# Questrade vs. TD Waterhouse



## MRT (Apr 8, 2013)

I have 35k in a TDW LIRA, and another 25k in TD bank accts and TFSA, with intentions of index investing using ETFs.

Problem: TDW charges $29/trade, with their 50k threshold to have $9.95 trades applying only to TDW accts, which doesn't work for me as I want to keep some cash there in TD bank accts.

With Questrade offering free ETF purchases, 100 free trades, US$ in RSP (avoiding TD's FOREX fees), and to cover the transfer fees from your current broker (TDW's transfer charge would otherwise cost me $135), is there any good reason NOT to leave TDW?


----------



## andrewf (Mar 1, 2010)

Some people don't like the service that Questrade provides. There are some 'horror stories'. I have most of my accounts there and I know some other people who do as well, and I think the service is pretty reasonable.


----------



## Spudd (Oct 11, 2011)

TDW's 50k limit is across all TDW accounts. So you could potentially move your TFSA to TDW to bring it up over the limit, when combined with your LIRA?


----------



## none (Jan 15, 2013)

I don't have any accounts with Questrade but I'm really happy with the customer service at TDW - they're great actually.

Finically though if I had moved all my accounts to questrade instead of tdw i would have myself a free ipad mini and would not have been charged for the buys I did for the recent little TSX dip.

Customer service is important to me though so I'm happy at TDW.

Although I have to say my experiences with TD bank have been abysmal. I've had to go in there about 5 times, needed 15 emails and numerous phone calls and my RESP still hasn't been set up properly. The people in the branch I'm dealing with seem to be completely incompetent.


----------



## MRT (Apr 8, 2013)

thanks for your responses, much appreciated.

andrewf - good to hear some positive experiences. I've read the horror stories, which are hard to ignore, but I also know that we tend to mostly hear the bad stories, as fewer clients go out of their way to publicize good ones. Since I won't trade much, it could be an argument for not being too concerned with TDW's fees, but it is also an argument to not be too worried about some of the things I've read about with Questrade (wait times, for e.g.)

Spudd - that is a good idea (TDW TFSA), as within it I can just park whatever amount of cash I want to keep handy. I've put through an application to open one and we'll see how painless this process proves to be (opening the LIRA with them was...challenging. I'll leave it at that). It is the first time their online ID authentication process has ever worked for me during an application, so maybe that is a good sign 

none - I agree that quality service is important. I will even pay a reasonable premium for it. The questions become how much of a premium, and how much better is the service. I've had issues with both TD and TDW, but nothing that wasn't eventually solved once someone competent became involved. I can't say service is what is keeping me there, but it isn't driving me away either. 

I think I'm going to try the TDW TFSA route, to get over the 50k hump, and deal with the $9.95 fees for the initial buys (assuming this account is drama-free, otherwise I think Questrade is getting a shot). As I won't be adding to the ETFs for a while, I can take more time to consider a move, if warranted. 

This may be a silly question, but relevant to me since the LIRA is all cash right now. If an account is moved to another brokerage, do all holdings simply move with it (providing the other brokerage has access to them too)? Or do you need to sell and re-purchase any types of investments?


----------



## none (Jan 15, 2013)

Assuming they are not bank specific (like an ING direct mutual fund) you can just move the stocks over.


----------



## Four Pillars (Apr 5, 2009)

This article talks about transferring assets between brokerages:

http://www.moneysmartsblog.com/t203...p-account-at-different-financial-institutions

I've used Questrade for years and am very happy with them. 

I recommend Questrade for anyone who doesn't qualify for the cheap trades at the bigger brokerages. If you have enough assets, then it's really a tossup.


----------



## m3s (Apr 3, 2010)

MRT said:


> With Questrade offering free ETF purchases, 100 free trades, *US$ in RSP (avoiding TD's FOREX fees)*, and to cover the transfer fees from your current broker (TDW's transfer charge would otherwise cost me $135), is there any good reason NOT to leave TDW?


The forced USD shenanigans at TDW is the kicker for me. Double the fixed cost of purchasing is one thing (and in the long scheme of things it's relatively minute and fixed at $5 or $10 per) but the % based hidden FOREX fees really annoy me. USD dividends and even CAD stocks paying USD dividends are hit with FOREX fees forever and ever and then again when you just convert back to USD to buy another USD stock... An endless cycle over say 20, 30 years of having all your USD dividends and USD transactions hit with % based FOREX fees senselessly over and over and over. No thanks. You can do the whole wash trade and gambit dance but you can't do anything about the dividends afaik. I've had no issues with Questrade and I really like the improvements they continue to make especially the new platforms. I'm sure some of the horror stories are true but a lot of them are very exaggerated by the type of new investors Questrade attracts


----------



## neoabraxas (Mar 4, 2013)

I'm sorry to say that I did not have a good experience with Questrade. I suppose they are OK if you never intend to withdraw your money! Recently I tried to transfer my TFSA from Questrade to iTrade and Questrade insisted that there was no money in my TFSA account! This was a lie. The account was fully funded (> $25,000) and it took several calls between Questrade, iTrade and some threats to Questrade for them to finally approve the transfer. 

A friend of mine deposited funds with them that never showed in his account. Again it took multiple calls and a threat of a lawsuit before they refunded him the money. The cash never actually reached his Questrade account. 

I would say, be _extremely_ careful with that brokerage.


----------



## Eclectic12 (Oct 20, 2010)

MRT said:


> ... This may be a silly question, but relevant to me since the LIRA is all cash right now. If an account is moved to another brokerage, do all holdings simply move with it (providing the other brokerage has access to them too)? Or do you need to sell and re-purchase any types of investments?


I've moved two LIRAs to TDW so I know that the transfer form gives the choice of:
a) selling for cash
b) transfer as-is 

As none says - a possible wrinkle is if the investment to be transferred is an obscure one that the receiving broker doesn't allow. In these days of many choices, it's pretty rare that this would happen. 

If does happen, then a difference company similar investment would be bought to replace it. As well, I'm pretty sure that the one-of can be sold for cash and the rest can be transferred as-is (i.e. a mix of sell and transfer can be done). 


Also - bear in mind that in addition to combining the TDW accounts for you in order to reach the cheaper trade price, you can also link the accounts for several people living at the same mailing address. 



> Household accounts are defined as those TD Waterhouse Discount Brokerage accounts for clients living in the same household, with the same address. You must advise TD Waterhouse Discount Brokerage of those multiple account relationships.


http://www.tdwaterhouse.ca/products...d-direct-investing/commissions-fees/index.jsp


Cheers


----------



## humble_pie (Jun 7, 2009)

mode3sour said:


> The forced USD shenanigans at TDW is the kicker for me. Double the fixed cost of purchasing is one thing (and in the long scheme of things it's relatively minute and fixed at $5 or $10 per) but the % based hidden FOREX fees really annoy me. USD dividends and even CAD stocks paying USD dividends are hit with FOREX fees forever and ever and then again when you just convert back to USD to buy another USD stock... An endless cycle over say 20, 30 years of having all your USD dividends and USD transactions hit with % based FOREX fees senselessly over and over and over. No thanks. You can do the whole wash trade and gambit dance but you can't do anything about the dividends afaik. I've had no issues with Questrade and I really like the improvements they continue to make especially the new platforms. I'm sure some of the horror stories are true but a lot of them are very exaggerated by the type of new investors Questrade attracts



my, what an outburst.

i really do believe you are exaggerating.

first of all, forex fees on US dividends in registered accounts are not a unique tdw phenomenon. Every single broker that does not offer a true USD rrsp is charging these same forex fees.

with respect to registered accounts at the big green, the only remaining issue subject to forex fees is US dividends. All other issues in reg'd accounts that incur forex fees at other brokers - the vast majority of brokers - have been cured by the tdw "wash" workarounds. In fact, TDW was the leader among canadian brokers leasing ISM from IBM in developing these wash workarounds. Other brokers like cibc have since copied them, but apparently not as efficiently.

turning now to non-registered accounts, waterhouse is exemplary as are other brokers in offering 100% USD cash & margin accounts that process trades, receive dividends, accept & deliver US cash, with no forex fees whatsoever.

there is a hidden FX issue with the 20 or so prominent canadian stocks, such as encana, thomson, magna, potash, agrium, methanex, barrick, goldcorp & others, that pay their dividends in US dollars only.

this scandal is broker-wide. Questrade is guilty along with every other broker in canada. The entire industry charges FX fees on dividends from those 20 canadian companies companies *when* those shares are held in canadian accounts. All types of accounts, including cash accounts, margin accounts & registered accounts.

all brokers (including questrade etc) are silent & secretive about this FX dividend grab on the 20 leading canadian companies. Brokers (including questrade) do not document the FX fee on non-registered statements. Their personnel are not trained to discuss the situation accurately & therefore many representatives will even deny that the FX heist is occurring.

the story has probably been going on since World War II or earlier - whenever the first company began paying its dividends in USD. All of our now-sold major mining companies - noranda, inco, falconbridge, alcan - always paid their dividends strictly in USD.

the only cure for this problem is for canadians who own any of these 20 stocks to hold them strictly in USD account. IE the investor buying barrick or thomson-reuters who wants his dividends "straight" as opposed to slashed with FX fees has to instruct his broker to place that stock in USD account (investor can pay in canadian dollars, or USD, as he wishes.)

a longer-term cure would involve complaining to the IIROC, since the scandalous practice is broker-wide across canada. Brokers *should* show FX details in canadian accounts that - continuing with the same barrick or thomson examples - hold ABX or TRI. It is wrong for brokers to mislead canadian investors imho.

brokers *should* train their personnel to support clients who pick up on these FX fees - if they could see them on statements - & inquire how to stop them. But brokers today are doing nothing, other than to deny the problem.

with respect to canadian stocks paying USD dividends that are held in USD account at major bank brokerages:

1) will there be US non-resident taxes? Answer: absolutely not.

2) will investor receive all of his eligible canadian dividend tax credits? Answer: at the big bank brokerages, absolutely yes. However, at IB he may lose those canadian dividend tax credits.

mode3 in the past i have tried to explain point (2) just above to you, but i recall that my attempt failed. It is my understanding that IB may have trouble or may be unable to generate a T5 that would report correct canadian federal & provincial dividend tax credits when a canadian stock from the famous 20, such as barrick or thomson, is held in USD account. Please note: my understanding is an understanding only & may not be correct; i am not an IB client.

on this point - the ability to generate accurate T5 tax credit information for canadian stocks paying USD dividends held in USD accounts - the big canadian bank brokerages score a 10. Their T5s are perfect.


----------



## mrPPincer (Nov 21, 2011)

There was talk of TDW offering true US dollar registered account capability by the first quarter of 2013 if I recall correctly.
What happened with that? It hasn't happened yet and I've heard nothing.


----------



## m3s (Apr 3, 2010)

humble_pie said:


> mode3 in the past i have tried to explain point (2) just above to you, but i recall that my attempt failed. It is my understanding that IB may have trouble or may be unable to generate a T5 that would report correct canadian federal & provincial dividend tax credits when a canadian stock from the famous 20, such as barrick or thomson, is held in USD account. Please note: my understanding is an understanding only & may not be correct; i am not an IB client.
> 
> on this point - the ability to generate accurate T5 tax credit information for canadian stocks paying USD dividends held in USD accounts - the big canadian bank brokerages score a 10. Their T5s are perfect.


I have both Questrade and IB configured to always "settle as currency of trade" rather than a base currency as the big banks seem to force? I should receive my dividends in their native currency. Questrade does not require a separate USD-RRSP account like some of the big banks do, they have a (unique?) ability to hold both USD and CAD in one RRSP account, or TFSA account. This setting "currency of trade" happened to cause some of the internet horror stories before, but I see they noted now in bold it will auto-convert if you try to buy with insufficient funds... I have some POT divvies coming in TFSA soon so I will be sure to look, but it doesn't really concern me because I don't want USD in TFSA anyways (and I could have bought POT in USD if so). It would bother me to have USD exchanged to CAD when I wanted the USD in the first place, such as in RRSP, paying the spread x2

I have several T5's from IB with dividend tax credits, but I don't have any of the USD-paying-Cdn stocks with IB to investigate. IB is very US-based though, so I can believe it. Maybe I will get one on next year's T5 just for the heck of it. Kind of like my little experiment of withdrawing foreign currencies from both TD Select Service and ING at the same time, and found TD was quietly adding to their coffers. BMO paid out a 5 year GIC to me today with only 1 year's interest instead of 5. I almost missed it myself. A few % here, few % there, no wonder they do so well


----------



## andrewf (Mar 1, 2010)

I quite like that feature--it's one of the things that keeps me from switching from Questrade.


----------



## humble_pie (Jun 7, 2009)

yes, POT dividends in questrade any type of account are an excellent test. Potash pays its divs in USD only. If you are receiving POT divs in CAD in any type of account - no matter if rrsp, tfsa, resp, cash, margin, etc - at any broker in canada, you are alas! paying FX fees on those dividends to that broker.

brokers display FX rates charged on dividends in rrsp statements. They do not display or divulge any information about the FX heist on canadian USD dividends in cash or margin accounts, therefore innocent investors have almost no way of knowing what is going on.

picture it. Canadian investor buys canadian stock potash from canadian broker HQ'd in downtown toronto. Investor pays in canadian dollars. Stk goes into canadian account. Thenceforward, the broker is going to collect 1.50% of each & every dividend as FX fees, without the investor being able to understand or know what is going on.

with respect to tax credits for the dividends of the 20 canadian companies paying dividends in USD, it's not surprising that IB might not be able to calculate these when canadian shares are held on the USD side of an account & the divs are paid in USD. I imagine it's for the same reason they don't offer registered accounts in canada. They are an american firm.

ps clients might "think" that a particular broker does not distinguish between US & canadian holdings in account; but in fact they do distinguish. In your questrade account, you can probably sort your holdings into one purely USD list & one purely CAD list.

this is a difficult area to navigate in. Maybe a bit like setting out from merzouga after a huge sandstorm with nothing more than a garmin. I'm pretty well used to the story by now but am still surprised that so few investors seem to understand or care. Meanwhile *all* of the brokers are scalping 1.50% off most of the dividends of the 20 canadian payors in USD. All of these 20 companies are well-known big cap stocks that are widely held by the public.

one notices that discount brokers have not raised their commissions in many years. However, they have certainly increased their FX fees dramatically. I'm sure the discount nobs at the highest level knew exactly what they were doing. They probably figured that clients would accept hidden & surreptitious FX fees more docilely than they would accept increased commissions.


----------



## m3s (Apr 3, 2010)

If you pay a dreaded annual % MER it is charged only one time per year. If you buy/sell USD in TDW RRSP even 3 times per year, you paid that small % fee 3 times on the same funds. Say over 30 years you pay the MER 30 times, but in TDW you pay that FX spread with every single little buy/sell/divvy transaction over 30 years! I would rather ride a camel to Timbuktu without a Garmin, than submit to this being scalped over and over

For tax efficiency reasons, most of my USD stocks are held in RRSP (no withholding taxes) and so most of my Canadian goes within TFSA/non-reg. I can always re-use USD in my RRSP to buy USD stocks, so I want those USD divvies to stay in USD (rather than converting USD-CAD-USD paying the spread over and over) Questrade accomplishes this simple wish, and if my USD divvies continue to grow for decades and decades it's no small change either. Does TDW do this? Can TDW do this? This is why I stay with Questrade

My recently acquired POT divvies in TFSA may or may not be converted to CAD (TBD) Regardless I will want CAD eventually to buy or withdraw CAD from TFSA. I mean I would just convert the USD divvy to CAD anyways myself. I have no use for the USD in TFSA as USD stocks would pay withholding tax with no chance to claim it back. As far as Questrade vs TDW, I think Questrade will come out on top here again. If Questrade does not pay Cdn-USD divvies in USD, one has the ability to hold it as US instead if they wish. There is no TDW advantage here?

IB has the best currency exchange rates hand down. TD is not innocent in the game of quietly increasing the spreads. I experimented by withdrawing foreign currencies from TD Select Service "preffered rates" vs ING and the free account surprisingly won out. I am paid in CAD so to have USD it must be converted at some point. In Questrade it is a one-time conversion CAD-USD until I withdraw the funds in a warmer country's cheap currency.. Even if I do pay a higher rate than TDW, it's better than paying a slightly lower rate over and over.


----------



## humble_pie (Jun 7, 2009)

(sigh) it's so difficult to discuss things with a camel.

mutual fund or etf MERs have nothing to do with FX fees charged upon dividends. Anyhow mode i am not trying to analyze your accounts or your situation. I am quite sure you are fine, indeed better than fine.

all i'm seeking to do is shine the light upon the millions of $$$ in dividends paid out in USD from the 20 well-known canadian companies that pay their dividends in USD.

i'm hoping to shine the light upon the fact that, when shares of these companies are held in canadian accounts, brokers are helping themselves to 1.50% of every dividend in FX fees.

all brokers, including questrade, are helping themselves to these FX fees.

extra-bright light is to be shone upon the fact that the brokers don't disclose this FX fee on dividends in non-registered accounts. Investor clients are given zero information that could help them figure out what is really going on. Many broker licensed representatives, speaking from ignorance, will deny that the FX fee is even being levied on, say, potash dividends when POT stock is held in canadian accounts.


----------



## humble_pie (Jun 7, 2009)

there are good reasons why serious investors might want to avoid small privately-owned brokers like questrade.

one individual owns questrade. Financial records are not published. We have no idea what the capitalization of that firm could be, or what the owner's banking relationships might be.

in 2008/09 the global financial network tottered on the verge of total collapse. How quickly people have forgotten! please notice that james4beach is presently calling for, if not another total global banking collapse, at least a massive setback for canadian financial institutions. His is a lone voice today in cmf forum, but nevertheless a valuable voice to hear (chapeaux, james.)

in a collapse, there would not be enough money in the it's-a-joke Canadian Investor Protection Fund to bail out the bunch of thinly-capitalized independent brokers that would likely fail. The CIPF is designed to protect clients of an isolated firm here or there that might go under for its own unique mismanagement reasons. In a pandemic global financial collapse, even brokers owned by canadian chartered banks might fail.

IB is an exception among boutique online brokers, since some of its shares are publicly traded. A client could easily check up on the firm's financial health from publicly-filed financial statements on EDGAR.

for this reason alone - better security - i'd never stash my portf at small independent brokers such as questrade, virtual broker or jitney. I'm happy to pay a few extra dollars to get my portf under the umbrella of a chartered bank broker.

there are other negative issues at the deep-discount brokers such as questrade, virtual, jitney etc. They don't offer decent research & apparently they don't offer decent service. When Argonaut was a questrade client, i used to be appalled at the difficulties he had to face whenever he was trying to place option spread orders, for example.


----------



## humble_pie (Jun 7, 2009)

mode if you are going to conduct a test on potash divs, you would need to find out the exact date upon which the FX on the dividends would be calculated.

i don't know which date would be used. It might be as early as the date of declaration of the dividend. This would be long before the X or record dates.

at the other extreme, it might be as late as the payable date. As i say, i just don't know which date is used.

once the date is determined, the test researcher should look up the bank of canada noon rate for that day. After that it's fairly straightforward to calculate by how much the actual Potash dividend paid in canadian dollars did deviate from the B of C noon rate.

EDIT: ps i just realized that if your Potash shares are held in TFSA, then the regulations should require questrade to disclose any FX rate charged on any USD dividend right there on the statement-of-account.

the blind FX fees i am muckraking about are hidden on non-registered account statements. These present no hint or clue that FX fees have been charged on USD divs from the famous 20 canadian companies ...


----------



## andrewf (Mar 1, 2010)

Being publicly traded didn't prevent dozens of US financial institutions from collapsing, for what it's worth.


----------

