Investmentfilter, Canada edition: What is the Canadian Vanguard?

August 26, 2023 10:22 AM

We (my wife and kids and I) moved from the US to Canada a couple of years ago. We used to use Vanguard for mutual funds, IRAs, education savings accounts, essentially all of our investments except for some stock options that my wife purchased through a former job. What is the Canadian version of Vanguard?

A bit of background:

To try to simplify our lives and spend less time on financial stuff, after we moved we opened an account with a wealth management firm that takes a percentage of your account's value to manage everything for you. (I know the usual advice is to use a fee-only financial planner and then manage things yourself.) We made this choice because we were overwhelmed with the move, with the extra complication of getting paid in the US and having to transfer our money to Canada, with figuring out taxes in two countries, etc.

Well, the firm isn't working out that well for us. The communication isn't great, the statements are hard to read, the online interface is clunky and hard to understand. They take a long time to follow up on questions and instructions, then things don't get done, etc. It isn't really saving us any headaches or time, so we figured we'd try to strike out on our own and manage things ourselves again.

We're going to need to set up RRSPs as well as general investment accounts. (Unfortunately, we can't do RESPs for the kids because they're not included in the US-Canada tax treaty, so they'll be taxed by the US government.) In the US we used Vanguard. What we liked about it:

• Easy-to-read dashboards and other tools to understand how much your accounts are worth and their performance over time.
• Lots of options for ETFs and mutual funds with low expense ratios.
• Very easy to buy and sell funds.
• No transaction fees when buying Vanguard funds.
• Ability to manage registered accounts (IRAs) and nonregistered ones.
• Easy to get help from a live person on the phone whenever we had questions.

With those things in mind, what is the best Canadian brokerage platform? Which one(s) do you/have you used, and what did you like about them?

posted by number9dream to Work & Money (9 answers total)

I use Wealthsimple, and I've been basically happy with it. I haven't dealt with any phone support so I can't speak to that. I've have both RRSP and TFSA accounts managed by them and a TFSA in which I've held ETFs. I use the phone app exclusively and haven't found it difficult.
posted by lookoutbelow at 10:53 AM on August 26, 2023

Best answer: If you're dual citizens this is much more complicated than you think, and may be true if you're not but just living in Canada.

Answers from Canadians-only here who are answering your exact question can get you into trouble.

I'm a dual citizen living in Canada and here's the short version:

- TFSAs is aren't covered in the treaty either so avoid or get an expert.
- Mutual funds should be held in registered plans but not outside of them otherwise you risk dealing with PFICs (PDF link!)
- ETFs for all non registered, or GICs or high interest savings.

And then there's cross border investing.

It's a potential minefield. I can recommend an advice only planner, and there's a crowdsourced spreadsheet of fee-only planners with cross border experience I can go find again, I found it on Reddit.

MeMail me if you'd like more information I gathered trying to figure this all out. I ended up with a full financial planner as I don't have the bandwidth right to figure it all out on my own, but will probably transfer out when I get my bearings.

Edited to add - it's entirely possible I've oversimplified above. That's how opaque and complicated it can be.
posted by mireille at 11:36 AM on August 26, 2023 [11 favorites]

If you haven't already, get a cross-border accountant and figure out the tax status of your US retirement accounts, stat. There are elections to be made, and triggers to avoid, e.g. new contributions. You really don't want to end up being taxed by Canada for your US retirement accounts.
posted by dum spiro spero at 11:58 AM on August 26, 2023

Dual citizen here; I too use a full financial planner because my options are a bit limited due to my status (my Canadian husband is fine). I would LOVE a TFSA, but alas, Uncle Sam does not so I don't have one. I'd echo the poster above to use a full financial planner until you've sorted it out enough that you can manage it.

Also, we have Vanguard up here in Canada.
posted by Kitteh at 12:12 PM on August 26, 2023

Best answer: While I favorited the remark by mireille above, I decided I would waste a tiny bit of bandwidth by typing this comment to make sure you paid attention to the remark by mireille, above, because that's how true it is. Be very careful.
posted by aramaic at 12:14 PM on August 26, 2023 [1 favorite]

Response by poster: Sorry, here's a bit more information:

• I am a dual citizen, my wife is a US Citizen with permanent residence in Canada. (She'll be eligible for citizenship in a couple of years.)
• We know to avoid TFSAs.
• We know a little (probably not enough) about PFICs.
• We have started the process of making the elections for my wife's 401(k) account in the US.
• On the tax front: we hired a cross-border accountant for the first year, she was expensive and she screwed everything up (including submitting false information on our behalf to the CRA), so this year (ie the 2022 tax year) we did it all ourselves, and that seems to have gone ok so far. But that was before we had any Canadian investments.

I did see that Vanguard exists in Canada, but it seems to be a somewhat different thing. It looks like in Canada I can only buy Vanguard mutual funds and ETFs through an online brokerage or a financial advisor, I can't log in to a Vanguard account and buy directly from them.
posted by number9dream at 12:26 PM on August 26, 2023

Best answer: I tell you this with enormous bitterness about being taxed abroad and therefore excluded from the simplicity of being able to do this myself by picking an index fund and calling it a day, and with months of research and interviewing a half dozen planners before I picked one, you absolutely don't want to invest in mutual funds outside of registered plans.

If you're doing your own taxes make sure you're filing FBARs. I wish for all of us that this wasn't the case.
posted by mireille at 12:43 PM on August 26, 2023 [2 favorites]

Fyi - in the same boat. According to our cross border tax CPA (Smythe, in Vancouver, recommended), TFSA's are borderline permissible IFF you limit the contents of said TFSA's to boring GICs or the like. (No mutual funds or equities or ETFs). Does limit their usefulness, but if you foolishly listened to your bank's "financial advisor" and put money in one (thanks HSBC!), at least that's a way to avoid ruinous penalties.
posted by cfraenkel at 6:31 PM on August 26, 2023 [3 favorites]

I use and like Questrade for this - it's a popular online brokerage here and should do everything on your list. I've never tried to get someone on the phone so I can't speak to that (I did use the online chat once and it was efficient). I buy Vanguard ETFs through Questrade and it's very easy and inexpensive.
posted by randomnity at 5:24 AM on August 27, 2023