More Canadians taking advantage of online options
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You’ve cooked your own gourmet dinner and put together your own furniture. Why not use the upcoming deadline as a cue to take control of your own RRSP?
An increasing number of Canadians are taking advantage of online brokerage firms, do-it-yourself operations that provide a more hands-on — and cheaper — approach to managing investments.
“The difference between us and a full-service brokerage firm is that in a full-service firm you have an investment adviser who gives you recommendations and advice,” says Connie Stefankiewicz, president and CEO of BMO InvestorLine, Bank of Montreal’s self-directed online brokerage firm. “We put the information on our website and make it available to our clients. It’s up to them to decide what to do.”
BMO InvestorLine allows clients to manage an RRSP or regular investment account, and also access a broad range of tools, resources, and information to help them make wise decisions. Unlike full-service brokerage firms, the staff at BMO InvestorLine does not offer advice.
“We can help narrow the field of potential options,” says Stefankiewicz, “but a direct brokerage approach is not for all clients.”
There are, however, a number of advantages, including cost. “In a full-service firm,” says Stefankiewicz, “you’re getting the tremendous value that an adviser brings to the relationship. In a direct-brokerage firm, since you’re doing it on your own, the cost of transactions are considerably less.”
For instance, a client that has a minimum of $100,000 with BMO InvestorLine, or who does 30 trades per quarter or more, can do trades for as little as $9.95 per trade. At most full-service brokerage firms, there’s a minimum commission per trade around the $100 mark.
“We’ve seen tremendous growth both in registered accounts and non-registered accounts,” says Stefankiewicz. “There’s still a bit of a prejudice out there that the online brokerage account is just for traders, but that’s not the reality. The reality is that the vast majority of individuals who are using direct investment accounts or direct brokerage accounts are long-term investors. Over 40 per cent of our assets are in registered accounts. And that’s long-term serious money.”
- Go to www.bmoinvestorline.com for more.