Questrade applies for a Canadian banking license
Questrade Financial Group Inc. continues to expand its presence in the financial services industry with an application for a Canadian banking license, allowing it to diversify beyond trading stocks at low cost to Canadians.
Managing around $ 9 billion in assets, Questrade is best known for its discount brokerage platform, which it promotes through a series of television commercials depicting people firing their financial advisers to can invest at a lower cost. The company also runs a robotics consulting business – Questwealth Portfolios – which recently reduced its management fee to 0.25%, making it the cheapest online portfolio manager in Canada.
Earlier this year, Questrade abandoned its online business to acquire a Mississauga-based loan and deposit business, Community Trust Co.
Now Toronto-based Questrade has filed an application with government regulators which, if approved, will allow it to operate a division under the name Quest Bank.
Questrade chief executive Edward Kholodenko would not provide details on the timing of a new service or the type of services that can be offered to clients.
“The application is only one part of a longer-term process that will allow us to explore potential new ways to help Canadians keep more of their money and be more successful and successful. financial security, ”he said in a statement to The Globe and Mail.
Being able to accept deposits from consumers would allow Questrade to engage people outside of the investment segment, which is proving difficult to engage the affluent population, said Josh Book, Founder and CEO of Parameter Insights Inc.
As the major discount brokerages in the United States continue to reduce their fees to zero, diversification into other product lines will become a growing trend in the online counseling industry.
Last year, Wealthsimple Inc., Canada’s largest robo-advisor, launched a savings account in partnership with Equitable Bank. Deposits are directly held by Equitable Bank, so Wealthsimple is not required to have a banking license. At the time, Wealthsimple CEO Michael Katchen said he had no plans to apply for a banking license immediately.
In the United States, Fintech start-up Robinhood, which offers free transactions to investors, applied to become a chartered bank earlier this year – before withdrawing the request last week. If approved, Questrade will be one of the first online managers to directly hold a banking license in Canada, Mr. Book said.
“It allows them to explore a more creative way to start a relationship with a broader set of consumers and to overcome some of the inertia created by low levels of financial literacy among people,” he said. stated in an interview. “This is an exciting development for wealth management that we have yet to see in Canada.
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