Manulife mix-up: $170K retirement nest egg transferred from account without warning

A Toronto woman’s retirement nest egg was transferred out of her RRSP account after Manulife Financial wired more than $170,000 to a foreign third-party stock transfer company, putting the funds in limbo amid an ongoing spat with the financial services giant.

Dilhani Dodangoda told CTVNews.ca she has been a Manulife client since 2001, opening multiple accounts for her retirement savings and investments. Last December, she decided to invest the balance of one of her Manulife RRSP accounts, about $5,700, in Equiton, a private Ontario-based real estate investment trust (REIT).

“I’ve never invested in a private REIT before. I didn’t want to risk a lot of money. $5,700 seemed like a safe amount,” Dodangoda told CTVNews.ca in an interview. “I wanted to take a risk and test it out.”

After more than a decade of doing IT work for Deloitte, Dodangoda was preparing to launch her own small business. She wanted to consolidate the retirement savings she accrued through her employer with another RRSP account.

“What I was expecting to happen was that the Equiton deal would have gone through already, so there would only be a little bit of money left, if anything, in that $5,700 RRSP, and that would get consolidated with the other one,” she said.

A call from Manulife in early January informed Dodangoda that her accounts had been merged. She then realized she had not checked with Equiton to make sure they received her investment. She was told the transaction is in process.

She said her two RRSP accounts were consolidated before the money was removed.

Dodangoda said Manulife advised her to give Equiton the number for the newly merged account. She resisted at first, wary of potentially allowing access to the bulk of her retirement funds.

“They said, ‘No, that won’t happen because we will call you when we get the request from Equiton,” she said. “In February, I got a letter from Manulife indicating that they had withdrawn my full RRSP account, and transferred the money to another third-party that Equiton uses for transfers, called Computershare.”

Word that the bulk of her retirement savings was now in the hands of an unfamiliar Australia-based stock transfer company came as a shock for the new entrepreneur who had just left her steady IT job with Deloitte.

“I obviously freaked out. In my world, that is a lot of money,” Dodangoda said. “If it was the $5,700 I expected to transfer, I knew I was taking a risk with that. But to have all my money removed, that wasn’t what I wanted.”

She said a Manulife account representative told her a box was checked on a form indicating the balance of her account should be transferred to Computershare when requested, but no such box was checked on her copy of the records.

“She said, ‘I don’t know why no one called you,’ and ‘our policy is anything over a $100,000 transfer needs to be verified with the account owner.’”

Dodangoda said Manulife did not attempt to contact her at any point to confirm the details of the transaction, or for permission to transfer funds to a third party. A call to Equiton confirmed to her that they had no information about the larger account that had been emptied.

She believes Manulife applied her stated intention to clear out the smaller, now closed, account to the larger one containing the bulk of her retirement savings.

Now, more than five weeks after her account was emptied, she feels no closer to recovering her money.

To make matters worse, she said Manulife has told her that there was “no error on their part” and “there will be no correction or reversal to the transaction.”

Dodangoda said she has been in touch with Computershare, through Manulife, to request that any erroneously transferred funds be returned to her, and has been reassured that will happen.

“It was sort of like they were putting it on me at that point to follow up on it, when it was their mistake,” she said.

The fact that Dodangoda has been told she will not lose her savings has done little to restore her confidence in one of the Canada’s largest asset managers.

“It tells me that there is no due diligence. I am really disappointed,” Dodangoda said. “The fact that they are not willing to admit there is a problem with their process, that blows my mind.”

She said Manulife told her in an email that a 10-day investigation into her situation was opened on Wednesday.

In the meantime, she wants the company to use their reserves to restore the funds that were transferred out of her account without her authorization, and compensate her for the capital gains she might have received had the money remained in her RRSP.

“There are two reasons that people put money into RRSPs, to keep your money safe and to make it grow. They are failing me on both of those points,” Dodangoda said. “My money was not safe with them. And it’s not growing now, so long as it’s not in the market.”

In a statement to CTVNews.ca, Manulife spokesperson Beverley MacLean said the matter is under investigation and the company is working to resolve the situation.

“Manulife takes the responsibility of protecting the privacy of our customers very seriously, and cannot discuss specific details of any case,” she said.

Let's block ads! (Why?)