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Minimizing Fees

6K views 15 replies 8 participants last post by  protomok 
#1 · (Edited)
I am starting up a new portfolio and was looking for suggestions on which brokerage to use to minimize my fees, I am planning to buy mainly ETFs using the Canadian Couch Potato method as well as mimicking the ETF portfolios on Wealth Simple and Questrade IQ.

1) Which brokerage do you recommend to minimize or eliminate comission as well as other fees? --I probably won't be trading much since I am taking the couch potato approach

2) Is my strategy of copying the Wealth Simple and Questrade IQ portfoilios a good idea?

Will be investing 100k

thank you
 
#2 ·
Don't get too focused on fees. If you're <0.5% then you're good. People get a bit crazy over saving an additional 0.1 sometimes - which is $10 a year on 10,000.

I used TD waterhouse. It can be a bit annoying but the flexibility of the e-series works for me when I add occasional cash and don't want to pay the $10 trading fee.
 
#3 ·
... I am planning to buy mainly ETFs using the Canadian Couch Potato method as well as mimicking the ETF portfolios on Wealth Simple and Questrade IQ.

1) Which brokerage do you recommend to minimize or eliminate comission as well as other fees? --I probably won't be trading much since I am taking the couch potato approach ...
Without knowing which ETFs and what the starting amount is, it is hard to say.

Some have used the bank version of the TD eSeries MFs to build up their $$$ until they can qualify for the cheaper commissions. Some have figured out which particular discount broker offers the ETFs they are okay with on a "no commission to buy" basis.


... 2) Is my strategy of copying the Wealth Simple and Questrade IQ portfoilios a good idea?
Do either of them tell you enough to "copy" them without being a customer?


Cheers
 
#6 ·
Thanks all, I'll be investing 100k for 3-5 years time horizon, very aggressive as I am in my mid-30s

1) What do you think about WealthSimple's portfolio here vs. building my own version of that with buying ETFs? How do you think the MERs compare? Would it be cheaper if I build it myself - but givven the comission fees would it be cheaper to just go with wealthsimple or wealthbar?
https://help.wealthsimple.com/hc/en-us/articles/214187018-How-has-the-Growth-portfolio-performed-

2) If you;d suggest I build it myself which brokerage do you recommend? Questrade?

Thanks
 
#7 ·
Thanks all, I'll be investing 100k for 3-5 years time horizon, very aggressive as I am in my mid-30s

1) What do you think about WealthSimple's portfolio here vs. building my own version of that with buying ETFs? How do you think the MERs compare? Would it be cheaper if I build it myself - but givven the comission fees would it be cheaper to just go with wealthsimple or wealthbar?
you can certainly build it yourself, but then you will need to figure out a way to balance/rebalance and buy/sell in proportion. you'll also need to consider which accounts
(tfsa/rrsp/non reg) to place each etf in for tax efficiency. as to whether the MER is more, you will need to calculated the weighted average MER for all the funds listed and see if it is cheaper to DIY and by how much.

finally, will you be more willing to make regular contributions if you have a hands-off set up like wealthsimple. much of investing is behavioural, and if you are going to sit on your hands and avoid adding cash in order to avoid tinkering with a spreadsheet, then the increased cost may be worth the ease of transaction.

2) If you;d suggest I build it myself which brokerage do you recommend? Questrade?
questrade is great because of the low fees and no-commision ETF purchasing. a few years ago they were the only no-commission ETF purchase broker, but now there are others.
 
#10 · (Edited)
YMMV ... I've worked with people who sweat the $10 a year then promptly spent by buying 3 Starbucks coffees a working day x $5 each x five days a week x four weeks per month x ten months of the year without a second thought.

The irony was that a coffee maker was available to them for a fraction of the cost.


Cheers
 
#11 ·
I don't get the Starbucks analogy. I'd rather save 10 bucks on fees and spend 10 bucks on mindless consumerism than have a final coal institution take my 10 bucks.

... But the $10 commission can easily be offset if you have an opportunity to invest in a compounding mechanism that has a lower MER.

With $100k, I wouldn't be too caught up in commissions. You can own 10 different equities and pay $100 in purchase fees which will amount to 0.1%.

... So you would be better off investing in something that performs just 0.2% better over three years and pay the fees.

Do not prioritize fees as the top selector. Prioritize the investments and then go where you need to make it happen.
 
#13 · (Edited)
I don't get the Starbucks analogy.
What analogy? :confused2:

This is what my co-workers were *doing*. I watched for three years in disbelief.


... I'd rather save 10 bucks on fees and spend 10 bucks on mindless consumerism than have a final coal institution take my 10 bucks.
Really? You'd rather sweat to save $10 a year then blow $3K a year on coffee?

Never mind that something like $4K of pre-tax income is needed to replace it?


Interesting ... maybe I should be buying Starbucks stock. :biggrin:


... But the $10 commission can easily be offset if you have an opportunity to invest in a compounding mechanism that has a lower MER.
Possibly ... but using the coffee maker would have given them $3K+ a year more to invest ... which I would think is more significant than time spent to save $10 commission.

Or one could make a minimal effort to go half/half.


... I think what you are saying is that fees on productive assets are less relevant than leaking money with a consumerist lifestyle.
I'm saying people should look at the big picture before worrying about what to focus on.

It seems silly IMO to be worried about that minimal savings while missing that far can be accomplished in other areas.



Cheers
 
#12 ·
Btw eclectic12, I would avoid the fee and use the coffee maker too. Your point is taken, in this regard.

I think what you are saying is that fees on productive assets are less relevant than leaking money with a consumerist lifestyle.

In retrospect, I completely agree and apologize for countering your point. I'd edit my post but can't on the mobile device I'm using.
 
#16 ·
I've been using the couch potato strategy for a few years now, here's what I do:

I use TD Waterhouse and Questrade as my brokerages.

I have (automatic) biweekly payments set up from my main bank account to TD Waterhouse. I also have a 'Systematic Investment Plan' (SIP) which automatically purchases my eSeries index funds biweekly. My eSeries funds have an average MER of 0.42.

In my Questrade account I use ETFs (VCE, VFV, etc.) and my average MER is very low - 0.12. I should be shifting funds from TD -> Questrade periodically to reduce my average MER but I typically only do this every few years.

Looking purely at fees Questrade I think is unbeatable. But for what it's worth I can't stand their web interface and am seriously considering consolidating everything at TD Waterhouse!
 
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