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.
I 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.