Tradefreedom Discount Brokerage Review

Time for another low cost discount brokerage review: Tradefreedom.  We have done many discount brokerage reviews, from the good to the not so good. I thought that we had most of the brokerages covered, but after some comments from readers, I was missing an essential piece of the Canadian discount brokerage market, Tradefreedom.

This article will provide a preliminary view of the discount brokerage Tradefreedom. As I don’t have an account with them, I can only go by what it stated on their website and by what readers are saying about them. I would be grateful if more Tradefreedom clients to add their comments.

Note that MDJ is not affiliated with Tradefreedom.

Account Types Offered:

  • Cash, Margin, Short, Options, Futures, Forex and Registered (RRSP, RRIF, LIRA, LIF, RESP)

Trading Platforms

  1. Tradefreedom Online. As with all Canadian discount brokerages, Tradefreedom provides an web based trading platform that includes direct access trades, along with free real time quotes and charts. Seems to be similar to Questrade’s interface.
  2. Tradefreedom Edge. This includes all the features of the web platform but with the addition of advanced trading tools. Their online demo looks fairly advanced.

Commissions/Fees for Trading Stocks and Options (+ ECN fees)

  • U.S Equities: $9.95 Flat
  • Canadian Equities < $3.00: $9.95
  • Canadian Equities > $3.00: $9.95 up to 1,000 shares, $0.01/share after that.
  • Options: $9.95 + $1.25/contract
  • Broker Assisted Trades: $20 + regular commission
  • Mutual Funds: $37.95/transaction
  • No trade, account minimum or annual fees

Datafeeds

  • This is where Tradefreedom really shines. They provide free REAL TIME streaming quotes AND charts (level 1). I believe that this may be the only Canadian discount brokerage to do this.

What the Readers are Saying

Michael Watkins

If your account is relatively small, and you do not trade very often at all, then TradeFreedom is a good provider.

However if you are at all active – even swing trading I push through more than 30 trades a quarter – the transaction costs will quickly make TradeFreedom the most expensive choice.

Andrew

You can open an account with TradeFreedom Securities and get free real-time STREAMING quotes for both USD and CAD exchanges includes free US market depth. No trade minimums either – all clients can obtain $9.95 rates regardless of your trade and asset levels.

Why would you want to toggle between one website (for the last quotes price – not even streaming quote) and then go to another site to place the trade?

Mr. T

They have great rates, and great Windows platform. (rich client Windows app that you install on your desktop) They also have a Web interface which lets you do all the trades, quotes and account maintenance, but it needs some work to make it look nicer.

The Windows app is great, real time quotes, blotter, watchlists, all that you need. Trades are around $9.95 per trade (I didn’t quite figure out the formula, but it depends on how many shares, at what price, but for my last 5 trades I paid $9.95, $10.08, $11.03, $10.02, and $10.08) They have been bought by ScotiaBank, but so far they are running the shop independently.

I would like to see great FX rates and great premuim interest rate for cash balances. Currently cash balances earn 0% interest. With TradeFreedom you can have CAD or USD balance on the account. To transfer money to TradeFreedom, you just set-up a bill payment on your web banking, and there you go, you “pay a bill” to transfer any amount to your TradeFreedom account.

To transfer money back, you need to call them, and after password validation on the phone, you can tell them to EFT your cash amount back to your bank. This takes about 2 days to EFT (electronic fund transfer).

Final Thoughts

I’m not sure why I missed this brokerage before, but now that I’ve noticed them, they are a legitimate player in the low cost discount brokerage market. What I like most about them are the fact that they have no account trade or cash minimums, they provide free real time streaming quotes/charts and they have direct access to the markets.

If you are interested in stock trading, here are some free online stock trading tools that I have used and recommend.

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Peter
10 years ago

Tradefreedom has now been shut down and Scotia Itrade has taken over all the accounts. They have all the junk fees that TF didn’t. I was never charged the platform or low useage fee. However, It took them 2 months to set up my account, and another month to get the edge platform working.
It seems Questrade is now the only other option for low costs and light trading.

RIP Tradefreedom!

RKN
10 years ago

I signed up with Tradefreedom in early 2007 and finally have the courage to take my meager savings and run.

These guys are charlatans and thieves of the highest degree. My father signed up with these guys after one of their sales reps met my dad in person and offered *very very competitive* exchange rates for US equities in RSP accounts, and same for margin.

After trading lots and lots of options and stocks over 3 years, the service kept getting worse. Our accounts were shrinking. New fees like the data fee and recently the low activity fee were added.

Then suddenly one day I found out how they were gaming us. They would show how much we earned in a trade but you could NEVER see how much Canadian Dollars they ACTUALLY credited to your account. Both my father, me and my mother’s rsp and margin accounts had HUGE spreads.

On some trades I paid over 400 basis points over the exchange rate. I was furious. So they offered to refund us with preferred rate for this last quarter that ended in june, 2010. I got 400$ back. My father got $2200 + $185 in 2 accounts.

Right now another broker is processing my in-kind full transfer. Tradefreedom should be investigated by the government. The sales rep was a total d…che when the push came to shove.

My father slowly is moving things to another broker for margin and has already made quite a few trades very happily with them. You will regret TF once you’ve lost tons of money to their criminal ways of doing business. If this is slander so be it. I got papers to prove it.

TL
10 years ago

Same here!
I’d add that there’s also an inactivity fee that they’ll charge, something like $60/year /not too sure/ on accounts with smaller value. Also read several posts on the net and the overall impression is that Questrade is the worst and iTrade is the second worst discount broker out there in terms of user experience and (dis)satisfaction. Seems to me there’s not much choice for us the little guys, so I think I’d me switching to QTrade – not that I really want to but at this point I kinda have to. I’d be paying between 25-30 per trade probably but considering the fact I don’t trade that often anyways it’s probably the right thing to do.
I’d like to hear QTrade user experience out there – share your insights with us pls.

Mathieu
10 years ago

Just got my info pack for TradeFreedom’s move to Scotia iTrade. It is as I suspected; my commissions will be doubling effective October 18.

(equities)

150+ trades/quarter
$6.99

30+ trades/quarter or $50,000+ assets
$9.99

others
$19.99 + $0.02/share over 1000 shares

They refer to these values numerous times as “low” and “competitive”. Ha ha, I’ll be shopping around thanks. The transfer-out fee alone will be less than the extra I’d have to pay to sell everything off.

JT
10 years ago

It seems that most people complain about $30 a month fees, then they complain about trade fees being to high, then inactivity fees. Maybe trading isn’t for you if $30 a month or $100 a year causes such an uproar. That is the cost of entry. A retail business owner does not expect to find free rent!

On another note, due to the poor customer service I have closed my accounts at TF (although they were very infrequently used). I continue to use and be very happy with DISNAT Direct for my RSP account and IB for my trading account.

TL
10 years ago

Chris, would you share with us here – what discount broker are you gonna switch to? I’m still on the search for a TF alternative, but the outlook isn’t good at all. Unless I find a decent discount broker in the meantime I’ve decided to wait till I have the $100 000 and then go with some of the big guys, most likely RBC

Chris W
10 years ago

Just want to add that I too fell victim to TF and Scotia iTrade. I’m a very infrequent trader. When the new ‘inactivity fee’ came out, I felt that I would trade at least every 3 months so wasn’t too worried about it. I noticed on one statement last year that I was charged the $25 fee and just made a note to do the odd trade.

I did however somehow miss the news that they were going to start charging the $29/month fee for their crappy software.

I didn’t notice this until I opened a statement in March of 2010. That was the first time that I saw I had been charged $160 so far for this fee.

I emailed them and demanded that they return the money they stole. I got the standard response that I was ‘notified’ last June.

I agree with everyone above that TF should be boycotted completely. I am also in support of a class action suit as this is outright theft and they are not conducting business in good faith.

What prompted me to find this today is that I just noticed I can’t purchase OTC stock on their crappy platform. One more reason to switch.

TL
10 years ago

Thanks zander for your prompt response.
I’ll try to avoid turning this blog into a personal conversation, but let me quickly clarify some things that may be beneficial to other readers as well.

>I am at a loss as to why you insist on continuing business as usual with TradeFreedom

No – I don’t. As stated in my posting:
“So the biggest issue right now is not whether to use TF or not, but rather – where do I transfer my account to?”

Let’s do the math – closing the account will cost me a $100. Selling my positions will be around $50 may be. Converting the USD to CAD? Who knows, depends on the current rates, will have losses from lost dividends and finally when I find another broker to reacquire the same positions I hold now will cost me several times their trade fees.
All this said I think you’ll agree that transferring my account is a much better alternative not to mention that some brokers are willing to cover the transfer fee should you choose to switch. The problem is that right now I’m kinda stuck with TF – there simply doesn’t appear to be a better place to go. I’m still looking for a better broker and I’m not putting anymore money in my TF account.
Will research TDWaterhouse for sure, but $100 per year maintenance fee seems kinda pricy. After all – is there much difference whether they charge you for inactivity or for software or whatever name they happen to put on it – either way they cut their share out of your pie, most importantly without any risk or additional service on their side. It may appear to some readers that I’m looking for a discount broker that’ll provide the best service in the world for free with all the bells and whistles but all I really need is the most basic service possible – just place an order and forget about it. Is this too much?

Finally let me disagree with you:
>If you see an abusive relationship towards you in a business entity, break all ties immediately. At any cost!
In game theory what you’re doing here is called punishing – you’re exiting at a loss, just to punish the other guy. This however may or may not be your best strategy. And following your best strategy at any given moment in order to maximize your desired payoffs is called being rational. That’s what I’m trying to do, may be not as successfully as I wish. I’m very cautious now, but I think that my biggest losses from my business with TF are already in the past. Until I find a place to transfer my account to I will most likely remain with TF – this is simply my best /least expensive/ strategy right now.

zander
10 years ago

Reply to post #86 by TL:

TL, I am at a loss as to why you insist on continuing business as usual with TradeFreedom. Here you have outlined in great, long detail your history and dissatisfaction with them, yet you not only continue to deal with them, but are actually expanding your account with them (to accommodate options).

I first posted here almost a year ago (post #37). I too had an inactive account, as I had changed by behaviour from trading to investing. I began the process of closing my account just about the time they introduced the inactivity fee and it took me several months to finally get my account closed.

Finally, after my account was confirmed as closed, I posted my last here in #49 as follows: “Please take heed and break ties with this company if your experience proves similarly abusive.”

TL, not to put you on the spot, but you say you came from the former communist bloc. Well, truth be told, so did I. To that end, it takes me but a split second to recognise an abusive relationship by an entity and, once I do, I will break ties with that entity as quickly as possible and at any cost. Isn’t that the reason we ended up on the free shores of the west? To be able to have the choice and freedom to do so? I think so.

I am with TDWaterhouse now. I don’t trade much at all. Maybe just a few transactions a year to realign or add to my positions. Because of the low amount of trades, I do pay high fees. Do I mind? Not for one second! The service at TDW is second to none! I’ve actually had that account since before TradeFreedom. TradeFreedom was going to be my infrequent trader account with no inactivity fees, whereas TDW had a fee of $25 per quarter of inactivity. Again, do I mind now? Not for a second. I am making money by investing. If a small percentage of those gains goes towards fees for exemplary service from a top notch bank, so be it. They can have it with my blessings. (If you are a frequent trader with TDW, the fee per trade is $7, by the way)

I’ll say it again, in departing. If you see an abusive relationship towards you in a business entity, break all ties immediately. At any cost! It’s not a personal relationship like a spouse or a family member which you should work on saving. No, it’s a business. There are a thousand and one other businesses waiting with open arms, if one doesn’t value you enough. That’s a fact! It’s the nature of the market, be it retail, or financial, or whichever.

Remember the movie “Rainmaker” with Matt Damon and Danny DeVito? Remember this scene in the courtroom?

“On seven prior occasions we have denied your claim in writing. We now deny it for the eighth and final time. You must be stupid, stupid, stupid. Sincerely…Everett Lufkin, vice-president of claims.”

Remind you of anything?

Do yourself a favour. Don’t try to change the way an abusive company does business. People waste all this energy on trying to change the direction of a great big ship. Get off the ship and go board another ship. If enough people leave this ship, it will soon enough run aground on its own. Either run aground, or rust out from no one using its cabins and services. THAT is how you change a business.

Good health to you and prosperity.
zander

TL
10 years ago

Just read all 85 comments above and decided to throw in my story here as well

PART ONE – EDGE platform fees
I have an account with TF for 2-3 years now. I’m a very inactive investor – 1 trade/quarter sometimes less. In the beginning everything was fine, since I was trying to use the service as sparingly as possible. /Now I’m trying not to use it at all/ The troubles began when TF got bought out. At the time it so
happened that I was in Europe and missed one of the statements. I did read the warning in the other statement about the new-coming inactivity fee but I was so sure it would not apply to me that I simply ignored it. After all, I had no trades whatsoever in the past 5-6 months since the market collapse – no trades means I didn’t use their software, right? I bought a new computer as well and didn’t even have the EDGE platform installed on it. 3 months later I
decided to install the software considering entering the market again. Then I remembered about the new fee and decided to contact TF first and ask them whether the fee would apply to me, since I was an old customer – my plan was to use the web platform in case they refuse to waive the fee. Imagine my frustration when the guy on the other side told me that not only the fee applies to me, but my account had already been charged for several months. I couldn’t believe my ears. I was also told in a quite impolite manner that they were not obliged in any way to care about my money and that I should be looking after my portfolio. After this I exchanged several emails with their customer service demanding reimbursement. 90% of the time I received standard form replies, same as most of you must have received. /just copy/paste/ basically stating that there will be no reimbursement and that it was entirely my fault. The story doesn’t end here unfortunately. At that point I decided to discontinue my business relationship with TF. I didn’t want to sell my positions though, so I was looking for a different discount broker to transfer my account to – so far I haven’t found any. In the meantime another statement arrived from TF and guess what – my account is being charged an inactivity fee! My blood boiled at that point – I mean this is nothing less than a fraud – since they
already have my money I couldn’t do anything – they’ll simply take whatever they felt belonged to them. I come from an ex communist east europian country, but even there I’d say such thing couldn’t happen. You don’t get charged for something you DO NOT use, it’s the other way around. And Canada was the last place I expected I’d fall victim of such a scam. After contacting them again via email furious about what had happened they agreed to refund my account for the last fee and haven’t deducted any other fees since then. /I ended up loosing ~120 in total/

PART TWO – Password lockouts
I consider myself an advanced computer user – particularly in network security and related issues, for reasons I won’t discuss here. As mentioned above I try to minimize unnecessary logins to the system, partly because of security reasons – the less you use your account the less likely it’ll be compromised. Not according to the IT guys at TF! Apparently if you don’t login to your account for certain period of time that is considered an account abuse and it gets locked, so your password doesn’t work anymore. This thing happened to me several times and no one could explain to my why – everytime I contacted TF to have my password reset they’d blame it on me, claiming that I must have forgotten my password or I wasn’t typing in right. Then I realized that it could be some sort of a system issue on their side, since I don’t believe someone would bother locking my account on a regular basis. Last time I called TF to have my password reset I asked the guy whether it was possible that my account gets locked because of inactivity and he confirmed, explaining that it was built into their software for security reasons, but failed to explain how it benefits the users and even more surprisingly didn’t know what the inactivity period was.
All my questions thereafter were treated as I was a hacker doing some social engineering. Anyway – in a followup email 15 days later they specified that “loging in at least once weakly should prevent your account getting locked”. Now I try to remember to reset my TF cutoff counter once a week to avoid that phone password reset experience.

PART THREE – OPTIONS and account types
Recently I decided to modify my account to include basic options trading. Not that I really need them, but just in case. I was sent a PDF form to fill and mail them back. So I did. I had this feeling that
something would go wrong and I still wouldn’t be allowed to trade options. I was right. I received an email in which they sent me the exact same form yet again, telling me that I had to convert to margin account first in order to enable options trading. Since the form had 2 separate fields for options trading /which I want/ and for margin account /which I don’t want/ I decided to look at the web site and double check the account types. On
http://www.tradefreedom.com/en/tradingprodfees/accounttypes.asp
it says that
“With a cash account, you can trade equities, options and mutual funds. This is the most common type of account and is meant for investors who intend to pay cash for every purchase.”
I think I may have been somehow blacklisted and they simply don’t want to provide this service to me. In the following letter they explained that their
website was incorrect and that they’ll update it, however I cannot trade options with my cash only account. As of today the web page remains still unchanged.

So the biggest issue right now is not whether to use TF or not, but rather – where do I transfer my account to? Each time I find a new canadian discount broker my research takes me to forums such as this one, where people describe such ridiculous experiences /Scottrade stands out/ that I find it hard to believe this is possible in a country like Canada in the 21st century. Having to pay 30+30 per buy/close trade, maintenance fees, taxes on the profits, exchange fees and commissions – looks like they want to keep people out of the market. The 3-4 discount brokers out there available for canadians seem to offer the same terrible service /or lack thereof/ making it an even worse choice. I’d appreciate any solutions from you guys, I think we have a long enough list of problems already.
I was thinking – since I have a European citizenship, should I consider taking my money to a europian online broker?
Any comments/advice on this?

Thanks in advance

PS> 58. cedricloi, 60. Rich11, 61. Jake, 67. Ryan, 70. kevin and others – I agree 100% and willing to assist in anyway possible to recover that EDGE fee ripoff. Any updates on your stories, guys?