Types of Brokerage Fees to Track

Brokerage fees include: per-trade commissions ($5–$10 per trade), ECN fees ($0.25–$1 per trade for electronic communication networks), currency conversion fees (1–2% per USD/CAD trade), inactivity fees ($50/year if no trades for 12 months), RRSP/TFSA administrative fees ($50–$150/year), and transfer-out fees ($50–$150 when switching brokers). Many investors focus only on commissions and miss the others. Total fees often add up to 0.5–1.5% annually—equivalent to missing investment returns.

Currency Conversion and Norbert's Gambit

When you buy US stocks, banks charge 1–2% for CAD-to-USD conversion (hidden in spreads). Norbert's Gambit is a tax-efficient strategy: (1) buy CAD-denominated shares of a USD stock (e.g., HXT on TSX), (2) notify your broker it's a currency conversion, (3) the conversion happens at near-zero cost. This saves $100–$500 per $50,000 USD transaction. Questrade supports Norbert's Gambit; Wealthsimple does not. For large USD investments, this alone can pay for switching brokers.

ECN Fees Explained

ECN (Electronic Communication Network) fees charge $0.25–$1 per trade for order routing through electronic systems. Some brokers bundle this in commissions; others charge it separately. A typical stock trade ($10 commission + $0.30 ECN = $10.30). For frequent traders, ECN fees compound. Questrade discloses ECN fees upfront; others hide them. When comparing brokers, ask: "What is your total cost per stock trade including ECN?"

RRSP and TFSA Administrative Fees

Opening or maintaining an RRSP or TFSA at a bank or broker may incur annual fees ($50–$150). These are often waived if you maintain minimum balances (e.g., $25,000+) or trade regularly. Discount brokers typically waive these; full-service brokers charge them automatically. When opening tax-advantaged accounts, ask: "Are there account maintenance or opening fees?" and "Under what conditions are they waived?"

Hidden Spreads vs. Explicit Commissions

Wealthsimple advertises "commission-free trading" but embeds a 0.5–1% spread in stock prices—you pay indirectly. This is fine for buy-and-hold investors but costly for frequent traders. Questrade charges explicit commissions ($5–$10) but minimal spreads. Spreadless trading on major indices is lower cost for ETF investors; commission-based is better for stock traders. Compare your actual intended trading pattern to understand your true cost.