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Questrade Gives Back Trailer Fees and Weekend Reading

Questrade Mutual Funds and Trailer Fees

I noticed over at Questrade that, in addition to offering a low cost TFSA, they now offer a new feature for mutual funds.  While they have reduced their mutual fund trading fee to $9.95, they also now rebate the mutual fund trailer fees back to the investor (up to 1%).  Obviously, the higher the MER of the mutual fund, the closer to 1% that you’re going to get back.

Typically, a discount brokerage will keep the trailer fees as added revenue.  Kudos to Questrade for putting the effort into reducing our excessive mutual fund MER’s in Canada.

You can visit Questrade for more info and for their trailer fee rebate calculator.  If you haven’t already, you can read about my experience with Questrade here.

Weekend Reading

One year ago, I wrote about shopping for a newborn.  Where does the time go?

As CBC reports, it seems that the once mighty Nortel has finally filed for bankruptcy protection.

Five Cent Nickel writes about investing in the S&P 500 Dividend Aristocrats.

Canadian Capitalist shows the perils of tactical asset allocation.

Moolanomy illustrates income diversification.

Mrs. Micah explains how to start and manage a debt snowball.

If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).

FT About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 20 comments… add one }
  • Avatar sundae1888 January 16, 2009, 9:39 am

    I (re-)visited your post on shopping for newborn. With a 2-month-old sleeping in a baby carrier (I received from freecycle), I must say your article and the comments now all start to make sense. :D

  • Avatar Canadian Capitalist January 16, 2009, 12:13 pm

    Thanks for the mention FT. Have a nice weekend.

  • Avatar Pinyo January 16, 2009, 12:31 pm

    MDJ, thank you for the link. I’ll have to check out Nickel’s article. I recently bought some Dividend Aristrocrats too and would like to see his take on it. Have a good weekend.

  • Avatar Charles in Vancouver January 16, 2009, 2:18 pm

    Don’t forget to add that they keep the first $29.95/month in trailer fees and rebate the rest. This means you need to own a considerable amount of trailer-paying mutual funds to see the first penny of rebates.

  • FT FrugalTrader January 16, 2009, 2:20 pm

    Charles, thanks for the heads up, I wasn’t aware of that detail. That means that a portfolio $36k or greater is required to benefit from the rebate.

  • Avatar Cow January 16, 2009, 3:05 pm

    I love Questrade; I just opened a TFSA with them in addition to my normal account. One update to your review: you only need to put $1000 in now, instead of $4000, and your equity balance has to stay above $250. Compared to other trading sites (which often charge, say, $30 a trade if you don’t have $100k in balance) this makes Questrade an amazing deal for someone just starting out in equities; you can put a few thousand in and play around, get your feet wet, and build up some trading confidence without losing it all to trading commissions.

  • Avatar mjw2005 January 16, 2009, 6:07 pm

    Finally someone is giving back those rip off trailor fees…they were like free money for the Discount Brokers as they are supposed to pay for advice…
    and you do not get financial advice at a DB….

  • Avatar Jordan January 16, 2009, 6:55 pm

    Questrade is very proactive about lowering fees and adding new services which is great, but this $29.95/month “administrative fee” is a real rip off. Their own website’s example is with $100,000 invested you would earn back $1,000/year, but after fees it’s only $640.

    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.

  • Avatar EconStudent January 16, 2009, 11:50 pm


    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.

    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.

  • Avatar Peter B January 17, 2009, 2:03 am

    The devil is always in the details…

    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.


  • Avatar Jordan January 17, 2009, 3:08 am

    EconStudent & Peter B

    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.

  • Avatar Matt January 17, 2009, 3:42 pm

    So you have to have a minimum of $36K to see any benefit.

    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.

  • Avatar gerrydee January 17, 2009, 4:17 pm

    I believe Questrade is way ahead of the other online brokers with their fees and constantly push the envelope forcing the others to lower theirs in order not to lose too much business to them.
    I have been with them for a year now and really appreciate their service. If I have any questions they are usually answered in minutes either by chat or phone.
    For my Forex account, I even have a staff person’s direct phone number and he gets back to me in minutes even after leaving voice mail.
    And now, with mutual fund trades @ $9.95 compared to ~$30 at the other places they really have them over the barrel.
    I have an account at BMO and their service stinks so bad I am considering moving it now.
    Go Questrade! :)

  • Avatar Peter B January 18, 2009, 12:00 am

    Hi Jordan,

    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.


  • Avatar Sampson January 18, 2009, 2:26 pm


    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.

  • Avatar Mina January 19, 2009, 10:15 am

    Not so fast guys they’ll take 30$ a month so this is only for people who move alot of mutal fund $$ over there but I would not trust them with so much of my money.

  • Avatar Rolland January 21, 2009, 4:41 am

    Hi guys,

    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 =)


  • Avatar Lynn Suderman January 21, 2009, 11:43 am

    Hi MDJ readers,

    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

  • Avatar Sam August 6, 2009, 7:04 pm


    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.

    • FT FrugalTrader August 6, 2009, 8:39 pm

      Please no cross posting the same comment among other threads.

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