I am looking into investing in an ETF. I'm very new at this. Is it better to open a self directed RSP with a bank or an investment management service like WealthSimple or Questrade? I heard that if you open with a bank, they will consider it when approving you if you need a loan, whereas Wealthsimple and Questrade have slightly lower fees. Is this correct? Is there anything else to consider?
Before you open open an account with either a discount broker or your bank, you need to ask yourself a few questions
- How much money can I afford to invest
- Do I know what my risk tolerance is
- Do I really know how risky my investments are
If you know how much you can reasonably invest each month, if you know how safe/risky the asset is, and you are comfortable with your asset choices when it fluctuates with the market then you should go with an online broker. It will be cheaper and give you a lot more flexibility in what you are trading.
If you investing just to invest, have no idea what you are doing, and may be tempted to buy riskier assets then you should go with your bank broker. There will be higher fees, but it will make you stop and think "do I really believe the gains will outweigh the fees" and you might have access to an advisor.
For reference, I had a financial advisor with very high fees for 2 years before investing on an online broker. The advisor was a family friend and I learned a lot about what I should and shouldn't invest in.