A Would-Be Couch Potato Responds

Last week I posted an e-mail from Shannon, a reader who related her difficulties in opening a TD e-Series Funds account. That post (and an earlier one about her experiences with TD) generated a huge number of comments. Many were supportive; others were rather condescending.

Shannon sent along another follow-up, which I’ve posted below. (Note that you may have to refer back to the comments section of the earlier to post to follow the discussion.)

I’ve spent so much space covering Shannon’s story because I’ve come to appreciate just how much resistance many investors face from financial firms when they try to simplify their investments and lower their costs. Shannon and her husband were screwed by their first investment advisor. When she went looking for help elsewhere, she didn’t get it.

As she notes, many of us who are experienced DIY investors know what to expect, and we know how to push back against the sales pitches. But many people don’t have that knowledge or confidence. I hope by sharing these stories, this blog and its readers can be a supportive community for investors who want to take back control of their own finances.

Here’s the letter:

I’m Shannon, the woman the Couch Potato respectfully listened to and guided. Thank you, CP. I have a few additional comments to make based on some of the posts.

1. I did not begin this process as a “lark.” Some of my comments may sound funny, but that’s my way of coping, and they were only a portion of what I wrote. I was certainly not laughing while I was sitting through the session with the people at the TD branch.

My husband and I lost over 40% of our retirement portfolio with a well-known investment company, where we were in 90%+ equities. We didn’t know what a DSC was, or an MER, what a split between equities and fixed income meant, diversification, etc. Seven months from retirement, we had to go back to work, as many others have had to. I certainly wasn’t laughing then.

Perhaps, as Paul L says, I am too dumb to live (not an exact quote, but that’s the gist). All my husband and I can do is try and learn as much as we can and take advice from those who know better. At least those who are actually trying to help.

2. My experience with the TD branch in our community was factual. In my conversation with the Couch Potato, I even left out some really depressing bits. I appreciate that others have had great experiences, and that gives me hope. Perhaps it was a situation of a e-Series newbie (me) meeting a newbie mutual fund representative and her super-trained (in traditional mutual funds) supervisor. I don’t know, I don’t have anything to compare it to. But it was peculiar that even the EasyLine rep basically told me to lie to his own colleagues at the branch so as not to rock the boat. Perhaps, if I’d followed his advice, things would have gone better. But I’m not very good at lying, and I didn’t get why I should have to.

3. I did investigate the TD Waterhouse route. Since we do not have a household account of $100,000 stuffed under our mattress (in order to qualify for the cheaper trading fees), it would mean moving our money from our current investment company (which is currently holding our money captive with exorbitant DSC fees) into a kind of holding account.

To avoid the annual $100 fee on an RRSP account, we had to have a minimum of $25,000 in each registered account with TD. We don’t have that extra money. And this seemed too complicated for us, particularly since we simply wanted to determine how the e-Series process worked with a basic $1,000 deposit. In this, in my opinion, TD failed. As we have still not received notification that we can do the conversion online, we’ll see how the second part of the process goes. I am hopeful, based on the helpful experiences shared here.

4. After all we’ve been through this past two years, we are weary of more sales talk. Perhaps more sophisticated investors can shut it out, but that’s more difficult for me. My conversation with the TD branch supervisor and the TD Waterhouse rep involved the same spiel my husband and I have heard (and succumbed to) countless times before. Eventually the TD Waterhouse rep realized that not only had I been there, done that, and had the T-shirt, but a permanent tattoo on my backside. I wanted to hear about other possibilities, and I think by the end of our conversation he got that.

5. Finally, thanks to those who posted helpful comments. Knowledge shared between positive, helpful, concerned people is, I have come to believe, our only weapon against the investment industry juggernaut. As for those who can only make themselves feel superior with sarcasm, you are wasting my time. I consider it an achievement to have finally figured that out.

13 Responses to A Would-Be Couch Potato Responds

  1. Mark September 28, 2010 at 3:30 pm #

    I can’t tell 100% if you were able to open up the TD e-Series account from your letter but here is a nice step by step guide.

    http://youngandthrifty.ca/funds/how-to-apply-for-a-td-e-series-fund/

    Good luck.

  2. ABC September 28, 2010 at 5:17 pm #

    Shannon’s experience with TD is obviously painful. If my comment after the previous related blog post seemed inappropriate, I did not intend it that way and I am sorry. Shannon writes well and it is obviously easy for her to underscore the humour, for example when she says “Eventually the TD Waterhouse rep realized that not only had I been there, done that, and had the T-shirt, but a permanent tattoo on my backside.” As she points out above, humour is her way of coping.

    In her point number three, Shannon writes that she investigated the TD Waterhouse route. She is concerned about trading fees, given that she is not ready to move $100k to Waterhouse to qualify for the cheaper trading fees. She writes that “it would mean moving our money from our current investment company (which is currently holding our money captive with exorbitant DSC fees).”

    There is no need to trade, and therefore no trading fee, if Waterhouse and WebBroker are used to manage TD index e-funds. The e-series are no load mutual funds and can be purchased without commission online via a WebBroker account with TD Waterhouse. A test done with $1,000 outside RRSP and TFSA could work very well and would not cost anything.

    Regarding the DSC fees:

    She may be interested in a recent article in the Globe and Mail about a couple investigating the transfer of their investments given the early redemption fees they are facing. The advice they received encouraged them to determine the break even point, that is how many years it would take to recoup the early redemption fees with lower MER from low cost investment vehicles. For them it was determined to be equivalent to three years. They were then encouraged to take the long term view, that is pay the fees in order to benefit from lower costs in the long run. Shannon’s situation could be different however. The Globe article is at:
    http://www.theglobeandmail.com/globe-investor/personal-finance/financial-facelift/split-incomes-and-pay-down-debt/article1724987/

  3. Slacker September 28, 2010 at 5:26 pm #

    TD Canada Trust and TD Waterhouse don’t know each other that well. I find that the staff in TD Canada Trust don’t know the TD Waterhouse products. Be prepared and have patience if you have to deal with TD Waterhouse products through the bank branch.

  4. Patch September 28, 2010 at 5:45 pm #

    I browse this site from time to time and I wish I had caught the earlier post.

    I managed to open a TD eFunds account a few years ago and sympathize with Shannon. It sounds like they’ve streamlined the process so that you just have to mail in a form now. From what I remember of what I had to do, I had to print the forms out, go through that investor profile, do a bunch of mailing and ultimately needed to go into a branch to get it all set up. Certainly you shouldn’t have to do that investor profile at the branch.

    Fortunately for me, the account manager didn’t give me a hard time or try to sell me anything. It got setup and now it’s done. Funny thing is that I’ve since moved on to ETFs so I haven’t dealt TD eFunds in awhile now.

    For what it’s worth, I work in a field where I deal with banks all the time. I think what some people need to be more understanding of is that the banks are not as unified or streamlined as we would like. The information I get from one department or branch can vary depending on who I get to talk to that day. Sometimes all you can do is callback and find someone else who can help.

  5. ABC September 28, 2010 at 6:06 pm #

    Would Waterhouse and WebBroker be a better route for Shannon to access and manage the e-series index mutual funds? Probably. And if she wants to try she could start here:

    http://www.tdwaterhouse.ca/app_info2.jsp
    Should she require some help with the process, there is a toll-free line: 1-800-465-5463.

    After getting a Waterhouse account, the next step would be to open a WebBroker service. It is the Internet tool needed to manage a Waterhouse account online. It’s user friendly, and it is needed to purchase the e-funds without commission.

    To learn more about WebBroker, try:
    https://www.tdcanadatrust.com/easyweb5/start/tdw/get_started.jsp?referer=https://www.tdwaterhouse.ca/apply/index.jsp

    There is a web tour available by clicking the proper link at the very bottom of the page, under WebBroker, at: https://www.tdwaterhouse.ca/apply/index.jsp

    To open a WebBroker account, here’s the form:
    https://www.tdcanadatrust.com/tdaccess/waterhouse/wh_app.html?referer=https://www.tdwaterhouse.ca/apply/index.jsp

  6. Jack September 29, 2010 at 10:33 am #

    Hi Shannon,

    Just a quick note. I have been through two major, so called “full service,” brokerage houses. Each time I was referred to a specific person in these firms by a trusted friend. What did I learn? It is all a very slick sales pitch and it is most certainly not going to end up to your benefit without doing your own due diligence and keeping your head!

    DIY investing with education, patience and due diligence is the only way for the average person to attempt to reach their financial goal(s)!

    Best of luck and ignore the insecure deeming self-righteous,

    Jack

  7. g s September 29, 2010 at 1:19 pm #

    i had no problem in getting to the e-series. when i know what i want and written instructions are sufficient, i avoid dealing with the bank staff. i find most of them very poorly trained and almost unprofessional.

  8. SophieW September 29, 2010 at 2:07 pm #

    It’s unfortunate that Paul L was such a $#!t… One thing I really appreciate about most Canadian finance blogs is the respect between commentors – even when there’s a disagreement…

    I guess I was relatively lucky in that the person I saw at the branch was curious about the e-series funds so she went through the whole process with me, even mailed in the conversion form for me :)

    I’ve been investing regularly for several months now and it’s waaay easier to invest than it was to open the account – just saying…

    Keep at it Shannon, it will be worth all your troubles! And thanks again Couch Potato for helping me get to where I am.

  9. Paul N September 29, 2010 at 5:23 pm #

    I’m the other Paul… the one that had some difficulties like yourself.

    If you name TD why can you not name “the other well known investment company ” you had troubles with. It would be good for all of us to be at least “prepared” if we ever cross their paths as well. Sounds like that experience is much more then an annoyance. (maybe a future topic?)

    I have issues such as you also with Great Western Life. I can’t get anyone to answer any of my more complicated questions. They have a robot / prepared statement like approach to clients that question them. None of their representatives seem to be able to answer investment questions and you get passed around in their system until you are frustrated and give up. They hate anyone sligh

    I think sites like this are great because reading through the original post some of the responders kind of sounded like a protective employee of TD rather then the average person looking for some meaningful dialog. It gives a voice to the little guy/girl. It looks like these posts force some normally faceless entities out of their corner to make some comments.

    As Sophie says now that the account is set up it’s really easy to make purchases of more e-funds. Has anyone taken money out ? Is it just as easy? I wondered that?

  10. CJ September 29, 2010 at 6:26 pm #

    I also know exactly what Shannon went through, but the good news Shannon, is that you’ve educated many people with your story. I opened an e-series account a couple of years back – first an RRSP and then a TFSA. I have to say that when I called TD, they told me exactly what to do, but like Shannon, when I got to the branch the staff had no idea what the e-funds were.

    Luckily, the first person I dealt with picked up the phone, made a call, and did exactly what he was told to do. He did ask me why I wasn’t interested in the other mutual funds and I told him the truth.

    Later when I went back to TD and opened up a TFSA, I went through the same process with a different mutual fund “specialist”. However, when we finished the entire process, he turned to me and said, “Can you tell me more about these e-funds?”. I thought it was hysterical that I was educating the bank staff and by the time I left, I think he was about to open up an e-series account for himself!

    Thanks for sharing your story.

  11. Shannon September 30, 2010 at 5:20 pm #

    Thanks for the comments. Really enjoy hearing people’s stories. The well-known investment company is the Investors Group.

  12. youngandthrifty October 1, 2010 at 1:16 am #

    Mark thanks for the link to my how to open a TD e-series guide! =)

    Shannon, sorry to hear you had what sounds like a very tumultuous experience! I agree that some people are very condescending online when they comment (I’ve had my fair share on my blog), they think that perhaps because they are hidden behind a computer screen, they can say whatever they want. The key is to let those words and nasty comments roll off your back. People who want to leave comments like that are likely insecure themselves.

  13. investnoob October 1, 2010 at 11:46 am #

    I had a relatively minor hiccup when trying to open a td e-series account, when compared to Shannon’s ordeal. I already have a TD Canada Trust chequing account. Last year, I tried to open what I thought was a TD e-series funds account.

    Instead, I opened a Basic Self-Directed RSP account with TD Waterhouse, that was linked to my TD EasyWeb chequing account. I ended up being charged an annual 25 dollar fee. Well, after reading this post. I finally know how to convert the RSP account to an e-series funds account. Thanks Shannon.

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