 Setting Up Accounts in the US WHERE TO SET-UP - A common question
we get from our clients is "Where should I set up an investment
account in the US ?" We believe the best value for the dollar is
at one of the large discount brokerage firms like
TD Ameritrade
. They offer low commission rates, a wide array
of low cost mutual funds and exceptional internet-based services.
TD Ameritrade is the second
largest discount brokerage firm in the world. In Canada, we use
TD Waterhouse making it easier to transfer
assets or provide a consolidated investment management solution
when your assets span both the US and Canada.
SSN/ITIN - For those making the transition
to the US and wanting to open an account as a US resident, you must
have a Social Security Number or
an Individual Tax Identification Number
. This is to ensure any income from the account can be tracked
for income tax purposes. For those with non-working spouses, you
will need to apply for an ITIN first before opening up a joint account
with the spouse that has a Social Security Number.
TITLING YOUR ACCOUNT - The other question
you will see on the account application form asks how you want the
account titled; joint tenants with rights of survivorship, tenants
in common, community property, sole and separate property, etc.
Most Canadians have no idea so they check any box or they don't
check any at all, and the brokerage firm uses their default. In
reality, the option selected can have potentially profound estate
planning effects on your family in the event one of you dies or
becomes incapacitated. This is not a decision that should be taken
lightly as the answer is probably none of the options provided,
but an ownership option that never appears on the form at all! See
the Estate planning
section of this website for further details on these issues.
CANADIAN LOONIE ACCOUNTS - Another
big question we get from our clients is "Can you can set up a Canadian
dollar account in the US ?" At the heart of this question is the
issue of losing money
when exchanging Canadian loonies into US dollars, which we
address in the Cash Management section . The answer to the question
is essentially, no, you cannot open a Canadian dollar account in
the US whereas in Canada , it is commonplace to open a US dollar
account at a Canadian brokerage firm. Once, we succeeded in opening
a Canadian dollar account at a US brokerage firm but some of the
problems we encountered were:
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It is very difficult to just find a brokerage firm in the
US that will set-up a Canadian dollar account to begin with.
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There is no end of paperwork to set-up a Canadian dollar
account and once submitted, you have to follow-up to explain
to them what you are doing and the standard answer is "we
can't do that".
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The investment holdings are still reported on the monthly
statement in US dollars so you still have the "discomfort"
of seeing your portfolio in US dollars anyways.
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When a dividend is paid or a bond matures, the Canadian dollars
are automatically converted to US dollars at the prevailing
rate plus whatever "shaded" amount the brokerage firm decides.
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To get paid dividends or matured bond payouts converted back
to Canadian dollars is a lot of calls, paperwork, etc.
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The bottom line is the US brokerage firms are just not capable of
opening and managing Canadian dollar denominated accounts at this
time. With all of these factors listed above, why would you want to? 
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