Questrade acquires Community Trust | General financial discussion | Discussion forum

According to The Globe and Mail article (sorry, only news source that covers the deal, so I'll summarize the salient points since behind paywall), Questrade Financial Group, parent company of Canada's fastest growing self-directed discount brokerage and lowest cost robo-advisor portfolio management service Questwealth Portfolios, has acquired federally-regulated Community Trust, which was founded in 1975. The deal's already quietly been approved administratively by OSFI (no public announcement or gazetting) and closed April 16, 2019. Apparently, it's Questrade's first acquisition (they previously sold their ETF manufacturing and investment management business to WisdomTree Canada) since the company's founding.

They don't state what their intent is with this acquisition, but seeing as Community Trust specializes in providing outsourced registered plan custodianship, trustee services, and administration, I would think it would be logical to assume that Questrade may well decide to switch the trustee/custodian from, say, Computershare Trust, Concentra Trust, or Canadian Western Trust (whoever they use) to Community Trust. Community Trust also has boutique direct-to-consumer and broker mortgage & deposit origination businesses, so this is also just a new business line for them. Community Trust's deposit rates are not that remarkable (comparable to Concentra Bank if under $50,000 and nearly as high as Oaken Financial if over $50,000, at least in terms of GICs). Interestingly, they only offer registered GICs and HISAs, no non-registered deposits. They do offer plain vanilla RSPs, RIFs, TFSAs, etc., and are based in Ontario (Hamilton, possibly?), which would suit the Ontario contingent of forum users (i.e., Loonie) well. They specialize in also offering self-directed registered plans, including those that hold their mortgage in a registered account, which is complementary to a service that Questrade offers.

One thing I found interesting is that Questrade and Questwealth Portfolios, which last year cut its management fee to 0.25% for its robo-advisor service meaning that its all in management fee & ETF MER is at or below even TD Canada Trust's e-Series mutual funds, are opening more than 50,000 new accounts per year. Those are "Big 5" bank-owned brokerage numbers; perhaps even more, as their growth rates have likely slowed considerably by simple virtue of their size.

Cheers,
Doug