APR 7 2011 – Penson to TD Changeover

If Blackburn Davis Financial Inc. were to simplify our responsibilities it would be to protect our client’s assets. Two elements of this protection are selecting and monitoring the right Investment Counsellor to achieve the appropriate level of capital preservation, and also ensuring the assets are secure and easily verifiable on the books and records of the custodian.

Over the past two months one of our custodians, Penson Financial Services Canada Inc (Penson), has given us and our Investment Counsellors reason for concern. As a result we have faced challenges in providing the highest level of customer service. The majority of issues arise from a decision by Penson to move to Broadridge’s Brokerage Processing Services platform. This change has not been seamless and we know that a number of client accounts have been temporarily impacted. As we continue to face these challenges, we believe that it is important to notify our clients that we have alternatives to Penson and the process to make the change is easy. All assets can move from one custodian to another “in-kind” meaning there is no trading cost and no tax.

When we selected Penson, one of the main reasons was the low cost. At the time, alternatives such as TD Waterhouse Canada Inc. (TD), were almost twice as expensive. However, our Investment Counsellors have been able to negotiate a new agreement with TD. Key features of these agreements are:

Transfer costs – TD will absorb the fees to transfer the accounts out of Penson.
Trading costs – TD will reduce equity trade commissions to 3 cents per share, subject to a reduced minimum of $15 per trade. This represents a significant reduction from the 5 cents per share and $29 minimum that was previously charged.

Although all our client circumstances are different we believe it is prudent to change from Penson to TD at this time, unless you have very specific needs.

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