In September 2016 the National Bank Direct Brokerage (NBDB) became the first brokerage in the country to offer commission-free transactions on all exchange-traded funds (ETFs) in Canada, on the sole condition that a lot of 100 shares is traded. This is a major initiative to make investing more accessible. Here’s an overview.

While the National Bank of Canada has been navigating the discount brokerage industry since 1987 and that it has borne its current name since 2008, NBDB currently appears to have the wind in its sails. Last September, the small Quebec company also received a second consecutive J.D. Power, award for providing high quality customer service to its users.

It’s not because of the low commissions associated with transactions that NBDB stands out from the pack. Most of the players in the country start off with a unitary commission of $10 ($9.95 in this case). Remember, however, that an annual fixed “maintenance fee” is also levied in the absence of holding a minimum amount of assets or making a minimum amount of transactions per quarter. At $100 per year on average, the brokers aren’t giving this away and NBDB is no exception. However, it does have some little extras that might well appeal to the majority of independent investors.

NBDB : Test Mode

At first glance, the refined interface is inviting. It gives you the urge to…make money! The main menu is very standard and enables you to access the main things like Accounts, Transactions, Quotes and Markets, Tools, Search and Analyze, Investment Solutions and Electronic Services.

It’s the “Quotes and Markets” tab that first captured my attention. In a few minutes before the markets open, I can get the information I want about the few stocks in which I’m interested. The richness of the information available is likely one of the platform’s strengths. The “Dow Jones Morning Briefing” is very informative and deserves mention. On June 26, 2017, it informed me that Donald Trump was hosting the Indian Prime Minister, that Ottawa was preparing for Washington to impose additional duties on Canadian softwood lumber exports to the United States and that rising oil prices, on that day, would boost global markets.

The rest of the menu headings are great too. In the “Tools” menu, the “Goal Planner” is a tool you can use to financially plan your retirement, or to plan for a specific savings goal. For those with 30 minutes to spare, the “Asset Allocation” sub-menu helps you find out if your investment strategies are compatible with your investor profile.

And, if you’re like me, you will also make good use of alerts and watch lists.

NBDB : Things that grab our attention

The presence of a robo-advisor or a portfolio rebalancing service on a trading platform definitely adds value to an online broker’s service offering. NBDB provides the InvestCube tool. This financial solution combines an ETF portfolio with an intelligent automatic stock rebalancing system to ensure optimal distribution. For a 0.73% management fee, the long-term investor seeking index-based management may find it beneficial, especially since no commission is charged on the purchase or sale of ETFs.

The investor can get information about this in the “ETF Centre”, under the “Quotes and Markets” menu, as well as access to the previously mentioned InvestCube portfolio or access to predefined filters. The tool also allows you to select ETFs based on your own personal criteria (industry, management style, annual fees, underlying assets, performance history), and therefore easily find those meeting your needs. You will also get real-time ETF quotes as well as each one’s characteristics and composition.

There’s not just information about ETFs on the platform. The investor gets access to research provided by National Bank Financial analysts (300 securities are followed), and can also refer to independent research provided by Morningstar and Recognia.

In the same vein, the PredictWallStreet tool is also available. This is found in the “Quotes and Markets” menu under “Stocks”, “Summary” tab. This tool helps investors to predict a stock’s price variation or their sense of the market in general. It compares a user’s prediction to how the community feels. The user can predict whether they expect the price to increase or decrease over different periods. It’s fun! Are you the kind of person who follows the herd?

NBDB : Nothing is perfect…

  • The inability to have an account in two currencies (CAD and USD) can be a hindrance to investors seeking exposure to the US equity markets. This way, the investor then has a Canadian balance and an American balance with which to carry out transactions, thereby limiting exchange rate fees. Despite not being able to hold both currencies in the same account, you can, however, open separate accounts to do so.
  • At the time of writing this article, a mobile app was not yet available. However, the mobile-friendly website is very functional. “Obviously, a mobile app is part of our growth plan. It’s essential!”, said Laurent Blanchard, President of National Bank Direct Brokerage.

NBDB: The last word

The platform’s user-friendliness is a highlight. There is also a generous amount of information provided. NBDB has merit – the service offering is more than fair and is available at a competitive price. Stock market veterans and beginners alike will find what they need. Although it’s not hard to get familiar with the platform, it’s worth being curious. Look everywhere. Navigate unconditionally. And do it all over again!

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