Fintechs Welcome Ottawa’s Proposed Ban on Investment Transfer Fees

Fintechs Canada and Wealthsimple are welcoming a federal proposal to ban investment account transfer-out fees, while urging provinces to extend similar protections to financial providers they oversee.

The proposal would also establish timelines for key stages of account transfers, addressing both the cost of switching providers and delays in moving investments.

In a statement, Fintechs Canada said the draft regulations advance two priorities it has pressed Ottawa to address: eliminating exit fees and making account transfers more timely, with clearer information for consumers.

“We congratulate the federal government for acting on its Budget 2025 commitment,” said Adriana Vega, executive director of Fintechs Canada. “Canadians should not be charged to move their own money. Moreover, exit fees can be a strong disincentive to switching, curtailing competition.”

The Financial Consumer Agency of Canada’s recent banking-fee review found that full transfers of registered products typically cost $50 to $150 per account. Those charges can accumulate when consumers move several accounts and disproportionately affect people with smaller balances.

Wealthsimple co-founder and CEO Michael Katchen underscored the scale of those costs in a LinkedIn post, saying Canadians have been charged $73 million this year to move their savings to Wealthsimple.

Katchen described the proposed ban at federally regulated banks as an important first step toward fulfilling Ottawa’s Budget 2025 promise. He called on provincial governments and the rest of the financial industry to follow.

“Wealthsimple has never charged an exit fee,” he wrote. “We earn the privilege of managing our clients’ money by giving them reasons to stay, not charging them to leave.”

With financial services overseen at both the federal and provincial levels, Fintechs Canada is also pushing for broader coverage.

“Federal action is an important step,” Vega said. “We look forward to working with Ottawa to finalize the ban and with provinces to extend the same protection to more Canadians.”