Tag Archives: planning

What is in the Transaction History for a BMO InvestorLine Account and What Should I Watch Out for?

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When you buy or sell an investment with BMO InvestorLine you will usually get a statement in the mail [or by the MyLink secure email system] for the transaction. But when you receive a dividend, interest or distribution payment the only record is your e-statement and a line item in your Transaction History. I find the Transaction History screen quite useful as a simple list of everything going into and out of my account. Unfortunately, InvestorLine only keeps a 24-month version of the report available online. So periodically, I save the data to my own computer to keep my long term records simply and easily available. There are a few things you should be cautious about in the report, though.

What Does the Transaction History Report for my BMO InvestorLine Account?

Here’s a quick refresher of what info is stored in the Transaction History:

  • Transaction Date
    This is the date you issued the order, earned the distribution or payment, requested the contribution or withdrawal etc.
  • Settlement Date
    This is the date you became the owner on record for a new investment, or ceased to be the owner.
  • Activity Description
    This is a simplified description of what happened. For example: Dividend. Interest.
  • Description
    This usually is the (shortened) name of the company that is involved in the transaction. For example, K-Bro Linen or Dundee Investment Sving Acct.
  • Symbol
    This is the trading symbol for a stock or mutual fund. For example, AW.UN for the A&W Revenue Royalties Inc Fund T.
  • Quantity
    If the transaction involves a volume of shares or units etc that value is reported here.
  • Price
    If the transaction involved purchasing or selling units at a specific price that value is reported here.
  • Total Amount
    This is the total dollar value of the transaction.

Cautions about the InvestorLine Transaction History Report

While the Transaction History screen and report is very useful it does have some quirks you should be cautious about.

Reporting the Sales of Fractional Mutual Fund Units

The method of reporting the sale of units of a mutual fund can be misleading. As I detailed in How to Sell a Mutual Fund Using BMO InvestorLine, I found the report of the sale of one of my funds confusing.

I owned both whole units and a few fractional units. For clarity, I’ll say I owned 100.25 units of ABC fund. When I sold, the Transaction History reported I had sold 100 units for $1002.50. It then reported a day later that I had sold 0.25 units for $0. It looked like I wasn’t paid for the 0.25 units. In reality, I was paid $1000 for the 100 units and $2.50 for the 0.25 units. It just wasn’t reported clearly.

Neither the Transaction Date nor the Settlement Date is the Actual Activity’s Date

BMO InvestorLine back dates deposits to the date they should have been available in your cash or trading account.

That can be a bit frustrating when trying to determine exactly when you really received something. For instance, when one of my stocks split off a sub-company to shareholders it was supposed to be effective on a certain day, call it June 1. The shares of the new company did not appear in my trading account though till about June 9. When they appeared, the transaction was back dated to June 1. I understand why they did that, but it does make it a bit confusing.

Dividends are Not Really Paid on the Transaction Date

Again, the dates can be a bit misleading. A dividend payment or other distributive payment will not show up in your cash account or in your transaction history until at least the next day. When it is posted, though, it is back dated to the true distribution date. Again, while not a major issue it is a minor annoyance.

Oversimplified Activity Descriptions

The activity description may be so simplified that it’s not really accurate. For example, the transaction history may report: Interest when a payment was actually not interest.

The 2012 monthly distribution from AW.UN, for example, is listed in the Transaction History as Interest. According to the tax information for 2012 provided on A&Ws on website, the payment is actually a Non-eligible Dividend.

Please look at your more detailed statements (such as a T3) if you need to confirm what type of distribution you received.

Foreign Currency Transactions

To keep the screen simple, InvestorLine does not report everything about a transaction visibly on the screen.

I’m trying to determine whether InvestorLine reports whether a distribution or payment was originally made in a foreign currency on the Transaction History screen and what foreign currency conversion rate was used. (It shows this information on the e-statements.) If your account is in Canadian dollars only, then the transaction will be reported in CDN $ after conversion.

It’s tricky because the Canadian stocks I own which pay dividends in US dollars will directly pay the dividends in Canadian dollars if advised to do so by the brokerage. I need to own one of the many Canadian resource and mining stocks that simply pay their dividends in USD and let the brokerage handle the conversion. I don’t particularly want to buy one of these stocks just to check, though! Maybe I’ll have to. Hmmmmm. (If you are in this exact situation, please let me know what InvestorLine is reporting by adding a comment below. It would be greatly appreciated!)

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Have you found any other odd quirks about the Transaction History? Or does it sound like information you wish your brokerage had available? Please share your experiences with a comment.

Maximize your TFSA First

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I believe most people should completely maximize their TFSA before they contribute to their personal RRSP.

The Exception: Work RRSPs Versus Personal RRSPs

There’s one exception. Some people’s work company pension plan is called a Group RRSP. Rather than having a defined contribution or defined benefit pension plan at work, they contribute money to an RRSP through their employer. The employer may also contribute to this same RRSP. I think employees should contribute to a Group RRSP if that is the only type of pension plan offered at work. In that case, the person should contribute to their work RRSP and then try to maximize their TFSA next, before starting a personal RRSP.

Maximizing a TFSA Doesn’t Require Much Money

As of January 2013, the most a person can contribute to a TFSA if he or she was 18 in 2009 is $25,500. (That does not include re-investing any money withdrawn from the TFSA in previous years.) Younger persons can contribute less.

Personally, I think everyone needs at least $25,000 in savings ready to help with regular living emergencies. If someone loses a job they may need savings to pay the bills until they find new work. Very few people find EI benefits are high enough to maintain their standard of living.

As of February 2014, the maximum a person can contribute if he or she was 18 in 2009 and lived in Canada the whole time since is $31 000. That’s still not much savings.

The savings are also intended to be a personal “reserve fund” for major expenses. For example, most homeowners will  need a new roof every 15-20 years. That means each year they should be saving some of the cost of that new roof. Many people also own cars. That means saving every year to be ready to buy one in 10-15 years when the current car wears out.

While saving for retirement is very important, I think it’s unnecessary to save in an RRSP when there is still room in a TFSA. Both allow investing in everything from cash and GICs, to bonds and bond funds, to shares and stock ETFs.

What Should I Do Once I Have Contributed my Maximum Allowable Amount to my TFSA?

Once a person’s TFSA is fully funded, it’s time to start an RRSP. How? I’ve written a series of posts on where to invest and in what, called Retirement Strategies. I invite you to read those articles and consider my approach.

Until you have more than $25,000 in savings I cannot personally see why you need to have an RRSP. (Disagree? Convince me with a quick comment!)

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Do you agree that people should top up their TFSA before they rev up their RRSP? Please share your experiences with a comment.