RBC Investments rating

RBC Direct Investing Brokerage, Stock Trading Review


RBC Direct Investing review, brokerage rating for 2018. Is RBC Direct Investing Safe? Stock trading fees. RBCDI Canada RRSP, RRIF, TFSA account investment cost, minimums, and ETFs.



RBC Direct Investing Overview


Investors in Canada do not have the multitude of options available to them like traders in the United States. Most of the options they have are with the large Canadian banks like CIBC, TD Canada Trust, or Bank of Montreal.

There have been a few that have made some traction, like Interactive Brokers and Questrade, however the banks still seem to dominate.

One of the larger banks in Canada, RBC (Royal Bank of Canada), has an online discount brokerage called RBC Direct Investing. Investors interested in potentially opening up an account with RBC would be wise to read the following review to understand what it is they are getting in the online trading platform.


New Account Setup


Opening an account with RBC Direct Investing is easiest if potential customers are an existing banking client with the company. If they are already an RBC customer but not yet an RBC Direct Investing client, they can simply head to the home page and click on the Open an Account link and select the sign-up method for existing clients. This will be the quickest way to get access to the trading platform.

If they are not clients yet, they can select the link within the Open an Account section stating they are not yet clients and then use the 24-hour application process. With this method, investors should be able to start trading within 24-hours of opening an account. In the author’s experience, accounts can be opened as quick as 24-hours which is great if you want to get started right away.

Most account types can be opened using this method, including RRSP, RRIF, TFSA, or cash/margin accounts.


Canada RBC investing review


Web Trading Platform and Tools


RBC Direct Investing is not designed for very active traders or people looking for advanced trading platforms like Interactive Brokers or Questrade.

Instead, it is geared towards the not-so-active investor who is looking to manage their investments themselves. Active traders would find the process to enter and manage trades too cumbersome. Efficiency is not RBC Direct Investing’s strong suit!

However, the website does have all the typical web-based sections that most investors will need. It is broken down into four primary sections: My Portfolio, Place an Order, Research Centre, and Community. Let’s review the ‘Place an Order’ and ‘Research Centre’ sections.


Place an Order Section


Traders are able to enter orders for a multitude of investment products, depending on their account type. For example, traders can buy and sell stocks, ETFs, mutual funds, and options. Option trading is entirely dependent on the type of account you open and risk tolerance.

Entering a stock order is simple, and all the standard order types are available. Traders can enter market or limit orders, and apply stop prices to them. If investors wanted to do advanced order types like bracket orders, they are out of luck. Again, this brokerage firm is focused on the most basic of investor who is looking to buy and sell in as simple a way as possible.

The attached screenshot of the order entry screen shows that the tool is laid out in a logical fashion, with users required to work their way down the screen entering the account they want to make the trade in, whether they are buying or selling, what stock symbol, how many shares, market or limit pricing and so on.


RBC Direct investing review


Once an order is placed, order execution is relatively quick, depending on if the order is a market or limit order. Market orders get filled the quickest, but limit orders seem to have some lag.

One issue with the order entry and execution process is that when an order is entered, the user needs to navigate manually to the “Check My Orders” screen to see if the order was filled and at what price. It would be more convenient if they were taken right to that screen after placing a trade.


Research Centre


With the wealth of information about the markets and stock available to investors all over the web, there seems to be little value to RBC Direct Investing’s Research Centre. It seems to be geared to investors with little to no market knowledge or understanding of the markets. There is more of a focus on explaining what an ETF is versus trying to identify which ETF has the best performance.

There is a stock, mutual fund and ETF screener that can help with some analysis, however it will not be very useful for anyone other than the most basic investor. The only real upside to the Research Centre is it provides some information to Morningstar based research which can be helpful when researching mutual funds.


Mobile Trading


In a smartphone dominated environment, it would be negligent not to cover the mobile trading environment available to RBC Direct Investing clients. The screenshot of the Direct Investing app shows that users have access to all the same tools available on the web platform.

The app itself is well done and easy to navigate. However, like the website, it is geared to investors looking for basic investing tools.


Pricing and Fees


RBC Direct Investing is not the cheapest brokerage available to Canadian investors. However, it is not the most expensive either. Trades are $9.95 flat per transaction for stocks. If clients make more than 150 trades per quarter, then commissions drop to $6.95 flat per transaction. However, if traders are doing more than 150 trades per quarter with RBC Direct Investing they will be paying way too much.

There are no fees to buy, sell, or switch mutual funds using the online site. It would be great to see RBC offer free trades for ETFs like Questrade.

There are no account maintenance fees with RBC Direct Investing, as long as clients have over $15,000 in their account. If they don’t then there is a fee of $25 per quarter.

Right now RBC Direct Investing does not provide robo-investing service similar to one offered by WealthSimple.


Pros and Cons


Like all online brokerage accounts, there are a number of pluses and minuses for clients of RBC Direct Investing. Potential clients should determine what is most important to them and consider these pros and cons when making a final decision.


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Pros


  • Strong customer service with a lot of hand holding and support available to clients.
  • Trading platform is easy to navigate and walks users through making a trade in a logical process.
  • Very good banking integration for existing clients of RBC.
  • Allows clients to hold USD funds in their RRSP accounts.
  • Allows automatic dividend reinvestment (whole shares only) for eligible securities.
  • Easy access to low cost D series mutual funds.
  • Wide selection of GIC’s.
  • Users can open practice accounts to practice trading.
  • Mobile app is well designed and easy to use.


Cons


  • Slow fills on limit orders and delayed quotes make it tough to determine what a limit price on a buy should be.
  • Option trading functionality is limited.
  • Not good for more advanced trading, or a higher volume of trades due to the need for multiple clicks and intensive entry requirements. No point and click like Interactive Brokers or Questrade.
  • Market intelligence and research tools are basic and provide little value.
  • Interface is clunky and many clicks required to move around the site.
  • tock quotes are delayed (they say they are real-time but that does not always seem to be the case).
  • Account balances do no update in real time. Often need to wait until trade clearing is done before account balance reflect true amounts.
  • Account activity page is hard to read.
  • Poor portfolio performance monitoring tools.


RBC Direct Investing Review Summary


Is RBC Direct Investing a good broker? That depends entirely on how sophisticated the investor needs their broker to be.

If all they are doing is making the odd stock, mutual fund, or ETF purchase every once in awhile, then RBC Direct Investing will meet their needs. However, if there are more advanced needs beyond that then it would be advisable to people to look elsewhere. The clunky interface and multiple clicks required to complete the most basic tasks will be frustrating for active traders and investors.

RBC Direct Investing does what it is supposed to do; buy and sell stocks, mutual funds, ETFs, GICs, and monitor a portfolio. However, for such a large bank, the trading platform should focus on becoming more efficient and easy to navigate.

For investors looking for a bargain pricing or to trade actively, Questrade is a much better broker.


RBC Direct Investing reviewed by Brokerage-Review.com. Rating: 3





Is RBC Direct Investing a Legitimate Firm?


RBC Direct Investing is a subsidiary of Royal Bank of Canada (RBC), Canada’s largest bank and one of the largest banks in the world, based on market capitalization. The company is a leader in diversified financial services and has over 80,000 employees and more than 16 million clients in Canada, the U.S., and 37 other countries. Founded in 1864, RBC has grown to become one of the 100 largest companies in the world as measured by revenue and market capitalization according to the Forbes Global 2000 listing.

RBC Direct Investing (RBCDI) is RBC’s online discount brokerage and offers individuals the ability to trade stocks, ETFs, mutual funds, options, and fixed income securities in both taxable and tax-sheltered retirement accounts. In addition, RBCDI offers services such as mobile trading, free educational seminars, research and planning tools, practice trading accounts, and the convenience of linking investing accounts with RBC banking accounts.


Is RBC Direct Investing Safe?


As a subsidiary of one of the largest banks in the world, RBCDI is most definitely legitimate. The parent company, RBC, lists total assets of more than C$1 trillion and had revenues in 2015 of more than C$35 billion. RBC has more than US$673 billion of Assets Under Management (AUM).

RBC has won numerous national awards including One of Canada’s “Best 50 Corporate Citizens,” one of Canada’s “50 Most Socially Responsible Corporations,” one of the “Best Workplaces in Canada,” and one of “Canada’s 10 Most Admired Corporate Cultures.”

Regarding safety, the company offers a 100% online security guarantee for any direct losses from unauthorized transactions through either online investing or the RBC Mobile app. They also use multiple security features and technology to keep personal information safe and secure. Privacy is also a high priority along with tips on the website about preventing identity theft or investment or website fraud.


Is RBC Direct Investing Insured?


RBCDI is insured through the Canadian Investor Protection Fund (CIPF). Since banking and investing accounts may be linked through RBC, many savings accounts and time deposits within the RBC bank are insured by the Canada Deposit Insurance Corporation (CDIC) against insolvency up to $100,000 per account. Certain exceptions may apply, so investors should take care to learn which accounts are covered and which are not covered by insurance.


Is RBC Direct Investing a Scam?


No. RBCDI is not a scam. The company offers legitimate, honest online investment brokerage services to individuals in Canada and around the world.


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RBC Direct Investing Better Business Bureau (BBB) Rating and Reviews


Data for RBCDI was not available at the BBB Website, so data is shown for the RBC headquarters located in Toronto.

RBC’s standing with the BBB is average, with a rating of C-. The company has not sought accreditation from the BBB. In the past three years, 51 complaints against RBC have been closed. Twenty-two of those complaints were closed in the last 12 months. The breakdown of complaint types is shown below.

Advertising/Sales Issues-4

Billing/Collection Issues-17

Delivery Issues-0

Problems with Product/Service-30

Guarantee/Warranty issues-0

Five customer reviews have been submitted in the past three years. All reviews were negative. Issues were mainly about poor customer service as well as high or raised fees and failure to deliver promised gifts for opening an account.

While 51 complaints seem high, but when compared to RBC’s enormous size and customer base, 11 were resolved satisfactorily and 29 were answered but the consumer did not accept the response, or BBB has not heard back from the consumer as to their satisfaction. Only 11 complaints were either ignored or RBC did not make a good faith effort to resolve it. These complaints are cause for some concern and caution but not a major factor in assessing RBCDI since no specific complaints against the investment brokerage subsidiary could be found at the BBB website.


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Is RBC Direct Investing Safe Conclusion


RDC Direct Investing is a safe, legitimate online investment brokerage that offers competitive discount brokerage services to millions of customers. They are insured and regulated by the appropriate government agencies and enjoy a solid reputation both in Canada and the other countries in which they conduct business.


Updated on 2/26/2018.