Having Trading Authorization (often called “TA”) is useful in a number of scenarios, but it doesn’t cover every angle either. It’s a minor hassle to set up, but altogether a useful endeavour.

What is Trading Authorization?

Well, you can start with a formal definition here: https://www.investopedia.com/terms/t/trading-authorization.asp. In essence, it gives you control and visibility over another person’s investment accounts (non-registered, TFSA, RRSP, RRIF, it doesn’t matter what kind).

Wait, what? Isn’t that what is normally called “Power of Attorney”?

Well, sort of. Power of Attorney (a handy — and free — guide can be found here) gives you the right to have this sort of control over any sort of account (bank, investment) but most institutions will still require you to fill in THEIR paperwork.

Trading Authorization forms normally require you to specify which accounts, specifically, are being authorized, meaning it’s entirely possible to have TA for a person’s TFSA but NOT their RRSP.

Here are some links describing the process for a number of brokers¹:

• BMO Investorline: https://www.bmoinvestorline.com/selfDirected/pdfs/AuthorizedTradingAgent.pdf
• Scotia iTrade: https://www.scotiaitrade.com/content/dam/itrade/documents/SIT501-NB-ENG.pdf
• QTrade: https://www.qtrade.ca/content/dam/investor/forms/en/Trading_Authorization_Form.pdf
• Questrade: https://www.questrade.com/learning/questrade-basics/how-to-open-an-account/setting-up-an-authorized-trader
• Wealthsimple²: does not seem to support Trading Authorization per https://help.wealthsimple.com/hc/en-ca/articles/5739416847771-Setting-up-a-power-of-attorney

Scenarios Where I’ve used Trading Authorization

Managing Family Finances

Since I’m the prime manager of our family’s retirement funds, I have trading authorization over my spouse’s accounts. The prime reason to do this is so I can see all the accounts from my login³ — even if they are held exclusively in my spouse’s name. This just makes things faster and simpler to do portfolio rebalancing, or even more practically, to get paid in retirement.

My spouse still needs her own login, since things like account statements and tax forms are only available from her login since she is ultimately the owner of those accounts, not me.

Managing My Parents’ Finances

As my parents aged, they passed on management of their retirement assets to me. I sat with them in a BMO branch as they filled in the paperwork⁴ to open their self-directed BMO Investorline accounts. This included filling in BMO Investorline’s paperwork designating me as the Trading Authority over their RRIFs, their TFSAs, and their joint non-registered account.

Having trading authorization on my parents’ accounts gave me my own login to the BMO Investorline platform, and from that screen I could see all the accounts and make trades. It also allowed me to call their support line myself and seek help doing things like in-kind RRIF payments to my folks’ non-registered account.

Limitations of Trading Authorization

Trading authorization isn’t an identity-based concept; rather, it’s an account-based concept. This means, for example, if you have trading authorization over three of your spouse’s accounts, and your spouse opens a fourth account, you do not automatically get trading authorization over the new account. The paperwork has to be filled in for the new account.

Trading authorization is only good for people who are alive. Trading authorization has no meaning if the account holder dies. Once that happens, you lose access to the account. Getting it back usually involves going through the probate process.

Different platforms treat accounts managed by trading authorization differently. In QTrade and BMO Investorline, there was no distinction at all between my and my spouse’s accounts. I had to give them nicknames to help me remember whose accounts were whose. In Questrade, I can only get a unified view of accounts from Questrade’s Edge platform, which although powerful, is a bit of an assault on the senses.

1. all found by googling “trading authorization” <broker name> ↩︎
2. A pretty interesting gap for a company that doesn’t have too many ↩︎
3. Interestingly, Passiv doesn’t care who owns a linked account. If you have the login credentials of ANY user from a Passiv-supported broker, you can link them to your Passiv login. ↩︎
4. One example of only a few where the relationship between BMO and BMO Investorline was useful. ↩︎