RBC Direct Investing Review
RBC Direct Investing is a top-notch investing platform but is more geared towards seasoned investors. Supported by Canada’s largest bank, there is zero concern in terms of securing your assets with RBC Direct investing.
Account fees are reasonable, but commission fees are among the highest in the country. Easy to use with plenty of features and available on desktop and app. Geared towards the investor, not the trader.
If you're wondering how to buy stocks or looking to get started with investing, you'll first need to open up a brokerage account.
In case you missed it from some of our other discount brokerage reviews, you might be wondering why all the major banks tend to have separate brokerage names. The reason is simple - they are required by law to do so.
If you're with Royal Bank, their investing solution is RBC Direct Investing.
As a investment brokerage, this is where Canadians can buy and sell stocks, mutual funds, bonds, exchange traded funds, and more.
Royal Bank is the largest bank in the country and is among the most respected brands in the industry. Does RBC Direct Investing compare in stature?
You're going to find out in our in-depth RBC Direct Investing review for 2021. We'll be going over 6 key elements in this review.
- Account types
- Customer service
Without further ado, lets start with RBC Direct Investing's account types.
RBC Direct Investing account types
RBC Direct Investing offers the full suite of investing account types. Whether you are a seasoned investor, or one that is much more experienced, investors will find whatever it is they are looking for. In fact, there really isn’t anything RBC Directing doesn’t offer.
- Tax Free Savings Accounts (TFSA)
- Registered Retirement Savings Plans (RRSP)
- Registered Education Savings Plans (RESP)
- Registered Retirement Income Fund (RRIF)
- Locked-In RSP (LRSP)
- Prescribed Retirement Income Fund (PRIF)
- Locked-In Retirement Account (LIRA)
- Locked-In Retirement Income Fund (LRIF)
- Cash Account
- Margin Account
- Corporate or Partnership
- Investment Club
- Formal Trust
Impressive? Sure. Unique? Not quite.
Most full-scale brokers offer accounts of all types. In fact, we recently reviewed CIBC Investor's Edge, and it contains all of the same account options.
This used to be a key feature with brokerages, as some had better account selection than others.
But this was one of the quickest gaps to close for major brokerages, in which they did.
RBC Direct Investing commissions and fees
There are seven different types of commission fees at RBC and each have their nuances. However, the most important for retail investors are the following:
|Investment||All Clients:||Clients w/ 150 or more trades in a quarter:|
|Stocks and ETFS||$9.95 flat per transaction||$6.95 per transaction|
|Options||$9.95 + $1.25 per contract||$6.95 + $1.25 per contract|
As you can see, the most basic is the $9.95 flat fee per transaction (stock or ETF) which drops to $6.95 for active trading accounts defined by trades of 150 or more per quarter.
Unfortunately, this is among the highest in the country and one of the biggest drawbacks of the platform.
This is especially true when one considers there are now no-commission fee platforms and several which offer free ETF trading.
RBC Direct Investing Commissions Investment Rep
|Stocks and ETFs||$0.00 - $0.50||2.5% of trade|
|$0.51 - $2.00||$35 + 0.02 per share|
|$2.01 and over||$35 + 0.05 per share|
|Options||$35 + $1.75 per contract|
It gets even more expensive when you need to place an order using an Investment Service Representative.
On the bright side, in my more than a decade using the platform, I’ve never had to call and place an order using an investment service rep.
Overall, this isn’t what will win you over and it may even discourage users from their platform.
But as we reiterated in prior reviews, commissions should not be the be all end all when it comes to choosing a discount brokerage.
RBC Direct Investing account fees and margin rates
RBC Account and Margin Fees
|If combined assets exceed $15,000 across all accounts||$0|
|If combined assets do not exceed $15,000 across all accounts||$25 per quarter|
Unfortunately, the dreaded inactivity fee rears its head again when we look to RBC Direct Investing fees.
However, for those with a balance of combined assets greater than $15,000, I have good news – there are no fees.
For those with a balance less than $15,000, then RBC charges $25 quarterly. While there are a number of exemptions to this fee, for the most part investors with a lower balance will end up paying the $100 annually.
These fees compare favorably to other big bank brokerages. However, many discount brokerages like Questrade and Interactive Brokers have moved on from inactivity fees, and the major banks will need to catch up.
Especially considering the amount of new investors with minimal assets that are entering the markets.
When it comes to Margin Rates, RBC Direct Investing charges 4% for CAD and 4.50% for USD which once again, compares favorably to its peers.
RBC Direct Investing security
The security measures put in place by RBC Direct Investing mirror that of its banking peers.
I mean let’s be honest, there is likely no safer place to park your money than one of Canada’s Big Banks and many investors likely trust them over independent brokerages.
This is exactly why, at least up until now, these banks have been able to charge higher commissions and inactivity fees like we went over above.
There is a trust factor here, and if that is important to you, then there might not be a more reliable institution than RBC Direct Investing to place your capital.
As mentioned previously, RBC is the country’s biggest bank and its investing platform has all the latest security including two-factor authentication.
Not surprisingly, it is also part of the CIPF or Canadian Investor Protection Fund. What this means is that in the event of insolvency, CIPF will cover your investments up to $1 million.
Investors may not appreciate that last part, but if we remember during the stock meme craze, many U.S. brokers had liquidity issues and most notably Robinhood needed a capital raise to keep the ship afloat.
Having this extra level of security is important, and you'll find most brokerages here in Canada participate in the CIPF.
RBC Direct Investing customer service
I am not going to go out and say RBC has the best customer service in the country. Why?
Because today, most brokers are overwhelmed dealing with a flood of new investors and they simply can’t keep up.
It is not uncommon to wait for hours until you reach a representative. The good news is that I have not needed to call customer service more than a few times in my 10+ years of using the platform.
Why? Because you can do everything online.
It should also be noted that they have a robust FAQ section to chose from and you can send them a secure message via their message system. They commit to answering questions within two business days.
I’ve used this feature many times to ask non-time sensitive information and pre-pandemic, I would usually receive a response in about 24 hours. During the pandemic, it usually took the full two days, but I still found them to be quite timely.
In this day and age with the flood of new investors hitting the market, the most important thing to understand about customer service is that the grass is likely not greener on the other side.
Many of these brokerages had zero customer service issues prior to the surge of investors in 2020, and many of these brokerages will figure it out over the next while and will return to excellent service.
RBC Direct Investing trading platform and useful tools
Both RBC Direct Investing and their app platforms have undergone overhauls in recent years. For the most part, they were welcomed, and the platform is quite simple to use.
It can be a little intimidating at first as it is a full-scale brokerage with many features. Once you spend some time with it, it becomes extremely intuitive to buy and sell stocks.
You can do so from multiple places (quote page, my holdings, place an order) which I find to be particularly useful.
It has a research centre, charting tools, an IPO centre and a very useful Investing Academy for those looking to learn and educate themselves on investing in the markets.
All things considered, I don’t necessarily think RBC’s platform stands out in terms of usability or common trading tools, but its pretty straightforward and easy to use.
It is less geared to traders and beginners as it appears more set up to attract seasoned investors.
In terms of unique features – I think it is worth highlighting a few that can make all the difference for a platform that has higher than average commission fees.
RBC Direct Investing is the best broker to execute Norbert’s Gambit. In simple terms, it allows you to exchange your CAD to USD (and vice versa) without paying extensive currency exchange fees.
With most brokerages, the process of Norbert's Gambit takes around 3-4 days as particular currency ETF's have to "journal" over to their US counterparts. However, with RBC Direct Investing that is not the case.
To execute Norbert’s Gambit with RBC Direct Investing, it is a simple process and the journaling is automatic. You can buy your CAD security and sell in on the US exchange (or vice versa) and have USD in your account in a matter of minutes.
While the backend of the trade and your accounts may look wonky for a couple of days while the trades settle, all the journaling is done automatically. No calling an investment rep or waiting days for cash to arrive in your account.
It is bar none, the best brokerage in Canada to execute this currency strategy.
If you bank with RBC, arguably the biggest benefit is to be able to contribute cash to your account instantly.
As per their site “RBC Royal Bank clients enjoy the convenience of a single sign-on, consolidated view and real-time transfers between your RBC Online Banking accounts and RBC Direct Investing accounts.”
This has been incredibly useful as I am able to take advantage of time sensitive trades even if I don’t have cash readily available in my RBC Direct Investing Accounts.
There is nothing more frustrating than wanting to buy a stock on a particular dip in price or a solid earnings report, only to not have enough capital in your accounts and having to wait 2-3 days for a deposit to come through.
With RBC Direct Investing, this isn't the case.
Level 2 Quotes
A recent addition to the new features is that RBC now offers free real-time and Level 2 quotes. This is a feature that many other brokers will charge for or investors will pay subscription fees to other sites to access.
In fact, some fees for level 2 data at other brokerages can exceed $80+ a month. This is a huge feature that separates RBC Direct Investing from many other discount brokerages, and often justifies the high commission prices, depending on how much you're trading.
At RBC Direct Investing, investors get it free of charge on all Canadian stocks and ETFs.
RBC Direct Investing uses Morningstar research to allow members to view pick lists, stock reports and credit ratings.
This is a nice added bonus, and is one that many discount brokerages don't have.
Additional research tools include their stock screeners, charting tools, a technical analysis platform and education center and more, including their community forum and FAQ, as we've highlighted in the image above.
RBC Direct Investing summary
Overall, RBC Direct Investing is a top-notch investing platform, but is more geared towards seasoned investors. It has plenty of added options and extra tools, as well as being extremely convenient for RBC banking clients with automatic withdrawals and deposits.
We view the instant Norbert's Gambit transactions as well as free level 2 data to be the main points that separate this brokerage from the rest in terms of pros. And when we look at cons, it would have to be some of the highest commissions in the industry.
Security wise, there is zero concern in terms of securing your assets with RBC Direct Investing. It's backed by one of the largest financial institutions in the world.
There are plenty of extras to ease the concerns for higher fees. Most may not be relevant for novice investors, but seasoned ones will definitely appreciate.