Mutual Fund Order Rejected (again)

This article was written in late 2015, during a period when TD Mutual Funds still required phone-based KYC(Know Your Customer!!) updates for almost every account type. Online updates were inconsistent, profiles weren’t linked across accounts, and mutual fund orders were routinely rejected for outdated investor information. While some improvements have been made since, many parents still encounter similar roadblocks, especially in older mutual fund-based RESPs.
Too Long: Didn’t Read (TL:DR)

Estimated reading time: 4 minutes

My friends at TD Mutual Funds ended 2015 with a bang by cancelling a Mutual Fund order that I had put in for my son’s RESP Account. Do you recall the last time I attempted this? I ran into issues because my Trading Profile was not up to date, and thus, my order was cancelled. Well, it happened again, thanks to my Trading Profile (or Risk Profile).

I was following my own end-of-year advice, trying to put money into my son’s RESP account, and decided it would be prudent to do this online, and attempted to buy some TD E-series Funds for the account. I placed my order, and within less than an hour, an email arrived outlining why my order was refused: my Trading Profile (or Risk Profile) was not up to date. The cry of anguish from me could be heard in Orleans.

Transaction Denied!

One of my new goals for this year, is to fight through the red tape, that is set up to stop me from getting what I want, so I dutifully called the number supplied (in the rejection e-mail), and after a bunch of “security questions”, the young man on the phone told me he could help me “update my investing profile”, which allegedly had not been updated since 2007. I could have asked what I was doing last year when I “updated my profile” for another account, but I did not.

I then spent 10 minutes answering questions about my investing beliefs and ideas, of which two of the questions were specific to this investment account (an RESP). Those two questions were only specific in that it was, “When do you need this money?” questions, but I suppose they are savings vehicle specific (in an obtuse way).

Was that all that needed to be done? No! My wife also had to go through the same interrogation, as she jointly holds the account with me (for my son). She then had to answer the same questions for 10 minutes. After about 1/2 an hour, I was informed that I was allowed to resubmit my mutual fund purchase (yes, I had to resubmit the purchase; they could not simply reuse the rejected request).

Lessons Learned: RESP Transaction Denied

What have I learned from this:

1. I should follow my own advice, and move this account somewhere else, as I refuse to go through this inquisition again.
2. TD needs to revamp its Mutual Fund Investing profiles to cover all Mutual Fund accounts held by an individual, instead of forcing them to maintain more than five up-to-date investing profiles (yes, I evidently have five investing profiles). Given the questionnaire has 12 questions and only 2 have to do with the specific investment, that is the least that can be expected here.
3. I should re-read my old posts and remind myself how painful this process can be.

A fantastic way to end 2015. For those of you hoping I write fewer whining and ranting articles this year, sorry, it doesn’t look like that will happen.

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Cancelled TD Transaction FAQ

TL:DR RESP Blocks

Banks love to tell you Know Your Customer is for your protection, but after a decade of watching this process break more than it fixes, I can tell you the truth: it’s about compliance, not clients. TD rejecting an RESP deposit because your risk profile is deemed too high is precisely what happens when legacy systems and half-baked procedures collide. Lawyers strike again!