Worth noting .... IndependentInvestor.info has published an article that pulls together various official media sources of recent discount broker comparisons and ratings. There is an especially useful link to a pdf table compiled by a finance student Charles Martineau which contains direct links to the specific sections of the broker websites to get the detail on such things as commissions, account charges, dividend reinvestment policies etc.
Missing from the Martineau pdf are some other comparison factors that are significant like the ability to hold USD foreign currency in registered accounts and/or the implicit commission rates charged by brokers who do not allow foreign currency in such accounts and; for ETF investors, the ability to DRIP, which may not work as easily as for ordinary shares, as I posted about in DRIPing ETFs in Canada.
The information makes clear that there may not be any single "best" broker for everyone since what is important to some, like low trading commissions, may not count for much to someone who needs good customer service or the best DRIP program. Or, as Independent Investor notes, it may that a broker like TDW has the best choice of fixed income. Indeed, the ratings surveys by the Globe and Mail, JD Power and Surviscor come up with quite pronounced differences in rankings.
Monday, 24 May 2010
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4 comments:
Good point about the currency conversion problem. I wonder if there is any difference in the spreads charged by discount brokerages. If you're trying to rebalance between Canadian and US assets, being allowed to hold US dollars in an RRSP won't help -- you have to convert from one dollar to the other. It matters whether the loss in this conversion is 0.5% or 1.5%.
MJ, yes there is a spread. Million Dollar Journey started compiling this particular data in his blog post http://www.milliondollarjourney.com/review-canadian-discount-brokerages.htm. Don't know if it still current though.
I recently asked Questrade about their currency spread...this was their answer:
Our RSP accounts exchange at 0.0050, and margin accounts at 0.0125.
I just have to agree with our discussion regarding one of the most common brokerage problem now a days which is the currency conversion. I am also wondering if there is any difference between the spreads changed by discount brokerage or none. However thanks for the feed. Useful indeed.
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