HSBC Bank (Hongkong and Shanghai Banking Corporation) is one of the world’s largest banking and financial services companies.
In Canada, HSBC InvestDirect is the self-directed discount brokerage of the financial institution, allowing clients to trade and invest without paying for advice.
A US study has shown that 72% of millennials identify as self-directed investors.
Here is an HSBC InvestDirect Review below, where I will outline how competitive the platform is as a discount brokerage here in Canada.
Manage Your Investments with HSBC
HSBC InvestDirect Allows You To Cheaply Trade Most Investments
- Backed by a reputable financial institution
- Flexibility to trade in most markets
- Active trade discounts
- High fees relative to cost leaders
- Poor customer service
What is HSBC InvestDirect?
HSBC InvestDirect is HSBC Bank’s self-directed brokerage. The platform puts you in charge of your investments, allowing you to buy or sell different asset classes without paying for advice.
As a client, you will be responsible for making investment decisions, rebalancing, and monitoring your portfolios.
HSBC InvestDirect offers competitive pricing relative to other major Canadian bank discount brokerages. Like the major banks, HSBC has a large client base to which the firm can market its discount brokerage.
This means that it does not compete as aggressively on price as independents such as Wealthsimple Trade and Interactive Brokers.
HSBC InvestDirect Fees
For investors that are in charge of their investment accounts, fees and trade commissions are a key concern in order to reduce how much money they are paying over time.
The standard trade commissions for various asset classes at HSBC InvestDirect are broken down into North American trade commissions and Global trading commissions.
North American Trading Commissions
- Stocks: $6.88 per transaction ($4.88 for HSBC Active Traders)
- ETFs: $6.88 per transaction ($4.88 for HSBC Active Traders)
- Options: $6.88 per transaction plus $1.25 per options contract ($4.88 + $1.25 per options contract for HSBC Active Traders)
- Mutual Funds: $6.88 per order (online), $43 per order (telephone orders)
- Fixed-Income Securities: Bond par value: $0 – $49,999 = $40 commission + $1.50 per $1,000 / Bond par value $50,000+ = $40 commission + $1.00 per $1,000 (with a total minimum fee of $110)
HSBC InvestDirect offers different rates for four types of clients:
- HSBC Premier Preferred: Maintain at least $500,000 in your HSBC InvestDirect account and complete 0 – 149 trades every 3 months
- HSBC Advance Preferred: Maintain between $50,000 and $499,999 in your HSBC InvestDirect account and complete 0 – 149 trades every 3 months
- HSBC InvestDirect Standard: Standard rates for investors that don’t qualify for other pricing, complete 0 – 149 trades every 3 months
- HSBC InvestDirect Active Trader: Complete 150 trades or more every 3 months
For North American trade commissions, Premier Preferred and Advance Preferred do not offer any cost savings for online trades. HSBC only slightly reduces your trade commissions when placing orders over the phone.
Overall, the only real fee reduction is obtained through the Active Trader pricing, which is similar to what most major Canadian banks offer anyway.
Global Trading Commissions
HSBC InvestDirect shines in the global trading department, where clients have the ability to trade investments across several different markets.
The fee structure here is similar to the North American commission schedule, with Active Traders paying $4.88 per trade while all other investors pay $6.88 per trade.
HSBC Premier Preferred clients received 20% off of international trading commissions (both online and over the phone) while HSBC Advance Preferred clients receive 10% off of international trading commissions (both online and over the phone).
There are additional fees for trading on different markets or exchanges, which are outlined on HSBC’s website.
Some key global markets that HSBC InvestDirect clients can access include:
- Hong Kong
- The United Kingdom
HSBC InvestDirect charges competitive fees relative to major Canadian bank discount brokerages. When compared to cost-leading independent brokerages, HSBC has a difficult time competing.
Commission-free trading platforms such as Wealthsimple Trade or National Bank Direct Brokerage can save you a ton of money in costs.
Low-cost discount brokerage alternatives to consider include:
- Wealthsimple Trade
- Interactive Brokers
- National Bank Direct Brokerage
HSBC InvestDirect Account Support
HSBC InvestDirect offers fairly limited support for account types. Investors can currently open the following types of accounts through the platform:
- Non-Registered (Cash)
- Non-Registered (Margin)
- Non-Registered (Margin with Options)
- Non-Registered (Margin with Short-Selling)
- Corporate Account
- Estate & Trust Accounts
- Tax-Free Savings Account (TFSA)
- Individual Registered Retirement Savings Plan (RRSP)
- Registered Education Savings Plan (RESP)
- Registered Retirement Income Fund (RRIF)
If you are looking to trade within accounts that are not supported above, you will have to find an alternative discount brokerage.
HSBC InvestDirect Platform Features
HSBC InvestDirect has a good online platform and can also be accessed on the go through the HSBC Banking application. HSBC InvestDirect does not have a dedicated application.
The brokerage’s online platform is fairly standard in terms of features. It offers tools and resources to help with:
- Market analysis
- Investment Management
- Financial Planning
- Market Quoting and Watchlists
- Investment Research
The complexity of the platform’s investment management and financial planning resources are limited since these are usually offered through full-service brokerages (i.e. working directly with an investment advisor).
Investment research is offered from Standard & Poor’s (for stocks) as well as from Morningstar (for mutual funds and stocks).
HSBC InvestDirect Vs Other Discount Brokerages
HSBC InvestDirect Vs Wealthsimple Trade
Wealthsimple Trade is a well-known discount brokerage in Canada. The platform investors to trade a lot of North American stocks and ETFs without paying trade commissions. Unlike HSBC InvestDirect, Wealthsimple Trade only allows clients to trade ETFs and stocks.
One of Wealthsimple Trade’s weaknesses is its slim account opening variety. Investors have more account types to choose from when investing with HSBC InvestDirect.
If you are looking to trade North American stocks or ETFs, Wealthsimple Trade is a superior choice between the two platforms. By avoiding trade commissions when buying and selling stocks/ETFs, you can potentially save a considerable amount of money.
You can open a Wealthsimple Trade account by clicking here.
HSBC InvestDirect Vs Questrade
Questrade is another discount brokerage in Canada used by a good number of Canadian investors.
In terms of fees and trade commissions, Questrade offers similar pricing. Since Questrade’s trade commissions are more variable in nature, you will need to closely compare the two platforms to see which is more cost-efficient for your particular situation.
Unlocking active trader pricing from Questrade (by buying an advanced market data package) will likely make most trades more competitively priced at Questrade.
Both platforms offer investors good variety in terms of investment asset classes, with HSBC InvestDirect offering greater flexibility when investing globally.
You can open a Questrade account by clicking here.
HSBC InvestDirect Vs Interactive Brokers
Interactive Brokers is an independent discount brokerage used by a large portion of seasoned traders and investors. Interactive Brokers charges significantly lower trade commissions than HSBC InvestDirect.
Interactive Brokers supports a good variety of investment asset classes but lags behind HSBC InvestDirect when it comes to international options.
The tools and resources offered by Interactive Brokers are likely to be geared to a more seasoned investor audience (relative to those from HSBC).
HSBC InvestDirect Customer Reviews
HSBC InvestDirect has very poor customer reviews, with an average rating of 1.3 stars out of 5 stars on Google. Currently, this rating is an average of 37 reviews, outlining that a good amount of users are having issues with the platform (and with customer service).
HSBC InvestDirect’s reviews mention several issues, including:
- A lack of response or availability when calling customer support
- Outdated platform and website
- Crashing website
- Delays of several months on administrative matters
The poor customer reviews on Google, coupled with the platform’s less-than-competitive fees make it difficult to positively view the discount brokerage.
Since HSBC has a substantial client base across other business segments (banking, credit, etc.), they are probably not too concerned with problems involving their discount brokerage.
Given the above reasons, it is likely a good idea to consider other self-directed discount brokerage alternatives in Canada.
Frequently Asked Questions
Is There an HSBC InvestDirect App?
HSBC InvestDirect does not currently have an independent application for its discount brokerage. You can access your HSBC InvestDirect account through the regular HSBC Banking application.
How do you use InvestDirect?
Once you have opened an appropriate account and funded it, HSBC InvestDirect allows you to trade different investments in order to grow your money. The platform is a discount brokerage, meaning that it offers clients the tools necessary to buy or sell investments.
Our Final Verdict
HSBC InvestDirect comes with relatively high trade commissions and poor customer reviews online.
Despite being competitive among other major bank discount brokerages in Canada, there is still an enormous difference between the fees charged by HSBC InvestDirect and cost-leaders such as Wealthsimple Trade (in this case, lack of trading fees).
While smaller brokerages may not have as much publicity as HSBC, independents like Wealthsimple and Interactive Brokers do not expose investors to additional platform risks.
If you are thinking of placing a lot of trades, switching to a low-cost (or free) discount brokerage can save you hundreds or thousands of dollars.
One positive attribute of HSBC InvestDirect is that it offers investors the ability to trade across a lot of markets internationally if this is something that is valuable to you.
In a lot of cases, Canadian investors may not have access to enough information to make informed investment decisions about international companies.
If you are looking to learn more about other choices in the self-directed discount brokerage space, be sure to read through our comprehensive guide on the best trading platforms in Canada.