MogoTrade Review 2022: Ethical Self-Directed Investing Simplified

The impact of climate change has made environmental, social, and governance (ESG) investing popular worldwide.

If you’re looking to invest while helping society, ESG investing is the way to go. But knowing where to invest is key to making a fruitful decision.

Mogo is one of the leading eco-friendly fintech companies in Canada that supports ESG investing through its self-directed brokerage called MogoTrade.

MogoTrade operates like other discount brokerages in Canada with the added value of building an eco-friendly environment.

There are a lot of other factors that make MogoTrade unique which this article explores. After reading this MogoTrade review, you should be able to make an informed decision on whether to sign-up with it.

Let’s get started.

About Mogo

For the sake of newbies, it’s essential to start this review by understanding what Mogo entails.

Mogo is a financial technology company founded in 2003 with the mission of helping Canadians achieve financial freedom while fighting climate change.

From its inception to date, Mogo has already planted over 1.8 million trees toward achieving its mission.

Even though the Fintech company is more popular for its free credit score services, Mogo is also famous for its unique financial solutions ranging from:

• Personal lines of credit
• Personal Loans
• Mortgages
• Cryptocurrency
• Automated investing
• Discount brokerage

Besides investing through Mogo, the company can also be traded on TSX and NASDAQ with the self-identified ticker “MOGO”. 

Learn more: Mogo Review

What is MogoTrade?

MogoTrade simply refers to the self-directed discount brokerage of Mogo that was launched recently in 2021.

The online brokerage allows self-directed investors to execute commission-free stock and ETF trading at TSX, TSX-V, NASDAQ, NYSE and BATS exchanges.

You can trade your favourite securities on the platform using a taxable account, TFSA or RRSP.

Besides waiving commission on trades, MogoTrade doesn’t also require monthly fees, quarterly fees, annual fees, or a minimum investment amount.

Compared to its peers, MogoTrade has a lower FX fee of 0.75%. This sums up to make MogoTrade one of the low-cost discount brokerages in Canada.

On top of these benefits is the peace of mind you will get by helping improve society when you invest with MogoTrade. This makes MogoTrade a unique self-directed brokerage in Canada.

How Does MogoTrade Work?

MogoTrade works like other online discount brokerages out there. The only difference is that MogoTrade allows you to invest while actively fighting against climate change.

All you need is to sign-up with the brokerage to start trading through the MogoTrade app available on Google Playstore and App Store. 

With no minimum investment requirement, you can start investing with any amount on MogoTrade.

Interestingly, you don’t have to be worried about commissions, monthly fees, quarterly fees or annual fees when trading on MogoTrade.

And for every trade you execute, you will directly help in fighting climate change, restoring Canadian forests, boosting biodiversity in Canada, preventing extreme natural disasters and creating more jobs in the country.

Finally, your MogoTrade account dashboard contains a live tracker that highlights your current contribution to the fight against climate change through the brokerage.

Is MogoTrade Safe?

Absolutely. The key features that make a brokerage safe are present on MogoTrade. 

Firstly, your personal information is protected on the platform with 256-bit encryption which is currently the strongest and most robust encryption worldwide.

Secondly, the operations of MogoTrade are regulated by the Investment Industry Regulatory Organization of Canada (IIROC).

IIROC supervises the activities of Canadian investment dealers to ensure they continually meet high standards.

That being said, assets on MogoTrade are held by CI Investment Services, which is a member of the Canadian Investor Protection Fund (CIPF). This means that your assets in the brokerage are covered by the CIPF up to $1 million per insured account.

With this, there’s nothing to doubt about the safety of MogoTrade.  

Is MogoTrade Legit?

Short answer, yes. MogoTrade is one of the legitimate online discount brokerages in Canada that are regulated by the reputable IIROC.

With CIPF coverage, MogoTrade has also made itself a reliable discount brokerage in Canada.

Mogo, the owner of MogoTrade, is trusted by over 1.8 million Canadians. Mogo is also one of the reliable free credit score service providers in Canada.

As a whole, there’s no reason to doubt the legitimacy of MogoTrade.

MogoTrade Supported Securities

As of the time of writing, MogoTrade supports stock and ETF trading. These securities are available for trading on the following exchanges:

• TSX
• TSX-V
• NASDAQ
• NYSE
• BATS Exchange

By giving you access to these multiple exchanges, you will gain broader exposure to thousands of stocks and ETFs.

On the downside, MogoTrade has limited securities that make it less suitable for traders looking for a full-fledged brokerage.

Related: 

• Best Stocks to Buy For Beginner Investors 
• Best All-in-One ETFs in Canada 

MogoTrade Accounts

MogoTrade currently allows you to trade through a taxable account, TFSA or RRSP. Investing through a taxable account will subject your transaction and capital gains to taxation. This account only makes sense when you max out your TFSA and RRSP contribution rooms.

As you might already know, there are no taxes on Tax-Free Savings Accounts (TFSA). The only charge on this account is a 1% penalty per month on any amount that exceeds your contribution limit. 

The TFSA contribution limit varies annually and you can claim your unused contribution room. For 2022:

• $6,000 is the maximum TFSA contribution limit
• $81,500 is the maximum TFSA contribution limit if you haven’t contributed since when the program started in 2009

With RRSP, your investment, dividends and capital gains will remain tax-free until withdrawal. This account is ideal if you’re looking to reduce your taxes on retirement. The RRSP contribution limit also changes annually and you can claim unused contribution limits. The 2022 limit is any of the following that’s lower: 

• 18% of your earned income or
• $29,210

Related:

• Best TFSA Rates in Canada 
• Best RRSP Rates in Canada 

MogoTrade Fees

Unlike other online discount brokerages in Canada, MogoTrade doesn’t charge the following fees:

• Monthly, quarterly or monthly fees
• Trading fees/commissions 
• Live-streaming stock price fees

How does MogoTrade make money? By charging a low FX fee of 0.75%. This fee is not even applicable to Canadians who trade in CAD.

With this, it’s safe to say that MogoTrade is a low-cost self-directed trading app in Canada.

Pros and Cons of MogoTrade

So far we have discussed what MogoTrade entails. From the above review, we can identify the following pros and cons of the trading app.

Pros 

• Ethical investing: MogoTrade allows you to invest without compromising your personal values. Every investment you make through the platform contributes directly to improving society.
• Commission-free: Not many brokerages in Canada offer all-round commission-free trading access as MogoTrade.
• Freebies: Most of the things that other brokerages charge fees on are offered for free on MogoTrade. This includes monthly administration fees, trading execution fees and live-streaming stock price fees.
• Low FX fees: MogoTrade FX fees are more than half of the FX fees of many brokerages in Canada.
• No minimum investment required: MogoTrade requires no minimum investment, unlike other brokerages out there. This eliminates the pressure of investing more than your budget.
• Free identity fraud protection: Being a MogoTrade user gives you direct access to free identity fraud protection for up to 90 days. You can make the identity protection unlimitedly free by activating a MogoCard.

Cons

• Limited securities and accounts: If you’re looking to invest beyond stocks and ETFs, MogoTrade is not your option. The brokerage also supports only taxable, TFSA and RRSP accounts at the moment.
• Can’t switch accounts: You can’t move your investment account to MogoTrade at the moment.
• Limited funding method and amount: You can only fund your MogoTrade account through e-Transfer. And the maximum amount you can deposit at a time is $3,000.
• Accessible by invitation: The brokerage is currently accessible by invitation to existing Mogo clients. If you’re looking to execute quick trades, you may want to look elsewhere.

How to Open a MogoTrade Account

Before you can open a MogoTrade account, you must have a Mogo account. If you don’t have a Mogo account, follow the steps below to create one: 

• Go to the application page using this link
• Enter your email address
• Create a password 
• Verify your email address
• Follow the prompts

Once your Mogo account is verified, you can open a MogoTrade account by downloading the app on Google Playstore or App Store.

Note: The MogoTrade account is currently available by invitation. So after applying for the account, you will be on a waiting list until it’s your turn to join.

How MogoTrade Compares

Before MogoTrade, there were already established online discount brokerages that were famous for various reasons. 

These brokerages are also regulated by IIROC and assets with them are insured by the CIPF.

In what follows, we’re going to look at how MogoTrade compares with Wealthsimple Trade, Questrade and Qtrade.

MogoTrade vs Wealthsimple Trade

Wealthsimple Trade is two-year older than MogoTrade, having been launched in 2019. Wealthsimple Trade prides itself as the first Canadian commission-free brokerage. 

Before MogoTrade, Wealthsimple has already provided Canadians access to commission-free stock and ETF trading. 

Like MogoTrade, Wealthsimple Trade doesn’t require minimum investment. Wealthsimple Trade also doesn’t charge monthly fees on its basic plan. The premium plan that charges a $10 monthly fee provides access to a USD account that allows you to trade without worrying about FX fees.

Through the Wealthsimple Trade platform, you can trade fractional shares and cryptocurrencies in addition to stocks and ETFs.

That being said, Wealthsimple Trade has limited securities and trading accounts like MogoTrade. It also lacks advanced trading tools for research and analysis.

MogoTrade vs Questrade

Questrade is more than two-decade older than MogoTrade, having been in existence since 1999. The brokerage is popular for its low-cost brokerage services and comprehensive securities and trading accounts.

Unlike MogoTrade, Questrade provides you access to mutual funds, bonds, IPOs, CFDs, FX, precious metals, foreign equities and GICs. You can also trade using more than taxable, TFSA and RRSP accounts on Questrade.

However, Questrade has a partial commission waiver as it only eliminates commissions on ETF purchases. This is not the case with MogoTrade which allows you to trade stocks and ETFs without any commission. 

While MogoTrade doesn’t require a minimum investment amount, you need a minimum of $1,000 to start trading on Questrade.

Notwithstanding, Questrade is ahead of MogoTrade in terms of robust collections of securities and trading accounts.

Questrade also offers access to advanced tools that make it suitable for investors at different levels. These tools include practice accounts, an automatic rebalancing tool, research tools, charts and free real-time snap quotes.

MogoTrade vs Qtrade

Qtrade Direct Investing is two-decade older than MogoTrade. Qtrade is also among the best online discount brokerages in Canada due to its unique offerings.

This brokerage waives commission completely on 100+ selected ETFs. However, it charges $6.95/$8.75 on trading other ETFs and securities.

Besides stocks and ETFs, you can trade mutual funds, bonds, IPOs, options, secondary/treasury offerings and GICs on Qtrade. 

In addition, Qtrade supports trading through taxable, RSP, RRIF, TFSA, RESP LIRA and LIF accounts. 

What also distinguished Qtrade from its peers include its award-winning customer service and robust trading tools. This makes the brokerage suitable for investors across different levels.

But unlike MogoTrade, Qtrade charges a quarterly administration of $25. This sums up to $100 per year. With $100, you can own dozens of fractional shares or a couple of stocks/ETFs.

Verdict on MogoTrade Review

Self-directed trading is the overall low-cost way of investing. This is because the more you take control of your investment, the less fee you pay for that purpose.

While there’s no shortage of self-directed brokerages in Canada, it can be tricky to narrow your selection amidst the pool of options.

MogoTrade is no doubt one of the best self-directed brokerages in Canada irrespective of its drawbacks.

But to make an informed decision, you must understand how the brokerage compares with its peers as we have just done.

The bottom line of this review is that you can’t go wrong with MogoTrade so long as it suits your investment needs.

If you’re still not sure whether MogoTrade is for you, contact your financial advisor before finalizing. You can also reach out to our expert team at [email protected] for a free bespoke recommendation.