If you are a DIY investor who holds a brokerage account, the reality is that your portfolio is split between many accounts – his and hers RRSPs, his and hers TFSAs, joint or his and hers CAD and USD investment accounts and if you have kids, perhaps a few more RESP accounts. Typically, discount brokers will charge an annual administration fee if the market value of any of these accounts is below a certain value. TD Waterhouse, for example, charges an administration fee of $100 if the market value of a self-directed RRSP account is less than $25,000. In other words, even if you have a large balance in one of the accounts, you may be dinged (note that you should try and get any admin fees waived whenever possible) with a fee for the smaller accounts.
RBC Direct Investing (read review) deserves a pat in the back for taking the initiative to simplify the account maintenance fee structure. Starting this month, RBC Direct will waive all account administration or maintenance fees as long as clients have a balance of $15,000 across all accounts. If the client’s combined assets across all accounts are less than $15,000, a total fee of $25 per quarter split across all accounts with apply.
RBC Direct is also offering ways for clients to avoid administration fees altogether even if their account balances do not add up to $15,000 such as: signing up for pre-authorized contributions that total $100 per month or making three or more trades across all accounts.
The simplified administration fee structure instituted by RBC Direct Investing will help small investors avoid some annoying fees. One hopes that TD Waterhouse and BMO InvestorLine among others will follow RBC Direct Investing’s lead and simplify their respective fee structures as well.