You opened an FHSA at a bank and got sold mutual funds with 1.5–2.5% MERs. Find out how much the fee gap costs and what a self-directed escape actually looks like.
Answer 4 questions to get a blunt assessment and escape plan.
The difference between a bank FHSA mutual fund and a self-directed FHSA with ETFs is usually 1.5–2.0 percentage points per year. On a $40,000 FHSA held for 15 years, that's not nothing.
Typical MER range: 1.5–2.5%. E.g., RBC Select Balanced Portfolio (~2.0%), TD Balanced Growth Fund (~2.1%), BMO Balanced ETF Portfolio (~1.7% for mutual fund version).
Wealthsimple Managed FHSA charges a 0.5% advisory fee + underlying ETF fees of ~0.1–0.2%. Fully automatic, no fund-picking required.
One all-in-one ETF like XEQT (0.20%), VGRO (0.22%), or XGRO (0.20%) at Questrade or a bank DI account. Zero trading commissions at Questrade on ETF buys.
Assumes 6% gross annual return, constant balance for illustration. Actual outcome varies with returns and contributions.
| Scenario | MER | Net annual return | Approx. 15-year value | Fee drag vs ETF |
|---|---|---|---|---|
| Bank mutual fund FHSA | 2.0% | 4.0% | $72,000 | −$22,000 |
| Robo-advisor FHSA | 0.65% | 5.35% | $86,000 | −$8,000 |
| Self-directed ETF FHSA | 0.20% | 5.80% | $94,000 | — |
The trap is structural, not personal. Bank advisors selling branch FHSAs only have access to that bank's mutual fund shelf. They cannot put you in ETFs. This is a product-access problem, not bad advice — but it costs you the same either way.
What you're likely holding and what's actually available if you move.
| Bank / Provider | Typical branch FHSA product | Approx. MER | Self-directed arm? | ETFs available there? |
|---|---|---|---|---|
| RBC branch | RBC Select funds / FHSA GIC | 1.7–2.2% | RBC Direct Investing | Yes |
| TD branch | TD Comfort or Mutual Funds | 1.7–2.1% | TD Direct Investing | Yes |
| BMO branch | BMO Balanced or LifeStage funds | 1.6–2.2% | BMO InvestorLine | Yes |
| CIBC branch | CIBC Balanced or Portfolio funds | 1.8–2.3% | CIBC Investor's Edge | Yes |
| Scotiabank branch | Dynamic / Scotia funds | 1.8–2.4% | Scotia iTRADE | Yes |
| National Bank | NBI or advisor mutual funds | 1.6–2.2% | National Bank Direct | Yes |
| Questrade | You choose | Your choice | Already there | Yes — ETF buys free |
| Wealthsimple Managed | Automated ETF portfolio | ~0.65% total | Wealthsimple Trade DI | Yes (Trade) |
Same-bank transfer is often in-kind. Moving from a branch FHSA to the bank's own discount brokerage arm (e.g., RBC branch → RBC Direct Investing) usually means your funds convert in-kind without triggering a sale. Moving to Questrade or Wealthsimple usually requires selling to cash first, which means a brief period out of the market. Your bank charges a transfer-out fee (~$50–$150) and your new broker may reimburse it.
What each path actually involves, based on your starting point.
Friction: Low. Open an FHSA at RBC DI, TD DI, BMO InvestorLine, etc., then request an internal FHSA transfer. Usually in-kind. No transfer-out fee charged internally. You pick ETFs after the move. Downside: some bank DI accounts charge $9.99/trade. Questrade ETF buys are free.
Friction: Medium. Open a Questrade FHSA. Your bank sells your mutual funds to cash, sends the cash to Questrade. Questrade reimburses most bank transfer-out fees if you ask (often up to $150). You're briefly out of the market while the transfer processes (7–14 business days is typical). ETF buys are free at Questrade.
Friction: Low. Good option if you want automatic investing without picking ETFs yourself. MER is ~0.65% total — much better than bank mutual funds, worse than pure DIY ETFs. Wealthsimple also handles the transfer paperwork. Reimbursement for transfer-out fees is available.
Friction: None — but limited upside. Some banks offer D-series or index mutual funds in the 0.35–0.75% MER range. Ask specifically whether any index or passive funds are on the FHSA shelf. Most bank branches don't volunteer this information. Still higher than ETFs, but a meaningful improvement over typical balanced funds.
FHSA transfer rules: Direct transfers between FHSAs preserve your contribution room — the transfer does not count as a new contribution. Do not withdraw and recontribute; that would use your room again. Use the T2033 or institution transfer form to move FHSA to FHSA directly.
If you go self-directed, one all-in-one ETF is the practical default for most FHSA holders.
| ETF | Equity / Bond split | MER | Best for |
|---|---|---|---|
| XEQT (iShares) | 100% equity | 0.20% | Long horizon (5+ years), high risk tolerance |
| VEQT (Vanguard) | 100% equity | 0.22% | Same as above — Vanguard version |
| XGRO (iShares) | 80% equity / 20% bonds | 0.20% | 3–5 year horizon, medium risk tolerance |
| VGRO (Vanguard) | 80% equity / 20% bonds | 0.22% | Same as above — Vanguard version |
| XBAL (iShares) | 60% equity / 40% bonds | 0.20% | Buying a home in 2–4 years, lower risk needed |
FHSA money is earmarked for a first home purchase — if you're planning to buy within 2–3 years, consider a more conservative split or a HISA/GIC for near-term funds. Equity all-in-ones carry short-term volatility risk.
Use the fee comparison calculator to estimate how much your current MER costs over 10–15 years before deciding.
Open fee calculator Fund series decoderThis tool is educational. Nothing here is personalized financial advice. FHSA rules, provider offerings, and MERs change — verify current details with the institution before transferring.