A few months back, I moved our investment accounts to Questrade to take advantage of their rock-bottom trading commissions. Since then, the bigger discount brokers (TD Waterhouse, BMO InvestorLine and RBC Direct Investing) have reduced commissions to $9.99 for some of their clients. Since we already have our RRSP accounts with TD Waterhouse and qualify for the low commissions, I have decided to consolidate all our accounts with TD Waterhouse.
While I would probably stick with Questrade if we still paid $29 per trade, a $5 difference is not enough to offset some of the problems faced with Questrade and one big advantage of consolidation:
- Parking Cash: If you are like me, often you have a bit of cash sitting around waiting for the right opportunity to buy and while you are waiting, it’s best to park cash in a money market fund or cashable GIC. With Questrade, depending on your cash balance and trading frequency, the amount you give up in interest earnings may negate any savings on the commissions.
- Customer Service: There must be some very satisfied Questrade customers as it was ranked #1 that category in The Globe & Mail ranking of discount brokers. Let’s just say I am not one among them.
- Funding Your Account: If you mail a personal cheque to Questrade, it may take as long as 20 business days for your account to be funded. While, it is true that there is an alternate way for the funds to appear in your account a little faster, it is still slow compared to TD Waterhouse. You can walk into any TD Canada Trust branch with your brokerage account number and deposit a personal cheque and fund your account within 2 business days.
- Benefit of Consolidation: Today, our RRSPs have some Canadian equities and investment accounts have some international index funds and I would like to swap their location because dividends from Canadian equities are taxed favourably. Of course, you can only swap if you consolidate all your accounts with one broker.
