Little did I know when making this post complaining about BMO's policies regarding foreign exchange rates when buying and/or selling US securities in a registered account that much has already happened.
First, there was the $100 million dollar class action lawsuit launched back in August 2006 against BMO claiming that BMO has illegally forced customers to change foreign currency from Canadian dollars into US dollars or vice versa in registered accounts since June 2001 when the tax laws changed and began allowing foreign currency to be held in such accounts. You can register with the lawyers Paliare Rolland to be kept informed of the case's progress. Or you can sit back and keep an eye out for news, or just wait - I'm betting years - for a letter from BMO or the lawyer, saying the case has been settled for x amount and here is what you get.
The second development is the internal memo issued by BMO and reported by the Toronto Star in April this year to allow clients who trade in and out of US dollars on the same to take a single exchange rate for both the buy and the sell and thus avoid the buy-sell spread and/or any fees for the conversion. There is also a lower fee structure - down to 75 basis points (0.75%) or 70 basis points for all you folks who have trades over $30million. There isn't any notice or warning on the website about this situation, so BMO clients be aware - you must phone and ask for the single rate out of and into US dollars.
Maybe someday the big bank brokerages will manage to convince their software supplier to make the necessary changes to the program they all use in common to manage registered accounts. Apparently the bottleneck is the software and the supplier just won't change it (no it isn't Microsoft). Those of you at all familiar with the world of IT will not laugh and scorn but will quote the old saying, "God could not have created the world in seven days if he had had an installed base." Some who have had similar experience with the bugs that follow on new versions of software might just wisely note, "be careful of what you wish for, you just might get it."
Thursday 28 June 2007
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5 comments:
Does ANY online brokerage allow settlement in USD for registered accounts?
I seem to remember that one of the non-big bank brokerages would allow FX holdings in a registered account but I'm not sure. Check out Million Dollar Journey's blog for the review he has of online brokerages at http://www.milliondollarjourney.com/review-canadian-discount-brokerages.htm
btw, it is worth asking any brokerage to do this kind of FX wash trading in a registered account. I don't think BMOIL is the only one doing it.
Today, Aug. 16, 2007, I brought in $560 of Australian dollars to BMO and received only $431.16 in Canadian dollars.
I think I got ripped off big time as I discovered on the Internet that the sell rate at RBC today is 0.8312. Even with the $5.00 Branch delivery fee, I should have received $465.47 - $5.00 = $460.47 and not $431.16. I am short $29.31 because I went to BMO.
Where I can go to enter a complaint against BMO?
Ouch, my sympathies on the lousy exchange rate you received.
I gather the method to address complaints is a two-step process. First step is to write directly to BMOIL. Try this person, from whom I received a preliminary reply in my efforts on this subject:
Shane Gradini
Manager - Client Services
BMO Investorline
First Canadian Place
20th floor
Toronto. ON
M5K 1A1
(it seems they don't do business by email)
After you have likely received the ''sorry but no'' reply, the next stop is apparently the Investment Dealers Association of Canada. They have a website at www.ida.ca which explains the complaint process and provides a form under the Investors tab on the left hand side of the page. Note that the IDA material says they expect aggrieved investors to first contact the offending company directly.
Good luck!
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