Sunday, September 11, 2011

My current review of Crudential Direct

I'd like to take some time today to share my experience so far with Credential Direct.

Why did you want a brokerage account, Jack? They steal your money with fees and commissions!

Well, a month or so ago in my 'investor infancy', I didn't believe I needed any broker at all.

They would just level heavy commissions on me, and drag down my profits!

I was going to invest in Canadian Dividend stocks, buying directly from other investors that held physical certificates, and use Drips (Dividend ReInvestment Plans) and OCP's (Optional Cash Purchases) to get more stock.

Then I started looking at the forecast down the road for dividends, and how they are likely going to be taxed more and more as time goes on. Then I looked at the long term tax benefits that my investments would enjoy in a TFSA or an RRSP.

I'm putting together a post that crunches some numbers on how your long-term gains can be crippled with taxes in non-registered accounts, but you'll have to take my word for it at the moment.

Long-term investments are often best kept in tax-advantaged accounts, which you currently cannot have without a broker!

So, you have to have a broker to take 'advantage' of tax-advantaged accounts!

Why go with Credential Direct? Why not Questrade, with it's $5 commissions? TELL ME, JACK!

Frankly, I don't like alot of the reviews of Questrade. They make the entire service sound like crap. Too many people that sound pretty pissed off at bad customer service, lost money, delayed trades, and disappearing dividends.

I'm a tough mofo, but when it comes to my money, I want to know the people 'looking after' it are competent, and answer the phone when I call. So far, with Credential Direct, that seems to be the case.

My longest wait on hold so far has been 1 minute. After that, I was able to monopolize an account services gentleman for nearly 20 minutes, as he carefully and calmly answered my questions.

Plus, I have share certificates to deposit. Credential Direct takes deposits of share certificates for FREE. This is compared to $200 each for Questrade. Bloody ouch, indeed.

In-fact, the gentleman I spoke with said if I was in the area (Downtown Vancouver, B.C.), I could drop the certificates off directly at their mail-room, and save myself the courier fees. That's smart of him to offer, and likely a good idea, considering courier fees.

The only negative so far with Credential is the fact that they do not have or allow any sort of USD or USD 'money market' holdings in RRSP accounts. Questrade current offers this, and  so far, this has been my only issue with Credential Direct. I have spoke with their customer support about this, and asked for it three (3) separate times to three (3) different people, so hopefully they get the picture that it is a big deal to me.

I don't like Credential Direct. They stole all my money. 

I'm honestly sorry for you. As far as I can tell, they appear to be a decent, reputable company, charging a decent cost for a decent service.

I would strongly suggest that you call them, and ask why you lost money. They do have 'investment coverage' on deposits, much like banks and credit unions have coverage. So if you money was in your brokerage account, and disappeared, I believe it's covered under that insurance.

If you were a stinker and just lost your money on a bad investment, then I would suggest speaking with a fee-based financial advisor. They may be able to put you back on the right path.

A decent service for a decent price.

At this point, having just made my account, and speaking with their support staff quite a bit, I can feel strongly that Credential Direct is a decent company, with good customer service. They do have fairly costly trades ($20 for < 10 trades per 3 months), and no USD in RRSP accounts, but the fact that they seem to be decent people, offering a decent service, helps me sleep at night.

I would recommend Credential Direct to anyone that is looking for a smaller, less expensive brokerage then say TD Waterhouse, but still wants good customer service. If they pull down their trade fees to $14.95 or $9.95, and add USD holding capabilities to their RRSP accounts, then I would whole-heartily recommend them to anyone.

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