# Questrade TSFA and Dripping



## Midas (Jan 11, 2012)

Hi. has anyone used the Questrade TSFA account for their dripping. I read the article from dripprimer ( http://www.dripprimer.ca/tfsadrip ) and I think this sounds like the best way for me to go. But I was hoping for any insight from those who have "gone before". Hate learning from my failures (had too many of them) and would prefer to learn from others.


----------



## slacker (Mar 8, 2010)

This is 3rd hand information, but I have heard that the fee for getting the certs is very high with Questrade.


----------



## Jungle (Feb 17, 2010)

They offer synthetic drip, but no discount is applied to repurchased shares and they will not purchase fractional shares, just whole shares. Left over money from the dividend sits as cash. 

FYI Waterhouse passes along the discount on drip shares, thus why I might move my portfolio to Waterhouse.

On that website you posted, there is a list of all the companys that offer discounts to new shares when you drip. For example, BMO gives you a 2% discount on new shares purchased for DRIP.


----------



## mrPPincer (Nov 21, 2011)

Jungle, I thought that TD Waterhouse offers 2 kinds of drip. If they do, does their synthetic drip pass on the discount as well?


----------



## Jungle (Feb 17, 2010)

Yes and I called them on this, the guy on the phone said on elegible shares. I am still with Questrade (non reg) so I Have not jumped ship yet.


----------



## Cal (Jun 17, 2009)

TDW will honor the discount on all dripped shares.

Midas, you didn't specifically mention what your concerns were in regards to using Qtrade or TDW...

Mr Pincer....as far as I know TDW only offers a synthetic drip, of whole shares.


----------



## Eclectic12 (Oct 20, 2010)

Cal said:


> TDW will honor the discount on all dripped shares.
> 
> [ ... ]
> 
> Mr Pincer....as far as I know TDW only offers a synthetic drip, of whole shares.


Did you have to call for the discount or was it automatically applied?


+1 on the TDW offering only a synthetic DRIP.


@mrPPincer: What did you mean when you said "two kinds of DRIP"?

As far as I've read - financial institutions offer a synthetic DRIP (i.e. whole shares + whatever remains of the dividend) or company DRIP (i.e. whole plus fractional shares only, where all the dividend buys shares).



Cheers


----------



## Cal (Jun 17, 2009)

I am not sure if you 'have' to call, but after the trades settle, I call just to 'remind' them that I am aware of the discount that I would like dripped.


----------



## Eclectic12 (Oct 20, 2010)

Cal said:


> I am not sure if you 'have' to call, but after the trades settle, I call just to 'remind' them that I am aware of the discount that I would like dripped.


Hmmm ... well I've been too busy and haven't done a lot of DRIPs, so I'm not sure either. I plan to request more so I'll probably check it out.


Cheers


----------



## indexxx (Oct 31, 2011)

slacker said:


> This is 3rd hand information, but I have heard that the fee for getting the certs is very high with Questrade.


Yes, it's ridiculous. QT charges $300 for the certificate. It's cheaper to pay the $28.95 for a share with RBC and get the cert from them as they only charge $50.00. Or whatever other brokerage you choose; here is a list of all the brokerages and their fees:

http://www.dripprimer.ca/canadiandiscountbrokers


----------



## Jungle (Feb 17, 2010)

Cal said:


> TDW will honor the discount on all dripped shares.
> 
> Midas, you didn't specifically mention what your concerns were in regards to using Qtrade or TDW...
> 
> Mr Pincer....as far as I know TDW only offers a synthetic drip, of whole shares.


So TDW no longer honoring discount on drip? I wonder when this started.. I just spoke with them a few months ago. 

I hope you spoke to an ill informed rep?


----------



## Patience (Mar 8, 2012)

Jungle said:


> So TDW no longer honoring discount on drip? I wonder when this started.. I just spoke with them a few months ago.
> 
> I hope you spoke to an ill informed rep?


No, he said they are honoring the discount. 

Synthetic means you have to buy whole shares, not a part of a share. Assuming they don't jack your discount, like it appears Questrade does, you will get shares at the discount price, and an amount of cash that is less than the discounted price of a share.

That's how BMO InvestorLine does it anyways.


----------



## Jungle (Feb 17, 2010)

oh ok, silly me. 

Yea I have noticed that Questrade jacks up the purchase price buy on my most recent drip of RY, they actually bought during the low of the day. 

I wonder if the brokers who don't pass the discount on shares just keep the profit for themselves? hmmmmmmm

Cause really they are elegilble for the 2-3% discount in most cases and could just pocket the difference between market value.


----------



## mrPPincer (Nov 21, 2011)

Eclectic12 said:


> +1 on the TDW offering only a synthetic DRIP.
> 
> 
> @mrPPincer: What did you mean when you said "two kinds of DRIP"?
> ...


I guess that's what I meant.
I had the impression from my brief conversation with a TDW rep that either method* might or might not be available depending on the stock or etf.
But I should add that I have not yet had any DRIPs set up.
I am currently in the process of modifying my portfolio from an all td e-funds setup to something more complex.

* edit - I'm thinking now that it could be an internal thing within TDW and that it's irrelevant to us as customers if all we see is a synthetic drip. 
It is good to hear that they pass along the discount even with their synthetic DRIP. That definitely makes it not worth the trouble of purchasing a certificate, at least for me.


----------



## Toronto.gal (Jan 8, 2010)

mrPPincer said:


> It is good to hear that they pass along the discount even with their synthetic DRIP. That definitely makes it not worth the trouble of purchasing a certificate, at least for me.


Synthetic or not, why wouldn't the discount be passed along when it is the company and not the broker who is giving the discount?

The ++ with true DRIPS is that every penny is reinvested, hence partial shares can be purchased + no commission fees for OCP.


----------



## Patience (Mar 8, 2012)

Toronto.gal said:


> Synthetic or not, why wouldn't the discount be passed along when it is the company and not the broker who is giving the discount?
> 
> The ++ with true DRIPS is that every penny is reinvested, hence partial shares can be purchased + no commission fees.


Right or wrong, my understanding is that some brokers offering a synthetic drip don't actually go to the company to get the shares, but instead buy the shares off the market. The market doesn't offer a discount, so they don't offer it to the customer.


----------



## Toronto.gal (Jan 8, 2010)

Got it! 

I had been under the understanding that as long as shares had been purchased with dividends, that the discount applied to the eligible stocks.


----------



## Eclectic12 (Oct 20, 2010)

mrPPincer said:


> I guess that's what I meant.
> I had the impression from my brief conversation with a TDW rep that either method* might or might not be available depending on the stock or etf.
> 
> [ ... ]
> ...


Synthetic DRIPs are not specific to TDW. 

As far as I am aware, the only true DRIPs (i.e. all dividends buy new shares, including fractional shares) are either the company itself or through Canadian ShareOwner.
http://www.investments.shareowner.com/home/v1/index.html


As for two kinds, all plans I've read the details too either offer a true DRIP or synthetic. I'm not aware of any financial institution that offers both types.


So I'm not really sure what the TDW rep and you were talking about. All of my conversations about DRIPs were that it was a synthetic.


Cheers


----------



## mrPPincer (Nov 21, 2011)

Eclectic12 said:


> As for two kinds, all plans I've read the details too either offer a true DRIP or synthetic. I'm not aware of any financial institution that offers both types.
> 
> 
> So I'm not really sure what the TDW rep and you were talking about. All of my conversations about DRIPs were that it was a synthetic.


My apologies for the thread necromancy, but I've just gotten of the phone with TDW and while I was speaking with them I asked for clarification on this.
TDW's synthetic drip program will get the shares that they pass on to us in one of two ways, either through a treasury drip if possible, or if not then TDW will provide a market drip.

With treasury drip the company offers the shares directly to TDW often at a small discount.
When that isn't available, then it's market drip, and TDW purchases the shares for us on the the day of the dividend on the open market at that day's market price.

I hope that clears up any confusion I may have created


----------



## lewin (Jan 10, 2011)

I have used the synthetic DRIP for BCE with questrade in my TFSA and it seems to be working fine. Been going for 5 quarters now.


----------



## Financial Cents (Jul 22, 2010)

I have used DRIPs for years. First of all, as others have mentioned, there are 2 main types. 

1) Full DRIPs with Share Purchase Plans (SPPs) and,
2) Synthetic DRIPs. 

Full DRIPS with SPPs are available through company Transfer Agents. 
Synthetic DRIPs are available through your discount broker. Synthetic DRIPs can be used for stocks but also ETFs. 

Regarding stocks, TDW definitely honours the DRIP discount.

Dividends can be reinvested a couple of ways though: Treasury or Market.

Treasury DRIP: dividends are used to purchase more shares directly from the company's treasury stock. Oftentimes, because the company is issuing the shares, it will offer the shareholder a small discount on the share price; between 2-5%. Examples include ENB (2%), Fortis (2%), and Emera (5%) - believe it or not  

Market DRIP: company uses its cash dividends to purchase shares on the open market. 

http://www.myownadvisor.ca/drips/


----------

