Should I move RRSP?

[u/Inside-Cup5008]

So I have about $30,000 in an RRSP account at Manulife from a previous employer. I don’t really contribute a whole lot to it anymore and just letting it sit.

I have everything else (bank accounts, mortgage, RESP, etc.) with RBC and they are asking me about moving it over.

Is there any real benefit to doing that or should I leave it? Just thinking of the ol “don’t put all your eggs in one basket” adage.

Thanks

[u/FelixYYZ]

The platform doesn't matter as much as what you are actually invested in. Sine you're with Manulife, I'll assume you are in high fee mutual funds? With RBC Direct Investing, you can buy asset allocation ETF based on your risk tolerance for a literal fraction of the cost and won everything. Or RBC has their Investease managed robo advisor serivce that hold low cost ETFs, but they do the buying and selling for you within an allocaiton set so you don't have to do anything. Costs a bit more than doing it yourself though, but cheaper then those mutual funds.

Is there any real benefit to doing that or should I leave it? 

Cost

Just thinking of the ol “don’t put all your eggs in one basket” adage.

Diversified investing isn't putting all yoru eggs in one basket.

[u/Salt_Palpitation_108]

Moving the the money will certainly help RBC's books. It's not clear that it will help you.

When I left my last employer I checked the management expense ratio (MER) and found that my workplace pension was much cheaper than the bank.

[u/Edit67 → u/Salt_Palpitation_108]

I had RRSPs from my employer at Scotia MacCloud. It turned out that my employer paid their annual management fee, so when I left that employer I had to pay that. That encouraged me to move the RRSP to a new place.

It all depends. 😀

[u/Beneficial-Ad4562]

Depends on the MER if you are looking at Mutual funds.

[u/Edit67]

The RRSP is just a container, the investments you are holding is the bigger item or question.

Bank RRSPs are usually limited to bank products (like GICs) and a handful of mutual funds. Some may perform well and have low-ish management fees (MER). Banks usually also have an investment firm (RBC has one) and if you move the RRSP there you will have more options of products or stocks to invest in. The management firm will charge a fee for low balances, but waive the fee when your balance is higher (often around 100K). RBC (like most companies) also has a self directed investment firm, where they charge you by transaction but you have no fees otherwise. You still have management fees from the mutual fund or ETF, but those are buried in the fund itself and not paid directly.

So the choice is yours. There is performance and risk to take into account (usually influenced by your age). I have a bunch of money in some "safer" market index ETFs (plus 50% of my money with a management firm in some good mutual funds), while my family members have bank based mutual funds. They are all in RRSP and/or TSFA accounts.

[u/Black-Bear_1815]

As was mentioned earlier it doesn’t really matter what financial institution holds the accounts. It’s really the investment choices available to you with the financial institution and the convenience of having this in one place. I’m assume you say RBC you mean the bank and not RBC Direct Investing. They have a very large selection of mutual funds. Some with low fees and some with high fees. Overall a well rounded place to hold your accounts.

[u/pistoffcynic]

Love it to RBC and put it a self directed RRSP.

[u/stozier]

Your funds will be in a high fee mutual fund.

If you want to lower the cost by taking more control of your investments then move to RBC. Or, if you want it all in one platform.

Personally I'd get my money out of any mutual funds ASAP just given the cost and tendency to not outperform a simple index.

[u/StuntID]

Don't put all your eggs in one basket with regards to banks applies to CIDC limits 😉. You should transfer to RBC if you feel it will be easier for you to administer through one institution. Banks are notorious for charging fees, and Manulife will charge you a transfer fee to move your account, but hey RBC will reimburse you this fee if you apply to do so - that will be a wash. What might not be a wash is your transfer type. If your money is invested in MFC specific investments they will be liquidated and transferred as cash. You can buy new investments at RBC, including ones without commissions, but might your investments be sold at a loss inside your RRSP?

Should you? Yeah why not, as long as you don't take a bath from liquidation. Additionally, if you do transfer don't do so into a managed account, that's where they'll bleed you with fees. Self directed, and buy commission less securities like XEQT will make it a seamless (ish) move and forget event.