How long to close down a LIRA? | RRSPs and RRIFs | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

No permission to create posts
sp_Feed Topic RSS sp_TopicIcon
How long to close down a LIRA?
December 25, 2017
12:03 am
Loonie
Member
Members
Forum Posts: 6404
Member Since:
October 21, 2013
sp_UserOnlineSmall Online

I am well above the minimum age, my LIRA is very small (under 3k), it is sitting in a savings account at the moment, I've had this account at this bank for 30 years, and I had my (only) spouse in tow with pen in hand, so I thought it should be a fairly simple matter to shut it down. It has taken a matter of minutes to shut down an RIF savings account at TD.
But at Scotia I was told this would take a MONTH!!
I was wondering if anyone thought this was normal or to be expected.

This is a warning to anyone else who wants to cash one in during a particular year for tax purposes. Do it early!!

December 25, 2017
9:54 am
Jon
Member
Members
Forum Posts: 364
Member Since:
August 9, 2014
sp_UserOfflineSmall Offline

Ask the staff in question to give a detail explanation why it will take this long and demand you want the answer now, that should put him/her on the spot.

December 25, 2017
3:14 pm
Nehpets
Ontario
Member
Members
Forum Posts: 701
Member Since:
December 20, 2016
sp_UserOfflineSmall Offline

Jon said
that should put him/her on the spot.  

In situations like that, I like to say, "What is your name and extension or employee number, so I can record the details of this call for my log."

I found that once I have the CSR's name and contact info, they tend to be more diligent in their responses.

If not, I can always escalate my call to a supervisory staff member, with details of the person whose responses were unsatisfactory.

December 26, 2017
10:09 pm
Loonie
Member
Members
Forum Posts: 6404
Member Since:
October 21, 2013
sp_UserOnlineSmall Online

This was an in-person visit, with an appointment - since you can't count on getting anything done without an appointment. So I do know his name. When I complained, he went off and checked with someone else, an unknown woman. It seemed she was senior to him, at least in experience, as he cited how many years she'd worked on this sort of thing - I think it was 30. It was clear this was a final pronouncement and it was desired that I should shut up. I had not been obnoxious, but I was truly taken aback by this pronouncement and told him how it was going to inconvenience me. He was not concerned - perhaps because I have no other accounts with Scotia.

The only clue I was given was that this matter had to be sent somewhere else for some kind of processing. However, you can only make this request at the branch where the plan is deemed to reside (by them), so you can't hurry it along by going somewhere else instead. As far as I'm concerned, it must be in cyberspace somewhere. I think that at one point he went to look up the "original" file/application. That in itself was amazing. I have never moved the account, but it was originally with National Trust or some other FI that they took over. Why would he need to look this up in this day and age? I had brought in my most recent statement. (I could have brought him my original copy, as I keep everything!) A couple of years ago, when I was closing down an RSP at another bank, I brought along the entire file from day One, and they thought I was over the top!

I like your idea, Jon, but I don't think it would have registered with this guy at all. He clearly didn't know the answer and wasn't about to find out. He did not consider that he was accountable to me in any way.

Perhaps I should have asked him to cite the memo I'd been sent about how complicated it was going to be to get my money and how I should be sure to leave at least a month's leeway. Hah!

I suppose I should be grateful that I was informed at all. Otherwise I'd have had no opportunity to rearrange my financial plans before year's end - which would have cost me real dollars in money left on the table in my tax bracket.

I think that when I go back (next year) to do this transaction, I will ask to speak to the manager. I'd better plan for that in advance as I'm sure he/she won't be available in any testy circumstance. We will discuss their $50 fee for closing the account and my plans to publicize their inflexibility and poor customer service.

Any more ideas?

December 26, 2017
11:39 pm
Saver-Mom
Member
Members
Forum Posts: 280
Member Since:
December 12, 2015
sp_UserOfflineSmall Offline

Hmm, maybe just withraw $2999 and leave the account open with $1 in it to forego the $50 account closure fee? I hate these types of bank practices, charging you to give you your own money.

December 27, 2017
9:48 am
phrank
Member
Members
Forum Posts: 83
Member Since:
January 3, 2009
sp_UserOfflineSmall Offline

I'm sorry you're having to deal with this norm level of bad service Loonie. I like saver-moms idea of leaving $1 in to by-pass their account closure fee.

We're going to be in your shoes in the near future with a TD LIRA TD. So it's helpful for me to read of your experience and be prepared, because we plan on closing it out ASAP.

So, thanks for sharing for the others on this form. I hope that's on topic enough to prevent people from getting upset? sf-laugh

December 27, 2017
12:30 pm
Norman1
Member
Members
Forum Posts: 3398
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Unlocking and withdrawing from a LIRA is not as routine as withdrawing from a regular RRSP account that is not locked-in under some pension act.

I think the financial institution will need to confirm that one is actually allowed to unlock and withdraw from the LIRA. That will depend on the legislation the LIRA is locked-in under.

For example, the rules for unlocking a small LIRA, locked in under Ontario rules, only allows the unlocking when

• You are at least 55 years old and the total value of all assets held in every Ontario locked-in account [LIRA, LIF or LRIF] you own is less than $22,120 (for applications signed in 2017).

In such cases, one would not be able to unlock a $1,000 Ontario LIRA if one had another Ontario LIRA or Ontario LIF with $50,000 in it.

December 27, 2017
11:03 pm
Loonie
Member
Members
Forum Posts: 6404
Member Since:
October 21, 2013
sp_UserOnlineSmall Online

No can do Saver-Mom's great suggestion as LIRAs have both minimum and maximum withdrawals, by law, if you are going to do a withdrawal. They are peculiar beasts, meant to mimic real retirement plans in many respects.

As I said earlier, I am well above the minimum age and this account is well below the minimum for cashing in. I have no other LIRAs or LIFs or anything like it. As I am in Ontario, the pension fund from which it originated is clearly only available to Ontarians and registered under Ontario law, and the bank branch is in Ontario, I think this should not be at all difficult to transact. There is another requirement Norman didn't mention, and that is that the spouse has to sign off on it as someone with a financial interest in the proceeds, but spouse was ready, willing and present. Part of my frustration is that I was well prepared for this event and knew there were no encumbrances.

The only possible reason for slowing this all down might be the need to investigate total amount in such funds, but that can't be very difficult either. The province must have this on record and easily accessible for approval. If they don't, the FI would have to be sending inquiries to all the other FIs, and that would take months, if not years! - and would be highly inefficient.

I'm glad my experience is going to be useful to someone though. This was Scotia, and I do find them to be slower than TD at almost anything, but it could be that this will be equally slow at TD. It takes a full month to get a statement from Scotia by mail, but only about 2 weeks from TD. (Yes, I have reg'd plans with both - soon to be neither!sf-smile)

I'll try again when the weather is more hospitable. I didn't want to start the process during my recent visit just in case it went through in 2017, which would have messed up the alternate plan which I had to put into effect. Will let you know how I make out.

December 28, 2017
8:29 am
Norman1
Member
Members
Forum Posts: 3398
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Loonie said
As I said earlier, I am well above the minimum age and this account is well below the minimum for cashing in. I have no other LIRAs or LIFs or anything like it. As I am in Ontario, the pension fund from which it originated is clearly only available to Ontarians and registered under Ontario law, and the bank branch is in Ontario, I think this should not be at all difficult to transact. …

The only possible reason for slowing this all down might be the need to investigate total amount in such funds, but that can't be very difficult either. The province must have this on record and easily accessible for approval. If they don't, the FI would have to be sending inquiries to all the other FIs, and that would take months, if not years! - and would be highly inefficient.
… 

That's probably what takes some time to do. I don't know if the Ontario pension regulator has the required info easily accessible for the financial institutions. Maybe the financial institution has to mail in a request and wait for the information to be mailed back! sf-laugh

Had the LIRA been locked in under Saskatchewan legislation, all locked-in money has to be considered (not just money locked in under Saskatchewan legislation). That includes deferred pension entitlements where one did not transfer the money out to a LIRA and left it in the pension plan. As well, the LIRA contract itself also needs to allow for the small benefit unlocking:

Bulletin - Unlocking Pension Money

2. Small Benefit Rule under a LIRA
Subsection 29(8.1) and (8.2) of the Regulations permit a LIRA contract issuer (“the issuer”) to make a lump sum payment where the total value of an individual’s locked-in money is too small to warrant being administered as a pension:

“29(8.1) Notwithstanding subsection (4), but subject to subsection (8.2), the contract may provide for the withdrawal of the locked-in money as a lump sum if the amount of locked-in money in the contract does not exceed 20% of the Year’s Maximum Pensionable Earnings in effect in the year in which the withdrawal occurs.

(8.2) The issuer shall not permit a withdrawal pursuant to subsection (8.1) unless the issuer is satisfied that the owner has no other locked-in money.”

Subsection 29(8.1) of the Regulations is permissive, not mandatory. The issuer is responsible for administering the small benefit rule and must ensure that the terms of the contract provide for the release of locked-in money pursuant to the small benefit rule.

Subsection 29(8.2) of the Regulations requires the issuer to be satisfied that the LIRA owner has declared all other locked-in money for purposes of applying the small benefit rule under subsection 29(8.1). This includes locked-in money that may be subject to the pension legislation of other jurisdictions. A signed written statement from the owner, for instance, should be sufficient to release the money.

In determining the amount of an individual’s total locked-in money, the issuer must include amounts in all LIRAs held by the individual, as well as any deferred pension entitlements the individual has in a pension plan. Such an entitlement is created when a plan member terminates membership in a plan, and does not transfer the entitlement out of the plan.

The YMPE is a figure determined under the Canada Pension Plan on an annual basis. The YMPE for 2018 is $55,900. Therefore, a LIRA contract could provide for the withdrawal of the locked-in money that is subject to Saskatchewan pension legislation as a lump sum if the total amount of an individual’s locked-in money from all sources does not exceed $11,180.

December 28, 2017
11:59 am
Loonie
Member
Members
Forum Posts: 6404
Member Since:
October 21, 2013
sp_UserOnlineSmall Online

This may also constitute a warning to people who may have an option as to whether to take an LIRA or not. Mine was so long ago that I don't remember the details. I think I had an option, and I think I made the wrong choice in hindsight.

What is obvious, however, is that the rules can change at any time AFTER the LIRA commences. Same with all registered plans, and this is one of the reasons I am so wary of them and would never recommend an RSP except under very particular circumstances. I have been around long enough to see too many rules change mid-stream, and usually not for the better. The worst is the changes in CPP for survivor's benefit introduced a few years ago which radically strips out what lower-income survivors used to be entitled to. A great many people are not aware of this change until they find themselves victimized by it when widowed.

Getting back to the current case, it seems from what Norman wrote earlier that the requirement to check on other LIRAs is a recent innovation. He cited applications from 2017 forward as being affected. I am pretty sure this was not in effect when I originally made my plan to liquidate this LIRA this year, although it's possible I ignored it because I knew it was not my situation.
In my opinon, if the government is going to have such a rule, then it's their responsibility to make a directory of such plans readily accessible, either directly to the FIs or, better, by giving the FIs a dedicated phone line or password in order to find out if the plan in question qualifies for redemption. Not only will this speed things along for the planholder, it is only reasonable from the point of view of both government and FIs. Anything else is going to take up unnecessary staff time. Or did they put the cart before the horse?

December 28, 2017
12:45 pm
Nehpets
Ontario
Member
Members
Forum Posts: 701
Member Since:
December 20, 2016
sp_UserOfflineSmall Offline

Loonie said
But at Scotia I was told this would take a MONTH!!
I was wondering if anyone thought this was normal or to be expected.
  

Loonie,

I've been following your discussion with interest, because I have a substantial LIRA that pays out the compulsory percentage each year.

Though I have not considered closing mine, I never gave much thought to the ramifications of doing so.

My understanding about a LIRA, is that unlike a RIF, it cannot be liquidated, but rather converted to an annuity, otherwise it remains invested and pays out the obligatory annual percentage.

Presumably your "under3k" LIRA falls under different rules, and I'm looking forward to reading the outcome of your situation.

When I was investigating alternative FI's to administer my LIRA, very few had the infrastructure to do it.

Mine is with a deposit broker who gives me a wide variety of options to place it in GIC's.

Stephen

December 28, 2017
9:35 pm
Loonie
Member
Members
Forum Posts: 6404
Member Since:
October 21, 2013
sp_UserOnlineSmall Online

The issue of cashing yours probably never came up, Stephen, because it's large. You can only cash out if small - and now, apparently if sum total of all such plans is smallish. Most likely, you would never be able to do anything else with yours, especially now that you are already drawing from it. For an amount like mine ($2700), there is little point in hanging on to it as it pays next to nothing, no matter what you do with it, and it seems the government understands this, so they allow it to be collapsed. I just wanted to simplify and reduce my accounts , and use it to top up my tax bracket as it's not much use otherwise.

FYI, I am pretty sure that Achieva offers LIRAs and LIFs. Meridian also does. I don't know about the others. As time passes and the population bulge makes its way through retirement, more FIs may offer them. A few years ago, very few offered RIFs (outside of the big banks), but now most that offer RSPs also offer RIFs.

If mine were substantial, I might not have decided to cash out. There are reasons for hanging on to them. They operate much more like a pension fund.

'The fellow at Scotia never cited any rules to me or suggested it couldn't be done. I had introduced my spouse, he'd confirmed my age and my account, had asked for ID etc, and was about to start processing it when he revealed that I couldn't have the money before the end of the year, when I needed it.

My advice to anyone who plans to cash theirs and who qualifies to do so would be to do it as soon as you can, lest they change the rules again and lock you in further. However, it's not a decision to be made lightly, and needs to be part of an overall retirement income plan.

December 29, 2017
9:02 am
Norman1
Member
Members
Forum Posts: 3398
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Loonie said

Getting back to the current case, it seems from what Norman wrote earlier that the requirement to check on other LIRAs is a recent innovation. He cited applications from 2017 forward as being affected. I am pretty sure this was not in effect when I originally made my plan to liquidate this LIRA this year, although it's possible I ignored it because I knew it was not my situation.
In my opinon, if the government is going to have such a rule, then it's their responsibility to make a directory of such plans readily accessible, either directly to the FIs or, better, by giving the FIs a dedicated phone line or password in order to find out if the plan in question qualifies for redemption. Not only will this speed things along for the planholder, it is only reasonable from the point of view of both government and FIs. Anything else is going to take up unnecessary staff time. Or did they put the cart before the horse?

I don't know if there is a central directory of locked-in plans. It is possible that the government did put the cart before the horse!

The 2017 only refers to that $22,120 ceiling for small LIRA unlocking. The exact ceiling is 40% of the Year’s Maximum Pensionable Earnings for the calendar year which is adjusted each year.

The requirement to include other locked-in accounts seems to have been there as far back as January 2011.

The requirements for small Ontario LIRA unlocking are in the Revised Regulations of Ontario 1990, Regulation 909, Part III, Schedule 3 (Locked-in retirement account requirements), Section 6:

6. (1) The owner of a locked-in retirement account may, upon application in accordance with this section, withdraw all the money in the account or transfer the assets to an RRSP or RRIF if, when the owner signs the application,

(a) he or she is at least 55 years of age; and

(b) the value of all assets in all life income funds, locked-in retirement income funds and locked-in retirement accounts owned by him or her is less than 40 per cent of the Year’s Maximum Pensionable Earnings for that calendar year.

(2), (3) Revoked: O. Reg. 185/13, s. 6 (2).

(4) The application form must be signed by the owner and accompanied by one of the following documents:

1. A declaration described in section 9 about a spouse.

2. A statement signed by the owner attesting to the fact that none of the money in the account is derived, directly or indirectly, from a pension benefit provided in respect of any employment of the owner.

(5) If assets in the account consist of identifiable and transferable securities, the financial institution may transfer the securities with the consent of the owner.

(6) The contract governing the account must include the following term and, if it does not, the contract is deemed to include it:

1. The value of all assets in all life income funds, locked-in retirement income funds and locked-in retirement accounts owned by the owner when he or she signs the application under this section is to be determined using the most recent statement about each fund or account given to the owner. Each such statement must be dated within one year before the owner signs the application.

December 31, 2017
1:30 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3577
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

Loonie said
I am well above the minimum age, my LIRA is very small (under 3k), it is sitting in a savings account at the moment, I've had this account at this bank for 30 years, and I had my (only) spouse in tow with pen in hand, so I thought it should be a fairly simple matter to shut it down. It has taken a matter of minutes to shut down an RIF savings account at TD.
But at Scotia I was told this would take a MONTH!!
I was wondering if anyone thought this was normal or to be expected.

This is a warning to anyone else who wants to cash one in during a particular year for tax purposes. Do it early!!  

What is actually considered a "small" locked-in RRSP or retirement account, anyway, according to different jurisdictions, and is there an age at which point a LIRA could be co-mingled with a regular RIF regardless of size?

At any rate, a month or doesn't strike me as an inordinate amount of time to close down a LIRA. One option would be to maintain the assets in whatever form you choose and have them transferred out in-kind. sf-cool

Cheers,
Doug

December 31, 2017
1:37 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3577
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

I get the feeling Loonie could easily stomach a ~$50 plan closure fee, if it he (am I correct in assuming this gender?) could get a reasonable timeline and detail on the process and steps involved. sf-cool

In a situation like this, I would try and remain calm and ask the branch representative to look into this and agree on a reasonable timeframe (i.e., several days but not more than a week) to be provided, preferably via e-mail, an update on the timeline and steps involved. That shows you understand this is a less common procedure and you're flexible in allowing them to look into it. Make it clear that failure to get an adequate response within that timeframe would result in your escalating the concern to the Office of the President. 🙂

Cheers,
Doug

December 31, 2017
6:01 pm
Loonie
Member
Members
Forum Posts: 6404
Member Since:
October 21, 2013
sp_UserOnlineSmall Online

Since it also takes Scotia an entire month to send me a quarterly statement when there is no activity on my part whatsoever, I am inclined to think it is their own sluggishness that is at issue.

I'm not going to fight with them, politely or not, at this stage. My deadline is past and it's not worth my while. I'll start early for 2018, when it thaws, and will be very glad to get rid of Scotia.

I don't care about transferring it to an RIF. I am in the process of cashing out our RSPs and RIFs as fast as we reasonably can, and this small amount will fit into 2018 tax plans.

I'm wondering why you think a month is reasonable, though, Doug. I got same-day service to close an RSP last year, and instantaneous to close an RIF this year, both at BigSix. The only one that took time was at the inimitable HSBC, but even that one only took a couple of weeks and the reasons were clear - it was in a mutual fund and their systems were antiquated, AND they were falling all over themselves apologizing for the delay - none of that at Scotia, just "put up and shut up; we are the boss of your money"sf-surprised. I guess I didn't look like a very good prospect for the "wealth business" as I always dress down for such excursions...

January 1, 2018
10:37 am
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3577
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

Loonie said
Since it also takes Scotia an entire month to send me a quarterly statement when there is no activity on my part whatsoever, I am inclined to think it is their own sluggishness that is at issue.

I'm not going to fight with them, politely or not, at this stage. My deadline is past and it's not worth my while. I'll start early for 2018, when it thaws, and will be very glad to get rid of Scotia.

I don't care about transferring it to an RIF. I am in the process of cashing out our RSPs and RIFs as fast as we reasonably can, and this small amount will fit into 2018 tax plans.

I'm wondering why you think a month is reasonable, though, Doug. I got same-day service to close an RSP last year, and instantaneous to close an RIF this year, both at BigSix. The only one that took time was at the inimitable HSBC, but even that one only took a couple of weeks and the reasons were clear - it was in a mutual fund and their systems were antiquated, AND they were falling all over themselves apologizing for the delay - none of that at Scotia, just "put up and shut up; we are the boss of your money"sf-surprised. I guess I didn't look like a very good prospect for the "wealth business" as I always dress down for such excursions...  

I guess because registered plan transfers can take up to 28 days plus it's a locked-in plan and the branch staff likely aren't familiar with all the nuances and would likely need to liaise with the back office or ship it off to the back office to process entirely. sf-cool

I'm not certain as to the specifics of the problem you had at HSBC and, while I can say that they use an antiquated system (I have a screenshot I could share with you privately if you'd like), I can say that some of the reason(s) for the delay in the closure of your RSP would likely include:

  • Cheque processing time - mutual fund redemptions are processed by the HSBC back-office in Canada and mailed via a company cheque, either to the current address of the client or, optionally, to a specified branch for pick-up (this is less preferred due to cumbersome logging procedures upon receipt and pick-up by the client)
  • Lack of staff training, mainly at the branch level
  • Lack of licensed branch staff to facilitate the request or even approve the trade due to frequent employee turnover

FWIW, HSBC is even more likely to give you the "cold shoulder" if you don't look like a good prospect for their "wealth business," though Scotia is adopting the HSBC business model of general "snobbery" to non-wealth qualified clients and also in terms of lean business model. Looking back, it was perhaps not surprising we regularly got Scotia customers show up in branch thinking it was Scotiabank because of, presumably, the red and white colour scheme. In hindsight, perhaps the executive-coached staff behaviours and product mix were giveaways in this way? We were actually actively encouraged and told by Branch Managers to lie & make up phony excuses of why we couldn't open up a new account for a potential customer that looked to be "low income or (even) homeless" just so we could turn them away without having to refuse to open an account and prepare associated documentation for such refusal to open an account. We were even encouraged to generally give that person the appearance that we didn't value their potential business, through visual cues or word choice. 🙁

Cheers,
Doug

January 1, 2018
2:46 pm
Loonie
Member
Members
Forum Posts: 6404
Member Since:
October 21, 2013
sp_UserOnlineSmall Online

Fascinating insights, as always, from the other side of the counter at HSBC!

On the colour thing, it is my understanding that red is a kind of auspicious colour in Chinese culture - wedding dresses, envelopes of money etc. are in red. I can't account for Scotia though. CIBC is maroon, also a variant of red. Even National has a splash of red. No doubt a consultant was paid a lot of money to sort all this out!

Any and all the reasons you cite for HSBC slowness might have applied - but even they only took about two weeks. And they definitely didn't look down on me because I didn't look wealthy - but I had to go to the Spadina location, where nobody looks wealthy! It was Scotia who lacked interest in me. Perhaps it was because the account at Scotia was significantly smaller. It's proof positive that there is no linking with Tangerine though!

As for Scotia, if local staff can't do this efficiently for whatever reason, when why do they insist that we must go through the specific branch where the fund is deemed to be located (by them)? I think they really don't have any interest in streamlining the process and have chosen to do nothing to facilitate it. Their mistake is in assuming this doesn't matter for their overall business and bottom line.
Even an RSP or TFSA can be transferred within 2 weeks when the systems are in pace, e.g. Peoples, Tangerine. And that involves a two-party process with snail mail back and forth.
At Scotia, it seems everything takes a month, including quarterly statements. TD statements take 2 weeks now, for the same kind of accounts.

I'm curious what sort of documentation you had to fill out when refusing an account. Was this internal, or is there some place to which it had to be reported? I am imagining it was internal, as they wouldn't want to refuse real money.

I have been fascinated (and very much annoyed) by the statements of my financial worth that TD has sometimes (inadvertently?) shared with me in recent years. This occurs when I ask for a balance on an account which is not on the ATM card and the staff person can't figure out how to just write it down on a piece of paper as requested. Instead, they press a button which produces a sheet itemizing the value of my house and all TD accounts - growing ever smaller. According to them, my net worth has decreased considerably over the past few years!! Yeah, right...sf-laugh

January 1, 2018
3:45 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3577
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

Interesting ideas about the colours - I'm not sure how they arrived on the colours, though National Bank is a bit more than a "splash," I'd argue. I suspect for Scotia and National, and CIBC, which is more of a lighter red than a darker shade of maroon nowadays, they went with red for the patriotic Canadian "feel"? You're quite right, though, that various internal and external consultants were paid handsome sums of money to create these branding schemes. sf-cool

I think, generally, some HSBC branches are better than others. It depends on the DVP that oversees that region (we were part of Western Region, which included all of the Manitoba, Saskatchewan and Alberta branches as well as the B.C. Central & Southern Interior and Vancouver Island branches) and how the BM interprets their directives, I think. They seem to be trying to win back clients, or show the appearance of doing so instead of targeting exclusively the affluent clientele. It's probably more the latter. Trouble is, I don't think, or hope, people's memories aren't that short. 😉

As for why you had to go to your home branch, that likely goes to what Norman1 and Bill were mentioning in other threads about accounts being domiciled to certain branches and the regulations for POA handling & estate processing varying as such. Personally, we all know they centralize many activities so it shouldn't matter but I do know, because my mom worked at Scotiabank for a combined 30+ years of service (two separate service records), that Scotia keeps all of their files at the home branch, including RSP files. HSBC is that way as well but does seem to centralize more of the administrative processing. HSBC is a nightmare in terms of estate handling, though, you can go in to another branch but it's a nightmare for staff who have to make photocopies in triplicate, one for their day's work, one for the Domestic Service Centre (based in Vancouver on Virtual Way [used to be 401 W. Georgia St] and North Toronto, on Steeles Ave now [used to be Markham on Allstate Parkway]) and one for the home branch's estate file which got sent via inter-office mail. The problem is...many branches didn't do the third step and was a nightmare audit-wise! 🙁

As for the refusal to open an account, as per the Access to Basic Banking Regulations, administered by FCAC, banks have, supposedly, limited reasons they can refuse to open a new account, technically speaking. You can see here for the reason(s), though I note that the last two reasons have been added since I left in early 2014, likely due to, and probably at the request of, the proliferation of virtual banks, which likely makes you wonder: who's in charge here? The regulator(s) or do the banks tag the figurative "tail" of the regulatory "dog"? 😉

We had two internal forms we completed: first, a checklist, and second, a form letter, where we basically just dated & signed it. We gave it to the client, kept a copy for a single "Refusal to Open Account File" along with the completed checklist. Manager sign-off was not actually required for this and any staff member could do this. However, it was recommended to get a second set of eyes in case the customer makes a complaint. In the five years I was at HSBC's Westbank Branch, I think I did one, maybe two, "refusal to open an account". It didn't need to be reported but had to be divulged in the event a customer complained to FCAC. Practically speaking, however, if you turn a client away because, let's say, you tell them you have no one available to see them, no checklist needs to be done and no letter given. They can still come back another day or book an appointment but most didn't - they went elsewhere, which is what HSBC wanted. 😉

Still, that's one good thing about bank regulation, though: access to financial services. Provincially-regulated credit unions are only regulated from capital adequacy (including deposit insurance) and governance perspectives (i.e., proper notification and annual/special meeting rules are followed). There's no consumer protection regulation of provincially-regulated credit unions. Some credit unions are what I call more "consumer friendly," more open to taking clients with less than desirable credit ratings and applying lower hold periods or holding all deposits. Also, provincially-regulated credit unions don't need to adhere to federal Access to Funds Regulations (i.e., first $100 availability or same maximum hold periods).

As to the last point you cite re: TDCT, I can't speak to that, specifically, but I will say that for balance enquiries, it's often quicker just to hit "print screen" and "okay" and walk to a nearby MFD printer to pick it up than grab a "balance enquiry" form notepad, scribble in a balance and, for anal people like me, the customer's name and account number. I guess I could've just written a balance but that looks less professional - unless you wouldn't have minded that, if you were my customer, maybe? 😉

Hope that helps!

Cheers,
Doug

January 1, 2018
10:56 pm
Loonie
Member
Members
Forum Posts: 6404
Member Since:
October 21, 2013
sp_UserOnlineSmall Online

thanks, Doug. Interesting to hear how it all works. I didn't know there were rules about when they could refuse an account. Interesting that financial status is not pertinent at all. If you've got enough to make a deposit and cover whatever monthly fees, it seems they have to take you. However, the "brush-off" seems to work, as some social service agencies have ended up having to function as bankers for their clients.
I too have thought CUs a bit looser on this, because it's a membership thing and they can presumably decide not to admit you to the club. This is more obvious with closed bond CUs.

Not sure what POA has to do with it.

I would have been QUITE happy for you to scribble down the figure on any scrap of paper - would have even provided same - and said so - but some will do it and some insist on taking more time and printing more paper - which I then bring home and shred once I'm done with it. Maybe they just wanted an excuse to look at my profile?sf-wink or maybe they don't need one. Maybe they wanted to stretch their legs, slow down the flow of customers, or catch the eye of someone yonder. I'll be in again for another update this week probably.

It's funny what branches do and do not keep. I have had accounts at same TDCT branch for over 30 years. In that time, they have lost my signature cards and my power of attorney forms. When they had to add a second signature sheet to the safety deposit box sign-in, this seemed to cause them a lot of problems and took forever as they were missing something or other having to do with setting it up in the first place. When I withdrew money from the RIF, I could do that on the phone to central CSR. When I closed the RIF, I could do that at another branch, no special questions asked, as I happened to be in that vicinity with time on my hands after aforementioned failure to proceed at Scotia. Come to think of it, when I transferred the RSP to RIF in the first place, I did that at yet another branch as the central booking department told me that was the only place in the area where someone could see me in a timely fashion.
I, on the other hand, have every form they have ever given me or that I have given them. i have reason to believe they intentionally discarded the POA but not sure about the rest.

Do you still work in financial services? You don't have to answer if that would be too revealing. Just wondered.

No permission to create posts

Please write your comments in the forum.