Company News

Scotia iTrade covers bank’s discount brokerage platforms

By Rudy Mezzetta |

The Bank of Nova Scotia today relaunched its E*Trade Canada active trader discount brokerage business, which it bought last year, as Scotia iTrade Corp.

The new brand will be the name for the bank’s entire discount brokerage business when it consolidates all three of its platforms by the end of the year.

“We intend to be the market leader,” says Barb Mason, exec. vp of wealth management at Scotiabank, in announcing the rebranding.

Scotia iTrade will continue to offer the same low-cost pricing as E*Trade Canada did, but will now give clients access to Scotia Capital equity and economic research, the bank says.

The bank’s two other discount brokerage platforms -- Scotia McLeod Direct Investing and Trade Freedom Inc. -- when combined with Scotia iTrade makes Scotiabank the second-largest in terms of trades, third-largest in terms of accounts, and fourth in terms of assets under administration in the discount brokerage industry. The category leader is TD Waterhouse, the direct brokerage arm of Toronto-Dominion Bank.

E*Trade Canada CEO Duncan Hannay becomes managing director of direct investing for all of the bank’s platforms. Hannay replaces Cathy Welling, who will be the head of Scotiabank’s private client group. In turn, she replaces James McPhedran, who will head up the bank’s retail banking business in Ontario.

After the amalgamation of all three discount brokerage platforms, likely in the fall, the combined Scotia iTrade business will be segmented to include different pricing for active traders and mass affluent trader based on number of trades and account size. Best practices from each platform are being taken and will be maintained in the Scotia iTrade entity, Mason says.

The bank has already begun a marketing push supporting the Scotia iTrade name, says Hannay.

“We will continue to be aggressive in acquiring new customers,” he says. “We’re making a significant investment in the new brand.”

The discount brokerage trade has been booming, with many investors, spooked by the volatility of the markets, moving money from full service to discount brokerages. Scotiabank reported a 75% increase in the number of new online brokerage accounts in the first quarter as compared to the previous one, and a 62% increase from the same period a year ago.

Nevertheless, Scotiabank believes the discount brokerage business and the full-service business can co-exist in a mutually supportive way, Mason says.

“Some customers move from advice to discount, and others move from discount to advice,” Mason says. “I don’t believe the online business takes away from full-service.”