Blessed by the Potato

“I’m never listening to your financial advice again.” ;)

Yet another bad day on the market, as TD (which I still like, damn all evidence to the contrary) was down, just after Wayfare bought some last week; Q9 (TSE:Q) also released their results and dropped almost 14% on the day. To be fair, I never recommended Q9 to her– I like it as a company, but I’ve been looking to unload my shares for the last year (and am kicking myself for not doing so last summer). It’s been a rough week (hell, a rough year) on the markets, and while (most) of it is just paper losses to me, and all the nice cash flows from dividends/income trusts are still in place, it’s still damn depressing to see all that red day after day; hard to stay positive about the investing experience, and pretty much everything else in life! Anyhow, her quote there is probably the best financial advice that will ever appear here :)

In a bit of related news, Wayfare has an RRSP (I still don’t, even though I learned that I can defer any deductions from contributions made now until a year when I have non-grad student income). She had some issues with it recently, and for some reason isn’t off blogging about it on her own (her blog has pretty much dried up after that parking lot stunt in November). Anyhow, since it’s a customer service story about TD, I figured I would share for everyone else.

To go back in time about a year, Wayfare was looking into what to put into her RRSP and asked for help from the advisor at TD in branch. Unfortunately, she learned the hard way that they really don’t know what they’re doing and are mostly salesmen: she got stuck in some high-MER low-yeild mutual fund/GICs and wasn’t all that happy with the experience. So this year she went in better prepared and decided that she’d like to buy some of the TD e-series mutual funds. The guy in the branch was happy to set her up with them, and she was off to the races… or so she thought. After getting a start on her mutual fund early, she had contribution room left and some savings discipline, and wanted to top up the rest before the deadline recently. And she could not for the life of her figure out how to go about doing that. As far as she could figure out, she wasn’t allowed to buy the e-series funds with her particular mutual fund account. Looking back on the documents from her in-person visit it turns out… she wasn’t. Despite being very explicit about wanting the low-MER e-series funds, the guy ended up buying the “investor series” fund. While that version of the index fund is not as bad as some of the funds they could have stuck her with, it’s still a 0.54% difference in costs, and that can add up over time.

She was, to put it succinctly, pissed off at TD for lying to her. I encouraged her to phone in, and fortunately the people on their phone line were a little better informed. The savings of the e-series funds that let them have a low MER come in part because they can only be purchased online from a special account (or a non-registered discount brokerage account if you’re not talking about an RRSP). The in-branch guy had no ability or authority to try to sell her one directly. The phone guy told her where to go to setup/convert her account on the website, and credited her RRSP with $25 as a bit of an apology bonus for the mix-up, and also to offset some of the fees that her more expensive mutual fund would have incurred over the time she had it.

I think the whole affair was handled relatively well — TD seems to have made a decent effort at setting things right for her. Unfortunately, the phone rep couldn’t immediately open her e-series account and do the transfer for her. She has to mail in her forms and then put in a change transaction for her mutual funds on her own when that account is processed, which is seriously a bit of a bummer. The guys in the branches, unfortunately, will probably continue to make these mistakes. At their core, they’re basically in a retail sales position and don’t tend to have a good understanding of the bank’s system or providing sound financial advice (though there are of course exceptions).