Canadian online investment platforms Wealthsimple and Questrade are intensifying pressure on federal regulators to address the controversial fees that financial institutions charge customers who want to move their assets to competing services.
These “transfer out” fees—often ranging from $50 to $150 per account—have become a focal point in Canada’s increasingly competitive financial services landscape. The fees can create significant friction for investors looking to switch platforms, even when seeking better service or lower management costs.
“This isn’t just about the dollar amount—it’s about giving Canadians true financial freedom,” said Michael Katchen, CEO of Wealthsimple, in a recent stakeholder meeting in Ottawa. “When someone wants to move their money, they shouldn’t face penalties that effectively lock them into services they no longer want.”
The campaign gained momentum after a CO24 Business investigation revealed that Canadians pay approximately $40 million annually in account transfer fees—costs that many financial experts describe as disproportionate to the actual administrative work involved.
Questrade President Edward Kholodenko has been particularly vocal about the issue, arguing that the fees create an artificial barrier to competition. “The actual cost of processing these transfers electronically is minimal,” Kholodenko stated. “These fees exist primarily to discourage mobility, not to recover legitimate expenses.”
Data from the Investment Industry Regulatory Organization of Canada (IIROC) shows that accounts under $50,000—typically belonging to younger or new investors—are disproportionately affected by these fees, as the fixed costs represent a higher percentage of their total investments.
The Department of Finance confirmed to CO24 Breaking News that it is reviewing the regulatory framework for financial services fees, though no timeline has been established for potential changes. Deputy Finance Minister Michael Sabia acknowledged the concerns during parliamentary committee hearings last month, noting that “excessive friction in financial services ultimately harms market efficiency.”
While both Wealthsimple and Questrade have programs to reimburse transfer fees for incoming clients with significant assets, these policies still exclude many smaller investors. Critics argue this creates a two-tier system that further disadvantages those with modest portfolios.
Consumer advocacy groups have joined the campaign, with the Financial Consumer Agency of Canada (FCAC) recording a 27% increase in complaints about transfer fees in the past year alone.
John De Goey, portfolio manager at Wellington-Altus Private Wealth, believes the issue extends beyond just the fee amount. “The real problem is the 4-6 weeks these transfers often take, leaving investors in limbo. The industry has the technology to complete these transfers in days, not weeks.”
As digital investment platforms continue to reshape Canada’s financial landscape, the outcome of this regulatory push could significantly impact how freely Canadians can move their money in the future—potentially saving millions in unnecessary fees and creating a more dynamic, competitive marketplace.
Will Ottawa ultimately side with consumers or with established financial institutions? For investors across Canada, that’s a $40 million question worth watching.
