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Canada Orders Wealth One Bank Shareholders to Divest
September 12, 2023
11:22 am
Dean
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UkrainianDude said

I see no harm if you keep under 100k  

Ahhh, the old CDIC card ... 'Good Luck' with that.

Yes, you may get most (if not all) of your $$$ back, but it will take months, if not a year or more.

Best not to go there (W1BoC), in the first place ... it's just not worth it

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

September 12, 2023
11:47 am
mordko
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Wealth One is advertising on this website. They are advertising 5.98% interest and CDIC coverage. You know there is a problem when a bank needs to advertise 6% interest AND insurance. Perhaps we’ll see how well CDIC works out for the gullible. Its not like they haven’t been warned.

September 12, 2023
11:59 am
Bill
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I wouldn't read anything into advertising CDIC coverage, that's pretty standard for a lot of fi's, lots of people probably look for that "certification".

Interesting you should mention that, mordko, this website accepting advertising money from Wealth One. I'm surprised the high-ethics signalers here continue to participate on this site. As I said, if it's legal it's ok, end of story, we all do it.

September 13, 2023
8:56 am
Dean
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.
This thread/subject reminds me of a famous quote . . .
.

.
'Good Luck' to those who dare,

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

September 13, 2023
11:08 am
UkrainianDude
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Dean said

Ahhh, the old CDIC card ... 'Good Luck' with that.

Yes, you may get most (if not all) of your $$$ back, but it will take months, if not a year or more.

Best not to go there (W1BoC), in the first place ... it's just not worth it

    Dean

  

Unsure where you got your information.
We expect to start mailing cheques for the Deposits held in one name and Deposits held in more than one name (i.e. joint deposits) categories in the days following the closure of the failed member.
https://www.cdic.ca/what-happens-in-a-failure/reimbursement/#:~:text=CDIC%20would%20reimburse%20insured%20deposits,would%20be%20completed%20via%20cheque.

September 13, 2023
2:27 pm
Dean
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.
I'm sure that promptness would only happen under 'Ideal Conditions'. And as we all know, W1BoC is about as far from Ideal as an FI can get.

If someone wants to continue to have $$$ at W1BoC, then ... Fill Yer Boots
It's your risk, exposure and worry, not mine (i.e. no skin off my back.)

Like I've said here before ... 'Good Luck'

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

September 13, 2023
3:50 pm
AltaRed
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I have little doubt CDIC would pay out quickly, especially with a small institution like Wealth One. They would pursue Wealth One after the fact to mitigate their exposure. That isn't the issue.

September 13, 2023
4:30 pm
mordko
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I think it all depends on circumstances at the time of the bankruptcy. Chances are it will be paid up as stated as quick but there certainly are other scenarios.

September 13, 2023
4:50 pm
AltaRed
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September 13, 2023
6:51 pm
canadian.100
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UkrainianDude said

I see no harm if you keep under 100k  

I agree in regard to safety of the funds up to 100K. No risk thanks to CDIC. However, I might be concerned with protection of my personal information.

September 13, 2023
7:05 pm
Dean
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.
With all this talk of CDIC coverage, etc., it's quite clear that most here expect W1BoC to eventually Crash ... and I would agree.

A good analogy is comparing this to driving on the road in traffic. As we all know, the best plan is to Drive Defensively, and 'Avoid' the accident/crash.

But for some here, they seem to be relishing in the possibility that the Crash 'Will' happen ... and that they're directly involved in it, and are looking forward to it.

There's a term for them, you know ... they're called; 'Crash Test Dummies'.

LOL sf-laugh

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

September 13, 2023
7:16 pm
AltaRed
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I am not reading any consensus that folks necessarily expect Wealth One will go insolvent, but if it does, or if it is closed down by the regulator, CDIC protection will be there for insured amounts (in event of insolvency), and perhaps entirely if shutdown by the regulator.

There is probable reason to believe their business model is now being severely tested, both in attracting retail business and being ring fenced/handcuffed/shackled by the regulator, and that means substantial headwinds to business success (earnings and cash flow). It is tainted.

September 13, 2023
8:56 pm
Loonie
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Good points, AltaRred.

I have well under CDIC limits at W1 in a GIC that pays poorly. I am confident CDIC will cover it if need be.

In my particular case, however, I'd be happy if W1 went under and was not bailed out by another bank because it would enable me to get out of that poorly-paying GIC! sf-smile

Even though I have enough "room", I won't likely buy another GIC from them until or unless the air clears. I don't want to put money into a high-paying GIC if there is a good chance I could lose that deal and then find that rates have since dropped.

I did buy another GIC (within CDIC limits) when Oaken (HCG) was in danger, and did very well on five years at a premium rate. However, in that case, the underlying business seemed sound. But W1's picture is not clear to me.

I would not read too much into W1's current rates. These are promo rates. You can tell because they all end in 8, a lucky number in Chinese culture. We are now getting into Autumn Festival season, and W1 always offers a rate promo at that time of year. In a few weeks, rates will drop off again, then come back during Lunar New Year in the winter - assuming W1 is still operating.

September 13, 2023
9:03 pm
mordko
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If they go down soon and alone, CDIC will pay out. But banks in general may be facing difficulties over the next couple of years. If W1 survives until there are bigger issues and funds within CDIC start running out, imagine W1 clients could be the last in queue for compensation. They had plenty of warning. An argument over owners syphoning off funds, lawsuits wth the auditors and other litigation are always a possibility with outfits like this. Its a low probability event but CDIC payouts are not a 100% certainty like some suggest.

September 13, 2023
9:12 pm
Loonie
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W1 is a small bank. It is also the most vulnerable one right now. So , if there is/are bank failure(s), W1 will most likely go first. CDIC will then cover it because it's first in line. Small banks are the canaries in the coal mine. It's actually the larger banks that CDIC would have the greatest difficulty covering, although i am aware that most people on this forum think they could never fail. Maybe so, but how many times have you heard the word "unprecedented" in the last year? I'm guessing an "unprecedented" number of times!

September 14, 2023
6:51 am
COIN
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Audentes Fortuna Iuvat (fortune favours the bold).

But, I don't feel very bold when it is only a few basis points.

September 14, 2023
8:22 am
AltaRed
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There is far too much 'crying wolf' as regards CDIC ability to pay out. CDIC has considerable assets, plus the ability to borrow, plus the ability to intervene in a financial institution far before the situation gets out of control.

All of this information is available on the CDIC website. It is time to read and be truly informed rather than to postulate and speculate.......

Maybe start with the 2022 Annual Report https://www.cdic.ca/wp-content/uploads/cdic-2022-annual-report.pdf with $7+B of assets.

Then spend some time looking at actually what happens in a failure https://www.cdic.ca/what-happens-in-a-failure/

If one really wants to dig into the history and evolution of CDIC, including the eventual granting of rights of oversight, intervention and borrowing, https://www.cdic.ca/wp-content/uploads/our-history.pdf

CDIC is about as bullet proof as an insurance provider as anything that can reasonably exist. Time to move on....

September 14, 2023
9:44 am
mordko
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I prefer another cliche: “ Past performance is no guarantee of future results." Also, I am still to find a financial organization describing how things could go wrong with its core services.

Bernstein provides a nice summary of insurance risks in “Investor’s manifestor”. A lot depends on economic and political situation at the time of the bust.

Giving money to an obviously dodgy institution for a few basis points a year seems crazy, regardless of the high (but not certain) likelihood of a savings bailout.

September 14, 2023
2:01 pm
Bill
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My theory is that Wealth One is operating in Canada for reasons other than making a profit, though they wouldn't mind that either, I'm sure. It has connections with China (and wasn't our current government linked to it a few years ago, some kind of fundraiser or something like that, just before it received its charter, I seem to recall - ?) so I would guess it has a "backer" with probably endless dough who wants to keep it operating in Canada. That's my personal thinking only, so I'm not worried, though I would certainly not exceed CDIC limits, just to be safe.

And 5.98% GIC rate doesn't sound that desperate if profit-making Tangerine's rate is 5.95%, pretty much the same, especially if 8 is indeed considered lucky by a certain community.

September 14, 2023
2:03 pm
COIN
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mordko said
Bernstein provides a nice summary of insurance risks in “Investor’s manifestor”. A lot depends on economic and political situation at the time of the bust.   

Does anyone remember Lloyds of London?

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