In October 2020, online broker Questrade made the move to eliminate account inactivity fees from its price list. Coupled with an already-advantageous commission rate, that's all it took to get investors interested in the platform.By choosing one of the most active discount brokers in the industry, you’re guaranteed lower commission fees.

On the other hand, you’ll have to learn to navigate by yourself in the maze of stock market investments. Questrade is one of the Canadian brokers to consider. Since it's easier than ever to open an account with an online broker. With such an investment account, you can trade a wide variety of products offered on the financial markets, including stocks, exchange-traded funds (ETFs), mutual funds, and others. The craze for online brokerages has also recently made the headlines.

How does Questrade differ from the competition?

A first observation: any investor interested in this discount broker can open a practice account very quickly. It takes two short minutes, and you’re done! And you’ll end up with a nice practice balance of $500,000 in Canadian dollars and another $500,000 in US dollars. You can have plenty of fun with that, especially since the account remains active for 90 days!

Navigation is intuitive. The main menu bar is found on the left of the screen and not at the top of the browser. You get used to it quickly. During my trading sessions, I mainly used the Accounts and Watchlist tabs.

The user has a choice of two different trading platforms. The first, IQ Web, opens in your favourite browser. The second, IQ Edge, is an application to install on your workstation. This is available for Windows and MacOS environments.

The web-based platform is sufficient for the majority of investors who don’t do extensive research or trade frequently with Questrade. While both systems offer relatively the same functionality, more active investors will likely prefer IQ Edge. In particular, it provides more options to personalize the trading experience.

Certain features of Questrade that are worth noting:

A portfolio monitoring tool

Portfolio monitoring is offered through a partnership with Passiv. This informs you when your asset allocation deviates from the parameters you’ve set. It also offers support to rebalance your portfolio according to the original allocation. Passiv therefore integrates with Questrade and transforms your brokerage account into a modern portfolio management tool.

Questrade Global 

Questrade Global can be used to trade on the foreign exchange market (Forex) and on the precious metals market, from around 15 international stock exchanges. It’s packed with features and tools to increase your chances of making profitable Forex and commodity trades. What could be better?

Questwealth Portfolios

Available exclusively to Canadian residents, Questwealth Portfolios are investment products pre-established by Questrade Wealth Management. They incur a management fee of 0.25% per year, or 0.20% if you invest more than $100,000.

You can therefore obtain a portfolio with total fees of only 0.37%. That includes Questweath’s 0.25% management fee plus those of the Exchange Traded Funds (ETF) held in the portfolio, using a fee rate of 0.12%. This service therefore enables you to invest at a low cost as well as to benefit from dynamic portfolio rebalancing when market conditions require it.

Does the Questrade platform have any weak points?

Electronic Communications Network (ECN) fees are charged to the user

ECN fees are inconvenient. They’re usually charged when an investor withdraws liquidity from the stock market. For example, an investor who buys or sells incomplete lots. An regular lot consists of 100 shares. If you withdraw less than 100 or a complete lot, you will be withdrawing this so-called liquidity. 

These ECN fees are typically a fraction of a cent per share traded. The trader is nevertheless should know beforehand exactly what costs they’ll have to assume when placing the order to buy or sell, instead of being faced with a done deal.

Occasionally problematic mobile applications

Questrade offers a mobile application to enable investors to track their investments and make transactions on their phone. It’s not, however, one of the highest rated in the various app stores. In several users’ opinions, improvements are required to bring it to the level of the best online brokers in this category.

The phone service requires patience

As part of a study conducted between January 19 and 22, 2021, investment advisory firm Dalbar Canada undertook a study to verify the quality of the telephone service provided by Canadian brokers. This firm’s representatives therefore called each of them five times during normal business hours to assess an investor’s waiting time before they could speak to an agent. 

The average wait in the industry was 92 minutes, while Questrade’s average response time was 128 minutes. The longest wait was almost five hours. Virtual Brokers and Qtrade Direct Investing were the only brokers that answered more than one call within 10 minutes or less.

What are the costs associated with using Questrade?

Questrade relies heavily on ultra-aggressive pricing. We’re talking about just a penny, $0.01 per share, for a minimum commission of $4.95 and a maximum of $9.95 per trade. For exchange-traded funds (ETFs) buying is free and selling works the same as stocks, i.e. the usual commission is applied when selling the product.

Until October 2020, Questrade levied certain administrative costs in specific circumstances. You had to hold assets of more than $5000 with them or to conduct at least one trade during the period to avoid the account maintenance fee of $24.99 per quarter. But since that date, Questrade hasn’t been charging any inactivity fees. This is an initiative that could eventually snowball in the industry.

Questrade offers various monthly plans which may appeal to the more active investor. The first of these is the Enhanced Plan, offered at a cost of $19.95 per month. As soon as you spend more than $48.95 on transactions per month, you’ll receive a rebate of $19.95. This plan also improves your access to market data, in particular by offering level 1 listings on the Canadian and US stock exchanges.

The Advanced Plan is offered at a monthly cost of $89.95. It features a fixed commission rate as well as a variable rate. You’ll also get the $19.95 rebate and the benefits mentioned in the previous plan, in addition to access to level 2 listings. Under this plan, you benefit from certain discounts on your trades. So an investor who spends $399.95 during the month gets the full rebate of $89.95, which equals the monthly cost of the plan.

And if you hold more than $250,000 with Questrade, you’ll qualify for the Platinum Group. Members of this group have access to dedicated phone lines and benefit from a shorter wait time for email correspondence.

Questrade: what's the verdict?

If you’re looking for excellent value for money so that you can hone your investing skills, Questrade should be one of your options. And although Wealthsimple offers free trades, they don't offer certain types of accounts, eliminating it from the outset for those who want to consolidate all their assets in one place. 

What we like most about Questrade 

  • No-cost ETFs purchases
  • No inactivity fees
  • The most advantageous price list
  • Its easy-to-use platform with “à la carte” options
  • You can instantly fund your account up to $3500 with a Visa debit card

What we like least about Questrade

  • ECN fees apply for certain transactions
  • Its rather “average” mobile application.
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