- Client Experience/Website User Interface
- Account Reporting and Maintenance
- Research and Tools
Another concern for us would be the time period during which portions of our portfolio would be in limbo. Typically the transfer takes 5-10 business days but there have cases where significantly longer delays occurred or not all funds transferred properly. Once our funds are properly transferred, we would need to link the new broker accounts back to our bank account, which would cause a further delay. We depend on the regular flow of dividends to cover our expenses and monthly RRIF payments and might not have access to them during the transfer period. We could use our emergency funds to temporarily cover our expenses while waiting for accounts to settle with the new broker, but I'm not sure what would happen to our monthly RRIF payment if the cash from the RRIF account was not available when the payment comes due?
We considered the fact that we would lose all investment history of past purchases, sales, capital gains and losses that we have accumulated for over 10 years. We would also lose all of the Dividend Reinvestment Programs (DRIPs) that were set up with the old broker and would need to reapply to have them reinstated with the new broker, assuming that new broker supports the same DRIPs. Not all brokers have the same DRIP coverage.
Scotia iTrade actually has excellent DRIP support, offering broker DRIPs on more Canadian and US stocks than most if not all of the other brokers. Its Web interface also allows you to request to enroll in or withdraw from a DRIP for a stock within an account or across all accounts that hold that stock, without the need to contact customer support. For those corporations that do not offer a discounted DRIP for their stock, iTrade offers the Dividend Purchase Plan (DPP), which reinvests cash dividends commission-free.
What we learned from this exercise of comparing discount brokers and investigating what it would take to move brokers is that you need to choose your broker wisely based on the factors that are important to you, because it is a painful, costly and non-trivial process to move between discount brokers later.
But keep in mind that things change and these competitors will continuously try to one-up each other. So unless a much more pressing impetus arises in the future, for now we are sticking with Scotiabank iTrade as our discount broker, but will continue to lobby for them to finally start supporting US currency registered accounts.