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RBC Direct Investing vs. other bank-owned online brokerages

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  • Nov 1st, 2008 1:33 pm
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RBC Direct Investing vs. other bank-owned online brokerages

I'm thinking of opening a SDRRSP account with a bank-owned online brokerage and from some advices I gathered here on the forum (from my personal inquiries), RBC Direct Investing and TD Waterhouse seems to be the better choice. TDW permits wash trades while RBC doesn't though which is neat when investing in US companies.

I bank with RBC and was wondering whether I should open up an account with TDW. I've heard that foreign exchange conversion rates are pretty good through TDW though I seldom do fx conversions anyway.

What kind of features should I be looking into in TDW or RBC DI as I am also considering opening an Interactivebrokers account? Are there really marked differences with the quality of Level 1 and 2 quotes from these two brokers (or for other online brokers)? I want to spend the least amount of add-ons/fees on the IB account. On the bank-owned account, I don't think I will be trading a whole lot if especially if I can trade on the IB account and make transfers in kind to the SDRRSP. Is it at all possible to move portions of holdings from IB to the SDRRSP?

How good are BMO, Scotia and CIBC"s online trading platform? I would consider robustness of the platform being the most important consideration especially during volatile markets and simplicity of interface/trade functions.

Thanks so much guys!!!
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It's very convenient to have your brokerage account with the same company as your other bank accounts. If you're not planning on moving everything to TD, I'd stay with RBC. The differences between RBC DI and TDW are pretty minor. I think TDW is slightly better, but that's coming from someone who works for them and who has never used RBC DI.
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Thalo wrote:
Oct 31st, 2008 11:59 pm
It's very convenient to have your brokerage account with the same company as your other bank accounts. If you're not planning on moving everything to TD, I'd stay with RBC. The differences between RBC DI and TDW are pretty minor. I think TDW is slightly better, but that's coming from someone who works for them and who has never used RBC DI.
Thanks Thalo. The only drawback that AllWheelDrift saw was that with TDW, you could do a wash trade and with RBCDI you couldn't. I guess I just have to hold Canadian equities within my SDRRSP and use the IB account to hold US securities right?

I'll check both sites out over the weekend. Cheers.
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Feb 19, 2008
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bc
I am happy with BMO. I prefer it over RBC which I used previously. Excellent options for depositing and withdrawing money from the investment account. I am not sure about wash trades, but imagine that all platforms will support them soon enough. I will ask and post on Monday if I don't forget.
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squid wrote:
Nov 1st, 2008 2:19 am
I am happy with BMO. I prefer it over RBC which I used previously. Excellent options for depositing and withdrawing money from the investment account. I am not sure about wash trades, but imagine that all platforms will support them soon enough. I will ask and post on Monday if I don't forget.
Thanks for the info Squid. What features does BMO have that RBC doesn't or at least how does BMO do it better? Also, do you bank with both BMO and RBC and what deposit and withdrawal options were you referring to? I guess with commissions, the banks all charge similar fees and have similar trading tiers but I will not be using this as the primary account, I'd like to use this as a complement to an IB account.

Data feed from TDW doesn't come cheap but this one's from their active trader platform:

https://www.tdwaterhouse.ca/activetrade ... cation.jsp

Aren't there free data fees from the bank brokerages?
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squid wrote:
Nov 1st, 2008 2:19 am
I am happy with BMO. I prefer it over RBC which I used previously. Excellent options for depositing and withdrawing money from the investment account. I am not sure about wash trades, but imagine that all platforms will support them soon enough. I will ask and post on Monday if I don't forget.
From what I hear BMO Investorline has by far the best online interface of any of the major bank brokerages. That's a weakness of TDW, an absolutely god-awful interface that has hardly changed at all since I first started using it in 2002. Plus side though is the amount of information they cram in there.
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alanbrenton wrote:
Nov 1st, 2008 12:03 am
Thanks Thalo. The only drawback that AllWheelDrift saw was that with TDW, you could do a wash trade and with RBCDI you couldn't. I guess I just have to hold Canadian equities within my SDRRSP and use the IB account to hold US securities right?

I'll check both sites out over the weekend. Cheers.
Because of taxation, you should be holding US securities in your SDRRSP. US dividends are taxed as income while Canadian dividends get preferential tax treatment. Also, you aren't subject to the 15% IRS withholding tax on US dividends in an SDRRSP.

Hopefully wash trades will be a thing of the past. I dug up an article from early this year about Questrade allowing USD in their RRSP accounts which also said RBC DI is hoping to allow holding of US cash in 2009 and TD is "working on it" too but didn't give a timeline. https://secure.globeadvisor.com/servlet ... RCARRICK10
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AllWheelDrift wrote:
Nov 1st, 2008 1:03 pm
Because of taxation, you should be holding US securities in your SDRRSP. US dividends are taxed as income while Canadian dividends get preferential tax treatment. Also, you aren't subject to the 15% IRS withholding tax on US dividends in an SDRRSP.

Hopefully wash trades will be a thing of the past. I dug up an article from early this year about Questrade allowing USD in their RRSP accounts which also said RBC DI is hoping to allow holding of US cash in 2009 and TD is "working on it" too but didn't give a timeline. https://secure.globeadvisor.com/servlet ... RCARRICK10
Thanks for the additional info AWD. So without the wash trades, I'd like to confirm that Canadians lose out on currency exchange as cash from sale proceeds or other income denominated in other currencies (I guess USD for the bank-owned brokerages) will always be converted to CAD dollar.

AWD, in your opinion, what makes TDW slightly better than RBCDI? And what is the biggest constraint if I went for other brokers when I do all my banking with RBC. My wife has a TD chequing account though but that's all she has. My LOC is with RBC and because I will not be a day-trader for the most part, I guess I will not be subject to margin calls and the associated funding requirements.

Do you have an IB account too? I will have to do some research as to how much it cost (and how long it takes) to move holdings from IB to my SDRRSP and TFSA.

EDIT:

The articles says it all about wash trades.
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alanbrenton wrote:
Nov 1st, 2008 1:12 pm
Thanks for the additional info AWD. So without the wash trades, I'd like to confirm that Canadians lose out on currency exchange as cash from sale proceeds or other income denominated in other currencies (I guess USD for the bank-owned brokerages) will always be converted to CAD dollar.

AWD, in your opinion, what makes TDW slightly better than RBCDI? And what is the biggest constraint if I went for other brokers when I do all my banking with RBC. My wife has a TD chequing account though but that's all she has. My LOC is with RBC and because I will not be a day-trader for the most part, I guess I will not be subject to margin calls and the associated funding requirements.

Do you have an IB account too? I will have to do some research as to how much it cost (and how long it takes) to move holdings from IB to my SDRRSP and TFSA.

EDIT:

The articles says it all about wash trades.
Yes, without wash trades, currently everything gets converted to CAD. Even if you have access to wash trades, I'm not sure if you can "wash" dividends to avoid the conversion. Once the brokerages support USD sub accounts in RRSP accounts USD should remain USD and you should have the option of making purchases from the CAD or USD sub account.

I've never used TDW so my opinion is based on the fact that they allow wash trades and you have access to eFunds.

I do also have an IB account, but I've never tried transfering anything between the two.
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AllWheelDrift wrote:
Nov 1st, 2008 1:30 pm
Yes, without wash trades, currently everything gets converted to CAD. Even if you have access to wash trades, I'm not sure if you can "wash" dividends to avoid the conversion. Once the brokerages support USD sub accounts in RRSP accounts USD should remain USD and you should have the option of making purchases from the CAD or USD sub account.
It seems like I might have to for RBCDI. On the financial webring forum I found this:

I called RBCDI and talked to a rep.

1. Electronic links to external chequing accounts: not available

2. RBCDI as a bill payment option: not available

3. Cheque writing: not availble

5. To deposit funds, you have to mail them a cheque.

6. To withdraw funds, you have to call and order a cheque. $10 charge, Royal Circle members exempted. Cannot be done online.

(Naturally, he mentioned that the most convenient option would be to open an RY account)
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