SLIM PICKINGS: 
The higher the income, the steeper 
the drop: Pre-retirement income 
Per cent of income replaced
Less than $10,000 147%
$10,000 -$19,999 69%
$20,00 -$29,999 62%
$30,000- $39,999 60%
$40,000 -$49,999 59%
$50,000 -69,999 56%
More than $70,000 45%
Source: Statistics Canada.

Investors are doing a lot of talking about discounters on Internet discussion forums and the comments are a study in customer dissatisfaction.

The purpose of checking out the on-line chat about discounters wasn't to trawl for negative comments. Believe me, I have enough of those already.

Instead, I wanted to see if these forums are worth checking out if you're an investor trying to choose a discounter from among the dozen that do business in Canada. After all, at least a few discount brokerage executives monitor these forums to see what their clients are saying.

If you're shopping for a broker, definitely take a few minutes to peruse the discussion forums mentioned here. Just be warned that the participants come across like that kid Mikey in the Life cereal commercial -- they hate everything. There are some complimentary postings out there, but their impact is often lost in the vitriol.

In fact, the best way to use the discussion groups may be to scan for brokers people hate the least.

These discussion groups are also good for a laugh, by the way. There are techno-malcontents out there who refer to Royal Bank's Action Direct as Inaction Direct and call TD Waterhouse's WebBroker on-line trading system WebBroken.

A good place to start comparing customer comments on discount brokers is the Directions site, which has lots of good information on discounters, including commission comparisons and fairly detailed ratings in such areas as speed, cost and resources. (The addresses of all the Web sites mentioned are listed below.)

To find investor comments, click where it says "Canadian discount broker survey," then head to the bottom of the page that comes up and click where it says: "Check out what other investors are saying!"

The best thing about the comments found here is that they start about 1998 and continue right up until the present. This means you can track customer satisfaction during a variety of market conditions, including the stark raving trading insanity of the past four months.

If you want to get the full sense of how attitudes have changed, read the early comments and then skip to the end to get the most up-to-date ones.

"Excellent Web site. Fast execution," the first (undated) posting in the Royal Bank Action Direct section says. "I'm a satisfied customer."

The last posting, dated Feb 17, comes from a client who is clearly suffering from battle fatigue.

"One-hour trade processing; 2.5-hour confirmation; antiquated site layout; 30-minute-plus phone responses; I am shopping around for something reasonable. I cannot trade this way."

Several brokers more or less duplicate the Action Direct experience on the Direction site. People start off reasonably happy and then get progressively more peeved as service levels decline in the face of heavy trading volumes. You'll have to sift through the nuance of the various complaints to decide which brokers are worse than others. Be prepared to see every broker criticized as being slow.

It's a subjective thing, but the worst drubbings on Directions may have been given to CIBC Investor's Edge and TD Waterhouse, Canada's largest discounter.

The Investor's Edge comments are plain nasty for the most part. "Never again!" says one succinct posting.

TD Waterhouse's problems seem to stem from high expectations related to its market dominance as much as slow service.

Charles Schwab Canada is at the other end of the scale. This broker takes its lumps, but it also has a few very favourable comments from people who have tried other discount brokers. "The banks should be embarrassed by what Schwab can do," one investor wrote.

Another place to compare discounters is The Fund Library's popular discussion forum. At any given time, you're likely to find a variety of threads on discounter-related topics.

Sometimes, the mere title of the thread tells a story. Two examples from this past week: "Schwab is falling apart" (so much for the halo around Schwab) and "E*Trade fiasco continues -- any ideas?"

Another way to use the Fund Library forums is to do a search under the name of a broker you want to research. Or just type "discount brokers" into the search engine. I came up with a thread of 35 messages that was generated by the query: "Are all discount brokers that bad?"

This thread is worth reading for its well-rounded look at how discounters are meeting the needs of their clients. Several frustrated investors chipped in with some comments, but so did a few others who have found service to be adequate or better for their purposes.

The Quicken.ca Web site has created a discussion forum on discounters to go along with its recent 2000 On-line Brokerage Report. The Quicken people rate Schwab Canada highest, followed by HSBC InvestDirect and TD Waterhouse.

So far, there hasn't been enough action on the Quicken.ca broker forum to make it worth reading. Wait a while and check back.

The exact opposite is true of the Silicon Investor site. This ever-popular U.S. investing discussion site has attracted a large number of Canadians who endlessly commiserate with each other about how bad their discount brokers are.

Early last year, someone sent a posting to Silicon Investor posing the question, "Where is the I hate TD Green Line thread?"

Two hundred and sixty-five snarky replies later, they're still working on this one. Comments and suggestions are welcomed at rcarrick@globeandmail.ca

WEB SITES
Web sites mentioned in this article:
www.ndir.com/stocks.broker.html
http://www.fundlibrary.com
http://www.quicken.ca
http://www.siliconinvestor.com

Initially, investors panicked, shedding BCE and Teleglobe stock in a frenzy. Shares of both companies plunged, with Teleglobe shares plummeting as much as 31 per cent.

BCE hit a low of $165, before rising steadily to close at $177.65, up $4.40 on the Toronto Stock Exchange. Teleglobe fell as low as $33, before recovering to $41.10, down $6.45 from Tuesday's close.

BCE and Teleglobe were among the most active issues on the TSE.

"There was sheer panic this morning. ... It was ridiculous," said John Wilson, an analyst at Warburg Dillon Read in Toronto. "For our clients, we just said back up the truck and buy as much as you can. And it turned out to be the right call."

Analysts had lingering concerns yesterday about BCE's decision to buy the 77 per cent of Teleglobe it doesn't already own. BCE could have bought Teleglobe a long time ago for considerably less than what it now will pay, said telecom analyst Eamon Hoey.

"The shareholders of BCE should be asking themselves some serious questions here," he said. "Why are they paying so much for a company that could have been bought for significantly less dollars, and for which BCE had lots of opportunity to buy in the past 10 years."

Instead of laying out an over-all strategy, Hoey said, BCE management is "behaving reactively to the events around them rather than to a really definitive strategy."

BCE's decision last month to spin off Nortel is another example of a lack of strategic thinking, he added.

"Why did they get rid of their interest in Nortel?" Hoey asked. "Not because they sat there like great pontificators and thought out this strategy that we're going to sell off Nortel.

"They sold off Nortel in a desperate move to try and get valuation out of the rest of their business. That's not strategy. That's just reacting to the events that are bigger than you are."

"They are paying a very high price for it and I'm skeptical," said Norman Rothery, chief investment strategist at Fund Monitor.com Corp.

"It may be more about (BCE chief executive Jean Monty's) ego than anything else. It may be about BCE wanting to become a world player and maybe it is justified, but I'm skeptical."

Douglas Kirk, an analyst with Nesbitt Burns in Toronto, said it's hard to say "if the deal is positive for BCE and Teleglobe shareholders. If the deal goes ahead, it converts into BCE and I think that can ultimately raise the value of Teleglobe."

He said he had been concerned about dilution in BCE shares as a result of the new shares BCE would be issuing, "but the market seems to have accepted that for the future." He said he still maintains a buy rating on BCE.

Warburg Dillon Read's Wilson said that "over the long term, there is no question in my mind that it's a good deal."

"The problem is that when this thing eventually closes, will BCE's share price likely be in the range they talk about?" Wilson asked. "I'm actually fairly confident that it will be, and, in fact, there is a good chance that it could be higher than that."

Financial analysts and mutual-fund managers remained bullish on BCE, but expressed concerns about chief executive Jean Monty's Internet strategy.

BCE had been under pressure from investors to unlock the value of the company's other holdings by spinning off Nortel, whose shares had quadrupled in value in the last year, fueled by strong demand for communications-network equipment.

BCE, which is keeping a stake of about 2 per cent in Nortel, is giving its shareholders the rest of its 39.2-per-cent stake. This windfall is worth almost $73 billion to shareholders.

The problem was that Nortel's spectacular performance was overshadowing parent BCE. As a result, BCE's stock had been trading significantly below the underlying value of its assets by up to $30 billion.

Yesterday, BCE shares traded as high as $156 before closing at $150 in Toronto, up $7.55. It was the day's most active stock in Toronto, with 9.8 million shares changing hands. Nortel, however, closed down $3.50 at $139.95, with 6.5 million shares traded.

"It is a wonderful thing to be a BCE shareholder right now," said John Wilson, a telecommunications analyst with Warburg Dillon Read in Toronto. He added that "we believe that there are significant upsides still to go."

"We should see an increase in the value of BCE based on the stub value the spin(off) uncovered," said Mary-Ann De Monte-Whelan, an analyst with BLC Securities in Toronto. "So we have a $160 target."

De Monte-Whelan said she expects the spinoff to initially lower BCE's discount to 15 per cent, adding that this could go up or down, depending on how BCE undertakes its restructuring plans to turn itself into more of an operating company.

"The stock price is going to go up," said John Grandy, a telecommunications analyst at Yorkton Securities in Toronto. "The implications are very positive.

"I have a target price of $162, and that's not including any more acquisitions," he added.

"And I'm aware that there are some analysts that have target prices that are even higher than that."

But the three analysts expressed concern about BCE's lack of a strong Internet strategy.

"That's still a bit of a mystery," said Grandy, adding that the strategy currently consists of Bell Canada's Sympatico Net-access business, which gets most of its revenue from subscribers on a monthly basis.

Sympatico has had much-publicized problems with its high-speed service, including complaints about poor customer service. Monty himself has said that Bell will have to scale back on the number of targeted new subscribers as they work to iron out the problems of those already connected to the service.

As well, competition for high-speed Net access has been strong from the cable industry, whose service is comparable with, if not faster than, the high-speed Sympatico service.

"Their whole Internet strategy has to be rethought," said De Monte-Whelan, adding that while BCE has a good base of dial-up customers through its Sympatico service, the company has got to go to the next level - providing content on the Internet to its customers, perhaps through a Net portal.

$8 Billion to Spend

One analyst estimated that BCE has about $4 billion in cash available from its sale of 20 per cent of Bell to SBC Communications Inc. for $5.1 billion. Add to that about $4 billion that BCE could raise by selling its remaining 2-per-cent stake in Nortel, after the spinoff, and BCE's buying power totals about $8 billion, the analyst said.

The BCE chief did say that he will be making a major announcement in the next couple of weeks about the company's strategy, although it was not clear whether this involved an Internet-related acquisition.

Another hurdle BCE faces in the post-Nortel era is fierce competition in the long-distance and local-calling telephone market.

Bell Canada has been hit hard by heavy discounting and loss of market share in long distance, as well as recent deregulation of the local-calling sector, which is drawing new rivals, including, once again, cable companies.

But it is the Sympatico problem that BCE needs to solve quickly, said analyst Wilson of Warburg Dillon Read.

"It would be naive to say that they don't have challenges," he said, adding that the Internet industry is moving at an extremely fast pace, and "BCE has not been great on that front."

Funds Avoided Nortel

As for mutual-fund managers, many of them had bought positions in BCE and avoided Nortel, said Norman Rothery, chief investment strategist at Fund Monitor.com Corp. of Windsor.

"They were essentially making the bet that BCE would in fact spin off its Nortel bit - which it is has done," he said. "If they stuck with their positions throughout the summer and into the winter, they have done very well on that bet."

Ian Ainsworth, vice-president (equities) of Altamira Management Ltd., said the Nortel spinoff "doesn't really change the (fund's) strategy."

"It didn't really change our weight in Nortel - all it does is consolidate it now in one security," Ainsworth added. "We've liked Nortel for some time - it's one of the world's great technology investments."

It's basic investing advice to take advantage of the DRIPs offered by hundreds of Canadian and U.S. companies. These plans allow you to use your quarterly cash dividends to buy more shares of a company without paying brokerage commissions.

A few companies even give you a 5-per-cent discount off the price of their shares when bought through a DRIP. Others have an optional share purchase plan allowing you to invest new money along with your dividends.

Admit it, this DRIP thing sounds kind of good. In fact, you're probably wondering how and where to sign up.

That's where the week of free time comes in. While everybody sings the praises of DRIPs, finding step-by-step instructions on setting them up is surprisingly hard.

So here's a rundown on what you need to know. First, there are two main sources of DRIPs -- from a company itself in conjunction with the trust company that acts as its share transfer agent, and from a full-service or discount broker.

Generally, small investors without large positions in a stock will find the company DRIP most useful, even though it's a pain to get rolling.

The reason is that company DRIPs usually allow you to buy fractional shares. If you reinvest $20 in dividends from a company with a $30 share price, you'd end up with two-thirds of a share.

Most brokers, both full-service and discount, don't want the annoyance of keeping track of fractional shares, so they'll only buy full ones. If your dividend payments aren't sufficient to do this, then no DRIP for you.

If a company DRIP is the way to go then you'll first need to find out which firms offer them. A company's annual report will say if it offers a DRIP. Failing that, the Toronto Stock Exchange publishes an annual list that you can order for $20 plus tax by calling 416-947-4681. Right now, there are 110 companies on the list.

You can also check a few different sites on the World Wide Web, notably those offered by leading transfer agents CIBC Mellon Trust Co. and Montreal Trust. Both carry lists of the DRIPs they administer, including downloadable enrolment forms in many cases. Two other great sources of DRIP information are a wide-ranging investing site called Directions and the Web site operated by Canadian MoneySaver magazine.

The next step is to call your broker and request that the shares (you can start with as few as one) you want in the DRIP be registered in your name and then sent to you. According to the Directions site, discounters will charge $25 to $30 to do this. The cost is in addition to whatever commission you pay to buy your shares.

Once you've got your shares registered in your name you'll need to fill out a company's DRIP enrolment form and send it to the transfer agent. Either the company or the transfer agent can supply the forms.

That's all there is to it, unless you want to make your DRIP a registered retirement savings plan.

In that case, you'll have to set up what's called a single-purpose RRSP that will hold the shares of just one company. The annual trustee fee is $40 at CIBC Mellon.

Broker DRIPs are available at full-service and discount brokers, with the notable exception of E*Trade Canada. Broker plans vary widely, but they share a drawback in that you won't be able to top up your dividend reinvestments with new cash. For that, you'll need to deal directly with the company and its transfer agent.

Here are some questions to ask a broker about the DRIPs it offers:

How many stocks do they offer DRIPs on? The answer to this one varies widely. ScotiaMcLeod and Scotia Discount Brokerage have a list of about 80 Canadian stocks, while RBC Dominion Securities and Action Direct offer any dividend-paying stock on the TSE 300 composite index and the Standard & Poor's 100.

Can fractional shares be purchased? According to the Directions Web site, CT Securities, Charles Schwab Canada and Sun Life Securities offer fractional shares.

Are there any charges? No-cost DRIPs are available at CT Securities, Royal Bank Action Direct, Scotia Discount Brokerage, HSBC InvestDirect and Bank of Montreal InvestorLine, according to Directions.

How is the DRIP administered? At Scotia Discount, for one, a DRIP stock can a segregated holding within a larger investment account. At some other brokers, you'll need a DRIP-only account.

You'll have the easiest time if you have a big portfolio and use a full-service broker. Expedient, no-charge DRIP setups are just the sort of thing that justifies the big commissions that are charged. Comments and suggestions are welcomed at rcarrick@globeandmail.ca

WEB SITES
Related Web Sites:
http://www.cibcmellon.com/drips
www.montrealtrust.com/mt/English/SecurityHolders/DRPLibrary/index.html
www.ndir.com/stocks.drips.html
http://www.canadianmoneysaver.ca/reg_drip.htm

HOW DISCOUNT BROKERS DO DRIPS

Broker                    Cost

BMO InvestorLine*         None
CT Securities             None on most stocks
CIBC Investor's Edge*     $1/dividend
E*Trade                   No DRIPS offered
HSBC InvesDirect*         None
National Bank Invest Net* None
Schwab Canada             Initial $10/stock 
                           + $2.50/dividend
Scotia Discount*          None
Sun Life Securities       Initial $10/stock 
                           + $2.50/dividend
TD Waterhouse*            $1/dividend

-* Whole shares only 
Source: The Directions Web site, 
http://www.ndir.com

But try closing your higher-commission Canadian brokerage account to take advantage of these deals, and you'll be running afoul of provincial securities regulations, known as the blue sky law. Something is definitely wrong here.

The term "blue sky" reflects the law's intent to protect investors from the sale of securities a judge once called as worthless as "lots in the blue sky." First enacted in 1911 by the Kansas legislature, and brought to Canada a year later by the Manitoba government, the law has evolved to require that any securities offered for sale within a state or province, and any brokers doing business with its residents, be registered with local regulators.

The goal is to ensure public disclosure of all relevant information about securities. The rules are also meant to render brokers fully subject to jurisdictional authority, keep known stock swindlers away from investors, and restrict the brokerage business to individuals who have demonstrated satisfactory knowledge of the securities markets, as well as their duties to clients.

The problem is, U.S. online brokers are generally not registered to operate in Canada. Nor are the U.S.-based mutual funds that are available through these brokers. Still, the U.S. Securities and Exchange Commission doesn't prohibit foreigners from opening brokerage accounts. Online brokers execute trades only when adequate funds have already been deposited, so they don't have to worry much about the legal hurdles involved in collecting debts from someone in another country. Thus, according to the detailed listings at Norman Rothery's popular Directions Web site, Canadian clients are welcome at 29 American discount brokers. Accounts are easy to open, and no U.S. address is needed.

An increasing number of Canadians are signing up. Mr. Rothery has noticed a surge of interest among visitors to his site. The Ontario Securities Commission has had to post a warning about the illegality of the cheap Internet brokers on its Web site, and it is exploring whether U.S. state regulations bar foreign accounts. Canadian discounters are definitely worried about losing customers. They are lobbying securities regulators to relax the "know-your-client" (KYC) rule, which requires all trades to be monitored for their suitability with customers' circumstances and objectives, in order to better meet the American competition.

Those taking their money southward are not in sore need of legal protection. No one is being solicited to buy anything; most want to buy stocks they have researched on their own. Aside from being drawn by lower commissions -- $5 to $15 in the U.S., as opposed to $24 to $30 in Canada for the same Nasdaq and NYSE-listed issues (all figures U.S. dollars) -- investors prefer the faster trade executions made possible by the absence of the KYC rule in the U.S. For active traders, slow executions are costly because they exacerbate slippage, the difference between the price at which one plans a trade and the price one actually receives.

Long-term investors such as Bylo Selhi (a pseudonym) are attracted by U.S. registered mutual funds for the low management expense fees, which average 1.25% compared with 2.15% in Canada -- a small difference that adds up over time. Mr. Selhi particularly likes the large number of index funds offered by Vanguard, because these provide greater opportunities for diversification and track the indexes better than equivalent Canadian funds.

Consider, too, that U.S. discounters are members of the Securities Investor Protection Corp., which insures all customer accounts up to $500,000, and that like U.S. mutual funds, they operate within the most rigorous securities laws in the world. The only thing Canadians give up is the protection offered by the KYC rule, which hasn't done much to make brokers accountable for touting a risky mining play like Bre-X to the Canadian investing public.

The real beneficiaries of the blue sky laws are the regulators, who rely on them to preserve their power and garner registration fees, and even more, the Canadian brokers, who are shielded from competition. American firms shy away from registering in Canada, not just because of the costs involved, but because of the need to have staff take all the exams necessary to operate here.

Instead, why not institute a system in which North American regulators recognize a registration filed in any one jurisdiction? At a minimum, American discounters should be granted a registration exemption. And relax the KYC rule for Canadian discounters to give them an even playing field.

Then, watch as aggressive American players corrode the gentleman's code that keeps fees high in the Canadian securities industry. Expect lower transaction costs to increase the liquidity of domestic equity markets and make active traders excited about fast-moving growth stocks, enabling promising companies to raise capital more easily in Canada. Investors will also acquire additional incentives to educate themselves about the financial markets -- the best defence against fraud.

With the Internet already narrowing the information advantage traditionally held by brokers over investors, and rendering geographic boundaries meaningless, these changes will help keep securities laws in line with the times.

George Bragues is an economics and philosophy instructor at Toronto's Humber College.

The spreads between Canadian and U.S. on-line trading commissions are so big in many cases that they look good even after factoring in the onerous exchange rate.

Minimum Canadian on-line commissions are commonly in the $27 to $29 range. In the United States, it's not hard to find $9.99 (U.S.) trades, which translates into roughly $15 (Canadian). This differential is huge if you're even a sporadically active investor, and it's all the more attractive when you factor in the faster order execution at U.S. brokers.

There's nothing to stop Canadians from opening U.S. brokerage accounts save the unwillingness of these brokers to accept the business.

But that doesn't mean the process is entirely above board. Technically, a broker is not supposed to accept clients in a province unless it's registered to do business there. A quick glance at the Ontario Securities Commission's list of registered dealers didn't turn up any of the cheap U.S. Internet brokers.

The OSC is just now getting around to the question of how to enforce this rule. As a first step, commission staff are researching which U.S. states have regulations preventing brokerages registered there from trading securities on behalf of foreign clients.

If Canadian provincial regulators could persuade U.S. state regulators to get tough on this matter, it might be much harder in the future to find a stateside broker who will accept your business. For now, though, there are plenty of U.S. options for Canadians.

An ideal place to start the search for a U.S. broker is the Directions site on the World Wide Web. It contains a listing of 68 U.S. discount brokers and notes which firms will deal with Canadians. Toll-free phone numbers and links to the Web sites of the listed brokers are also included.

Norman Rothery, who runs the Directions site, said some of the brokers who won't deal with Canadians indicated it was because they were not licenced to do business in this country.

It seems that prohibitions on dealing with Canadians aren't sacrosanct, however. Some of the brokers who are down in the Directions list as not accepting such business said they would do so when contacted late this week.

To open an account with a U.S. firm, you'll need to fill out a W-8 Internal Revenue Service form, which is a certificate of foreign status. Some U.S. firms said it's also necessary to complete a 1001 form, which pertains to withholding tax on income-producing investments. Copies of both forms can be downloaded on Suretrade Inc.'s Web site, providing you have Adobe Acrobat software.

The biggest challenge in opening a U.S. account has to be picking a broker. A good place to start is the March 15 issue of Barron's, which contains the financial weekly's annual ranking of on-line brokers.

If you're looking to a U.S. broker primarily to save money, be aware that Barron's ranking of 21 brokers emphasizes trade execution, reliability and range of services more than low commissions.

That explains why three of the four top-ranked brokers, DLJdirect, Discover Brokerage Direct and National Discount Brokers, all have minimum commissions no lower than $19.75 (U.S.). The fourth, Web Street Securities has an interesting proposition -- a $14.95 base commission and free on-line Nasdaq trades of 1,000 or more shares priced over $2.

The best combination of low prices and solid reliability on the Barron's list is Datek Online, which has a minimum $9.99 commission.

Definitely don't pick a U.S. broker without visiting a Web site called Online Investing Services. Twice a month, this site reviews 80 different companies according to cost and overall service. It also has a summary of rankings by business magazines, including Barron's, as well as links to the on-line broker bulletin boards of The Motley Fool and Silicon Investor.

The ratings on Online Investment Services are divided into three categories -- deep, mid- and high-cost discounters. The top five stocks among deep discounters go to Brown & Co., Datek, Trading Direct, Muriel Siebert and ForbesNet.

Online Investment Services also has a special section evaluating brokers for their service to day traders, and it looks at the best brokers for novice and more experienced investors as well.

The OSC points out that in using a U.S. broker a Canadian investor is giving up certain protections. U.S. firms aren't members of the Canadian Investor Protection Fund, which covers client money lost in the collapse of a broker. As well, there's no enforcement of the know-your-client rule, which requires trades to be checked against a client's investing objectives.

Of course, the absence of the so-called KYC rule is one of the reasons why U.S. brokers can deliver faster, cheaper service.

RATING THE ON-LINE BROKERS

Barron's tested 21 brokers through their "Net connections." They ranked them in the following categories: Trade execution, ease of use, reliability range, amenities, commissions, weighted total and stars, but gave extra weight to trade execution, reliability and range of services.

DLJDirect ****
Discover ****
National Discount Brokers ****
Web Street Securities ****
Datek ***=
E'Trade ***=
A.B. Watley "Ultimate" ***=
SureTrade ***=
Charles Schwab ***
Muriel Siebert ***
Waterhouse Securities ***
Quick & Reilly ***
Wall Street Electronica ***
Brown & Co ***
Fidelity ***
AB Watley "Trader" **=
Jack White **
Wall Street Access **
Mr. Stock **
Accutrade **
Net Investor **
Ameritrade **
Source: Barron's

WEB SITES

Here are the addresses of the Web sites mentioned in this column:
http://www.ndir.com (Directions)
http://www.suretrade.com
http://www.sonic.net/donaldj (Online Investment)

Comments and suggestions are welcomed at rcarrick@globeandmail.ca

• Know-your-client regulations in Canada that require each Internet trade to be vetted by an investment professional for its consistency with the client's stated investing objectives. U.S. discount brokers don't have to worry about this.
• The great economies of scale available in the U.S. market, because of its larger population and the higher percentage of homes with Internet-capable computers.
• Differing levels of service. Canadians can generally speak to a live human if they have problems while trading on-line, while some cheap U.S. services don't offer this option.
• The willingness of some U.S. players to forsake profitability so they can build market share with low prices.