HSBC InvestDirect Review (2022 Update)
HSBC InvestDirect Review
- Fees and Pricing
- Account Options
- Customer Service
- User Friendly Platform and App
HSBC InvestDirect Review Summary:
HSBC InvestDirect, the self-directed investment arm of the Hong Kong and Shanghai Banking Corporation, Ltd, offers Canadians a way to conveniently access international markets (30 to be exact), using multiple currencies
The wide variety of markets is good news for seasoned traders who are looking to diversify their portfolio beyond what’s available on the Toronto Stock Exchange (TSX), but for most of us, this feature is overshadowed by HSBC’s cost compared to the best online brokers in Canada.
Our HSBC InvestDirect review looks at all the major features of this global DIY investment broker. We’ll break down everything from platform to pricing and compare it with two of our top recommended online brokers.
- One of the biggest banks in the world
- Most markets and currencies to trade in
- Discounts for active traders
- Flat-rate trading fees are lower than many big banks
- $25 inactivity fee
- No commission free ETFs
- Additional fees for trading in international markets
- Outdated platform with no mobile app
- Recent drop in customer service quality
HSBC InvestDirect is not among our top Canadian brokers: Higher fees, no mobile app or a signup bonus.View Alternative, Better Rated Canadian Brokers
What Is HSBC InvestDirect?
HSBC (The Hongkong and Shanghai Banking Corporation) was founded in 1865. Today, it’s a multinational conglomerate and one of the largest banks in the world. HSBC is best known in Europe, the Asia Pacific region, and of course, here in North America.
HSBC InvestDirect Canada stands out from other Canadian discount brokerages because it lets you trade on 30 different domestic and international markets in 10 different currencies.
In addition to the usual North American stock exchanges, HSBC InvestDirect gives traders access to markets in:
- Asia (China, Japan, and Hong Kong)
This makes it one of the only truly international DIY trading platforms available to Canadian investors.
Is HSBC InvestDirect Safe and Legit?
As you can imagine with a 150+ year history and a global reach, HSBC is as well-known as any of the big banks.
HSBC InvestDirect uses 128-bit encryption, firewalls, and digital certificates to help protect clients’ privacy. They also have a 100% reimbursement guarantee for victims of “fraudulent events” (subject to terms and conditions, as you can imagine).
HSBC InvestDirect’s Canadian parent company, HSBC Securities (Canada) Inc., is a member of the Canadian Investor Protection Fund as well as the Investment Industry Regulatory Organization of Canada (IIROC).
Basically, HSBC InvestDirect keeps your money as safe and protected as you would expect from a big bank.
HSBC InvestDirect Fees
While the overall fees are certainly not the best in Canada, and reviews of customer service and the platform indicate that there is much to be desired, HSBC InvestDirect is worth considering for those who have an interest in global trading.
We’ll break it all down for you as our HSBC InvestDirect review continues further down the page, but first, here’s a quick look at how their fees compare to other leading online brokers.
|ETFs||Mutual Funds||Options||Account Fees|
|HSBC InvestDirect||$6.88 per contract/$4.88 for active traders (plus additional fees for international trading)||Over 4,000 commission-free mutual funds||$6.88 per contract/$4.88 for active traders + $1.25 per contract||A number of fees including inactivity fee, and annual RESP account fees|
|Qtrade||$0-$8.75||$0||$8.75 per contract/$6.75 for active traders + $1.25 per contract||$0 (as long as certain requirements are met)|
|Questrade||$0 ETF buy, sell at $0.01/share (min. $4.95 to max. $9.95)||$9.95/trade||$0.75 per contract/$4.95 Min.||$0 monthly account fee|
|Interactive Brokers||Tiered and fixed commission pricing||17,000 commission-free mutual funds||Tiered and fixed pricing, starting at $1.25 per contract||$10 monthly account fee|
If you are into options trading, cutting costs is key, and while HSBC’s fees are lower than Qtrade’s, they’re clearly not the winner here. If you haven’t gotten into the game yet, but are interested, check out our guide about options trading in Canada.
Along the same lines, if you’re a day trader, you’ll want to keep costs as low as possible, as you’ll be trading in volume. And again, HSBC isn’t your best choice.
HSBC InvestDirect ETFs and Mutual Funds
A major strike against HSBC InvestDirect is their lack of commission-free ETFs. This is an increasingly serious issue as free ETF trading is quickly becoming a standard offering in the industry.
While not enough to turn everyone away, it’s a definite turn-off for some would-be investors. Many current and would-be investors have made it clear that they’re willing to switch platforms if it means avoiding being overcharged.
In fact, Disnat (Desjardins’s online brokerage) recently eliminating trading fees on both stocks and ETFs – and they rocketed up 69 points to land the #3 spot on JD Power’s Customer Satisfaction study as a result. Our preferred online brokers at Qtrade, Questrade and BMO Investorline offer commission-free ETFs, and we consider ETF trading fees to be a serious downside for any discount brokerage.
On the other hand, while there are no commission-free ETFs, HSBC InvestDirect does offer more than 4,000 commission free mutual funds.
HSBC InvestDirect Trading Fees
HSBC InvestDirect commissions start at $6.88 for HSBC Premier and HSBC Advance clients for online and ETF North American trades, and a flat fee of $288 for most trades on the Hong Kong market.
Individuals who complete 150 or more trades per quarter are considered to be Active Traders, which makes them eligible for a reduced rate of $4.88 per trade on North American markets and 20% off international equity trades.
Options for both the flat rate pricing and the Active Trader pricing are an additional $1.25 per contract.
Keep in mind that additional commission fees apply for trades made on international markets. For example, trades under €25,000 made on European exchanges will incur an additional 0.50% fee. You’ll get the best rates by sticking to the North American exchanges.
Options for both the flat rate pricing and the Active Trader pricing cost an additional $1.25 per contract. Currently, more than 4,000 mutual funds are commission-free.
HSBC InvestDirect Admin and Account Fees
Administration fees can be a real deal breaker for us when we’re reviewing a discount brokerage, and in the case of HSBC InvestDirect there are quite a few to take note of. Here are just a few of the many fees HSBC InvestDirect clients encounter:
- Accounts are charged a $25 inactivity fee if fewer than three trades are made during the preceding 3 months. However, this fee will be waived if you maintain a balance of $25,000 or more in the account.
- RESP accounts have an annual $50 administration fee
- Each registered account is permitted one free withdrawal, with each additional withdrawal costing $50.
Additionally, there are fees for wire transfers, handling, document administration etc. You can find the full list of admin-related fees here.
HSBC InvestDirect Account Options
HSBC InvestDirect allows clients to hold direct-trading, registered, foreign currency, personal, and corporate accounts. Registered account options include:
It is important to note that you cannot hold US dollars in these registered accounts.
HSBC InvestDirect Trading Platform and Tools
HSBC’s online platform is pretty run of the mill, offering the basic trading tools you need to execute transactions with relative ease.
To be fair, they do have a few some decent research and planning resources. Their market analysis tools allow you to:
- Monitor real-time stock prices
- Analyze stock trends
- Research global economic news and trends
- Access reports
- Create your own charts and alerts
- Create and monitor your ideal portfolio with the help of HSBC’s Asset Allocation tool.
However, while they’re useful, they’re not enough to set HSBC InvestDirect apart from their competitors.
Does HSBC InvestDirect Have a Mobile App?
While HSBC Hong Kong does have a trading app, and HSBC UK rolled out its app in late 2021, HSBC Canada does not have an app for its InvestDirect customers at this time. While HSBC customers can check on their registered accounts through the mobile banking app, they aren’t able to trade.
Perhaps that will change in the future, as we can see HSBC is moving in that direction in other parts of the globe. If it does, we’ll reconsider our verdict, but as far as we’re concerned, a lack of app in 2022 is inexcusable.
HSBC InvestDirect Review: Customer Service
HSBC InvestDirect’s customer service, seems to have dropped off in the past 5+ years. Back in 2015, they scored the top rating for customer service in a report by Dalbar Canada Review.
Today, however, reviews claim that HSBC’s customer service leaves much to be desired with reports of clients waiting for as long as 73 hours to hear back from customer support. That being said, they do offer customer service in multiple languages including French, English, Mandarin, and Cantonese which may be beneficial to some clients – as long as they don’t mind waiting for it.
HSBC InvestDirect Against Cryptocurrency in 2021
HSBC made waves in April 2021 by stating that customers of InvestDirect could no longer trade the MicroStrategy (MSTR.O) stock due to its status as a “virtual currency product”.
The company’s press release stated, “HSBC has no appetite for direct exposure to virtual currencies and limited appetite to facilitate products or securities that derive their value from VCs (virtual currencies).”
This bold move ran contrary to several banks’ recent embrace of cryptocurrency and offering various Bitcoin-related product lines to customers.
By the end of 2021, HSBC spoke out in favour of CBDCs (central bank digital currencies) with several HSBC economists and officials touting them as more transparent and stable, and therefore less risky, than typical cryptocurrency such as Bitcoin. You can read the full report from HSBC Group Chief Executive for more context.
We’ll be keeping an eye on HSBC’s efforts in the field of digital currency – in the meantime, you can read our post on the best cryptocurrency apps and platforms in Canada for more information about crypto trading.
HSBC InvestDirect FAQ
Who is HSBC InvestDirect Best For?
So, who is HSBC InvestDirect best for? In our opinion, there are much better options out there for Canadians. If you are coming from a country such as Singapore or Hong Kong, and want to keep the same bank for simplicity’s sake, then HSBC might provide some value to you.
HSBC’s combination of high fees, low-rated customer service, dated trading platform, no mobile app, and relatively poor customer educational materials is why we don’t recommend HSBC InvestDirect.
Our number one pick for discount brokerages in Canada is Qtrade. To learn more about why they have finally overtaken Questrade as our top pick after several years, read our detailed 2022 Qtrade review.