POA and RRSP's???

I am a Canadian from birth, moved to USA and now US citizen for 20 yrs. My father has become mentally incompetent, and I am the only POA appointed for him should my mother become incapable to manage his finances, which I hope is not before this issue can be resolved. They reside in BC, but I believe the accounts are managed by an AB branch of RBC securities.


Problem here is RBC Dominion Securities Inc is adamant that because I am a US resident they "are unable to accept instructions or directions on any of Xxxx's accounts held at RBC Dominion Securities Inc. this is because of the rules imposed by the US. We require a letter from her stating that she will not provide any trading instructions or direction on any of the accounts held at RBC Dominion Securities Inc."

Am I the only one that is POA on parents and living abroad? This has got to be a joke? Really, I can not direct how his RRSP money will be taking care of him should my mother be incapable of doing such? How do people get around this? Any link leading to where I can research this sticky issue?

And if there is no way around this, does the BC government get to be directors of his RRSP's by default?

Regards, SPS.

No joke. Cdns living in US have a tough time dealing with RRSps, although it is getting easier. It is indeed an SEC matter.

I suspect if you were an RRSP-holder, RBC would have requested you close your account years ago, or move it to another institution (like TD waterhouse). I suspect your mother will have to do the same, or leave the account as is. Or, you could just provide the letter.

You may need to give POA to a Cdn residnet.

Dear AGN:

Your reply was pretty much in line with the reply I got from RBC today. See below.

" I understand the frustration dealing with legal matters. We have contacted our compliance officer for clarification, they have advised the following:

Due to rules imposed by the US, RBC Dominion Securities can not operate regular trading accounts for individuals residing in the US. The only accounts that we can retain are registered accounts (RRSP, RESP, LIRA) for those individuals that were previously in Canada and have now relocated to the US., however in this situation the registered accounts can only operate on a hold and liquidate basis.

We generally do not permit US residents to hold a Power of Attorney for Canadian resident accounts, it is not perceived to be in the beneficial interest of the client because the account would operated on a hold and liquidate basis only.

It is not the citizenship but the residency that determines if we are able to deal with an individual. If your primary address is the US then we cannot take instructions from you, if your primary address is Canada and you spend the majority of your time here then it may be possible.

I hope this helps clarify your questions.

Regards"

And since I gave up my "residency" status in Canada for tax purpose, I guess the answer is clear...I can't fight the government of either country at this point. It's a no win!

Do you know who then becomes the "POA" if another replacement is not appointed in my place? Is it the BC govt because they reside in BC? AB govt because that is the office who they have their finances through?

Thank you for your advice too! Much appreciated to get from two sources similar answers.

Its NOT a no win situation at all. Just for RBC.

As I said, RBC is taking the position of NOT allowing US residents to manage even their own RRSP if they are in US, so it stands to reason that they would not allow US POA of another RRSP.

At this point I would be contacting TD Waterhouse, which does not have the RBC restriction (which is purely a business decision): "The only accounts that we can retain are registered accounts (RRSP, RESP, LIRA) for those individuals that were previously in Canada and have now relocated to the US., however in this situation the registered accounts can only operate on a hold and liquidate basis."

TD Waterhouse, for example both allows new RRSP clients (I was one), and allows trading (with very minor restrictions). They might allow POA.

You would need to talk with someone in their "US compliance" group.

I know little about RRSP's, having moved to the USA when I was very young and before I was ready to begin such saving. I'm sure AGN knows more than me but there is a slight inconsistency between AGN's two replies that perhaps should be clarified. The first reply says that the rules are an SEC matter; the second reply says that the difference between RBC and TD Waterhouse is a business decision (so presumably not a matter of SEC regulation). It might be good to clarify to what extent this is a matter of business discretion and to what extent SEC regulations rule.

As for who becomes the POA if the OP cannot, wouldn't that be up to the mother? As far as I can tell, the mother is still in charge for the moment and this is all just hypothetical in case the mother, too, becomes incapacitated. The mother perhaps should be considering appointing a trusted Canadian resident to act as POA in such event. If the mother is considered at risk to become incapacitated, then is there someone local already empowered to keep an eye on them? Could that person be appointed POA?

No inconsistency in my statement. allow me to expand (and, yes, I am quite expert on this topic).

The SEC forbids Cdn brokers from dealing with US residents in non-registered accounts. Period.

The SEC (and each the various state SECs) , according to rules they have each determined (which took about 7 years to finalize), to allow Cdn brokers to deal with US clients in registered accounts, IF the Cdn brokers wish to adopt/comply with the regulations each state has set up. Holding and selling is not considered dealing.

TD Waterhouse has made the decision that they will have specific brokers compliant with all 50 states. RBC has decided not to adopt this policy, but allows you to keep the account. many other firms have simply decidedto drop their US clients altogether. Some have decided to comply in some of the "big" states (FL, CA, AZ) because of the number of Cdn clients there.

So, the inconsistency is indeed with how each brokerage is deciding to comply (or not) with each states regs on this issue.

On the issue of POA. As cal said, the state is not going to get involved a this point, she is not becoming a ward of the state.


Explore other brokerages, and if unsuccessful, find a Cdn POA you and her trust. The fac ttaht you are in US would seem to me that she needs someone closerr to make other non-financial decisions on her behalf in a timely fashion.