Looking For Discount Broker for RRSP while resident of US

[truffle]

I currently use RBC Direct Investing as my discount broker and manage my RRSP within them.

I will soon be a US/California resident. At that point they will let me sell for 90 days only, after that I can buy or sell canadian stocks and canadian bonds (nto etfs, not funds) only via telephone.

My understanding is they are being over zealous but this is their policy.

I'm looking for a discount brokerage I can transfer my RRSP to that will let me continue to do self directed investing of my RRSP, ideally online. I am not interested in working with a wealth manager, I want to do my own trades. Has anyone had any success with any of the major discount brokers?

[nelsona]

The fact that RBC is even letting you keep the account is great, since until recently TD wAterhouse was the only discount broker that would allow US resident RRSPs.

Their restrictions are in line with TD Waterhouse. It is the state that determines what the brokerage is allowed to sell.

Contact TDW and see what they will allow Cali residnts to purchase in their RRSPs, then make the choice.

[nelsona]

By the way, NO ONE will let you deal online -- the deal for US residents is that they MUST deal personally with their few brokers that are licensed to deal with US clients . You can however negociate them to charge the online fee

[tsanaha]

TD bank and Scotia Bank will let US residents to keep mutual funds (RRSP or not), but they won't let you to buy, and any distribution has to be cashed out except for RRSP. You can sell anytime.

[nelsona]

That is not what most are looking for.

[truffle]

Thanks for the replies so far.

In comparision to what has been noted so far RBC seems to be acting pretty reasonably:
- They will let me do trades over the phone, but only for individual CAD stocks and bonds
- I can't do online trades, I can't even view my assets online
- They will charge me the cheaper online trading fees as I do not have the ability to do online trades

In my opinion based on the research I have done they are overly restricting what I can trade in. I'm totally ok with having to do trades by phone, but I am not convinced the US/Canada tax treaty actually requires them to not allow me to purchase ETFs and mutual funds via these over the phone transactions.

Thus, I am looking for a broker that may have similar restrictions to RBC (I.E. phone trade only) but will let me buy and sell with more flexibility (CAD etfs, CAD mutual funds).

If you can offer advice please let me know, I will return to this thread and update it based on what I discover.

[nelsona]

The treaty has nothing to do with this of course. that is a tax treaty.

The trades of stocks etc are governed by the various ceruties commisions involved, which in your case is the SEC and the Califormia SEC.

Cdn brokerages are absolutely forbidden to trade in non-reetirement accounts with US residents. period. this is universal and has been the cae since about 1998.

What has become llowed, thru variuous SEC and state SEC regs adopted since then is allowance of trades within retirement accounts under 2 conditions: that the individual broker has sought to comply with the state requirements, and that the brokerages even wants to do this.


So, as I said earlier, to allow online trading would not satisfy the first requirement, as the trade MUST be processed by one the few brokers which have specifically been approved to do so.

The inability ability to monitor your account however seems
a tad restrictive. This may be because until recently RBC and all otther bank discounters merely told their clients that they were closed for busincess. period. They are obviously slowly chaning their policies.

Now, as to mutual funds. A Cdn mutual fund can only be sold in PROVINCEs (never mind states) in which it has sought and received licensing to do so from the provincial exchange commisions. it may surprise you to find out that there are many Cdn funds that are not sold across the country.


So the fact that Cdn mutual funds would not be available to US residents. Some brokerages however, based on the specifics of the stste the client resides in, allow mf trades as long as they are not advising such trades. Again, each state's rules govern what the Cdn broker can do, ANF the brokerage then decides if they wish to abide with these rules, of close the account down.

You will not be able to change RBC's policy, not will you be able to change Cali SEC regs. SO what you need to find out is if anothr disounter (TDW for example) has adopted ruke s for california which meet your requirements. if they have the same rules as RBC, then you can assume that the restriction is a matter of cali law.

[nelsona]

All bank discounters except TD waterhouse, which was the only plyer for several years.

[truffle]

[quote="nelsona"]
What has become llowed, thru variuous SEC and state SEC regs adopted since then is allowance of trades within retirement accounts under 2 conditions: that the individual broker has sought to comply with the state requirements, and that the brokerages even wants to do this.
[/quote]

Yes that is exactly what I am looking for, and is all I am looking for.

[quote="nelsona"]
Now, as to mutual funds. A Cdn mutual fund can only be sold in PROVINCEs (never mind states) in which it has sought and received licensing to do so from the provincial exchange commisions. it may surprise you to find out that there are many Cdn funds that are not sold across the country.
[/quote]

Good info. What about ETFs though? Like iShares XIC / XSB.

[quote="nelsona"]
You will not be able to change RBC's policy, not will you be able to change Cali SEC regs. SO what you need to find out is if anothr disounter (TDW for example) has adopted ruke s for california which meet your requirements. if they have the same rules as RBC, then you can assume that the restriction is a matter of cali law.[/quote]

Yeah that sounds exactly right, I will keep checking into this.

[truffle]

I'm talking with a rep for TD Waterhouse right now they have been pretty helpful.

If anyone else wants to call them their line for US residents is 1-866-303-0341

What I've confirmed:
- If prior to becoming a US resident I have a RRSP trading account with them
- After I become a US resident they will allow me to do trades within my RRSP
- There are no restrictions on what can be traded, however, some mutual funds have restrictions that prevent them from being purchased by US residents. I specifically confirmed that the ETFs I'm fond of (XIC and XSB) are fine.
- To open an account since I am not a TD customer I would have to do so within a Canadian TD branch
- The cost of all trades will be at Internet rates, but must be made through one of their specific US licensed representatives

This is pretty good news I will probably shop around but this sounds solid

[nelsona]

The only variant I would report is that TDW has never required pre-existing relationship in the past. I was able to open one from US by phone (mailing required docs).
I would not worry about this requirement if it an inconvenince to you.