Personal Finance

Ideal brokerage for ETF's & MF's

  • Last Updated:
  • Apr 24th, 2011 1:46 am
Tags:
None
Member
Feb 25, 2009
300 posts
7 upvotes
Mirabel

Ideal brokerage for ETF's & MF's

I need advice on which Big Bank or Online Broker is best suited for my situation.

I have Mutual Fund RSP's, scattered at 3 FI's (4 funds in RRSP @ National Bank, 4 funds in LIRSP @ National Bank, 4 funds @ CIBC, and employer stock @ Solium Capital) all worth about $180K. I want to consolidate into either low-MER Index Funds or Index ETF's. I'm mainly interested in bulk Fund transfers from above FI's initially.

Im not an active trader, will be setting up a couch potato portfolio with a 15 year horizon. I will likely open a spousal RRSP later this year, and inject a lump sum once a year. I might also engage into pre-arranged payments eventually.

My criteria is:
  1. least hassle to join brokerage firm
  2. lowest/waivered fees (including currency conversion fees when buying US ETF's)
  3. simplest online interface
  4. waivered transfer fees which I assume is possible given my assets mentioned earlier.
I intend on moving into ETF's, from mutual fund RRSP accounts listed above. How do I determine the optimal transfer method to use (in-cash or in-kind), to avoid fees, delays, or a tax hit?

What do you guys think about the 2010 Globe and Mail assigning #1 ranking to Qtrade.ca?

Thanks for your advice on the several questions! :o
4 replies
Newbie
Dec 15, 2010
27 posts
2 upvotes
Winnipeg
I recently switched away from Qtrade due to a few issues I was having with them (and also because you cannot hold TD e-Series funds -- see below). Qtrade does earn its top spot for customer service: there is no phone tree to navigate and they are very helpful even when you are transfering out/closing your account.

If you open a TD Waterhouse account, you can hold TD's low-MER e-Series Index Funds along with most other MFs & ETFs. I opened my account at the TDW office in Winnipeg and the whole process took only 1 hour (open non-reg, RRSP and TFSA accounts, and arrange 4 transfers in), but I believe you can simply walk in (best to make an appointment though!) to any TD branch and open a Waterhouse account.

You have more than the $50k required to lower trading fees to $9.99/trade and $25k in your RRSP to waive the $100/year account fees. There are brokerages with lower fees, but I have heard some worrying negative reviews (and/or charge $9.95 to trade mutual funds, trading MOST mutual funds at TDW is free).

I can't say much about TDW's online interface as I only have Qtrade's to compare against. The interface is a little dated (looks very similar to TD's webpage), but is simple enough to figure out. The TDW rep I dealt with offered me a quick tour of their WebBroker interface after we opened my accounts.

It took TDW and Qtrade one week to transfer my investments in-kind, and that's only because one ETF paid a divided (which was DRIP-ed) on the day of the transfer. YMMV, but since you would be moving a large amount, you may be able to have your transfer fee(s) waived. Ask first before opening the account.
Member
Feb 25, 2009
300 posts
7 upvotes
Mirabel
alvanson wrote: If you open a TD Waterhouse account, you can hold TD's low-MER e-Series Index Funds along with most other MFs & ETFs. I opened my account at the TDW office in Winnipeg and the whole process took only 1 hour (open non-reg, RRSP and TFSA accounts, and arrange 4 transfers in), but I believe you can simply walk in (best to make an appointment though!) to any TD branch and open a Waterhouse account.
Thanks. This is likely the scenario I will follow too.
alvanson wrote: trading MOST mutual funds at TDW is free)
Good to know for the funds, which I might use for PPP. But for bulk purchase, I will likely throw ETF's in the mix.
alvanson wrote: since you would be moving a large amount, you may be able to have your transfer fee(s) waived. Ask first before opening the account.
I will surely ask, and it would be great that they cover the fees for two of my account transfers.

I would have liked buying Vanguard ETF's, and I learned that I will be impacted by currency conversion costs, when buying/selling. Can someone explain why that is, especially with our dollar at and over PAR? I’m just wondering if I should buy all iShares or BMO equivalent ETF's, since they’re tracked against CDN currency with no currency cost. I assume that when you purchase a us stock with cdn currency, the brokers first exchange the cdn to us currency and then buy the stock. Let’s say the exchange rate is 1.05, your brokerage might charge you 1.07 for the exchange and so it’s an additional cost on top of the regular rate of (Amount x .02). I suppose that if you buy and sell frequently, then this would become an issue. That is not my plan, other than yearly transfer from e-series fund or lump sum such as ad-hoc bonus income.

When buying US ETFs for a long term portfolio you are presumably also going to be rebalancing it. At 1% to sell and 1% to buy, this is an additional 2%. If you’re rebalancing 10% of your portfolio per year, this is like adding .2% to your MERs. So is it really cheaper to buy US ETFs? I suppose I could simply rebalance when contributing. I have hear that if you have an account with a broker that offers wash trades, you pay for the currency conversion only if you switch between currencies. For example, selling XIC to buy VTI or vice-versa.
Member
Jan 26, 2011
233 posts
14 upvotes
Coquitlam
It seems that TD Waterhouse imposes a redemption fee on some mutual funds. National Bank Direct Brokerage and BMO InvestorLine as well.

Looks like CIBC Investor Edge and Scotia iTradedo not charge that for any funds.

RBC Direct Investing also no charge. But there is fine print saying Processing fees may be charged on some funds at the time of purchase (1% to 5%)....

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)