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moneysense.ca, 18/09/06
The Problems with RBC Action Direct
As regular readers know, we use RBC Action Direct almost exclusively as our discount broker and hold self-directed RRSPs and investment accounts with them. It has been evident for sometime that while their fees and commissions are among the highest, they rank among the last in The Globe and Mail’s annual rankings. It is easy to see why:
- Clunky Website: You would think that a discount broker’s website would be easy to navigate and intuitive to use but someone should point that out to RBC. For instance, say you want to get a quote for a stock. You type the ticker and press “Enter” and nothing happens till you realise that you have to click on the “Get Quote” button for the thing to work.
- Little or No Research: The Globe and Mail ranking gives high marks for Action Direct’s research offerings (“A highlight is access to reams of equity research from RBC Dominion Securities Inc. and S&P.”) but I can’t find it anywhere on the website.
- Stale Data: Really, how difficult is it to offer real-time updates to the portfolio? You can set up a free online portfolio that offers updates with a 20-minute lag with any number of portals that have offered such a feature for years. My RRSP portfolio at Action Direct shows that BNS is at $47.26, except that I am not sure what data is being displayed. BNS closed yesterday at $47.34, opened today at $47.40 and closed today at $47.87. So, the portfolio shows some data, just that I am not sure what it is.
- No Performance Reporting: What is my YTD portfolio return? How much did my portfolio make last year? How much did my portfolio earn in dividends? How much was contributed to the RRSP in the first 60 days and in the rest of the year? How did the TSX Composite perform during the same period? Such information is critical for investors to determine how well (or poorly) they are doing. Sadly, you’ll have to track such information yourselves, though Action Direct does offer a weak “Total Account Value” chart that looks flat even if you made 20% over the past year.
- Poor Selection of GICs: An earlier post described the adventure of the cashable GICs from Action Direct.
- “Wash” Trade: In my opinion, TD Waterhouse’s ability to wash your US equity trade in a self-directed RRSP account into a US dollar money market fund is not available from any of the other brokerages.
Since, I can’t think of any positive reasons to stick with Action Direct, I will be shopping for a new discount broker during the upcoming RRSP season. Currently, TD Waterhouse is the front-runner because it offers the ability to do a “wash” trade and its superior GIC offerings. E*Trade is a strong contender for our investment accounts due to its low commissions.
moneysense.ca, 18/09/06
Just FYI your points 3 and 4 apply to TDWaterhouse as well. There isn’t any information on portfolio performance and price of your holdings is also way out of wack. Using your example, BNS is listed at $47.84 this morning. According to Yahoo it closed at $47.87 and according to the “Markets & Research” section of the TDWaterhouse site (which I can get to with one click from almost any other part of their site which is nice) the closing price is also $47.87. So why can’t they get that right in the “Account Holdings” part of the website? Another example is Russel Metals. The Account Holding page reports it as $27.38 but the Markets & Research page reports it as has it at $27.50 as does Yahoo.
I’m seriously considering going to E*Trade. If TDWaterhouse could offer $9.99 trades (even with the same restrictions as E*Trade) I would be willing to overlook the annoyances like not being able to ever rely on my portfolio value as reported on TDWaterhouse’s WebBroker site.
I am thinking of TD Waterhouse because of the “wash” trade feature. If you have lots of US equities in your RRSPs (a good place for dividend paying US stocks), if you buy and sell $10,000 worth of stock, you could save $300 just by saving on commissions. If E*Trade offers the same feature, it would be my first pick too.
You might want to call E*Trade and ask them about currency conversions in registered accounts. I found this on their web site:
“At E*TRADE Canada, you can have your cash/margin accounts denominated either in Canadian currency, U.S. currency, or both currencies.”
I went to http://www.etradecanada.com and near the top on the right of the screen there is a Help Centre link. I clicked on that and it brought up another window with a bunch of topics in it, one of the topics is “Converting funds between currencies” which is where I found the quote I gave above.
Ok, further down on that page there is an answer to the question:
” E*TRADE Canada offers a U.S. dollar trading account and a Canadian dollar trading account for customers who wish to trade (and pay for their trades) in the currency of the market in which they trade, thereby insulating themselves from exposure resulting from fluctuations in Canadian/US dollar foreign exchange rates. This enables you to trade U.S. securities in your U.S. dollar account, and Canadian securities in your Canadian dollar account (except for registered accounts, which are available in Canadian currency only).
“
CC,
I would suggest overlooking the TD Waterhouse (TDW) account. I am with them, but am looking to transfer everything to e-trade. I’d rather save $20 in commisions (each way!), and forgo the “benefits” TDW provides. The interface for TDW is also clunky. One thing I find crazy is that TDW shows you a delayed 20 minute price, but it’s not that they don’t have the most recent. For if you go to their charting options and choose last 24 hours, the chart displays up to the present moment.
Oxcc Re: #1 – In that section they list the closing bid price of the equity in question, not the last trade price.
This thread is interesting b/c I have TDW and I am reasonably happy with it. This is my plan before the end of the year: i)Move USD and CAD cash accounts to etrade (>$50K therefore lowest costs in Canada) and ii)Keep my RRSP funds with TDW and take advantage of the ability to conduct the wash sale and still have benefits of TDW.
With regards to the wash sale at TDW it seems to me that you should have that feature with any discount broker but I don’t have a lot of experience with that.
I don’t actually do self-directed RRSP, but I was surprised that no discount broker offers USD$ based RRSP.
I did a quick search and it looks like BMO is actually being sued regarding the conversion fees. Hopefully something good for consumers comes out of the case.
http://www.investorvoice.ca/regulators/PI/2831.htm
I use BMO Investorline and I find their interface easy to use. Their available choices for fixed income products really sucks. The total of all my RSP and cash accounts at BMO is over $250K so I was able to get those transfer fees waived when I transferred my Scotia McLeod account to BMO. Although, I had to make an agitated phone call in order to get it waived. Their commissions are on par with everybody else, at a $29 minimum.
I have never used my BMO account to trade stateside, since I also have an AMEX brokerage account down in the USA with both my IRA and cash investments. As a result, I have no idea how they work with US trading…
TDwaterhouse just sent out an e-mail stating that effective Oct 30 trades will be 9.99 unlimited shares, requires 500,000 minimum family balance or 30 trades per quarter…..no fees on rrsp’s etc if balance greater than 25,000
In response to Action Direct’s ‘Stale Data’ – that is not the case. The price that they use is the closing BID price of the previous session, and this price may be different from the LAST. As of two weeks ago, Action Direct has implemented intra-day (real time) balances so portfolio values are updated by the second.
I’m curious about your view on Action Direct’s poor selection of GICs. Are you referring to simply the issuer, or the interest rates? If its simply the issuer than I’d hardly find that an issue – any purchase up to $100k is CDIC insured to begin with.
I still stand by my stale data comment. The portfolio shows the closing bid price of the previous day though markets might have already closed for the current day.
The GIC comment has to do with cashable GICs as discussed in some older posts.
I FIND WATERHOUSE REALLY POOR WITH OPTIONS TRADING ,OFTEN THEY DO NOT HAVE THE SYMBOL IN THEIR DATA BANK IF NO ONE HAD ENTERED IT BEFORE YOU AND I HAVE TO PHONE IN TO MAKE THE TRADE
any one have any pro or cons on Questrade
[...] We have held investing and self-directed RRSP accounts with RBC Direct Investing for more than 5 years now but the time has come to move our accounts to another broker. I short listed just two brokerages: E*Trade (low commissions) and TD Waterhouse (wash trades, TD eFunds). [...]
I took advantage of their offer and transferred my accounts but will be switching back to TD asap.
My experience at RBC has been nothing but one big HEADACHE !