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Overview
Linking your Wealthsimple Trade accounts to your margin account lets you use assets in those accounts as collateral to increase your buying power. This means you can borrow more in your margin account without taking assets out of a linked account. Using a TFSA as collateral doesn't affect its tax advantages.
Corporate (Business investing) margin accounts can also boost buying power by linking one or more eligible corporate non-registered accounts.
Eligibility
You can link up to five of your individual Trade TFSA and non-registered accounts to your personal margin account. Once you link an account to a margin account, you can't link it to a different margin account. You must unlink it first, then link it to the other account.
Corporate margin accounts: You can link up to five eligible corporate non-registered accounts to your corporate (Business investing) margin account. Only corporate non-registered accounts are eligible right now.
You don't need to have money in your margin account to boost your buying power with a linked account. If your margin account has a $0 balance, your buying power will be based entirely on the eligible assets in your linked account(s). This allows you to use margin without first transferring assets to your margin account.
Considerations and risks
Consider the following before you link your accounts to your margin account:
- We can use your linked account(s) to cover margin debts: If you owe money on your margin account, we have the right to use assets in your linked account(s) to resolve that debt.
- Your linked account(s) become collateral: By linking your accounts, you're using them as security for any money you borrow on margin. This gives us legal rights to your linked account(s) if you can't pay back what you owe.
- We could sell your linked investments: In some situations, we may need to liquidate securities in your linked account(s) to meet your margin obligations.
- A sale of assets in a non-registered account is a taxable event: If we sell assets from your linked non-registered account to cover margin debts, this could result in a capital gain or loss that you'd need to report.
- We may reject your order: We may automatically reject any order that would cause your margin account to go into a margin call.
- We may restrict your accounts: If you hold multiple margin-enabled accounts (such as a margin account and a portfolio line of credit) and any of them goes into a margin call, you'll be temporarily blocked from placing new buy orders or withdrawing funds across all of your margin and linked accounts.
How to link your accounts to your margin account
The steps depend on whether you're linking accounts to a personal or corporate margin account.
How to link accounts to a personal margin account
Follow these steps to link your eligible accounts to your personal margin account:
- Log in to the Wealthsimple app
- From the Home page, tap your non-registered margin account
- Tap the Boost your buying power card
- Read the margin account linking disclosure
- Check the box to confirm you've read and understood the disclosure
- Tap Link account
- Log in to your Wealthsimple profile
- Select your non-registered margin account
- Select the Boost your buying power card
- Read the margin account linking disclosure
- Check the box to confirm you've read and understood the disclosure
- Select Link account
How to link accounts to a corporate margin account
Follow these steps to link eligible corporate non-registered accounts to your corporate margin account:
- Log in to the Wealthsimple app
- Tap your corporate margin account
- Tap the Settings (gear) icon in the top-right corner
- Select Collateral accounts
- Choose the eligible account(s) and follow the on-screen prompts
- Log in to your Wealthsimple profile
- Select your corporate margin account
- Select the Settings (gear) icon in the top-right corner
- Select Account settings, then Collateral accounts
- Select the eligible account(s) and follow the on-screen prompts
How to unlink your accounts from your margin account
You can unlink an account at any time, provided that unlinking won't cause your margin account to become under-margined (meaning it doesn't have enough collateral to meet its margin requirements). If removing the link would result in insufficient margin, you'll need to either deposit additional funds or reduce your margin positions before unlinking.
Follow these steps to unlink your account(s):
- Log in to the Wealthsimple app
- Select the Profile (person) icon in the top-right corner
- Choose the Settings (gear) icon from the menu
- Select Accounts
- Select your margin account
- Under Investing settings, select Collateral accounts
- Uncheck the account(s) you no longer want to use as collateral for your margin account
- Tap Save
- Log in to your Wealthsimple profile
- Select the Profile menu in the bottom-left corner
- Select Settings from the menu
- Select Accounts
- Select your margin account
- Under Investing settings, select Collateral accounts
- Uncheck the account(s) you no longer want to use as collateral for your margin account
- Select Save
How margin calculations work
When an account is linked, we calculate your overall margin buying power using the value of eligible assets in your linked account(s) and your margin account. This increases your buying power and the loan value available to you.
Limitations
For a personal margin account, you can only link individual Trade TFSA and non-registered accounts. You can't link managed investing accounts, joint accounts, or RRSPs.
For a corporate margin account, only corporate non-registered accounts can be linked as collateral.
Frequently asked questions
Will linking my TFSA to my margin account affect my TFSA contribution room?
No. Linking your TFSA isn't considered a withdrawal or a contribution, so it doesn't affect your TFSA contribution room. Your assets stay in your TFSA.
Are there tax implications if I link my non-registered account?
The act of linking the account itself has no tax implications. However, if assets are sold from your linked non-registered account to resolve a margin call, this sale is a taxable event and could result in a capital gain or loss.
What happens if I receive a margin call with a linked account?
If your account receives a margin call, you'll be notified and given an opportunity to deposit funds or reduce positions to meet the margin requirements. You can't resolve a margin call by transferring cash out of another healthy margin account, as outbound transfers are blocked while you're under-margined.
If you don't take action within the specified timeframe, we'll automatically liquidate assets to cover the deficit. Our liquidation process doesn't prioritize any specific account type. This means assets may be sold from your margin account, your linked account(s), or a combination of both, based on what's most efficient to resolve the call.
Can I boost buying power in my corporate margin account?
Yes. You can link up to five eligible corporate non-registered accounts to your corporate margin account. Only corporate non-registered accounts are eligible right now. Learn how to link accounts to a corporate margin account.
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