Risk Profiles and E-series Orders Rejected

in Index Fund, Investments

My daughter is running into the same issue that I did when I had my TD E-series orders rejected, due to my investment risk profile. She has set up a TFSA, unfortunately with TD Mutual Funds (not TD Direct investing). As we learned to use TD E-series funds in a TD Mutual Fund account, you must complete many steps. None of these steps include the change your investment risk profile to stop having your TD E-series orders rejected.

e-series orders rejectedI have talked about how to use the E-series funds to set up a simple Couch Potato investment portfolio, so my daughter is going to use this for her TFSA account.

The application to allow you to use TD E-series Index Funds in your TD Mutual Fund account is straight forward and easy to fill in. You must do this if you end up with a TD Mutual Fund account, which is what you end up getting steered into if you go into a TD Branch. My daughter thought she was opening a TD Direct Investing account, but it ended being a TD Mutual Fund.

If you fill in the form, you assume that you then buy E-series funds (they even show up in your list of funds that you can buy), however, that is incorrect.

The E-series funds are Index funds with low MER fees (and I use them in many of my accounts, as full disclosure, but I am not receiving any recompense for talking about them). Many different web sites have talked about them, and how useful they are, but they are tricky to use in a TD Mutual Fund account.

A TD Mutual Fund Investing Risk Profile is filled out when the account is first opened, and periodically after that (every year or two). The profile questions usually push folks into a lower risk Balanced profile, and evidently the E-series funds are far more riskier funds.

The E-series Funds have turned into the red-headed step-child of the TD Mutual Funds group. None of their staff seem to want to sell them or use them in any kind of form. It is easier to use TD E-series funds in a Questrade account than a TD Mutual Fund account.

My opinion is that due to the E-series being lower cost, the TD Mutual Fund reps don’t make much money (if any) off them, so they are less motivated to sell them. Why the TD Mutual Fund on-line system seems to default to E-series orders rejected, is another issue.

Simple Solution to E-Series Orders Rejected ?

A simple fix which I will suggest to TD Mutual Funds who be to add the following “initial” block.


Ο  I allow the TD Mutual Funds group  to alter my Investment Risk Profile to allow me to use the E-series funds in my investment portfolio.

Name:  ________________           Initials: _____________


Seems straight forward to me. I doubt this will happen, it is too straight forward and nobody makes money.

Questrade Democratic Pricing - 1 cent per share, $4.95 min / $9.95 max

{ 6 comments }

{ 6 comments… add one }
  • Liam Hodgins May 24, 2018, 12:38 PM

    I’ve set up the accounts up twice once for my TFSA and again for an RESP Both times in branch with an advisor. When the risk profile part came up I just said please just click D for every single question so that I can send in my conversion request form. I was asked once about purchasing a balanced fund instead and I answered this is my money I’m going to invest it in low cost ETF’s and balance it myself

    Reply
  • Sam Brooks May 23, 2018, 4:59 PM

    I think Jayne has a point, you seem to revel in TD’s shortcomings, yet, you don’t simply leave? Might be time to take your own advice eh Mr. Caj ?

    Reply
  • Jayne May 23, 2018, 1:56 PM

    Curious… other than blog fodder.. Given all the issues you’ve had with TD and no doubt their typical big bank fees… why are you still using them?

    They sound like a nightmare to deal with compared with Simplii or Tangerine or Questrade.

    Even Edward Jones where I had a couple Resps were a simple email and signature to cash out; haven’t cashed out my Questrade Resps yet but gotta be easier than TD sounds to be.

    Setting up TFSAs at Simplii and Tangerine were a couple of minutes and done.

    Curious.

    Reply
    • bigcajunman May 23, 2018, 1:59 PM

      I am not still using TD Mutual Funds (the service), however, my daughter got bamboozled into using them, instead of TD Direct Investment. My kids’ RESPs were with them, because initially they were Canada Trust RESPs, but when TD bought them, they became TD Mutual Fund accounts.

      Yes, other services are easier (Edward Jones? #WTF). A simple email to cash out an RESP? I doubt that was all you did, as you still need to send them a proof of enrollment, don’t you?

      Yes, don’t use TD Mutual Funds (the service), but do use the TD E-series funds for a simple Couch Potato Portfolio.

      Reply
  • David Lin May 23, 2018, 11:31 AM

    I have experienced the same issue before. From what I understand, the TD risk profile only affects one variable, which is the percentage of equity in a fund. You are right in that they push you toward balanced mutual funds with higher MER, but it’s not just the e-series being singled out. Whether you are purchasing the e- or I- series of the TD Canadian Index Fund, for example, makes no difference, as they are both 100% equity. They don’t seem to take into account the overall asset allocation (e.g., whether you also hold a bond fund) and only focuses on the single security. TD Direct Investing completely bypasses the risk profile and won’t reject your order.

    Reply
    • bigcajunman May 23, 2018, 11:41 AM

      Yes, that is where I hold my E-series funds (TD Direct).

      I ended up fixing it by calling TD Mutual Fund Services on line and asked them to redo my risk profile, and my answer every time was, What do I need to answer so I can buy E-series funds?. After the 3rd time I answered that, they got the hint.

      Reply

Leave a Comment

%d bloggers like this: