Sunday, April 26, 2015

RBC Direct Investing Inc. - Legal siphons

Three years ago, my mom got a tip on a very hot stock to buy.  It was going to go through the roof, and soon.  I told her that I wasn't really interested, but she was so sure of it, she sent me $500.00 to invest.  Because I was already a member of RBC, I decided to use RBC Direct Investing Inc. as my broker so that I could keep track of this wonderful investment right on my RBC Online account.  There was a one time buying fee of 6.95 or something like that, so I bought over 600 shares at a value of about $450.00.

I then basically forgot about this wonderful investment, but received regular statements that showed it going up and down, and not materializing into the 'get rich' value mom had told me it would go to.  This is the important part for people to understand.  This was a relatively small investment, and actually no investment on my part, but RBC has quarterly management fees that they tend to hide in their multitude of information upon signing up.

There is a $25.00 quarterly fee deducted from your account every three months.  Now, on a 447.00 investment that isn't doing as wonderful as predicted, within three years these small fees add up to $300.00.  Then add in a stock change of some sort about a year into the purchase (the value of the shares dropping somehow), my mom's $450.00 investment not only deteriorated in value, any increases were eaten away by RBC.

The stocks are now about $0.00, and the only people that made any money off them was RBC Direct Investments Inc.  Fortunately my mom purchased her shares through CIBC, and hers are still holding their original value (or slightly less).  The moral of the story - DON'T use RBC Direct Investing Inc. for any small share portfolios.  They'll ensure they make as much, or more, than you from your investment.