History of Discount Brokers in Canada

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deaddog
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History of Discount Brokers in Canada

Post by deaddog »

I'm trying to figure out when discount brokers first showed up in Canada.

I know when I first started investing in the early 80s I was limited to dealing with full service brokers with commissions of 3% with a $50 minimum. It was tough trading in those days as you started 6% in the hole.

Some time in the 90s I think Discounters showed up in Canada.

My records only go back 20 years. In 1996 I had an account with RBC Action direct; commissions were a flat $40

In 97 I opened accounts with Waterhouse in the US; Trades were a flat $12 but in 2000 US brokers refused to take Canadian customers and I had my account moved to TD Waterhouse Canada. Commissions were a flat 29.

IB showed up in Canada in 2000 with trades of 1 cent a share, data fees waived if you traded over 20 or 25dollars in commissions.

Other brokers followed and online commissions dropped. I believe the first discounters were phone in but I'm not sure. I do remember getting quotes over the phone from a 1-800 number but not sure how I placed my orders.

I'd appreciate anyone else's recollection of when Discounters first showed up in Canada.
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AltaRed
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Re: History of Discount Brokers in Canada

Post by AltaRed »

I started with E*Trade Canada in 1998 (had not been looking before then). I liked what I saw for online buying and selling, and I had broadband internet by then. I think commissions were $24.99 but I cannot be sure.
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Re: History of Discount Brokers in Canada

Post by Shakespeare »

Schwab had commissions of $29.95. Not sure when I started with them; possibly 1999 or 2000. Later bought by Scotia.
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Re: History of Discount Brokers in Canada

Post by OnlyMyOpinion »

For the first discount brokerage in Canada check out George R. Gardiner and his brokerage which was sold to TD in 1987 as part of Greenline Investor Services, renamed TD Waterhouse in 1999.
In addition to his brokerages (he had also started Gardiner Watson earlier), George brought us Scotts (Kentucky Fried Chicken), thoroughbred horses, and the Gardiner Ceramic Museum. He was an interesting man and a very sharp businessman.
See for example: https://en.wikipedia.org/wiki/George_R._Gardiner
and: https://www.thestar.com/business/person ... seman.html
and: http://www.newswire.ca/news-releases/td ... 95501.html
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big easy
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Re: History of Discount Brokers in Canada

Post by big easy »

I seem to recall getting 5 1/2" floppy drives from TD Green Line with which to install software on my computer. I think you connected to their servers via dial up modem but I can't remember. I think it operated on DOS but again I can't be sure. We have come along way.
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Re: History of Discount Brokers in Canada

Post by thundarr »

For me, i remember my first required going in, in-person to place trades at a desk for a %. It's been so long i can't even remember the company name. They are gone now. But when the internet started taking off it was E*trade for $24.99-$29.99 ... ouch .. I always cringed when making trades with them and sadly managed what & how i traded around these high prices :( (it was all new to me).

I also remember Wit Capital. Anyone remember them? If i am not mistaken they were the first to offer IPOs (mostly US internet stocks) to the general public. Before them IPOs were strictly to the uber wealthy and other connecteds. It was still a crap shoot on who got shares but at least it was something. If one wrote a script to keep monitoring them you could get a few shares here and there at times though and the day it went public you'd make a killing. Ahhh i miss the 90s.
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big easy
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Re: History of Discount Brokers in Canada

Post by big easy »

Some historical background here - mostly TD centric.

Link
Soon after the hearing, TD purchased Loewen, Ondaatje, McCutcheon & Company’s base of 800 discount brokerage accounts. By early 1984, Green Line began its operations with eight employees andone telephone line under Keith Gray’s leadership.

The initial concept for Green Line centered on a toll-free telephone hotline that would enable existingTD clients and new discount brokerage client base to make direct contact with a central order-takingdesk at the Toronto head office.
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Re: History of Discount Brokers in Canada

Post by Peculiar_Investor »

Interesting history lesson. I've added this topic to the wiki article on Discount brokerage - finiki, the Canadian financial wiki
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Re: History of Discount Brokers in Canada

Post by deaddog »

big easy wrote: 25 Oct 2017 22:07 Some historical background here - mostly TD centric.

Link
Soon after the hearing, TD purchased Loewen, Ondaatje, McCutcheon & Company’s base of 800 discount brokerage accounts. By early 1984, Green Line began its operations with eight employees andone telephone line under Keith Gray’s leadership.

The initial concept for Green Line centered on a toll-free telephone hotline that would enable existingTD clients and new discount brokerage client base to make direct contact with a central order-takingdesk at the Toronto head office.
An interesting read. Thank you
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Re: History of Discount Brokers in Canada

Post by SQRT »

big easy wrote: 25 Oct 2017 22:07 Some historical background here - mostly TD centric.

Link
Soon after the hearing, TD purchased Loewen, Ondaatje, McCutcheon & Company’s base of 800 discount brokerage accounts. By early 1984, Green Line began its operations with eight employees andone telephone line under Keith Gray’s leadership.

The initial concept for Green Line centered on a toll-free telephone hotline that would enable existingTD clients and new discount brokerage client base to make direct contact with a central order-takingdesk at the Toronto head office.
Thanks for posting this, quite interesting. I think also interesting is the follow on results of TD starting Greenline. Specifically allowing them to buy Waterhouse securities based in NY (deal closed in 1997) and participate in the internet brokerage craze of the late 90’s. When the bank mergers were turned down in late 1998 TD was able to monetize some of this by IPO’ing 11% of Waterhouse in 1999 ($1billion) and using the capital to buy Canada Trust for cash. This minority stake was later bought back at a fraction of the IPO price once the tech boom fizzled and TD’s capital was replenished.

So there was a direct link between starting Greenline in 1984 and buying Canada Trust in 1999. TD’s “merger” with Canada Trust was transformational in that it took the number 5 retail bank in Canada and put it very close to par with the largest (RY).
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Re: History of Discount Brokers in Canada

Post by kcowan »

Green line offered a chequing account and I used it for direct deposit of my pension cheques in May 1992. They gave me two cheque books, one for C$ and the other for USD. I primarily used the USD to pay maintenance fees for our timeshare in Mexico. When I eventually ran out of the initial 50 cheques, they refused to send anymore, saying the plan had been discontinued for new clients. The C$ cheques still work, and the direct deposit gets swept into my investment account. So I can still write cheques directly from my investment account as long as the cheques last.
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Re: History of Discount Brokers in Canada

Post by Jaunty »

I had a TD Greenline account that by my calculations I opened by 1988. The trading was by telephone. I had limited money, but did execute a few trades this way before joining ShareOwners and buying stocks and Dripping through them.
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Re: History of Discount Brokers in Canada

Post by Peculiar_Investor »

big easy wrote: 25 Oct 2017 22:07 Some historical background here - mostly TD centric.

Link
Thanks for finding and posting this. Interesting reading for sure. FWIW, a more direct link is The Toronto-Dominion Bank and Canada’s “Little Bang” of 1987 – by Ashwini Srikantiah (2011), which is part of the Canadian Business and Financial History - Rotman School of Management project.
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Re: History of Discount Brokers in Canada

Post by kcowan »

Funny story. TD told me that I could not transfer money electronically between GreenLine and the bank in the early 90s.

I said that I was doing it by bill payment both ways (using my chequing account at Greenline and utilizing Greenline as a payee from the bank).

My main frustration with TD is their snail mail Corporate Action Notices. I have even approached Computershare to see if I could get an account to solve it. They always have a default that is not attractive to an investor like me.
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