Opinion: Sorry, your life savings are in the mail

financialpost.com:

By Mike Katchen

You probably haven’t heard about it but right now thousands of Canadians are missing their life savings. Hundreds of millions of dollars are stuck in limbo, completely out of their owners’ control. The culprit? That most archaic of payment technologies, the paper cheque.

The Canada Post strike has delivered a fresh reminder about our outdated financial system and exposed a problem that has existed in Canada for years. Cheques have been used to transfer money since at least the 18th century. And though we may live in an increasingly digital world, it’s estimated that Canadians still write nearly a billion cheques each year. But it’s not just people who can’t quit paper cheques. It’s also many financial institutions. Even if you bank online, when you move an investment account (like your TFSA or RRSP) from one provider to another, it’s still likely that behind the scenes your hard-earned money will travel by cheque.

In Canada, moving investments is often unwieldy, interminable and expensive. Instead of electronic transfers being the industry standard, financial institutions are still allowed to use physical cheques to complete registered and non-registered account transfers. A third of account transfers coming to Wealthsimple in 2024 were done by cheque. And the negative impact on consumers is hard to ignore.

To start with, it’s incredibly slow. Even without a postal delay, it can take up to four weeks for funds to arrive where an investor has requested they go. Anxious to finalize the move of your RESP to take advantage of a surging market? Sorry, your cheque is in the mail. Doing things this old-fashioned way lacks transparency and security for the investor. Once the funds are removed the investor has no