Consumer seeks compensation due to transfer delay from RRSP to RRIF
Ms. R was an older investor who held equities in her Registered Retirement Savings Plan (RRSP) at an online investing firm. She turned 71 in 2020 and was required to convert her RRSP into a Registered Retirement Income Fund (RRIF) by the end of the year.
In November 2020, Ms. R consulted her investment firm about the transfer and started the process of opening the RRIF. When Ms. R’s firm reviewed her paperwork, it was incomplete. The firm followed up with Ms. R by email and by phone to inform her of the outstanding documents. After waiting for a response for almost 30 days, the firm phoned Ms. R again to follow up. The firm also sent Ms. R an email message with a list of the outstanding documents.
In December 2020, Ms. R spoke to one of the firm’s investment specialists over the phone and the specialist confirmed that an email message with a list of the outstanding documents had been sent to her. During their conversation, she provided a different email address and asked him to resend the message. Ms. R followed up with the firm a couple of weeks later. She spoke to another phone representative who reviewed with her the information missing on her forms.
Before the end of the year, the firm transferred the assets from Ms. R’s RRSP into the RRIF she had started opening to avoid having to deregister the RRSP at the end of the year. Most of the equities were transferred in kind, and some had to be converted to cash. Because the firm still did not have all the documentation for the new RRIF, Ms. R did not have access to it.
In early January 2021, the firm received more documentation from Ms. R. but did not act on her submission. In mid-February, Ms. R called the firm to inquire about her RRIF application. The firm informed her of a missing form on the file and she submitted it the same day they spoke. The firm now had the necessary documents to complete the opening of Ms. R’s RRIF account.
For weeks, Ms. R did not hear back from the firm. At the end of April 2021, she followed up with the firm and it submitted her documentation to the appropriate department for review. At no time during this interaction did Ms. R mention any intentions to invest the RRIF.
As a result of the firm’s delay in processing Ms. R’s application, her RRIF was fully opened, and she gained access to it in mid-May 2021. While the firm completed the transfer into the new RRIF account, trading was restricted, so Ms. R did not have the option to invest the funds.
Afterwards, Ms. R complained that she was unable to make trades during the six months it took to open the RRIF account and complete the transfer. She estimated that given the growth in the market during this period, she consequently suffered a financial loss of $5,500 due to lost opportunity. The firm told Ms. R it was not responsible for opportunity loss due to market fluctuations. However, the firm did apologize for the delay in opening her RRIF and for the poor customer service she experienced and offered to credit her account $500. Ms. R refused and came to OBSI for help.
Complaint not upheld
During our investigation, we spoke to Ms. R and representatives of the firm and found that both parties agreed on the facts of the case. We considered Ms. R’s claim for missed opportunity, and we found that, while the firm’s delay in opening Ms. R’s RRIF caused her to potentially miss out on trading opportunities from January 2021 to May 2021, there was no evidence that she had intended to make trades in the RRIF during that time. In fact, she had not communicated any concerns about investing the cash holdings in her RRIF in any of her conversations with the firm. In addition, without knowing how the RRIF would have been invested, it was not possible to confirm any potential increase in its value.
However, we determined the period Ms. R was unable to trade was excessive and recommended that the firm increase their offer to $1,000. The firm agreed and Ms. R accepted its offer.