Discount Broker Overview for Dividend Investors

Questrade Discount BrokerIt’s always a pleasure to be featured in the Globe & Mail by Rob Carrick and this week he highlighted my RBC Direct Investing Discount Broker review. Since I have been investing, I have used 5 different discount brokers (not so discounted back in the day though) and it’s a competitive market out there. One year broker A is ahead and the next it’s broker B. They catch up to each other and try to outdo each other until they have spent enough money ūüôā

I realized after looking at the Globe & Mail Discount broker review Rob had done that I had done the review from my investing requirement perspective Рfees were totally omitted because my investing accounts are large enough to have the lowest trading cost with all of them. Along the same line, the Globe & Mail review did not take into account the most important requirements for my dividend investing strategy.

The most recent review by the Globe & Mail on online discount brokers. The grades are good representations.

Dividend Investor Requirements

There are 2 main requirements that I must have with a discount broker for my dividend investing strategy. It must:

  1. Support DRIP (Dividend Re-Investment Plan)
  2. Provide the DRIP discount

DRIP is a powerful concept as it allows me to always have my money at work and to generate compound growth. Money at work is more important at this early stage for me than to pick my purchase price so I let it ride.

Discount Broker Comparison

This table is strictly setup to highlight what I need as a dividend investor. If you are an ETF investor, Scotia iTrade might work better for you since they have free ETF trading on certain ETFs. As you can, the spreadsheet presents quite a different view than the Globe & Mail review list.

Discount Brokers

As you can see, there are no non-bank affiliated discount brokers as I knew already that DRIPing wasn’t possible with Interactive Brokers from an email inquiry at the time. I am not¬†excruciatingly¬†picky either on all aspects of a discount broker. As it turns out, I am starting to move my banking over to RBC as well since Scotia is not willing to waive my bank account fees and with multiple products, RBC will. I know there are options for free banking since my wife is with Coast Capital Savings but it’s much easier to transfer money when you have an account with your discount broker.

Forex trading is probably the only feature I am missing now. It’s not something I need often but at least 2 times a year. If you do want to execute currency exchange, I recommend a broker with a true dual currency setup for your account management.

Related: DLR and DLR.U Currency Exchange

In the future, it might be interesting to turn the table into a grade since yes or no cannot always represent the extent of the feature. If you feel I am wrong in some cases, please bring it up as I have tried to get feedback from people who actually use them. For example, I heard that the customer service with Questrade is poor and I put no for it.