TD Direct Investing did something earlier this month that may help it retain its top spot in the annual Globe and Mail digital brokerage ranking.
TD’s introduction of fractional share trading tells us that this giant of online trading aims to keep a recent wave of improvements going rather than resting on past success. It’s not unusual for brokers to freshen their offerings to clients and then coast for years. TD has signalled that it’s not in coast mode, at least for now.
But TD has also had its problems recently, a reminder that even top-notch trading platforms are subject to glitches. A few readers got in touch to complain about a promotion where TD Direct Investing clients who transferred in assets were eligible for a cash payment of between $300 and $5,000, depending on the amount of the transfer. The offer ended March 1, but some clients had not received the money they expected as of mid-summer.
”A technical issue resulted in a delay for clients receiving their payments,” TD said in an e-mailed response to questions. “However, all eligible have now received their transfer reward.”
Another technical problem occurred recently when at least one TD client was charged a fee for paper statements, even though he was signed up to receive electronic documents. TD said a system error resulted in “a handful” of clients being inadvertently charged a paper statement fee. The issue has been resolved, and the clients reimbursed.
Another reader complaint about TD Direct Investing speaks to a lingering and glaring omission in its product lineup. A year and a half after the introduction of first-home savings accounts, TD Direct Investing does not not offer these savings vehicles for aspiring first home buyers. TD said it is working toward making FHSAs available to TDDI clients at the end of the year.
Fractional trading – TD calls it partial shares – allows investors to buy just a piece of one share. It democratizes investing at a time when shares of companies like NVIDIA (NVDA-Q), Apple (AAPL-Q) and Microsoft (MSFT-Q) have been trading at levels between US$125 and $415 or thereabouts.
Fractional trading has been around for a while in the U.S. market, where customer innovation works at a much faster pace than in Canada. Here, fractional trading is offered by Wealthsimple, Interactive Brokers and both TD Direct Investing and TD Easy Trade, which is an investing app that targets a Gen Z and millennial audience with 50 commission-free stock trades per year. Partial share trades are included in the allotment of free trades at Easy Trade.
TD Direct Investing is charging a flat $1.99 per trade of less than one share and the regular $9.99 for trades of one or more shares. Some 2,000 Canadian and U.S. stocks are eligible for fractional trading. The minimum dollar amount you can invest in a partial share is $1, and the minimum share amount is 0.00001 shares. Dividend investors get a proportional partial dividend.