E*Trade is trying to inject some badly needed competition into the Canadian discount brokerage industry, where the major players owned by the big banks have a comfortable oligopoly. As described in an earlier post, E*Trade now charges a minimum commission of $19.99, which is the lowest among the big brokerages.
Now, E*Trade is raising the stakes in its bid to lure more self-directed RRSP accounts from the big banks by:
- Eliminating the annual administration fees on self-directed RRSP plans. In contrast, RBC Action Direct (for example) charges $50 if the market value of the plan is less than $25,000.
- Giving $5 for every $1,000 in assets transferred in, up to a maximum of $500.
- Offering to pay transfer fees up to $125 (though I think only accounts of $25,000 or more are eligible).
I think the new E*Trade offer is very attractive and I am definitely considering moving our RRSP accounts. With the elimination of the foreign property rule, I think E*Trade can become an even more attractive option by offering trading in US dollars in RRSP accounts.
Full Disclosure: E*Trade (ET) is one of my top five holdings.
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4 responses so far ↓
1 0xcc // Feb 3, 2006 at 9:46 am
Wow, that is pretty tempting. The one thing I like is the close integration between my TD Canada Trust accounts and my TD Waterhouse accounts but I don’t really make too many movements into my RRSP. The only issue is that I don’t trade a whole lot either.
The $5 per $1000 does make it more tempting though…
2 Canadian Capitalist // Feb 3, 2006 at 10:45 am
0xcc: I don’t trade very much either, maybe 5-10 trades in two RRSP accounts every year (usually adding to my positions). Still that is a $50-$100 saving even without the $5 per $1000 offer. For RRSP accounts, the integration with my bank account is not a big deal. I can wait 3-4 days for the money to be transferred. As you say, it is a tempting offer…
3 0xcc // Feb 3, 2006 at 12:00 pm
It looks like TD is countering at least for active traders. I think this will probably move to all traders in the longer-term.
Here are some details:
http://biz.yahoo.com/cnw/060203/td_new_trade_platform.html?.v=1
4 Bill // Feb 4, 2006 at 7:17 pm
I had a bad experience with Ameritrade when I closed an account. They charged $50 to do so and pulled the money out of the account prior to transfer. Know if Etrade does this?
Thanks Bill
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