Saturday, November 24, 2012

TD e-Series Post Follow Up

This post got me some personal attention from TD after I posted a link on Twitter. Their social game is pretty good. They ask me for some contact info and after a few days someone in the e-Series group contacted me. She was very nice and we had a chat about the process as it stands and how it could be better.

It turns out I used the wrong form altogether. The 11 page one that I've spent so much time on is for opening a new account. There is a much shorter one for converting an existing account. Big, big sigh. I'm really not sure how I missed that. Now that I go looking for the forms I see that there is always a link for both cases. Maybe having not worked at CIBC since February my form-fu has gotten rusty.

According to the person I spoke to, there are a couple of interesting reasons TD doesn't offer the e-Series index mutual funds on all mutual funds, making the extra steps necessary:
  • Due to mutual fund regulations enforced by the Mutual Fund Dealers Association these funds shouldn't be offered by fund advisers due to their "do it yourself" nature. I'm not totally convinced this is a major factor because TD, like the other banks, offer a range of index funds through advisers, but with higher management expense ratios (MERs).
  • Fund advisers get commissions from selling mutual funds, which is why even normal index funds have surprisingly high MERs. They can't sell the e-Series because there is no compensation structure, hence the lower MERs. To me, this is the primary reason.
I made a few suggestions about the process, like somehow pre-filling the forms with information after you've logged in to online banking. Another was to just make the e-Series funds available to everyone all the time. I understand that they can't be sold through a branch, but I'm not sure what would prevent making them available to everyone online only, I didn't ask. Perhaps some compensation happens even when you buy mutual funds online that needs to change.

I'm happy that someone from TD listened to my suggestions, and seemed to understand that the process could be better. She offered to help speed up the process by having me fax the forms to her, which is very nice. But I still have a bit of a bad taste left in my mouth having had to try this 3 times for the same account. It's made me very curious about potential alternatives.

All Canadian banks suffer from process problems. So far President's Choice Financial has been the lowest friction one I've dealt with, because of their online nature. If ever foreign banks are allowed to  compete seriously in Canada the current banks will have to adapt very quickly. Things still feel like they're stuck in a time before the internet.

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