The best online brokerages in Canada for 2023

If you rely on a financial advisor to invest for your future, you're likely overspending on fees and add-on expenses unnecessarily. This becomes hard to digest, especially given that  Canadians already pay some of the world's highest investment fees. Fortunately, online brokerages offer a solution, empowering you to take control of your investments and part ways with your financial advisor, ultimately resulting in substantial fee savings. 

Additional online brokerages 

Our guide to the best online brokerage in Canada

What is an online brokerage?

An online brokerage is an online platform that enables you to buy and sell stocks, bonds, exchange-traded funds, mutual funds, and more, all within a trading account.  The fees associated with this kind of software are much lower than those you’ll pay with a financial advisor, which is why they are also sometimes called discount brokerages in Canada.  With an online brokerage, you’ll invest your money yourself, choosing a combination of stocks, bonds, and ETFs to create a balanced portfolio that will reach your long-term goals. There is no oversight with an online brokerage, and aside from a helpful education center, you are responsible for your investments. Instead of paying fees as a percentage of your overall investments, you’ll pay per trade. 

What to consider when selecting an online brokerage?

The main benefit of using an online brokerage is the money you’ll save on fees, but low fees are not the only factor you should consider when choosing the right online broker for your needs.

1. Trading fees

Not all online brokerages charge the same fees, and the fees can change depending on the type of investment you plan to purchase, and how frequently you make trades. If you are planning to build a passive portfolio out of ETFs, then you should look for an online brokerage with free ETF purchases. If you are planning to purchase stocks and bonds individually and trade at a higher volume, you should prioritize an online brokerage that has high-quality trading platforms and access to third-party research.

2. Account fees

Most online brokerages also charge administrative account fees determined by the assets you hold in a single account or the size of your portfolio across all accounts. If you have a smaller portfolio, these fees will heavily erode your returns, so it’s best to choose a brokerage that doesn’t charge those smaller portfolio fees.

3. Account minimums

Some online brokerages also have account minimums, usually around $5,000. If your portfolio is small or you are investing in Canada for the first time, your choices in online brokerages may be limited.

4. Customer service

If you’re new to investing online, there will be a learning curve when you begin building your portfolio and making your first trades. An online brokerage with a good customer service track record will ensure your questions are answered quickly. If you’ve been investing in Canada on your own for a while, stellar customer service is less important.

5. Transfer fees

When you move your money from your financial advisor or robo advisor to an online brokerage, the original financial institution will often charge you transfer fees in the range of $150. Some online brokerages will pay these fees for you. Canadians are not limited to online brokerage options. Below are Canada's top thirteen online brokerages. Each selection is chosen considering the aforementioned section, primarily focusing on fees, minimums, and customer service.

Alternative investing options

Looking for alternative methods of wealth management? Look no further. Below are several popular alternatives to online brokerages.

• Robo-advisors are suitable for beginners or people with little investing knowledge. Similar to (human) financial advisors, a robo-advisor uses an algorithm to invest and manage money on behalf of the client. Fees tend to be higher than self-directed investing but are still cheaper than financial advisors.
• Financial advisors are licensed professionals who manage money and investments for a number of clients. They also provide advice to their clients. In return, the financial advisor’s clients pay a fee. Though the client’s investments receive more attention from a financial advisor, they tend to be more expensive.
• Guaranteed Investment Certificates (GICs) are low-risk investments that provide interest over the course of the investment's term. They are incredibly safe and secure but do not promise very high returns. They are also inaccessible until the term is complete.