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12:11 Anthony writes: In your discussion, can you address foreign exchange rates. Given the amount of trading Canadians due on the US market, I find the level of disclosure surrounding fx fees to be extremely poor (and that's putting it mildly).

Also, to my knowledge, RRSPs are now allowed to hold USD. I think questrade is the only one who has allowed the users to do this. To be honest, I think the banks are just too greedy to do it (they like the commission both buying and selling). Can you let us know if you are aware if any other brokers are planning to allow US currency in their RRSPs (or what we can do to push them other than comp).

p.s. Do you know if we are allowed by CRA to hold USD in TFSA or RESP accounts?

12:11 Rob Carrick: Hey, Anthony. One of the biggest complaints I hear from investors about online brokers is foreign exchange fees for moving in and out of U.S. dollars. Let's face it, this is a profit centre for brokers. They clip you on the way in, and they do it again on the way out. So it's no surprise that disclosure of forex charges is poor to non-existent.

If you're investing in a regular cash account, brokers do let you hold U.S. dollars without forcing a conversion. But this isn't the case in registered accounts. When you sell a U.S. stock, the proceeds are automatically converted, and the same goes for dividends. Very costly.

You have rightly pointed out that there is no regulatory reason why brokers can't allow clients to hold U.S. dollars in their registered accounts. But so far, the only two firms to offer RRSP accounts where you can hold U.S. dollars are Questrade and, as of recently, Qtrade. TD Waterhouse lets clients use U.S.-dollar money market funds to hold U.S. cash, and that's not a bad substitute.

12:15 Mike writes from Vancouver: Hello Rob, what specifically do you mean when you say "cleanly...place orders for stocks", and how important is this?

12:16 Rob Carrick: Thanks for the question about methodology. As background, Mike is asking about how I rate brokers in the category of "trading," which accounts for 25 per cent of the overall mark out of 100. Here are a few of the things I look at:

-does a broker offer real-time updates of the cash and buying power in an account?

-how clean and easy to use are the trading and order confirmation screens?

-does a broker offer a variety of ways to settle a trade (take money from a bank account, cash in a money market fund, use cash sitting in the account)?

-does a broker offer extra-detailed Level II quotes

-will a broker send you an e-mail to notify you a trade has been filled?

-does a broker make it easy to find a mutual fund symbol and then use it to place a fund trade?

12:19 Andrew Chong writes from Toronto: Let us say that I wasn't planning on doing a lot of trading, e.g. buy-and-hold ETFs. In that case, wouldn't it make sense to just use the most convenient discount broker - the one associated with my regular bank?

12:19 Rob Carrick: Hi Andrew. This is a common misconception. In fact, it helps explains why the bank-owned firms totally dominate the online brokerage business, even though they're not all great operations.

Fact is, you can get money into your account at a wide variety of firms by designating them as a bill payee through your online banking service. Others - Scotia iTrade is an example - allow you to shuttle money between your bank and your brokerage account electronically. All you have to do is send a void cheque.

Bottom line, it's probably simplest to use the broker that is part of your bank's family. But it's still easy to use other firms - firms, I should add, that may have a better service than the one your bank offers.

12:19 [Comment From Kerry:]Thank you for doing this Rob, you're very helpful. What are ECN's and how much do they add to one's overall cost of trading, assuming 2 or 3 trades per month ?

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