A client asked me to send step-by-step instructions on how to transfer your RRSP to Wealthsimple. He’s moving his $145,000 portfolio from Primerica over to Wealthsimple’s robo-advisor platform to save on fees.

My client’s existing “Asset Builder Fund” charges a management expense ratio (MER) of 2.30 percent – costing him $3,335 in fees each year. A similar portfolio at Wealthsimple is expected to cost just $957. That is comprised of a 0.40 percent management fee for a Wealthsimple Black account (a price break for funded accounts of $100,000 or more), plus an estimated 0.26 percent MER from the ETFs used to construct the portfolio.

Is my client thrilled with the idea of slashing his fees by nearly $2,400 per year? You bet!

It’s important to know that you don’t need to have a tough conversation with your current financial advisor before you transfer your funds to Wealthsimple (or any financial institution, for that matter). You simply ask your new financial institution to initiate the transfer on your behalf.

I’ve personally initiated this transfer several times with different institutions (big banks and online banks). In my experience, no bank handles this better than Wealthsimple. It was seamless.

Let’s walk you through the step-by-step process of how to transfer your RRSP to Wealthsimple:

How to Transfer Your RRSP to Wealthsimple:

First you need to open a Wealthsimple account. Use this referral link and you’ll get your first $10,000 managed free.

Click on “Get Started” and then enter an email address and a password to create an account.

WealthSimple Get Started

Getting started with Wealthsimple

Click “Get Started” again and you’ll be prompted to enter basic personal information such as your name, phone number, employment information, and mailing address. This will take approximately three minutes and is designed to verify your identity and secure your account.

WS Step 1

Your Personalized Portfolio

Next you’ll answer questions about your investing experience, goals, and time horizon. You’ll also enter your current salary and monthly savings rate (estimates are fine). Finally, you’ll list your existing assets such as your RRSP balance and estimated home value, plus any liabilities such as a mortgage or outstanding credit cards.

The goal with this section is for Wealthsimple to learn about you and recommend a personalized portfolio. This section takes five minutes to complete.

WS Step 2

Answer the questions and you’ll get a personalized portfolio like the one recommended below. It’s an “Unhedged Growth” portfolio, which is a mix of 80 percent equities and 20 percent bonds. Portfolios range from conservative to balanced, and aggressive.

If you’re happy with the portfolio it suggests for you then go ahead and click “Start with this plan”. (You can always change it later).

WealthSimple Personalized Plan

Funding Your Wealthsimple Account

In step number three you have the option to transfer an existing account or to open a brand new account. Since we’re transferring an existing RRSP account from Primerica we’ll select the option to transfer an existing account.

WS Step 3

Transferring Funds To Wealthsimple

Here’s where Wealthsimple really shines and makes it easy for new customers to transfer over their existing accounts to their platform. With other banks, you need to fill out a complicated transfer authorization form (like this one from TD. Seriously, you can’t even save the completed form onto your computer – you need to print it off and bring it to a branch).

With Wealthsimple, my wife followed these steps to transfer a small RRSP from Tangerine to Wealthsimple and the online process could not have been more straightforward.

If your existing RRSP is held with one of the 11 institutions in the image below then you can make a simple process even more seamless without the hassle of digging out a statement.

WS Where's Your RRSP Held?

Since Primerica is not one of those institutions we’ll have to provide the information manually (which sounds more difficult than it will actually be).

WS Manual Entry

Find a recent investment statement, enter the name of the institution from which you’re transferring the RRSP, and then enter your account number.

Next they’ll want to know how you want your account transferred. This can be done one of two ways. You can transfer your holdings “in-kind” which means your existing bank moves your investments “as-is” to the new institution without selling anything. This might occur if you held common stocks or shares in widely sold ETFs. The trouble is, most investment firms have proprietary funds that other institutions don’t sell (think: Tangerine Investment Funds).

The other, more common method is to transfer your account “in cash”. This means the existing bank sells your holdings and then moves the funds in cash to the new institution receiving the transfer. In some cases, due to the sale of mutual funds, you may be charged a deferred sales charge.

In many cases you will be charged a “transfer out” fee (ask if the receiving institution will cover these fees). Wealthsimple will reimburse transfer fees if you transfer more than $5,000 to your Wealthsimple account.

Finally, keep in mind that there are no tax implications for transferring non-taxable accounts such as your RRSP, TFSA, or RESP.

Transfer in Cash

If you have an investment statement handy then simply upload a PDF copy (optional). Review and submit your transfer request and Wealthsimple will take it from there.

Upload Statement

Wealthsimple will contact your financial institution to initiate the transfer and that’s all that’s required from you. You will see the estimated completion date in your Wealthsimple dashboard once they’ve sent off the transfer request.

You may notice that your funds have left your existing investment account but have yet to show up in Wealthsimple – this is completely normal and a good sign that your transfer is in its final stages. Most institutions send a cheque through the mail, and once received they will deposit the funds in your account and notify you immediately.

Final thoughts

I write a lot about why you should ditch your high priced mutual funds. I’ve done the math on your investment fees and showed you the ugly results. And I’ve beaten you over the head with reasons why indexing with low cost ETFs can lead to better investment outcomes.

What I haven’t done is written much about the actual mechanics of how to transfer your RRSP or TFSA to another institution to save on fees.

Many of you have got the message and have been waiting for clear direction on how to take action. I hope you found this step-by-step guide useful. Wealthsimple happened to be the example of the day, but you can do this with any of the robo-advisors in Canada. You can also open a discount brokerage account online or with a big bank and build your own DIY portfolio.

Do you have a question about moving your account from one institution to another to save on investment fees? Let me know in the comments and I’ll try to point you in the right direction.

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