RBC Direct Investing (formerly Action Direct) experience

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Postby Jo Anne » 15 Aug 2007 20:14

I got a phone call last week from "Elton" at ScotiaMcLeod Direct Investing. He was wondering why we moved our money to RBCDI, and if there was anything that could be done to entice us to return to SMDI. Of course! I HATE RBCDI!

What we are ending up with is:

1) SMDI will absorb the transfer fees
2) 40 free trades over the first 3 months (like I'll use these...)
3) A one-year subscription to some investing newsletter

I always said I'd move back. I'm glad I waited so I'd at least get the transfer fees covered.
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Postby Shakespeare » 15 Aug 2007 20:33

I got a phone call last week from "Elton" at ScotiaMcLeod Direct Investing
Mine was yesterday. Not sure if it was Elton; he left a message and I didn't call back.

Can't be bothered to reswitch at this point.
“Never appeal to a man's better nature. He may not have one. Invoking his self-interest gives you more leverage.” -- R.A. Heinlein, Time Enough for Love.
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Postby Jo Anne » 15 Aug 2007 20:42

Shakespeare wrote:
I got a phone call last week from "Elton" at ScotiaMcLeod Direct Investing
Mine was yesterday. Not sure if it was Elton; he left a message and I didn't call back.

Can't be bothered to reswitch at this point.


The closest RBC branch is in Belleville, about a one-hour drive from here. My husband gets paid with a regular cheque, so we need to have an account of some kind in Picton.

I like to do all of my banking with one financial institution. It ain't going to be a place an hour away.
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Postby Shakespeare » 15 Aug 2007 20:45

I like to do all of my banking with one financial institution. It ain't going to be a place an hour away.
The advantage of living in a small city is that you have at least one of everything within a 15 minute drive. :wink:
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Postby jeebuz » 16 Aug 2007 15:26

Jeebuz wrote:

1) RBCDI seems to have quietly dropped the 120 day holding period for AIS100 (Altamira High-InterestCashPerformer). You can buy/sell it without penalty or commissions (hopefully someone can confirm this however the phone rep I talked gave me this information and the notes of the fund no longer has a warning about the 120 day holding period). Given that it is currently yielding 4.00% it is superior alternative to RBC's own money market fund (and it is CDIC insured up to $100K)


After calling RBCDI to confirm this I was told that even though there is no mention of a 120 day holding period for this fund in the "fund notes" there is in fact a penalty for selling before the 120 days are up. From RBCDI's Commission and Fee Schedule:

RBC Direct Investing charges an Early Redemption fee equal to 1% of the selling value (minimum $43) on all funds sold within 120 days of purchase, with the exception of RBC Funds. Mutual fund charges imposed by fund companies are in addition to the fees stated above - please refer to each mutual fund’s prospectus before investing.


So selling anything other then RBC's own funds will always carry a penalty if sold before 120 days. :(
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Postby AltaRed » 16 Aug 2007 15:37

jeebuz wrote:So selling anything other then RBC's own funds will always carry a penalty if sold before 120 days. :(


It takes one quarter for the discount broker to capture a trailer fee (trailer fees typically paid quarterly). Trailer fees are the only sure source of revenue for mutual funds (0% FE load, no DSC). ETrade has the same 120 day limitation.
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Postby rhenderson » 16 Aug 2007 15:40

jeebuz wrote:


So selling anything other then RBC's own funds will always carry a penalty if sold before 120 days. :(


That's exactly the opposite of the info that I got from the rep that I spoke with.

Let's muddy the water a bit for the sake of arguement.

I hold approx 200 k in my AIS100 account and trade in and out at $10k a pop. How do they decide which 10k was in for 120 days and which $10 k wasn't ?
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Postby jeebuz » 16 Aug 2007 16:46

That's exactly the opposite of the info that I got from the rep that I spoke with.

Let's muddy the water a bit for the sake of arguement.

I hold approx 200 k in my AIS100 account and trade in and out at $10k a pop. How do they decide which 10k was in for 120 days and which $10 k wasn't ?


They track when you bought units and how many units you've bought. They sell the the "oldest" units first so you will not be charged the fee as long as you have sufficient "old" units to cover your sell order.

What pains me is that I have to manually track how many units I have that have cleared the 120 hurdle by manually checking my statements from months ago to see when I bought units. All this to save the 0.14% difference compared to the yield on the D-series money market.

Then again I may have lucked out by switching to a CDIC insured cash instrument just when all the turbulence in the commercial paper market started, avoiding a potential (unlikely) loss in the RBC money market fund. :)
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Postby IdOp » 16 Aug 2007 19:29

Given that the penalty for < 120 days' holding does exist after all, I find it astounding that they allow a random one of your MMFs to be used to settle trades, as reported up-thread by jeebuz:
3) If you have multiple money market funds in your account and you choose the "sell money market" option on a buy order, it is random which money market fund will actually be used to settle the trade. I had money in both RBF271 (RBC money market) and AIS100 and they used AIS100 to settle a buy order instead of RBC271.

Anybody who uses that feature would be playing russian roulette, and guess who is the house? Unless there is more to it than that, it is a patently unscrupulous feature.
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Postby AltaRed » 16 Aug 2007 21:12

IdOp wrote:Anybody who uses that feature would be playing russian roulette, and guess who is the house? Unless there is more to it than that, it is a patently unscrupulous feature.


I would agree. Conscience would tell you that in the absence of specific direction by the investor, the brokerage should select the one that has the least cost to the investor, i.e. the one without withdrawal charges.

But then, don't brokerages (in the absence of margin) already have the authority to arbitrarily sell assets at random to fund purchases?
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Postby IdOp » 16 Aug 2007 22:02

AltaRed wrote:But then, don't brokerages (in the absence of margin) already have the authority to arbitrarily sell assets at random to fund purchases?


They do, and I don't know how far that power extends, e.g., can they do it before the settlement day is past? But in this case (again, assuming it is the case, I haven't used the feature myself and can no longer check it) one can only hope it is an unintended flaw in implementing a new feature and that it will be fixed if brought to their attention. If not, and if they didn't reverse any charge generated randomly by it, I'd remind them of the client's authority to randomly transfer their assetts to a reasonable broker.
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Postby AltaRed » 16 Aug 2007 22:49

IdOp wrote:If not, and if they didn't reverse any charge generated randomly by it, I'd remind them of the client's authority to randomly transfer their assetts to a reasonable broker.


I don't disagree with you there.
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Postby rhenderson » 17 Aug 2007 07:33

jeebuz wrote:
Jeebuz wrote:

1) RBCDI seems to have quietly dropped the 120 day holding period for AIS100 (Altamira High-InterestCashPerformer). You can buy/sell it without penalty or commissions (hopefully someone can confirm this however the phone rep I talked gave me this information and the notes of the fund no longer has a warning about the 120 day holding period). Given that it is currently yielding 4.00% it is superior alternative to RBC's own money market fund (and it is CDIC insured up to $100K)


After calling RBCDI to confirm this I was told that even though there is no mention of a 120 day holding period for this fund in the "fund notes" there is in fact a penalty for selling before the 120 days are up. From RBCDI's Commission and Fee Schedule:

RBC Direct Investing charges an Early Redemption fee equal to 1% of the selling value (minimum $43) on all funds sold within 120 days of purchase, with the exception of RBC Funds. Mutual fund charges imposed by fund companies are in addition to the fees stated above - please refer to each mutual fund’s prospectus before investing.


So selling anything other then RBC's own funds will always carry a penalty if sold before 120 days. :(



I phoned RBC DI and asked once again about using AIS100 to settle trades and was told that they had dropped any early exemption penalty on this fund.

Anyway I kept the rep's name and ext no. on file so I can reference back if I'm ever charged a fee.
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Postby jeebuz » 17 Aug 2007 10:54

rhenderson wrote:
I phoned RBC DI and asked once again about using AIS100 to settle trades and was told that they had dropped any early exemption penalty on this fund.


Thanks for the update rhenderson. Hopefully I can get them to repeat this same thing to me so that I can have backup in case of a dispute.

- Jeebuz -
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Postby veracity » 17 Aug 2007 16:22

jeebuz wrote:
Jeebuz wrote:

1) RBCDI seems to have quietly dropped the 120 day holding period for AIS100 (Altamira High-InterestCashPerformer). You can buy/sell it without penalty or commissions (hopefully someone can confirm this however the phone rep I talked gave me this information and the notes of the fund no longer has a warning about the 120 day holding period). Given that it is currently yielding 4.00% it is superior alternative to RBC's own money market fund (and it is CDIC insured up to $100K)


After calling RBCDI to confirm this I was told that even though there is no mention of a 120 day holding period for this fund in the "fund notes" there is in fact a penalty for selling before the 120 days are up. From RBCDI's Commission and Fee Schedule:

RBC Direct Investing charges an Early Redemption fee equal to 1% of the selling value (minimum $43) on all funds sold within 120 days of purchase, with the exception of RBC Funds. Mutual fund charges imposed by fund companies are in addition to the fees stated above - please refer to each mutual fund’s prospectus before investing.


So selling anything other then RBC's own funds will always carry a penalty if sold before 120 days. :(


TD Waterhouse has only a 1 month minimum hold period for TD, RBC, and BMO funds. TD also has only a 1 month minimum hold period for most other funds, but in those cases, the fund company itself will charge a fee unless held for more than 90 days.

Although I like TDW very much, I'm thinking of switching to CIBC because they have a 50 stock trades for $395 program which is much cheaper than TD's $29 commissions.
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Postby Arby » 27 Aug 2007 09:36

RBCDI updated their website today, as as a result, Royal Circle clients can't access S&P and RBC research that was previously available. Don't these people test their website changes before they put them into service??
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Postby rhenderson » 27 Aug 2007 09:55

Arby wrote:RBCDI updated their website today, as as a result, Royal Circle clients can't access S&P and RBC research that was previously available. Don't these people test their website changes before they put them into service??


I didn't think that anyone actually paid any attention to the RBC research. :?
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Postby Arby » 28 Aug 2007 09:05

The security features on my RBCDI account are not as sophisticated as other discount brokers, such as TD Waterhouse and CIBC Investors Edge. For example, TD and CIBC both have a separate Logon Password and a Trading Password, and both also have additional personal verification questions if you logon from a location that is not your normal computer. RBCDI has neither of these additional security features.
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Postby Shakespeare » 28 Aug 2007 09:29

RBCDI has neither of these additional security features.
RBCDI has one of three questions that is asked if you log on from a different computer, unless they removed that feature in the new upgrade.
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Postby jeebuz » 28 Aug 2007 09:42

Shakespeare wrote:
RBCDI has one of three questions that is asked if you log on from a different computer, unless they removed that feature in the new upgrade


RBC's web site only asks you the three questions if you log into RBC's online banking. If you do it through RBC's online investing it does not (at least it doesn't for me).

Given that you can move back and forth between banking and investing it would appear to be a security hole (although I find it useful since it is actually faster for me to do my banking by first logging into the investing site then switching to banking mode)

- Jeebuz -
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Postby rhenderson » 28 Aug 2007 09:55

jeebuz wrote:
Shakespeare wrote:
RBCDI has one of three questions that is asked if you log on from a different computer, unless they removed that feature in the new upgrade


RBC's web site only asks you the three questions if you log into RBC's online banking. If you do it through RBC's online investing it does not (at least it doesn't for me).

Given that you can move back and forth between banking and investing it would appear to be a security hole (although I find it useful since it is actually faster for me to do my banking by first logging into the investing site then switching to banking mode)

- Jeebuz -


I noticed the same thing, if I log in to the RBCDI site it skips the three question routine altogether. I can then proceed to the banking site unimpeded. Compared to the other sites that I deal with ,on-line security seems to be the least of Royal's concerns. :shock:
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Postby Shakespeare » 28 Aug 2007 10:01

I find it useful since it is actually faster for me to do my banking by first logging into the investing site then switching to banking mode)

I always use the banking log-on. I had problems with the investing log-on while I was setting up the account and switched to the banking side.
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Postby northbeach » 27 Sep 2007 11:13

I inquired about getting a $9.95 rate for equity trades eventhough I am not a so called 'active trader'.

The representative checked with his higher ups and a day later I was given active trader pricing of $9.95 for online trades for the next 6 months. It will probably be automatically renewed. Or perhaps RBCDIs rate will be down by then regardless?

Anyways this makes me feel better and should save me a some money when I do some trading later this year.
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Postby The Captain » 27 Sep 2007 12:31

RBC DI will give its $9.95 rate if you have a million plus in assets, reviewable after one year. They don't promote this, you have to ask for it. If you have less than this and want to deal with the big banks, go to TDW where the min. is 100K, I think, for the same $9.95 rate.
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Postby AltaRed » 27 Sep 2007 12:33

Vote with your feet.... It is silly for a business to not promote something they are prepared to do anyway for the asking.
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