Wealthsimple presses Ottawa to curb exit charges while analysts warn fee hikes could erode bank trust
Canada’s largest banks are facing criticism over rising transfer fees on registered accounts, with Wealthsimple calling on Ottawa to review the practice during pre-budget consultations, reported Reuters.
Exit fees to move a Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA) have climbed sharply in recent years.
Money.Ca reported that TD Canada Trust will double its RRSP and TFSA transfer-out fee to $150 per account on July 1.
RBC made a similar increase in 2022, moving from $50 to $150, while Tangerine lifted its fee from $45 to $125 in 2020.
Wealthsimple argued in its submission that clients have already paid nearly $30m in 2025 to move savings to its platform.
The company said, “there is no reason why financial institutions should be permitted to levy high, hidden exit fees on the rapidly growing number of registered plans.”
Jessica Oliver, head of government and regulatory relations at Wealthsimple, told Reuters that “if the government were to take action, it would make it easier for clients to overcome that friction.”
Wealthsimple asked the Financial Consumer Agency of Canada (FCAC) to review transfer practices and called on government to amend the Income Tax Act and related regulations to cap exit and transfer fees on registered accounts.
The Canadian Bankers Association, representing the country’s large banks, said banks are required to clearly disclose all fees.
FCAC said it cannot comment on pre-budget consultations, while the parliamentary finance committee stated the submission has not yet been distributed for review.
Money.Ca noted that the fees act as a deterrent to switching, since each account is charged separately.
An investor holding four accounts — for example, an RRSP, TFSA, RESP, and LIRA — would face $600 in transfer costs at the current rates.
Paul Teshima, Wealthsimple’s chief commercial officer, estimated in a LinkedIn post that Canadians may be losing hundreds of millions of dollars annually to exit and withdrawal fees.
He suggested these charges pad bank revenues at a time when digital processes should be reducing costs.
Complaints on social media continue to highlight delays of 25 days or more in processing transfers, leaving assets exposed to market fluctuations.
Analysts told Reuters that challenger banks such as Wealthsimple and EQ Bank, which do not charge exit fees, are drawing younger clients and intensifying competitive pressure on the big six banks.
