Switching RRSP's

[Surfbum84]

Hey there.

So I have a bunch of cash in a Scotia Bank Managed RRSP Mutual Fund. It's obviously taken a bit of a hit...but that isn't the point. I'm paying MER of 2% and it's ridiculous as whether I make money or lose money I'm still paying this.

Is it possible to switch it over to something like ETF's and not have to pay these bloody fees to the scammer bankers who are telling me to buy buy buy?

I know 2% isn't tons, but it adds up. I'm sure I could contact Scotia for this...but...I'm lazy so I'm wondering if any of you wonderful Terbites have had similar experiences.

Thank you, and god bless each and every one of you!

 

[rgkv]

interesting....I'd like to know too.....

 

[HafDun]

easy answer is talk to Scotia.
Most funds tend to be back end loaded which means that there is a penalty to get out if you don't leave it there for a certain # of years.

 

[Peter123]

Sure been there done that....was with Scotia Mcleod...my so called investment advisor was turd...

Just go to a discount broker--say TD Waterhouse....set up RSP account--give them your RSP info---they will either tranfer in kind or in cash (sounds like you want the in cash)...you can them buy ETFs online for cheap and these those high fees behind

can find out about some Canadian ETFs at

http://ca.ishares.com/splash.do

 

[Rockslinger]

1) Transfer takes forever.
2) Usually there is a transfer out fee.
3) Transfer in kind. Not everthing is transferable in kind.
4) Transfer in cash means they will sell your crappy securities for Lord knows what little cash.
5) Just pray you don't have any ScotiaBank GIC's that you want to transfer to TD. They might not be transferable or redeemable until maturity.

Gratutious comment: The one upside to this stupid bear market is that we are not bombarded with those silly mutual funds ads during RRSP season telling us we must invest in equities for a happy retirement. If you want a happy retirement, go work for the public sector.

 

[Surfbum84]

1) Transfer takes forever.
2) Usually there is a transfer out fee.
3) Transfer in kind. Not everthing is transferable in kind.
4) Transfer in cash means they will sell your crappy securities for Lord knows what little cash.
5) Just pray you don't have any ScotiaBank GIC's that you want to transfer to TD. They might not be transferable or redeemable until maturity.

Gratutious comment: The one upside to this stupid bear market is that we are not bombarded with those silly mutual funds ads during RRSP season telling us we must invest in equities for a happy retirement. If you want a happy retirement, go work for the public sector.

I've been reading a lot of your posts recently and I echo your setiments. All these people are doing are screwing us. My RRSP portfolio is down 20% this yr...and Im' young so I'm not too concerned...but I'm still paying them 2% to lose me this money. It's absolutely asenine!!!!

 

[Peter123]

So what do you recommend?

1) Transfer takes forever.
2) Usually there is a transfer out fee.
3) Transfer in kind. Not everthing is transferable in kind.
4) Transfer in cash means they will sell your crappy securities for Lord knows what little cash.
5) Just pray you don't have any ScotiaBank GIC's that you want to transfer to TD. They might not be transferable or redeemable until maturity.

Gratutious comment: The one upside to this stupid bear market is that we are not bombarded with those silly mutual funds ads during RRSP season telling us we must invest in equities for a happy retirement. If you want a happy retirement, go work for the public sector.

Guy asked--how does he get out....sure there will be downsides (I've never heard of tranfer out fee-other than any built in back end load on the MFs of course).....but what is the option??---sitting in what he doesn't like--paying fees he doesn't want to pay for the duration??

If you make up you mind you done paying the MERs...then you gotta do what you gotta do...

and if he loses now...well he will be buying low--and should still end up ahead using the ETFs than leaving them in crappy MFs

 

[Rockslinger]

I've been reading a lot of your posts recently and I echo your setiments.

Thanks. Now that I am "between projects" I find that I can spend so much more quality time with my TERBIE friends.

 

[Rockslinger]

Guy asked--how does he get out....sure there will be downsides (I've never heard of tranfer out fee-other than any built in back end load on the MFs of course)....

Ok, here are his options.

1) If he stays with Scotia, he can ask them to redeem the MF's (yes, maybe a backend load fee). He can then take the proceeds and buy ETF's.

2) If he wants to transfer his RRSP from Scotia to say TD, then my earlier post discusses the various issues. Yes, most if not all financial institutions charge for a transfer out even if it is only a partial transfer. He will have to enquire.

 

[Barca]

If he opens a self-directed account at a discount brokerage, there shouldn't be transfer fees. Usually he should be able to transfer the securites over in kind.

 

[fuji]

Yes you can. I have transferred RRSP's many times. I do it almost yearly. Here is what you need to know and what you need to go find out:

1) There will almost always be a transfer out fee. A common fee is $125 or $150 for the transfer out "per account".

2) It is commonplace that you can get the fee refunded to you by the institution that you are moving your money to. Go talk to a few institutions that you think are reasonable, ask them if they would be willing to cover your transfer fees in exchange for your business. If you have >50k in your RRSP the answer should always be "yes", under 50k you may have to shop around to get the refund.

3) Ask your current fund (Scotia) whether there are any deferred sales charges or other fees on your fund that will only be paid when you close it out. Often there is a waiting period after you buy the fund during which you are hit with fees if you exit early--you might want ot wait until this period expires so as to avoid any surprise charges.

I agree that a 2% MER is ridiculous. Yes you can move your money to a self-directed RRSP in which you can buy an ETF at a fraction of the fee and I would recommend you do that, or at least get yourself into a fund with a less ridiculous MER.

The reason that I move my money around a lot is to accept bribes from institutions desperate for new business. I moved my funds from E*Trade to RBC this year because RBC was paying a 1% bribe to any new money transferred from another broker in addition they refunded the transfer fees--so I took the 1%.

As soon as someone else offers a bribe for my business I will ditch RBC and move my money there...

Yes the transfers can take a few weeks to go through but unless you are planning to day trade your stock what does it matter to you? You don't lose your investment, it's just not visible to you for a little while during this transit time.

One thing you should absolutely do: Make sure you have a paper statement listing all your investments before the transfer begins just so when it's over you can verify that everything got transferred properly and have paper proof of your holdings in case anything gets messed up.

 

[goldnut]

Questtrade,$4.95 max commission buy GTU.UN and CEF.A and wait till this all blows over.

Gold is money (google that shit)

GLTA

 

[hinz]

1) Transfer takes forever.
2) Usually there is a transfer out fee.
3) Transfer in kind. Not everthing is transferable in kind.
4) Transfer in cash means they will sell your crappy securities for Lord knows what little cash.
5) Just pray you don't have any ScotiaBank GIC's that you want to transfer to TD. They might not be transferable or redeemable until maturity.

Like CIBC, BNS is not known as having a decent, strong in-house manfactured, no load mutual funds available at the branches like BMO, TD Canadatrust and RBC. There's a possiblity that the Scotia Managed RRSP mutual fund could be a wrap account, bundled by BNS by using 3rd party mutual fund companies products such as InvescoTrimark, CI Funds, Franklin Templeton, Fidelity, Mackenzie Financial and AGF.

In addition to bribery/trailer fees to your salesperson/adviser, don't forget there's DSC if you buy the back end version and redeem before the funds mature after holding them for 7 or even 8 years.

Assuming there's no DSC or lock-in funds, say GIC, you could transfer to any self-directed brokerage you wish, be BMO Investorline, TD Waterhouse, or RBC Direct Investing. But unless you have $25K+ market value annually in your self directed RRSP, you will be charged annual admin fee for $100.

You could also try Etrade Canada for competitive commission but it is going to be takenover by BNS next month so you take the risk of staying with BNS again

BTW, stay away from streetwise at ING Direct cause it's essentially a wrap account using index funds and MER is too expensive for indexing (1%). If you insist to buy wrap account instead of doing portfolio rebalancing on your own once a year, you will get better deal by purchasing portfolio funds at ishares Canada as the MER is less, all the way down to 0.6%.

 

[alex52]

Like its been suggested transfer your funds into self directed rrsp account. Then buy etf's.
Info on etf's can be obtained from this site http://ca.ishares.com/splash.do.
I buy etf that tracks the market it consists of 60 stocks [xiu].

 

[goldnut]

I buy etf that tracks the market it consists of 60 stocks [xiu].

buying the market is retarded in this environment. Here is the dow:

look out below!

 

[goldnut]

here is gold:

 

[Mencken]

If he opens a self-directed account at a discount brokerage, there shouldn't be transfer fees. Usually he should be able to transfer the securites over in kind.

Did this with some bank mutual funds...then once they were transferred over I sold and switched to ETF's, etc. But..depending on the type of mutual funds you need to find out if there are deferred sales charges. May be better to leave them and pay your MER if you are essentially happy with what the mutual fund invests in. If you have to pay a 6% DSC for example...I would say you are sort of trapped (or at least you have to dislike your mutual fund a bit more in order to bite that one).

But if all you pay is the MER then go for it....sell once you have them transferred over "in kind". Transfer fees were minimal to nothing in my experience, and I also did not have any deferred sales charges.

 

[Rockslinger]

I moved my funds from E*Trade to RBC this year because RBC was paying a 1% bribe to any new money transferred from another broker

Hey Fiji, this "bribe" concept is interesting. Did anybody else besides the RBC offer bribes? Did E*Trade make a counterbid to keep your business? How did you learn of these bribes?

 

[fuji]

Hey Fiji, this "bride" concept is interesting. Did anybody else besides the RBC offer brides? Did E*Trade make a counterbid to keep your business? How did you learn of these brides?

That's bribe with a B! Not brides! I am not sure I would accept a bride from a bank!?

The 1% bribe that RBC paid was widely advertised everywhere in various media, pasted up in their locations, and all over their website. The promotion has ended now, but they've run it at some point every year for the past few years. Under the advertised terms if you transfer >20k to them and keep it there for a few months they gave you a bonus of 1% of whatever you transferred up to $2500.

The RBC promotion was particularly generous but other brokes have run various promotions in the past. I originally switched to E*Trade because they were offering 100 free trades under similar terms.

 

[alex52]

here is gold:

I like to invest not to speculate.

In the log run tracking the market has made me money. I Sell near the top and buy near the bottom.
Gold investments is speculation where idiots loose their shirts
e.g. Bre-X