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CI Direct Trading Review (Virtual Brokers)


Canada's CI Direct Trading review, brokerage rating for 2022. Is it good firm? Virtual Brokers stock trading fees. VB RRSP, RRIF, TFSA account investment cost, minimums, and ETFs.



CI Direct Trading Overview


Founded in 2009, Virtual Brokers (now called CI Direct Trading) is one of the newest Canadian online brokerage providers. It positions itself as a disruptive company which has attempted to revolutionize commission structures. Overall, it is much cheaper and easier to use than the traditional bank brokerages, but it has lost some of that advantage with its recent commission structure changes.


CI Direct Trading ETF and Mutual Fund Commissions


CI Direct Trading offers a fairly cheap option for investors looking to primarily trade ETFs and mutual funds. All mutual funds are free to buy and sell and all ETFs are free to buy. While free ETF purchases are increasingly becoming standard among the other discount brokerages, free mutual fund trades are a major advantage for CI Direct Trading. CI Direct Trading’ primary discount rival is Questrade, who charge a flat $9.95 commission to buy and sell mutual funds.

Selling ETFs are subject to standard commissions for equities. Under the new “classic commission” schedule for CI Direct Trading, this means that selling an ETF will be subject to a 1¢ per share, minimum $1.99/trade, maximum $7.99/trade. $3.99 per trade flat rate will apply for clients who make over 150 trades per quarter. By comparison Questrade trades would cost $4.95.

CI Direct Trading new “classic commission” rates are in many ways a step backward. Clients who signed up prior to this new pricing plan continue to have the option to choose from the four older commission structures. Included in this structure is a Free ETF plan which allowed clients to buy all ETFs for free, sell a select 100 popular ETFs for free, and be subject to a 99 cent commission on any ETFs outside of the select 100. Clearly this was a better pricing model for ETFs, as the new “classic” structure has dramatically increased sell costs. (see screenshot “history” for example of commissions and fees).


CI Direct Trading Stock Commissions


Equities are a flat 1¢ per share, minimum $1.99/trade, maximum $7.99/trade (or $3.99 with over 150 trades) per trade under the “classic” structure.

This structure may benefit active traders, however, it significantly increases costs for the average investor. Before this new structure was introduced, CI Direct Trading offered 1 cent per share equity trades with no minimum commission. While current customers who signed up before the change can still take advantage of this structure, it is not available to new clients. This shift in commission structure makes CI Direct Trading less attractive to the average investor who does not trade in large volumes.


Administrative Fees


CI Direct Trading has a major advantage when it comes to administrative fees, as there are very few of them. It charges no annual fee for TFSA or RRSP accounts and no fees for transferring money out of a registered account. By comparison, the average bank brokerage such as TD Direct Investing (TD Direct Investing vs CI Direct Trading comparison) charges $25/year for RRSP accounts and charges a $25 withdrawal fee on RRSPs. The one administrative fee that CI Direct Trading has recently added is a $25 inactivity fee that applies to accounts with less than $5,000 that do not pay at least $6.49 in trade commissions per quarter.


Issues and Problems


While the cheap commissions can result in significant money savings, the brokerage does have a number of ongoing issues and problems. The first problem is the research section, which needs considerable work to bring it up to the standard of the bank brokerages. Not only is the page layout somewhat ugly and dated looking (see screenshot of equity quote), but the data presented is fairly minimal. The stock, ETF, and mutual fund screeners are fairly vanilla and for the most part simply use Morningstar’s basic screeners.





CI Direct Trading uses its own clearing system, which allows it to offer cheaper commissions but can also lead to some problems. The system has serious problems when it comes to paying mutual fund dividends. In many cases, they will simply not pay the dividend, requiring clients to pay attention to their accounts and email support who then promptly issue the dividend a few days later. Sometimes the dividends will pay automatically and sometimes they do not. This does not seem to be a problem for dividends from ETFs or stocks, so mutual fund holders need to monitor their accounts closely.





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Another problem is that the account positions summary page is often wildly inaccurate for no apparent reason. While it always has the correct number of shares held in each position, the market value, book value, and unrealized gain/loss columns often have no connection to reality. In some cases, the book value may for some reason become doubled or even tripled at a later time, making it seem like one has taken a major loss on a position when in reality it has gone up in value. In other cases, the system will under-report book value, giving the illusion of major gains. While the overall totals of shares and dollar value are accurate, if one wants to keep track of gains and losses, one must do this manually by keeping separate records.


CI Direct Trading Review Summary


Prior to the change in commission structures, CI Direct Trading was easily the best discount brokerage for the average buy and hold investor. The problems listed above were a small price to pay for huge savings on commissions. With the new commission structures, buy and hold investors primarily interested in ETFs and equities will find cheaper rates at Questrade (Questrade review), while CI Direct Trading remains a better deal for mutual funds. Given that clients who had been with CI Direct Trading before the commission changes can still use the old commission structure, existing clients should stick with CI Direct Trading.
About the Author
Arthur Chachuna is professional personal finance blogger, and the owner of Brokerage-Review.com. He has been an avid investor for 23 years, and has background in both applied math and programming.