Budget 2025 - no more registered account transfer fees | Page 2 | General financial discussion | Discussion forum

It's untrue that nobody will move registered accounts due to $150 fee. It's also untrue that investors won't start up a new financial institution because they won't have the money to reimburse people who move their registered accounts to them.

And no hoops at all, last time I did it I just sent a screenshot of the fee taken by my old institution and immediate credit to my account at new institution.

These particular fees are not the issue, they're immaterial in big banks' financial statements, in the economy as a whole, in our list of life's expenditures, it's just political virtue signaling for votes. It's always a popular move for the government to save us from big corporations like banks, telecomm, grocery chains, airlines, etc, the people eat it up, that's all this is. Next time it'll be some $10 fee on Taylor Swift tickets or something similar, and on it goes.

Lodown said
As for the discourse this has spanned, the bottom line is such fees stifle competition. Your average bank customer often does not know receiving institutions will reimburse such fees and even when they do, the hoops they must jump through makes it a bridge to far.  

I disagree. The fees are quite nominal at $50 for bank related accounts and upwards of $150 for brokerage accounts. Imagine someone with a $10k registered account. $50 is 0.5% and is a one time cost.... even if not reimbursed. Imagine a $100k brokerage investment account where $150 is 0.15% one time cost... even if not reimbursed.

It is a matter of being outstandingly lazy for someone to research a new institution and not be aware of all the incentives and the terms and conditions associated with the new institution. At the very most, as Bill articulated, it is a matter of simply providing a PDF copy of the charge from the outgoing institution to receive reimbursement.

I recall making a transfer of registered accounts only twice in the past 20 or so years, a 6 digit brokerage RRSP from brokerage A for a bribe at brokerage B and then some years later, back to brokerage A. The brokerages made it clear in their offers they would reimburse fees up to $X and it was a simple process to collect it.

Folks who want to hop around like a butterfly in a garden chasing promos from the HISA or GIC listings on this forum every year or two need to recognize they have some responsibilities and work to undertake in the process. This is not a supervised kindergarten.

Bill: The transfer fee is an anti-competitive client lock-in. That's why, as its typical level of $25-$50 has risen to $150 or more, regulators are stepping in. This would not be the case, or a complaint from me, if the costs had not become usurious. And, as BlueSky notes, bait-and-switchy.

AND those transfer-out fees often are imposed or increased AFTER the client has signed in their money. No chance to make an informed decision when buying!

I certainly have made decisions based on departure fees, as they can easily exceed all the interest an investment can earn. (Few of us, I'd guess, have only one single investment.) Or, if not that, exceed the interest difference between competitors. This gets worse as interest rates fall and investments earn less and less.

There is also the year-end option, but it's rare to be able to pick one's maturity date near year-end when investing at the start of a year when new contribution room kicks in. I took a lower-interest cashable account last year to avoid a a hefty transfer fee.

(Brokerage accounts are a different matter. I have nothing to add about them.)

Mordko: Insurance companies actually do often charge "change-your-mind" fees, where they charge more for new clients than for renewals.

AltaRed: "Businesses are not charities." True. But regulated businesses that are protected by regulators have responsibilities. Like, why else would banks have to contribute to deposit insurance systems? That's CUSTOMER money from bank profits, not federal taxes, that bails out shaky banks.

And I don't disagree that banks can pick their clients - as many do with minimum deposits or relationship requirements. Until I moved to BC, I had a very difficult time getting motorcycle insurance without having a car or truck inured.

"“Despite efficiencies provided by technology (electronic transfers cost Wealthsimple less than $2 to process) exit fees have ballooned:"

The marginal cost might be minimal but the cost to build and maintain that tachnology/infrastructure can be expensive.

Most people (I hope) would understand that Wealthsimple, or any corporation, is anything but unbiased in its presentation of any issue.

End of the day, I've only transferred registered accounts twice in my life, both times been reimbursed easy peasy, I (a pretty average guy) can apparently handle myself quite fine re this matter without government help, not sure why others can't. And in all my years I've never talked to anyone who had as a government priority the elimination of these fees, it's an issue to pretty well nobody, this is just government virtue signaling on a trivial matter of no consequence picked out of the air for popularity purposes only.

The debate could go on forever on here but it comes down to whether you prefer looking out for yourself or you want the government to do it for you, and the opinions expressed here are predictable based on how you stand on that.

Thank you. It is why I am always suspicious of anything with a vested interest in pushing an agenda. Obfuscation, if not intentional misrepresentation, tends to be the order of the day. The WS piece is not differentiating between simple cash transfers and 'securities in kind', vastly different complexities. Never mind that transfer of a LIRA or an LIF is even more complex than a RRSP/RRIF with the various jurisdictional limitations.

Still, the industry has brought on much of the heat themselves with ever increasing and unjustified fees, and I am not against some oversight regulation if the FIs cannot/will not do it themselves.

"ATON fees will only be around $2 from each side for a simple one-item ATON transfer of a cash balance: $0.91 + $0.135."

I think they will argue that this is just the incremental cost and doesn't include the infrastructure cost.

AltaRed said

Businesses are not charities. That all said, I do agree transfer out fees should be proportional to the administrative work effort (costs) to facilitate the transfer and not a profit center. Some of them may have gotten out of hand. $50-$100 seems more reasonable than $150 that brokerages charge for investment accounts, but we also do not know how complex some investment accounts can be. There could be 100 holdings in some of these accounts, not the more 20-30 we often think of for the typical account.

FWIW, I am guessing the push to eliminate transfer fees for registered accounts may not cover certain brokerage registered accounts that are far more complex than bank/CU based deposit registered accounts.  

While I agree that a reasonable fee could be charged, it shouldn't be a cash cow. I would dare any bank to stop offering TFSA accounts due to this proposed change. My bet is that if the government is determined to push ahead with the change, banks will swallow the frog.

BlueSky said

That's a strange statement, as most people have gotten used to be overcharged for everything in Canada. However, I wonder why folks pursue "free stuff" on forums such as this one, if $150 transfer-out fee is not such a big deal.  

Free stuff is not really free as so many here already know. There is angst, effort, trials and tribulations trying to play games moving between institutions. For those who are mostly rate shopping between bank or CU deposit type accounts (GICs, HISAs, etc.) for their TFSAs et al, I am not aware of such institutions charging $150 transfer out fees. It has been my understanding the higher transfer out fees are more related to transfer outs of brokerage accounts and that is generally a different customer. Few people move brokerage accounts back and forth between brokerages.