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GIC Wealth Management Broker Rates
December 13, 2022
4:59 pm
gicjunkie
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LeBronBMT said
Recently signed up. Windsor Family Credit Union is the one offering the 5 year rate. Got a letter from GIC Wealth today asking me to sign a Client Consent form by request of Windsor Family Credit Union.

The attached letter just asks me to sign and return with the included envelope. The signature spot has been manually highlighted yellow with a sign here sticker put on top. There is a section just above asking me to tick off to consent to credit bureau checks from time to time and to receiving electronic communication. The rest of the form is just definitions and legal jumbo. Should I actually tick off those boxes or should I just sign as requested? I don't want to agree to casual credit checks.  

oltunde said
Not sure why for depositing GIC, they need credit check!!!  

First of all, just sign the form. Don't check off the credit check area or anything else. They just want "consent" for the broker to act on your behalf. The funny thing is that many FIs do what they call a "soft credit check" with no real effect to your credit rating even when you are just purchasing a GIC. It has never made sense to me that in order for me to lend them money, they want to do a check on me. I guess they want some kind of assurance that you are real.

December 19, 2022
7:52 am
gicjunkie
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Rates Continue to Climb:

1 year 5.58%*
18 month 5.15%**
2 year 5.57%*
30 month 5.20%***
3 year 5.59%*
4 year 5.59%*
5 year 5.64%*
* Minimum Investment $25,000
** Minimum Investment $50,000
*** Minimum Investment $75,000
**** Minimum Investment $100,000

December 20, 2022
3:44 am
dickyran333
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Kevin Rotenberg of GIC Wealth told me today that the 5-year rate of 5.64% is for Ladysmith & District Credit Union (LDCU). However, since I live in BC, the best he could get me from LDCU is 5.60%. He mentioned that the deposits at LDCU are 100% protected by CUDIC (no ceiling). He also offered me 5.5% for a 5-year GIC at DUCA.

He also mentioned that:
1) Once the GIC is opened, the certificate will be mailed to me by GIC Wealth (and not by the CU). The GIC certificate will be in my name.
2) Based on this GIC investment, I won't be able to register for online banking at the CU. But I can register online at GIC Wealth and will be able to see the details of all my GICs purchased through GIC Wealth.
3) Three weeks before maturity, GIC Wealth will get a PDC in my name from the CU and mail it to me if I decide not to renew at the same CU, and not to invest with any other GIC offer GIC Wealth may have then.
4) In case the CU goes down, I will get my funds from the corresponding deposit insurance corporation even if I'm going through a broker (and I'm not able to verify my GIC directly with the CU). As far as the CU is concerned, I'm their customer and not GIC Wealth, and so the deposit insurance corporation would pay directly to me (but I guess through GIC Wealth).

When asked whether it would be okay if I call the credit union directly (after the investment) to confirm my GIC, he said that I wouldn't get any information from the CU and so no point calling them.

I think this is quite similar to buying a GIC through stock & bond brokerages such as Scotia iTrade, Questrade, etc., where the GIC principal is debited from the investor's account, the GIC is visible in the broker's system, and the redemption amount gets credited in the investor's account. The investor doesn't have to deal with the CU. The brokerage takes care of everything. However, the major difference is the broker's insurance. The stock and bond brokerages are insured by CIPF up to 1 million (non-registered and TFSA combined) and another 1 million (RRSP). I don't see any such insurance coverage for GIC Wealth. Their website only mentions that GIC Wealth is a member of Registered Deposit Brokers Association (RDBA). But that's useless if an unforeseeable event happens with GIC Wealth.

For a moment, I'll take all what Kevin mentioned as truth - that if something happens to the CU, the deposit insurance corporation will return my principal and accumulated interest. But are my funds safe, not if something happens to the CU, but rather if something happens to GIC Wealth itself?

Put differently, I'm curious to know in what scenarios I would lose my investments partially or entirely.

December 20, 2022
6:29 am
savemoresaveoften
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if the GICs are registered with the CUs under your name and it should, the broker is just a middleman and no impact whether they exist or not after the purchase I dont think.

December 20, 2022
7:38 am
gicjunkie
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In the past, GIC Wealth has issued a confirmation of investment which was then followed by an actual GIC from the FI. Don't know how LDCU handles this, but, regardless of what Kevin said, you could call them directly just to answer general questions about investing through a broker. If you do make this investment, I am sure the FI will acknowledge its existence to you.

And, yes, you are actually investing with the FI, not the broker. You are covered by the deposit insurance plan that this FI participates in.

December 20, 2022
7:57 am
Koogie
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I can confirm the other responses to your questions. While not a perfect analogy, think of GIC Wealth (and the other GIC brokers) simply as introduction agents. The contract exists solely between you and your chosen financial institution.

Also, highly impressed with your thoroughness and perceptive questions. It took me a lot longer when I was first investing through brokers to think of and get answers to all those questions...

December 20, 2022
8:33 am
Norman1
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dickyran333 said

I think this is quite similar to buying a GIC through stock & bond brokerages such as Scotia iTrade, Questrade, etc., where the GIC principal is debited from the investor's account, the GIC is visible in the broker's system, and the redemption amount gets credited in the investor's account. The investor doesn't have to deal with the CU. The brokerage takes care of everything. However, the major difference is the broker's insurance. The stock and bond brokerages are insured by CIPF up to 1 million (non-registered and TFSA combined) and another 1 million (RRSP). I don't see any such insurance coverage for GIC Wealth. Their website only mentions that GIC Wealth is a member of Registered Deposit Brokers Association (RDBA). But that's useless if an unforeseeable event happens with GIC Wealth.

They are not quite the same.

Going through an investment dealer brokerage, like Scotia iTRADE, the GIC is not registered in investor's name. Instead, the GIC is registered in the broker's name and the broker owes the GIC to the investor. This is called in-nominee-name placement. Should the broker go under, the investor becomes a creditor to the broker for the GIC owed by the broker. That's why CIPF is needed.

Going through a broker, like GIC Wealth, the GIC is registered in the investor's name and not held by the broker. This is called in-client-name placement. So, no CIPF-like coverage is needed because the broker doesn't hold and owe the investor the GIC.

December 20, 2022
8:39 am
COIN
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"Based on this GIC investment, I won't be able to register for online banking at the CU. But I can register online at GIC Wealth and will be able to see the details of all my GICs purchased through GIC Wealth."

Does this mean you cannot log in to the CU directly and see your GIC?

December 20, 2022
8:52 am
agit
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Norman1 said

They are not quite the same.

Going through an investment dealer brokerage, like Scotia iTRADE, the GIC is not registered in investor's name. Instead, the GIC is registered in the broker's name and the broker owes the GIC to the investor. This is called in-nominee-name placement. Should the broker go under, the investor becomes a creditor to the broker for the GIC owed by the broker. That's why CIPF is needed.

  

They are nominees and hold their clients’ investments in the trust

Example of nominee registration versus client name

Nominee account registration:
ABC Investment
In Trust For: John Doe, Account# 123456
ABC Head Office Operations,
Toronto, ON

Client name registration:
John Doe
Toronto, ON

If the GIC is registered in the broker's name then say goodbye to CDIC.

note the investments in the trust

CIPF does not protect the value of your GICs. If you have an account with a CIPF member firm, and the CIPF member firm becomes insolvent, CIPF works to ensure that any property (including GICs) being held for you by the firm at that time is given back to you, within certain limits. CIPF does not guarantee what the GIC will be worth.

December 20, 2022
9:22 am
gicjunkie
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COIN said
"Based on this GIC investment, I won't be able to register for online banking at the CU. But I can register online at GIC Wealth and will be able to see the details of all my GICs purchased through GIC Wealth."

Does this mean you cannot log in to the CU directly and see your GIC?  

This is correct. You do not have the "full voting rights membership" that an individual investing directly with the CU would have. You have a kind of "provisional membership" (my terminology) in order to invest through the broker.

December 20, 2022
11:43 am
savemoresaveoften
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COIN said
"Based on this GIC investment, I won't be able to register for online banking at the CU. But I can register online at GIC Wealth and will be able to see the details of all my GICs purchased through GIC Wealth."

Does this mean you cannot log in to the CU directly and see your GIC?  

For example, a CU that you already have a membership with, the new GIC transacted thru a broker will NOT show up under ur account when u log in, even tho it 'is' registered under ur name.

And CU that you already have/had GICs thru brokers, chances are the CU will reject your application to become a member, so as to "protect" the GIC broker's interest.

December 20, 2022
12:08 pm
HermanH
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savemoresaveoften said And CU that you already have/had GICs thru brokers, chances are the CU will reject your application to become a member, so as to "protect" the GIC broker's interest.  

I have transacted GICs through GICWealth at DUCA. I wonder if I can still make other transactions with DUCA. I contacted DUCA and the manager told me about the provisional membership given me in order to purchase the GIC. At maturity, those shares revert back to DUCA. He also told me that the broker handles all the management of my GIC in order to take this burden from DUCA.

I wonder if I can still use my provisional membership in order to purchase other instruments such as RRSP or TFSA from DUCA? I would not be stepping on the broker's toes, since GICW won't deal with amounts below $50K. I was going to ask Mr. Rotenberg next time, but thought I would broach the subject here, in case anyone had experience with the matter.

December 20, 2022
1:01 pm
savemoresaveoften
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HermanH said
I have transacted GICs through GICWealth at DUCA. I wonder if I can still make other transactions with DUCA. I contacted DUCA and the manager told me about the provisional membership given me in order to purchase the GIC. At maturity, those shares revert back to DUCA. He also told me that the broker handles all the management of my GIC in order to take this burden from DUCA.

I wonder if I can still use my provisional membership in order to purchase other instruments such as RRSP or TFSA from DUCA? I would not be stepping on the broker's toes, since GICW won't deal with amounts below $50K. I was going to ask Mr. Rotenberg next time, but thought I would broach the subject here, in case anyone had experience with the matter.  

You can check with DUCA to see if they will accept ur regular membership application with them (i.e. regular and provisional membership can coexist). Be very specific that you already have a provisional membership thru broker already.

My experience with another CU was they will not accept my membership request, as I already have outstanding GICs with them via a broker.

So it may come down to individual CUs having their specific arrangement with broker, and whether the broker introduced u to the named CU first or not.

As long as you are professional and behind upfront about it, the CU should be able to provide u a clear answer.

December 20, 2022
4:52 pm
dickyran333
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Thanks all for your responses. I really appreciate. In general the tone is that it's safe to invest through GIC Wealth. But let me ask the worst things that come to my mind:
What if both partners die the same day, or file a law suite again each other? Or what if a financial fraud surfaces and GIC Wealth has to file for bankruptcy?
In such a case, will the CU deal with me directly based on a piece of paper (GIC certificate) that was sent to me by GIC Wealth?

One more thing and perhaps far less important to me but still:
The GIC Wealth's 5-year posted rate is 5.64% and it's for LDCU. But Kevin told me that the best rate he would get for me for LDCU is 5.60% (not 5.64%) and that's because I live in BC. I mean 5.60% is also a good rate for me. But I'm curious to why a BC-based CU will offer slightly lower rate for BC residents. Is this 5.60% really offered by LDCU to BC residents, or GIC Wealth has a say in determining the rate -- maybe they get a higher commission if they convince investors to accept a lower rate?

December 20, 2022
7:18 pm
Norman1
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dickyran333 said

What if both partners die the same day, or file a law suite again each other? Or what if a financial fraud surfaces and GIC Wealth has to file for bankruptcy?
In such a case, will the CU deal with me directly based on a piece of paper (GIC certificate) that was sent to me by GIC Wealth?

The CU issues the GIC and not GIC Wealth. I don't think GIC Wealth is one of those brokers that hold the GIC in its own name for its clients. Consequently, you should receive some kind of confirmation of the GIC from the CU. I received confirmations from the GIC issuers when I used to go through deposit brokers.

There is a good chance GIC Wealth will have sold their book of clients and associated business to another deposit broker in such cases. So, the CU would rather you deal with the new deposit broker.

CU will rely on its own records of the GIC and not necessarily on statements one of their deposit brokers sends out.

December 20, 2022
8:35 pm
dickyran333
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savemoresaveoften said

For example, a CU that you already have a membership with, the new GIC transacted thru a broker will NOT show up under ur account when u log in, even tho it 'is' registered under ur name.

And CU that you already have/had GICs thru brokers, chances are the CU will reject your application to become a member, so as to "protect" the GIC broker's interest.  

If so, I wonder whether I should always open a chequing or savings account at the same CU first and only then open a GIC with them through a broker.

This assumes that the CU will accept my GIC application through a broker even when I have an account with the CU. I don't think the broker is supposed to bring in a brand new customer to the CU to be eligible for get a commission.

December 21, 2022
7:30 am
savemoresaveoften
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dickyran333 said

If so, I wonder whether I should always open a chequing or savings account at the same CU first and only then open a GIC with them through a broker.

This assumes that the CU will accept my GIC application through a broker even when I have an account with the CU. I don't think the broker is supposed to bring in a brand new customer to the CU to be eligible for get a commission.  

I can confirm the following:

One CU wont accept my membership application cuz I already "cover" by a GIC broker.
Another CU I already have membership with, I am able to get GIC thru the broker, which offers a higher rate than the CU direct.

Also brokers have discretion on the rate, eg matching a higher rate etc. But unsure if posted rate may be different for different provinces. You can ask for other CUs name that you may prefer, and may be losing out a bit (e.g 10bps). So posted rate may be 5.6%, but u maybe able to choose your preferred issuer at 5.5%

December 21, 2022
8:48 am
Norman1
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dickyran333 said

One more thing and perhaps far less important to me but still:
The GIC Wealth's 5-year posted rate is 5.64% and it's for LDCU. But Kevin told me that the best rate he would get for me for LDCU is 5.60% (not 5.64%) and that's because I live in BC. I mean 5.60% is also a good rate for me. But I'm curious to why a BC-based CU will offer slightly lower rate for BC residents. Is this 5.60% really offered by LDCU to BC residents, or GIC Wealth has a say in determining the rate -- maybe they get a higher commission if they convince investors to accept a lower rate?

It may not be LDCU.

It could be that LDCU is offering 5.60% and GIC Wealth is assigning 0.04% of its 0.25%-per-GIC-year commission to the investor to give the investor 5.64%.

GIC Wealth is in Toronto. You are in BC somewhere. GIC Wealth may not be willing to assign that 0.04% to the investor if GIC Wealth has to cover overnight BC-to-Ontario courier charges to get the paperwork and cheque.

December 21, 2022
9:05 am
JenE
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Email just received:
(I don’t have any other info.)

1 year 5.90%*
18 month 4.85%**
2 year 5.90%*
30 month 5.20%***
3 year 5.59%*
4 year 5.59%*
5 year 5.64%*

December 21, 2022
11:08 am
oltunde
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One more question, any chance the cheques you send brokers , even though in your own name, can be just deposited in their own account by fake endorsements, and they just send you a fake gic certificates, which are easy to make?

Please write your comments in the forum.