Last week I wrote about the top discount brokers that offer U.S Dollar RRSPs/TFSA accounts with Qtrade Investor as one of the candidates.  After that post, a number of readers emailed me about Qtrade and what makes them so popular, especially among Globe Investor readers.

As one of the few independent discount brokerages remaining, Qtrade can keep up with the big banks through innovation.  The features that stand out the most with Qtrade Investor are their USD RRSP/TFSA and commission free ETFs offerings.  However, although they can keep up with the big banks, they don’t quite keep up with the other independent brokers like Questrade or Virtual Brokers.  Keep reading to find out why.

Accounts Offered

Like most other Canadian discount brokers, Qtrade offers the standard fare in types of accounts available to investors.  These include Cash, Margin, Corporate, RSP, RIF, LIF, RESP and TFSA.

Commission and Fees

Maintenance Fees

This is a category that I pay most attention – just how much is the account going to cost me in the long run?  In order to judge this, I look at the ongoing trading fees and the maintenance fees.  Their website details that they have no maintenance fees on their cash, margin and TFSA accounts.  However, there is a $50 fee for RRSPs for smaller accounts (<$15,000).  In addition, they charge $50/year for their US Dollar RRSP regardless of balance.

Trading Commission

In terms of trading commissions, for an independent discount broker, their trading commissions are high for smaller accounts.  For accounts less than $50,000, buying or selling shares costs $19/trade but decreases to $9.95/trade once the account reaches $50,000.  Active traders doing 30-149 trades/quarter get charged $9.95/trade while high volume traders (150+ trades/quarter) gets the preferred rate of $7/trade.

In my opinion, the higher balance requirement (thus higher fees) is where Qtrade stumbles vs the other smaller brokers.

Foreign Exchange Rates (FX)

I’ve been told by an MDJ reader that FX charges for CAD/USD are:

1.75% for < $10k, 1.60% for > $10k but < $25k
This simply means that if you are moving less than $10k from a CAD to USD account, Qtrade Investor will charge you an extra 1.75% of the amount exchanged.  Although this is high, it is comparable with other online discount brokers.

U.S Dollar RRSP

If I was looking for a new discount broker, one feature that I would require is the ability to hold USD in my RRSP.  Being dinged 1.75%-2% to purchase and sell a US stock is simply too much.  At least with a USD RRSP, the sale of US stocks (and dividends) will settle in USD, thus avoiding the FX fee.

While Qtrade offers a USD RRSP, it doesn’t offer the best USD RRSP out there.  What sets it behind the competition is that they charge $50/year for the USD RRSP account regardless of balance and another $50/yr if the account is less than $15,000.  On top of that, investors need at least $50k to qualify for the $9.95/trade.

Commission Free ETFs

For index investors, having a discount broker that offers commission free ETFs can be a big money saver.  While the other independent brokers also offer commission free ETFs, Qtrade Investor followed the iTrade model.  That is, a select list of 60 ETFs that can trade completely free on both the buy and sell.

Reviewing the list of ETFs available, an index investor can put together a low cost ETF portfolio, but it is very limited in choice.  For example, they are missing the popular ETFs such as XIU, Vanguard Canada ETFs, and key Vanguard US ETFs such as VTI, VEA, VWO, VIG and VXUS.

Personally, for long term investors, it’s likely a better deal to have access to ALL ETFs for free commission when buying, but having to pay when selling (like Questrade or Virtual Brokers).

Final Thoughts

Altogether, Qtrade Investor is a comprehensive discount brokerage that offers a bit of everything, but simply not the best at anything.  As an independent brokerage, they have high account balance requirements which is not ideal for beginner investors.  While they do offer USD RRSPs and Commission Free ETFs, the other independents simply have a better offering.  Here are their direct competitors; MDJ readers favorite Questrade, and low cost Virtual Brokers.

See how Qtrade Investor compares to other Canadian discount brokerages here.

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I did a thorough research of all main brokerages in Canada recently, after I fired Questrade.

Qtrade is not on, so it was out. We have become super reliable on this nifty tool.

Questrade are crooks. They stole 20 dollars (called it inactivity fee) from me without notification for having a slow quarter. This is one of the worst companies I have ever dealt with in my entire life. They refused to reimburse.
Calling them was like experiencing hell on earth. Nobody every available, and had to be put on hold for up to 45 minutes. Not a good business model, if they are looking after your moolah.

I figured out the best brokerage to be BMO investorline. If you have over 50k in investments the trades cost 10 bucks, and that is by far a better value than the 5 bucks you pay at questrade. Somebody at BMO picks up my calls on the first ring. It’s a real business not a boiler room. Learning to pay a bit more for transactions is a sign of maturity for an investor, and I am happy to say that I have matured…

Couple of other things I learned about QTrade that were not obvious. Read the fine print! The commission free ETF’s are only for trades greater than $1000 in value, so even less of a preferred option for small accounts. Also there is an extra $4.00 per trade for non-market orders on all equities, ETF’s, whatever, so trying to use limit orders to get desired price (or stop loss) will also cost you.

One of the intangibles that can be hard to quantify is the quality of customer service. I have accounts with both Questrade and Qtrade, and by far QTRADE is the leader in customer service. Fast replies to messages left through their online service, not to mention email and by phone. I moved my main trading account to them after a particularly bad customer service spell with Questrade. I’ve never looked back. It’s worth paying a slightly higher commission to have really excellent customer service.

The extra $4 fee for non-market orders is removed once you qualify for other tiers of their commission table. I have >$50k invested, and all my limited orders went through for $8.95.

Then why am I getting hammered with $0.25 per $1000 of ‘routing fees’ and why do so few online reviews of Qtrade mention them?

A limit order I just put through cost me 36 bucks. My balances exceed all of their minimums.

Time for a phone call.

Qtrade is designed for a slow, long-term investment style.
Anyone interested in frequent trading would be better serviced elsewhere based on the fee structure alone. The fills are poor and frequently exceed purchase limits.
Recent example: small purchase of 2200 shares@1.27 limit which was below current market price.
Filled @ 1.29 and commissions were $44 – due to commission structure after the first 1000 and 2nd 1000 shares.

Customer service is a completely different issue. Qtrade’s customer service is very good.

After questioning the cost of a trade, they admitted the mistake and promptly reimbursed the difference. Although there were a few frustrating issues during transfer of our 6 accounts from full brokerage I would give them full marks for communication and their promptness of it. I’m glad I didn’t go with Questrade!
I heard a rumour that Questrade has removed stop loss trades from its trading platform?

I have very bad experience with Qtrade.
Their fees are high and hidden.
Costumer service rude and weak.
They made mistake several times by transferring my open positions from CAD account to USD account and vice versa.If I want to rate them; 1 or 2 over 5 will be adequate for them.
I finally moved from that company.