# Canadian Banks Fighting Brokers Back For Customers Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-01-14 Category: TRADING Category URL: https://financedigest.com/category/trading Meta Title: Canada Banks EFT Trading Battle: Free Deals vs. Broker Meta Description: Discover how Canadian banks are challenging ETF brokers with free trading offers, changing the game for investors in the market. URL: https://financedigest.com/canadian-banks-fighting-brokers-back-for-customershtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1310316502-1736816301106-compressed.jpg) _ETF’s have long been recommended by financial advisors owing to their low risk status, and also the fact that a lot of brokers offer great, low cost deals on trades. However, in Canada the big banks are now fighting back and seeking to rival ETF brokers by offering their customers free trading on ETF’s. Let’s take a closer look at what this could mean for the market._ ### What Is ETF? In case you just joined us, let’s start with the absolute basics. Exchange-traded funds (ETF’s) are ‘baskets’ of [securities that investors can buy](https://www.financedigest.com/exclusive-amazon-to-secure-unconditional-eu-approval-for-8-5-billion-mgm-buy-sources.html "Exclusive-Amazon to secure unconditional EU approval for .5 billion MGM buy – sources") into. They operate much like mutual funds and track broad [investment indexes like the Standard & Poors Top](https://www.financedigest.com/5-top-tips-in-investing-on-diamonds.html "5 Top tips in Investing on Diamonds") 500\. However, unlike mutual funds, ETF’s are [traded throughout the day when the stock](https://www.financedigest.com/stocks-fall-treasury-yields-rise-upon-final-2022-trading-day.html "Stocks fall, Treasury yields rise upon final 2022 trading day") market is open, making them appealing to investors as well as day traders. Since launching in the 1990’s, ETF’s have become a staple of any healthy [investment portfolio and they are widely recommended by financial advisors](https://www.financedigest.com/5-tips-choosing-right-investment-advisor.html "5 tips for choosing the right investment advisor") to their clients. They are ideal for individual “DIY” investors who have humble amounts to invest, limited [expertise and low appetites for risk](https://www.financedigest.com/jaywing-releases-horizon-a-new-ifrs-9-modelling-solution-that-encapsulates-its-extensive-credit-risk-expertise.html "Jaywing releases Horizon, a new IFRS 9 modelling solution that encapsulates its extensive credit risk expertise"). ETF’s are typically sought as a higher return alternative to savings accounts r [ather than a “get rich](https://www.investopedia.com/articles/exchangetradedfunds/11/advantages-disadvantages-etfs.asp)” type of speculative investment – a sound addition to any retirement portfolio and great for long term saving goals. ### ETF Brokers The ETF market is a steady and effective one but does not usually [offer the same lucrative returns](https://www.financedigest.com/bellways-kent-wharf-offers-excellent-returns-for-city-bonuses.html "Bellway’s Kent Wharf Offers Excellent Returns For City Bonuses") as riskier investments. For this reason, brokers have long been competing with one another to [offer the best deals](https://www.financedigest.com/twitter-shares-cruise-towards-musks-offer-price-as-deal-deadline-looms.html "Twitter shares cruise towards Musk’s offer price as deal deadline looms") and lowest fees on trades. This makes it a great market to ‘dabble’ in without having to worry about losing any gains in custody and trading fees (like many low level [investors do with stocks)](https://www.financedigest.com/uk-stocks-slip-as-rate-hike-worries-grip-investors.html "UK stocks slip as rate hike worries grip investors"). Big name brokers like Charles Schwab have been a long [time leader](https://www.financedigest.com/now-is-the-time-for-finance-leaders-to-take-on-a-more-strategic-and-valuable-role.html "Now is the time for finance leaders to take on a more strategic and valuable role") in the ETF “budget” broker space. They have long [offer](https://www.financedigest.com/discount-dining-clubs-tastecard-and-gourmet-society-grow-their-offering-as-chimichanga-and-spaghetti-house-both-sign-up.html "Discount dining clubs tastecard and Gourmet Society grow their offering as Chimichanga and Spaghetti House both sign up") ed zero commission trades on its own, “in house” ETF offerings and now offer zero-commision trades on all ETF’s. Furthermore, there are no fees for opening a Charles Schwab broker [account and no annual](https://www.financedigest.com/hmrc-annual-report-and-accounts-2020-21-debt-at-an-all-time-high.html "HMRC Annual Report and Accounts 2020/21 – Debt at an All-time High") or quarterly maintenance or custody fees. Investment giant Fidelity also offers great deals on ETF trades – it is little surprise that the brokers had the market sewn up for a long [time and left the banks](https://www.financedigest.com/stock-pickers-reckon-its-time-to-move-on-from-central-banks.html "Stock pickers reckon it’s time to move on from central banks") relegated to the sidelines. Even some smaller online brokers have managed to score some easy wins by picking up disgruntled [bank customers](https://www.financedigest.com/insight-into-tomorrows-retail-banking-customers.html "INSIGHT INTO TOMORROW’S RETAIL BANKING CUSTOMERS"). ### EFT and the Banks It seems that the [banks were caught napping and remained asleep for a long time in relation to the ETF market](https://www.financedigest.com/deutsche-bank-equity-bear-market-rally-will-stretch-into-2023-dollar-weaker.html "Deutsche Bank: Equity bear market rally will stretch into 2023, dollar weaker"). Whilst brokers were offering zero-commission trades and free accounts, the [banks were typically levying set fees or taking commissions for EFT trades and effectively punishing their customers](https://www.financedigest.com/communicating-with-the-customer-is-the-future-of-mobile-banking.html "Communicating with the customer is the future of mobile banking") for their loyalty. However, Canadian [banks have finally woken up and are seeking](https://www.financedigest.com/seven-out-of-ten-uk-adults-aged-25-44-never-seek-advice-on-dealing-with-debts-despite-depending-on-the-bank-of-mum-and-dad.html "Seven out of ten UK adults aged 25-44 never seek advice on dealing with debts despite depending on the bank of mum and dad") to claw their way back into the humble ETF trading zone. BMO has become the first Canadian [bank to properly compete](https://www.financedigest.com/5-ways-banks-can-compete-in-payments.html "5 ways banks can compete in payments") with the brokers and is offering free trading accounts and zero-commission exchanges on ETFs via its brokerage arm and Scotiabank is looking to do something similar via its Scotia iTrade subsidiary. Furthermore, [Scotia Bank’s iTrade](http://milliondollarjourney.com/scotia-itrade-online-brokerage-review.htm) is just one of the new tech platforms the sector is setting up to coax customers into the ETF market. The Spanish-global megal [bank Santander has also announced the upcoming launch of an algorithmically based EFT investment advisor tool designed to take the hard work](https://www.financedigest.com/boes-bailey-says-bank-reforms-worked-but-questions-about-liquidity-buffers.html "BoE’s Bailey says bank reforms worked but questions about liquidity buffers") and worry out of investing. ### Who Will Win?! So it seems the game is afoot but how much difference will this really make? The brokers have been leading the ETF trading market for a long time now and some commentators may feel the [banks have simply left it much too late to really challenge](https://www.financedigest.com/big-banks-can-be-challengers-too.html "Big banks can be challengers too") them or establish any serious foothold. However, the banks know full well that DIY, low-level [investors often prefer to use their own bank](https://www.financedigest.com/investors-trim-bets-for-peak-bank-of-england-rate.html "Investors trim bets for peak Bank of England rate") and stick with a familiar name for trading rather than go searching for brokers who they may never have heard of before. BMO and Scotia [bank are also household names in Canada](https://www.financedigest.com/bank-of-canada-seen-on-hold-even-as-economy-accelerates.html "Bank of Canada seen on hold even as economy accelerates") whereas even investment titans like Charles Schwab and Fidelity are only known to those in the know. **This is a Sponsored Feature.** --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---