So far, I only had a vague idea of what this exclusive account is. You had to have over $500,000 in invest-able assets or generate over $5,000 in commissions. I heard of rumors that you get cool benefits such as exclusive events. It is pretty much the Centurion Card of TD Waterhouse.
Today, while I was browsing through my Web Broker and researching my tax statements, I noticed something peculiar:
The minute I saw that, I was anxious and excited. What is going on? Is it a temporary bug because I know I don’t have over $500,000 in investments!” As my line was dialing the Waterhouse Helpline, it suddenly hit me. You qualify once you have over $500,000 in household assets! Because of the recent surge in the stock market, my parent’s investments had finally reached a level which enabled all of us to qualify under the President’s Account!
Thus, I decided to get a complete overview of the benefits so I knew exactly how amazing (or underwhelming) it is.
How do I qualify?
You qualify for President’s Account when your household has over $500,000 in invested assets with TD Waterhouse or generate over $5,000 in commissions in a rolling 12 month period.
*Notice that the key term here is household assets. If your wife has $200,000 and you have $300,000, then you both qualify!
What Happens if I go under $500,000 or stop trading excessively?
The minute the reach President’s Account status, then it stays there forever until you decide to close the account. That is the beauty of having this. If you had $500,000 and tomorrow the stock market crashes and you lose half your investments, you would still retain your PA status! (Though I reckon that would be the very least of your worries!)
So What are the Benefits???
Ahhh, this is the main dish that everyone is wondering about. I have them listed and explained below.
1. Lower Margin Interest
Regular margin accounts have an interest rate of 4.25% (for CAD accounts) and 4.50% (for USD accounts).
Margin interest for the President’s Account are tiered as follows:
| Margin | CAD Interest | USD Interest |
| Under $25,000 | 4.00% | 4.50% |
| $25,000-$99,999.99 | 3.75% | 4.25% |
| Over $100,000 | 3.00% | 3.75% |
For example, if you had $100,000 and you bought $130,000 worth of Canadian stocks, then $25,000 of that would accrue 4% interest and $5,000 of that would accrue 3.75% interest.
Yes, any amount over $100,000 in margin will accrue just 3% interest…which can rival retail bank mortgage rates!
2. No Annual Fees for RRSP
There are absolutely no annual fees for the RRSP (Registered Retirement Savings Account).
For the regular discount brokerage, if you have under $25,000 in your RRSP account, you would be charged an annual $125 administrative fee. With the President’s Account, that is waived.
*Note: RESP (Registered Education Savings Plan) is still subject to an annual $50 fee if you have under $25,000 in the account.
3. Toronto Stock Exchange IPO Access
With the PA, you are given dibs are stocks offering IPO on the Toronto Stock Exchange. Because TD gets allotted a certain amount of shares of that company, it is a first come, first serve basis. If a hot stock is gonna IPO, you better act fast before it is snatched up! Also, make sure you first sign up for it in the New Issues tab:
4. Exclusive Invitational Events
I don’t know alot about this as I just reached President’s Account status but once a year, you are invited to an evening dinner compliments of TD Waterhouse.
5. Additional Information in Markets & Research
Several additional links and tabs are revealed for President’s Account holders.
6. Lower Interest Rate for Cash Overdrafts
For your Non-Margin Accounts, PA holders get a priority 6% cash overdraft rate. Regular direct investment clients have it at 21%
7. Free Annual Trading Summary
At around February, you get an free summarized version of your trades to faster finish your tax work. It can be sent via email or hard copy. How considerate of TD Waterhouse!
8. Priority Phone Line when you call via Voice Print
If you signed up for the voice print system with TD, a President’s Account would automatically jump the line and get priority to agents.
*Previously PA holders had a special calling line but that was replaced with this new system.
This is a decent benefit for me because I do call in from time to time for certain requests such as buying foreign based stocks on the NYSE (ADR Stocks) or enrolling in the Dividend Reinvestment Plan (DRIP).
9. Lower Trading Fees placed with Agents
This one is quite useless for us tech savvy guys who place most of our trades online. But if you insist on calling in to place a trade, you do get a small discount.
The regular price for placing a trade with a live agent is ($35 base + 6 cents a share; $43 minimum). For example, if you bought 1000 shares of stock ABC via an agent, your commissions would total $35+1000*0.06= $90.
With various tiers of President’s Account, you get a rebate as follows:
| Account Level | Qualification | Rebate |
| President’s Account | $500,000 – $1 million | 10.00% |
| President’s Account Gold | $1 million – $2 million | 10.00% |
| President’s Account Platinum | $2 million – $5 million | 15.00% |
| President’s Account Diamond | $5 million + | 20.00% |
So, in our same example (1000 shares of ABC), a President’s Account and Gold member would pay $81; A Platinum member would pay $76.5; And a Diamond member would pay $72.
Conclusion
Overall, it’s nothing spectacular, but for something that is free and a given once you reached the status, why not? The margin interest is okay for the risk takers and you also can’t complain about free dinner!
There is no longer a priority phone line. And also, I was told today that there is no additional information made available in markets and research. It is now all made available to everyone, apparently.
Most of these benefits don’t seem very meaningful to me with those two being moot. Perhaps the summary.