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Discussion Starter · #1 · (Edited)
Hi all, looking for some advice on how to proceed ending my association with my TD Waterhouse financial advisor and move that portfolio to a DIY discount brokerage.

Background: I've had a Financial Planning account at TD Waterhouse for a few years, but I only gave the advisor a part of my non-registered investment portfolio, which has grown to roughly 100k. The portfolio is all mutual funds (12 different ones): ~20% of the value in High Interest "Savings" funds, ~70% in various TD I-Series funds, and ~10% from other fund companies. I calculate the portfolio's MER is about 2.3%, so it's costing me 2.3k/year.

To complete the picture, I have another 100k in my non-registered Questrade account that I've been looking after myself. I also have roughly 30k in a RRSP account with Questrade, 30k in TFSAs (a few thousand with TD Direct Investing, 10k with Peoples Trust, and the rest with Questrade), and various savings with PCF and ING.

Goal: I want to consolidate my non-registered portfolio with Questrade. Reasoning is I'm much more comfortable with DIY now, and I have not been receiving value for the 2.3k/year I'm paying for my TD FP due to my relatively simple financial situation that I don't foresee changing for a while. If I do feel the need for financial advise, I would go to a fee-only (hourly or one-time) advisor.

Thought Process:
  • I figure I would do a transfer in-kind from TD to Questrade. I looked up the mutual funds that I hold, and they are all available to trade with Questrade (as they are all I-Series or otherwise "normal" fund classes).
  • Once with Questrade, I would slowly sell the mutual funds (at $10/trade) and buy ETFs to meet my portfolio balancing/allocation targets. As many of the funds have unrealized gains and only a couple with small losses, I'm trying to use tax loss harvesting where possible, but want to transition to 100% ETFs by the end of the year, so I may have to take a large capital gains tax bill this year. I don't foresee a change to my tax bracket for the foreseeable future.
Questions:
  • Is there any formal process or key words/actions to end the relationship with the TD advisor? Should I just start the transfer in-kind process with Questrade and then inform the TD advisor?
  • If I do a transfer in-kind to Questrade, are there any costs that TD will try to charge me? I'm not selling them, and they don't have loads AFAIK, but not clear on any account transfer/"closing" fees.
  • Has anyone experienced issues selling mutual funds with Questrade that they transferred in-kind from another brokerage?
  • Any other way I can optimize tax savings in my case?
  • I'm pretty set on going to Questrade, but anywhere else I should consider for a 100k non-registered account? It would be mostly CA-listed ETFs, but may 20% of it is intended for US-listed ETFs.
Thanks for any and all comments/suggestions to help me make the move.
 

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I would think a phone call to your advisor would be courteous. He/she will certainly try to get in touch with you when the paperwork comes through. Your contract with TD might have some notification period or requirement for a written cancellation. I am not sure if the I-series can be held by another broker, but probably yes.

TD will charge you fees for moving. You should try to get Questrade to cover them... they may or may not.

Once the in-kind transfer has been made, there shouldn't be issues with Questrade. There might be some lagging dividends or payments that TD will have to cough up later. Watch out for these - you might have to nag.

If the transfer is completely in-kind there should be no tax implications. I assume you are keeping track of ACB yourself - Questrade's numbers will probably not be correct for these calculations.

Questrade is pretty good, from what I hear.
 

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I would think a phone call to your advisor would be courteous. He/she will certainly try to get in touch with you when the paperwork comes through. Your contract with TD might have some notification period or requirement for a written cancellation. I am not sure if the I-series can be held by another broker, but probably yes.

TD will charge you fees for moving. You should try to get Questrade to cover them... they may or may not.

Once the in-kind transfer has been made, there shouldn't be issues with Questrade. There might be some lagging dividends or payments that TD will have to cough up later. Watch out for these - you might have to nag.

If the transfer is completely in-kind there should be no tax implications. I assume you are keeping track of ACB yourself - Questrade's numbers will probably not be correct for these calculations.

Questrade is pretty good, from what I hear.
Why would you move the mutual funds before you sell them? Why don't you just slowly sell your mutual funds with TD (while offsetting with capital losses) and move the money once it is sold. I don't see how ending your relationship in one fell swoop is a benefit to you if you will still be paying a M.E.R. on those funds with questrade.
 

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Careful of the back end fees. I'm still sitting on a mutual fund that my wife bought 5 years ago that I'm waiting to sell for the potato.

My old advisor wanted me to sell all of my stock prior to moving them over. That ended our working relationship right there.
 

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Discussion Starter · #5 ·
Thanks all for your posts.

Good point about distributions, I'll have to watch that closely after the transfer. And I have been tracking my ACB for each fund, once I update for 2013 I'll be caught up.

In regards to moving now to Questrade before selling (all of) them with TD and just moving the money, that's a fair question. My napkin math is that the Questrade's Mutual Fund Maximizer would save me $540/year (aggregated 0.9% MER rebate on 100k portfolio less the $30/mth fee), which cover the estimated $100 trading fees (10 trades at $10/trade with Questrade vs. free with TDW FP), and I would pocket the difference. Of course, the $540 figure declines as I sell the mutual funds, so the savings isn't that much, especially if I a lot of within a year.

I will confirm if there are any back load/fees on the current funds, but I don't think there are any, so if it weren't for the Mutual Fund Maximizer and the tax implications, liquidating them with TDW would certainly be an option... other then the advisor having to do paperwork for a client that is slowing creeping away; may not be the most gentlemanly thing to do.
 

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Had a good relationship with a FP at TDW - prior to opening my account I had told her that I had planned on managing my own account in a few yrs time. Late 2012 I contacted my FP and ask her to closed my financial planning account at TD. We sold the majority of my funds on the financial planning side and purchased TDB8150. We then transferred over TDB8150 "in kind" to my TDW discount brokerage accounts (TFSA, RSP, Non-Reg Cash). Transfer was quick and painless, no hidden fees. I was doing just fine with all the funds that had been selected by the FP at TD - no complaints, I simply wanted "control" of my entire portfolio and my preference was to own individual stocks and ETF's. Congrats on the move to DIY!

I would contact your advisor to give them a heads up - they may be able to offer you some advice on how best to proceed with the transfers.
 

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Questrade is pretty good, from what I hear.
Not sure who you've been talking to but beware the spin doctors. There is a LOT of dirt on this company available in CMF as well as on google. I had a lot of problems doing a simple account setup with them. One of the owners of this forum has a multi-year thread going on his blog which outlines plenty of customer problems. Beware.
 

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Theirs no need contact TD about moving your accounts. Choose where the money is going and have them start the process.

I never had anybody contact me from my previous account holder.
 

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And I have been tracking my ACB for each fund, once I update for 2013 I'll be caught up.
The financial planning division at TDW and / or your advisor should keep track / calculate your ACB for you - just ask. I had them do it for me when I transferred away from FP. You may also want to dowload / save all your statements, tax documents, etc. before you close the account.
 

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Discussion Starter · #10 ·
Although I have read about various issues with Questrade, including from these forums, I have been with them for a few years and am generally happy, so I'm ok giving them more of my business. It hasn't always been rosy though:

1) I already opened a RRSP with them, and shortly afterwards opened a Non-Reg account. They still required a bank verification, even though my RRSP was already funded and I started trading, and I would be using the same bank account. Nothing in the new account process had indicated this was a required step, and I had to deal with it via e-mail when I couldn't trade with less than 1k in the new account. That said, when I opened my TFSA late last year, I explicitly contacted them to confirm that I only needed to fund the account, not go through the verification again.

2) The transition of clearing houses and trading platforms was a bit rough, but didn't lose anything, Still, it made me spend more time on my statements.

3) Their nightly downtime is a little inconvenient, especially those late night panic attacks back in my early investing days.

4) The introduction of the inactivity fee was offputting, but it didn't affect me personally.

I like the various customer service options (I've used web chat, e-mail, phone, and callback with acceptable wait times) I'm ok with their trading platform, and their account options and fees are competitive. The ease of doing Norbit's Gambit (or at least not harder than most other brokerages) and free ETF buys are also nice.

But back to my stuff with TD: I just remembered that I could do the selling and transferring of funds out via the website without engaging the advisor, so that's an option to trade for free. Maybe I call the advisor to declare my intentions, execute the sell-off myself over the next little while and the advisor will close the account when it's all sold? It'll be a small hassle and delay in transferring the proceeds as I liquidate from TDW to my TD bank account and then to Questrade before buying the replacement ETFs. Thoughts?
 

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Discussion Starter · #11 ·
The financial planning division at TDW and / or your advisor should keep track / calculate your ACB for you - just ask. I had them do it for me when I transferred away from FP. You may also want to dowload / save all your statements, tax documents, etc. before you close the account.
I will ask, thanks for the tip. I do download any/all digital documents via WebBroker, and will do another pass before account closure.
 
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