Blog post

The Question

Hi Phil,

I’ve been following your YouTube channel for a few months now and it’s been incredibly helpful — especially the video about the 5 biggest mistakes people make when moving to Canada. My wife Laura and I are both 63, currently in Denver, and we’re moving to Victoria this summer. We’ve been vacationing on Vancouver Island for years and finally pulled the trigger — bought a place in Oak Bay last month.

We’ve got our financial life spread across three brokerages: Schwab (about $1.1M — our main taxable account), Vanguard (about $400K — mostly index funds and bond funds), and a small account at TD Ameritrade with about $80K that Laura uses for some individual stock picks she likes to manage. We also have IRAs at Schwab — mine is about $600K and Laura’s is about $350K.

I called Vanguard last week to let them know about our move and ask about updating our address, and the woman on the phone basically said they’re going to freeze our account once we have a Canadian address. She said we’d be restricted to “liquidation only” — meaning we can sell but can’t buy anything new. She wasn’t rude about it but it was clear this wasn’t negotiable.

Schwab seems more flexible based on what I’ve read online, but I’m not sure anymore. And TD Ameritrade — aren’t they part of Schwab now? Laura is really upset about potentially losing access to her account. She’s been managing that portfolio for 10 years and has done well with it.

Is this a real problem? Can they just lock us out of our own money? And what are our options if they do?

Worried,
Greg

Phil’s Answer

Hi Greg,

Unfortunately, yes — this is a very real issue, and you’re smart to be dealing with it before the move rather than after.

Here’s what’s happening: many US brokerages and custodians are not licensed to serve clients with foreign addresses. When you notify them of a Canadian address, their compliance department flags the account. Depending on the firm, they’ll either restrict your account to liquidation-only (meaning you can sell but not buy), freeze it entirely, or in some cases close it and mail you a check.

Vanguard is one of the strictest — they generally will not maintain accounts for Canadian residents, period. Schwab has been more accommodating in the past, but their policies have tightened over the years and it’s not guaranteed. TD Ameritrade was indeed acquired by Schwab, so they’ll follow the same policies — Laura’s account will likely face the same restrictions.

This is something we deal with regularly. The solution is to move your assets to a custodian that’s specifically set up to work with cross-border clients. Our clients’ US-based assets (IRAs, Roth IRAs, taxable accounts that need to stay in US dollars) are typically held at a custodian that’s comfortable working with Canadian residents and understands the reporting requirements on both sides.

A few things to keep in mind:

• Start the transfer process well before your move date — account transfers can take 2-4 weeks
• You’ll want to avoid selling positions just to move custodians (this would trigger capital gains unnecessarily) — in-kind transfers are the way to go
• Make sure the new custodian can handle the specific account types you need (IRA, Roth, taxable, joint, etc.)
• Laura can still manage her individual stock positions at the new custodian — she won’t lose that ability
• Once you’re settled in Canada, your Canadian-dollar investments (RRSPs, TFSAs if applicable, taxable CAD accounts) should generally be with a Canadian custodian

The worst scenario is getting locked out of your accounts mid-move with no plan B. I’ve seen it happen, and it’s stressful.

Hope that helps, Greg. Happy to walk you through the transition plan.

Regards,
Phil Hogan, CPA, CA
phil@beaconhillwm.ca

Related Articles

• Can I Keep My US Brokerage Account After Moving to Canada?
• Wills Across Borders: A Complete Guide for Americans Living in Canada

If you need help with your cross-border tax and investment planning, click here to get started — we’d love to help.