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moneysense.ca, 23/07/07
TD Waterhouse Review
Last week, I reviewed RBC Direct Investing to complement Million Dollar Journey’s series of posts covering discount brokers and in this post, I’ll offer my thoughts on TD Waterhouse. We got our first account with TD Waterhouse when the broker purchased the Canadian arm of Ameritrade, which used to offer $10.99 trades for US equities, the lowest commissions at that time. Currently, we have all our self-directed RRSPs with TD Waterhouse for reasons I’ll explain below.
Fees and Commissions
TD Waterhouse charges a commission of $29 (inclusive of all fees) on trades of up to 1000 shares for market and limit orders. Self-directed RRSPs are charged an annual administration fee of $100 if the value of the account is less than $25,000. A quarterly fee of $15 is charged on investment accounts with a market value of less than $5,000, which is waived in some cases. You can refer to the full fee schedule here.
Mutual Funds, GICs and Money Market Funds
TD Waterhouse offers a wide selection of in-house and third-party mutual funds and GICs including the TD e-Series funds, one of the lowest-cost index mutual funds offered in Canada.
Forex Exchange Rates
The exchange rates charged by TD Waterhouse is about 1%.
Trading Features
TD Waterhouse offers a very basic web-based trading platform with real-time quotes for all the major exchanges but does not offer real-time charts. I am not a trader and hardly make 10 transactions in an average year, so this is hardly an issue for me.
Conclusion
We recently moved our registered accounts to TD Waterhouse from RBC Direct Investing to take advantage of “wash trades“. As far as I know, TDW is the only broker that allows you to avoid the currency conversion fees when you sell an US equity and buy another within your RRSP, which would typically end up costing 1% on each conversion and could cost more than the trading commissions.
Reviews of the competition: Questrade, CIBC Investors Edge, Interactive Brokers, BMO InvestorLine, Credential Direct, Qtrade, Questrade, RBC Direct and Scotia Direct.
moneysense.ca, 23/07/07
Can you do online USD cash transfers in and out of your account? This is something that Scotia Mcleod recently added. Before, I had to call them to move my USD cash to/from my Scotia USD chequing account.
Besides the commission, overall I’m quite satisfied with SMDI.
Ahmed
CC, thanks again for the links. Have you done the “wash trade” process a few times? Does it take a bit longer to do a wash trade transaction than a regular transaction?
Just this past weekend, I mailed in the application to open a non-registered Questrade account. I intend to continue to maintain both my registered and non-registered Investorline accounts at BMO. I have a buy & hold philosophy so I don’t expect it to cost me much money to keep them open. For my registered account, I mainly only hold large and mid-cap companies and bonds in it so I’m not quite as pissed off at the high commissions as I usually don’t buy more than 1000 shares in a single transaction.
For my cash account, I generally like to buy large blocks (meaning 3000 to 5000 shares at a time) of small and micro-cap stocks. And it was extremely annoying to pay $100 of commissions on, for example, a $2000 speculative transaction. That’s 5% of the entire value of the investment!!! It’s hard to make any money when you lose 5% right up front! So, all of my future non-registered trading will be taking place in my new Questrade account, since it’s a $9.95 flat fee regardless of how many shares you buy.
The big difference between Questrade and E*Trade is that Questrade’s minimum balance is only $1K as opposed to E*Trade’s $50K minimum in order to qualify for the $9.95 flat fee.
I should mention that one advantage of not being able to do wash trades is that it will force you to trade less, thus lowering your costs.
Ahmed: I am not sure I will be able to transfer USD cash within the SDRSP account. I usually buy USD equity outside and do a transfer in-kind.
MDJ: Our RSP accounts just got transferred to TDW. I am about to do the wash trades, so I’ll let you know how it went.
Phil: Good point. I have actually initiated a transfer of taxable accounts to Questrade. I usually buy 100 shares or less, so I am going to like the $4.95 commissions.
Dave: Yes, it will discourage trading but I want to convert all my US equities into ETFs. Once that’s done, I won’t really care much for the wash trades feature.
Yes, I have heard only good things about TD Waterhouse… I’m with CIBC Investors Edge and they don’t even offer L2 QUOTES!
Argh.
[...] Canadian Capitalist has written a review of TD Waterhouse. [...]
Nabloid -you heard only good things about TD Waterhouse? Where, from who???? TD? I can only compare them to a few brokers I have been with (BMO, Scotia, Interactive Brokers, Ameritrade…) but they are the worst of the small bunch I have tried. Unless, I am missing out on something, TD does not offer L2 Quotes either. Maybe in rheir “active trader” platform, which I have only used for like 10 days last year, for which I refuse to pay 99 bucks a month for. It is not worth it.
That’s just personal experience however, it really depends on what type of investor/trader you are and what it is that you are looking for in a broker.
omg d00d! l2 quotes r teh b0m!
CT: I recently moved our RRSP accounts into TD Waterhouse and I am very happy. I couldn’t care less about L2 quotes (I don’t even know what it means). I am not a trader and I make a handful of transactions every year. I would rate TD’s customer service to be the best among brokers I’m familiar with (RBC, E*Trade and now Questrade).
what is questrade and what are the pros and cons of it?
TD Waterhouse is the worst. I bought some US share in my Canadian dollar account. I was charged 2.3% as a conversion fee. What a scam. Check out Interactive brokers much much much better.
[...] you have a Self-Directed RRSP account with TD Waterhouse (read my review), you will be able to sell a US-listed stock and park the proceeds in TD US Money Market (US$) Fund [...]
[...] sent me an e-mail noting that E*Trade has joined TD Waterhouse and Qtrade in offering some form of “wash trade” capability when buying and selling US [...]
[...] It is surprising that Credential Direct’s wash trading is limited when its competitors like TD Waterhouse, Qtrade and E*Trade do not have restrictions based on the size of the [...]
[...] regular readers know, we have our brokerage accounts with TD Waterhouse. I transferred our accounts over from RBC Direct Investing to take advantage of TD [...]
Screw this idea of washing trades; go to Quest Trade and get a US dollar account to avoid conversion charges.
None of the major banks offer this, I phone every one of them and was told that “They are aware of this problem” and that “They are in the process of upgrading their systems to handle US dollar accounts”.
What has been? 6 or 7 years since the Canadian content rule was scrapped? With 100 basis point spreads, I don’t think it will be “fixed” any time soon.
chris: I did try out Questrade but let’s just say that my experience was underwhelming (I’ve chronicled that elsewhere on the blog). I’m mostly in index funds that pay dividends of the order of 2.5%. A 2% currency fee on conversions is an extra expense of 0.05% on your foreign holdings. I’ll gladly pay that not having to deal with the hassles of dealing with Questrade every time something goes wrong.
Canadian Capitalist: Could you expain how a 2% currency fee works out to a 0.05% extra expense.
I bought and sold about $50,000 of a stock. When adusting for everything (including fluctuations in the currency) I should have made about $3500. But I only made $2500 after the two 100 basis point spreads I had to pay. If I could have left it in the US dollars I would have made the full $3500.
My costs: $50 for two transacion fees
$1000 for currency conversion fees
I’ll take a chance on Questrade if they can reduce my round trip fees from $1050 to $50.
chris: That’s because at TD Waterhouse, you can use the wash trade feature to put the US dollar proceeds of your sell order into their US dollar money market fund. I’ve done this many times in the past: sell a US stock, say BUD and buy another, say VTI. I don’t pay any currency conversion fees.
My 0.05% comes from the 2.5% dividend payments from USD stocks. These are automatically converted to CAD and cannot be “washed”. The 2% currency fee works out to an extra 0.05% expense.
Why don’t you use DRIP to avoid the “extra 0.05% expense?”
TD Waterhouse is having lots of problems, every few weeks is having an issue – it is slow, or irresponsible; their real-time level 2 TD Waterhouse WebBroker Select also shows sometimes incorrect data, different than the data from Webbroker; their IT department is probably not very good in what they are doing; today Dec 31 2008 you can not even login to TD Waterhouse if you want to trade – they say you have to call in order to place a trade; After using it for 4 years, I am NOT RECOMMEND it; Looking for an alternative, any suggestion is Welcome. Thanks
I was thinking of changing from TD to either Qtrade or IB. The main problem I had with TD is they abruptly reduced the margin loan value on my stocks from 70% to 25% even though both stocks were well above 5$. They said something like they had low volume and were volatile even though both had a beta of only around 1.5 and traded more than 2% of the float per day. You can say what you want about bad service and computer glitches but at least Qtrade isn’t arbitrarily droping the margin loan percentage by a huge factor for no particular reason and putting their customers into incredibly difficult margin calls. TD is the worst broker now in my opinion for people that use a margin account. I’m willing to put up with a few computer and service glitches so I won’t be worried about TD pulling the rug out from underneath of you at any moment. For cash or RSP account TD is OK, but I would never invest on margin with them.
TD Waterhouse blah. Their legacy system is so poorly designed, even selling shares you own can turn a long position into a short one.
Case in point: I told TDW’s system to sell 1000 shares and told it to cancel 1 minute later. 2-3 minutes later, I changed my mind and placed another order to sell those 1000 shares. 10 minutes later I find out BOTH orders went through and TDW sold 2000 shares when I only owned 1000 shares. I was told by TDW to “cover” my position as it was now considered a short position (on a long postion account) as their system oversold the number of shares I owned.
Covering the rather unexpected short position lost me money, and is quite frankly outrageous. TDW has no checks in place to see how many shares of anything you own in realtime, leaving the possiblity of selling more shares than you own, because a cancellation request is not honored in a timely manner.
I have never seen this happen with other brokerages. Other brokerages have real-time information on how many shares of a company you own and will allow/disallow subsequent transactions basd on that.
TDW are probably negligent as hell for allowing this to go on. I would suggest TDW is not the safest brokerage firm to go with.
I tried setting up an account with TD Waterhouse at the Edmonton Heritage branch. Totally frustrated, I gave up after about 4 weeks of playing phone tag. Over the course of literally dozens of calls, not once was my call answered live, but I was required to leave a message. I may have an odd schedule with very small windows to conduct personal business, but as a potential customer, I was completely turned off by the lack of customer service.
I am totally dispointed with the service of the TD waterhouse. I called them at least 2 times to ask commission fees, agents told me only 9.95 each if quaterly over 30 times transactions. but last night, I called them again to verify, they told me I must do over 30 transactions within 3 months then they will examine to verify whether I am qualified for discount, then later maybe I can get 9.95 each for the new trade. That means for the first months, I must pay at least 900 dollars commissions then they will check I am good or not .WTF, NO ONE TOLD ME BEFORE.
So I decide now to close or transfer to another broker such as questrade.
BE CAREFUL! READ THEIR POLICY CAREFULLY AND DO NOT TRUST AGENT ORAL WORD!!!
I really like TD Waterhouse, but I need only $50k total assets or 30 trades per quarter to get the good rate at Scotia Itrade. And, the Scotia’s Itrade of $19 per trade is much easier than $29 per trade. So, I prefer Scotia Itrade better.
TD Waterhouse DOWN AGAIN !!!! So Far Most of the afternoon.
Was down last week too, what’s up with that?
Opened a Questrade account and transferring my trading over. $4.95/trade with no minimums. Fully insured, multi-platforms + ForEX.
Time to move with the times – TD WATERHOUSE is a dinosaur
TD Waterhouse trading platform is called Web Broker. It is down very often, sometimes for hours. Sometimes they don’t have quotes! Imagine that, no quotes. Hard to decide to buy or sell. They make all kind of mistakes washing trades, they don’t have backup servers in case their main site goes down, etc… I traded for 2 years now and I had enough. I’m switching all my trading accounts to e-Trade (now rebranded to iTrade by their new owner, Scotiabank).
[...] April 29th, 2005 · Update: You cannot open a discount broker account with Ameritrade Canada, as it has been acquired by TD Waterhouse (Read review here). [...]
TDW is fine. DRIPs just fine. Hooks into QuoteTracker for minutely quotes just fine. It’s great to have it all linked into EasyWeb and everything in a single portal for an overall picture of your networth. Can’t wait until I get $100k in assets in there to try the Level2 stuff and can’t wait to get my future mortgage all rolled into the same portal view, too. I have total control over all my money transfers, TFSA, self directed RRSPs, and day-to-day banking using their TDW/TDEW portal, and it’s great. Have you tried their new Portfolio Manager, wicked.
[...] regularly rates discount brokers is out with its Summer 2009 rankings. The top spot is taken by TD Waterhouse, which edged out Credential Direct in a photo finish. BMO InvestorLine, RBC Direct Investing and [...]
Re: Forex via TD Waterhouse:// Dec27, 2009.
I have read quite a lot on this blog re currency trading on TDWaterhouse… most
of it very conflicting.
Do they trade the Forex market???
I have all my accounts there. I have no problem transferring between my various
accounts, but have not previously seen anything re.. Forex.
They are re-organising their markets and research section… and it is a mess!
Even one of their tech support people had trouble navigating through it!!!
A……………
The worst customer service ever. Cannot even withdraw my own funds. No explanation for the last seven days sent about 10 messages and numerous phone calls.
TDWaterhouse is nothing but huge pain:
WebBroker is a cheap crap outsourced probably in India or Bangladesh – They are not capable to recalculate your margin in a real time. As result you see no sciences in your account balance, but the worst part is that as result of these wrong numbers WebBroker may not allow you to place orders and you have to call TDWaterhause support which takes about 10-15 min – if you do day-per-day trading you know that this just make TRWaterhouse WebBroker useless
If you try to complain be ready to face wall of ignorance and arrogance
I just went to add $1500 CAD to my Waterhouse USD account, and I thought to ask the clerk to check the spread on the currency conversion …. it was a 5.5% spread!!! I said “what?! either youve made a mistake or this is some kind of scam”. They said it was their only rate. I escalated to the customer service manager, insisting that I usually pay a ~3% spread (you dont here me clapping even here!) I was told that they knew of no increase in the spread…and the manager reconfirmed the waterhouse rates. Well, I’d rather burn my money than pay TD a 5.5% spread to convert my money, so I cancelled the transaction
……and then went home, logged in to my waterhouse account, and converted online with a 3% spread!!
*boggle*
So what do you think? Do they just screw up when converting money at the counter? or is this just part of some intentional scam?
We need banking law changes! We should be able to plug-in a currency conversion provider to any financial service, much as we choose a long distance provider!
B.
@Bruce: That’s interesting. I haven’t converted online of late but I did ask for a “Waterhouse Rate” at my local branch and the exchange was done at an approx. 2.5% premium. It wasn’t a huge sum but it’s interesting that I could have done that conversion online and saved about 1%. I’ll test this out and probably write about it because I had simply assumed that the banks have jacked up rates across the board (both online and in the branch) of late.
I have been a customer of TDW for about 15 years, and have about 200,000+ business with them.
I have both a US & CDN margin account with them… plus my RRSP account.
I trade US and CDN stocks in my CDN Margin accounts… for a flat 9.95 per trade.Same in my RRSP Acct.
I don’t use my US margin acct… no advantage…except I think it might save me money with options.
I pay no currency conversion costs,
I’m not sure what wash trades are……………..
A.N.
[...] into Canadian dollars). I’ll illustrate how to execute this trick at TD Waterhouse (read my review here) with TD Bank’s stock as an example but it should also be possible at other discount brokers [...]