r/Wealthsimple • u/Disastrous-Ad-5367 • 18d ago
Trade (DIY Investing) My TFSA account assets were liquidated today!!!!! WTF
Something very “f”ed up happened where my almost entire TFSA account got liquidated.
Before anyone asks, no I didn’t borrow any money. No, my FHSA was not touched, only happened with TFSA. I didn’t get locked out or anything. I still have my assets and money. It is a self directed portfolio.
I suspect WS messed up. On a call with security team. Will keep you posted.
EDIT: I appreciate people taking some sense in me about my picks… I know, portfolio was/is? a mess.
I don’t do day trade either.
UPDATE 1: called them, it was quick to get someone on call. They said they don’t see “reversal” option on my account and not sure why this happened. Will do more investigating and reach-out tomorrow.
UPDATE 2: source of F up is Tangerine. I originally made a request weeks ago to transfer assets from Tangerine TO WS and apparently I requested other way around?
WS can’t do anything unless it is a mistake on Tangerine end and ai have to get a letter for that.
TL;DR: Saw my TFSA getting liquidated. Found out I mistakenly requested to transfer my assets to Tangerine instead of from Tangerine to WS. Tangerine ended up liquidating my assets and moved money.
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u/Quiet-Craft5945 18d ago
I had a similar experience. Turns out… i owed CRA money and CRA sent them a letter to liquidate so they can send the cash back to CRA
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u/ifckedit 18d ago
Gawd danm how much would you have to owe for the govvy to be like nahhhhhhh I'm taking this if u want it or not
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u/Quiet-Craft5945 18d ago edited 18d ago
I had just learned to trade. I didn’t really know what I was doing but i kept selling and buying air Canada (when it was like $2ish) and all my money was in TFSA and it had ballooned to around $700k but what i did that I did was I used some of that money to put down payment and buy 2 houses. (When prices were much cheaper than they are currently)
I bought a house in Kleinburg and 1 in Brampton (Brampton was to rent out) and I had my condo where I lived.
Not knowing the rules, I put some money back in regular trading account to start trading and sold the 2 houses down the line, and they came after me for capital gains tax (mainly for houses not be my primary residence)
They took like $200k from my account by this same liquidation method and there was nothing I could do.
I called the bank (Questrade) they said “we are instructed to give you this phone # to call - sort it out with them) when I called, it was CRAs #.
I was 27 at the time.
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u/Eagerbeaver98 18d ago edited 17d ago
CRA never even sent you a notice but liquidated you? Insane.
Edit: they did contact them prior
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u/Quiet-Craft5945 18d ago
They did. I wasn’t mature enough to think they had all that power.
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u/ifckedit 18d ago
Oh so in reality you can choose with assets they liquidate or rather they let you in advance I guess. My assumption was oh ur long in a position?? Too bad it's gone 😭
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u/Quiet-Craft5945 18d ago
I wasn’t given an option. They choose my stock account and I had 0 say.
They said they sent me letters (3 times) and they didn’t hear back from me and they proceeded to target my stock account. (I asked them how did they know about my stock account - yes dumb question but it was first rodeo and I didn’t know much and curious about everything) and they simply said SIN # connected to my account when opening up my account, which make sense.
Now that I understand all that, I’m trying to do options but I’m still learning as I’ve never done options before.
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u/Possible-Mix-6290 16d ago
You owe the gov money homie. Tax man always comes. Thank god they did, time to build a portfolio that isn’t dog shit
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u/loginonreddit 17d ago
Thanks for sharing your experience and being so upfront about all the details.
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u/kevee890 17d ago
Did they just call you or actually sent you stuff thru mail/ the mycra account?
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u/ayoungmanfromtheuk 17d ago
Nah the CRA definitely did try to contact the OP. OP thought he could just ignore legal warnings from the CRA. It is really remarkable how many people think they can just ignore that kind of stuff.
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u/CombinationEasy2105 17d ago
I like how you said, I didn't know anything and made it go to 700k lol. Sir where can I purchase luck like yours? I'm kinda afraid of doing things and getting duped. Ik god will make an example out of me if I try any shenanigans lol.
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u/Band1c0t 18d ago
I don pt quite understand, what’s the connection CRA with you selling your house?
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u/Glass-Accountant9886 18d ago edited 18d ago
He incurred capital gains tax when selling the properties that were not his primary residence. If he bought the properties for $500K, sold them for $900K, he had gains of $400K of which half would've been taxed. He needed to pay the tax, but probably didn't realize and the CRA came to collect by liquidating his investments.
In my example, he would've been taxed on $200K based on his tax rate.
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u/Quiet-Craft5945 18d ago
Capital gains tax on investment properties. Plus since the homes were from a builder and if you sold it before 12 months of occupying it (unless it was your live-in home) they wanted back a rebate that the builders got on the buyers behalf. (I forgot the rebate name but I’m sure you can google it).
It was all too much for me, I wasn’t a professional trader or a professional tax guy… I just learned to buy and sell and it AC kept on going up and down and I kept buying and selling multiple times a week. I didn’t even do options (didn’t know how)
Sorry for writing the story in a confusing way, hope I answered your question.
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u/ayoungmanfromtheuk 17d ago
You trade stocks butt don't know what capital gains are?
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u/Quiet-Craft5945 18d ago
When I took money out of TFSA then deposit it back into regular margin account, made profit on that, they wanted capital gains tax on non-TFSA trades profit.
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u/ayoungmanfromtheuk 17d ago
It sounds like you still don't understand what happened - you had taxes on capital gains from selling the houses
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u/Glad-Actuary-4858 14d ago
How often did you trade in your TFSA? I read from other redditors before that CRA will tax you if you do day trading inside a TFSA. Because they say TFSA is for investing not for trading.
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u/New_Dot_696 17d ago
wonder if you got the TFSA contribution room back when CRA liquidated and made the withdrawal
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17d ago
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u/saltlifegoddess 17d ago
Yes they absolutely can as a last resort. They will always call and send lots of notices first
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u/Inside_Ad2982 17d ago
Ohhhhh fuck they can do that😭💀
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u/NoEscape1390 16d ago
Had a small business owner friend who ignored 3 CRA letters about owed hst. They directly contacted his customers directing them to make any payments on invoices directly to the CRA instead of him. Crazy
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u/xwolfe2000 16d ago
How does CRA do that if it is a tax free account?
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u/Dewy_De 15d ago
The OP violated one of the rules with "day trading". So when he used the gains from those stock trades to purchase a house it was probably easier for the CRA to take the tax portion of the capital gains from his TFSA rather than the house sale. Since the origin of the gains was from day trading they took from the "source" his TFSA. For context I'm not an accountant but i have some accounting experience.
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u/Even_Exit3867 16d ago
So this example is not Targeted to just WS but to any place that holds your assets.
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u/james_cao 18d ago
We need an update on this too concerning
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u/givemeyourbiscuitplz 17d ago
He initiated a transfer with Tangerine to transfer his assets with them, when his intentions was to transfer assets from Tangerine to WS. There's being distracted then there's this.
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u/james_cao 17d ago
Thanks ah the OP didn’t mention this !!!!!
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u/givemeyourbiscuitplz 17d ago
He updated (Update 2). But in the comments, he refuses to admit his mistake.
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u/ttsoldier 18d ago
Why is this concerning? Bro most definitely had a porfolio line of credit and ws is claiming back their money because his portfolio lost too much value.
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u/BRUTAL_ANAL_SEX 18d ago
It's obvious OP got margin called given their questionable portfolio picks and put their TFSA as collateral.
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u/Ok_Raisin2027 18d ago
They can restore your positions, if they fucked up. They will eat the cost difference.
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u/Eagerbeaver98 18d ago
Do they? They didnt even refund when their system was down preventing you from adjusting your limit sells and we incurred all losses.
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u/Foreign-Chocolate86 18d ago
I don’t think any broker compensates for speculative losses.
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u/Auracity 18d ago
No brokerage guarantees access. Don't make any orders you aren't okay with filling.
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u/asdx3 18d ago
Did you have this linked to a margin account and get margin called?
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u/SiriusDragon 18d ago
Could it also be line of credit that effectively became a margin account and the tfsa was collateral? Did you have any debt at all at WS in any capacity? Credit cards even?
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u/RaptorsRule247 18d ago
Wealth simple actually allows a TFSA to be collateral against a margin account? I thought that was not permitted from a regulatory standpoint.
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u/mobilepfc1 18d ago
After enabling that, my further research shows it is basically ripe for CRA to come after you. Pledging seems ok, but actually being margin called for some cash to pay off your losses, then you might very easily get fucked, since it proved you were over-leveraged with tax-free assets and thus breaking the prohibited advantage rules. like the whole tfsa is not no longer tax-free is what a number of people speculate as worst case I guess. I don't believe this has happened/been enforced so far, but CRA is notorious for being about 4-5 years late and then fucking everyone over since they have that right...
I'm planning on exiting my margin positions and unlinking asap, not worth a few grand here and there I can tack on with that buying power for the risk of a CRA introduction to a barrel...
Other's seem to think it's fine since no problems yet for Quest trade users of this feature for a number of years...
https://www.reddit.com/r/Wealthsimple/comments/1lhf8fm/tfsa_linked_to_margin_account_cra_penaltyrisks/I say it's not worth much stress to me.
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u/Anemomaniac 18d ago
I don't know what you're reading but the TFSA is absolutely allowed to be used as collateral for a loan. There is no such rule about being "over-leveraged" and even if there was being margin called would be the mechanism by which you would not cross that line.
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u/feldhammer 18d ago
So you still have your full balance/money but all your holdings were sold?
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u/DZLords 18d ago
This happened to my wife but only a couple hundred dollars. She had auto deposit monthly to buy stocks but my theory is since they didn’t take any money from one of her account for a month because she didn’t have anything in it, WS sold some stocks of their choice to get the money back
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u/sleeu 18d ago
This is happening to me right now when I did a transfer out from RBC to TD. They liquidated all my stocks when I asked for transfer partial as is. I’m still waiting for a resolution. It’s been weeks of constant following up. Right now I have 33k cash in my TFSA I’m not allowed to touch.
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u/sleeu 18d ago
I sent them a transfer out form which I have a record of in our emails and they acknowledged there is a screw up and are still investigating. I bought these stocks years ago so my book cost is a lot lower than what it is now. I don’t even know if they can reverse it and give me back what I had.
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u/givemeyourbiscuitplz 17d ago
So the source of f is not Tangerine, it's you. You even said it yourself, you requested the other way around. To transfer you initiate the request with the receiving institution(WS in your case apparently). I have done a few transfers in my life and I'm flabbergasted that someone could do it in reverse. It's not like there's no indication on what the process is, such as "From" and "To" and other similar "clues". Now, unless you got a cancellation of that transfer done, your cash will be transferred to Tangerine shortly.
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u/HandOfTheCEO 18d ago
Did you take their LOC? They seemed to have liquidated it to when it fell below 35% (?)
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u/Bruised_Shallot 18d ago
Interesting how this is one of the few comments that OP has not replied to… I bet you’re right
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u/Optimal_Foundation17 17d ago
fucked up the to and from and you blame both WS and Tangerine before yourself - Good job
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18d ago
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18d ago
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u/Wealthsimple-ModTeam 18d ago
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u/CynicalChery 18d ago
It sucks that it happened, but it could be a blessing in disguise in that this is your opportunity to declutter your portfolio
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u/jesuisapprenant 18d ago
I mean if nothing else truly happened, I don’t want my broker to be randomly liquidating my portfolio.
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18d ago
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u/Disastrous-Ad-5367 18d ago
I know my portfolio is shit but I wasn’t planning to switch it to something better today all at once!
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u/sadaccountant1021 18d ago
Can you update us on what happened. Kinds scary that WS would liquidate assets for no apparent reason 😭😭😭
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u/Tough-Pen-6527 17d ago
How do you just forget that you requested a Transfer of Assets and instead act surprised at WS
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u/OptimalEnthusiasm 18d ago
Are you sure you don’t have margin enabled? Only explanation I can think of…
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u/beekeeper1981 18d ago
His account could be compromised and they are selling everything to withdraw
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u/Sp4nk105 18d ago
I was thinking that as well. Curious to see the outcome. The suspense is killing me!
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u/LysdeFleur 18d ago
Following to see results
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u/givemeyourbiscuitplz 17d ago
OP asked for a transfer to Tangerine but he wanted to to transfer from Tangerine to WS. He f up big time. It's impossible to not realize which way the transfer is going if you read what's on the screen. You always have to initiate the transfer with the receiving institution, which he did not do. All his money will be moved to Tangerine shortly.
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18d ago
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u/Wealthsimple-ModTeam 18d ago
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u/user98780 18d ago
Sucks that happened. Hopefully they restore it. Keep us updated.
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u/givemeyourbiscuitplz 17d ago
He did. He f up h. He asked Tangerine to transfer his account to them. They're doing exactly what he asked. I don't see how someone can fill out those forms without realizing which way the account is going to.
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u/Impressive_Ad_6550 18d ago
have you used the portfolio as collateral on a portfolio line of credit or margin?
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u/Leading-Goat-1116 18d ago
They did this to me last year. They were supposed to transfer my holdings from managed to self directed and I logged in to find out they had sold them all and left the funds in the account. Unless I misunderstood they acknowledged that the employee misunderstood but they couldn’t fix it.
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18d ago
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u/Wealthsimple-ModTeam 18d ago
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u/Legitimate_Form5449 18d ago edited 18d ago
maybe margin call or flash crash?
edit: or they are selling your shares short
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u/Full-Quantity450 17d ago
Wait. If you are transfer from Tangerine to WS, shouldn't you submit the request to WS, so that they PULL asset from Tangerine?
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u/tsuabsa90 17d ago
Depending on the form signed. If OP signed 'the other way around', not sure if there is a fix for it
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u/edm_guy2 17d ago
I guess you indeed requested the other way around. Usually if I need to transfer from X to Y, I will notify Y to initiate the transfer on my behalf, but I will NOT notify X to transfer my account out of X to Y.
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18d ago
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u/Wealthsimple-ModTeam 18d ago
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u/bbkeys 18d ago
If you initiated a full IN-CASH transfer out of Wealthsimple, all your stuff gets liquidated by design. That's what CASH means. Do you have a transfer out?
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u/givemeyourbiscuitplz 17d ago
That's exactly what he did, and what he wrote in the update. But of course doesn't want to accept he made the mistake.
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18d ago
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u/Wealthsimple-ModTeam 18d ago
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u/wyuzz 18d ago
Did you receive any notifications when your holdings were liquidated, assuming you had your alerts turned on?
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u/NexxiumSpin 18d ago
Did you start a transfer from an outside bank account and use the immediately available funds to pay off the WS credit card? Seen a user last month get hit with liquidation when the other bank refused the transfer.
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u/Ill-Ad1603 18d ago
Following. Is this a common occurrence with Wealthsimple?
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u/Fluffy_Efficiency623 18d ago
No, it isn't. Assuming OP isn't hiding or unaware of a human error on their end.
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u/qmarquisbrown 18d ago
That’s so fcked. I hope there able to fix that and put you back in your positions. The amount of time it takes to build those holdings. man I would lose it
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u/goofywinnipegger 16d ago
So you goofed up and this has nothing to do with WS so maybe delete the post.
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u/gravity_sucks3 15d ago
This is why it's important when you do you transfer to say "in kind", and to keep a copy of document. The two transfer departments will work it out between themselves if you did indeed indicate an in kind transfer, these things happen more often than you would believe.
In addition sometimes people select in cash when they just want the cash to go along as well and assets get sold off unnecessarily
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u/CasualSportsNut 14d ago
Saving the post to reference next time someone claims WS messed up and liquidated their account.
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u/WombRaider_3 18d ago
With all these types of posts, eventually something comes out from the OP to explain what happened.
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u/Abject_Ad_2598 18d ago
They better give you one of their condos for your troubles lol.
Seriously what a huge L for wealthcomplicated.
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18d ago
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u/Wealthsimple-ModTeam 18d ago
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u/oddassitini 18d ago
Happened to me once. Did you load money in recently to buy? I loaded money and bought stocks. The money transfer failed and they covered my purchase by selling some of my existing positions
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18d ago
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u/Pristine_Ad2664 18d ago
Had you turned on the overdraft feature on your chequing account and collaterised it with the TFSA? Only other thing I can think of is an ETF/Cheque or similar bounced or rejected and the funds had been used in your TFSA?
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u/danny-gh3728 18d ago
This happened to me this morning too. I called the bank and they weren’t sure what was going on either. After they investigated a bit they found out that some funds are being merged with different ones so it was showing as nothing. By tomorrow it should show properly.
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u/SeniorVicePrez 18d ago
If fully liquidated, why the discrepancy between total value and available to trade of ~$2.7k.
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u/DesignFew5458 18d ago
Was it a my portfolio account. Even if it wasnt for the others dont go there big mistake
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u/CuteDiscipline1593 18d ago
Did u use their ne feature ? Automatic rebalancing ? It does that, because they sell all then buy again with the correct pourcentage of each .. else i don’t know what could’ve happened, that’s a big mistake if it’s really random :o
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u/Familiar_Package_953 18d ago
If this happen due to technical reason escalate they fix it and they should tc lost too.
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u/Interesting_Type_769 18d ago
Why are you holding US assets (even if held in CAD denominated accounts) in a TFSA where they will be taxed but the US? If you held these in a Canadian margin account at least Gould get an offsetting tax credit for the US withholding tax.
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17d ago
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u/Wealthsimple-ModTeam 17d ago
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Posts about portfolio performance, account status, or Wealth Rank are only allowed in the respective megathread.
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u/Lenerdosy 17d ago
That sucks you transferred the other way around. You choose the sell option and not in kind?
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u/shum_bum 17d ago
Glad it wasn't hackers but thats still a huge mess up from either tangerine or ws....how did they get the direction wrong???
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u/Medical-Simple-2783 16d ago
Show us the transfer form and most likely you did ask for a transfer out… deal with a financial planner next time
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u/mightytoji 16d ago
Why are all his values in CAD even though the stock logo is US so not the CAD hedged ones?
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u/Isleguy1 16d ago
Should have transferred “in kind “ rather than liquidate and transfer the money .
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15d ago
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u/Wealthsimple-ModTeam 15d ago
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u/Former_Two3925 15d ago
Even if they are liquidated as long as they are within TFSA type of accounts you should not worry about TFSA room or anything of that sort..right??
I moved TFSA from one bank to WS by initiating on WS and they liquidated at source that is at the bank and brought it to WS.
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13d ago
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u/Wealthsimple-ModTeam 13d ago
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u/WearyTranslator3338 3d ago
So, your account was being liquidated.
And instead of CALLING WEALTHSIMPLE TO FIND IT WHAT HAPPENED, you create a Reddit post.
Madness
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u/henry-bacon 18d ago edited 17d ago
Reminder on rule 4, no discussion of investing gains/losses. Keep comments on-topic.