I was holding onto a stock called the sentry select income fund (SDT.un.to) and it is converting to a mutual fund by August 14th and as result was delisted from the TSX on the Aug 4th and stopped trading. This morning in it’s place I have a stock with the ticker SSDUF.pk which trades OTC and is USD position. Since it’s a USD position I now have a large margin call because of inadequate funds. I contacted Sentry Select and they have told me that SSDUF.pk had nothing to do with their stock but the people at QT don’t seem to care and all they demand is that the margin call be filled. I can’t trade my SDT.un since it doesn’t exist anymore. I’m scared that QT is going to sell this junk that is in my acct in it’s place and cost me a ton of money.

I wanted to address a few of the questions here – clear up any misconceptions about our Mutual Fund Maximizer and trailer fee rebates.

After the processing fee ($29.95 per month), the Maximizer rebate is 100% of the rebate paid by the fund company whether the trailer is 1.25% or .5%.

EconStudent: I understand your concern, but I hope to alleviate it with some context. The trailer fee stated by the fund company in their annual prospectus is usually accurate, but not always. We keep that in mind when we post the anticipated trailer fee in the calculator or in the rebate tracker in myQuestrade.

Let me illustrate this with an example: a fund company promises a trailer of 1%. However, for several consecutive quarters they do not pay us, and so we cannot pay out a rebate to investors who hold that fund. If we post the rebate as promised by the fund company, our clients may make purchasing decisions based on that number. By posting an anticipated rebate based on actual experience, our clients will have a more realistic picture of what they can expect.

As I stated above, when rebates are paid out, they are 100% of the rebates we receive, whether the fund company pays 90% of their posted rebate or 110%.

Jordan: we are currently offering a promotion in which we pay the transfer fees. Our site has all the details.

Rolland: go to our margin centre for more information on trading on margin: http://www.questrade.com/pricing/margin_centre.aspx

For more information, Rob Carrick of the Globe and Mail wrote a story yesterday. Here’s the link: http://www.theglobeandmail.com/servlet/story/GAM.20090120.RCARRICK20/TPStory/TPComment

Thanks MDJ readers, and keep the questions coming!

Lynn Suderman
Communications Manager, Questrade

I recently opened an “individual” trading account with Questrade (New to the stock market) and after funding my account, I realized it’s a “Margin” Account.

Does it mean, I am borrowing?? For example, I funded my account with $5,000 CAD. If I used $2,500.00 and buy one stock, does that mean I am borrowing $2,500 to buy?? Or does the “margin” account kicks in, only when I exceed my $5,000 initial deposit?

Also, how can I buy USD stocks? I will need to convert my CAD to USD first, right?

Thanks and thank you MDJ for referring me =)

Rolland.

I believe I can trade mutual funds commission free at RBC direct investing (although I don’t). Equities, options and others certainly cost more than Questrade though, and the inability to hold US cash in registered accounts (TFSA and RRSPs) stinks.

Screwed over by high fees – yes. Don’t like the advice of my financial advisor – yes. In May 2008 I was advised to take a small portion of my portfolio (most likely the DSC free fund) and go aggressive into commodities including oil. I couldn’t believe it and have not done any business with him since. TD Waterhouse will let me transfer but I don’t have the value in my portfolio to avoid the annual fee. TD e-Series value don’t count towards this total.

Peter

So you have to “pay” (they never charge you directly!) $29.95/mo.

What is the alternative?

You get nothing!

I think this is a good move by Questrade and I don’t see any other brokerage offering this type of incentive – in addition to $4.95 trades and $9.95 mutual funds.

I’m pretty sure I read that TD e-series can’t be bought or transferred in-kind out of a TD Waterhouse account (otherwise I would have) and Dimensional Funds are only available to “F” class brokers who are certified to sell Dimensional funds. Even if you have a fee only certified dimensional advisor you aren’t allowed to have direct control of your account.

I think the confusion is because Questrade is just providing all of the fund information & trailer fees from Morningstar, but they don’t appear to actually screen out weather the fund is truly accessible or not.

I’m tempted to test it out just to see, so I’ve placed a purchase order for a DFA fund, I’ll find out on Monday if it goes through or not!

Also Peter the $29.95 isn’t charged if you don’t have more then that amount coming back from the trailer, if you have less you get nothing and pay nothing.

If you just want to switch brokers because you got screwed over with high fees from a financial advisor and don’t want them collecting your trailer fee (I know the feeling) but can’t bear the loss of selling the funds early, then even though I like Questrade more you should probably move them in kind to TD Waterhouse because they will cover the transfer fee, Questrade usually won’t.

Was ready to print out the application last night then saw the fees section. $29.95 per month is a rip-off considering they charge $9.95 per trade.

One of my goals for this year was to get out of high MER funds and switch them into TD e-series or ETF’s. The Questrade account seemed like a great place to park this money while I wait out the high DSC penalty if I sell early. But what is the point of switching if there is no incentive for me.

Funny they even offer a fee rebate on TD e-series funds (.135%). Too bad you need $266K in the Canadian index fund just to break even.

Peter

I played around with Questrade mutual fund calculator and I found another catch.

I have the trailing commission schedule of bank fund family. By comparing the trailing commission schedule to the amount that questrade rebate, I found out that questrade only rebates 90% of the trailing fees. I found out that DFA funds are available to questrade, which is a surprise.

Example:
If you invest 100,000 in XXX funds and trailing commission is 1% to questrade, then the amount you get refunded is approximately 900 – 360 = 540.

At the very least they should allow you to select the payment interval or payment threshold before charging you to process your pay out. Then you could just set it to once a year or a $1000 minimum.

The next thing Questrade needs to offer is a no fee high interest savings option, something like the Altamira High-Interest CashPerformer so you can get a bit of interest while you wait.