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Haventree Bank: Canada's Newest June 11, 2018
June 12, 2018
8:33 am
Nehpets
Ontario
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Press Release Canada's Newest Bank

Haventree Bank Website

Initial GIC rates not very inspiring at 2.51% one yearHaventree.JPG

June 12, 2018
10:34 am
Doug
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Thanks for posting this update, but I would've been completely surprised, blindsided even, had this been a new bank application that commenced operations under my nose. Indeed, a quick search using this forum's Google Custom Search function (a great feature that is far superior, in my view, to many message boards' native search functions!) revealed that I'd posted initially here on the application (see: https://www.highinterestsavings.ca/forum/general-financial-discussion/equity-financial-trust-company-applies-to-convert-to-schedule-i-bank/), only back in November 2017. Given that it was little better than 6 months ago, that's actually relatively quickly. 🙂

Granted, this was a conversion from a federally regulated trust company to a Schedule I chartered bank, with relatively minor/nuanced differences as both were able to make loans/mortgages and accept deposits to/from retail customers. sf-cool

Given that current practice on these forums is to consolidate forum threads relating to "news updates" (not necessarily user-specific questions) into a single thread, I'm going to request to the forum's administrator, Peter, that he consolidate your post and my reply beginning as post #4 into https://www.highinterestsavings.ca/forum/general-financial-discussion/equity-financial-trust-company-applies-to-convert-to-schedule-i-bank/ as I think it's much better to provide updates to pre-established news, discussion topics, and conversation. 🙂

As far as rates go, while they might not be in the "top 3" in Canada, 2.51% is actually a really good 12 month GIC rate - it's in the "top 3" in the broker-held, nominee form deposit space and in the "top 10" in comparison to the direct-to-consumer space. You have to remember that a lot of deposits are held in the broker channel, deposit brokers to be sure but also with investment advisors/advisers and self-directed discount brokerage accounts. Moreover, funds in a LIRA or RRSP in those accounts cannot be easily transferred out.

It should be noted that Equity Financial Trust Company is separate from Equity Trust Company, which is a competitor but which also offers registrar/transfer agent/other custodial services and has since been renamed TMX Trust Company as it's now a wholly-owned subsidiary of TMX Group Inc., operate of the Toronto and Montreal stock exchanges.

As an aside, I remember chuckling at and enjoying Loonie's reply in response to my post. 😉

Cheers,
Doug

June 12, 2018
11:03 am
Rick
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Maybe I set the bar a little high, but before an institution can call themselves a bank, they should AT LEAST offer some sort of savings and/or chequing account. From what I see, unless you want a mortgage or GIC you're SOL. No RSPs, No TFSAs, No Chequing, No Savings, linking is a question. Decent rates but not worth adding another FI to the ones I have already.

June 12, 2018
11:18 am
Doug
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Rick said
Maybe I set the bar a little high, but before an institution can call themselves a bank, they should AT LEAST offer some sort of savings and/or chequing account. From what I see, unless you want a mortgage or GIC you're SOL. No RSPs, No TFSAs, No Chequing, No Savings, linking is a question. Decent rates but not worth adding another FI to the ones I have already.  

Yeah, that's too high high a bar, Rick. President's Choice Bank doesn't offer high interest savings accounts (nor does it partake in the direct-to-consumer space with respect to the same).

My "wish" was that the self-directed discount brokers, particularly those offered by the major banks, had to offer GICs and/or HISAs offered through FundSERV by all Canadian banks and trust companies. With Scotia iTRADE, I've got access to Concentra Bank, Equitable Bank, Home Trust, and other bank GICs, but not Haventree, Street Capital, and others. That's not right. It punishes the smaller deposit takers. If they want to enforce $100,000 deposit limits per customer, that's absolutely fine, but I think they need to be required to increase their offerings (as well as offer Series F funds without trailer fees). It's asinine that Scotia iTRADE gets to collect a 0.25 trailer fee on HISA deposits for the advice they don't provide! 🙁

Cheers,
Doug

Disclosures: I own shares in Bank of Nova Scotia, parent of Scotia iTRADE through its Scotia Capital subsidiary; Street Capital Group, parent of Street Capital Bank of Canada; other major Canadian banks; and, I was previously licensed within B.C. to sell mutual funds through HSBC Bank Canada's mutual fund dealer, HSBC Investment Funds (Canada) Inc.

June 13, 2018
8:42 am
Norman1
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Doug said

… With Scotia iTRADE, I've got access to Concentra Bank, Equitable Bank, Home Trust, and other bank GICs, but not Haventree, Street Capital, and others. That's not right. It punishes the smaller deposit takers. If they want to enforce $100,000 deposit limits per customer, that's absolutely fine, but I think they need to be required to increase their offerings (as well as offer Series F funds without trailer fees) .…  

Scotia iTRADE offers GIC's from their competitors CIBC, Royal Bank of Canada, Bank of Montreal, and National Bank! I think they are quite agnostic as to who they receive the customary ¼% GIC brokerage fee from.

There's no electronic marketplace for GIC's like there are for stocks. I think it depends on the smaller deposit takers setting up the required connections to accept electronic GIC orders from Scotia iTRADE.

There's zero chance of Scotia iTRADE offering F-series (zero trailer) mutual fund units under their current commission schedule. With 0% up-front purchase commission, 0% commission when sold, and zero annual account fee, there is literally nothing in it for them.

June 13, 2018
4:33 pm
snoopy
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Did you see who they are leading the money too . high risk loans !
is it cdic insured dose osfi regulate this place ? are the customer who get the mortgage stress tested as well as the fi

June 13, 2018
9:56 pm
Norman1
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snoopy said
Did you see who they are leading the money too . high risk loans !
is it cdic insured dose osfi regulate this place ? are the customer who get the mortgage stress tested as well as the fi  

I believe it is "higher risk" loans:

Welcome to Haventree Bank, we provide mortgage solutions for hard-working Canadians.

We are a mortgage lender that partners exclusively with mortgage brokers and their clients. Our goal is to be the first choice for brokers and borrowers in the non-/near-prime mortgage market. …

It is no different than the kinds of mortgages Home Trust Company, Home Bank, and Equitable Bank target.

Haventree Bank is on the list of CDIC members, just before Home Trust Company and Home Bank.

Haventree Bank is just three days old. OSFI has not updated its web site yet. Until three days ago, it was Equity Financial Trust which is among the federal trust companies in OSFI's Who We Regulate list.

June 14, 2018
7:33 am
Norman1
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OSFI has updated their list.

Haventree Bank is now listed among the domestic banks in OSFI's Who We Regulate list.

June 14, 2018
8:56 am
snoopy
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what I am finding different is that they lend to people with

"Bruised Credit , Thin or No Credit "

I do not recall eq or home capital advising for people with this type of credit

but maybe I am about to learn some thing here . do home capital and eq have adds for people with bad credit .

and do the higher rate at one fi to an other represent a higher risk with a higher interest rate

when I have asked this the fi say that unlike every thing in the free enterprise system . you can get a higher rate with out increased risk

is this true ?

June 14, 2018
4:18 pm
Norman1
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snoopy said
what I am finding different is that they lend to people with

"Bruised Credit , Thin or No Credit "

I do not recall eq or home capital advising for people with this type of credit

but maybe I am about to learn some thing here . do home capital and eq have adds for people with bad credit. …

Alternative lenders, like Home Trust and Equitable Bank, don't usually advertise their lending products directly to consumers. Instead, they develop business relationships with agents, like mortgage brokers, who then deal with consumers.

The type of lending they like to do is not a secret, especially to mortgage brokers.

They are open about their lending. One can see this on Equitable Bank's home page:

Home Purchase

Whether you’re self-employed, a new Canadian with limited or no credit history, or someone with a low credit score, we’re here to provide mortgage financing solutions to help you achieve home ownership.

This is from Home Trust's mortgages page:

… Most of our [mortgage] customers usually fall into one of a few groups:

• Small business owners who cannot prove enough income to qualify with a major bank;
• New immigrants to Canada who do not have a credit history;
• Homeowners who have built up equity in their property but do not meet income requirements of the major banks; and
• Canadians with former credit difficulties that have since been resolved, including discharged bankrupts.

Home Capital's CEO gave interesting details about the alternative mortgage lending business in an interview I wrote about previously.

June 14, 2018
7:13 pm
snoopy
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if they all do this type of leading how do you asses the risk from one to the other ?

Dose a higher rate mean higher risk is that what the market is telling you when one fi has a higher rate than an other ?

June 15, 2018
6:34 pm
Norman1
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One can't easily assess the risk because it requires private information about their loans which the financial institutions don't make public.

I use the next best thing: The debt ratings from bond rating agencies like DBRS, Fitch, and S&P.

Deposit interest rates have a very loose connection with risk. Late last year, CIBC was paying 3% on its Simplii Financial HISA deposits. That was double the 1½% that Home Trust was paying on its Oaken Financial HISA.

CIBC had an investment grade rating of AA. In contrast, Home Trust obligations were considered to be junk with a non-investment grade rating of BB (low).

The 3% from Simplii Financial HISA deposits was a promotion and not an indication of higher risk.

June 15, 2018
8:06 pm
AltaRed
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Norman1 said
There's zero chance of Scotia iTRADE offering F-series (zero trailer) mutual fund units under their current commission schedule. With 0% up-front purchase commission, 0% commission when sold, and zero annual account fee, there is literally nothing in it for them.  

I will suggest it is not the discount broker that won't offer F class. It is actually the mutual fund companies themselves that won't offer F class because of the heat that comes from the commissioned channel, e.g. full service brokerages, wealth management companies et al. At one time, the predecessor to Scotia iTrade was E*Trade Canada. I bought F class in the late 90's but they had to stop when the mutual fund companies would not let E*Trade sell F class any more to the retail public.

Lastly, Scotia iTrade (and some others) offer Mawer mutual funds (among others like Beutal Goodman) that do not pay trailers either. No up-front purchase commission, 0% selling commission, 0% account fee, 0% trailer fee. Why they sell them is beyond me, but I have MAW104 in my Scotia iTrade account.

June 16, 2018
10:04 am
Norman1
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I think E*TRADE Canada would have discontinued offering the F-series mutual fund units on its own or started charging transaction commissions on them.

I don't think that loss leader retailing trick works with investments. I'm not going to buy $100,000 of conservative Mawer funds and, while I'm on their web site, start trading stocks daily and pay them $13 to $20 a day in commissions.

You are right: Mawer does not pay any trailer commissions. However, I don't believe they pay zero.

I suspect they pay a negotiated account maintenance fee to compensate the dealers. Could be something like $50 or $100 per year per account. It is not a percentage of the account or per transaction. So, it is technically neither a trailer nor a commission. This is from page 9 of Mawer Mutual Funds 2017 Annual Information Form:

Sales Commissions and Trailer Fees

No trailing commissions are paid in respect of Series A Units, Series O Units or Series S Units, and there are no sales charges or other commissions associated with the purchase of Series O Units or Series S Units.

If you purchase Series A Units through MDIL [Mawer Direct Investing Ltd., our wholly owned subsidiary and a distributor of units of the Funds], you will not be required to pay any sales charge. If you purchase Series A Units though another authorized dealer, you may have to pay a sales charge to your dealer and the amount of that sales charge is a matter to be determined between you and your dealer. However, in certain circumstances we may, in our discretion, pay the sales charge on your behalf out of the management fees received by us in respect of the Fund being purchased by you.

We may, from time to time, make arrangements with MDIL and other authorized dealers to provide distribution services in respect of units of the Funds in consideration for a fee. Any such fees will be paid by us [Mawer Investment Management Ltd., the manager of the Funds] and not by you or the Funds.

RBC Direct Investing probably had a look and decided it wasn't worth their while.

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