Last week Canadian Capitalist broke the story that TDW was offering stock trades for $10 with a minimum balance of $100k. This is important news because as far as I know it’s the first time that one of the brokerages owned by a bank has offered semi-competitive pricing for stock trades. Prior to this announcement TD charged $29/trade.
I decided a couple of months ago to go with the independent brokerage Questrade mainly because of their fees – for trades involving less than 495 shares they charge $4.95 which is a fantastic deal. Ironically my second choice was TD, but with their $29 trades they were a distant second choice.
Having signed up with them, I’ve found that Questrade customer service was quite excellent with minimal wait times and very pleasant staff. I like their trading platform and their simulator helped me get acquainted with entering trades since I had never done so before.
Canadian Capitalist had some valid concerns about Questrade which is why he’s switching back to TD but the fact is that none of the things that affect him, concern me in any way.
- Funding in US$ can only be done by cheque and Questrade holds the money for 20 days. I agree that this holding period is ridiculous and apparently there is no other way to move US$ to the account. Having said that I have no reason to move US$ into my account so no big deal for me.
- Wash trades – this occurs when you own a US$ security and you want to sell it and buy another US$ security. Currently with all the brokerages except TD this involves selling the US$ security, the US$ get converted to CDN$ (and you pay a fee) and then you convert the money to US$ again (another fee) and then buy another US$ security. Apparently Questrade is working to resolve this issue but regardless I don’t have any issue with it since all the US$ equities I plan on buying will be ETFs and I will be holding them until retirement at which point I’ll convert them back to CDN$ so this issue doesn’t concern me either.
- E-series index funds. These funds are the lowest cost index funds available in Canada so if you want to contribute to an rrsp, resp or open account with small dollar amounts then the E-series funds are a great way to do it. However, in my case I make all my contributions to a group rrsp at work so I don’t plan on doing this type of contribution anywhere else.
One thing I noticed about my account is that there are three different logins to get into the main account, the webtrader platform and your financial history screens. I’m not sure what other brokers do but this seems excessive.
My suggestion for anyone who is looking to switch to a new broker or looking for their first broker is to take their time and research their options to make sure they are getting the best fit for their needs.
Check out the comprehensive guide to Canadian discount brokerages.