Tag: Questrade

Questrade – Cash withdrawing is timely

Out of all the issues (1, 2) that Questrade has, cash management is not one of them. I have made several cash withdrawals through the course of late 2010 and 2011 as I have exited my debenture positions and they have been deposited via EFT to my bank account in a timely fashion.

I have been scouring the internet and have been reading nothing but trouble stories from people as they have done significant back-office migration since early February. It generally does not inspire confidence, which is why I entrust most of my idle cash balances to Ally (up to the CDIC limit!) and Interactive Brokers.

As long as you keep your transactions simple with Questrade, you should have no problem with them. If there is anything out of the ordinary or anything that could possibly warrant human interaction, then your mileage will vary – greatly.

Watch out for Questrade – Check those statements

(Update, February 18, 2011: David Del Grande from Questrade contacted me via e-mail regarding the issue I mentioned in this post. I will keep this post updated and see if they can resolve this issue.)

(Update, February 28, 2011: So far, Questrade has not responded to my reply.)

(Update, March 30, 2011: Much to my shock, I received a voice mail from Questrade and they have credited the amount in question, plus five commissions, to my account. I checked my account status and indeed they have made the appropriate corrections.)

Questrade recently went through an upgrade, and this has caused some disruption to their service.

I noticed that they have incorrectly processed a transaction on my account concerning a debenture trade – I sold some debentures about a week ago, and normally when you sell debt you receive a cash credit for accrued interest. On the trade history, it shows that there were three trades – two “sell” orders and a “cancel sell” which offset one of the sells. I noticed the interest was given on a sale, and taken back on the canceled sale, but the remaining sale did not have the interest income. This is wrong!

It is not a huge amount of money we are considering (about $80) but this sort of process should be correctly automated – I should not be having to waste my time and their time to contact customer support to get this corrected. Other people likely have issues with Questrade, since when I try accessing their live help (which generally has been a good way to correct issues with them), I get the following message:

You have reached Questrade’s Client Services. You are in priority sequence for the next available Client Services Specialist. Thank you for your patience, the average wait time is ’55’ minutes. Thank you for your patience.

There is no way that I am going to keep the window open for 55 minutes.

I am starting to seriously question why I have my money with this firm – they offer the cheapest trades, by far, for debentures and fixed income products. However, other hassles such as this one, offset any cost savings. Since fixed income opportunities are in very short supply these days, it is unlikely I will be needing to trade those products to the degree that I did back in 2009. The other reason why I stick around is because my other broker is Interactive Brokers, where I do the bulk of my transactions, does not do RRSP or TFSA accounts.

Finally, Questrade forced clients away from their dated “Webtrader” platform and onto their “QuestradeWEB” platform. I personally preferred the Webtrader platform as it was very simple, quick and just seemed to “work”. The QuestraderWEB platform is more heavy and takes more time to navigate. I understand their need to migrate people off of a platform that was coded 7 years ago, but why can’t they design a simple user interface to a stock trading service? A poor user interface costs them money – people will trade less.

A Questrade failure

Questrade is still not ready for “prime time” for serious investors – I notice that with the slew of income trust conversions today that most of them are trading with new ticker symbols.

In one of my portfolios held with Questrade, I own some previous trust units that have converted into a corporation. I notice the market is moving in a favourable position and I wish to liquidate some shares. I enter in the new ticker symbol, and the following information comes up:

Date of Order: 01/04/2011
Time of Order: XX:XX:XX EDT
Status of order: Rejected
Order Id: XXXXXXXXXXX
Notes: The client does not have any positions in this stock

I note that Interactive Brokers does not have the same problem. Their system handled the transition perfectly.

Although this system issue is unlikely to cost me money, what if there had been a market event that I wanted to swiftly liquidate my positions into?

Their customer service mentioned the following:

Once we receive the new symbols from your clearinghouse, we will update your position. This process generally takes about 5-7 business days to update. If your intention is to trade this stock before that time, please contact our trade desk at 1-888-783-7866.

Although Questrade continues to be a good low cost alternative, it has lingering issues like these that cause me to be very wary of sole-sourcing them for my investments.

(Update, January 6, 2011): I actually called the 1-888 line and reached their trading desk. They said I could not sell the units/shares until the symbol change is recognized by the system. Not thrilled about this at all.

Questrade offering bonds

I notice that Questrade is offering bonds to their clients. More interestingly, they have a comprehensive list of securities available with tentative pricing. This method of offering is a good step, although they probably will need to automate the transactions.

They claim to be offering it “commission-free”, but the commission is embedded in the bid-ask spread. For example, a Government of Canada bond maturing on December 1, 2011 (a year and a couple months away) is quoted at bid 1.28%, ask 1.26%. This is not bad when you consider that 1-year T-Bills have a yield of 1.23%.

One of the big differences between retail investing and institutional investing is that if you have $100 million lying around, you just can’t dump it all into Ally or some retail savings bank and get your 2%; with large quantities of cash, you have to pile them into government securities in order to get a risk-free return – in this case, locking away $100 million you can get about 1.23%, at least using end-of-September quotations. If you want 2% or higher, you have to go all the way out to December 2015 for Government of Canada debt (2.04% on the ask); if you are willing to settle for a province, Quebec has June 2014 issues for 2.06%.

A retail investor does have the option of putting money risk-free into retail facilities, and thus this makes investing in government bonds quite useless since typically GIC rates (of up to 5 years of maturity) will be higher than prevailing government bond rates.

Corporate debt is another story – you can find higher yields there, but will have to take the appropriate amount of risk, and/or be willing to take debt with very long terms to achieve the desired yield. Most of the interesting issues are also exchange-traded, which alleviates the hassle of dealing with somebody over the telephone.

Finally, Interactive Brokers has a system that enables automated transactions on bonds, but it strongly depends on the corporate issue whether you will have any liquidity available.

Questrade – Nickel and diming

Although I do not use Questrade’s platform for active traders, I do use their basic web-based interface. I don’t look at it too often since I don’t actively trade with the account, but I notice they are trying to implementing a cap on the amount of real-time quotes you can request to 1,000 per month. Anything else above that would cost 1 cent each. This doesn’t really affect me, but I was curious as to why they made the decision.

My guess is that it was designed to prevent an abuse of the system where you can pull data through the service with an application like Quotetracker or something. I did ask their customer support the following question:

Is there any way that the real-time quotations can be disabled after the free 1,000 quotes per month are reached? Or will there be any way to know how many quotes I have used in a month to date?

Their answer was the following:

Unfortunately there is no method to view how quotes have been utilized. We are, however, working to have a feature implemented on our platforms. In the meantime, please contact us and we will advise you of how many you have used. Thank you and I apologize for the inconvenience during this process.

I find this to be very silly on both a business and user interface perspective.

First, the data fees they pay to the exchanges to provide their customers with real-time quotes is probably on a fixed-price basis (either for the whole company or per-customer), so the excuse they gave for implementing a price is nonsensical. Secondly, it is very likely that customers that have more ready access to real-time data will trade more, generating more commissions for them, so by charging for quotations it is likely detrimental to their business of transacting trades. Thirdly, a customer has no idea whether they will be incurring billing for quotations, and asking for a customer to contact support for something like this is ridiculous for both parties.

It looks like this was a snap decision and done without any serious thoughts of the repercussions.

I continue to use Questrade for registered accounts (RRSP, TFSA) and non-registered holdings of TSX debentures, but as I mentioned in my previous review of them, security continues to be a lingering concern for me. They really need to implement a policy whereby if your accounts get hacked that they will cover you – similar to BMO Investorline, etc. Until then, my recommendation of them is lukewarm.