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Online brokerage services are filling up



The recent abolition of commissions at the National Bank and at Desjardins seems to have had an impact on the registration of new clients.

“We have had our best months since our launch in terms of acquiring new clients,” says Claude-Frédéric Robert, President of National Bank Brokerage Direct.

The National Bank’s online brokerage subsidiary last summer became the first broker affiliated with a major Canadian bank to offer gratuity, that is, zero-commission transactions.

Launched on August 23, this new pricing on stocks and funds traded on North American markets was matched the following month by Disnat, a subsidiary of Desjardins.

For the period from September to the end of January, National Bank Brokerage Direct claims to have opened more than twice as many accounts for new clients and to have recorded 40% more transactions than for the five equivalent months a year earlier.


Claude-Frédéric Robert, President of National Bank Direct Brokerage

January 2022 was better than January 2021, both for account openings and transaction volume. We are very happy to have made the decision to go with this new pricing.

Claude-Frédéric Robert, President of National Bank Direct Brokerage

How to explain these figures? Is it market enthusiasm or the abolition of commission fees? “Impossible to say with certainty,” replies Claude-Frédéric Robert. But possibly a mixture of the two, he believes.

“The new pricing may have continued to generate some enthusiasm for the brokerage, but I can’t say more about the cause of the enthusiasm observed”, he specifies.

It is still too early to know, according to Claude-Frédéric Robert, because the most recent industry market shares were not yet available at the time of writing this report.

Same at Desjardins, decline at BMO

At Desjardins, the elimination of commissions took effect on September 13. An average increase of 38% in the number of new clients was recorded in September and October compared to the same period a year earlier, indicates the vice-president and general manager of Desjardins Online Brokerage, Marc Girard.


Marc Girard, Vice-President and General Manager of Desjardins Online Brokerage

“Since then, we have returned to the normal curve,” he says, adding that online brokerage remains a growing segment. As proof, he indicates that the research firm specializing in financial services Investor Economics projects growth of 7.4% per year for this sector until 2030.

At BMO, where the InvestorLine subsidiary’s fee is $9.95 per trade, demand and trading volumes slowed last month compared to January 2021, a month when the meme stocks (Gamestop, AMC, BlackBerry, etc.) had boosted the volume of activity.

New account openings are down 50%, while trading activity is down 35%.

Sabrina Della Fazia, National Head of Digital Sales and Investments at BMO InvestorLine

Despite the recent downturn in activity, Sabrina Della Fazia notices upward momentum from pre-pandemic levels.

“New account openings in January 2022 are 48% higher than January 2019, while trading activity increased by 30%. »

Extraordinary events

Desjardins Online Brokerage also indicates that the curve for new clients over five years, from January 2017 to January 2022, is “clearly” influenced from time to time by extraordinary events that cause market volatility.

The organization refers, for example, to the anticipation of the legalization of cannabis in 2018, when investors had very high expectations of the potential profits that were dangled from publicly listed cannabis production companies, a bubble that s quickly deflated.

The onset of the pandemic in 2020 is another defining moment with lockdown granting more time and savings for self-directed investing.

Many investors have decided to enter the market to seize opportunities in various sectors of the economy affected by the pandemic.

The Reddit phenomenon at the beginning of last year was also promising as many people wanted to participate in the saga pitting small investors against the giants of Wall Street.

Commission fees have always been an important source of revenue. By eliminating them last August, National Bank Direct Brokerage had to turn to deposits, exchange rates and annual fees to generate revenue.

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