Wednesday, September 20, 2017

Transferring into TD Direct Investing and reimbursing account transfer fee

Disclaimer: I don’t work for any financial institute. I am just sharing my experience.


This is post to walk through my experience of transferring an TFSA investment account with Questrade and combining it with a TD Direct Investing (TDDI) TFSA account. If you are not already a TD client, the process will be very similar except you’ll have to sign a few more paperwork to open a TD Direct Investing account.


When the Canadian government first introduced the TFSA, I opened a TFSA with TDDI but the fee back then was a hefty ~$29 per trade. If you do the math, the fee added up very quickly. As online brokerage became more and more popular over the years, I decided to give them a try and opened an account with Questrade for a low ~$5 per trade (back in around 2012). Their fees were alright for while until they started increasing them to effectively ~$10 per trade and introduced an inactivity fee of ~$25 per quarter if your balance is below $5K and don’t perform a trade. As the same time, TD caught up with the pack and decreased their fee to ~$10 per trade but also started charging an $25 quarterly fee if your balance is below $15K.


$5K balance was not a big amount to maintenance but ever since the drop in oil price (my holding in Questrade was oil heavy), my holding balance went below that threshold. As a result, I was left with two options: 1) increase my balance with Questrade so I don’t have to pay the quarterly fee or 2) transfer out. I don’t want to simplifying close the account because that means selling all the stocks, withdrawing the amount, and affect my TFSA contribution.


Both Questrade and TDDI have a comparable online trading interface but since I do majority of my banking with TD and they have a lot of retail location I can go to, I decided to transfer my Questrade account to TDDI and combine everything together.


Step 1: Call or go online and book an appointment with TD
I decided to call TDDI because I want to see if TD can cover the $150+tax account transfer fee Questrade will charge me when I transfer out. The agent on the other side of line told me that won’t be a problem so I booked an appointment with an advisor at a TD investment centre. You could book an appointment with any retail location but the advisors at their investment centre should have more knowledge in performing an account transfer.


Step 2: Ensure there are enough cash in your account to cover the fee
Ensure there are enough cash to cover the transfer fee in your transfer-out account. If you already have a TDDI account, you can just have enough cash to in your TDDI instead (this was my scenario, I only have ~$10 in my questrade account so they took money from my TDDI cash instead). If you don’t have enough cash, they will sell some of your stock.


Step 2: Bring all the necessary document to the appointment
If you are going to be a new TD client, bring the necessary document to open a TDDI account. For me, I just have to bring my TD client card. To perform the transfer, you’ll also need to bring the most recent investment account statement from the other investment broker. The statement need to have your account number, your name, and your holding/balance.


Step 3: Confirm with the advisor if the transfer fee will be reimbursed
I double checked with the advisor about reimbursing the account transfer out fee and he told  me it shouldn’t be a problem if the fee is less than $200.


Step 4: Sign the account transfer form
When I gave my account statement to the advisor, he asked me if I want the transfer to be “in-cash” (sell the stock and get cash) or “in-kind” (keep everything in stock). I decided to just do a “in-kind” stock transfer because I intend to keep holding them. I signed the transfer form afterward and done.


Step 5: Wait for the transfer and ask for reimbursement of the transfer fee
The transfer process can take upto 2 weeks according to my TD advisor but it only took 2 days in my case. After I saw everything in my TDDI account, I simply took a screenshot of the transfer-out fee that I got charged, e-mailed it to my TD advisor, and asked him to process a reimbursement. Within a day, he reimbursed that amount and now all of my holdings are with TDDI.

Bonus: By default, TDDI only deal in CAD. However, if you want to deal in USD, you can call them and set up a USD account over the phone so you won’t get caught in currency trade. You can also transfer-in stocks from other exchange, such as Europe or Asia, and sell them from your TD account. However, you can’t buy oversea stock directly from your TD account.

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