When transferring funds from one institution to another, there are three different options to choose from:
- Entire account in cash (most common): Your institution will sell your holdings and move the money to us, but keep in mind you may be charged DSC or trading fees, which Wealthsimple cannot reimburse.
- Entire account as is: We move your holdings to us as they are today. When setting up the transfer request, you'll be able to indicate whether you'd like us to sell or hold onto your existing holdings. If you'd like us to hold onto them, we'd encourage you to set up a call with our portfolio management team to have a discussion on how you'd like us to manage your investments (this will be the final step in the transfer set up process).
- Part of the cash in my account: You can transfer any amount from the cash balance in your account. Before submitting a transfer request, make sure you've liquidated enough of your holdings to cover the cash amount you'd like to transfer.
Which option should I choose?
The most common method for transferring an account is in cash. However, there are a few circumstances where it's better to transfer your funds as is.
- If your relinquishing institution charges for trades, there will be a fee associated with converting your portfolio into cash.
- If you own mutual funds that have DSC (Deferred Sales Charge) or LL (Low Load Charge) next to their name, you'll need to make sure you don't get penalized for selling the mutual funds before their maturity date.
Frequently asked questions about in kind (as is) transfers (ie. liquidating your holdings after they've been transferred)
- Are there any tax implications if Wealthsimple sells your assets?
If you're transferring a non-taxable account (e.g., RRSP, TFSA or RESP), there are no adverse tax consequences. However, if you're transferring a taxable account (e.g., Personal or Joint) there could be tax consequences on any capital gains earned.
- Are there any fees if Wealthsimple sells your assets?
We don't charge you any fees for selling your holdings. However, some mutual fund companies may charge you Deferred Sales Charge (DSC) fees that we don't cover. Depending on your mutual fund company, they may charge you a DSC fee if the funds are sold before the date the DSC has expired. You can check if deferred sales charges apply to the mutual funds you want to transfer by contacting the mutual fund company or by asking your broker or advisor.
- What if you don't want Wealthsimple to sell a particular asset(s)?
When you create your 'as is' transfer request, you have the option to not sell your holdings and schedule a conversation with our portfolio managers to let us know how to manage your holdings. If your preference is to not sell, we will hold any assets with a Deferred Sales Charge or a significant Capital Gain or Loss (in a taxable account ONLY) you've asked us not to sell, however, we will not monitor or trade these assets with the rest of your portfolio. Unfortunately by not selling, many of Wealthsimple's benefits such as portfolio rebalancing and tax-loss harvesting will not be supported for these assets either.