Starting your self-managed accounts

Getting accounts started is a simple as a visit to your local bank

So you have emptied your piggy bank, read my book, and are now motivated to start a stock investing account. Or you already have accounts at a few different places and want to consolidate them to start managing yourself. Perhaps you are working with a financial advisor but want to take more control. How do you actually set up accounts so you can self-manage your investments.

Always trying to take the simplest approach, I went to my local bank branch and met with one of the branches’ financial advisors. We filled out and signed the appropriate forms to set up accounts at that bank’s internet brokerage division, and within a few days had the accounts ready to operate. All major banks have an internet brokerage arm. I like that I can go into one website to manage all my accounts. Transferring money between accounts is also easily done. My wife’s accounts are set up so that I can manage them, and I expect many families will have one person doing the investing.

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There are also a number of independent internet brokerages like QTrade, Questrade, Virtual Brokers and Interactive Brokers, for those of you comfortable doing everything on the web, but I still prefer a bit of the old-fashioned way. All internet brokerages have help lines to ask technical or account questions, but the onus will be on you to make the investing decisions.

One consideration is to look for an institution that allows both Canadian and U.S. dollar TFSAs and RRSPs. All institutions have taxable accounts in both currencies, but not all allow registered accounts in both currencies. With small accounts it may not be necessary, but as the account grows and when you wish to diversify internationally, it is better to avoid paying conversion costs every time a dividend is paid or you buy and sell a foreign stock. With a U.S. dollar-based account, you only pay the conversion cost upon depositing and eventually withdrawing the money. I expect, in time, all our major Canadian banks will allow both currencies in registered accounts.

For a married couple, if you both have a TFSA, RRSP and regular taxable account, that’s six accounts. Potentially seven if you have an RESP. Let’s say you are working with a financial advisor and want to start learning to invest on your own, I might suggest moving just one or two accounts to start with. Perhaps start with just your own TFSA. When you’re meeting with the bank to set up the account, simply bring in a statement from your current TFSA, and the bank will take care of transferring that account into your new account at the banks internet brokerage. You don’t need to sell anything prior to moving it. It can all be transferred in kind, and when the accounts are moved you can begin to manage on your own.

You don’t even need to talk to the financial advisor where the account currently resides, but I would suggest a courtesy call and explanation, especially if you are leaving some accounts with that advisor. If the account has mutual funds you may want to ask the advisor if there are any penalties for cashing them, as many mutual funds have what are referred to as deferred sales charges.

If you have a few accounts and are just moving one, that advisor shouldn’t be upset. If they are upset it’s not a good sign. An advisor adding value should not feel threatened when you move an account to try taking greater responsibility yourself.

A great way to save is by having money automatically transferred each week or month from your bank account to your investing account. This is very doable with a self-directed stock account. Let’s say you want to begin your TFSA by transferring $105 weekly from your bank account to a TFSA. This will almost max out your TFSA contribution for the year. I would suggest waiting until $1,000 has accumulated in the TFSA and then buying $1,000 worth of one of the stocks mentioned in my previous column. When another $1,000 accumulates, buy another company mentioned. Over time you can build a very nice portfolio.

About the author


During a 35+ year career in ag sales and management, Herman VanGenderen became an active investor and stock and real estate, building portfolios in both. His latest book is “Stocks for Fun and Profit: Adventures of an Amateur Investor.” Visit his website at or email Herman at [email protected]

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