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Re-thinking where to deposit TFSA, RSP/RIF GICs.
June 1, 2020
3:06 am
Loonie
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As I mentioned on another thread, I have been encountering extraordinary difficulty exercising a POA at 2 major banks recently. In particular, they are completely unwilling to allow access to TFSAs because they are "investments". Never mind that the client needs these funds to pay her bills, they won't free them up as their lawyers say "no", under any circumstances. and no matter that the person is almost 100 years old. If not now, when??. As a result, I am having to pay these bills out of my own money right now. It's a very long story.

This experience has made me think again about where to keep registered funds.

I certainly don't use the Big Banks for this purpose, but the reality is that you don't really know for sure how your duly executed POA is going to be treated by any given FI until the time comes to use it. The rules of the FI can change, their lawyers can become more difficult, the forms you filled out at the FI or even the lawyer's office can change, laws can change, etc. The point is that you don't actually know what the circumstances will be by the time your POA has to act on your behalf.

One small example, not related to my current problems. A few decades ago, I was out of the country for a significant period of time and had set up a POA at my bank, then TD. I filled out the bank forms as required and the person I had appointed was permitted to act on my behalf for several years. About 8 years later, some time after I had returned to Canada, I wanted to make some other changes, and TD said they had no record of this POA or these forms at all.
I had never cancelled the POA. They offered me new forms to sign instead, which I chose not to do as they were quite different and I didn't agree with some of their provisions.

Now, coming back to the present and thinking towards the future, I have no confidence that my Attorney will necessarily be able to access my registered funds and make investment decisions on my behalf.

It is my habit to move the GICs around to get the best deal. I would expect the Attorney to do the same if they had the insight to do it, but, if not, to do the best they could, but I do expect them to have power to do as they see fit.

I can't count on them having this power for the reasons outlined above, plus each FI will have its own rules, making it even more difficult for the Attorney.

As many of you know, I have said before that I don't like to keep registered accounts out of my province (Ontario) because of such potential issues. I prefer to only keep joint non-registered accounts outside of the province.

I am now seriously thinking of narrowing this even further.

I must now assume that it could very likely be difficult or impossible for my Attorney to move my registered funds from one FI to another and, even if successful, it could be difficult to make the subsequent switch.

So I am now thinking in terms of Ontario Fis that have tended to have superior rates over time and putting the money there (to insurable limits) as the current GICs mature. This is not necessarily getting the best available rate on a given day, but a reasonable one. Thus, whenever a registered GIC matures, the worst that could happen would be that the FI would not allow my Attorney to do anything and the GIC would roll over at a reasonable rate if not the best rate. Of course, the best FIs for rates can change over time, but I think this is my best defence, at least for RIFs, right now.

This also reinforces my thinking that I want to maximize RIF withdrawals in a tax-efficient way so as to minimize or eliminate the balance that is in them. I have been working on this for several years and now think I can complete it for spouse and me within the next 5-7 years, depending on returns, reducing the balance to zero.

I don't think this will work as well for TFSAs as I don't intend to empty them, but it might still be better than having a disempowered POA.

For the non-registered funds, I am working towards having only joint accounts with equal contributions from both of us. To this end, we are living off the assets and income of one of us until our funds are equal, at which point we will live more from the funds of the person with the higher income in order to maintain equal amounts in the investments. I estimate this process will take about 4-5 years.

If I'm lucky, we'll both live long enough to complete this process! I hope circumstances don't require me to dream up yet another plan.

June 1, 2020
6:46 am
Doug
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Loonie said
As I mentioned on another thread, I have been encountering extraordinary difficulty exercising a POA at 2 major banks recently. In particular, they are completely unwilling to allow access to TFSAs because they are "investments". Never mind that the client needs these funds to pay her bills, they won't free them up as their lawyers say "no", under any circumstances. and no matter that the person is almost 100 years old. If not now, when??. As a result, I am having to pay these bills out of my own money right now. It's a very long story.

This experience has made me think again about where to keep registered funds.

I certainly don't use the Big Banks for this purpose, but the reality is that you don't really know for sure how your duly executed POA is going to be treated by any given FI until the time comes to use it. The rules of the FI can change, their lawyers can become more difficult, the forms you filled out at the FI or even the lawyer's office can change, laws can change, etc. The point is that you don't actually know what the circumstances will be by the time your POA has to act on your behalf.

One small example, not related to my current problems. A few decades ago, I was out of the country for a significant period of time and had set up a POA at my bank, then TD. I filled out the bank forms as required and the person I had appointed was permitted to act on my behalf for several years. About 8 years later, some time after I had returned to Canada, I wanted to make some other changes, and TD said they had no record of this POA or these forms at all.
I had never cancelled the POA. They offered me new forms to sign instead, which I chose not to do as they were quite different and I didn't agree with some of their provisions.

Now, coming back to the present and thinking towards the future, I have no confidence that my Attorney will necessarily be able to access my registered funds and make investment decisions on my behalf.

It is my habit to move the GICs around to get the best deal. I would expect the Attorney to do the same if they had the insight to do it, but, if not, to do the best they could, but I do expect them to have power to do as they see fit.

I can't count on them having this power for the reasons outlined above, plus each FI will have its own rules, making it even more difficult for the Attorney.

As many of you know, I have said before that I don't like to keep registered accounts out of my province (Ontario) because of such potential issues. I prefer to only keep joint non-registered accounts outside of the province.

I am now seriously thinking of narrowing this even further.

I must now assume that it could very likely be difficult or impossible for my Attorney to move my registered funds from one FI to another and, even if successful, it could be difficult to make the subsequent switch.

So I am now thinking in terms of Ontario Fis that have tended to have superior rates over time and putting the money there (to insurable limits) as the current GICs mature. This is not necessarily getting the best available rate on a given day, but a reasonable one. Thus, whenever a registered GIC matures, the worst that could happen would be that the FI would not allow my Attorney to do anything and the GIC would roll over at a reasonable rate if not the best rate. Of course, the best FIs for rates can change over time, but I think this is my best defence, at least for RIFs, right now.

This also reinforces my thinking that I want to maximize RIF withdrawals in a tax-efficient way so as to minimize or eliminate the balance that is in them. I have been working on this for several years and now think I can complete it for spouse and me within the next 5-7 years, depending on returns, reducing the balance to zero.

I don't think this will work as well for TFSAs as I don't intend to empty them, but it might still be better than having a disempowered POA.

For the non-registered funds, I am working towards having only joint accounts with equal contributions from both of us. To this end, we are living off the assets and income of one of us until our funds are equal, at which point we will live more from the funds of the person with the higher income in order to maintain equal amounts in the investments. I estimate this process will take about 4-5 years.

If I'm lucky, we'll both live long enough to complete this process! I hope circumstances don't require me to dream up yet another plan.  

Loonie, see my post # 25 in the other thread you mentioned (which may be split off into a new thread following my and @AltaRed's suggestions). However, I'm wondering if this is actually a case where your mother (or mother-in-law?) would be better off having her deposits at a self-directed discount brokerage or a deposit broker like Desjardins Financial Security Investments, Inc. In either case, acceptance of the POA would be done by the discount broker or deposit broker. She may be giving up a bit in return on her deposits, but she's 100 years old. She may not have many years left anyway and, at this point, access to capital should be valued more than an extra 10-30 basis points.

So long as she's still of sound mind, it should be possible for you to complete the required brokerage POA form (or try submitting your legal POA), signed by the applicable number of unrelated witnesses, along with her brokerage account application form.

If the bank is refusing to allow a redemption from the GICs (perhaps that's the issue, that the GICs are not redeemable prior to maturity?), well, fine. They can't reject a T2033 transfer form duly signed by you, as the POA, provided it's been accepted. You could also have your mother (or mother-in-law) sign the T2033 transfer form for even greater certainty.

Cheers,
Doug

June 1, 2020
8:44 am
AltaRed
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I think Loonie is actually using the experience of the POA difficulties with her? (my apologies but I am not familiar with Loonie's gender) mother to want to avoid it for herself in the future. Understandable to say the least.

I am adamant about minimizing proliferation with consolidation to as few FIs as possible with respect to POAs. I have accounts at Scotia/Scotia iTrade (chequing/RRSP/TFSA/non-registered), BMO/BMO Investorline (chequing/non-registered/RESP) and EQ Bank (HISA/GIC). That is all that I will ever have. I obviously do not get the best rates for GICs at Scotia iTrade and BMO Investorline but I do NOT care. Both of those brokerages offer clean DIY online buy/sell of GICs and both have a long list of GIC providers albeit only 3-5 of them are usually at better rates. Could easily have $1M or more in CDIC insured amounts. I am at peace with my affairs being relatively simple for my POA.

I don't have bank POAs with any of these (yet) and don't really intend too, given I have a blanket enduring POA that is supposed to work province wide, if not Canada wide. I suppose I should start inquiring with Scotia and BMO IL about that.....

P.S. If I was POA for someone, I would NOT go chasing rates at various FIs for that person. It would all be in one FI family and if it was not all at one FI when I took over, I would cause it to become that way over time.

June 1, 2020
10:22 am
cruzinalong
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Correct. KISS is a good rule. I have a friend that banks with CIBC. His wife banks with Scotia. He says the brokerage accounts are the same. You said BMO is the same as Scotia. They are competitive no reason to switch.

June 1, 2020
10:41 am
Doug
British Columbia, Canada
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AltaRed said
I think Loonie is actually using the experience of the POA difficulties with her? (my apologies but I am not familiar with Loonie's gender) mother to want to avoid it for herself in the future. Understandable to say the least.

Yeah, sorry about that. I replied to Loonie's post before I read the whole thing. I realize that Loonie was using his mother's, or mother-in-law's, experience with him as a POA as a rethink to his and his spouse's own situation. I didn't bother amending my post as the advice is the same whether for mother-in-law/mother or himself and that of his spouse.

I don't think Loonie's ever specified his or her gender, ostensibly for privacy reasons. It's hard to say; he could be the husband or wife, or she could be the wife or husband. It doesn't really matter to me and I think it's kind of cool that we all picture Loonie differently. sf-cool

I am adamant about minimizing proliferation with consolidation to as few FIs as possible with respect to POAs. I have accounts at Scotia/Scotia iTrade (chequing/RRSP/TFSA/non-registered), BMO/BMO Investorline (chequing/non-registered/RESP) and EQ Bank (HISA/GIC). That is all that I will ever have. I obviously do not get the best rates for GICs at Scotia iTrade and BMO Investorline but I do NOT care. Both of those brokerages offer clean DIY online buy/sell of GICs and both have a long list of GIC providers albeit only 3-5 of them are usually at better rates. Could easily have $1M or more in CDIC insured amounts. I am at peace with my affairs being relatively simple for my POA.

I don't have bank POAs with any of these (yet) and don't really intend too, given I have a blanket enduring POA that is supposed to work province wide, if not Canada wide. I suppose I should start inquiring with Scotia and BMO IL about that.....

P.S. If I was POA for someone, I would NOT go chasing rates at various FIs for that person. It would all be in one FI family and if it was not all at one FI when I took over, I would cause it to become that way over time.  

Completely agree here, @AltaRed, though you probably guessed that. I was only a bit surprised you had two brokerage account providers, but am wondering if that is because BMO InvestorLine perhaps has access to a larger pool of GIC and/or bond issuer than Scotia iTRADE? Also, have you ever called in and booked a GIC with either of them to book a GIC that isn't listed online and, if so, in the case of Scotia iTRADE, do they waive the additional fee for orders placed with a representative (since it's not available online)?

As to bank POA versus legal POA drawn up by a lawyer, while I think there's no reason why a bank should reject a legal POA, and this is just anecdotal and supposition, but I do think that discount brokerages and deposit brokers are more receptive to accepting legal POAs from a lawyer than a bank. That being said, I can say from experience banks do accept legal POAs, but it really varies branch to branch, in addition to by institution/bank. Banks are generally a lot more cautious with accepting POAs and have more stringent monitoring protocols to try and curb POAs playing a bit fast and loose with the donor's funds, which, in the end, is a good thing. The downside is, though, innocent people may get caught up in that. Nonetheless, I really do feel that the discount brokerages are much more accepting of POAs.

Having said that, I do have a full enduring POA for my aunt's Scotia iTRADE accounts. It's essentially the same as an enduring POA drawn up by a lawyer except that it only applies to Scotia iTRADE (Scotia Capital Inc.) accounts and may only apply to the Scotia iTRADE accounts opened at the time the POA form was completed. That is, I could not open an RRSP Scotia iTRADE account for my aunt. As well, they're a bit stringent on the funding to/from her external bank account as they wanted to see me either (a) joint on her external bank account (which I wouldn't want) or (b) have a POA on her external bank account, in order to add funds to her Scotia iTRADE accounts or withdraw to her linked external bank account. Having said that, if she requests a withdrawal, I can telephone or submit a chat request to requisition a withdrawal to her linked bank accounts and there's no fee. In terms of the witness requirements, it was the same as the witness requirements for a legal enduring POA. In fact, I actually had to correct their back office department here as they initially said I needed a second witness because I'm in B.C. (which is true, if my aunt resided in B.C.). However, in addition to pointing out that I clarified this with the front office before submitting the POA and account opening documents, that their form does rightly note that the witness requirements are to the donor's province of residence. Since she resided in Alberta, even though it was signed in British Columbia, the witness requirements Alberta's, which required one witness unrelated to me or my aunt (which excluded my parents).

I also agree with your P.S. wholeheartedly—I would not chase rates as a POA and would probably limit myself to being a POA at no more than three financial institution families/groups of companies, with a possible upper limit of five.

Cheers,
Doug

June 1, 2020
11:00 am
AltaRed
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I have a BMO IL non-registered account for a particular family legal situation that I will not expand on here. That said, the BMO IL relationship turned out to be a good one since Scotia iTrade just could not handle an Individual RESP account from a non-family subscriber (believe it or not). Regardless, each of BMO IL and Scotia iTrade has its positives and negatives and I exploit that, but for GICs. The GIC list is only slightly longer at Scotia iTrade (Concentra GICs for example) and is no reason in itself to have an account at BMO IL.

I will still have to follow up with both Scotia and BMO sometime post covid-19 regarding POAs both in their discount brokerages (registered and non-registered), and bank accounts. I certainly don't want my POA to be handicapped in any way regarding investment buy/sell decisions in the brokerage accounts and/or banking needs...albeit I don't use the two banking subsidiaries for anything other than chequing/e-transfers/pre-authorized debits.

June 1, 2020
2:01 pm
Loonie
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As I suggested, I don't really want to get into all the details as we would be here forever dissecting it all.

Just a few things for the record:

As regards the person whose POA I hold, there are no GICs involved. The bank pulled a fast one on her and got her to put almost all her money into a TFSA mutual fund last year which was inappropriate, has lost money and which I am not allowed to access in any way. We are not talking about a wealthy person. Later, there will be some money from property but my current problems are a nightmare.
Further, this person resides in a retirement home now. The retirement home will not permit residents to leave the building for anything other than medical urgency or they risk not being allowed back in. This is stated in writing. It is a risk we can't afford to take as she would be homeless. This situation exists despite rent being fully paid and despite the tenancy being a landlord-tenant relationship in law.
Even if it were possible to sign up remotely or by mail for some other kind of account or any account elsewhere (whichh is certainly my and her hope), it would be too risky to consider. She was financially abused at Big Bank and can't afford to get mixed up accidentally in anything that is inappropriate, must have me available to help. I am not allowed to enter the retirement home. This is all covid related, but we have no idea if it will be lifted during her lifetime. Hence, cannot set up any other account until covid subsides. In the interim, people are basically imprisoned in their retirement homes with no visitors and severe limits even on health professionals entering the building. Frankly, I am sorely tempted to remove her from the place, which she would like. But it is just too much to undertake, for me.
However, if anyone knows of a reliable GTA FI that might allow the entire process of sign-up to be done in her name online, please send me a PM. I suggest you don't post it publicly because they will likely close that loophole if it becomes well known. I asked Meridian, which would have been my choice for this purpose, but they will not do it.
So far, she is mentally capable of opening a new account, with assistance due to forgetfulness and blindness, but this could change at any time.

But this thread is about my own concerns and plans. I put it out there as to what I am thinking of doing in case anyone else finds it useful to think along the same lines and may find my experience instructive.

I understand that some of you prefer a brokerage account even for your GICs and I appreciate the benefit of all-in-one-place and the possibility that they may be easier to deal with.
If I go ahead with my plan, it will be largely all-in-one-place, at least as regards registered plans, which are the most difficult for POA to access. It may take more than one due to insurance limits and trade-off with rates, but even AltaRed has more than one.
AltaRed can afford not to care about the difference in GIC rates between brokerages and top-tier FIs as he has previously told us he only holds about 5% or less of his money in GICs. If that were my strategy, I would feel the same way. However, it is not my strategy. The difference in rates makes a significant difference to my income. Even so, I will not change this strategy. I can certainly live with lower returns if necessary but am not willing to sacrifice if not necessary.
The person who holds my POA would not want to deal with a brokerage, having had bad experience in the past.

June 1, 2020
4:25 pm
Bill
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FWIW, my parents had most of their money with Edward Jones, gave me POA at some point and easy peasy, working with their advisor, right until their estates settled. In their last few years they were totally disinterested in whether they made an extra half percent or so on a GIC, or whether an account had a $100 annual fee or not, etc, so there are other ways to make it much easier for yourself. They also added me joint to their bank accounts, easy peasy there too.

Of course if you need the best rates, and the cheapest fees, and the most convenient accounts, and virtually no negatives to whatever you choose...…..well, you'll be very busy constantly moving stuff around trying to get all those things. I think, despite their complaints, that's actually how some people like to spend their time. My parents were glad they had to spend zero time on their finances over their last few years, they had far more important things to do with their fast-diminishing time here so the little bit extra it might (might) have cost them was irrelevant.

June 1, 2020
4:28 pm
christinad
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Just curious if anyone has had contact with hubert financial over poa yet? Sorry to hijack. I remember going into td and asking about poa and they knew nothing, so appreciate its a tricky one. Sorry for your problems, Loonie.

There is a thread on oaken and poas if you google it.

June 1, 2020
5:46 pm
cruzinalong
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Bill said
FWIW, my parents had most of their money with Edward Jones, gave me POA at some point and easy peasy, working with their advisor, right until their estates settled. In their last few years they were totally disinterested in whether they made an extra half percent or so on a GIC, or whether an account had a $100 annual fee or not, etc, so there are other ways to make it much easier for yourself. They also added me joint to their bank accounts, easy peasy there too.

Of course if you need the best rates, and the cheapest fees, and the most convenient accounts, and virtually no negatives to whatever you choose...…..well, you'll be very busy constantly moving stuff around trying to get all those things. I think, despite their complaints, that's actually how some people like to spend their time. My parents were glad they had to spend zero time on their finances over their last few years, they had far more important things to do with their fast-diminishing time here so the little bit extra it might (might) have cost them was irrelevant.  

Correct. They could afford to buy the necessities of life and still leave something for their children.

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