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For Investors |
Frequently Asked Questions |
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This list of Frequently Asked Questions
will explain further the role of the FCIDB. Click on the question
to view its answer.
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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.
This ensures you receive unbiased advice. Deposit brokers, unlike
most investment advisors, have access to large volume, deposit
product selections. Financial Institutions use the deposit broker
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. |
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Why can your deposit
broker offer higher interest rates than other financial institutions
and advisors? |
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Deposit brokers monitor interest rates and available products
on a daily basis to help you get the best possible returns from
a wide range of financial institutions all across the country.
Because product availability, demand and volumes vary daily
with each financial institution, new opportunities for better
rates are constantly being created. Typically, a deposit broker
can find you rates that are up to 1% better than the retail
bank-posted rates. That can earn you hundreds of dollars more
- without the slightest increase in risk. |
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What are the benefits
of dealing with a deposit broker? |
- Specializes in guaranteed investment products
- No cost to you on guaranteed investment products
- Finds the top rates by monitoring interest rates
and available products daily
- Saves you time and effort by shopping the market
on your behalf
- Comprehensive and unbiased advice and recommendations
- Trusted customer relationships with personal and
professional service
- Peace of mind knowing that your money is protected
by the appropriate deposit insurance organization within
their insurance limits
- Tracking investments so you don't miss maturity
dates and renewal reminders
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Do I need a lot
of money to invest through a deposit broker? |
| 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. |
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What type of financial
products can I invest in through a deposit broker? |
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Though deposit brokers specialize in guaranteed investment
products, most deposit brokers are full service investment
advisors who are licensed to provide the full spectrum of
investments - from mutual funds to annuities and life insurance
- for RRSPs, RRIFs, LIFs and pension plans, as well as non-registered
accounts.
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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.
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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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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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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 that varies for
each province. Life and Health Insurance Companies can be members
of Assuris. 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 Assuris.
Mutual Funds are not covered by CDIC, while the Life Insurance
Companies' guarantee applicable to segregated funds, is covered
by Assuris. For detailed information on insurance coverage provided
by CDIC, Assuris or a provincial deposit insurance organization,
contact your member of the FCIDB for their published brochures..
Toll-free numbers are also available for questions not covered
by the brochures. |
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Should I be concerned
if an institution is not a member of CDIC, Assuris or provincial
deposit insurance organizations? |
| Yes. Membership
in CDIC, Assuris and provincial deposit insurance organizations
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, Assuris and provincial deposit
insurance organizations were originally introduced. |
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Are members of the CDIC, Assuris and provincial deposit insurance
organizations 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. |
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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,
Assuris and provincial deposit insurance |
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FCIDB and you |
Founded
in 1987, the Federation of Canadian Independent Deposit Brokers
(FCIDB) is a Professional Standards Organization (PSO) with
membership from all regions across Canada. It sets professional
conduct and procedural standards for its Member's and provides
a context within which member deposit brokers operate with a
mandate to enhance investor protection and strengthen public
confidence in the Canadian deposit broker industry. The Federation
is the only organization that specifically represents the voice
of deposit clients and independent deposit brokers.
Member deposit brokers and their representatives comprise a
distribution channel for the Canadian consumer to access over
30 various Federal and Provincial Regulated Financial Institution
members and their various guaranteed deposit 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, Credit Union and Insurance Companies.
Our primary focus 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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What qualifications
does my deposit broker require to maintain membership with FCIDB?
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| (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 member financial institutions.
- Not excluded from membership by his/her professional
association.
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What are the FCIDB's
objectives? |
- To always put the consumer's interests first
- To further Member knowledge and expertise by qualifying
for industry recognized designations through the completion
of the Canadian Deposits Self-Study Course
- To work closely with legislative and regulatory bodies,
CDIC and Financial Institutions to protect investors
- To work in co-operation with the Financial Institutions
to provide uniform guidelines, practices and procedures,
and respond to consumer issues
- To educate and inform member deposit brokers about important
issues through regular communication, meetings, and annual
conventions
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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 to find a complete regional
listing of members with
complete contact information. |
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