Converting to RBC Direct – Problem With Trade Fees

by Mike Holman

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As I’ve outlined in past posts – we are moving our money from Questrade to RBC Direct to take advantage of their 1% rebate offer.  So far the process has gone very smoothly with 1 rather annoying exception.

The money in my wife’s rrsp and spousal rrsp was in mutual funds – in order to do the transfer we sold the mutual funds and moved the money “in cash”.  As a result we have to make some purchases once the money got to RBC.  First problem was that RBC didn’t tell us when they received the money – I was checking periodically and one day noticed that it was there.  Second problem was the amount of trading fees.  RBC default rate is $29 per trade which is a ripoff.  If you have $100,000 (by household) in assets there, then you qualify for the lower rate of $10 per trade.  Still not cheap but that is ok given the 1% rebate we will be getting.

Now my wife’s two accounts have less than $100k in them so we needed to make sure they were including my accounts when setting the fee schedule.  First of all she called on a Thursday to see if they could set the fees to the lower rate.  The guy she talked to said yes, but it wouldn’t take effect until the following Tuesday.  I thought that was pretty ridiculous but whatever – no rush.   The following Tuesday she called again and the fee had still not be set.  The guy then told her to make the trades and then call back and they will manually adjust the fees.  At this point I’m pretty annoyed – how many phone calls do we have to make to get the fees that they advertise?  This is one of the reasons we will be moving back to Questrade eventually – they have $4.95 fees for EVERYONE and you don’t need to jump through hoops (or make multiple phone calls) to get it.

Anyway, we made the trades – my wife called to get the fees adjusted to everything will be fine.  Only problem is that we made the US$ trades on one day and will do the Cdn$ trades on a different day (so we know exactly how much money there is) so we will probably have to phone again.

So far, I’m not impressed.

By the way – we bought VTI at $44.31, VEA at $26.31 and VWO at $23.61.

VTI – this is Vanguard’s “All American” stock index – basically all the publicly traded stocks in the US.

VEA – Another offering from Vanguar – Europe and Asian stocks etf.

VWO – from…you guessed it…Vanguard.  This is their “emerging markets” etf.

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{ 18 comments… read them below or add one }

1 Mr. Cheap

Beyond a couple of annoyances, it sounds like it worked out ok… In the end I didn’t go for this, because the 1% just didn’t seem worth it in case they messed something up and I had to fight with them…

2 Four Pillars

Cheap – this is only part one. I have run into many more issues with them! :)

3 Average Joe

I am just curious but why didn’t you buy the stocks within your Questrade account before you transferred to RBC? You would have paid less commission and you would have got a better exchange rate.

4 Four Pillars

AJ – the money for those ETFs were in my wife’s accounts which were never at Questrade.

5 Sampson

I switched a bunch of my wife’s holdings (previously outside RBC DI, and in their normal investment accounts) earlier and had to make a couple phone calls to ensure the $9.95 commissions were in place.

I was told they make updates to trading fee schedule at month end, so although you might get dinged $30, you’ll get refunded at month end. Annoying, but at least they get it correct.

I’m anxious to see their fee schedule for the TFSA though and how well it will be integrated into the existing platform.

6 Four Pillars

Sampson – I’ve been really disappointed with RBC so far – they charge an arm and a leg – are associated with the #1 bank in Canada and they suck.

I called yesterday about the TFSA – all the normal trading fees will apply as one would expect.

As far as annual account fees – she said it hadn’t been determined yet so they will probably do the same as Scotia? and waive it for the first year and then $50/yr after that unless you have $100k in total.

7 Jordan

I’m buying up similar ETFs for my portfolios.

With the huge amount of volatility with big spikes up and down I’m having pretty good luck at placing limit orders for about 5% less then the avg market price for the past few weeks and then just let it wait to get filled. So far I’ve managed to shave off 5.8% (compared to the current price) on average on my buys within the last 1-2 weeks which seems like a pretty good saving.

Have you thought of tilting your portfolio towards small cap / value to increase returns by adding some of Vanguard’s Small Cap, Small Cap Value or Value ETFs?

8 Four Pillars

Jordan, the 5% discount thing is a great idea – not sure if I have the patience for it but I might try it.

I’ve thought about small cap – especially after reading Richard Ferri’s book on asset allocation but I have to admit – I’m a bit skeptical that small caps will outperform like in the past.

9 Jordan

I’m doing a guest post on Canadian Capitalist soon about my asset allocation ideas, it’s a topic I struggle with as I start investing.

Could you share more about what your allocation is? or why you think there won’t be a risk/reward premium for small cap & value in the future?

This is my first time I’ve bought equities myself so I’m feeling pretty antsy watching the market every day pretty closely, but its also kind of fun.

Over the long term who knows maybe we’re just buying into the beginning of more another drop and the 5% will mean nothing, or the market will take off and recover before I fully invest.

I figure either way is a gamble, either dumping everything in, or trickling it out trying to hit a few low days. At least this method feels like I’m making money :)

10 Four Pillars

Jordan, I have posted extensively in the past about my asset allocation – but given that I keep changing my mind you should wait until my next post on the subject. We just did a “redo” of the allocation so I can probably post on it.

I’m looking forward to your guest post – mine went up tonight!

11 Mr. Cheap

Rather than placing limit orders at 95% of the recent average, wouldn’t you be better to sell puts on the funds (then you either collect the option premium or get a further discount from buying, the 95% price – whatever you got from selling the put)?

The problem I see with this is it’ll work fine in volatile conditions like now, but when markets stabilize your orders might go unfilled…

And you might miss the bottom whereas if you’d bought outright you’d have bragging rights ;-).

12 CanadianInvestor

Re asset allocation, I had recently considerably boosted my Canadian content due to Canada’s more favourable financial position but now that the loose cannons of the NDP and Bloc may get into power I’m having second thoughts.

13 Jordan

@ Mr. Cheap

That’s a good suggestion. I’ve just started buying for the first time and didn’t think of that. After reading up on selling puts I think it is worth trying, I’ve hit a few good bottoms already so a bit of both might be the best option instead of just waiting. I’ve put in the request for my 2 main Questrade accounts to allow trading options.

@ Mike

Was it “All About Asset Allocation” I’d love to hear what you thought of it. I want to get some new books and seeing as we have the same appreciation for Bernstein I’m looking for suggestions & recommendations.

14 Four Pillars

Jordan – yes, it was.

I don’t know if it is worth buying but see if you can find it in a library.

15 Springbok

We have recently taken advantage of the 1% offer. I did one application on-line but after the system froze, had to do the other two from the local RBC branch. The on-line account was established by the deadline, but the ones I did at the bank were not approved until after the weekend.

We did send in the transfer details by fax on the final day. The agent tells me that these were properly date stamped and that there will be no trouble getting the 1% bonus.

But, I have nothing in writing.

Did anyone get anything from RBC confirming that they had qualified for the bonus?

I don’t want to find out in June that someone has misled me.

16 Four Pillars

Springbok – I haven’t received anything. I would assume they would use the dates in their system.

I would try to get something in writing or you might be out of luck.

17 Springbok

Thanks 4P. I have asked for something in writing, but so far no response.

It seems strange to me that RBC would go to some lengths to promote the 1% program, but then when investors take buy in, they don’t say a word. Just a little note to say thanks and confirm the bonus is all it would take.

I will keep pressing for a written confirmation.

18 Dale

I just opened an online TFSA account at RBC and I’m totally frustrated at the misinformation regarding trading fees. I have sent e-mails and called three times to sort out why I was charged 57.90 (2 X 28.95) for one trade which was 2 partial fills and another single fill for 28.95. Initially I was told that because my household assets were over 100 thousand that the trading fees would be the same as my other DI account which is 9.95 per trade. I was told once by phone and once in writing that the charges were a “temporary” thing and would be corrected overnight and that I was charged the “appropriate” amount. Still waiting for resolution.

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