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Discussion Starter #1
First off, I tried to post this thread into the "Investing" category, but I am not able to do that. I get a "security error". So posting here instead.

I have been planning for the past 6 months to end my relationship with my advisor and move my investments to a discount brokerage. My plan was to do this in April, once I had all the documents needed to file my taxes. My understanding is that my entire portfolio could be out of the markets for 1-2 weeks while the transfer happens.

My question is this: with the current day-to-day variability in the markets, is this the right time to be doing this transfer? I see a risk in being "out of the markets" if there happens to be a sharp increase. (Of course, I could also be out of the markets during a large dip as well.) Any opinions on this?
 

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To elaborate on LTR's comment, you have two options for transferring an account:
1) All securities get sold by the originating adviser/broker and cash is transferred;
2) The securities are all moved over "in-kind," maintaining your ACB.

The advantage of 2) is that you don't trigger any capital gains/losses and that you aren't out of the market.

There are two things to bear in mind with an in-kind transfer: First, some holdings -- like proprietary funds -- may not be eligible to be transferred to your new discount broker. They will have to be sold for cash.
Second, if you are transferring regular mutual funds -- big bank funds, for example -- your new broker may charge your $35 or so if you sell them within 90 days after the transfer. The reason for this is that they expect to collect at least one trailer fee, or the trade fee, as compensation. You can either accept the fee as the cost of simplifying/improving your portfolio, or sit tight for three months.

If transferring in-kind there is no reason to wait. If you need/want to transfer cash you may well wish to wait for calmer markets.
 

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It would make sense to transfer as much as possible in-kind. You don't say what investment firm you're using or what kind of investments you have, so it's hard to offer any real advice. If you're using an insurance company right now, your holdings may be in specialty "segregated" funds that can only be transferred in cash. I had this situation when I moved my RRSP out of Manulife to TDDI. If you are using IG or similar, you may find that some of your investments carry deferred sales commissions or other encumbrances that would hit you when you go to shift the funds. There are threads regarding this situation on the site.

As regards market timing, I would say that if you are forced to sell to cash and re-buy, this is not an ideal time to do that.
 

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Discussion Starter #5
Thanks for the feedback.
Current broker is National Bank (NBCN). 90% of my holdings are common ETF's, and the remainder are a few common mutual funds (which are all past the DSC). The receiving broker (Questrade) has already confirmed that they can take them on without issue. My plan is to transfer everything "in kind". My only concern (and it sounds like it's not a concern afterall) was the timeframe where the transfer is in progress. I guessed that there would be a few days where my entire portfolio would be "on the sidelines" as it moved from one broker to the other.

I confirmed with Questrade that they will cover the transfer fees (up to $150 per account), so that will likely cover most/all of what NBCN will charge.
 

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Rest assured that anything transferred in-kind will stay fully invested without any cost base or CG effects or effects on MF DRIPs or distributions. It is only "on the sidelines" in the sense that you couldn't actively trade it during the transfer.
 

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I would definitely transfer in-kind. As you said in your original post, there's no way to know if the market will go up or down during the transition.

ltr
 

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I confirmed with Questrade that they will cover the transfer fees (up to $150 per account), so that will likely cover most/all of what NBCN will charge.
If you are transferring significant amount, ask QT for cash back. Last year I transferred around $180k to QT and they covered the fees and also paid me $300/$400 cash reward.
 

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Discussion Starter #9
Thanks for that tip, scorpion_ca.
And thanks everyone for your input. I am ready to get the ball rolling on this.
 

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I think it's a bad time to do anything complicated with brokers. It's impossible to get anyone on the phone, and there is generally reduced staff since they are still trying to figure out how to get their employees working in safe conditions / from home.

So I wouldn't be concerned about price fluctuations but rather about employee availability and phone support if needed. I am also planning to transfer some assets between brokerages and will be waiting at least a couple months before trying to do it.
 

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James, I don't think it is going to get much better at discount brokers until well into the summer, perhaps the Fall. Turbulent markets seem to have a way of vastly increased customer interaction with their brokerages. Why I don't know and I have never understood that...since I don't see any reason for anyone to actually have to call their brokerage to do trades (GIC purchases aside for some brokerages).

That said, I agree it is appropriate to flag the higher probability of delays in account transfers at this time. As long as the OP remains invested and 'transfers in kind', it does not matter much if individual holdings get hung up in cyberspace for some time. The OP still remains invested.
 
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