How to move an investment account to another brokerage

Moving an investment account is not like sending an e-transfer. You are moving the account registration, its cash, and every investment inside it. The new brokerage may not accept all of them.

The process becomes simpler once you answer two questions: what is moving, and will the investments be sold first?

Save a picture of the old account

Download a current statement before starting. Keep your trade confirmations and tax records too, because access to the old account may disappear after it closes.

Check the account type, account number, currencies, cash, and quantity of every holding. Cancel open orders and let recent trades settle. Then ask the new brokerage whether it accepts each unusual asset, such as a guaranteed investment certificate (GIC), proprietary mutual fund, private investment, or fractional share. Fractional shares generally cannot move between brokerages and may be sold.

Choose how it moves

A full transfer moves the account. A partial transfer moves only the cash or investments you name and leaves the old account open.

An in-kind transfer moves accepted investments without selling them. A cash transfer sells them first and sends the proceeds. Cash solves the problem of an unsupported holding, but it also leaves you out of the market while the transfer is underway. Selling in a non-registered account may create a taxable gain or loss.

You can combine the two methods. Accepted shares move in kind, while an unsupported fund or fractional share is sold and moved as cash.

Keep registered money registered

The easiest mistake is withdrawing the money yourself.

For a tax-free savings account (TFSA), ask the receiving institution to arrange a direct TFSA transfer. It does not use contribution room. If you withdraw the money personally, that room does not return until January 1 of the next calendar year.

The same principle applies to a registered retirement savings plan (RRSP). An eligible direct RRSP transfer keeps the money registered. An ordinary withdrawal is generally taxable and has tax withheld.

Other registered plans have their own forms and restrictions. Make sure the sending and receiving account types match.

Keep your own tax records

For a non-registered account, keep the records needed to calculate adjusted cost base (ACB). The book value imported by the new brokerage may be missing or wrong. The Canada Revenue Agency says the cost shown on a T5008 securities transaction slip may not equal your ACB.

Let the new brokerage start

The receiving brokerage normally initiates the transfer. Keep the form, statement, reference number, and date. Read both brokerages' fee policies before submitting it.

Transfers can stall because of an unsupported asset, unsettled trade, account mismatch, debit balance, or missing signature. Ask what is blocking the transfer instead of submitting a duplicate request.

When the account arrives, compare it with the statement you saved. Check every holding, cash balance, currency, fee, and forced sale. Look at the old account again later for a late dividend or refund, and restore any beneficiary designation or recurring purchase at the new brokerage.

The safest transfer is boring: document the old account, let the new brokerage move it directly, and check every dollar that arrives.