Friday, 15 January 2010

Claymore PACC DRIP SWP - Beware of the Broker

One of the valuable features of Claymore Canada's ETFs is that the company offers investors three automatic programs, all on a voluntary basis without commissions or fees:
  • PACC - Pre-Authorized Chequing Contributions - owners of ETFs can make regular monthly, quarterly or annual purchases of additional units
  • DRIP - Dividend Re-Investment Plan - ETF distributions received are used to buy more units
  • SWP - Systematic Withdrawal Plan - ETF units held may be sold on a regular monthly, quarterly or annual schedule
However, there is a catch. The broker at which the ETF units are held must cooperate with Claymore to make it happen. Not all brokers do and some only participate in one or two of the programs. The PACC is the one with the most brokers missing. Unfortunately, it is also the case that the major bank brokers are least on board - none supports all three programs. To check your own broker, here is the list posted by Claymore of which broker supports what.

Thanks to Larry MacDonald at Canadian Business for asking the question that prompted me to look into this. You learn something every day.


Anonymous said...

Who at CIBC did you talk to ? I talked to CIBC Investor's Edge and CIBC Imperial Service and they told me they do not support the program.

CanadianInvestor said...

Just phoned Claymore and they say that it is unfortunately true that CIBC does not support PACC but they do say it supports SWP and DRIP. So if CIBC still says it is not on board with any of it, maybe stir the corporate pot a bit and call the Claymore folks at 866-417-4640 (I got an immediate line to a person who answered as above). Maybe it is just a poorly informed rep at CIBC or Claymore who is wrong. Good luck!

CanadianInvestor said...

oh, and Claymore said they would update their webpage ...

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