What are the Best Trading Platforms in Canada in 2022?

If you watch a lot of old movies you might be under the impression that a stockbroker is someone who spends all their life shouting “Sell! Sell! Sell!” into a telephone while anxiously scanning a stock market ticker. There are a few of those old codgers left on Bay Street, remnants of the old “full service” brokerages, complete with a pricy financial advisor, that might charge you hundreds to make a single stock trade.

Today, however, most stock purchases and sales are executed not by humans, but by computers. The official legal definition of a broker is “any person engaged in the business of effecting transactions in securities for the account of others in exchange for a fee or commission,” but when it comes to trading platforms, computers are “persons” too. There are many online brokers available in Canada that might merit a look from you if you’re interested in stock trading through a trading account.

Which trading platform is the best? Probably the one that meets your specific needs and goals. Account fees — including possible maintenance fees or management fees — and the interface might be important to some, while others might value desktop trading and a wide variety of stocks to choose from.

To help you pick the best online broker for your needs, below we’ll compare some of the main online brokerages that operate in Canada. We’ve included key features, account types, and pricing. Although we think the service we provide at Wealthsimple is excellent, your trust is important to us. That’s why we always do our best to be fair and provide complete and accurate information, even on our competitors. To complete your homework, we recommend visiting their sites to continue your research.

Overview and pricing of Canadian trading platforms

Online stock brokers were first introduced in Canada in 1996 when TD Bank unveiled WebBroker, the country’s first online brokerage platform. Since then, there’s been a slow but steady trickle of online trading platforms — and now, every single one of Canada’s “big six” brick-and-mortar banks have launched self-directed trading platforms and accompanying mobile apps.

Today, Canadians have more than a dozen online trading platforms to choose from, a fact that makes this a great time for consumers because there’s unprecedented competition bringing trading prices down. Unfortunately it also can make for a tough selection process. To make things a little easier, we’ve broken down some of the key differences between seven of the most popular trading platforms in Canada and put them in this handy chart.

Apple App Store ratings are scored by users. The rating mentioned is the average rate. The best possible rating is five stars. The account minimum listed is the required balance to avoid inactivity fees on non-registered accounts.

The history of online trading platforms in Canada

Here is a little more info on the trading platforms we’ve analyzed in the above chart:

1. Wealthsimple

Wealthsimple is the app created by Toronto-based investment manager Wealthsimple. It debuted as Wealthsimple Trade in March 2019, offering unlimited commission-free trades and no account minimums, which immediately set it apart in the market. Since its 2014 founding, Wealthsimple, led by CEO Mike Katchen and majority held by Power Financial, has expanded its base to 175,000 clients across Canada, the United States, and the UK.

2. BMO InvestorLine

Founded in 1817, the Bank of Montreal is the fourth-largest Canadian bank by assets. BMO launched its self-directed investing service for clients in 1988. Then, in 2000, BMO put its service online.

3. CIBC Investor’s Edge

CIBC Investor’s Edge is the brokerage division of CIBC. According to its official history, CIBC, or the Canadian Imperial Bank of Commerce, was the product of the “largest merger” of chartered banks in Canadian history, a union that took place in 1961 and united the Canadian Bank of Commerce (established 1867) and the Imperial Bank of Canada (established 1875). CIBC has been active in building its brokerage business, acquiring a majority stake in Wood, Gundy & Co. in 1988, then picking up Merrill Lynch & Company’s Canadian retail brokerage business in 2001.

4. Qtrade Investor

Vancouver-based Qtrade has been operating since 2001 and is formally known as Credential Qtrade Securities Inc. Qtrade is a division of Aviso Wealth, which describes itself as an “integrated financial services company.” Aviso Wealth is a fairly new company, formed in 2017, and a merger of three older independent financial players: the Credit Union Centrals, the CUMIS Group, and Desjardins.

5. RBC Direct Investing

RBC Direct Investing is the brokerage division of the Royal Bank of Canada, or RBC, the largest bank in Canada by market capitalization. RBC is one of the oldest banks in Canada. Its roots go all the way back to 1864, when it started as the Merchants’ Bank of Halifax.

6. Scotia iTRADE

Scotia iTRADE is Scotiabank’s online brokerage. In 2007, Scotiabank acquired the boutique brokerage TradeFreedom Securities Inc., and the following year bought ETrade Canada from the troubled American startup, ETrade. Though both TradeFreedom and E*Trade were favoured by active investors, iTRADE has expanded its business to cater to all clients. Scotiabank was formerly known as the Bank of Nova Scotia and was founded in 1832.

7. TD Direct Investing

TD Direct Investing is the online brokerage for Toronto Dominion Bank, the largest Canadian bank by assets. The name TD Direct Investing only goes back to 2012, but TD has had a brokerage since 1984, though it was originally called Greenline Investor Services. In 2005, the American discount brokerage Ameritrade acquired TD Waterhouse USA, jointly owned by TD Bank, and the Canadian brokerage kept the name TD Waterhouse, until it rebranded to TD Direct Investing in 2012.

Comparison of supported registered accounts, customer support, and security

Customer support and security of trading platforms

Support and security are vitally important to consider when choosing a trading platform. Support might be more important to those who are less tech-savvy or need a little more help. Security is important too, assuming you don’t want someone else getting their hands on your precious stock. Two-factor authentication or 2FA, as it’s often called, means that when you access your account, you’re required to not only know your login and password, but also possess something, like an authentication code sent to your phone. Trading platforms that don’t offer two-factor authentication might not leave you high and dry should your account get hacked, but who needs to even risk such a headache?

Other trading platforms available in Canada

Since the seven trading platforms above are far from the only available, here’s five more dark horses, arranged alphabetically, that you might want to consider. For simplicity’s sake, we’ve included some information about them, including their per trade commission rates.

1. CI Direct Trading

Founded in 2009 as a division of BBS Securities, the Toronto-based Virtual Brokers (which was acquired by CI Direct Trading in 2020) was the first in Canada to offer commission-free trading.

Per trade commission: Equity trades and ETF sales are $1.99-$7.99; ETF purchases are free; and options are $7.99 per trade plus $1.25 per contract

2. Desjardins Online Brokerage

The brokerage arm of the large 120-year-old Quebec financial cooperative was founded in 1991 and offers trading platforms for both occasional and active investors.

Per trade commission: $0 for stocks and ETFs; for options, $1.25 per contract (minimum $8.75); telephone rates start at $45

3. HSBC InvestDirect

The online brokerage arm of the London-based multinational bank HSBC (the largest bank in Europe) and an offshoot of its HSBC Direct online banking platform.

Per trade commission: Online trades start at $4.88 and increase depending on services

4. Interactive Brokers

The Canadian branch of Interactive Brokers, the Greenwich, Connecticut-based discount brokerage firm, was founded by Hungarian-born billionaire Thomas Peterffy. One of the earliest online brokerages, Interactive Brokers has long been favoured by active traders owing to its low trading costs.

Per trade commission: “Flat rate” of $0.01/share with a minimum charge of $1.00 per trade

5. National Bank Direct Brokerage

The brokerage arm of the National Bank of Canada, Quebec’s largest bank, which is also known as Banque Nationale and was founded in 1859. As of April 2022, the National Bank of Canada boasts $652 billion in assets.

Per trade commission: $0 for most trades and purchases, with a fee of $1.25 per contract for options

How trading platforms make money

Nobody decides to open a discount brokerage because they have some altruistic desire to unite people they don’t know with their dream stocks. They do it for the money, and there’s a lot of money to be made in being able to move people’s money to places they can’t move it on their own. The fees mentioned above are, of course, far from the only fees assessed by most brokerages, but will provide one good standard for comparison.

It might surprise you to find out how the bulk of trading platforms’ bottom line is made. It’s easy to imagine it’s from the commissions they charge to trade stocks, or those annoying, unyielding fees that brokerages love to assess if you don’t keep a certain balance in your account or fail to make a minimum number of trades per quarter. However, as programmer Patrick McKenzie points out, about half of brokerages’ revenue comes from net interest, the money brokerages make loaning the cash you leave uninvested in your account to others who are willing to pay them a heck of a lot more interest than they’re paying you.

So all those fees you pay are just gravy — and one of the reasons why fees can vary so significantly from brokerage to brokerage.

Advantages and limitations of brokers

To buy stock, you need an intermediary that can take your money and convert it to a security and hold that security for you in an account. Fish around in your wallet. Do you have a license to make trades with any securities exchanges? You don’t? Then, you need a broker! Some recognizable “brokers” may not actually be brokers at all. Instead, they might be financial institutions that own or work with a brokerage to get you the same end result: the ability to trade stocks.

Online trading platforms are considered “self-directed,” meaning that the companies are legally barred from providing any investment recommendations. If you’re the type who might want a bit more direction in how you invest, and you don’t want to spend a fortune, you might instead consider an automatic investing service, sometimes called a robo-advisor. Since most robo-advisors invest your money in low-cost exchange-traded funds, they tend to have low fees.

Here’s an overview of your options.

With the exception of order execution only dealers, all registered firms have a suitability obligation. A fiduciary duty to act in the best interest of a client applies only to registered portfolio managers and dealers that are authorized to trade securities on behalf of their clients.

How to choose an online trading platform

When shopping for online brokers, there are four major considerations you’ll want to weigh. These are value, features, security, and reviews.

Value

Though you could buy stocks or ETFs over the phone from humans who could execute your order, the absolute easiest, cheapest way to buy stocks is through an online discount brokerage. Accounts can probably be opened in 10 minutes if you have a social insurance number, a home address, and an employer’s address (freelancers fret not — it’s totally A-OK if your office happens to be 5 feet from your bed). Since stockbrokers by and large assess fees or commissions in exchange for making trades on your behalf, you’ll want to understand exactly how much you’ll be charged, and how your account balance and trading frequency will affect those commissions. Most online trading platforms will assess a flat per trade commission fee for any security purchase, big or small, that generally ranges from $5-$10 per online trade. These fees may be higher or lower depending on your account balance and trading habits. Since you’ll need to open a brokerage account in order to trade, you’ll want to read the fine print and decide which suits you best, though below you’ll see that we’ve taken the liberty of going deep into the banks’ account agreements and disclosures and summarized our findings. Pro tips: if you have a small amount of money to invest, look out for a provider that offers a low minimum investment to open an account. Also, does the brokerage assess any fees beyond trading fees?

Features

Another important question you’ll want to ask yourself is beyond actually executing the trade, what other investment-related services are important to you? Are you reasonably technologically savvy or do you think you’ll need some human handholding in order to help you execute trades? Do you imagine you’ll want to pursue a set-it-and-forget-it strategy of investing — buying a few stocks, mutual funds, and/or ETFs or other securities and leaving them alone to grow? Or do you imagine you’ll be trading a lot, even daily, and in need of the kind of research that sophisticated “pro tools” that active traders require? Here’s a litmus test: do you know what “simple moving averages,” “Bollinger bands,” and “stochastics” are? These are a few fairly basic terms for active investors, so if they sound like stuff Dr. Seuss made up, you probably won’t be in need of very advanced research tools (and probably shouldn’t give up your day job yet to become a day trader).

Security

The most basic thing any stockbroker should offer is peace of mind to know that regardless of your investing acumen, your broker’s not going to disappear with your money. So don’t fall for any online phishing scams or too-good-to-be-true stock offers from random callers. You should seek out a brokerage, not the other way around. (Every broker we compare here is 100% legit, so no need to fret about any of these particular players blowing your investment on bottle-service vodka and poker debts.) If your broker is legit, it will almost certainly be a member of the Canadian Investment Regulatory Organization (CIRO) and you will be able to find it on CIRO’s website, though don’t call the police if you don’t see your broker immediately since some brokers do business under separate business names. Contact your broker if you can’t immediately find them. Being an CIRO member should put your mind at ease a bit since all CIRO members are insured under the Canadian Investor Protection Fund (CIPF), so if any one of them becomes insolvent, all their clients will be reimbursed up to a $1,000,000 of their investment. Of course, the CIPF will be no help if you invest poorly and lose most or even all your money.

Reviews

Should you want to do some further reading and have a subscription to the Globe and Mail, their annual ranking of online brokerages might also be worth your time. Since Wealthsimple Trade is the newest arrival in the field of online trading platforms and has not been included in many of the annual surveys, consult other sources, such as user-generated app reviews, or, even better, find someone who’s actually traded with it. There are thousands out there already. And remember: if self-directed trading is too risky for your taste, you can still help your money grow with automated investing through a robo-advisor, or even try out a high-interest savings account.

Methodology

The information on this page was originally compiled by Wealthsimple in November 2019 and has since been updated for accuracy. In order to uncover competitor information, we looked at our competitors’ websites, press releases, and third-party sites. The information collected relates to features, accounts, and pricing. The guide is only intended for Canadian investors. It’s important to note that the general information within this guide is not specific to your personal situation. Some brokers requested that we not cover them in our content and those brokers have been excluded.