Formal E*Trade Eviction Notice

Nov 18, 2013 by

maple leaf with slash

Canadian residents not welcome at E*Trade.

You may recall that Ms. Money Counselor and I were ordered by E*Trade to transfer our accounts to another firm. A brief review of events:

  • We had E*Trade accounts for many years. I’ve always liked E*Trade, and to my knowledge I wasn’t a troublemaker.
  • In August 2009 we moved to Canada. We’re both American citizens.
  • Earlier this year—nearly four years after our move—E*Trade left me a voicemail indicating I’d have to change the address of record for my accounts to a U.S. address or transfer all of my accounts to another firm.
  • When I called to ask why the sudden change, my ‘handler’ at E*Trade told me that E*Trade wasn’t willing to spend the money to comply with Canadian securities regulations.
  • After briefly toying with the idea of using a relative’s U.S. address as my E*Trade address of record, I discovered that Charles Schwab would be happy to receive a transfer of our business. Though a lot of paperwork of course was involved, the transfer went smoothly, thanks in part to the diligent help of a Charles Schwab employee assigned to our case.

Eviction Notice from E*Trade

I thought you might be interested to see the formal eviction notice I got from E*Trade. Ms. Money Counselor got the same.

ETrade Eviction Notice

What I Find Interesting About My E*Trade Eviction Notice

A couple of things about this letter I find interesting:

First, my transfer completed on September 25. Not long after that date I logged into E*Trade and formally closed every account. As you can see, the date of the eviction letter is November 8th—about six weeks after my association with E*Trade had definitively ended. My E*Trade log-in still works, and here’s what I see on the Accounts ¦ Complete View page:

my etrade account screen

I guess when I don’t respond to its eviction letter, someday E*Trade will decide to follow through on its threat to “close your account on your behalf”, only to find there’s nothing to close.

I also found interesting this sentence:

In accordance with applicable Canadian regulations, E*TRADE Securities LLC is not permitted to maintain this account.

This statement is misleading, in my opinion, because it implies that Canadian regulators are to blame for my eviction. Presumably the same regulations apply to Charles Schwab, where our accounts now peaceably are maintained. To be fully accurate, the statement should include a preface, something like this:

E*Trade has made a business decision not to make the necessary expenditures to comply with Canadian regulations; therefore in accordance with applicable Canadian regulations, E*TRADE Securities LLC is not permitted to maintain this account.

If E*Trade declined to spend the money to be compliant with U.S. securities regulations, it wouldn’t be permitted to maintain accounts for customers with U.S. addresses either. I suppose E*Trade would then blame U.S. regulations for its inability to operate in the U.S.

I have no problem with E*Trade’s business decision not to operate in Canada; that’s wholly its prerogative, and I’m surely not qualified to second-guess. I do have a problem with disingenuousness.

I also wonder: did Canadian regulations recently change, or has E*Trade been flying under (Canadian) regulatory radar since we moved to Canada in 2009? Or perhaps E*Trade had been compliant in Canada, but recently decided the benefits don’t justify the costs and so is pulling out.

Account Transfer Fee

Notice the reference in the letter to an “account transfer fee.” In my opinion, since we were being ordered out of E*Trade, the transfer fee should have been waived. Also, it would have been nice if E*Trade had bothered to notify me of this fee up front. (Probably it did in the fine print somewhere.) The fee is $60 per account, so a total of $180 for my two IRA accounts and Ms. Money Counselor’s single IRA account.

To consolidate everything with one firm, we also transferred Ms. Money Counselor’s Roth IRA account from Vanguard to Charles Schwab. Vanguard did not charge any transfer fee, even though we, not it, initiated the transfer.

The $180 E*Trade transfer fee isn’t a huge amount of money, but it’s the sort of shabby treatment that motivates me to invoke a lifetime ban on doing business with a company and inspires me to write and publish posts.

End of Story

So we’re all set with Schwab now and happy. Have any of you had similar experiences with E*Trade or another firm?

PS to the guy from E*Trade who called me repeatedly, leaving voicemails, after my Evicted by E*Trade post: unless you want to refund my $180 in transfer fees, don’t waste your time.

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