Online brokerage platforms seem almost interchangeable, especially when they belong to a major Canadian bank. However, RBC Direct Investing does offer a more comprehensive experience without any real weaknesses, which will likely please RBC’s current clients.
Up until now, no other financial institution has dared to join National Bank Direct Brokerage or Desjardins Direct Brokerage and offer free transactions. For now, all RBC Direct Investing clients pay a fixed rate of $9.95 for every online transaction, without any minimum account balance or minimum transaction amount required.
It’s nothing to write home about, and it's nothing that will worry the competition. But RBC Direct Investing clients get a lot for their money. The pros far outweigh the negatives. Let’s take a look.
How does RBC Direct Investing distinguish itself from the competition?
RBC Direct Investing offers clients the choice of three trading platforms: the online investing website, and the Trading Dashboard which is available both as a web app and a mobile experience. The Dashboard is really gaining in popularity as the markets evolve.
Offered since June 2021, the Trading Dashboard has some features that really let RBC Direct Investing differentiate itself from the competition. The dashboard makes it very easy to customize the display: the investor has full control over how market information is presented. It also offers many news articles, research reports that are easy to access, and advanced visualization capabilities.
Current Royal Bank of Canada (RBC) clients can link their RBC Direct Investing brokerage accounts to their RBC bank accounts, which makes it easy to access all of their financial services from a single sign-on. Obviously, it's ideal for when you want to transfer money between your accounts in real-time, letting you avoid the imposed wait time that happens when transferring between different financial institutions. Let’s turn now to some features that you should really know about.
It’s not every discount brokerage that offers its clients a practice account as well as the possibility to get it up and running in just a few minutes. The one from RBC allows you to practice executing trades with the same online experience that you would if it were a real account. Take advantage of the opportunity to access the tools to become a better investor. You even get to practice with 100,000 in fake dollars.
Thanks to the RBC mobile app, you can make investments through RBC Direct Investing directly from your smartphone. You can buy or sell stocks, mutual funds or Exchange Traded Funds (ETF) and options while you are on the go. Real-time Level 2 quotes are also offered free of charge.
The sector analysis tool is powered by Refinitiv. It is really useful for finding companies from different sectors. The user can easily consult the sectors that had the best and the worst performance over the last five business days. They can also compare the fundamentals of those companies.
Research from RBC companies
RBC leverages its vast network to bring clients useful research to help them make investment decisions. For example, the RBC Economics team prepares economic and financial analyses of the major international markets. The Global Outlook morning bulletin is equally useful. The research reports from Morningstar are also available for users.
Quotes in real-time and real-time streaming quotes
RBC Direct investing offers all of its clients, regardless of account balance, both real-time and streaming real-time stock quotes. What’s the difference? You get both of them in real-time but the streaming quotes are automatically updated in your dashboard. You don’t have to refresh the page to see the trading changes. Level 2 quotes are also offered free of charge. These let you see the number and volume of orders waiting to execute for shares you are watching.
RBC Direct Investing: are there any weak points?
The RBC Direct Investing platform isn’t perfect. Its weaknesses, however, can improve with some small changes. Let’s look closer.
The inability to trade in international markets
Stock trades and ETFs are limited to the North American market. We were expecting more from Canada’s biggest bank. Certain online brokers, such as Interactive Brokers, let you trade in several different financial markets.
An unimpressive fee schedule
Overall, the fees the user has to pay are nothing special. The price list is in step with what the other big banks are charging. Only National Bank Direct Brokerage and Desjardins Online Brokerage stand out on this issue.
What are the fees associated with using RBC Direct Investing?
It’s like the fee schedule is a copy-paste of the industry standard. The last time RBC Direct Investing updated its fees was July 2, 2019. It’s probably due for a refresh in light of the competition’s recent moves.
Every client of RBC Direct Investing pays a fixed commission fee of $9.95 per transaction, and there is no minimum balance or a minimum number of trades required. Clients that do at least 150 transactions each quarter are automatically eligible for a reduced commission of $6.95 per activity. However, you need to know that $0 commission is not offered whenever you buy or sell any ETF.
There are no fees for clients with combined assets of $15,000 or more across their RBC Direct Investing accounts. Conversely, clients that do not have at least $15,000 across their RBC Direct Investing accounts are charged $25 each quarter.
These account maintenance fees can be cancelled if the client meets certain criteria. It is a common practice found at different online brokerages. But there are seven ways to qualify for your fees to be cancelled.
RBC Direct Investing: what is the verdict?
Both novice and experienced investors will find something for them at RBC Direct Investing. There are a lot of elements that will make people feel at ease: an abundance of educational material and chat-based customer service are just two examples.
There is also a free and anonymous platform called The Community that will make people feel less alone when managing their investments. This network helps investors build a relationship with other online investors, help them get investment ideas and help them share their good and not-so-good experiences with like-minded people.
This online broker is very attractive to more active investors, giving them free streaming real-time quotes as well as Level 2 quotes. It's a commendable initiative but is it enough to convince those not already loyal to RBC or those that want to trade without having to pay a commission every time?
What we like about RBC Direct Investing
- Just like at every other big bank, you have all types of accounts, including a registered disability savings plan (RDSP). We like that!
- The quality of the educational resources available, as well as the number of research reports you can access.
- A practice account that you can use to get used to investing before jumping in.
- A dividend reinvestment plan (DRIP) is offered for certain stocks.
- The possibility of using your RBC Reward points to pay the cost of commissions or to convert them into cash and deposit them into your brokerage account.
- The telephone and chat-enable customer service is getting good reviews.
What we like less about RBC Direct Investing
- You can only trade on Canadian or American stock exchanges.
- The usual commission of $9.95 applies to every transaction.
- There is no $0 commission when you buy or sell any ETF.
- For those with less than $15,000 in their investment accounts, you have to read the fine print in order to avoid any account maintenance or account inactivity fees.