If you have just opened a trading account with a new discount broker or you have accounts in different places and want to consolidate, you’ll need to transfer your holdings between brokers. In this post, I have put together a detailed checklist on what you have to do to make this process as painless as possible.
- Transferring accounts between institutions costs money. The transferring institution will charge you a transfer out fee of about $150. If you have his-and-hers RRSPs, his-and-hers TFSAs and a joint investment account, you are looking at a total of $750 in fees. Therefore, the very first thing you should do is call the receiving institution and ask them to cover the cost of transfer. Note down the details of the call: the date and time, who you spoke with and the accounts for which the refund will apply.
- Scrub your holdings in the transferring brokerage. You should be able to transfer out stocks, exchange-traded funds, most mutual funds, bonds and most GICs. But, the receiving institution may not accept in-house funds available only at the transferring institution (example: TD e-Series Mutual Funds) or may charge you a hefty fee (example: High-Interest Savings Accounts and money market funds from other brokers). Sell these holdings.
- Make sure you have enough cash available in each account you are going to transfer to cover your transfer out fees.
- Download records such as monthly statements, trade confirmation slips and tax documents pertaining to your accounts from the transferring broker. This is especially critical if you have signed up for online delivery of documents.
- If you are relying on your broker to track your adjusted cost base in your taxable cash or margin accounts, download this information as well. In my experience, the book value information may or may not get transferred along with the account.
- Complete your transfer paperwork and submit it by fax or mail or in person at the nearest branch of the receiving broker. You’ll need information such as the name and address of the transferring institution (available from your latest monthly account statement), the account number, type of account and whether you want to do a partial or full transfer and whether you want to transfer in-kind or in-cash or a mix of both. Check out this post on MoneySmartsBlog for a good explanation of these terms. I recommend an “in-kind” transfer.
- Account transfers between discount brokers, in my experience, take between 5 to 10 business days.
- After the transfer-in to your new broker has been completed, you’ll see the securities appear in the account at your receiving broker. Make sure the list of securities and the number of shares are now correct in your new account.
- If you are transferring from a broker that does not segregate US dollar securities in registered accounts (such as TD Direct Investing) to one that does (such as RBC Direct Investing or BMO InvestorLine), call and journal your US dollar holdings to the USD side of the registered account.
- Re-enrol in dividend reinvestment plans (DRiPs) you participated in your old broker.
- Follow up and get the transfer fees refunded for each transferred account at your receiving broker.
- If dividends and DRiP shares were deposited in your old account at the transferring broker after you initiated the transfer, don’t worry, the cash and/or securities will follow into the receiving account at a later date without any action on your part.