Which Investing Platform is The Best?

25 May, 2020 4 min read
online brokers

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With so many choices on investing platform, it can be difficult to find the right one. Fee structures, tax implications, and account types are all a few things to take into consideration before making a decision. I choose Questrade, which I recommend to anyone who asks, but this is not the only site available. There are many choices available to you; here are the top 3

Questrade

questrade

Questrade is the online platform that I have used for years, and I recommend it to all my friends and family who want to handle their own finances. To date, it is Canada’s largest independent online brokerage. Established in 1999 and headquartered in Toronto, Questrade has $9 billion in assets under management.

You can use Questrade to build a portfolio using all sorts of financial assets:

One of the best things about Questrade is it’s intuitive interface; it’s really easy to use even with no training or knowledge of the program (that being said, I would strongly recommend watching a video on how to navigate the program properly).

Questrade doesn’t charge an annual fee, but if you don’t make at least one trade each quarter, they charge an inactivity fee of $24.95. To avoid this fee, make at least one trade a quarter, or have at least $5,000 in your account.

The commissions for Questrade are pretty low, with a minimum of $4.95 per trade to a maximum of $9.95 to buy stocks. As I mentioned in a previous article on ETFs, you can buy ETFs for free using Questrade.

Here’s a quick summary of the fee structure for Questrade:

Fixed: “Great for high volume share and option trading at one low price.”

  • Stocks: $4.95/trade
  • Options: $4.95 + $0.75 / contract
  • ETFs: Buy for free; Sell for $4.95/trade

Variable: “Great for buying a few shares of expensive companies.”

  • Stocks: 1¢/ share (min $0.01 to max $6.95)
  • Options: $6.95 + $0.75 / contract
  • ETFs: Buy for free; Sell for 1¢/share (min $0.01 to max $6.95)

Interactive Brokers

Interactive Brokers is a more intense online brokerage platform that is geared towards professional investors and institutional traders. The trading platform is more advanced, making it a bit more difficult to navigate for beginners. On the other hand, it is well constructed for those who already have a great deal of experience or formal education in trading and investing.

Interactive Brokers has been a popular broker for advanced traders for years, and in 2019 they created IBKR Lite for more casual investors.

Just like with Questrade, IBKR Pro charges an inactivity fee (again, you can circumnavigate this fee by making trades more frequently.

IBKR Lite offers unlimited free trades of stocks and ETFs on US markets. Buying and selling other financial assets like options, futures, and mutual funds comes with costs similar to what professional investors pay using IBKR Pro ($0.005 per share, with a minimum commission of $1).

WealthSimple

Wealthsimple, founded in 2014, is currently one of the world’s most well-known robo-advisors. It boasts a team of top-tier financial professionals and technology in pursuit of financial success for their clients (in fact, many of the employees previously worked at tech giants like Amazon, Google, and Apple). Today, Wealthsimple has over $5 billion in assets under their management.

WealthSimple offers access to portfolio review services, in which a professional will take a look at your portfolio to ensure you get to keep as much of your money as possible (when taking into account taxes and fees). They also take into account your individual behaviour, such as your own personal tolerance for risk.

As for a fee structure, WealthSimple has two options:

  1. An overall management fee. This changes depending on the total amount of money you have in your account. For example, if your balance is less than $100,000, you’ll pay 0.5%. If your balance is greater than 100k, the fee is reduced to 0.4%
  2. Each ETF has its own expense ratio, which can be anywhere from 0.05% to 0.4%. Learn more about ETFs here

Also, WealthSimple Trade is offered, which allows investors to construct their own portfolio. You get to trade ETFs and stocks for free, with the exception of the expense ratios mentioned earlier. Also, the stocks and ETFs traded have to be on a North American exchange. Finally, any stocks purchased have to be priced at $0.50 at a minimum (the average volume of trading must be around 50k each day as well).

If you’re wondering how WealthSimple Trade earns a profit, your head is in the right space. The platform charges a 1.5% currency exchange rate from CAD to USD transactions; however, I’m not sure how long this will last. The rumor is that they will start to add premium services with extra fees, but as always, wait out.

Final Thoughts

There are many different choices when it comes to finding an online broker for your investing needs, and the three that I have mentioned are not the only ones. Do some research based on your location, financial goals, tax bracket, and investing habits. Take a look at the fee structure, inactivity fees, and financial requirements of each broker.

How Many Stocks Should Your Portfolio Have? –>

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