Pluses
- Fully online account sign-up - For those who are out of the country a lot, as I am right now in the UK, it is a relief and a pleasure to be able to do online the whole sign-up, including form filling, "signing" agreements, providing ID by email (a scanned passport or driving license). No paper to send in Hooray!
- Electronic money transfer from my bank account to Questrade via the Pay Biller service to make the $5k TFSA contribution (or if I was to need it, to move money back)
- Rapid personal email confirmation from the the new account manager Emil Vojkollari, whose name and number I now have in case I need it!
- Quick human contact to a rep through the 1-888 number when I had a question about the only negative below
- Multiple named beneficiaries for the TFSA is not yet possible on the electronic form; you must post a letter in with instructions - names and proportions to each beneficiary. BTW, why is the province of Ontario lagging others like BC, AB, NS and PEI (according to accountant Dean Paley writing in Jonathan Chevreau's column on the Three Big TFSA Issues) in passing legislation allowing such named beneficiaries to be direct recipients of a TFSA proceeds upon death instead of having this pass through the will/estate and incurring probate taxes?
They are the only brokers who offer more or less complete ability to set up ETFs to automatically reinvest dividends/distributions and without extra commission as I wrote about in DRIPing ETFs in Canada. (Actually, Qtrade will also DRIP ETFs but they don't offer a TFSA) For me, the TFSA is not an emergency funds account, it is just another part of my investment portfolio which consists primarily of ETFs, and that's what I want to buy at Questrade. Given that the TFSA limit is only $5000, the distributions will be small and it would be too costly to buy a couple of shares at a time so the cash would just be sitting there idle without Questrade's unique free service.
Stumble It!
7 comments:
Aren't the trading fees going to be high if you are putting only $5000 into three ETFs?
If the distributions are so small, can't they wait a year until you put in another $5000?
Hardly unique. I bought $2500 of PD.UN and $2500 of AVF.UN and they DRIP just fine at TDW.
Anon, I will pay the initial $9.95 commission to buy the initial holding e.g. $9.95/2500 (for two ETFs) = 0.4% then nothing more as the distributions come in and more shares are bought by Questrade for my account with NO commission charged. So if I bought 185 shares of XIU at $13.50 and received the same cash distribution per share of about $50 per quarter as in 2008, I will have about 15 shares more at the end of the year instead of $200 cash sitting there idle. That $200 could be added to next year's $5k for a purchase as you point out. But I would lose out on the potential appreciation of the quarterly purchases of XIU - I don't expect the market to continue falling in 2009. Let's call this "averaging up".
Ray, you raise an interesting point about an important difference. TDW doesn't DRIP ETFs. (***.UN securities aren't ETFs) I called them to confirm again what I was told last year. This is a Questrade difference and advantage for me.
TDW has a list of various ***.UN income trusts and closed-end funds that it will DRIP and others that it will not. The rep could not explain the reasoning behind the list, nor is this list published or on the web for clients. What a pain, you must call to ask about each specific security if you are considering buying it and want to DRIP. I prefer the Questrade blanket promise - if the company itself won't provide the DRIP, then Questrade will do the buying on the market for us the clients.
FWIW, TDW's verbal response to my list was that about 2/3 could be DRIP'd
Yes: AVF.UN BSI.UN AV.UN CTD.UN EIT.UN EQW.UN IDX.UN SDT.UN BA.UN ALA.UN
No: CCK.UN CHF.UN DIF.UN FIF.UN PGT.UN EP.UN NWF.UN
Ray, apologies my statement that TDW doesn't DRIP ETFs is not quite true. They will DRIP a few, like XIU, XIC, XSB, XBB, XTR, VTI, EFA, XFN, XDV, XRB. The rep I spoke to this morning told me they didn't do any but that isn't true. Shows how well staff is trained, huh?
Sure, I've been DRIP'ing XIU since forever, and recently DRIP'ing XEG and XGD too. It has HUGE value for me to see everything in a consolidated portal at TDW. All my TD and TDW stuff is consolidated and I use their new Portfolio Manager for tracking everything daily - it's quite perfect.
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