Dec 142012
 

TD Direct Investing (formerly and still almost universally referred to as TD Waterhouse) has announced new fees with effect from February 2013 [PDF]. I’ll update the details on this site closer to the time, but the key changes are summarised here [PDF] and appear to be mostly negative. In brief, they are:

  • International trades have gone from being the same rate as UK trades to being UK rates plus £5. This would have been forgivable had the firm reduced its exceedingly high commissions on currency conversions at the same time, but these appear to be unchanged.
  • No quarterly inactivity fee on a regular trading account if you hold an ISA as well (although the ISA will have an annual fee if it’s valued at less than £5,100). Otherwise, the minimum amount of assets to escape the charge is £15,000 (up from £7,500 before) or £10,000 in funds. The one trade in three months condition remains unchanged.
  • Slight changes to the frequent trader rates. The number of trades every month to get the £8.95 rate has fallen to 10 from 15, while there will be a new £5.95 rate for investors who average 20 trades per month (all still on a rolling three month average). While this is better for active trades, anybody trading that frequently can find lower cost options than TD Direct anyway (eg Interactive Brokers)

While UK brokers and supermarkets are scrabbling to find a new fee structure to meet the Retail Distribution Review changes (and to cope with falling trading activity as well), it’s hard to see these changes as anything but a step back for TD Direct. I’ve always been relatively well disposed towards them: They were early in promoting international investing for UK investors, they offered a good range of markets, they were one of the first to offer a full multi-currency account and they generally seem to offer good service (although not everyone seems to agree with me on that).

But they are now looking expensive versus Saxo Bank (both Saxo Trader and Saxo Modern Wealth Management) and Interactive Brokers among the firms that trade directly overseas. And the most competitive brokers for CDIs, such as iDealing and Sippdeal, can be a good option for major US and European stocks. With these new fees, it is increasingly hard to see why internationally focused investors should stick with them.

 

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