I recently moved my investment accounts from Questrade to RBC Direct in order to take advantage of the RBC 1% rebate deal so I thought it would only be fitting to do a review of their services.
Who are they?
RBC Direct is the discount brokerage arm of the Royal Bank of Canada which is the biggest Canadian bank.
Good things about RBC Direct
I like the trading platform – it looks nice, easy to use and is well designed. There is also access to analysts reports etc. It does the job.
Bad things about RBC Direct
Everything else. 
Fees – ridiculous fees in my opinion. $10/trade is not bad for a passive investor but why anyone would pay $29 a trade is beyond my comprehension. I’ve outlined the fees at the bottom of the post.
No electronic money movement unless you have a RBC bank account. This is the stupidest thing about RBC – yes, I understand they want to ‘bundle’ all their services but forcing investors to open up new accounts to use their discount brokerage when most of the other discount brokerages offer excellent electronic money movement options is just bad business. Get out of the stone age RBC!
In order for me to put money into the account, I have to write a cheque and mail it to them. If I want to remove any money – I have to pay $10 for a cheque to be written. My plan is to keep all cash in the account until next year when I can move back to Questrade and then withdraw it electronically. The most annoying part of this is that when I looked into the 1% deal – a customer service rep told me on the phone that I could do electronic money movement which turned out to be false. Speaking of customer service….
Bad Customer service
I won’t bore you will the multitude of issues I’ve encountered with RBC but suffice to say that I think their computer system was probably build sometime in the 20’s which makes it very hard for the customer service reps to do their job.
Most of the reps are pretty good although one time I called without an account number and the rep told me it was “very hard to look up an account without the account number”. I challenged him on it and he somehow was able to find the account immediately just using my name. Kudos jackass…kudos.
Conclusion
I can’t really recommend RBC Direct since I really don’t like them and can’t wait to collect my 1% and go back to Questrade. However, if you already do your banking with RBC and have a $100,000 in assets then they are not a bad choice. If you don’t meet those criteria then look elsewhere.
Trading Fees
- $28.95 per trade unless you have $100,000 in household assets at RBC Direct or complete more than 30 trades per quarter.
- $9.95 if you have $100,000 in household assets at RBC Direct.
- $9.95 if you make between 30 and 149 trades per quarter.
- $6.95 for those super-active traders who do at least 150 trades per quarter.
Annual account fees
- Registered plans – If market value of account is less then $25,000 the annual fee is $75 ($50 for RESP). Note that according to the website it doesn’t matter what the household assets are – this fee is based on the account assets.
- Non-registered accounts – $80 on balances less than $10,000 unless you also hold a registered account at RBC Direct in which case the fees are zero.
- TFSA accounts – For 2009 there are no annual administration fees or fees on withdrawals. Don’t count on this lasting past 2009.
Other discount brokerages reviews
Questrade discount brokerage review.
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Ouch. I’m *SO* glad I didn’t go for this, sounds like a lot of aggravation for a couple hundred bucks (what it would have been worth to me).
I posted on something similar about Harvey’s free hamburger give-away (http://www.four-pillars.ca/2008/05/28/when-free-giveaways-backfire/). It seem kind of crazy that they offer big money to get people to try them out, then offer a really bad experience.
I find E*Trade’s $20 trades pretty annoying, $29 trades is outrageous.
I’m sure if you surveyed a good sample of RBC customers the results wouldn’t be as bad as they were for me.
I do regret moving my open account though – the 1% bonus is not worth the hassle since I can’t easily move money in and out.
Great post! I’ve got an account with RBC direct investing, well, 3 accounts (RSP, non-registered, and TFSA), same with my wife.
I agree with all your points. It only makes sense if you have existing banking accounts (they do offer a high-interest e-account which is decent enough) and over $100k.
I really didn’t start using this account exclusively until our family built up our accounts large enough to benefit from the lower fees.
Thanks Sampson – you’re right about the e-account which does offer a decent interest rate.
Good points, but I am confused in that a relative uses RBC, has well over a $100k and is charged 6% for trades In and out????
Howard – you should ask your relative for more details. The only way I can see to have a percentage like that is either they are trading very small lots of stock ie $150 at a time. Or they are selling back-end mutual funds (with fees) from one fund company and being charged to buy front end with another fund company.
If either case is true they they need to change their investing strategy.
All clients of discount, phone/internet, direct brokers, such as RBC Action Direct, should be aware that these brokers can and will sell and surrender your shares without informing you either in advance of, during or after doing so. They may appear to be forwarding shareholder communications from your investment, but they can and will change that practice at will, when it suits them.
I have had a recent personal experience with RBC Action Direct in the instance of a friendly takeover bid by Royal Dutch Shell (RDS) of Shell Canada in 2005/6. RBC forwarded all offers by Shell to me up to the final “closure of offer” on March 30. By law then, if RDS had acquired 90% or more of the shares, they could apply to the Government for authority to invoke a compulsory sale of the outstanding shares. I wasn’t kept informed of this action nor of its progress i.e. neither its approval nor the date of implementation. The RBC Action Direct simply sold and surrendered my Shell shares on April 25 without informing me before, during or after acting.
Be aware that sale of your shares by your broker can occur without your advance knowledge, direction or consent at least anytime there is a “successful” takeover bid involving your shares.
Apparently, it is every direct broker’s stated policy not to be responsible for informing its client, you the shareowner, particularly when proceeding to execute a “compulsory” sale and surrender of the client’s holdings, without the client’s knowledge or authority. I guess the brokers are already assured of their fees, so why bother informing the client/owner.
This, I believe, is wrong as a matter of principle. But also, this “breach of trust” by the broker can preclude your right to transfer the shares prior to the approved compulsory sale, be that transfer to a registered charity or to other person(s) or entity(s) prior to their surrender and sale. In Canada at least, there can be a significant reduction or elimination in the capital gain tax by implementing such a transfer prior to the sale. In the case of my modest holding of Shell Canada shares, there was a net loss of benefit of more than $7000.
Ask your direct service broker if it is their policy act only on your direction and/or to inform you before executing any and all sales of your holding(s). For RBC Action Direct the answer is clearly “NO, THEY DON’T!”
The RBC Action Direct’s $29/trade is decieving because it depends on number of shares you buy. I have paid over $200 per single trade and could be even higher. Their active trade statuse is almost impossible to acheive and maintain without doing lot of useless trades. I decided to move to CIBC’s Edge package, it’s $400 for 50 trades and then it gets even cheaper. I do would not recommend RBC Action Direct to any one. I complained to them and they told me to get lost.
I’ve been with RBC for a number of years, but in the last few weeks, I have been frustrated to no end by technical difficulties with their online trading system; when it goes down, they recommend you use their telephone trading platform – problem with that – it’s just as unreliable; if you want to talk to an actual person, expect to wait 15-20 minutes – big problem if you’re trying to buy or sell a stock on the move. I will be switching to another broker soon.
I’ve just returned from a meeting with RBC folks about opening a TSFA self-directed investing account. Their fee structure blew me away which surprised them. Wondering whether I might be out to l checked out your blog. Based on your experience and those who responded , I’ll be looking elsewhere. Well done!
My biggest complaint with RBC DI is that whenever you phone them you get a different rep every time and when that person finally comes on the line, they usually speak with an accent you could cut with a chainsaw. On
top of that some of them are incredibly stupid, or obtuse, or perhaps both.
After staying 5 years with RBC and giving them thousands in comission fees i finally transferred my account to scotiaitrade.
Main reason, $28.95 for each 1000 shares traded! this is rape!
Also, RBC is very arrogant, I sent them email asking if they would match scotia’s comission fees and they basically told me I could go puck myslef as they didnt care if I closed my account…..well, if few thousand people do it, watch out RBC for you’ll lose clients fast.
Lastly many times I was unable to log in due to tech difficulties on their side……
Although my problem with RBC Direct invoved specifically their ignorance of capital gain tax excemption for securities donated to registered charities, it was their arrogance and unwillingness to accept any responsibility for not keeping me, their, client informed by continuing to forward the company’s bullletins, etc. and for surrendering my shares for cash without my authority or even my foreknowledge of their actions, that leads me to say “Don’t trust RBC Direct”. Their Ombudsman was also a joke.
Recently RBC Investing did an update on there site. I am a small investor who enjoys trading as a challenge. The site always gave you information on analyst ratings, comments on the market, stock picks , analyst information on different stocks, gas, oil and gold market. Know only the investor with $250,000 can get that information. (THE INNER CIRCLE). Why would a small investor stay with them and pay higher fees and know we don’t even get any Stock Analysis information. The site is absolutely useless.