I recently had to convert some USD to CAD in my mother's account, about $200,000, and I had to do it with a standard broker (TD Direct Investing), and they had a very large spread on the USD:CAD, I just checked to see if they still offer the same outrageously poor exchange rates, and the answer is yes.


By the way, if anyone else is ever in this situation, there is an ingenious way to avoid this ripoff, called Norbert's Gambit, which you can google. But it basically involves moving the shares of anything that is traded in both US and Canadian exchanges from a Canadian to a US-denominated accounted (in one direction or the other), which most brokers will do for free. So for instance if you are going from USD to CAD, you buy a stock of an ETF (DLR is a sensible choice) in USD, call them up and get them to transfer to the CAD-denominated account, then sell it, and you have avoided forex slippage, while only paying for two transactions (the buy and the sell). It takes a few days (has to settle before you can sell it), but no one should pay $1000 to do a currency conversion unless it's an emergency.

Some day, maybe the big Canadian brokers will close this loophole, but the strategy has been used for more than 20 years, and I guess the fact that they don't bother closing it means that most Canadian clients are either indifferent to losing $1000 here and there or, more likely, not aware that this is happening.

dtb