Qtrade TFSA deregistration

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Glen
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Qtrade TFSA deregistration

Post by Glen »

I've got a few TFSAs and I've been in the process of consolidating the money into a single TFSA. I'm reluctant to pay the closure fee (typically about $150) so I've left about $100 in each of the inactive ones. When I tried to take my Qtrade TFSA balance down to about $100 they changed the amount of the withdrawal so that the balance would be $141.25. I didn't initially grasp the significance of that amount but I now understand that it is $125 (their closure fee) plus HST. Without advising me, they then closed the account, helping themselves to the $141.25 balance as their fee. I just emailed them, inquiring as to whether the closure was intentional on their part and whether they would be advising me, which would seem appropriate. No reply yet.

Has anyone else encountered financial institutions that don't allow balances to go below the amount of their closure fee and when the account reaches that point they close them without notice?
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Re: Qtrade TFSA deregistration

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Glen wrote: 29 Dec 2017 15:44 I've got a few TFSAs and I've been in the process of consolidating the money into a single TFSA. I'm reluctant to pay the closure fee (typically about $150) so I've left about $100 in each of the inactive ones. When I tried to take my Qtrade TFSA balance down to about $100 they changed the amount of the withdrawal so that the balance would be $141.25. I didn't initially grasp the significance of that amount but I now understand that it is $125 (their closure fee) plus HST. Without advising me, they then closed the account, helping themselves to the $141.25 balance as their fee. I just emailed them, inquiring as to whether the closure was intentional on their part and whether they would be advising me, which would seem appropriate. No reply yet.

Has anyone else encountered financial institutions that don't allow balances to go below the amount of their closure fee and when the account reaches that point they close them without notice?
You just gave me a reason to avoid this organization. May-be Carrick at the G&B should hear about this. If memory serves me well he gives QTRADE a high rating as a brokerage firm.
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Insomniac
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Re: Qtrade TFSA deregistration

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Gipper: Carrick has written an article warning about TFSA fees.

Glen: you should read the agreementyou signed when you opened the account. Obviously the broker is smart enough to make sure people don't cheat them out of their fee by simply drawing down the account until there is not enough to cover it. TFSA is a registered account and they have paperwork to file when an account is closed. i.e. they earn the fee.

All: Lesson here is don't have more than one TFSA. If you have a TFSA with a broker, you can buy stocks, bonds, GICs and mutual funds. Why would anyone need more than one account?
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adrian2
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Re: Qtrade TFSA deregistration

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Insomniac wrote: 29 Dec 2017 20:45 TFSA is a registered account and they have paperwork to file when an account is closed. i.e. they earn the fee.
Is there more paperwork to file with CRA when the account is closed vs. simple withdrawal?
Insomniac wrote: 29 Dec 2017 20:45 All: Lesson here is don't have more than one TFSA. If you have a TFSA with a broker, you can buy stocks, bonds, GICs and mutual funds. Why would anyone need more than one account?
My first TFSA was with ING Direct (a few pennies left now at Tangerine).
Then came a TFSA GIC at Ally, taken over by RBC, matured last month and cashed out.
The bulk of my TFSA is at TDDI.
Next year I'll get a new TFSA, a group plan managed by Manulife, as part of the new benefit package from my employer.

"Why would anyone need more than one account?"
Because I don't want to pass up on free money from my employer.

Each person's situation (and priorities) is different.
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AltaRed
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Re: Qtrade TFSA deregistration

Post by AltaRed »

I think it is more of a case of individuals not having more TFSA accounts than one needs to have. Obviously a group plan with an employer is a 'value added' exception. I see too much of people jumping around looking for a bit more and then being surprised at either/both of withdrawal or transfer fees.

Savings institutions don't charge a lot to close HISA type TFSA accounts, but it is reasonable from a brokerage account to charge a $125 transfer out/close out fee. In many cases, a receiving institution will cover that cost but only if the funds being transferred are substantial enough. I don't know why the the OP was not aware of any of this.
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Re: Qtrade TFSA deregistration

Post by Peculiar_Investor »

AltaRed wrote: 29 Dec 2017 22:11 Savings institutions don't charge a lot to close HISA type TFSA accounts, but it is reasonable from a brokerage account to charge a $125 transfer out/close out fee.
I don't think that is the critical point of the OP's query. The fee is disclosed Pricing | Qtrade Investor.
Glen wrote: 29 Dec 2017 15:44 Has anyone else encountered financial institutions that don't allow balances to go below the amount of their closure fee and when the account reaches that point they close them without notice?
Requiring a minimum balance above the fee to close the account seems practical, but closing the account without notice seems odd to me.
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AltaRed
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Re: Qtrade TFSA deregistration

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Peculiar_Investor wrote: 29 Dec 2017 22:17 Requiring a minimum balance above the fee to close the account seems practical, but closing the account without notice seems odd to me.
I agree that closing, without notice, is indeed odd, but I don't consider it odd for the brokerage to 'force' closure of a 'zero balance' account if there is no certainty of incoming funding.
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Re: Qtrade TFSA deregistration

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FWIW I have a TFSA with just $0.09 at TD. If they pulled that move with me I would be extremely pissed and it would be sufficient to move our other 6 accounts (RSP, RIF, LIF, spousal RSP, spousal RIF, wives TFSA) elsewhere.
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Re: Qtrade TFSA deregistration

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chufinora wrote: 29 Dec 2017 22:56 FWIW I have a TFSA with just $0.09 at TD. If they pulled that move with me I would be extremely pissed and it would be sufficient to move our other 6 accounts (RSP, RIF, LIF, spousal RSP, spousal RIF, wives TFSA) elsewhere.
Well, they won't given your other accounts there. I had a similar situation at Scotia iTrade. The brokerages look at it on an aggregate basis, including all family accounts, at the same address.

The point being, they should not care about a client with a single account with nothing in it, nor should they in the interests of their shareholders.

Added: Think about it from the perspective of a shareholder. Would you, as part owner of a business, want that business to cater to a customer that is doing nothing for the business?
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Re: Qtrade TFSA deregistration

Post by Glen »

AltaRed wrote: 30 Dec 2017 00:10 The point being, they should not care about a client with a single account with nothing in it, nor should they in the interests of their shareholders.

Added: Think about it from the perspective of a shareholder. Would you, as part owner of a business, want that business to cater to a customer that is doing nothing for the business?
In fact we have a trading account and two RSPs with Qtrade - about $400K total. We've been migrating money over the past couple of years to TDDI and - depending on their answer to my email - the migration may accelerate.
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Re: Qtrade TFSA deregistration

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Glen wrote: 29 Dec 2017 15:44 Without advising me, they then closed the account, helping themselves to the $141.25 balance as their fee.
Curious if this would be considered a TFSA "withdrawal" and potentially trigger the rules regarding re-contribution in a the same calendar year
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Re: Qtrade TFSA deregistration

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chufinora wrote: 29 Dec 2017 22:56 FWIW I have a TFSA with just $0.09 at TD. If they pulled that move with me I would be extremely pissed and it would be sufficient to move our other 6 accounts (RSP, RIF, LIF, spousal RSP, spousal RIF, wives TFSA) elsewhere.
I have an RESP at TD with just $0.01. I just wish they would close it.
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Re: Qtrade TFSA deregistration

Post by Glen »

DavidR wrote: 30 Dec 2017 10:29 I have an RESP at TD with just $0.01. I just wish they would close it.
And if they offered to close it provided you made a $141 deposit first?
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Re: Qtrade TFSA deregistration

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Glen wrote: 30 Dec 2017 11:04
DavidR wrote: 30 Dec 2017 10:29 I have an RESP at TD with just $0.01. I just wish they would close it.
And if they offered to close it provided you made a $141 deposit first?
Nope. :rofl:
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Re: Qtrade TFSA deregistration

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Glen wrote: 30 Dec 2017 06:15
AltaRed wrote: 30 Dec 2017 00:10 The point being, they should not care about a client with a single account with nothing in it, nor should they in the interests of their shareholders.

Added: Think about it from the perspective of a shareholder. Would you, as part owner of a business, want that business to cater to a customer that is doing nothing for the business?
In fact we have a trading account and two RSPs with Qtrade - about $400K total. We've been migrating money over the past couple of years to TDDI and - depending on their answer to my email - the migration may accelerate.
Obviously, Qtrade sees you as an exiting customer given you have been migrating money over time to TDDI. For them, you are a PITA.

Curious though why you are 'migrating money over the past couple of years' to another brokerage? Why wouldn't you just transfer 100% of a 'whole account' at a time to TDDI (or all accounts at one time) and have TDDI pick up that $141.25 transfer/closeout fee for each account? I have never heard of anyone making a multi-year slow migration before.
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Re: Qtrade TFSA deregistration

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AltaRed wrote: 30 Dec 2017 12:18 Curious though why you are 'migrating money over the past couple of years' to another brokerage? Why wouldn't you just transfer 100% of a 'whole account' at a time to TDDI (or all accounts at one time) and have TDDI pick up that $141.25 transfer/closeout fee for each account? I have never heard of anyone making a multi-year slow migration before.
Two issues. A friend transferred an entire account between discount brokerages and it took months. The sending brokerage dragged it out and made it as painful as possible. Also, each Qtrade account holds a GIC that TDDI has said they could not accept being transferred in.
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Re: Qtrade TFSA deregistration

Post by AltaRed »

Fair enough. I do understand some brokerages don't like to take on certain issuers of GICs, though I've never experienced that problem myself. Market linked and tiered GICs seem to be a definite problem based on a few instances from people I know, or from a second tier issuer the brokerage has no relationship with. The new brokerage gets nothing out of a transferred GIC since the commission was paid up front when the GIC was bought. It is only expense to them.

I've made 3-4 switches of entire accounts before between brokerages and have never experienced more than about a full month of transfer time for everything, which seems excessive but of no real concern to me. GICs and mutual funds seem to take longest since the original issuer has to be involved and they are in no hurry to do the paperwork (in other words, not really within the control of the brokerage). Brokerages must have several staff paid to handle nothing but account transfers. Would be interesting to know the organizational headcount of the likes of TDDI or RBCDI, etc.
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