RBC Direct Investing (formerly Action Direct) experience

[Bylo Selhi]

What account is this?

It's not. It's a 1-year GIC that's partly or fully cashable after 30 days.

[boib22]

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 .

Should have asked for a loan.

[northbeach]

Further into my investigation on Manulife Bank's and Altamira's high interest savings accounts under the symbols MIP510 and AIS 100, I found out the following from RBC when I phoned them today. They can sell both.

Apparently from their side MIP510 acts differently from AIS 100, and the only concern would be how liquid the product was. To check liquidity of MIP510 the agent at RBC will inquire tommorrow when his trading desk is open and get back to me. There is no fee to buy or sell the MIP510. There is no minimum holding fee.

As for Altamira High Interest Cash Performer AIS 100 this shows up to them as a mutual fund. There is no fee to buy or sell the product. There is no minimum holding fee.

He was not sure if there were any separate charges by Altamira or Manulife however.

I believe other posters on Webring have stated than neither Altamira or Manulife have any other charges any longer.

[AltaRed]

I have received an email from RBC AD that they will accept MIP510 as well and recognize that FundServ code in their system.

However, they also told me as a result of my query that they will not accept or hold F class mutual funds.

[Bylo Selhi]

However, they also told me as a result of my query that they will not accept or hold F class mutual funds.

Is it worth making a "class action" submission to the OSC (and the other provincial SCs) against those discount brokers, who are not allowed to offer advice, but who nevertheless force investors to pay for it via trailer fees, because they won't allow those investors to buy F-class shares?

[AltaRed]

However, they also told me as a result of my query that they will not accept or hold F class mutual funds.

Is it worth making a "class action" submission to the OSC (and the other provincial SCs) against those discount brokers, who are not allowed to offer advice, but who nevertheless force investors to pay for it via trailer fees, because they won't allow those investors to buy F-class shares?

I would say yes, and would likely participate in that action, but it would be a significant effort by someone with intimate knowledge of workings of the industry. I don't know the basis on which such an action would succeed. Anti-competitiveness?

[IdOp]

As much as I'd like to hold F-series, I'm not sure why a broker should be forced by law to sell a product they don't make any money on. What if someone opened an account with them and purchased only such things? The cost would have to be bourne by everyone else.

Also, IIRC you can buy F-series (e.g., Franklin-Templeton) at TD-Waterhouse, they just charge you an explicit up-front commission to buy it.

TANSTAAFL

[Bylo Selhi]

it would be a significant effort by someone with intimate knowledge of workings of the industry.

That's not me either.

I don't know the basis on which such an action would succeed. Anti-competitiveness?

That's one argument. In that case the federal Industry ministry would be a more appropriate channel.

Another argument is that discount brokers should be required to explain to the regulators their basis for not allowing investors to buy and hold F class units. Since discount brokers aren't allowed to offer advise, what is their justification for collecting payments in respect of advice?

I do understand that with F class they get no remuneration from the fundco, but that's no different with stocks. Discount brokers have managed to make business cases for charging a transaction fee (a brokerage fee of ~$25) on stocks so why not the same with F class funds?

[AltaRed]

I do understand that with F class they get no remuneration from the fundco, but that's no different with stocks. Discount brokers have managed to make business cases for charging a transaction fee (a brokerage fee of ~$25) on stocks so why not the same with F class funds?

Think that is what the tradeoff would have to be to make it palatable to the brokerages and financial advisory industry as well. Would be no basis to protest. Those that buy lump sum should be happy to pay a brokerage fee (same as stocks) for F class. Those that DCA could still buy A or B class, etc. without a fee.

I suspect the first try should be with the regulators... also making the argument that there will be continued leakage to ETFs without it... and if no success, then go to Ottawa? Timing may be right given the proliferation of new ETFs this year, and an opportunity for Jimbo and his Industry counterpart to make a statement before the next election about helping the working class.

[northbeach]

AltaRed wrote:

I have received an email from RBC AD that they will accept MIP510 as well and recognize that FundServ code in their system.

In follow up, as per RBC agent I was told one can hold, buy MIP510 but that could not sell MIP510 and buy something else immediately with that money. For whatever reason the transaction would have to settle properly first. This could take 3 days plus or minus.

Therefore probably best to switch to Altamira Cash Performer where one can sell and immediately buy something else.

[AltaRed]

In follow up, as per RBC agent I was told one can hold, buy MIP510 but that could not sell MIP510 and buy something else immediately with that money. For whatever reason the transaction would have to settle properly first. This could take 3 days plus or minus.

Therefore probably best to switch to Altamira Cash Performer where one can sell and immediately buy something else.

Guess they are treating it as a normal mutual fund, ie. T+3. Good to know that going in before an ooooopsy happens.

[Bylo Selhi]

In follow up, as per RBC agent I was told one can hold, buy MIP510 but that could not sell MIP510 and buy something else immediately with that money. For whatever reason the transaction would have to settle properly first. This could take 3 days plus or minus.

Therefore probably best to switch to Altamira Cash Performer where one can sell and immediately buy something else.

Guess they are treating it as a normal mutual fund, ie. T+3. Good to know that going in before an ooooopsy happens.

So where's the problem? If you buy a security you have T+3 to pay. If you immediately sell enough MIP510 to cover it then it too will settle in T+3 (if not T+1) and so the cash will be there on time. What am I missing?

[AltaRed]

So where's the problem? If you buy a security you have T+3 to pay. If you immediately sell enough MIP510 to cover it then it too will settle in T+3 (if not T+1) and so the cash will be there on time. What am I missing?

Shouldn't be a problem. Been there, done that a number of times. Best to know however in the event one got a bit 'cute' in trying to get an extra day or two of interest before selling MIP510.

[Shakespeare]

What am I missing?

You might not be allowed to do it in a registered account without a phone call - I mentioned that some time ago when MIP510 came up.

You aren't allowed to go on margin in an RRSP and if the system doesn't know about the MIP510 sale it won't let you buy.

In a margin account, no problem.

[lystgl]

Two days ago I emailed SMDI asking them what they were doing to counter RBC's 1% (up to $2500 per acc't) offer. To date I've received no response. Has anyone else made an inquiries re: both RBC's offer and any (if any) counters the others may be offering?

[AltaRed]

Spouse and I have initiated the process to transfer accounts to RBC AD. Could not turn down ~$7500 non-taxable. Will advise on any significant glitches as/when they occur.

[Shakespeare]

Could not turn down ~$7500 non-taxable

In a column a while ago Carrick suggested splitting accounts and leaving trading money in one of the low-cost brokerages. That might be an option for some posters.

BTW, my LIRA is still at Scotia after ~2 weeks; I have switched the Scotia MMF to RBF271, leaving some cash to cover the transfer fee.

[AltaRed]

BTW, my LIRA is still at Scotia after ~2 weeks; I have switched the Scotia MMF to RBF271, leaving some cash to cover the transfer fee.

My experience with transfers in the past is 2-6 weeks, so am not holding my breath for a quick transfer, particularly if RBC is overwhelmed with queries and transfers.

I will also have a substantial account at E*Trade where I will do most of my trading @$10 instead of $30.

[lystgl]

I take it a lot of people are making the move? I've a call in to the local RBC bank manager to find out how on-line transfers between accounts (brokerage and bank) work (whether immediate or not) annual charges etc. Scotia does not seem interested in keeping our business. All I got for my trouble was a "canned" email response. You'd think they'd wake up and smell the coffee.

[Shakespeare]

RBC allows on-line transfers from the RBC bank account to the brokerage account (or vice-versa), although it may take a day or two and the values aren't updated immediately as they are with Scotia. Each transfer counts towards the monthly transaction limit for the bank account you have chosen. You can also debit or credit your bank account for any trades.

[gouthro]

I suppose you have to ask to receive. So, I asked and received a letter today regarding the Royal Circle. I mentionned the other day that there didn't seem to be too many things of interest to me in this privilege. But, in reading the letter I noticed something interesting in the footnotes that might also be valuable for those on this forum. That is that they seem to say that they will also cover the cost of swaps/substitutions (maximum of 3 per year), as well as no charge for RSP partial withdrawls.
Joe

[Shakespeare]

they will also cover the cost of swaps/substitutions (maximum of 3 per year), as well as no charge for RSP partial withdrawls

That's nice, and will cover the chequing account fee - I generally plan on two or three substitutions.

[pmj]

Checking out the RBC Direct website - on the Commissions and Fees page, under Mutual Funds, there's a note #2 that says:

Processing fees may be charged on some funds at the time of purchase (1% to 5%). Please verify with a RBC Direct Investing Investment Services Representative.

So I emailed today to ask if there is a list available to which funds this fee may (will?) apply, including the %age that would be charged. The answer was:

....there is no list of mutual funds available to which the fee would apply. You would need to ask about a specific fund and the proposed method of purchasing either in your reply or by ... speaking with an investment services representative.

... Not so helpful. I note that TDW has a full list - but RBC does deal with more fundcos than TDW.

Does anyone have the inside info on this? How about PH&N? - or indeed any of the funds that TDW charges for?

[AltaRed]

So that means anytime one wants to consider investing in a mutual fund with RBC DI, you have to ask about fees first.... 1-5% sounds like a lot of FE load (and BS) to me. Thank goodness there are outfits like E*Trade around to cut through the BS.

[gouthro]

That's nice, and will cover the chequing account fee - I generally plan on two or three substitutions.

Shakespeare, the note at the bottom of the page seems to indicate that they also cover the cheque fee charge.
Joe