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Discussion Starter · #1 ·
Hi Folks

We moved to the USA from several years ago and left the RRSP account, a bank account for rental income and a mutual fund account in Canada. We've been filing FBAR forms yearly.

We recently received a letter from the HollisWealth company that holds our mutual funds stating that we must close the account. The account holds Fidelity, Trimar, CI Pacific and AGF mutual funds.

I've searched extensively to figure out what to do in this situation. I can't find any company that is willing to let us open a Canadian account to let us transfer the mutual funds in kind. They say SEC regulations won't let them.

One idea I came up with was to transfer the money in $CAN to a USA Interactive Brokers (IB) account. They let you wire the money to an IB account at RBC and it stays in $CAN even though the account is in the US. You can also continue to keep the money in $CAN as long as you trade only on the TSX.

But this issue is IB will not accept Canadian mutual funds. :( So the day we cash out the mutual funds is the day we incur a big taxes. I'd prefer not to do this either.

The second issue is that IB only accepts wired funds and that requires us to visit a Canadian bank IN PERSON. I wasn't planning to travel to Canada, but maybe I have to just to move the money. It seem crazy that in this day of online banking that I have to go into a branch to do this.

I'd prefer not to transfer to the USA because the exchange rate is so bad right now.

Any ideas or thoughts on how to deal with this would be greatly appreciated.

Cheers
Eddie
 

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Very few investment houses are licensed to do business in both the US and Canada, i.e. serve residents of both countries.

I have heard, but have no personal experience, that TD Waterhouse is one company that does; it may be worth a phone call to explain your situation and see if they can help. (I have no relationship with TD.)

You may also have a secondary problem re: PFIC reporting for the mutuals on your US return. If you are not already doing this and are OK with it, that alone may be reason enough to cash them out.
 

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I agree with Maz57. If you haven't been making mark-to-market elections on your foreign mutual fund holdings (outside the RRSP) then it might be better to get that cleaned up now, through the forced sale, than later, as the PFIC-related issues compound.

The exchange rate isn't actually a problem beyond just making sure you choose a low cost fund transfer option. If you're happy with the asset allocation you can just invest in the same assets in the U.S. Assuming you move expeditiously you'll get the same underlying assets in the same quantities (less the tax impact), and they'll continue to evolve in the same way. Probably with lower management fees, at least if you choose wisely.
 

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I have the mirror image of SailingDreams' dilemma, having moved to the U S from Canada. I've also "heard" that T.D. Waterhouse handles cross-border accounts, but have not tried them. I ended up using Cardinal Point Wealth Management, a cross-border licensed financial advisory firm. (And no, I don't consider myself to be wealthy!) the US entity handles our US retirement accounts, while the Canadian arm handles our Canadian investment AND retirement accounts (RRSP & TFSA). I'd be happy to provide further details & info in a PM.
 

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Discussion Starter · #5 · (Edited)
Hi Folks

Thanks for your thoughts. I'll also follow up with Cardinal Point and see what they say.

I phoned TD Waterhouse and unfortunately they would do anything for us. The SEC has really give us the screws.

I've setup an account with Interactive Brokers (IB) in the likely event that we must cash out the Mutual funds and move it to the USA. Their exchange rates seem superior to Fidelity International. The only headache is transferring the money to IB. They - like Fidelity - will only except wire transfers. And wire transfers require you to visit a Canadian bank in person. Arg.

I have one more contact at HSBC to talk to about this predicament.

Cheers to you all
 
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