As one of Canada’s best online discount brokerages, Virtual Brokers’ trading fees and pricing has consistently been on the leading edge of cutting costs since they entered the market back in 2009.
In 2020, Virtual Brokers continues to shine when it comes to fees and pricing for self-directed investors. The company is a subsidiary of BBS Securities Inc., which was recently purchased by CI Financial (the same company that owns CI Direct Investing).
Virtual Brokers Review Summary:
Virtual Brokers Fees and Pricing
User-friendly platform and mobile app
Virtual Brokers is an excellent option for Canadian citizens who are living overseas. Their rock-bottom pricing makes them an excellent candidate for investors who place a high priority on cutting fees to the bone. The two areas that concern me are the consistent complaints about customer service over a prolonged period of time, and the non-beginner-friendly trading platform.
I think it’s worth comparing Virtual Brokers to our most recommended online broker, so check out our Questrade Review for more details. Personally, I think you can get the same low fees and free ETF purchases at Questrade – but with much better platforms and customer service (plus free RESP accounts).
Virtual Brokers Fees and Pricing
When it comes to Virtual Brokers’ fees and pricing, there are a few different levels of costs that you have to be aware of. There are different models for ETFs, Options, Active Traders, and Non-Active Traders.
Virtual Brokers No Fee ETF Purchases
Just like Questrade, Virtual Brokers allows investors to purchase ETFs for free if they trade on the Toronto Stock Exchange (TSX).
They do charge a fee when you sell ETFs, but it is likely only going to be around $2.00-ish. At a penny-per-unit (a unit of an ETF is similar to a share of a stock), and a cap at $8.00 total, even selling ETFs is quite cheap with VB. That said, most passive investors who use basic vanilla index options such as all-in-one ETFs are not likely to sell any ETFs until they are retired and withdrawing from their portfolio. You have to have accumulated quite a substantial nest egg before you can’t re-balance your asset allocation simply by purchasing more of one ETF than another (if you’re not using the all-one-one options).
Virtual Brokers Trading Fees
There are two different paths when it comes to trading fees at Virtual Brokers.
The first path is the one that 98%+ of the people reading this article will choose, and that’s the basic penny-per-share model. This Virtual Brokers pricing model applies if you make less than 150 trades per quarter. The investors who prefer Canadian dividend stocks or who are putting the Smith Manoeuvre into action will likely make 5-30 trades per quarter, and are often investing $1,000 – $5,000 at a time. Under this model, it’s a penny-per-share that you purchase, with a minimum cost of $1.99 (even if you buy less than 199 shares) and a maximum cost of $7.99 (even if you buy more than 799 shares). There are some very small fees tacked on in addition to this amount on most trades (usually a couple of pennies, at most).
The second path is for folks who are investing big time money and/or making many trades each quarter. It allows ALL trades to go on at the flat rate of $3.99. You can only access this rate if you made more than 150 trades last quarter. If you do some basic math, you’d have to be buying and selling a lot of shares to make that level of activity worth it. I wouldn’t recommend going down that route.
It might be worth mentioning briefly that the Virtual Brokers fee for options trading is $7.99 per trade + $1.25 for the options contract. That drops to $3.99 + $1.25 if you do 150+ trades per quarter. I’m personally not a big options trading guy, but some folks love that adrenaline rush.
Virtual Brokers Platform Fees
The vast majority of people reading this will be fine with the free dashboard and mobile app that Virtual Brokers provides. They do offer a wide variety of other options for more advanced traders, however. Below is a complete breakdown of the Virtual Brokers Platform Fees.
|VB Wave||$75.00 CAD|
|PowerTrader Pro||$250.00 USD|
|ITS Trader Lite||$580.00 USD|
Virtual Brokers Admin and Account Fees
One area where discount brokerages like to bury some of their overall pricing is the account administration fees, and Virtual Brokers is no different. The two costs that really stand out to me are the RESP administration fee and USD RRSP/USD TFSA quarterly fees (multiply by four to get the per-year costs). See the below table for the complete look at Virtual Brokers’ Account Admin fees.
|RRSP, Spousal RRSP, LIRA, RIF & LIF||FREE|
|Deposit-Bill Payment (CAD Only)||FREE|
|Deposit-Wire Transfer (CAD/USD)||FREE|
|Withdrawal-Electronic Fund Transfer (EFT)||FREE|
|Partial Transfer out||$50 per account|
|Account Transfer Out||$150 per account|
|Withdrawal-Wire Transfer (CAD/USD)-Canada||$50*|
|Withdrawal-Wire Transfer (USD)-International||$100|
|DAP (C.O.D) Transfer In/Out||$50 per name|
|US RRSP, US Spousal RRSP & US LIRA||US $15 per quarter|
|UK QROPS||US $150 per year|
|US TFSA||US $15 per quarter|
|RESP||$25 per year|
|US RESP||US $15 per quarter|
|Account Administration Fee||$24.95 per quarter|
|Partial Deregistration Fee||$25|
|Full Deregistration Fee||$50|
|Lifelong learning plan (LLP)||$25|
|Home buyer's plan (HBP) partial deregistration||$25|
|DRS (Direct Registration System)||$200 USD per name|
|Certificate Deposit/Withdrawal||$200 per Certificate / Name|
|Certificate Deposit/Withdrawal Rush||$450 per Certificate / Name|
|Safekeeping of Certificate||$50 per certificate / Month|
|Research Request (Minimum 1 hour)||$75 per hour|
|Electronic Trade Confirmation (e-Confirmation)||Free|
|Cheque Cancellation Fee||$50|
|Electronic Monthly Statement (e-Statement)||FREE|
|Paper Trade Confirmation||$3|
|Paper Monthly Account Statement||$5|
|Copy of Tax Statement||$35 per account per year|
|Copy of Monthly Statement||$20 per account per month|
|NSF Cheque/Returned Items||$50|
|Unclaimed property||$29.95 per quarter|
|Estate transfer||$250 per account|
|Legend Removal Rule 144/33||$300 per name|
|Settlement of non-DTC eligible securities||$450|
Virtual Brokers TFSA, RRSP and Other Accounts
Like all of the leading Canadian discount brokers these days, Virtual brokers offers all of the usual accounts including:
- Non-registered accounts (both CAD and USD)
- RRSP (both CAD and USD)
- Non-registered (All-in-One) Accounts include Options and Margin capability
Canadian Expat Non-Resident Investors
The one area where Virtual Brokers really shines is their commitment to Canadians who live overseas. Many discount brokers don’t want to take expat clients on because of the increased paperwork involved. Virtual Brokers don’t gouge you on extra administration fees and their pricing is still very low.
While there is no minimum amount needed to get started with Virtual Brokers in Canada, non-residents are required to have $25,000 CAD to open an account. This makes sense considering the increased administrative burden they are taking on with expat clients. Given how expensive non-USA discount brokerages are to use around the world, I know that many non-residents are happy they have the Virtual Broker option back home in Canada.
Virtual Brokers Review: FAQ
What markets can I trade on?
You can trade all of the various stocks, bonds, ETFs, mutual funds, and options on all major North American Stock Exchanges, including the Toronto Stock Exchange, New York Stock Exchange, and the Nasdaq.
What is the spread for currency conversions?
When you exchange foreign currency, Virtual Broker is going to add about .75% to 1.99% to the mid-market rate in order to make a profit on the deal. Obviously, you can avoid these fees with a USD trading account.
Is Virtual Brokers Safe?
Yes! When you invest with Virtual Brokers you are protected by the Canadian Investor Protection Fund (CIPF) up to $1 Million per account. Even before the CIPF would be needed, however, it is illegal for Virtual Brokers to use your assets if the company was in financial trouble.
Does Virtual Brokers offer free trading platform demos before opening an account?
Yes. A free 14-day trial to PowerTrader Pro is available.
Does Virtual Brokers Offer Dividend Reinvestment Plans (DRIPs)?
We know that Dividend Reinvestment Plans (DRIPs) are quite popular amongst dividend investors, and Virtual Brokers does offer something that accomplishes the same goal – but is just structured a bit differently. The VB Dividend Purchase Plan (DPP) allows VB to take your dividends and automatically purchase more shares at the market rate – but it does not offer an option to purchase them through a transfer agent (which is what a true DRIP is).
Who is Virtual Brokers Best For?
1) The small percentage of investors who do a lot of trading.
2) Canadian expat investors who are not residents of Canada, but want to keep their stock portfolios nice and safe at home.
Our Virtual Brokers review clearly outlines why these two groups of Canadians should check out what VB has to offer. On the other hand, the customer service reports and relatively high account administration fees clearly leave Questrade a step ahead as our preferred Canadian discount brokerage.