Canadian Money Forum banner

1 - 7 of 7 Posts

·
Banned
Joined
·
2 Posts
Discussion Starter #1
I recently quit working with a company which I worked with for about 6 years. Their RRSP contrinution plan was with Sunlife, where it is now sitting in various mutual funds. All of my other investments are with RBC Direct Investing, and I wish to consolidate everything there. Another reason I want to move it to RBC is so I can choose my own investments. I'm not really a fan of mutual funds, but had limited choices at Sunlife.

In June I requested to have my mutual funds/RRSPs with Sunlife moved to RBC. I opened an RRSP account at RBC, and requested to have all of my funds transfered in kind.

Today I got a letter from Sunlife saying they don't transfer in kind investments to other financial institutions.

So I wonder now if I should request to sell the funds at Sunlife, then transfer the cash to RBC. But I wonder if I will get dinged for selling my RRSPs.... or if they sell the mutual funds within the RRSP account and then transfer the account to RRSP thereby avoiding taking the tax hit. It is difficult to find info on their website.

It is a not an insignifigant amount of money, so I obviously don't want to take the tax hit.

Anybody have any thoughts on this?
 

·
Registered
Joined
·
7,252 Posts
Yes, you need to fill out an RRSP transfer form through RBC and indicate the transfer as All in Cash.
You will not get hit with the taxes as long as it's institution to institution and you don't get the money at any point.
Call RBC to make sure you get the correct form.
 

·
Registered
Joined
·
3,423 Posts
I

...

Today I got a letter from Sunlife saying they don't transfer in kind investments to other financial institutions.

...
I find this statement hard to believe. Did the letter actually say that the products are in-house investments which RBC doesn't offer and that's why they can't transfer them?
 

·
Registered
Joined
·
5,933 Posts
I also find it hard to believe, unless it's for the reasons Four Pillars mentioned.

I recently made the same request from another insurance company, but via my financial institution & encountered no problems. I filled the transfer forms at the bank & was told that if any investment could not be transferred in-kind (as per my request), that the transfer would not go through & then it would have to be in cash if I wanted the transfer to proceed. Speak to RBC just to make sure you were given the correct information by SunLife.

Note that there is a cost to close your account; I was charged $150 plus tax for full transfers and 1/2 that for partial ones.

edit: your financial institution however, will cover the transfer cost (up to $135 I believe) for transfers over $25K.
 

·
Banned
Joined
·
967 Posts
I did the same thing recently. I sent them a T2203 form, and I requested cash. You will not be dinged by taxes, because you are not withdrawing anything. You are transferring. So sounds like you actually want to transfer in-cash, because you plan to sell it anyway. I was with Great West Life, and they did not charge an account closing fee.

My suggestion is to get a phone number from SunLife, and follow up with them closely. Call them, and ask for status on every step of the way (have they received the form? is it ok? have you sent out the cheque to RBC yet? When can they expect the cheque? etc) You will not be their customer anymore, and they have every incentive to let things fall through.
 

·
Registered
Joined
·
2,892 Posts
Interesting topic, my fiance has a similar set up through her employer with Manulife and their funds. But the only option is low fee funds. I would rather buy Manulife stock (for the sake of an example) that at least pay out (albeit a recently reduced dividend) than low fee funds that you pay an MER. Both products (equities and funds) fluctuate in price, equities more so, one pays you to hold it, the other you pay for a management fee.

I have considered annnually or so, redeeming, and simply buying equities to compliment our portfolio.

This is in an RRSP account, which to me funds are useless in retirement, I have to sell them to get money. Income payers are what I will prefer then.

Good tip from Harold Crump on how to fill out the form to transfer to the bank. Thanks
 
1 - 7 of 7 Posts
Top