Expect to be charged $150 to break up with your online broker.
Pay it, and then ask to be reimbursed by your new brokerage. It’s pretty standard right now for brokers to welcome new clients with an offer to cover $150 to $200 in transfer-out fees charged by their old firm. Some examples of these deals:
- CI Direct Trading will refund fees of up to $150 for transfers valued at $25,000 and up.
- Qtrade Direct Investing will reimburse transfer-out fees of as much as $150 if you bring $15,000 or more to the firm.
- RBC Direct Investing says it will cover as much as $200 in fees when you transfer $15,000 or more to the company.
- The TD Easy Trade app is offering to cover transfer fees of up to $150 if you bring $25,000 or more in assets.
- Wealthsimple Trade reimburses up to $150 for transfers greater than $5,000.
The website Sparx Trading is helpful for finding out what transfer-fee offers are available. Brokers themselves are a bit cagey about these deals. If they’re mentioned on their public websites, it’s often in fine print you see only if you scroll well down the homepage.
Transfer-out fees are similarly buried in the commission and fee disclosures at most brokers. Many investors only find out about these costs when they transfer an account to another company and see a $150 debit in their statement.
If you find yourself dinged for transferring an account, keep the statement showing the charge and send it to your new broker as soon as your new account is set up. RBC requires proof of payment of the fee within six months of your account transfer.
Brokers in the 2022 Globe and Mail Digital Brokerage Ranking reported they charge either $135 or $150 for transfers. The only broker with no transfer-out fee was Wealthsimple Trade.
Can’t find anything on your broker’s website about covering transfer fees? It never hurts to ask a customer service rep about reimbursement, especially if you’re bringing an account with serious assets.
-- Rob Carrick, personal finance columnist
This is the Globe Investor newsletter, published three times each week. If someone has forwarded this e-mail newsletter to you or you’re reading this on the web, you can sign up for the newsletter and others on our newsletter signup page.
Through a difficult year for investors, these 3 ETFs have been overlooked
No one needs to be reminded that this is a bad year for investors. All the major North American stock indexes are in the red year-to-date. Bonds, which normally pick up the slack when stocks decline, are experiencing their worst year since the early 1980s. Unless your portfolio is 100 per cent invested in oil and gas stocks, you’re probably losing money. But there are a few outliers. Gordon Pape decided to do a search for ETFs that may have been overlooked by some investors and came up with three interesting ideas.
Three negative influences that have shaken markets - and where investors can seek refuge
An unholy trinity of negative influences has shaken markets over the past couple of weeks. First and foremost are rising interest rates. Second is a darkening outlook for corporate profits. Third is a global economy facing severe stresses. As Ian McGugan tells us, markets are unlikely to stage a major rebound until at least two of this ugly trio begin to fade or reverse. He has some stock suggestions, however, that may work well in the current environment.
Amid energy uncertainty, investors are betting big on nuclear. Here’s how to approach it
Nuclear power is enjoying a resurgence in popular sentiment, as policy makers pivot toward energy sources that are clean and secure. Will its moment in the sun translate into long-lasting gains for investors betting on uranium? David Berman shares some thoughts.
Why this $600-million fund manager is shorting the loonie and betting big on a rebound in energy
Few investors have experienced the devastating impacts of inflation like asset manager Rodrigo Gordillo, who grew up in Peru during the country’s “lost decade.” His family’s savings, held in a Peruvian bank, were wiped out when inflation skyrocketed 7,000 per cent in 1988, followed by a deflationary bust that led them to immigrate to Canada to start a new life when he was 8. The experience eventually led Mr. Gordillo to pursue a career in finance, with a focus on inflationary effects that had been an afterthought for many investors, until recently. Brenda Bouw talked with Mr. Gordillo, president and portfolio manager at ReSolve Asset Management, to find out what he’s been doing lately in the portfolios he manages.
Burned by bonds? Relief is spelled GIC
GICs are in high demand right now by conservative investors and savers looking for a worry-free place to put their money. Rob Carrick delves into how to use them effectively in your portfolio.
More worries for U.S. stocks, bonds: Fed ramps up ‘QT’
As the Federal Reserve accelerates the unwinding of its balance sheet this month, some investors worry that so-called quantitative tightening may weigh on the economy and make this year even more brutal for stocks and bonds. David Randall of Reuters reports.
Don’t believe the hedge fund hype – you’re better off in index-tracking ETFs
As inflation and the markets continue to gyrate, many investors are wondering where to put their money. Hedge fund managers whisper solutions: They can short the market when they believe the time is right. They can also shift money into alternative investments which could thump inflation. But long-term returns tell a different story. Andrew Hallam pulls away the curtain of deception to reveal that investors are likely to be better off in simple index-tracking low-cost funds.
How BlackRock, the world’s largest money manager, is navigating the market chaos
Take it from BlackRock, with US$8.5-trillion under its watch, that this time there are no easy answers in markets. In the same way the COVID-19 pandemic made us reconsider how and where we work, it is also reordering the way the global economy and financial markets function – and there is no going back. Tim Kiladze spoke with BlackRock’s chief executive Larry Fink on his latest thoughts for investors.
Others (for subscribers)
Monday’s Insider Report: Shareholder cashes out over US$200-million of this dividend stock
Are you a financial advisor? Register for Globe Advisor (www.globeadvisor.com) for free daily and weekly newsletters, in-depth industry coverage and analysis, and access to ProStation - a powerful tool to help you manage your clients’’ portfolios.
Ask Globe Investor
Question: My financial adviser advised me not to participate in Imperial Oil’s (IMO-T) share buyback. IMO paid $77 per share, which is much higher than current valuation. Interestingly, only 5 per cent of general shareholders participated. Was this a good move?
Answer: In early May, Imperial announced details of a substantial issuer bid to buy back up to $2.5-billion worth of shares in a modified Dutch auction. Interested shareholders were instructed to tender their shares at prices ranging from $62 to $78. On June 15, the company said it had taken up and paid for 32,467,532 common shares at a price of $77 a share.
At the time of writing, the stock was trading at $64.27, so it appears those who did not participate missed out on a big gain. But wait, there’s a catch – there always is. The company said it estimates that a deemed dividend of $75.25 a share was triggered on the repurchase, based on the estimated paid-up capital of $1.75 per share as of June 10.
In other words, unless the shares were held in a registered plan, all sellers are going to be hit with a massive tax bill. The dividend will be eligible for the dividend tax credit, but it’s still going hurt. That’s probably why your adviser suggested you stand aside.
What’s up in the days ahead
The Contra Guys look at the investment case for Western Union, a high dividend payer and a company that’s been able to stay in business since 1851.
More Globe Investor coverage
For more Globe Investor stories, follow us on Twitter @globeinvestor
You may also be interested in our Market Update or Carrick on Money newsletters. Explore them on our newsletter signup page.
Compiled by Globe Investor Staff