"Parking" funds/securities at a discount broker
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Thread: "Parking" funds/securities at a discount broker

  1. #1
    Junior Member
    Join Date
    Apr 2017
    Posts
    5

    "Parking" funds/securities at a discount broker

    My wife and I have recently transferred all our assets/funds from a private client bank to Scotia iTrade. The reason for the move was an enforced new policy at the previous bank of a flat fee structure on total assets which would have cost us about 1/3 of our total investment income.

    So far we are very happy with iTrade. However, we are not "traders" and only see ourselves making investment readjustments perhaps 2-3 times per year at most as we tend to be buy and hold investors. I intend to trade only a small amount of funds (more for fun and learning than an investing strategy).

    My question is if there are any other investors out there who have done the same and are using discount brokerages really as only a place to park your investments rather than trading per se. If that is the case in many circumstances how exactly are these discount brokers making any money out of us?


  2. #2
    Senior Member
    Join Date
    Jun 2009
    Location
    Okanagan Valley
    Posts
    3,661
    I'd suggest the majority of investors are (or should be) buy and hold with a minimum of trades. In accumulation mode, they may be buying once a month. In withdrawal mode, maybe a few times a year. A busy year for me would be 5 trades.

    They do get some revenue from third parties, e.g. GICs... The issuer pays them a trailer fee, but no direct cost to us. Also, if investors have mutual funds with a discount broker, most mutual funds pay a trailer fee directly to the brokerage (which is another indirect cost from us).


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