Almost half (48%) of young Canadians between the ages of 18 and 34 have started do-it-yourself investing after the beginning of COVID-19.
The major Canadian banks all offer a discount brokerage platform to their clients in order to keep fee-sensitive clients (that don’t want to work with an advisor) or those that wish to be in charge of their own investments.
Below is an RBC Direct Investing review where I will share our thoughts on the platform as well as how it compares with other major discount brokerage platforms in Canada.
A platform to buy and sell your own investments. For DYI investors.
- Owned by the Largest Canadian Bank
- Practice Accounts Available
- Easy to Integrate with RBC Banking
- High Fees
- Terrible Customer Service
What is RBC Direct Investing?
RBC Direct Investing is Royal Bank’s self-directed brokerage platform. It allows you to trade or invest across your accounts as you see fit without having to pay an advisor an advisory fee.
Since you will not have any professional oversight over your accounts, you will be entirely responsible for everything (i.e. rebalancing).
RBC Direct Investing is very similar in terms of features and pricing to most of the other major Canadian banks’ discount brokerages.
Since the major banks have a very large client base to which they can introduce their discount brokerage platform, these platforms tend to be highly uncompetitive (in terms of fees).
RBC Direct Investing, unfortunately, also fits this description.
RBC Direct Investing Fees
Most investors that have decided to invest or trade on their own tend to put a high emphasis on reducing fees and costs.
The standard trade commissions for various asset classes at RBC Direct Investing are:
- Stocks: $9.95 per transaction
- ETFs: $9.95 per transaction
- Options: $9.95 per transaction plus $1.25 per options contract
- Mutual Funds: 1% of the gross trade amount (maximum $50) when buying, selling is free
- Fixed-Income Securities: A minimum commission of $25 and a maximum commission of $250 per transaction, included in quoted price
RBC Direct Investing reduces your trade commissions for stocks and ETFs if you are an active trader, meaning that you have completed 150 or more commissionable trades in the past quarter. The reduced trade commissions for active traders are:
- Stocks: $6.95 per transaction
- ETFs: $6.95 per transaction
- Options: $6.95 per transaction plus $1.25 per options contract
RBC Direct Investing charges clients a $25 quarterly fee if they do not have combined assets of at least $15,000 across all RBC Direct Investing accounts. This fee is also waived if clients meet any of the following criteria:
- Has signed up for at least a $100/month pre-authorized contribution to an RBC Direct Investing account
- Has been an RBC Direct Investing client for less than six months
- Has completed three or more commission-paid trades during the quarter across all RBC Direct Investing accounts
- Has a group RRSP account with RBC Direct Investing
- Has an RBC VIP Banking Package
- Has a specific RBC student banking package
- Has qualified for the RBC Direct Investing Royal Circle program
Trades placed over the phone with an RBC Direct Investing representative are also substantially more expensive.
RBC Direct Investing is extremely expensive in terms of trading fees, especially now that several brokers offer commission-free trading for stocks and ETFs.
There are extremely few reasons, if any, to justify continuing to pay substantial trade fees when significantly cheaper (or free) alternatives exist.
Low-cost discount brokerages to consider as alternatives include:
- Wealthsimple Trade
- Interactive Brokers
RBC Direct Investing Account Support
RBC Direct Investing offers good support for different account types. The platform currently offers clients the following types of accounts and more:
- Non-Registered (Cash)
- Non-Registered (Margin)
- Corporate Account
- Tax-Free Savings Account (TFSA)
- Individual Registered Retirement Savings Plan (RRSP)
- Group Registered Retirement Savings Plan (RRSP)
- Spousal Registered Retirement Savings Plan (RRSP)
- Restricted Locked-In Savings Plan (RLSP)
- Registered Education Savings Plan (RESP)
- Registered Retirement Income Fund (RRIF)
- Locked-In Retirement Account (LIRA)
Since RBC Direct Investing is bank-owned, the support for various types of accounts (especially registered accounts) is very good. Non-bank discount brokerages sometimes offer limited account types to clients.
RBC Direct Investing Platform Features
RBC Direct Investing offers clients three different platforms depending on their needs and preferences:
- A Trading Dashboard
- A Secure Online Investing Site
- RBC Mobile App
RBC Direct Investing: Trading Dashboard
The trading dashboard is a web-based application that offers you access to a lot of customizable tools without having to download any programs.
It allows you to:
- Create custom views to monitor your investments
- Analyze data in real-time for fast trading
- Trade with a single click from multiple screens
- Use advanced tools to chart your performance and progress
The trading dashboard is a great tool if you are more focused on trading frequently as opposed to building a portfolio for long-term investing.
RBC Direct Investing: Online Site
The RBC Direct Investing website offers several benefits. These include:
- Buying and selling investments
- Discovering investments using tools and screeners
- Communicating with other investors in the community
- Accessing a practice account
- Linking your goals to your account to help track progress
- Accessing research and insights
- Viewing balances and tracking investments
The RBC Direct Investing Online Investing and RBC Mobile app are both covered by RBC’s security guarantee. This means that clients are 100% reimbursed for any unauthorized transactions that are conducted through either of the two platforms.
RBC Direct Investing: RBC Mobile App
RBC Direct Investing’s Mobile application allows you to invest or trade from anywhere. The application allows you to look up stock quotes, access recent information, and monitor or adjust your watchlists.
The Mobile App is designed to allow you to quickly monitor your investments while seamlessly switching between tasks. The app also allows you to conveniently transfer funds between your accounts (CAD or USD).
RBC Direct Investing Vs Other Discount Brokerages
RBC Direct Investing Vs Wealthsimple Trade
Wealthsimple Trade is a popular discount brokerage in Canada that offers investors no-commission trading for stocks and ETFs. Unlike RBC Direct Investing, Wealthsimple Trade only supports stocks and ETFs within its self-directed accounts.
Wealthsimple Trade is also more restrictive in terms of account variety. Investors are able to choose between many more different options when opening an account with RBC Direct Investing.
Unless you are looking to trade asset classes outside of stocks or ETFs, Wealthsimple Trade is an easy winner when comparing the two platforms.
You have the potential to save an astronomical amount of money in trading commissions, as well as have access to better customer service from Wealthsimple.
You can open a Wealthsimple Trade account by clicking here.
RBC Direct Investing Vs Questrade
Questrade is another popular, independent platform among Canadian investors. In terms of fees and trade commissions, Questrade offers better pricing in almost all cases (in some cases, you will be paying an equal commission).
Questrade allows you to trade stocks for 1 cent per share ($4.95 minimum to $9.95 maximum), buy ETFs for free (and sell for 1 cent per unit, $4.95 minimum to $9.95 maximum), and trade options for $9.95 plus $1 per contract.
If you purchase an advanced market data package from Questrade, trade commissions decrease substantially, making the platform even more inexpensive. In terms of account variety, both Questrade, as well as RBC Direct Investing offers investors a wide range of options.
Unlike RBC Direct Investing, Questrade does have a minimum account opening requirement of $1,000. Investors with very small accounts may not be able to qualify for this minimum.
You can open a Questrade account by clicking here.
RBC Direct Investing Vs Interactive Brokers
Interactive Brokers is another independent discount brokerage available in Canada, tailored for more seasoned investors and traders. In terms of trade commissions, Interactive Brokers charges clients much lower fees.
It also provides them with the flexibility of trading a wide variety of asset classes (unlike Wealthsimple Trade).
Interactive Brokers offers clients advanced tools and resources that professional investors and traders appreciate.
While this is not downplaying the resources available through RBC Direct Investing, a large portion of industry experts use Interactive Brokers for their personal trading or investing.
RBC Direct Investing Customer Reviews
RBC Direct Investing has extremely poor customer reviews, with an average rating of 1.3 stars out of 5 stars on Google. Currently, this rating is an average of 158 reviews, meaning that a lot of clients are having major issues with the platform.
The reviews mention several key issues, including:
- Long wait times on the phone and being placed on hold repeatedly
- Delays of several days or weeks when processing paperwork or requests
- Crashing website
- No responses to email inquiries
The terrible customer service reviews, coupled with the high fees of the platform, can make you wonder why anyone would use RBC Direct Investing as a discount brokerage.
The answer comes back to the large presence that RBC has with Canadians across the country and the company’s ability to quickly refer clients to the platform if needed.
If you value at least a decent level of customer service, you are likely better off using a competing discount brokerage.
Frequently Asked Questions
How Does RBC Direct Investing Make Money?
RBC Direct Investing likely makes a substantial amount of the segment’s profits from the commissions and fees that it charges clients.
Is there a Fee to Cancel RBC Direct Investing?
RBC Direct Investing charges a transfer out fee of $150 across all account types. This excludes donations of shares.
Is Wealthsimple Cheaper than RBC?
Wealthsimple Trade is substantially more inexpensive than RBC Direct Investing but only offers the ability to trade stocks and ETFs. If you are looking for cheaper alternatives for trading other asset classes, consider one of the following:
- Interactive Brokers
- National Bank Direct Brokerage
Which Canadian Bank is Best for Direct Investing?
RBC Direct Investing lags in terms of competitiveness not only against non-bank peers but also against some major bank peers. The most competitive Canadian bank discount brokerage is likely CIBC Investor’s Edge (in terms of fees).
There is really no additional benefit to choosing a bank-owned discount brokerage instead of an independent one such as Wealthsimple. Since independent discount brokers come with much lower fees, they are almost always a better idea.
Our Final Verdict
With high costs and poor customer reviews, it is extremely difficult to find a compelling reason to recommend RBC Direct Investing.
Relative to most other discount brokerages in Canada (including some major bank brokerages), RBC Direct Investing’s trade commissions are about as high as they can get.
Even after qualifying for lower commissions by placing more than 150 trades per quarter, the reduced rates are still very high.
Although not having as much visibility as a major bank like the Royal Bank of Canada, independents like Wealthsimple and Interactive Brokers do not come with additional platform risks.
Especially if you are planning to place many trades, switching to a low-cost (or free) alternative can save you hundreds or thousands of dollars.
If you are looking to learn more about other options in the self-directed discount brokerage space, be sure to read through our comprehensive guide on the best trading platforms in Canada.