TD Responds to e-Series Concerns

In a recent post, I shared a reader’s story about how difficult it was for her to open a TD e-Series Mutual Funds account. That elicited responses from dozens of readers who had similarly unpleasant experiences, as well as several who weren’t sure what all the fuss was about.

I contacted TD about the issue and received a response from Maria Leung of Corporate and Public Affairs, TD Bank Financial Group. Her explanations should help clear up some of the confusion surrounding these otherwise excellent index funds.

Many people who commented on the original post said they tried to open an e-Series account at a TD branch, only to encounter staff who had little or no idea what the e-Series funds were. So my first question was about that unfamiliarity:

While TD Mutual Funds offers a broad range of investment solutions, not all are actively promoted in each of our distribution channels. For our TD e-Series Funds, customers purchase the funds online, either through TD Canada Trust’s EasyWeb site, or if they are TD Waterhouse Discount Brokerage customers, online using WebBroker (discount brokerage accounts can be opened at any TD Canada Trust bank branch or TD Waterhouse Investor Centre across the country). The efficiencies of purchasing the funds online, combined with the low management fees of index funds allows us to pass the savings on to our customers in the form of lower MERs.

Bottom line for investors, then, is simply to avoid visiting a TD branch if you want to open a TD e-Series Mutual Funds (EasyWeb) account. Instead, go straight to the online application page. If you prefer to purchase the e-Series funds through a TD Waterhouse account, then you can do that either online or at a branch.

It’s entirely reasonable for TD to require customers to open an e-Series account online, but I would maintain there’s no good reason why branch employees should be unaware of their existence. It would be a simple matter to train staff to say, “Sorry, we don’t do that at the branch, but here’s a brochure with a link to the website where you’ll find the application.”

The risk-tolerance questionnaire

My next question was why it is necessary to fill out a rather lengthy risk-tolerance questionnaire when buying e-Series funds through a TD Mutual Funds account, but not if you’re buying the same funds through TD Waterhouse.

Customers who prefer not to work with advisors, but decide to purchase the funds online on TD Canada Trust EasyWeb are required to complete a thorough application process for a few different reasons:

When opening an account on TD Canada Trust EasyWeb, customers are in fact opening a mutual funds account with TD Investment Services Inc., the mutual fund dealer affiliate of TD Canada Trust. Each Canadian bank has a mutual fund dealer affiliate that offers mutual fund products to Canadian customers. The Mutual Fund Dealers Association of Canada’s (MFDA) rules require mutual fund dealers, including TD Investment Services Inc. to use due diligence to ensure that each order accepted or recommendation made for any client’s account is suitable for the client and in keeping with their investment objectives.

In addition, complete know-your-client (KYC) information is required when opening an account and before trading on behalf of clients. This process is consistent for all investment accounts opened with TD Investment Services Inc. The MFDA rules apply to all mutual fund dealers that are affiliated with Canadian banks, so a similar account opening process is in place amongst these types of financial services firms across Canada.  The MFDA Rules however, do not apply to dealers that allow customers to purchase stocks, such as in a discount brokerage platform.

Customers who choose self-directed relationships and who hold an account with suitability-exempt discount brokers, including TD Waterhouse Discount Brokerage, are not required to complete a suitability questionnaire. In these types of accounts, the investor is responsible to ensure their investment decisions are consistent with their investment objectives and risk tolerances.

So there you go. That’s the reason for the risk-tolerance  questionnaire. If this part of the process seems daunting, remember you can always adjust your asset allocation later, once the account is up and running.

Many thanks to Maria Leung at TD for providing clear and complete answers.

42 Responses to TD Responds to e-Series Concerns

  1. Anthony August 20, 2010 at 9:48 am #

    Probably the best RESP account around is a TD e-series account; but it looks like the application form doesn’t support RESPs. For that, I think an in-branch application followed by an e-series conversion form is still required.

  2. Canadian Capitalist August 20, 2010 at 9:58 am #

    One more point to be aware of is that the risk tolerance questionnaire and KYC form needs to be updated every two years (IIRC). I received a call from TD Mutual Funds one day asking all those initial questions all over again. It’s not a onerous requirement but something to be aware of.

  3. Canadian Couch Potato August 20, 2010 at 10:04 am #

    @CC: Thanks for the heads-up, CC. Can you confirm Anthony’s comment about not being able to open an RESP account online directly?

  4. Big Cajun Man August 20, 2010 at 10:32 am #

    The other point to watch for is that if you have TD Mutual Funds account I don’t think you can access the E-series funds at all, you can only buy them if you have a TD Waterhouse account. I have my daughter’s RESPs with TD Mutual, and have never been able to convince anyone to let me purchase E-Series funds in there, but I can easily get them with my TD Waterhouse account. The easy fix is don’t have your accounts with TD Mutual funds?

  5. Dong August 20, 2010 at 1:03 pm #

    I am in the process of investing a big sum of money through TD, i called they 1-800 line and spoke to a very knowledgeable fellow who booked me a meeting with the director my local branch. Got a call the next day and i am meeting him this monday, was aware of e-funds and responded to all my answer.

    So far, i must say that i am very impressed with TD customer service, wondering if it have anything to do with the amount of money i am investing or if someone with just a couple 1000’s would get the same treatment. I will start with a simple TFSA account to see how it goes 🙂

    So far, so good !

  6. Canadian Couch Potato August 20, 2010 at 2:42 pm #

    @Dong: Thanks for sharing your experience. I have no doubt that the amount of money you plan to invest has an influence. I could be wrong, but I would be willing to place a small wager that the person you meet on Monday will not suggest that you use e-Series funds for your account. They will almost assuredly want to put you into higher priced funds with one of their advisors. If you need advice, that’s fine, but if you don’t, make sure you’re not paying hidden fees for a service you don’t need.

  7. larry macdonald August 20, 2010 at 3:11 pm #

    CCP — to answer your question re: TD RESP
    Last heard, one has to go in to a branch and open a TD Mutual Funds RESP account , then put the depposit in the money market fund. Then apply to convert the account to a a TD e-Series account. A bit of a hassle

  8. Ace82 August 20, 2010 at 4:21 pm #

    The problem is not the expectation of in-branch staff knowing the ins and outs of the e-series, it’s as you say, they are unaware of their existence. If I have to open an RESP account in-branch (there is no way to do this through Easyweb to my knowledge), then I HAVE to purchase funds that I don’t want (because I only want the e-series and they are not available in-branch) and then I HAVE to choose a fund for the government contribution (the same funds that I don’t want). The answer provided from TD is too simplistic.

    Provide me the option to open an RESP account online, or provide me an option to do a Pre-authorized purchase plan in-branch for e-series, or maybe there is an option I’m not seeing. Currently, my only recourse is to set it up in-branch with funds I don’t want (even if it is only $100), move the purchase to e-series on Easyweb and then call Easyline to change the government contribution to e-series. As Larry mentions, it IS a bit of a hassle!

  9. Dong August 20, 2010 at 4:27 pm #

    @Canadian Couch Potato, i am meeting the TD Brokerage division, i am not sure this division sell mutuals funds, i will keep and eye open, i clearly told them it was purely DIY.

    I am also considering using TMA (Tulett, Matthews & Assoc. Inc) services, i read “Empowered Investor” book last month and i must say that i was very impressed about how everything was explained in a clear and concise manner. Interesting fact, i just noticed that TMA use TD too. I am still wondering if using them is really worth the ~1% additional MER.

    Can’t be worst than dealing with the guy who pushed 2.5%MER Fidelity funds and “Universal Insurance” product in my direction before even asking if i was married and/or with children…

    Excellent website, i have read all your article’s and also subscribed to MoneySense !

  10. Canadian Couch Potato August 20, 2010 at 5:53 pm #

    @BigCajunMan: Have you tried to convert your TD Mutual Finds account to an e-Series account online?
    http://www.tdcanadatrust.com/mutualfunds/tdeseriesfunds/convert_acct.jsp

  11. Bob Gibb August 20, 2010 at 7:07 pm #

    I would maintain that there’s no good reason why branch employees should be unaware of their existence.

    I don’t find this unreasonable at all.

    eFunds are sold via the brokerage arm. You wouldn’t expect a broker to know everything the bank does so why would one expect every bank employee to know what a broker does.

    The problem really is it’s not clear to most people there is a difference between TD Bank and TD’s arm’s length brokerage operations (Waterhouse or Online). TD, not the employees, are at fault for not making this clear.

  12. Canadian Couch Potato August 20, 2010 at 8:12 pm #

    @Bob Gibb: Just to clarify, e-Series funds are not sold only by the brokerage arm of TD, they are also sold by the Mutual Funds arm. If you walk into a branch and say you want to open a TD Mutual Funds account you would likely be welcomed with open arms and then steered toward their higher fee I-Series funds.

  13. Pablito August 20, 2010 at 8:12 pm #

    @Larry, @CCP: That is the exactly the process I went through to set up my kids RESP accounts. Frankly, the process is silly, but you either jump through their hoops or do without. 🙂

    @BigCajunMan, @Bob: Actually, the e-Series funds are sold by both TD Waterhouse and TD Investment Services. TD Investment Services falls under the TD Bank umbrella that sells only mutual funds as Maria explains in the post. In order to get access to the e-Series funds you have to convert your mutual fund account (whether RESP or otherwise) to be “online only” so to speak. Until you do the account conversion, no e-Series are visible to you online and as has been said, the people at the branch have no real visibility of these funds and so cannot sell them to you. @Bob: As such, I think it quite reasonable to expect that TD Bank (i.e. TD Investment Services) agents to at least know about the e-Series funds and send people to the web site.

    @Ace82: When I set things up, I believe I instructed them to deposit the government match straight in to the Money Market fund. Regarding the whole “but that’s not consistent with your investment profile” thing, I simply had the bank agent add some note to the file that I had specifically asked for this and would move things around later. Frankly, it took so long for the government’s initial matching contributing to be deposited that the conversion had taken place a month or more earlier. Nevertheless, I agree that it was more of a hassle than I’d have liked.

    And yes, the overall TD structure is so confusing, it’s not surprising that people are confused.

  14. Canadian Capitalist August 20, 2010 at 11:23 pm #

    I don’t think you can convert a mutual fund account into e-Series fund account online. You’ll have to fill up that form and send it in. At least, that’s the process for RESP accounts because that’s what I personally have at TD.

    If you have a TD Waterhouse account, you can purchase the e-Series funds directly. No jumping through hoops but then TD Waterhouse may charge a admin fee for small accounts.

  15. Financial Cents August 22, 2010 at 11:46 am #

    I must say though, good on Maria (from TD) to try and help clarify the issues. I guess the big picture takeaway is (for me at least), with so many financial products on the market, hard for any given investor (even the seasoned ones) to know it all.

    I wonder if that’s a future MoneySense article you could explore Dan, how a novice investor should/could start making sense of all the financial products “out there”?

  16. Brad August 23, 2010 at 10:53 pm #

    I already have TD e-series funds in my TFSA and sent in an application to open an e-series RRSP account. After 3 weeks I recieved my application back saying that I didn’t give enough detail about my job description. This was completely bogus because I did give a good description of my job and the company I work for, and the space provided was only one small line! If they were really concerned about the details of my profession, couldn’t they have just given me a call at the phone number right on the application?
    It seems like TD is just looking for any excuse to prevent people from buying their e-series funds.

  17. Frank August 24, 2010 at 11:27 pm #

    I recently opened an RESP account with TD and it requried me to visit the TD branch, as I did not have an existing TD RESP account. So to open a new TD RESP account we needed to visit the local branch in Burlington, Ontario and request to open a TD Mutual Fund account, which we would later convert to an e-Series Account. It took approximately 1 hour in the branch for them to collect our financial information/investment risk, as were not a prior TD Customer. They created an account at that time and supplied us with the account number. Since we didn’t have a TD chequing account we linked the RESP account to our existing CIBC Chequing Account. Once we arrived at home we completed and mailed in the following TD form to convert the TD Mutual Fund RESP account to an e-Series Account: http://www.tdcanadatrust.com/mutualfunds/tdeseriesfunds/convert_acct.jsp

    3 days later we received an email that the account was activated, but we did not have a TD Bank Card to access the EasyWeb website, so I visited the branch where I was issued a Bank Card that was linked to the RESP Account. Once I registered for online access I noticed the e-Series Funds were not available for purchase, after calling in I realized I had to wait an additional 2 days before the e-Series Funds were available.

    Now everything is linked and working well, I purchased my couch potatoe funds: 30% CDN Index, 30% US Index, 30% International Index, 10% Bonds and 2 days later the funds were deducted from my linked CIBC Chequing account and the funds were purchased. So we are very happy with TD and would now consider moving some of our RRSP Accounts over to them.

  18. Farhan Thawar August 25, 2010 at 8:43 am #

    I opened a regular RESP and converted to an E-Series.

    You have to have the matching portion (government grants) be put into a Money Market account otherwise you’ll get locked in for 30 days in some high MER account.

  19. Canadian Couch Potato August 25, 2010 at 3:06 pm #

    @Frank: Many thanks for sharing your experience. Glad it worked out well.

  20. nick August 30, 2010 at 1:57 pm #

    I just recently converted my TD Mutual funds locked-in RRSP to an e-funds account. I did this with the intention of setting up a passive portfolio (25% allocation each to the Canadian, U.S, International and Bond index funds) as has been discussed in this forum, but have not yet pulled the trigger for the following reason. I cannot and will not be adding any more money to this account due to its locked in nature. My question is whether this lack of flexibility should deter me from pursuing this investment approach. Right now I have the account invested 100% in a TD Dividend Fund. I’m not comfortable with maintaining the status quo either, but wonder if a different approach is required when your options to being able to add to a plan are limited.

  21. Canadian Couch Potato August 30, 2010 at 7:02 pm #

    @Nick: I don’t think there’s any reason why the locked-in aspect should deter you from using an indexing strategy. You might want to rebalance once a year or so, but this is easy enough to do even if you aren’t adding any new contributions.

  22. Jason September 20, 2010 at 1:26 am #

    Does anyone know if its possible to link children accounts to TD e-Series? My kids are only 3 and 5, but each have a jr. account with about $22K each. Due to income splitting and a family trust I don’t think these are eligible for an RESP. So I’d really like to get them into e-Series funds.

    Thanks.

  23. Travis September 18, 2011 at 8:55 am #

    Hello, I’ve just recently opened a TD e-Series RRSP account. I was fortunate to have read articles on CCP about how these funds are ‘hidden’, so I could prepare myself a bit better (knowledge is the key here). Sure enough, the financial rep I met with at TD had no idea these funds existed, and shes worked there for 11 years, longer than the e-Series funds have existed! I had printed off the ‘fund facts’ sheets (you can find these through a link on the TD e-Series mutual funds price/performance section online) so I could show her the MER difference between the regular index funds and the e-Series funds. She called someone at TD Waterhouse support, who helped her find the paperwork for these funds. She was genuinely excited to find out about the e-Series funds, almost as much as I was! From what I understand, you have to go in-branch to open a regular TD mutual fund account, then paperwork is sent away to convert it to an e-Series account(it took less than a week in my case). If you are going to set up an e-Series RRSP, I’d suggest that you just set up an e-Series TFSA at the same time just to save some hassle later on (the accounts are FREE after all). All that said, I was still impressed with TD’s customer support. If you’re going to open a TD e-Series account, dont settle for anything less, these funds DO exist, they just need a bit more searching. Have fun not paying high fees!

  24. Canadian Couch Potato September 18, 2011 at 9:06 am #

    @Travis: Many thanks for sharing your story. Did you already have a bank account with TD? Because people who have a chequing account at the bank already probably should not even go to a branch to open a TD Mutual Funds account. I believe they can do it all online.

    It’s really hard to believe that the product knowledge is so poor. TD has said they’re trying to make these funds more accessible, but I’ve seen evidence of this at all.

  25. Sally October 5, 2012 at 6:45 pm #

    Ironic that this was posted in 2010 and TD still doesn’t seem to have got their act together. I have now spent 5 weeks trying to get my TD e-series account going and in that time, TD:
    Having heard that the online route was bit circumvented by going into the branch, I did that. To be met with utter incompetence including the branch person sending the e-series form being sent to their ‘special e-series’ division with unchecked boxes – which I pointed out had not been checked and was told it didn’t matter, their e-series branch would fill them in.

    Two weeks later, the e-series branch sent back the form to with the boxes highlighted as unchecked and requested I please fill them in.

    I have also had to provide voided cheques twice now because they can’t seem to keep a record of the cheque I gave them to set up the transfer between my bank and the e-series account.

    I was told to open a TD savings account anyway to transfer money into the mutual fund account, and from there I could transfer money to the e-series account. In the end, the e-series account has been set up so that I can ONLY transfer money from my other non-TD bank account rendering the TD mutual fund and Savings account the branch person told me to open as pretty redundant. I can’t even transfer money from the TD Savings account to the mutual fund/e-series accounts because to do so immediately negates the link they have set up between my bank and their account. I don’t know if this an internal bout of stupid red tape or what – but what a waste of time.

    In the end, it took 4.5 weeks to open the e-series account.

    6 weeks on and I am still waiting for the money I have had sitting not working for me in another RSP account to be transferred in. It’s been 4 weeks since I sent that (corrected) paperwork in so I don’t know why it’s taking them so long to obtain the money – every other time I’ve transferred money between RSP accounts its taken less than 8 days.

    And now I’ve just received another request for a cheque as they have lost my previously provided cheques.

    At this point, I am quite prepared to tell TD to go shove it and accumulate ETFs instead. Is this why the e-series have low-MER’s – its filled with incompetent people managing it?!

    bunch of unchecked boxes – which I had pointed out were not checked, but the branch person insisted that they would be checked by the people

  26. Canadian Couch Potato October 5, 2012 at 8:26 pm #

    @Sally: Sorry to hear you had such a difficult experience. Unfortunately, your situation is all too common. I think a Twitter campaign is in order, don’t you?

  27. NJ January 7, 2013 at 11:55 am #

    *@CCP- i would like to know if you have any insight on my question

    I already have TD mutual fund (RRSP) account. I would like to buy e-series funds and from above posts i know that i will have to convert it to TD e-eseries account. What do TD do to existing mutual funds? Do they sell and buy again at that day’s rate or only the account type is changed from TD Mutual funds to TD e-series?
    Many thanks
    NJ

  28. Canadian Couch Potato January 7, 2013 at 12:12 pm #

    @NJ: The Investor series and e-Series are actually just different classes of the same funds, so I doubt there would be any actual sale and repurchase. But that’s really a question for TD customer service: I don’t want to lead you astray.

  29. NJ January 8, 2013 at 10:31 am #

    Thanks @CCP. I called TD customer service and they confirmed there will be no actual sale/repurchase done. Just the conversion to e-series account. I will update again once my account has been successfully converted.

  30. NJ January 21, 2013 at 10:39 am #

    Just an update. I mailed account conversion form to TD and I got an email confirmation in about 4 days. And I was able to switch some of my existing funds to e-series.
    Thank you @ CCP

  31. Canadian Couch Potato January 21, 2013 at 10:57 am #

    @NJ: Great stuff, glad it worked out.

  32. NC January 29, 2013 at 12:50 am #

    Rookie investor here – I am in the process of converting my TD Mutual Fund account to an e-series and I am wondering whether there are fees once I decide to withdraw money out of the account? Can the TD e-series hold cash or do I need to convert it again before withdrawing as cash?

    Thanks.

  33. Canadian Couch Potato January 29, 2013 at 8:40 am #

    @NC: There shouldn’t be any fees to withdraw money from a non-registered account or a TFSA, but best to just call TD and ask.

  34. MNH April 7, 2013 at 4:16 pm #

    Hello!

    Quick question, I am small business owner and my corporate account is with TD. I have a significant amount of cash that is sitting idle in my corp account and I would like to put it to work.

    Do you know if I am I able to buy E-series under the corporation name? I am not sure how risk profile would work for that. I am aware of the severe tax implications for capital gain earned by the corporation. I would be interested in hearing if any other small business owners have gone down this route.

    Regards

  35. Canadian Couch Potato April 7, 2013 at 8:39 pm #

    @MNH: You should have no problem opening a TD Direct Investing account for your corporation, and you will have access to the e-Series funds. But you should definitely consult an account or other specialist abut the tax implications.

  36. MNH April 8, 2013 at 6:24 pm #

    Thanks CCP. Just spoke with TD and my accountant and and going through the process now to open e-series. Actually seems much easier so far…maybe they streamline the process for business customers. Would be interested to hear any other corp. owners perspective.

  37. Andykbob April 23, 2013 at 7:00 pm #

    I see lots off issues with T.D. but people don’e seemed to have too many issues with T.D. Waterhouse. To open a new account with T.D. for trading E-series funds, is there any real difference between the Waterhouse account or the E-series?
    Is there a difference between fees?

  38. Canadian Couch Potato April 23, 2013 at 7:15 pm #

    @Andykbob: You make a great point. Opening a TD Waterhouse account (technically now called TD Direct Investing) is definitely a better option for most people. The only issue is that there is a $100 annual fee for RRSPs under $25,000. You can reduce this to $25 if you use TD Direct’s “Basic RSP” which allows you to buy mutual funds but not ETFs.
    http://www.tdwaterhouse.ca/products-services/investing/td-direct-investing/accounts/self-directed-rsp-rif/index.jsp#basic-sdrsp-info

  39. Andykbob April 23, 2013 at 7:16 pm #

    Also,
    To start off with the beginner couch potato portfolio , would it be best to start out trading the e-series funds in a TFSA?

  40. Canadian Couch Potato April 23, 2013 at 7:20 pm #

    @Andykbob: I highly recommend the e-Series funds (as opposed to ETFs) for beginners. Whether you use a TFSA or RRSP, however, depends on your situation.

  41. Andykbob April 23, 2013 at 7:26 pm #

    @Canadian Couch Potato
    I am not interested in the ETF’s for the time being(just read Millionare Teacher 🙂 ).
    I believe I will go with T.D. Water house TFSA and start there. The company I work for has a Defined Benefit Pension so I think im on the right track with the TFSA.

    Thank you sooo much for the responses. I love your web site. Quite the eye opener.

    Thanks for everything

  42. Jas June 24, 2014 at 5:24 pm #

    @MNH:
    In invest through my professional corporation. I decided to open a TDwaterhouse account and to invest with TD eseries for the following reasons:
    – Easy transactions (anytime of the day, no transaction fee, no need to use limit order, etc.)
    – Relatively low MER
    – Easier tracking of the Adjusted Cost Basis with mutual funds compared to ETFs, which is important for taxable accounts
    – No US-Can exchange fee and no issue with US estate tax (compared to US-listed ETFs)

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