Many discount brokers are now offering free commissions on both stocks and ETF’s. National Bank is one of these brokers.
Before you contemplate transferring over all your securities to a new platform, there are several factors to consider as follows
No one likes to work for free regardless if you are an individual or a corporation. By enticing you over to their website, these discount brokers still expect some type of financial reward that is not always transparent to the investor.
Personally, I would be very leery of any company offering you zero commissions. Every firm is looking for new clients and by offering free trades it provides these firms with a pipeline of potential new clients. Once you switch over, you will become a target for these discount brokers to offer you all types of bank products and services like credit cards, line of credit, loans, new types of bank accounts, GIC’s, mutual funds, and ETF’s. Many of these products you most likely already have and do not need any more shoved down your throat.
By making the decision to manage your own money, you want to focus exclusively on what investments are best suited for you. This is most likely the reason you switched over to a discount broker in the first place to get away from sales people hounding you continuously to buy their products.
Saving a maximum of $10 per transaction is largely immaterial taking into consideration the market value of your assets. However, for many young investors who do not have a lot of capital, saving commissions may seem like the right thing to do. Once again. I really do not think so as investors still need sufficient investment research availability in order for them to make good investment decisions.
Resist the temptation to switch over to another discount broker offering free trades unless you are absolutely comfortable with the quality of the trading platform and the availability of good investment research.
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