Mutual Fund Maximizer (Questrade):
This method is pretty innovative. The average equity mutual fund in Canada costs 2.35%. Questrade offers a method of automatically refunding around 1% of the costs of a mutual fund, bringing the overall cost down to 1.35% or less depending on your actual fund’s fees. This maximizer works by refunding you the “trailing commission” which is an ongoing annual payment to the advisor and firm selling you the fund. If you transfer to Questrade the mutual funds are no longer being held the firm or advisor, so that trailing commission is now pointless and thus removed. You can learn more about trailing commissions in my cost-based investing seminar.
The rebate/reimbursement of this fee happens automatically once your mutual funds are transferred into your Questrade account, no process is required. The actual yearly costs and savings of using this maximizer will depend on the amount of money you have invested and the fees of the mutual funds you have invested in.
You need ~$36000 for the rebate to begin kicking in because maximizer service charges $30 a month ($360 a year). If you don't have enough for the rebate service to be covered Questrade won’t charge you, but it’s not refunding your trailer fee.
Visual example to explain how the rebate works:
The annual savings increase with the more money you have invested. The money you save every year also gets re-invested so you’re earning money with the money you’ve already saved at no extra effort!
This method is perfect for those who are happy with their portfolio’s selection or are waiting to decide about which method they are going to switch their mutual funds to but also want to save money in the meantime (I think that’s everyone!)
In order make use of the mutual fund maximizer/rebate you must open an account on Questrade.com and transfer your mutual funds in. The sign-up process should not take more than an hour or so on your end, but it will take a week or so for Questrade and your previous institution to transfer your funds in. Remember: The rebate is applied automatically once your mutual funds are in your Questrade account, so there’s no hassle to start saving money!
You might not end up selling your mutual funds but if you do you will get $50 in free trades to cover the sale fees by signing up with this link
Using this link also supports me financially and every extra dollar allows me to help more Canadians by InvestingItForward.
If at any point you decide to sell the mutual funds Questrade allows you to trade and manage your portfolio on your own with free ETF purchases and also has a robo-advisor service called PortfolioIQ that will create and manage a portfolio of ETFs for you. The mutual fund maximizer combined with all these options makes Questrade a great all around choice since they're all available in one place.
Summary of the Mutual Fund Maximizer:
-This method keeps the same mutual funds you already own
-You will Need more than $36000 in mutual funds to receive the savings
-Transferring your mutual funds to Questrade immediately activates the rebate
-If you decide to switch to the ETF or Robo-advisor method Questrade can provide both
Does this option sound right to you? InvestItForward by sharing it with others.
See my guide about transferring from institution to institution on the original quick-switch page.