By Scott Ronalds
We’ve had a lot of calls lately from investors looking to purchase our funds through discount brokers. The questions often relate to availability, fees and fund codes. There seems to be some misinformation on the topic, so we felt it was a good time to clear the air.
Our funds are available through a number of providers (see the complete list here), several of which charge no commissions for purchases, including QTrade, BMO Investorline and Scotia iTrade.
Some institutions charge an upfront commission to purchase our funds, which can range from $9.95 up to 2.5% of the purchase price. Questrade, for example, charges a transaction fee of $9.95, while TD Waterhouse charges a purchase commission which ranges from 1% to 2.5% depending on the size of the purchase. To be clear, this is not a fee levied by Steadyhand. We have no control over it and do not receive any portion of it.
It’s understandable for discount brokers to charge a fee (if reasonable), as they make no money by offering our funds. This is also why it may be more cumbersome to purchase our funds through certain providers. For example, trades may have to be placed over the phone, rather than online, and investors may be required to know the fund codes when making transactions (see below).
A few discount brokers, unfortunately, have chosen not to offer our funds because we don’t pay trailer fees, which are ongoing commissions meant to compensate financial advisors for their services (discount brokers by regulation do not provide advice). RBC Direct Investing falls into this camp; they do not offer funds from several other no-load, low-fee companies as well. Their decision has not been a popular one among investors and industry observers (more here).
Many investors choose to purchase and hold our funds through discount brokers so they can have all their investments under one roof, which is perfectly understandable. As a reminder, though, our funds can be held directly with us, and the process of opening an account isn’t that painful. Direct Investors may benefit from: (1) greater fee rebates (we consolidate all household accounts when calculating rebates), (2) clear-cut advice at no charge, and (3) transparent reporting and account statements.
For reference, our fund codes are as follows:
Steadyhand Savings Fund – SIF110
Steadyhand Income Fund – SIF120
Steadyhand Founders Fund – SIF125
Steadyhand Equity Fund – SIF130
Steadyhand Global Equity Fund – SIF140
Steadyhand Small-Cap Equity Fund – SIF150