Ottawa readies ban on fees for moving investment accounts
The federal government has released draft regulations to stop banks from charging fees when a client moves an investment account to a different financial institution.
Would benefit lower-income Canadians and smaller financial institutions, expert says
Jeff Lagerquist · CBC News
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The federal government has released draft regulations to stop banks from charging fees when a client moves an investment account to a different financial institution.
The proposed change would impact registered accounts such as RRSPs, TFSAs and RESPs, as well as non-registered investment accounts at Canadian banks.
Such fees are typically $150 per account, according to a regulatory impact analysis published on Wednesday by the Department of Finance.
While the ban would eliminate the flat administrative fee to transfer an account, it would not waive product-level costs — like trading commissions, early-redemption penalties on GICs, or mutual fund sales fees — if investments are sold or liquidated during a move to a different bank.
If approved, the new regulations would fulfill Ottawa's promise in the 2025 budget to prohibit investment and registered account transfer fees. The government is set to table its latest federal budget on this afternoon.
A department official says a 30-day consultation period on this issue will begin after Saturday.
Fees associated with personal chequing and savings accounts would also not be impacted.
Eliminating transfer fees for investment accounts will encourage Canadians to shop around for banks and financial institutions that better match their needs, says Li Zhang, a financial literacy leader and director of social impact at Chartered Professional Accountants of Canada.
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"What we needed at 15 [years old] is not what we need at 20, is not what we need at 40. And so you need to look at your financial ecosystem to say, 'Am I being supported?'"
Wealthsimple CEO Michael Katchen praised the government's move toward eliminating so-called "exit fees."
The Toronto-based financial technology company has a vested interest in seeing these charges eliminated. Its main product is a popular app offering commission-free trading, automated investing, banking, and tax services.
"This year alone, Canadians have been charged $73 million in exit fees to move their savings to Wealthsimple," Katchen wrote in a LinkedIn post on Wednesday.
"Every financial institution in Canada could decide today to stop charging these junk fees and end this tax on choice. You don't need regulation to do the right thing."
If this happens, Zhang says it will benefit less wealthy Canadians, and the smaller upstart financial institutions that compete with Canada's biggest big banks.
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"It will be easier for smaller financial institutions to steal larger institutional clients, because oftentimes, if you have a certain level of net worth, a lot of times the competing or the new … institution will pay for your transfer fees," she said.
It will also benefit lower-income Canadians, "because that $20, that $150, that whatever the case may be, makes a huge difference on Canadians who are really struggling with affordability."
ABOUT THE AUTHOR
Jeff Lagerquist is a senior writer with CBC News based in Toronto. Originally from Erin, Ont., he studied journalism at Toronto Metropolitan University. Jeff previously worked as a senior reporter for Yahoo Finance Canada. He was also a reporter and digital producer for CTV National News, BNN Bloomberg and The Financial Post. In 2025, he was a Columbia University energy journalism fellow.
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