Disclosure: I use Etrade and used to be with RBC DIrect investing
Please note that what is written here are all personal opinion and by no means reflect other people’s experience.
I started an account with Questrade to probe how to reduce trading costs for a few people I know. We all agree that Questrade’s comission sounds very cheap, but skeptical of how it remained that cheap. Business wise, it does not make sense that a broker can do trades on such low comissions while catering to small time investors like your average Joe. On top of that, Canadian’s low population does not justify the price.
All that to say, we went in skeptical with the understanding that we are most likely going to lose some money from hidden fees and mishandlings.
The trading experience
I am going to stick with the usability here and suggest some improvement. I did this in 2008 so they might have already updated it. I chose the cheapest option and traded on the web platform and the first thing that hit me is the requirement to double login. This confused me greatly, I am pretty sure that they did not perform usability testing on their trading platform.
They way they work is this. You do your maintenance through your actual account. i.e. transfer of money, conversion of money, information update etc. Once you’ve done that, you have to use this to transfer money to your trading account.
So yo wait a few day for them to cash your checks, then you wait a few more days to get your money in your account. Until finally you can trade. To trade, you have to login to your actual trading platform. I really hope that they can combine these two together, but I doubt they will do that.
So my strategy is simple. I don’t trust the posted rates by most of these traders. So everytime I start an account, I do a transfer of $100 to different parts to see what will happen. I then buy some shares, hold it and see what happens.
Foreign exchange cost about 1.5% of the capital. I also somehow ended up with negative capital. At first I thought I miscalculated in my foreign exchange rate so I just transferred money in and forget about it.
2 month later, I logged back in to find a negative $50 balance. I promptly called them to figure out what’s going on. The wait was terrible and the support not so great. I had read on MillionDollarJourney that you had to talk with their manager in order to get any good support.
Long story short, there was some data fees that is charged to my account monthly, add on to that is the fact that they somehow granted me margin which allows me to borrow money from them and let my account go into negative territory without a hitch. Once that happens, they charge you the normal margin rate. Which, to my recollection, was extremely high. Add to the frustration is that there’s no way to check your account history online. You have no idea what’s deducted from your account. All you can do is rely on their support, which, in my memory, reminds me of RBC Direct Investing’s personnel who mocked my loss in Nortel.
At this point, I was so infuriated that I decided to close the account and transfer all my money out. There are some additional closing fees and some other shit that they tacked on. Which ended up with them gouging a total of around $250 out of this whole trial. At that point, I didn’t care anymore. I can smell a rat and I’d rather cut my leg off than get infested. So I got out.
A month later. I reported to the group of people. I used to think that RBC Direct investing’s account transfer fee of $100 was bad, this has so far been the worst. Objectively speaking, yes, I should’ve been more careful with my money and yes, I probably didn’t read things carefully. Fact of the matter is. I am the most careful investor out of the group and I reported that I lost money so, the decision was easy. Which led to the eventual conclusion that we should STAY THE FUCK AWAY from Questrade.
Next, I will evaluate TD Waterhouse. I am still in the process of opening a simple TD checking account first so it will probably take a while. Stay tuned.