Pro Tip: Never invest with Robo stocks in a non-registered account

[66bookssss]

@coolant Doesn't that defeat the purpose of a Robo advisor?

Isn't a "robo advisor" supposed to be easier than doing it yourself, yet you have to spend hours to figure out your cost basis..

 

[coolant]

@66bookssss They do automated rebalancing and investment decisions based on the client’s risk profile.

It’s unusual for a portfolio manager to calculate the acb for a client although I imagine it does happen somewhere.

 

[resjudicata]

@coolant One of the many features you get with full service management, for as little as .25-1% annually depending on portfolio size.

 

[coolant]

@resjudicata Some of the expensive ones like RBC Wealth Management point out in their docs that the ACB is solely the responsibility of the client and any provided ACB is strictly for “informational purposes” and may be wrong due to the client’s specific tax situation.

 

[lucaannibale]

@coolant They say that, because if you own the same things in a different non-registered account, your cost basis is a weighted average across your holdings of /all/ accounts, so they don't want to be liable for calculating it wrong when you have a lot of units of an ETF in another account.

 

[coolant]

@lucaannibale Precisely, the wealth management firm doesn’t have the data to be able to ensure a correct ACB calculation. This is why it’s left to the client to calculate.

 

[gregh87]

@66bookssss Email customer support asking for all of your transaction info in a csv. They got me mine in a few days.

 

[austins]

@66bookssss Damn I didn't calculate the ACB for WS last year. I thought they would have it. Does that mean I over paid???

 

[resjudicata]

@66bookssss But if your investments are in a tfsa then you're good? I started an account a couple weeks ago and now I'm confused.

 

[carriedaway1]

@resjudicata Nah, you're good. Doesn't matter what happens within a TFSA, all tax free. Set up a regular deposit DCA, and only look at it when you need to plan withdrawals. Set and forget.

 

[rickyd213]

@carriedaway1 This is the case for RRSPs too right? Unless I withdraw it?

 

[joseph_widner]

@rickyd213 Yes, even if you withdraw from an RRSP the ACB doesn’t matter because you pay tax on the whole withdrawal not just the gains.

 

[rickyd213]

@joseph_widner Thank you

 

[almonte]

@rickyd213 Yes.

 

[rickyd213]

@almonte Thanks!

 

[carriedaway1]

@rickyd213 It is. There is some key differences between them. TFSA, you can draw down at anytime. RRSP isn't something that you draw down until retirement, at which time it is converted to a RRIF and you willl pay income tax on your withdrawals.

For contributions to an RRSP, you pay tax at withdrawal and receive a refund at your applicable rate on the year of contribution.

For a TFSA, contributions are net of tax, and you pay no tax on withdrawal.

RRSP can also be used for the home buyers plan. It allows you to make tax free withdrawals, to cover a deposit of your first house, and you have 15 years to pay it back.

 

[rickyd213]

@carriedaway1 Thanks very much for noting the key differences! I’m just starting out so feel like there’s a lot to absorb. Thanks again!

 

[readwritedream]

@66bookssss Huh, WealthSimple didn't generate the tax documents for you automatically?

Live and learn.

What if you just buy Vanguard ETFs?

 

[manaf]

@66bookssss I’m confused by this post. WS provides the slips every year. Been doing this for 5 years with biweekly contributions (I buy only, never sell)

 

[bookofkittehs]

@manaf I just started a non registered robo stock with WS this year. According to https://help.wealthsimple.com/hc/en-ca/articles/360056580534 they just give you a couple of slips and are these just what you throw into the tax return?

edit: and in https://help.wealthsimple.com/hc/en...imple-provide-Adjusted-Cost-Base-information- they claim they do calculate the acb for you although i'm not sure if that is the same as what op is referring to