Last month, I shared the story of Shannon, an investor in western Canada who tried to open an account with TD to buy their low-cost e-Series index funds. As their name suggests, the e-Series funds are intended for online clients, and investors like Shannon who try to access them through their local TD Canada Trust branch have had frustrating experiences. Many bank staff seem to have no idea what an e-Series fund is, and those who do dare not speak the name aloud.
Shannon recently contacted me with an entertaining update on her ongoing adventure:
“I thought I’d let you know how it went with TD in setting up the account so I could purchase the e-Series funds. We’ve been in the midst of untangling our mess with [our former advisor] and put the TD stuff on the back burner, but I went in today to open the account.
“I know I could have applied online, but I really wanted to see what the experience would be like. I’m at that age when my curiosity has overtaken my natural shyness and ego. In other words, I am no longer afraid to look like an idiot. And there were so many different experiences noted on your original post that I felt an obligation to follow this through. As a middle-aged woman, I get few opportunities to engage in espionage.
“I called ahead and said I wanted to open a TD Mutual Funds TFSA. When I got there, I was met by a rep who was new to mutual funds (of course), so her supervisor sat in on the meeting. It took us an hour and a half to open the account.
“The representative I talked to on the TD Investment Services hotline said that I should tell the branch staff that as I was unsure what I wanted to invest in, and that I just wanted a money market fund for now. He said not to mention the e-Series funds. (And he works for TD!) So I did that.
“The supervisor looked at me as if I was a virus about to topple their entire system. She said that wasn’t how it worked. I couldn’t just ask for a money market fund — we had to go through their Customer Investor Profile, and it would tell me what I should buy. I said, ‘OK, let’s answer the questions so the recommendation at the end is a money market fund.’ She became very red in the face and I thought I might have to administer CPR. The newbie wasn’t saying a word. The supervisor said that that was impossible, we had to work through the questions, blah, blah, blah.
“Finally, I couldn’t take it anymore. I broke down and said I only wanted to open the account so I could buy the e-Series funds. A hush fell over the entire bank.
“When the supervisor could speak again, she said she that if I was going to purchase those funds, I had to go through TD Waterhouse. I explained that the rep on their hotline had told me I didn’t have to open an account with TDW. Luckily I’d printed off his email and brought it with me. The supervisor didn’t believe me, but I think she could tell that I was going to walk if she insisted.
“We then spent 45 minutes going through the Investor Profile. During the whole time, the supervisor made side comments about those funds not doing as well as TD’s other mutual funds, and that they were not for the sophisticated investor, and that I would receive no help from a trained TD rep. I patiently answered the questions, trying to ignore her comments. The newbie, irritatingly, read every question and every response aloud, sometimes raising her voice to speak louder than the complaining supervisor. It was surreal, and I’m sure that after a few glasses of wine I’ll look back on it and see it as an episode of Fawlty Towers: ‘Basil Goes to the Bank.’
“Finally, the supervisor, certain that I was threatening TD’s corporate structure, decided I had to sign a Transaction and Account Maintenance Form saying. “Client wishes to invest solely in money market fund as she may look at purchasing e-Series funds.” I left with 18 pieces of paper, having to sign six different times. I’m sure the supervisor had to lay down somewhere after I left.
“The hotline rep also suggested I bring the three-page account conversion form to the branch, along with a void cheque. The newbie said she would see that it got into the mail, though I have no idea if it will actually end up where it should. There was so much paper on the desk that I won’t hold my breath.
“I understand that TD is also in the business of selling high-MER mutual funds, but why offer the e-Series funds if even the hotline staff encourages you to lie about your motives, and you’re treated by the branch staff as if you were challenging their entire way of business? I’m convinced of the value of index investing — I’ll never do regular mutual funds again — but may have to find a different way to do it.”
There’s no question that TD makes it harder than necessary to access their e-Series funds. But you don’t have to endure an ordeal like Shannon’s. Here’s what to do: [These instructions were updated in July 2013.]
- You can access the e-Series funds (as well as all other mutual funds, ETFs and stocks) by opening a discount brokerage account with TD Direct Investing. This is generally the best solution, except for RRSPs under $25,000, which are subject to a $100 annual fee. (Note you can opt for a Basic RSP—which allows you to buy mutual funds but not ETFs or stocks—for just $25.)
- If you’re opening an RRSP or non-registered account and you’re already a TD Canada Trust customer, complete this online application. Print the form and mail it in with your signature. No need to open a discount brokerage account.
- If you’re already a TD Canada Trust customer and you’re opening any other type of account—a TFSA, an RESP, or a locked-in retirement account—you need to follow two steps. First apply for a TD Mutual Funds Account by visiting your local branch. You don’t need to purchase any mutual funds at this time. Once your account is opened, convert it to a TD e-Series Funds account using this form.
- Finally, if you’re not currently a TD Canada Trust customer, you’ll need to visit a branch to open a regular TD Mutual Funds Account. You can set up your new account as an RRSP, non-registered, TFSA or RESP and then link it to a chequing account with another bank. Again, don’t make any mutual fund purchases yet. First fill out the form to convert to a TD e-Series Funds account.