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About the FCIDB
Investing with a Deposit
Broker - what you need to know |
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| 1.
What is a deposit broker? |
Deposit
Brokers are independent retailers of financial products and
services specializing in "guaranteed" investment products such
as GICs, term deposits, and Canadian Savings Bonds. Your Deposit
Broker is also a one-stop financial products solution center,
with most members offering a full range of products including
Mutual Funds, Annuities, and Life Insurance, from numerous Canadian
financial institutions, as well as RRSP, RRIF, LIF and Pension
plans.
FCIDB Members work diligently to provide you with the best,
independent advice on information affecting your deposit product
needs. Your Deposit Broker understands the special requirements
of a deposit investment in much the same way a stock broker
specializes in their investment area. Your FCIDB Member maintains
daily information on current interest rates, helps you achieve
the best possible return on your deposit investment, and works
on your behalf to find the best investment available from all
financial institutions including trust companies, banks, insurance
and fund companies. And best of all, there is no fee for this
service! |
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2. How Can Deposit
brokers offer services Free of Charge?
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| You can
get the best rates and widest selection of investment options
at no cost to you by using the services of a Deposit Broker.
Deposit Brokers, unlike most investment advisors, have access
to large volume, deposit product selections. Financial Institutions
use the Deposit Brokerage channel to offer these deals which
can then be offered to investors efficiently and at top returns,
completely free of fees or commission. A Deposit Broker receives
compensation directly from the financial institution. |
3.
Why can your Deposit Broker offer higher interest rates than
other financial
institutions and advisors? |
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Deposit Brokers receive daily information on current interest
rates and current product availability from financial institutions
all across the country. The demand, volume and availability
of product varies daily, and by institution, creating opportunities
for better rates. These can be best accessed by a Deposit Broker
working daily to understand investors needs and the best possible
product solutions. |
| 4.
What are the benefits of dealing with a deposit broker? |
- Variety of Options
- Daily Market Data to achieve best possible rates and
returns
- Unbiased analysis, advice and recommendations
- All trade administration and paper work
- Immediate deposit to your chosen financial institution
- Offers personal service and consultation
- Advice on related tax implications
- Transfer of existing investments, including RRSPs, on
more favourable terms
- Investments tracking so you don't miss maturity dates
and renewal reminders
- Guaranteed confidentiality
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| 5.
Do I need a lot of money to invest through a deposit broker?
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No. Minimum
deposits are as low as $500 and can be invested in GICs or RRSP
eligible products. Short term deposits between 30 and 364 days
normally
require a minimum investment of $5,000 but may vary - ask your
Deposit
Broker. Finally, regardless of your level of investment, you
will receive
the same personal and professional service. |
| 6.
What type of financial products can I invest in through a deposit
broker? |
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Most Deposit Brokers and FCIDB Members are full service investment
advisors offering a complete range of financial products and
services including: Term Deposits, Guaranteed Investment Certificates,
Short Term Deposits, Cashable Certificates, RRSPs RRIFs, LIFs,
Annuities, Mutual Funds, Life Insurance.
Deposit investments include annual, semi-annual, monthly or
compound interest options and new products and services are
offered regularly to reflect the changes in today's financial
marketplace.
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| 7.
How is my money deposited? |
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Most investments made with your Deposit Broker are made payable
to the designated financial institution, or are in trust to
your broker. Your Deposit Broker will provide you with a suitable
acknowledgment that the Trust Account is approved and subject
to suitable bonding procedures. Deposits are made, on a daily
basis, to an account established by the financial institution
to receive your funds. |
| 8.
When does my investment start? |
Your investment
starts the same day you complete an application and submit a
cheque, (providing your investment is made prior to that days
trading deadline) or the next banking day.*
*Remote locations occasionally are the rare exception.
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| 9.
How do I receive my interest payments? |
| You may
choose to have your interest deposited directly to any financial
institution account or it can be mailed directly to you, payable
annually, semi-annually, quarterly, or monthly. Alternatively
it may be left to compound to maturity for a single payout.
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| 10.
How do I know my deposit is safe? |
Deposit
insurance is available for qualifying deposits. Banks, Trust
Companies and Mortgage and Loan Companies must be members of
the Canadian Deposit Insurance Corporation (CDIC) or similar
provincial Deposit Insurance Corporations. Credit Union Depositor
Protection Programs (CUDPP) have separate regulations and deposit
insurance rules and limits for credit unions which varies in
each province. Life and Health Insurance Companies can be members
of the Canadian Life and Health Insurance Compensation
Corporation (CompCorp). Published listings of these member institutions
may change from time to time due to corporate name changes,
buy-outs or amalgamations. There are limits to insurance protection
and not all deposits are insured. Certain terms and conditions
may apply. For example, the maximum deposit term covered by
CDIC is five years; there is no such limitation under CompCorp.
Mutual Funds are not covered by CDIC, while the Life Insurance
Companies' guarantee applicable to segregated funds, is covered
by CompCorp. For detailed information on CDIC or CompCorp coverage,
or any changes in a institution's status, contact your member
of the FCIDB
for brochures published by CDIC and CompCorp. Toll-free numbers
are also available for questions not covered by the brochures.
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| 11.
Should I be concerned if an institution is not a member of CDIC
or CompCorp? |
| Yes. Membership
in CDIC or CompCorp should be a consumer consideration when
choosing to place your investments. Special attention should
be paid to the maximum insurable amount. Some financial institutions
may argue that investment considerations should be based solely
on the strength of the institution's balance sheet, however
your investment is placed with that institution for a future
term and the balance sheet reflects historical, or at best,
current situations. Unforeseeable events such as new ownership
and a different corporate philosophy or changing economic conditions
may weaken financial stability. Deposit insurance is your best
long term protection, and it was for this reason that CDIC and
CompCorp were originally introduced. |
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12. Are members
of the CDIC and CompCorp regulated? Who regulates deposit
brokers?
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Federally
and provincially incorporated financial institutions are examined
and regulated by the Office of the Superintendent of Financial
Institutions on behalf of CDIC. Provincially incorporated members
are examined by an agent of CDIC and are regulated by the responsible
provincial authorities. Life Insurance Companies are regulated
by Provincial and Federal Superintendents of Insurance. Deposit
Brokers are subject to the applicable provincial regulations.
The FCIDB has a code of ethics and standards to which members
must adhere. The organization is a strong supporter of a regulated
industry and is working closely with provincial governments
and
other regulators to insure consumer safety. |
| 13.
Can a deposit broker manage my investment portfolio? |
| Some investments
like RRSP's and RRIF's can be very complex, depending on the
individual situation, so proper planning is essential. Members
of the FCIDB have the necessary qualifications and experience
to explain your options, will help you determine your allowable
contribution amount and provide the management systems to help
look after your individual maturities. As a consumer you have
the right to transfer your investment from one institution to
another to obtain a better interest rate, stay within deposit
insurance limits or to avoid or remove service fees. Our member
Deposit Brokers will take the time to coordinate this for you,
maximizing your returns through a diversified portfolio approach
while protecting your investments within the security of CDIC
and CompCorp limits. |
| 14.
FCIDB and you |
| Founded
in 1987, The Federation of Canadian Independent Deposit Brokers
(FCIDB) is the national association of deposit brokers. The
Federation is the only organization that specifically represents
the interests of deposit clients and independent deposit brokers.
The member deposit brokers distribute a broad range of financial
products such as GICs, short term instruments of deposit, annuities
and a variety of investments that qualify for RRSPs and RRIFs
for Canadian Banks, Trust and Insurance Companies. FCIDB members
provide you with access to the widest possible range of investment
products with the best terms available from a majority of Canadian
financial institutions.
Our primary objective is to serve the best interests of the
consumer by providing the fundamental keys to your financial
success: the best possible interest rates: a wide selection
of products and personal service. Members of the FCIDB are
concerned about you, the consumer, and have worked successfully
with institutions and regulators on behalf of Canadian investors.
Our goal is to improve consumer service by ensuring FCIDB
members practice the highest standards of financial responsibility
and professional business practice. All investment purchases
are made on behalf of the client in the client's own name.
The Federation does not condone the practice of purchasing
investments in the name of the Deposit Broker, or the Deposit
Broker in trust.
If you have other questions, please contact one of our members,
or the FCIDB directly.
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| 15.
What Qualifications does my deposit broker require to maintain
membership with FCIDB? |
| (Excerpt
from the by-laws of the FCIDB)
The membership committee may approve any person who has the
following qualifications, in addition to those requirements
set forth in paragraph 4.4, 4.5, of the by-laws, namely the
person must:
- Have three year's experience in the deposit brokerage
business or in a financial, or financially related business,
whether as an employee, partner or some other capacity;
- Be engaged in the deposit brokerage business or a financially
related business on a full-time basis;
- Have qualified staff available at place of business during
normal business hours;
- Have an acceptable office or place of business;
- Be financially stable;
- Provide character references from a least three sources,
two of whom must be either a trust company, savings and
loan company, or bank.
- Have obtained a specific volume of deposits with at least
four different financial institutions.
- Not excluded from membership by his/her professional
association.
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16. What are the FCIDB's objectives? |
- Always put the consumer's interests first
- Work closely with CDIC, Financial Institutions and regulators
to protect investors
- Provide input to Financial Institutions on procedures,
consumer issues, commissions and products
- Educate and inform member deposit brokers through regular
communication, industry research, regional meetings, and
annual conventions
- Further Member knowledge and expertise through mandatory
completion of the Canadian Deposit Self Study Course.
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| 17.
How do I find a deposit broker? |
| Ask your
current investment advisor if they are a registered deposit
broker or visit the FCIDB web site at www.fcidb.com to find
a complete regional listing of members
with complete contact information. |
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