Author Topic: investing fees?  (Read 6411 times)

scrubbyfish

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investing fees?
« on: August 14, 2014, 10:28:19 AM »
On $160,000, what would be the dollar-amounts in fees per year on equivalent accounts in:

Tangerine
Questrade
TD eSeries

Some people are saying Tangerine is easiest, TD second easiest, Questrade third, with the fees decreasing in the same order. However, I didn't manage to even get through Questrade's sign-up process, and am wondering if the actual difference in amounts charged per year would even feel worth it to me to go through much more struggle. i.e., For $2000/yr, it might be worth struggling some more. For $200, no.
« Last Edit: August 14, 2014, 11:13:20 AM by scrubbyfish »

MrFrugalChicago

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Re: investing fees?
« Reply #1 on: August 14, 2014, 10:55:14 AM »
Why do you ask?

Have you checked the FAQs on the websites?


scrubbyfish

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Re: investing fees?
« Reply #2 on: August 14, 2014, 11:04:53 AM »
Why do you ask?

I need to choose one, and tend to make massive errors in math and in understanding financial presentations.

[Moved to opening post: Some people are saying Tangerine is easiest, TD second easiest, Questrade third, with the fees decreasing in the same order. However, I didn't manage to even get through Questrade's sign-up process, and am wondering if the actual difference in amounts charged per year would even feel worth it to me to go through much more struggle. i.e., For $2000/yr, it might be worth struggling some more. For $200, no.]
« Last Edit: August 14, 2014, 11:11:23 AM by scrubbyfish »

matchewed

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Re: investing fees?
« Reply #3 on: August 14, 2014, 11:22:05 AM »
So post your analysis. This may sound harsh but I'm personally not going to do your legwork for you.

scrubbyfish

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Re: investing fees?
« Reply #4 on: August 14, 2014, 11:32:23 AM »
Well, my last analysis was so far off the mark, I think it kinda hurt all of us trying to wade through, correct me, clarify, etc. And it did horrible things to my finances in the meantime.

Definitely I don't propose to extract help from anyone for whom helping me would be a burden. I'm just aware that some people are way better at this than I am. Likewise, I spend infinite hours helping others with stuff that is easier and faster for me than it is for them. I think that's a pretty good system :)

daverobev

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Re: investing fees?
« Reply #5 on: August 14, 2014, 12:38:20 PM »
What fees?

Questrade has no fees if you've got > $5k equity.

You mean MER?

Ok, so on average with Canadian Couch Potato you'll probably pay 0.2% QT, 0.35% TD, 1.07% Tangerine.

On $160k, QT = $320 (ETF purchases are free now)

TD = $560

Tangerine = $1712

BEAR IN MIND that that doesn't count any withholding tax, which it's impossible to know without knowing what you're holding, and where. Probably add half a percent, but it comes out of dividends so you won't "see" it.

scrubbyfish

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Re: investing fees?
« Reply #6 on: August 14, 2014, 12:41:20 PM »
Have just taken several stabs. I will type out loud to see if I can grasp anything and/or if anyone can spot major errors in my process.

Goals:
Increase money as well as possible (save, invest, minimize fees).
Prefer everything in one place, partly so my brain can grasp and partly so I can talk to someone about how it all intersects.
Have system that I can grasp, which means someone to talk to -preferably in person but at least by phone.

Background:
Currently paying 5% (or more, overall) on one investment. Aiming to move this.
Have RDSP (registered disability savings plan) in one of the big banks. I have no info on this.
Have remainder of savings in no-interest account.

Key items:
Disability agency will give us an extra $6000/yr if we lock our savings into RDSP, trust, or homeownership.
Trust agency takes 1% per year, offers no return (just "safekeeping"). Can go to other agency, pay higher fee but invest it.
RDSP receives 300% on base contribution.
RDSP can only be set up with very specific institutions. TD said they can, but eSeries can't.
Intend to follow Canadian Couch Potato presentation.
Income is extremely variable, so intend to invest $500 monthly and hang on to any difference for subsequent year's.

Questions (for me or anyone will to help me):
What do Tangerine, TD eSeries, and Questrade each charge?
What do those percentages translate to in dollars per year?
Is the dollar difference between one and another worth the sweat?

Steps
1. Opened "sample" Questrade account. Got lost in initial set up. Do not understand its website's presentation of fees. I think I cannot have RDSP with Questrade.

2. Called TD, was referred to TD Waterhouse. Guy says info I was given last year is no longer so, that I can set up eSeries, then direct that some of that contribution goes to RDSP. eSeries MER is .33%. He says the math, then, is $220,000 [changed from 160000] x .33%, so every year $726 will come out in fees. There are no maintenance fees on some accounts, and in other cases maintenance fees are waived on some balances. He says I can go into a branch to discuss and set up, and that the branch will push their "in house" funds, more conservative and 2.3% MER, but that I can assert my insistence on eSeries and have it set up in-branch as a result.

3. Tangerine website. MER is 1.07%. According to the math TD guy taught me, this would be $220,000 x 1.07% = $2354 out of my account every year. Am I calculating that right? The same thing is $726/yr at TD eSeries and $2354 at Tangerine??

While I am typing, daverobev posted! Thank goodness.

scrubbyfish

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Re: investing fees?
« Reply #7 on: August 14, 2014, 12:47:50 PM »
Thank you, daverobev! I was very stressed out and in tears doing my immediate-previous post. Yours is extremely helpful because I now understand:

-that I was referring to any fees, but yes, it seems to be MERs that are the main concern
-that my math effort appears to be correct (I changed my starting number when TD guy added my savings up better than I did)
-the difference between Questrade and TD is worth (to me) paying, as I will have someone to talk to (and today's guy was awesome), and can have my son's RDSP there too
-that the discrepancy between fees in dollar amounts may become more of a concern as my investments increase, i.e., what is "only" a $240/yr spread now may become a much larger spread down the road
-definitely I don't want to go with Tangerine

Spudd

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Re: investing fees?
« Reply #8 on: August 14, 2014, 12:52:25 PM »
I think TD will be able to give you the most support and help out of the 3 choices, and that is worth the extra $$. And later, if you feel like moving to ETF's out of e-series, you'll be able to do that easily within TD Waterhouse and not need to worry about setting up a whole new thing.

scrubbyfish

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Re: investing fees?
« Reply #9 on: August 14, 2014, 01:37:47 PM »
Thanks, Spudd!

I'm feeling pretty excited about the TD option right now.

And I want to acknowledge that this option has been presented countless times on the forums, including to me in previous threads. I did hear, and I do remember! That direction did not go missed. I simply had not been able to piece together all the variables (disability nuances, limited RDSP location options, etc) until now nor identify all of my questions. Apparently it takes my brain almost a year to coalesce some info (though I also had to wait for my tax return assessment before I was allowed to move on some other options, so really it's only been a few months). I have three more mini-steps to complete around some disability stuff before the final move re: trust vs RDSP, but either way, it looks like TD is the right fit.

Prairie Gal

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Re: investing fees?
« Reply #10 on: August 15, 2014, 06:34:48 AM »
Regarding the sweat equity, once you pick the Tangerine fund suited to your asset allocation, they take care of the rebalancing. With the eSeries funds, you have to decide your own asset allocation, and do your own rebalancing every year. Not saying don't do it, just be aware that there is more work involved. I may eventually try eSeries, but for now, with my level of knowledge, I am happy with Tangerine.

The Canadian Money Forum has an investing section, and they may be able to guide you through the eSeries setup.

RichMoose

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Re: investing fees?
« Reply #11 on: August 15, 2014, 06:46:19 AM »
On $160,000, what would be the dollar-amounts in fees per year on equivalent accounts in:

Tangerine
Questrade
TD eSeries

Some people are saying Tangerine is easiest, TD second easiest, Questrade third, with the fees decreasing in the same order. However, I didn't manage to even get through Questrade's sign-up process, and am wondering if the actual difference in amounts charged per year would even feel worth it to me to go through much more struggle. i.e., For $2000/yr, it might be worth struggling some more. For $200, no.

There is no doubt that QT is the cheapest. You can get an average MER down to about .15% for a balanced portfolio. This means you are less than half the cost of TD-e funds. Also, with QT you can pick ETF's that are not subject to withholding tax. With TD-e, withholding taxes on TDB902 are not recoverable in an RRSP. In my opinion it's worth it to go with QT, especially once your portfolio grows to $500k or $1m. Once you have the accounts set-up, it doesn't take any more work than TD-e. Maybe it's worth it to call Questrade and get help with account sign-up, that 30 minute phone call may save you thousands. I guess that's a decision you'll have to make for yourself. Personally I switched from TD-e to QT about 6 months ago after seeing the benefit of lower fees. The only account I had trouble with in set-up was the LIRA. The rest seemed pretty straight forward to me.

scrubbyfish

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Re: investing fees?
« Reply #12 on: August 15, 2014, 09:59:55 AM »
As far as I know, I can't hold our RDSP with Questrade. Our RDSP accounts for about 1/4 of our total investment, and may soon hold another 25% -or 100%- of it. However, the government contribution on this easily compensates for any increase in fees.

I've been looking up withholding tax:
http://canadiancouchpotato.com/2012/09/17/foreign-withholding-tax-explained/
http://canadiancouchpotato.com/2014/02/20/the-true-cost-of-foreign-withholding-taxes/comment-page-2/
I can barely make out the topic -and CCP acknowledges it's complex- but I'm getting an overall gist.
Until you guys mentioned it, I hadn't been aware of it.

scrubbyfish

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Re: investing fees?
« Reply #13 on: August 15, 2014, 10:33:41 AM »
Carefully opened up the envelopes of current RDSP holdings.
I see they:
-hold no foreign investments (not sure if this is to preempt foreign tax withholding thing, or if not permitted for RDSPs)
-list two sets of fees, management and MER

Fund Name                                        Mgmt Fee  Management Expense Ratio (MER)
BMO Money Market Fund                         1.00%     1.06%
BMO Bond Fund                                 1.30%    1.60%
BMO Monthly High Income Fund II         1.85%   2.25%

Do I add those two fees together to get the true cost and call the first one "2.06%", for example?

daverobev

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Re: investing fees?
« Reply #14 on: August 15, 2014, 11:01:11 AM »
Carefully opened up the envelopes of current RDSP holdings.
I see they:
-hold no foreign investments (not sure if this is to preempt foreign tax withholding thing, or if not permitted for RDSPs)
-list two sets of fees, management and MER

Fund Name                                        Mgmt Fee  Management Expense Ratio (MER)
BMO Money Market Fund                         1.00%     1.06%
BMO Bond Fund                                 1.30%    1.60%
BMO Monthly High Income Fund II         1.85%   2.25%

Do I add those two fees together to get the true cost and call the first one "2.06%", for example?

MER = managements fee + any other expenses, so no. MER is it.

All of those are horrid. You want something that says "Canadian Index" in it (for this particular thing). Or.. for a money market, Christ that MER is basically ALL the payment you'll be getting, what a fucking rip off.

scrubbyfish

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Re: investing fees?
« Reply #15 on: August 15, 2014, 01:26:57 PM »
See, when you swear (ish), it really helps me know just how horrid it really is! When I looked at these, I felt sick to my stomach. Moreso when I looked at the 20 year return on each. Sigh. I have to remind myself that at least I've done a few good things: save almost every penny from my house sale, apply for the RDSP, apply for other stuff, now pursuing the fees issue.

So, to be clear: The MER listed includes the management fee noted in its preceding column?

I met with a TD investment person today. I really liked her. In a human, I was looking this time for:

-common speech (i.e., no literal language barrier; I'm confused enough as it is);
-patience; relaxed presence (with math and financials, I'm sick and tense enough as it is);
-slow talking;
-willing to repeat things, break things down, go over details as many times as necessary;
-at least once in the conversation, uses the words, "I don't know. I'll have to look into that."

She did all that PLUS reflected back what she heard as my concerns and priorities. I LIKE it!

She was not familiar with the nuances re: RDSP (many advisers aren't), and that's what she'll look into. She is aware of investment restrictions re: RESP, and was concerned that where ours are right now we have been ineligible for the grants we'd otherwise be getting.

I asked her to teach me how to read some parts of the statements -enough to be learning, yet not overwhelming my brain.

She and I will each do some more research then meet again next week, with their main adviser getting in on it in the meantime and hopefully for the next appt itself.

She was also willing to fax to the disability office my query about a specific exemption, which would allow me to avoid having to lock my savings into a trust.

I feel like I've learned a lot in the last 24 hours. I think I wasn't able to learn as much about this stuff when I had some survival things to take care of over the last year and a half, and that now that things are much calmer, my brain is able to do more of this.

KMMK

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Re: investing fees?
« Reply #16 on: August 15, 2014, 01:46:03 PM »
If you get set up with TD and need help with the website let me know. I can send you screenshots. But their phone people should help as well. Glad to hear you are making progress with this.

scrubbyfish

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Re: investing fees?
« Reply #17 on: August 15, 2014, 07:50:31 PM »
Thank you, Kestra! The steps you posted on my journal, I printed and brought to my appointment at TD today! I think those are going to be extremely helpful for me.