Beat The Bank: Real Investor Stories And Lessons Learned - Part 2

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This is the second of a three email series in which your fellow Beat the Bank readers describe, in their own words, their personal experiences in switching to smarter investing and share valuable lessons they learned along the way. Today's email will describe investor experiences with account transfers and overall level of satisfaction after making a change. The final email will offer investor "pluses & minuses" of making the switch and valuable tips for those considering doing the same.

Again, my sincere thanks to those who shared their personal stories.  Learning about your experiences will encourage many others to Beat the Bank! 

Experience with Account Transfers

Actual transfer of funds was smooth for some but others had to spend a lot of time getting their old firm to process the paperwork. The level of ease or difficulty was generally linked to the complexity and number of accounts. In my experience, the banks and major brokerage firms are more efficient at transferring accounts out than smaller firms and the life insurers. Some investors were charged fees on the way out the door, especially those who held DCS mutual funds (which will soon be banned by regulators). Here are MoneySense articles on Canada's best online brokers and robo-advisors.

"I didn't find the transfer process a hassle. There were a few forms to fill out and a lot of information to go over and agree to, but it was relatively painless."

"The transfer process only took about 2-3 hours in total from an admin perspective."

"Because I was going to the discount arm of the same brokerage, the transfer was relatively easy.  Most of it was done online."

"The bank wanted to know why I was transferring to self directed and when I explained my story of how disappointed I was in their advisors they were more than happy to switch."

"Leaving our advisor was easy. It took some time and administrative work to set up all of our new registered accounts, but worth it."
"Our advisor was aware of the eventual objective early on. When the "day" came, he had all the paperwork prepared, knowing that was the intent of the meeting. The transfer was painless. Our advisor and our bank made it so. We know how painful these transfers can be after having some personal experiences and helping others extricate themselves from poor financial circumstances with other institutions."
"The transfer process was very anxiety provoking as I had missed the gains from the market rises for the last couple weeks of January which was hard to deal with at the time." (Note: If you are switching to an online broker, try to move your assets over as the are ["in-kind"]. Then sell what you want to get rid of and buy your new lower cost assets on the same day. That way you will avoid the problem this reader had.)

I started the paper transfer with my bank's online broker and as I had several accounts this took almost 3 months. I had to devote a lot of my time to help with this transfer, to get account numbers and back and forth with my previous advisor.
"It was definitely a hassle since I had accounts with 4-6 different companies. I didn't realize the switch had to come from each of them and not just from her independent firm.  It took from Nov 2020 to March 2021 for all of the accounts to be sold and switched over. Also, I had to take a big hit in capital gains."

"I did lose money paying fees because I was invested in DSC mutual funds so I had to pay some penalties but I have made that all back ten-fold by investing myself into low cost ETFs."

"I am now in the process of transferring all of my investment accounts to an online brokerage account. I decided to start with transferring a couple of my accounts first to see how it would pan out. It was no hassle at all. When I informed them that I was going to transfer my investments to my self-directed account, because I no longer wanted to pay the high MER fees I didn't experience any problems at all. As a matter of fact, the young lady that I spoke to was very helpful. She informed me that there wouldn't be any transfer fees associated with the transfers and if I had any problems with the transfer to call back for assistance."

"It was a tedious process because of the number of steps involved and advanced planning was needed. We needed to liquidate a number of positions and some of these were in taxable accounts. I instructed my advisor to do the sells over Dec 2020/Jan 2021 to spread the capital gains over 2 tax years. I also wanted to do the sells of old positions and buys into the new positions before leaving the advisor so that everything was transferred in-kind. I didn't want to be holding cash or be out of the market in any way during the transfer process. The actual transfer process was quick and easy when everything went well, but a few unexpected things happened. 1. I didn't realize that positions in a full account transfer could arrive piecemeal at the destination account. 2. I didn't know that certain bonds couldn't be moved because they could only be held with certain firms. 3. Account ownership details must match exactly and Spousal RRSP accounts are more complex than regular individual accounts."

Overall Level of Satisfaction
"I am getting exactly what I want in my accounts at the lowest possible cost in a timely way by doing it myself and fewer mistakes have been made."
"Anyone who is on the fence about investing money on their own terms, it's one of the scariest moves we've ever done. We jumped in with both feet, we had read a lot of articles, followed some guidelines with ETF's, and we're ahead of the game. We learned with trial and error. We retired this year with more income than we ever imagined."
"Larry, my spouse and I save $9800.00 per year in fees with no additional risk. As you can see the savings almost covers our combined TFSA investment. We now spend far more time managing our online streaming service subscriptions and device updates than managing our investments. Managing our investments has turned into the highest paid employment I've ever had when I compare our return, including fee savings, to actual hours worked."
"A significant benefit for making the switch is that I am now handling money in a much better fashion in general because I can actually see what is happening."

"Overall, I am happy as a DIY. I proved to myself that I was right, my advisor was in it for his best interests not mine. The MER in his mutual funds was in the range of 2.5%."

"I am very happy with the decision and do not look back. I cannot think of any "minuses". My experience is only positive."
"Your book completely transformed my relationship with investing. What was once intimidating and overwhelming is now empowering and exciting. We divorced our advisor and tell anyone that will listen to do the same. It also inspired me to take an investing course and sign up for an investing club."
"I went from being afraid of the unknowns of investing to enjoying the process and taking control. It is extremely fulfilling to handle this on my own and look forward to seeing the growth continue over the years."

"I am now 100% AIY, in great part due to new products like asset allocation ETFs and new tools like Passiv and information on strategies behind target date funds giving me the confidence to mimic those glide paths myself. Having to AIY gives you a much better understanding, sense of ownership, and responsibility, as now you're more directly making high stakes decisions and these are not taken lightly. I believe I'm on the right path, but it's always hard to be 100% sure."

As mentioned, the final email in this series will reveal investor views on "pluses & minuses" of making the switch and valuable tips for those considering doing the same.

Once again, many, many thanks to all of you who took the time to share your stories!

If you have questions or comments just reply to this email. Keep an eye out for part 3 next Sunday!

Investment Advice for Affluent Canadians

Some investors prefer ongoing advice. I offer full-service, ongoing investment advice and financial planning for clients with portfolios of $1 million+. My clients benefit from greatly reduced fees and portfolios which are tailored to match their personal objectives, time frame and risk tolerance. If my service might be of interest to you, just reply to this email and we can set up a call to discuss.

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