3.5-star brokerage rating

Presidents Choice Financial Investing Review


Presidents Choice Financial review, brokerage rating for 2018. Is it good firm? Stock trading fees. RRSP, RRIF, TFSA account investment cost, minimums, and ETFs.



Presidents Choice Financial Brokerage Overview


President's Choice Financial (www.pcfinancial.ca) is an online Canadian bank providing an array of financial services including banking, credit cards, mortgages, borrowing and investments. These President's Choice Financial services are provided by the direct banking division of the Canadian Imperial Bank of Commerce (CIBC). The focus of this review will be on the Investment Accounts offered by President's Choice Financial but it's worth highlighting some of the key features of their other service offerings:

Bank accounts: President's Choice Financial offers a fee-free interest-bearing chequing account and a high-interest savings account. Savings rates tend to be quite attractive relative to its nearest competitors; this, combined with a no-fee daily banking account makes President's Choice Financial a solid choice for online banking.

Credit cards: President's Choice Financial offers a range of fee-free reward-based MasterCard® credit cards. The primary rewards associated with these cards are so-called PC® Points, which are redeemable for free groceries and other goods at participating stores (e.g. Loblaws, Real Canadian Superstore, No Frills, Provigo, Dominion, Extra Foods, Valu-mart, Your Independent Grocer, and others). The cards available differ in terms of the rewards offered (e.g. number of PC points awarded per dollar spent) and/or one's personal or household annual income required to qualify. The World Elite MasterCard, which is their most prestigious card on offer, provides holders with free travel emergency medical insurance, car rental collision/loss damage waiver insurance, as well as an identity theft assistance service.

Mortgages: President's Choice Financial offers a range of Fixed and Variable Rate mortgages. Fixed Rate mortgage terms on offer range from 2 to 10 years, with correspondingly different interest rates, all of which are clearly published on their website. With Variable Rate mortgages, the interest rate offered is tied to CIBC's prime rate, which is also published on the website. Also on offer are Cash Back and Convertible mortgages.

Borrowing: President's Choice Financial offers personal loans – at both fixed and variable interest rates – as well as two types of lines of credit: secured (against home equity) and personal. Interest rates for these products are not published on their website.


Presidents Choice Brokerage Review


Investment Account Types


President's Choice Financial – or PC Financial as it's also known – offers a number of registered, tax-free and non-registered investment account types. Among registered investment options they offer Registered Retirement Savings Plan (RRSP), Locked-In Retirement Account (LIRA), Registered Retirement Income Fund (RRIF) and Registered Education Savings Plan (RESP) accounts. Instruments that can be held in these various registered accounts include cash (Canadian dollars only), 1-5 year term Guaranteed Investment Certificates (GICs) and Mutual Funds.

In terms of tax-free accounts, there are two options available: a cash-based Tax Free Savings Account (TFSA), which earns interest at a rate comparable to a typical high-interest savings account, and a Mutual Funds based TFSA. The choice of Mutual Funds currently on offer includes a range of index funds from CIBC Securities Inc. These cover bond and equity index funds from Canadian, US, European, Asia Pacific and Emerging markets. These funds can be chosen in a pick-and-mix fashion or as part of 7 predefined index portfolios. These portfolios range from Conservative Income to Aggressive Growth. PC Financial provides access to CIBC Securities' investor selector tool, which helps one select a particular portfolio based on risk tolerance, investment objectives and investment time horizon.

In terms of non-registered accounts, one can purchase the same GICs and Mutual Funds that are eligible for registered and tax-free accounts.


Pricing and Fees


The cash-based TFSA – or Tax-Free Interest PlusTM Savings Account as it's known – incurs no opening or maintenance fees and has no fixed term or minimum balance or deposit amounts associated with it. Maximum dollar deposit limits are defined by the Canada Revenue Agency (CRA) and, for 2018, is set at $5,500. As a qualifying TFSA, any interest earned is tax-free and no tax is due upon withdrawal of any balance from the account. Contributions are not tax-deductible, so the amount invested is after-tax income. Money may be withdrawn at any time without penalty and re-contributed in the following or future years, up to one's personal contribution limit (as determined by the CRA). Standard and any special/bonus interest rates offered on the account are clearly advertised on the website and continually updated.

Each of the CIBC Securities Mutual Funds that are available for purchase through PC Financial has an associated annual Management Expense Ratio (MER). MER fees range from 0.65% for the CIBC Money Market Fund to 1.40% for the CIBC Emerging Markets Index Fund – so the total fees one will pay will depend on the amount and specific allocation of each index fund held. Discounts on management fees are available under certain conditions and for selected products. Also, depending on the account in which the funds are held (RRSP vs RRIF vs non-registered), certain minimum lump sum and/or initial investment amounts may be required. Customers are advised to contact one of PC Financial's Dedicated Mutual Fund Representatives for details.

Cash can be moved in and out of your TFSA account via your designated bank account, which could be a PC Financial bank account (and so free of charge) or one from another financial institution. Regular automatic payments can also be set up for ongoing contributions – whether as cash deposits or as Mutual Fund unit purchases.


Presidents Choice Financial Review


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Platforms and Account Access


PC Financial provides both a website (www.pcfinancial.ca) and a mobile app (called PC Financial Mobile Banking), which is available via the App Store, Google Play, Blackberry World and Microsoft Store.

The user interface of the website is clean, modern, well laid out, easy to navigate and highly usable. Most information is available in text/list form or as graphical pie and timeline charts, which makes for a very friendly and intuitive user experience. Information about all accounts held is readily available – be they banking, mortgage, borrowing or investment accounts. Fund transfers between any accounts held (subject to the usual constraints in terms of what is legally permitted) is straightforward. Deposits – to all account types, including investment accounts – can be made directly via the mobile app (using the device's built-in camera to take pictures of the cheques to be deposited). The website is also fully responsive – i.e. mobile-device friendly – so one can access the site from any mobile device without installing the app. All core features for viewing accounts, making deposits and transfers, as well as paying bills are available via the mobile app.

Registration and initial account set up is very straightforward. The process starts online (basic online form filling steps) and is followed by a phone call and/or visit to a PC Financial Pavilion with a PC Financial Customer Support agent to confirm some of the application details. PC Financial Pavilions are available at most of the larger grocery stores with which PC Financial is associated (e.g. Real Canadian Superstore, Loblaws). Once set up as a PC Financial customer, most products and new accounts can be then be opened online without any additional paperwork or manual steps.


Customer Service


Contact with Customer Service can be carried out via online secure email, 24/7 toll-free phone, mail or in person at a PC Financial Pavilion. Response times are very fast and the level of service provided is very professional and helpful. Note that, as with most banks, you will deal with a separate part of the organization when making inquiries or seeking assistance with your PC Financial MasterCard. At present, PC Financial credit cards are handled separately from their banking, borrowing and investment accounts.


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Presidents Choice Investing Review Summary


PC Financial has positioned itself as one of the leading online banking institutions in Canada. This is largely due to their attractive offerings, e.g. unlimited monthly transactions, free and unlimited withdrawals from CIBC bank machines, interest-bearing chequing accounts, PC Points rewards, and various other no-fee products and services available. In terms of competition it provides substantially more products and services than either EQ Bank (which offers no investment accounts at present) and Zag Bank (which only offers basic cash-based GIC, RRSP and TFSA accounts). Indeed, its only true competition, with which it compares very favorably, comes from Tangerine Bank - formerly ING Direct and now a wholly-owned subsidiary of Scotiabank.


Presidents Choice Financial reviewed by Brokerage-Review.com. Rating: 3.5