You’ve switched banks.  You’ve moved.  You want to start do-it-yourselfing in a discount brokerage account.  Whatever the reason, you need to transfer RRSP, TFSA, or RESP money from one institution to another (or sometimes, from one part of an institution to another), and you want to make sure that it stays tax-sheltered, tax free, or tax deferred while you’re doing it.

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No problem.

Let me repeat: no problem.  Transfers between institutions – especially transfers of money registered as a Retirement Savings Plan, a Tax Free Savings Account, or a Registered Education Savings Plan – seem complicated and intimidating, but are in fact are regulated events, governed by federal forms, timelines, and procedures.  Let’s all shout “hooray!” for bureaucracy and the tax man, shall we?

The first and most important mental hurdle to jump is this: you don’t have to break up with your bank or your advisor.  There’s no scenario in which you’ll need to sit down across from someone who wants to keep your money and convince them to give it to you.  You don’t have to worry about phone calls, or salesmanship, or awkward “it’s not me, it’s you” conversations, because it’s the receiving institution that initiates and completes the transfer.

If your RRSP is at Red Bank, and you want to move it to Green Bank’s self-directed brokerage, you go to Green Bank to do it.

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The next hurdle that you need to get over is that you have the power to hold the receiving institution to an exacting standard of procedural correctness.  They’re the ones filling out the transfer forms.  They’re the ones with entire back offices filled with staff whose only job is to shepherd innocent flocks of money from one institution to another unharmed.  Your job is to know what is supposed to happen and when, so you can hold their feet to the fire if it doesn’t.

Fortunately, with a tiny little bit of effort, and maybe a phone call or two, you can collect the necessary list of Things to Watch For and be as prepared as you need to be.

Before Signing the Paperwork:

  • Track down and make sure you have a copy of the most recent statement that shows how much you have invested and in what.  Are you cashing it all out and transferring the cash, are you hoping to keep all of your investments as-is (“in-kind” is the terminology you’re looking for) during the transfer, or do you want some combination of in-kind and in-cash?  Make notes, and make sure the receiving institution knows exactly what you want.
  • Is the institution you’re leaving going to charge you a fee to transfer out?  You can dig through their schedule of fees and commissions – which most banks and investment dealers have made available online – or you can ask directly by calling or live-chatting or whatever the young folks are doing these days.
  • While you’re live-chatting about fees and commissions, take a minute to ask about how your account is registered.  Is it the proceeds from an old pension plan?  What province was it registered in, or does it fall under federal legislation?  Is it a spousal RRSP?  A family RESP or individual plan?  If you didn’t keep the original documentation from way back when you opened the account, you’ll want to track this information down so the tax man can’t refuse the transfer and make you start all over again.
  • Will the receiving institution rebate some or all of the fee charged for the transfer?  If they aren’t offering it as an explicit promotion, it never hurts to ask.  It’s a rare salesperson that doesn’t have the authority to sweeten the pot when faced with a pile of money about to land on their books.
  • Ask the receiving institution how long a transfer like yours should take, and for the “When Should I Be Concerned” date.  Write it on your calendar, create an alert on your phone, or put a post-it note on your coffee-pot.

While You’re Waiting for the Transfer

  • If you’ve reached the “When Should I Be Concerned” date, and the transfer isn’t complete, be concerned.  Call the receiving institution first, and ask if they can see a pending transaction or any notes on the file that might indicate a problem.  If they don’t know anything, call the sending institution.  Ask questions until you find someone who knows what they’re talking about, get the full story, and take names.

Once the Transfer is Complete

  • Once the money is where it’s supposed to be, you need to look at your statements; both the one from the institution that used to have your money, and the one from the institution that has it now.  Were you charged a transfer fee?  Was it rebated?  Do you have the right amount of cash or the right investments?  If the answer is no, start making some noise at the receiving institution.  Procedural correctness is their responsibility, remember?

If your investments are now sitting prettily (and registered correctly with the tax man) at your new institution of choice, happy investing.  The crooners were wrong: breaking up ISN’T hard to do.

Sandi Martin is an ex-banker who left the dark side to start Spring Personal Finance, a one woman fee only financial planning practice based in Gravenhurst, Ontario.  She and her husband have three kids under five, none of whom are learning the words to “Fidelity Fiduciary Bank” quickly enough.  She takes her clients seriously, but not much else.


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