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November 20, 2022
2:36 pm
savemoresaveoften
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Loonie said
I agree that the CU will have the purchaser's profile, but does that make them a "member" legally?
I can buy any number of GICs at, say, WealthOne, with and without broker (as far as I know - never tried) but there is no
membership to consider and I doubt they are going to make a fuss if I use two channels. And CDIC doesn't care.

I'm not really sure why the CU should care either.  

the diff prob Wealth One is a bank, so there is no such thing as "client protection" when its comes to the GIC broker. For CU, since the broker already "introduces" the investor to the CU as a "member", it is different ? Its from personal experience so yes there is a difference when it comes to CU somehow...

November 20, 2022
5:22 pm
frugal lady
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I have been following responses since my post #28.
It appears no one has a definitive answer to my question.

Is there anyone here that has a solid relationship with GIC Wealth that would be willing to call Kevin to get a definitive answer?

November 20, 2022
5:29 pm
HermanH
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I'll be calling this week to clarify with Kevin Rotenberg.

November 20, 2022
8:14 pm
Loonie
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I think what you really need is verification from DUCA that you were a member at time of purchase. If you ever needed to argue in court for reimbursement, you would have to be able to prove this somehow, and I don't see that Kevin's say-so would suffice unless he has some document of agreement with DUCA which proves this and that he can give you a notarized copy of.
And I'd be happily surprised if they were willing and able to provide it.

November 20, 2022
8:46 pm
frugal lady
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Perhaps it is as GR responded in post 36 that the Credit Union puts up the membership on behalf of the purchaser.
I think the broker should be able to confirm if that is how it is handled if the purchaser is not already a "member".

November 20, 2022
9:06 pm
Loonie
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That may be the case, but if you ever had to pursue reimbursement and were told you were not really a member, you would only have the broker's word to support you UNLESS he or the CU provides you with documentation of your membership at time of purchase.

Hopefully this question will get straightened out this week.

November 21, 2022
11:58 am
Norman1
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Loonie said
Question for Norman1: Do you have special knowledge that your scenario is in fact what occurs or are you just guessing?

I don't know if any Ontario credit unions are actually using transitory memberships when placing deposits through deposit brokers.

No, the member does not have to pay for their required shares. Some credit unions front the cost of the shares and claw it back when the member leaves.

Some people have shared that PACE CU had fronted the $175 cost of the required shares for them. If they stayed a PACE member for a certain number of years, they would get to keep the $175 when they leave!

November 21, 2022
2:02 pm
Loonie
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Thanks for the response, Norman. Yes, I remember the PACE situation, but those members knew they were members and their relationship with PACE reflected that, unlike with the brokerage set-up, whatever it may be.

November 23, 2022
10:42 am
HermanH
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I just got in contact with DUCA, with whom I purchased a GIC, earlier this summer. The manager of deposit services spoke to me and explained that they gave me a $1 courtesy/transitory ownership share, but will take it back once the GIC matures and the funds move out of DUCA.

They don't like to speak with customers, because they do not want to give any impression of possible poaching of brokerage customers. Instead, all communication is directed towards the broker, but he was kind enough to answer my questions. I asked him directly because DUCA sent a confirmation purchase letter to my broker, who then sent it forward to me.

November 23, 2022
1:14 pm
Loonie
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Thanks, Herman. That's encouraging.
I don't suppose your contact at DUCA was willing to put this in writing, i.e. that you had or have a membership?

FWIW, I don't see how it could be poaching on the deposit broker's business since the latter's rates are significantly higher than DUCA's direct to member rates. Perhaps what he was getting at was that it was the broker's responsibility, in DUCA's view, to speak to their own customers. Seems like a grey area to me.

November 23, 2022
2:50 pm
HermanH
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He told me that he was surprised that someone had called him directly, as you guessed, they pass all management/contact responsibility onto the broker. He called me back because he didn't want to be rude. I doubt that he would do anything in writing, since he was already extending me a courtesy with his explanation of the industry.

November 23, 2022
5:10 pm
frugal lady
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HermanH said
I doubt that he would do anything in writing, since he was already extending me a courtesy with his explanation of the industry.  

I wonder if you asked GIC Wealth to confirm your membership number with DUCA if they would then contact DUCA to get the same? I hate "grey areas".

November 23, 2022
9:13 pm
Loonie
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I doubt any of them ever anticipated these questions from "inquiring minds" on this forum!

It doesn't affect me personally in this case but I do think people have a right to a clear and documented answer.

November 24, 2022
7:49 am
savemoresaveoften
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Its a grey area but at the same time think quite a few people here have used brokers for a long time without issue.
For me, unless the difference in rates are significant (30bps+), I rather deal direct.
I do have a couple outstanding with a broker but its more cumbersome and I feel I lack control.

November 24, 2022
10:34 am
COIN
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savemoresaveoften said
For me, unless the difference in rates are significant (30bps+), I rather deal direct.
I do have a couple outstanding with a broker but its more cumbersome and I feel I lack control.  

Agree. I also prefer to deal direct rather than through an intermediary.

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