-time streaming data for stocks and ETFs is available alongside snap quotes.
Questrade offers three premium data packages:
- Real-Time Options: $19.95 per month, providing streaming level 1 data on Canadian and U.S. options.
- Advanced Canadian Streaming: $89.95 per month, offering additional level 1 and level 2 data for Canadian exchanges, as well as indices data.
- Advanced U.S. Streaming: USD$89.95 per month, granting extra level 1 and level2 data for U.S. exchanges, alongside indices data.
These advanced streaming packages also unlock lower trading fees on stocks, ETFs, and options. Additionally, you can choose a la carte live streaming data add-ons.
It’s important to note that paid market data subscriptions are refundable. Moreover, if your total monthly commissions reach $48.95 or more, you’ll receive a $19.95 rebate. For those on the pricier plan (also offering access to “active trader pricing”), the full $89.95 fee is waived once you generate commissions of $399.95 or more.
Research Tools at Your Disposal
Questrade has earned recognition as MoneySense’s best online broker for 2023, thanks in part to its ability to empower Canadian investors with informed decisions. Here are some of the research tools Questrade offers:
- Mutual Funds Centre (Powered by Morningstar): This tool, available for free under the market research tab on Questrade’s online trading platform, enables you to search for and analyze mutual funds based on parameters like historical performance, fees, and risk factors. Fund filters, such as fund class, provider, currency, Morningstar category, and more, assist in narrowing down your choices.
- Intraday Trader (Powered by Recognia): Found under the market research tab, Intraday Trader utilizes pattern recognition (technical analysis) to monitor trading opportunities in Canadian and U.S. equities. The algorithm identifies trading ideas and events based on your chosen technical patterns, signals, or stocks, sending you notifications with annotated charts and explanations when your target trades are triggered.
- IPO Centre: This tool provides information on and facilitates the purchase of the latest IPOs, secondary offerings, and structured products.
- Newsletters: All Questrade account holders receive two daily newsletters:
- Bonds Bulletin: A daily list of liquid bonds and fixed income products. Investors seeking diversification in their holdings can browse available bonds and GICs before placing their trade orders (minimum $5,000).
- The Morning Brief: A daily newsletter covering news, views, analysis, technical predictions for the day’s markets, overnight news from Asia and Europe, and a synopsis of the expected direction of major market indices for the trading day.
The Drawbacks of Questrade
Let’s take a closer look at the pros and cons of choosing Questrade as your financial partner:
Pros:
- Low Trading and Admin Fees: Questrade distinguishes itself with some of the lowest trading and administration fees among Canadian online brokers and robo-advisors. Notably, it offers free ETF purchases.
- Variety of Account Types: Questrade boasts a wide range of account types, including margin accounts and FHSA accounts—the first of their kind in Canada.
- Diverse Investment Products: Beyond stocks and ETFs, Questrade provides a comprehensive suite of investment products, including bonds, GICs, and IPOs.
- Instant Deposit Options: Questrade offers various free and paid deposit and withdrawal methods, including instant deposits from bank accounts and debit cards.
- Paperless Account Opening: In an era where paper submissions are the norm in 2023, Questrade stands out with its paperless account opening process.
- Effective Customer Service: While customer service reviews vary, many acknowledge that Questrade’s service quality has improved. Offering online chat, phone, and email support, Questrade strives to provide a positive experience for its clients.
Cons:
- Relatively High Minimum Funding Amount: The $1,000 minimum funding amount to activate your account (except for FHSA accounts, which require $250) may deter some potential investors.
- Multiple Platforms or Apps: While this can be advantageous for some Canadian traders, novice investors may find Questrade’s multiple apps and platforms overwhelming, potentially requiring time to become familiar with all of them.
Conclusion: Is Questrade Right for You?
If you’re seeking a discount brokerage with an extensive range of investment products, low fees, and an entirely online experience, Questrade deserves your attention. Whether you prefer a DIY approach or opt for a robo-advisor like Questwealth Portfolios, Questrade’s products and services cater to both novice and experienced investors and traders. As a one-stop shop for your investments, Questrade excels in terms of price, user-friendliness, and product diversity.
Don’t miss out on the opportunity to explore the world of Questrade and make it your financial ally. Whether you’re a seasoned investor or just starting, Questrade offers the tools and resources you need to thrive in the world of Canadian investments.
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In this expanded guide, we’ve delved deeper into Questrade, addressing its history, target market, investment options, costs, market data, research tools, and pros and cons. It provides valuable insights for both novice and experienced investors, catering to the diverse needs of our audience.