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« Reply #1 on: October 27, 2006, 10:51:18 AM » |
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Hello,
This has been written in Feb 06, but even if some figures have changed since then, it gives a good picture of the industry:
Full Article***********************************************************
Saturday, February 04, 2006
Pay less, save more for retirement
On-line RRSP investors benefit from competition on fees, ROB CARRICK writes
Calling all do-it-yourself investors who want to squander as little of their retirement savings as possible on fees and commissions.
In an effort to compete with the bank-owned brokers that dominate the on-line brokerage business, E*Trade Canada has made it notably cheaper for investors to look after their own registered retirement savings plans.
The net result, as you'll see in The Globe and Mail's annual review of on-line brokers for RRSP investing, is that strong bank-owned players like BMO InvestorLine and TD Waterhouse face serious competition from E*Trade, as do other contenders such as Credential Direct and Qtrade Investor.
E*Trade isn't an automatic choice, in part because there are glitches in the mutual funds area of its website that need attention. Anyway, the point of this rating is not so much to pick a "best" broker for registered retirement savings plans as it is to match investors with an on-line brokerage that might best serve their particular wants and needs.
Still, E*Trade's moves to eliminate annual RRSP administration fees for accounts of any size and cut its minimum stock-trading commission to $19.99 from $27 are significant.
After all, the main reason to have an RRSP account with an on-line broker is to pay less in fees and commissions and hang on to more of your retirement savings.
Of course, there's more to a good on-line broker than low costs. That's why this rating also considers the selection of investments available to clients, the usefulness of any financial planning tools that are offered and the depth of equity and mutual fund research. All brokers offer service over the telephone, but only Internet-based services were considered here because they're the best way to take advantage of the cost savings and convenience that on-line brokers offer.
BMO InvestorLine
Parent: Bank of Montreal
On the Web: bmoinvestorline.com
Phone: 1-800-387-7800
RRSP admin fee: $100<$15,000, $15/quarter<$5,000
The good: InvestorLine is the top choice for investors who like the cost savings available from on-line brokers, but want help in building a sound portfolio. There are top-notch RRSP planning and asset allocation tools, and many suggested portfolios of third-party mutual funds and exchange-traded funds that are calibrated to differing investor profiles. More generally, InvestorLine has on-line bond-trading and stock-trading commissions as low as $25 for market orders. Improvements coming this spring will address a long-time deficiency at this broker, which is the lack of any equity research from analysts.
The bad: You'll pay fees of $32 to buy or sell funds from some no-load families. Also, this is a broker that clearly wants pint-sized accounts to take a hike.
Final word: A top choice for anyone, but especially those looking for a little direction.
HSBC InvestDirect
Parent: HSBC Securities (Canada) Inc.
On the Web: investdirect.hsbc.ca
Phone: 1-866-865-4722
RRSP admin fee: $50<$15,000
The good: If you plan to aggressively exploit the elimination of the foreign content limit for RRSPs, then HSBC InvestDirect is the most global of the 12 brokers covered here. It offers access to numerous global markets, including on-line trading on the Hong Kong Stock Exchange, and global stock research is plentiful thanks to access to analyst reports from Merrill Lynch, HSBC Securities, Standard & Poor's and Argus. As well, all mutual funds are fee-free here, and on-line bond trading is coming shortly.
The bad: Among the most expensive stock-trading commissions at $29 for up to 1,000 shares, and there's a lack of extras such as guided portfolios and proprietary mutual fund research.
Final word: A middling choice for mainstream investors, but a top player for those with global aspirations.
Credential Direct
Parent: The credit union system
On the Web: credentialdirect.com
Phone: 1-877-742-2900
RRSP admin fee: $50<$15,000; $25<$15,000 for accounts holding only funds and fixed income
The good: Like credit unions themselves, Credential Direct offers an earnest, friendly product that emphasizes value. Fees aren't the lowest, but they're certainly reasonable enough that clients can buy most mutual funds with zero commissions and trade stocks for as little as $25 a pop. With its stock-trading commission cap of $250 for on-line orders, Credential can save you hundreds of dollars over other brokers if you buy and sell large blocks of shares. Low commissions might suggest a dollar-store experience, but Credential has first-rate financial planning tools and on-line bond trading.
The bad: There's a commission of 0.75 per cent if you buy funds from families like Phillips Hager & North that pay no trailer fees to brokers selling their products. On PH&N's minimum $25,000 investment, that's $187.50.
Final word: The Credential Direct brand name is, to be polite, obscure, but these guys match up well with the competition for RRSP accounts.
ScotiaMcLeod Direct Investing
Parent: Bank of Nova Scotia
On the Web: scotiamcleoddirect.com
Phone: 1-800-263-3430
RRSP admin fee: $100<$15,000
The good: These guys are among the best in the business at providing clients with analyst research on stocks, bonds and mutual funds. There's a lot of value here if you're looking to add expert opinions to your own investigations on what investments to buy. Scotia also offers personalized portfolio feedback through a service called Sounding Board, and it's a true no-fee fund vendor. You can order anything on the menu and not worry about being dinged to buy or sell. Stock commissions are in the middle.
The bad: The high RRSP admin fee says Keep Out to startup investors. Also, there's on-line bond pricing, but trades must be placed over the phone (Scotia says its clients like it this way, although it's hard to see why).
Final word: If you want equity and fund research, these guys have it.
TD Waterhouse
Parent: Toronto-Dominion Bank
On the Web: tdwaterhouse.ca
Phone: 1-800-465-5463
RRSP admin fee: $100<$25,000; $25<$25,000 for fund and fixed-income accounts.
The good: An ideal broker for the savvier investor who knows what he or she wants to buy and, if not, wants some good research tools and analyst commentary to fall back on. TD's on-line bond trading is among the best.
The bad: Not much in the way of resources for newcomers to self-directed investing. Also, TD's a bit on the pricey side. There's the hefty RRSP admin fee for small accounts -- true, you can cut the cost by restricting yourself to funds and bonds or GICs -- plus commissions for trading some no-load mutual funds. At $29, the minimum stock-trading commission is on the high side as well.
Final word: Solid as a brick for experienced investors.
E*Trade Canada
Parent: E*Trade Financial Corp.
On the Web: etrade.ca
Phone: 1-888-872-3388
RRSP admin fee: None
The good: Where once E*Trade Canada focused mainly on hard-trading stock jocks, now it's welcoming investors of all types. Annual RRSP administration fees have been eliminated for accounts of any size, the minimum stock-trading commission for mainstream clients has fallen to $19.99 from $27 (frequent traders pay as little as $9.99) and customer service, long a weak spot, has been beefed up. E*Trade was one of the first brokers to eliminate commissions on mutual funds, and it also offers on-line bond trading and a good collection of financial planning and investment research tools.
The bad: E*Trade badly needs to fix its on-line resources for buying and researching mutual funds because they're a mess. Go to the fund order screen and look up a quote for a particular fund -- you'll find a jumble of individual funds and fund companies, some of which long ago disappeared (example: Canada Trust funds, which were absorbed into TD's fund arm several years ago). Research on funds is way out of date in some cases.
Final word: With its fund sales glitches fixed, E*Trade is a worthy contender for your RRSP account.
CIBC
Investor's Edge Parent: Canadian Imperial Bank of Commerce
On the Web: investorsedge.cibc.com
Phone: 1-800-567-3343
RRSP admin fee: $100<$15,000, $25<$15,000 for funds and fixed-income RRSPs
The good: A decent all-around choice that will let you purchase stocks for as little as $25 for market orders, buy bonds and guaranteed investment certificates on-line and browse through tons of CIBC World Markets equity research.
The bad: Lots of research on stocks, but funds are ignored, unless you want to hear about CIBC's core fund recommended list for winter 2005. Also, you have to pay $25 to sell some no-load funds, and the financial planning tools are so-so.
Final word: Does a pretty good job, over all.
National Bank
Discount Brokerage Parent: National Bank of Canada
On the Web: nbc.ca/nbdb
Phone: 1-888-293-6637
RRSP admin fee: $50<$25,000
The good: There are some definite pluses at this recently spiffed-up broker, including on-line bond trading and resources for serious stock investors that include streaming quotes and a technical analysis tool. Stock-trading commissions are reasonable.
The bad: Not much in the way of help for investors who want help with investment planning or equity and fund research, plus there are fees for selling some no-load funds.
Final word: Fine if you're a National Bank client, but falls a bit short of the top names.
Qtrade Investor
Parent: Privately owned
On the Web: qtrade.ca
Phone: 1-877-787-2330
RRSP admin fee: $40<$25,000
The good: Qtrade belongs in that middle tier of brokers that cover all the bases well enough to keep clients satisfied, but lack the polish of top players such as BMO InvestorLine and E*Trade. Fees are reasonable, there's on-line bond trading and clients have access to tools for planning an RRSP portfolio.
The bad: Not much to offer in the way of stock and fund research reports by analysts.
Final word: A fine choice.
RBC Action Direct
Parent: Royal Bank of Canada
On the Web: actiondirect.com
Phone: 1-800-769-2560
RRSP admin fee: $50<$25,000
The good: Offers at least a bit of most everything RRSP investors want -- a good selection of fee-free funds, on-line bonds and GICs, investment planning tools and research for choosing funds and stocks.
The bad: Falls a bit short of competitors in some areas. Want PH&N funds? You have to pay an upfront processing fee. Want on-line fixed income? The nannies at RBC won't give you access to high-yield bonds. Want fund and stock research? RBC's offerings are minimal and hard to access. Oh, and the minimum stock-trading commission is the highest around at $29.95.
Final word: Ho hum.
Disnat
Parent: Mouvement Desjardins
On the Web: disnat.com
Phone: 1-877-403-3656
RRSP admin fee: $75<$15,000
The good: A new financial planning centre has been added, and on-line bond trading is coming later this year.
The bad: Strictly no-frills, but with upper-level commissions for stocks ($29 minimum) and a $32 fee to sell most funds.
Final word: If you're an active trader, check out an RRSP account at Disnat's more elaborate Disnat Direct service (disnatdirect.com).
eNorthern
Parent: Northern Financial Corp.
On the Web: enorthern.com
Phone: 1-888-829-7929
RRSP admin fee: $50<$45,000
The good: Cheap fees. At $24, the minimum stock-trading commission is low, and there are zero fees for trading a wide variety of funds, including the likes of Chou, PH&N and Saxon.
The bad: Remember the strippo car -- AM radio, vinyl seats and numerous other reminders that you cheaped out on your purchase? Well, eNorthern is the strippo broker. There are no tools to help you plan your investing, nothing much to help you choose stocks or funds and no on-line bond trading.
Final word: If you want low stock-trading commissions, be sure to check out E*Trade Canada.
ROB CARRICK
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