Retail Brokerage and Distribution Report Winter 2024—All Quiet on the Zero-commission Front

When Wealthsimple began offering zero-commission pricing in 2019, many discounted them as an outlier. In mid-2021, National Bank Direct Brokerage and Desjardins Direct Investing announced weeks apart that they would be offering zero-commission pricing on all equity trades. Much was made of this announcement and the future of the online/discount brokerage (ODB) channel in Canada. Many viewed this shift as the first falling domino which could force the hand of many, if not all, online brokerages in Canada to move to zero-commission offers. However, aside from partial or promotional shifts, not much has changed in the channel, at least not in the foreground.

The zero-commission story is continuing to evolve in Canada. While the model seems to have worked for those who adopted it, does it mean others will follow? As commissions decline, what happens to the Canadian ODB space? How will the channel respond?