By Tom Bradley
I just finished listening to Chris talk with a client about her RRSP transfer. He told her that the paperwork had been sent to the relinquishing institution and we would be monitoring its progress. Chris tried to set reasonable expectations, “Given our experience with this bank, you should expect it to take about 3 or 4 weeks. It may be sooner, but I don’t want to set any false expectations.”
This conversation follows one I heard last week. Sher was following up on a different transfer from one of the bank-owned discount brokers. By the end of the call, she was pulling her hair out. The forms had been faxed on December 2nd. The broker didn’t acknowledge receipt of the transfer until the 13th. Sher called on the 23rd and the transfer was still in process. She left messages on December 30th and January 5th (she couldn’t wait on hold any longer). When she got through, she was told they wouldn’t begin processing it until four weeks after receipt of the forms (the 13th). Who knows when the client will get their money invested in the Steadyhand funds?
Why is it that big, sophisticated institutions can put money into your RRSP in a millisecond, but take weeks to transfer it out? Taking money in is actually more complicated than sending it out. A new account may need to be set up, the ‘Know Your Client’ information has to be completed (or updated) and the money needs to be allocated across specific investments. The transfer out, on the other hand, is dead simple. The bank receives a transfer form from Steadyhand, the requested trade/withdrawal is processed, a cheque is cut and sent to 1747 West 3rd Avenue, Vancouver.
Canadian dealers are all over the map on RRSP transfers. Ironically, some of the highest fee firms are the slowest. For sure, the smaller independent firms are the best. At Steadyhand, we treat transfers ‘out’ the same way we treat transfers ‘in’. We process them in one day, just as a number of other investment counselors do, including my former firm, PH&N. Interestingly, if you ask any of these firms why they do it that way, they’ll tell you two things: it’s not hard to do and it’s in the best interests of the client.
These calls make me regret not putting timely RRSP transfers on my list for Santa. These industry practices are completely unacceptable.