Virtual Brokers Review PROS CONS Online Broker In Canada 2020

Are you ready to start investing? No, she wasn't ready. But don't know which online broker to go with? In previous videos, I covered Questrade, WolfSimpleTrade, and TD Direct Investing. In this video, I will cover Virtual Brokers. Watch this video to the end to find out if this online broker is right for you. What is Virtual Brokers? It's a Canadian online broker that provides trading of stocks, ETFs, options, mutual funds, and bonds on all major North American markets. Virtual Brokers was founded in 2009 as a division of BBS Securities Incorporated and their parent company being CI Financial Corporation. They are a member of IROC and CIPF. They offer all the different account types a trader would need and 8 different trading platforms. Let's jump right into the pros. Number one, the commission fees. With Virtual Brokers, you can buy and sell equities for $0.01 per share, a minimum of $1.99, and a maximum of $7.99 per trade. These commissions are almost $3 cheaper than Questrade's minimum and almost $2 cheaper than their max. And for those who place over 150 trades in the previous quarter, you will get a flat rate of $3.99 per ticket. Per ticket pricing meaning you only get charged one commission fee for same day, same order, multiple fills. Virtual Brokers also offers commission-free accounts. In 2016, Virtual Brokers was the first online broker in Canada to offer commission-free trading. To qualify, you must fund your account with at least $5,000 when opening your account and pay for one of their platforms. The cheapest platform is VB Wave for $75. But if you have a commission-free account, this same platform will instead cost $150 per month. The only other broker to offer commission-free trading is Wolf Simple Trade. And with them, there's no conditions to qualify for free trades. With Virtual Brokers, you can also buy ETFs for free and to sell, it's $0.01 per share, minimum $1.99, maximum $7.99. At Questrade, you can also buy ETFs for free and sell at $0.01 per share. But once again, they have a higher minimum of $4.95 and a higher maximum of $9.95. Also, buying and selling options for Virtual Brokers is $7.99 plus $1.25 per contract. This price is slightly below average. With Virtual Brokers, buying and selling mutual funds are completely free. With Questrade, they cost $9.95. So if you're interested in buying mutual funds, you're better off with Virtual Brokers. So as for commission fees, Virtual Brokers is one of the cheapest options. The second pro, they will pay for your transfer fee. If you wish to transfer your account from a different financial institution, that institution will charge you a transfer fee. Virtual Brokers will reimburse you up to $150. While most brokers will reimburse you, saving $150 is always a pro. The third pro, their self-directed dividend purchase plan. Usually, a DRIP program allows you to use the dividend earnings to purchase more of that security with no commissions. But with Virtual Brokers' self-directed DRIP, you can automatically purchase up to five stocks or ETFs of your choosing. So any cash from dividends can purchase most securities commission-free. Virtual Brokers is Canada's first and only online broker to offer this self-directed dividend purchase plan. The fourth pro, Virtual Brokers' Kickstart investment program. This program automatically transfers money from your bank to your Virtual Brokers account every month. Then these funds can be used to automatically purchase up to five different Canadian or US stocks or ETFs of your choice. With this program, there is no commission fees for these purchases, but there is an annual fee of $50. But if you are a student or graduated within the last two years, you will get your annual fee waived. This program is a cost-efficient way to start investing for students and recent graduates. Before we get into the cons, can I get you to like this video and share this with a friend? Con number one, US registered accounts are $15 US per quarter. Why pay $60 a year for a registered account when there's brokers out there that offer this for free? And some brokers that do charge for registered accounts allow a minimum balance to waive the fee, while Virtual Brokers don't. You might be better off with a broker like Questrade, who has free US registered accounts. The second con, no Norbitz Gambit. For those who are unfamiliar with Norbitz Gambit, it's a currency conversion technique that allows you to exchange Canadian and US currency without paying the currency conversion fee. Virtual Brokers currency conversion spread is 75 199 basis points. So if you exchange a significant amount of Canadian dollars to US dollars, then you'll be much better off with a broker that supports Norbitz Gambit. The third con, expensive platforms and market data. Virtual Brokers offers eight different trading platforms. Two free web-based platforms for real-time snap quotes, a mobile app, and five premium platforms for a monthly fee. The most affordable one is the VB Wave for $75 Canadian. But if you want the commission-free account, then this platform costs $150 per month. Then they have the PowerTrader Pro 250 US, RealTik EMS for 400 US, ITS TraderLite for 580 US, and the IRIS for 1120 US. On top of this, the last three platforms I mentioned will have a 20% platform handling fee, minimum 150 US per month. The fun doesn't stop there. Now you need to buy market data. Virtual Brokers don't offer any market data packages, reduced pricing, or any rebates. So on top of the platform fees, you will always pay full price for market data. All of TD Direct's platforms are free and they offer reduced market data if you do 30 or more trades per quarter, or have $500,000 or more in assets. Questrade on the other hand, offers IQ Edge for free and has an all-in-one data package that ranges from $19.95 CAD to $89.95 US. The best part of their market data is that it's 100% rebatable if you reach a certain amount of commissions paid. So if you're an active trader that needs live streaming level 2 data, then Questrade would be your cheapest option. The fourth con, they have a $24.95 per quarter administration fee, also known as a maintenance or inactive fee. Most brokers will charge this fee, but at least you can get it waived. Have a minimum balance of $5,000 or more or complete at least one commission trade per quarter. Or if you are under the age of 26, or have a commission-free account, RESP account, or a registered charity. Also, if you do get charged a commission fee, your trade commissions can reimburse the total fee. The fifth con, ECN fees. This fee is charged when you remove liquidity from the market. These fees are very minimal, but they are per share. So if you're buying 10,000 shares, these fees can add up. Questrade also charges ECN fees, so Virtual Brokers isn't alone here. Con number six, not a very big con, but I think I should mention, there's a $1,000 minimum to open account. Before they had this minimum, it used to be $10,000 to open account. Most brokers nowadays have no minimums to open account. That being said, if you're gonna start investing, you should start with at least $1,000. Con number seven, no signup bonus. Most brokers will offer some kind of bonus for signing up. Brokers like Questrade and Wealthsimple Trade offer a referral program. So if you use someone's code, you can always get a signup bonus. But Virtual Brokers has no signup bonus or referral programs. All in all, Virtual Brokers is great for minimizing your commission fees. But with the U.S. registered account fees and the lack of Norbitz Gambit, it's best to stay away from U.S. stock and ETF trading. This broker can be perfect for buying Canadian stocks because of the low commission fees, Canadian ETFs because they're free, and mutual funds because they're free. Virtual Brokers can also be beneficial to students and recent graduates because of their Kickstart program. You can get your admin fee waived if you're under the age of 26. There are a few more things to consider with Virtual Brokers. One, the usability of their platform. I personally never use Virtual Brokers, so I can't give you my personal experience with their platform. But online, it seems like most people's experience are negative. Like the platform being unreliable and out of date. If you look at the mobile trading app, it hasn't had an update in two years and the comments aren't very nice. That being said, Virtual Brokers recently released a new trading app which will replace the PowerTrader mobile app. Also another thing to consider is their customer service. Online, people don't have anything good to say about them. So I tried to contact them in three different ways. Through online chat, where I kept on getting disconnected because of inactivity. On the phone, where I had no trouble getting a hold of someone, but they weren't very knowledgeable and couldn't answer my questions. And then email is where I had the best customer service. I emailed them the night before and they got back to me the next morning. This representative had no problems answering all the questions I had. So my experience with their customer service is inconsistent. Before you consider or not consider Virtual Brokers, check out my review on Questrade, which I think is hands down the better broker. Next week, I'll be doing a video on QTrade. So if you don't want to miss that video, make sure you subscribe and hit the bell icon so you don't miss when that video comes out. Also let me know in the comments, are you guys interested in these online broker reviews or should I move the channel in a different direction? Anyways, thanks for watching. Until next time, keep making money moves. Peace.