My family and I are relocating from Calgary, Canada to Stavanger, Norway as a result of a career opportunity with my current employer. Although this is an absolutely fabulous opportunity for my family and I, it does have some implications on my dividend reinvestment program.
As you know if you have been reading this blog for awhile now, I use the Canadian Shareowner’s Association as my primary broker. The reason I like them is for two reasons – they reinvest dividends into additional shares of the companies I hold AND they allow investors to hold fractional shares. In other words, ALL dividends I receive are plowed back into additional shares. However, as a result of my move to Norway I will become a non-resident of Canada and the CSA’s policies are not to allow investors to maintain accounts for non-residents. In other words, their initial position was that I was going to have to transfer all my assets to another broker who will allow non-residents (most of them seem to). I am sure you can imagine how dramatic this was for me!
It took some time to convince them what they were doing was really silly – I was not leaving forever (2 years) and would be back in Canada and would continue to invest through my entire accumulation years. Basically they were going to fire me as a customer and risked losing all my business. They seemed to agree and have allowed me to keep my accounts open in a suspended status, with a catch.
While my account does not need to be closed, all dividend reinvestment will not be allowed. I will still receive all my dividends however they will not be reinvested while I am a non-resident. This is tough to take, however at least I do not have to close the account. When I get back I will have some work to do to reinvest these dividends but at that point my dividend reinvestment will be reinstated as it was before.
Although I am not totally happy with this solution, it is the better alternative. Transferring all the securities would be a large pain as well as it can be expensive. I think the CSA needs to start thinking more global on this matter – how does it work for baby boomers who buy winter homes in the U.S.? I am sure it comes down to some stupid Canadian regulation that is supposed to “protect” us, but it is definitely behind the times.
(Photo: Rodolfo Clix)