3-star brokerage rating

TD Direct Investing Review


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



TD Direct Investing Overview


TD Direct Investing is one of Canada’s first online discount brokerages. Originally using the name TD Waterhouse, they have slowly begun to react to the emergence of non-bank discount brokerages such as Questrade and Virtual Brokers. Despite some recent improvements to commissions and a redesigned website, TD Direct Investing still trails far behind the non-bank brokerages.


TD Direct Investing ETF and Mutual Fund Commissions


TD does not offer any special rates for purchasing ETFs, which means they must be bought and sold for their standard $9.99 commission. Currently Scotia iTrade is the only bank-based brokerage which offers free ETF purchases, meaning that TD’s fees put them in line with most of the other big bank brokerages, but at a severe disadvantage compared to the non-bank discount brokerages (such as Questrade) where free ETF purchases are now standard.

Mutual funds are free to buy, sell, and switch with TD Direct Investing, but this comes at the cost of limited selection. At other discount brokerages, such as Virtual Brokers, clients can buy F series funds which have much lower management fees since they do not include an advisor fee. TD Direct Investing does not offer F series funds, which means that TD pockets the fee portion of mutual funds that is supposed to pay advisors for providing advice. Seeing as how TD is not giving any advice, this is a problematic practice. For example, one of Canada’s largest funds is the Dynamic Strategic Yield Fund. The F series has a management fee of 1.11%, while on TD, only the A series is available, which has a management fee of more than double at 2.25%. This makes the same fund much more expensive through TD Direct Investing than it otherwise should be.


TD Direct Investing Stock Commissions


Equities are a flat $9.99 (or $7 with over 150 trades/quarter) per trade. This pricing plan came into effect due to increased pressure from Questrade and Virtual Brokers (Virtual Brokers vs TD Direct Investing comparison). Prior to this pricing change, equities had a $45 commission for most clients. While this is a step in the right direction for TD, it only matches a few of their competitors and is nothing ground-breaking.

For active traders, TD Direct Investing is simply too expensive. A $7 commission compares very poorly to Virtual Broker’s free equities structure and Questrade’s (Questrade review) 1 cent per share commission. For high volume traders, commissions can significantly eat into profits, and TD Direct Investing takes a big bite.


TD Direct Investing Review


Stock Quotes and Research


While TD’s commission structure is simply uncompetitive and unreasonably expensive, their one major advantage is their research section and screeners. Their stock quotes provide a lot of useful information with a nice modern web design layout, and the screeners are excellent. Screens can be saved and shared, allowing clients to look through the best recommended screens and also the best community-created screens. The one thing that TD Direct Investing does well is research, and it can be worth it to have an unfunded account for the research alone.


TD Direct Investing Reviews


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Issues and Problems


A second major strength of TD Direct Investing is that its customer service agents are extremely helpful, however, this is actually not a true strength for TD. Their web interface is so lacking in the ability to perform basic tasks online, that one is required to call customer support quite often. Transferring money from a registered account to a non-registered account can only be done over the phone for unknown reasons. Selling certain mutual funds can also trigger a hold on one’s account, requiring a phone call to complete the trade. With most online discount brokerages, one can easily perform these basic tasks online in a matter of seconds. TD’s friendly and efficient customer service is a necessity because one has to call them for all manner of trivial tasks.

In addition to the problem with only high fee mutual funds being available, TD Direct Investing has two different types of RSP accounts. The self-directed account has an annual fee of $100, and the basic account has an annual fee of $25. The basic account only allows the purchase of mutual funds, which means if a client wants the lower fees of ETFs, they have to shell out the extra fees. By comparison, Virtual Brokers has no fees for RSP accounts and no limitations on what can be bought.

TD Direct Investing also can present major difficulties for those without a regular TD bank account. Unlike other online brokerages, TD Direct Investing does not allow one to easily enter banking information to link a chequing account to one’s TD Direct investing account for withdrawals. The only other withdrawal option is mailing a cheque which could take weeks (and is subject to processing fees). Despite the seeming link to TD Bank, TD Direct Investing is actually a separate company, and thus going to a local TD branch and inquiring about one’s Direct Investing account is met with blank stares. Branch staff are also unable to link a newly created TD bank account to a TD Direct Investing account, requiring yet another phone call to customer service.


TD Direct Investing Review Summary


Overall, TD Direct Investing is a very poor choice for buy and hold investors and active traders alike. Their commission fees are wholly uncompetitive and their website lacks basic features, requiring clients to constantly call customer service to accomplish basic tasks such as moving money or completing trades. While TD Direct Investing has an excellent research section, it is definitely not worth the price of the inflated commissions and account fees.


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





Is TD Direct Investing a Legitimate Firm?


TD Direct Investing is a major British and Canadian securities broker. Investors who are interested in opening an account with the company but have concerns should read through the following article, which will address specific questions.


Is TD Direct Investing a Scam?


TD Direct Investing is a subsidiary of TD Bank Group, one of the largest financial companies in the world. Obviously, TD Direct Investing isn't a scam. The broker is a lawful financial company providing legal investment services. The firm has over 300,000 customers, whose accounts total more than £13 billion. Clearly, customers trust TD Direct Investing with their financial lives. With the much larger TD Bank Group supporting it, there is no need to be worried about the integrity of the firm.


Is TD Direct Investing a Safe?


The securities arm of TD Bank was founded in 1997 in the UK. Today, it is one of Britain's major on-line brokers, helping clients with stocks, bonds, funds, cash management, and more. It has two offices in England—one in Leeds and another in Manchester. It is certainly a safe and legitimate securities firm. With billions of pounds under management, investors have no reason to be apprehensive about the company.


Awards


TD Direct Investing has won many awards over the past several years. For example, the broker was awarded the Hero of the Year award from The Langcat Direct Platform Awards of 2015. The honor praised the broker for no longer charging exit fees. Another prize in 2015 came from YourMoney. TD Direct Investing earned Best Online SIPP Provider. The award was based on price and quality of SIPP service. Online Personal Wealth Awards gave first place to the broker for best education and resources. With such a stellar record of honors, investors can be confident in the legitimacy of TD's brokerage team.


Is TD Direct Investing Regulated by the FCA and the IIROC?


TD Direct Investing is not a bank; and therefore it is not regulated by any banking authority. It is a securities broker, and as such it is regulated by the Financial Conduct Authority. It is a member of the London Stock Exchange (LSE). It is also a member of the ICAP Securities and Derivatives Exchange. These memberships help protect investors by creating oversight of the firm.

In Canada, TD Directing Investing is a member of IIROC, the Investment Industry Regulatory Organization of Canada. The broker's membership helps protect the assets of its clients.


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Is TD Direct Investing Free?


Canadian accounts with TD Direct Investing with total household assets of CAD$15,000 or greater pay no quarterly fee. To qualify as household accounts, all addresses associated with the accounts must be the same. Accounts with less than the required $15,000 are charged $25 every three months. This quarterly fee can be waived if certain conditions are met, such as if the first household account was opened less than six months ago. The charge is also waived if at least one account is signed up for a Systematic Investment Plan (SIP) or Preauthorized Deposit or Contribution of at least $100 per month. Placing 3 or more commissionable trades per quarter will also eliminate the charge. The trades can be placed across any number of household accounts. The $25 fee will also not be charged if any account in a household maintains a Registered Disability Savings Plan (RDSP). Mailed paper statements and trading confirmations are $2 each. The broker does charge a $9.99 commission for stock and ETF trades. Frequent traders receive a $3 discount.

UK accounts pay £20.00 plus a value-added tax. These charges are assessed every 6 months. The semi-annual account fee can be waived under certain conditions. For example, accounts that place at least one trade every six months are not charged the fee. Linking an Individual Savings Account (ISA) or an SIPP will also eliminate the charge. Accounts with a balance of at least £15,000 won't be charged the fee, either. Customers who maintain a Funds valuation (Unit Trusts/OEICs) of at least £10,000 can also avoid the fee. The broker charges between £5.95 and £12.50 for stock and ETF trades. Frequent traders receive the lower charge, while infrequent traders pay the £12.50 commission. The firm does charge for use of its platforms. The platform fee for accounts with funds under £250,000 is 0.30% per year. If an account has funds over £250,000, the charge is 0.20%. In either case, the platform fee is capped at £750 per 6 months and £1500 annually. The cap is applied to each account in a household.


Is TD Direct Investing a Safe Summary


TD Direct Investing on both sides of the Atlantic provides trustworthy investment service at an affordable cost. The broker's membership in regulatory organizations helps ensure the safety of clients' assets. Combined with the strength of the TD Bank Group, investors can't go wrong with this broker.