RBC Direct Investing (formerly Action Direct) experience

[Shakespeare]

I made a small trade yesterday in my new AD account. Because the bank account was not yet linked (I had to call and link it), I purchased a small amount of BA.UN on margin (rounding out my BCE spinoff to a board lot and a lower price than the one at which I sold my Aaliant position). Today, when I went to transfer funds in from the now-linked bank account, it would not allow the full transfer because of a hold on a cheque deposited Thursday. The AD site also indicates that the transfer isn't immediate from the bank account (at Scotia it was). It also appears that the bank account is debited on the same day for margin purchases, if you use it.

These are minor annoyances considering the amount of money RBC will pay me for the transfer, but annoyances nevertheless: it appears that buying on margin and transferring funds in from ING first to the RBC account and then to the margin account will incur a few days of margin costs.

Would keeping a small amount in a MMF alleviate this problem?

[yielder]

Would keeping a small amount in a MMF alleviate this problem?

Yep and at a better yield

INGDirect: 3.5%
MACKENZIE SENTINEL CASH MGMT(MFC298): 3.76%

[Shakespeare]

MACKENZIE SENTINEL CASH MGMT(MFC298): 3.76%

Thanks. In a few days when all holds are over I'll try buying it.

INGDirect: 3.5%

But part of the reason for keeping funds at ING is so it is more awkward for me to get my grubby paws on them.

[yielder]

But part of the reason for keeping funds at ING is so it is more awkward for me to get my grubby paws on them.

The old risk vs return argument in a slightly different form.

Have a close look at MFC298's portfolio. While the MER is low, it's not your vanilla MMF. It could break the buck if short rates spiked quickly and they weren't nimble enough.

[Shakespeare]

Yep and at a better yield

Not necessarily.

From AD on MFC298:

Notes: An early redemption fee equal to 1% of selling value (minimum $43) charged if units sold within 120 days of purchase.

Whoopie.

Added: RBF271 may be an option.

[westinvest]

At least you were able to open an account. I submitted three account applications over the course of the last week, noting that an online application would be confirmed within 24 hours. I'm still waiting for any of them to be acknowledged.

Perhaps this offer has overwhelmed them a bit. But for a couple of $K in "free money" I can put up with some inconvenience...

[Shakespeare]

RBF271 may be an option.

A quick read through the prospectus at Sedar suggests that the RBC MMF (RBF271) would, in fact, be suitable for short-term holdings in AD accounts, both registered and non-registered, with no switch or short-term hold fees. Can AD customers confirm this or suggest an alternative?

[DenisD]

Is MIP510 available?

[AltaRed]

Is MIP510 available?

I would think it should be. I am using it in lieu of a MMF for holding cash in my brokerage account. AD may charge for purchases and/or withdrawals though.

[ChrisH77]

At least you were able to open an account. I submitted three account applications over the course of the last week, noting that an online application would be confirmed within 24 hours. I'm still waiting for any of them to be acknowledged.

Perhaps this offer has overwhelmed them a bit. But for a couple of $K in "free money" I can put up with some inconvenience...

I had the same problem when I tried to open my action direct account a couple of weeks ago. Finally I phoned them to ask, and it was created within 24 hours but no notification was sent. It then took 2 more phone calls for them to finally get my AD account added to my normal RBC account so I could start using it....

[parvus]

shakes wrote:

These are minor annoyances considering the amount of money RBC will pay me for the transfer, but annoyances nevertheless:

You mean ~$2500, or is that the wrong promotion?

What I've found is that AD is sometimes slow to show what has been already passed on from my RBC account — the RBC account is immediately reduced, and a week later, the AD account shows no activity, and shows no evidence of working on a T+3 sked. This has happened a couple of times.

As a result, I double-invested in a fund last November, complained, demanded to exercise my rights of rescission, and the best the AD rep could say was, "you might not ever be able to invest in the fund again, as a frequent trader." Or words to that effect.

So I grin and bear it. I'm not unhappy with the investment. But I'm unhappy that AD reps don"t understand T+3 and fear they'll not understand straight-through-processing either. And if the banks and their affiliates don't get it....lord help us.

But, to AD's credit, I haven't been dinged on my occasional switches from long-term funds to MM funds to money in my bank account (this in an open account). IIRC, it takes about a week. I've tried to keep my open money in RBC funds, but this is getting harder as they close some of the O'Shaughnessy funds.

This creates an interesting dilemma, because of the silly prosecution of market-timing. I would like to hold some short-term assets in a mutual fund, but the 120-day trading rule means that I'm stuck with RBC funds. What do I mean by short-term? Basically, emergency money that could likely be replenished in a couple of months, since I still have a work income stream.

It would be nice, for example, to have the opportunity to sell a high-quality fund for a tax loss, and balance that against some past taxable fund distributions — then to reinvest in the fund. As RBC caps their quality funds, I'm stuck with RBC Dividend as my emergency fund.

As for buying stocks, buying from an AD MM fund is a thankfully streamlined experience. No problems there. It's also worked with stocks bought on debits from my bank account, so I have to wonder whether it's AD's mutual fund interface that is at fault.

[Shakespeare]

You mean ~$2500, or is that the wrong promotion?

That's the right promotion, but I have three accounts.

I double-invested in a fund last November

I'm now out of mutual funds except for MMFs for modest amounts and PH&N HYB, which I don't intend to add to from AD. My trading now is all in stocks and ETFs, with occasional switches from the non-reg to one of the RRSPs.

[Waskasoo]

RBF271 may be an option. Can AD customers confirm this or suggest an alternative?

I have been using RBF271 in my AD account for years but haven't recently looked for a better alternative.
The AD profile says current yield is 3.35% and that seems to be right.

Other comments on the AD experience.

The one, and only, advantage AD has over Waterhouse is that when entering a buy order one can have the exact purchase cost automatically withdrawn from a MMF. No separate MMF sell order is required.

An annoyance with AD is that the system can't handle fractional units so every mutual fund buy or sell turns into 4 transactions on your statement. (Buy full units. Buy thousandths. Convert thousandths to full...).

The customer service at Waterhouse is much better than AD. Better hours. Better help. I was ready to transfer my AD account to Waterhouse before this promotion but now will likely go the other way.

[Shakespeare]

Thanks for the responses. It appears that the RBC MMF will suffice for my needs.

In retrospect, I should have sold my Scotia MMFs immediately upon submitting the transfer.

[gouthro]

Quote:
RBF271 may be an option.
A quick read through the prospectus at Sedar suggests that the RBC MMF (RBF271) would, in fact, be suitable for short-term holdings in AD accounts, both registered and non-registered, with no switch or short-term hold fees. Can AD customers confirm this or suggest an alternative?

this is the one I use, shakespeare, and the above is my understanding. someone mentionned research reports. There are, from S&P. But, they have just started relatively recently
Joe

[gouthro]

I just made the transfer from BMO to Direct Investing, today. I followed Shakespeare<s advice and went to the bank to do it. It went smoothly, so far. They even threw in free cheques! One worry that I have is that I bought a 30 day GIC in one of my accounts not long ago, and I believe that I read somewhere that not all GIC's were transferrable. But, we'll see. So far, it is a beautiful sunny day and I am very happy with my free money. It pays my trading fees for setting up my accont over the past year.
Joe

[gouthro]

email regarding royal circle:

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·A wide range of investment privileges: Exemption from a variety of everyday account and administration fees. You also have access to preferred margin rates and additional premium interest tiers.

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[northbeach]

DenisD wrote:

Is MIP510 available?

I phoned RBC and was told that MIP510 does not show up on their system. However unless there was some stipulation from Manulife, that MIP510 may be able to be transferred into RBC. The agent was not able to guarantee this however.

The agent informed me that RBC carries Altamira High Interest Cash Performer AIS 100 3.75%
RBC Money Market Fund RBS271 3.35%
RBC Canadian Tbill RBS262 3.23%
All are no charge purchase or sell, no minimum time to hold.

They also offer 1 year cashable GICS.

In my case probably best thing to do is sell my MIP510 (3.85%) prior to transfer and choosing one of the above after transfer.

Don't think transferring MIP510 makes sense even if it can be transferred, because may not be able to buy and sell it easily afterwords?

[Shakespeare]

Altamira High Interest Cash Performer

I thought of that. Altamira used to charge $40 to open an account. Don't know if they still do.

[northbeach]

I was told there was no charge to purchase Altamira Cash Performer. However the person I was speaking to seem proficient, but new to the scene. So hopefully she was not mistaken.

[AltaRed]

I was told there was no charge to purchase Altamira Cash Performer. However the person I was speaking to seem proficient, but new to the scene. So hopefully she was not mistaken.

May wish to check again to be sure. I can understand there not being an RBC charge, but often the personnel have no idea about 'other' charges that flow through from mutual fund companies.

I have made an email inquiry about MIP510 on my own as well. Will see what I get for a reply. I like to have these things in writing, even if it is in email form.

[Bylo Selhi]

Altamira High Interest Cash Performer

I thought of that. Altamira used to charge $40 to open an account. Don't know if they still do.

IIRC Adrian2 confirmed a while back that they don't charge that any longer.

[cardhu]

Cashperformer is subject to early redemption fees.

[Donut]

Being a former employee of a RBC subsidiary I tried hard to deal with Action Direct but alas I found I had to leave them. My experience was that the employees are untrained and have a tendency to BS their way through a situation, pretending they know what they are talking about. I also found their record keeping to be lacking. One day I took my AD statement in to the account mgr at my local bank to show her that I had a $27 million balance at AD and I said "I hope you are suitably impressed". She believed the statement and I would have liked to as there was actually only $270 thousand in the account. That was the day I told her I was moving my banking to another institution.

I have no problems with TDW where I keeping my mad money in their "wait and see" account which is paying me 4% and is available any time.

[biker]

I have no problems with TDW where I keeping my mad money in their "wait and see" account which is paying me 4% and is available any time.

What account is this?