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Fiscal Agents Products & Services
What is a deposit broker?

The following information is from a booklet published by the FCIDB.

The Federation of Canadian Independent Deposit Brokers (FCIDB) was incorporated in 1987. 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 services. 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.

In order to help you to understand our business as a Deposit Broker, we have compiled some of the most commonly asked questions and answers. If you have other questions, please contact one of our members, or the FCIDB directly.

You may read the following information in the order presented, or use the following questions to jump directly to the information you seek:

WHAT IS A DEPOSIT BROKER?

A Deposit Broker acts as your agent for the purchase of investment products with numerous Canadian financial institutions. Deposit Brokers are a one stop shopping centre for the purchasing investment products, with most members handling a full range such as GICs, Mutual Funds, Annuities, Life Insurance; including RRSPs, RRIfs, LIFs and pensions. FCIDB members obtain daily information on current interest rates, helping you to achieve the highest possible return on your investments. Compare the time required and the results if you contacted all the banks and trust companies in your local area to find the best available interest rate, with a Deposit Broker who does the research for you on a daily basis, contacting many more financial institutions from all across Canada. There is no fee for this service.

HOW CAN DEPOSIT BROKERS OFFER SERVICES FREE OF CHARGE?

You can get the best rates and the widest selection of investment options at no cost to you by using the services of a Deposit broker. When a financial institution wants to increase its deposit base it offers higher interest rates. Deposit Brokers can deliver large volumes efficiently. Much like a travel agent, a Deposit Broker is paid by an institution for delivering its products to you.

WHAT ARE THE BENEFITS OF DEALING WITH A DEPOSIT BROKER?

Offers a wide variety of financial options to meet your needs;
Surveys the market to achieve the best possible returns on your investment;
completes all the necessary paperwork;
Deposits your funds immediately to the financial institution of your choice;
Offers personalized service;
Advises you of related tax implications;
Transfers existing RRSPs and other investments on more favorable terms;
Tracks your investments so you don't miss maturity dates, contacting you upon renewal, and;
Guarantees confidentiality.

DO I HAVE TO HAVE A LOT OF MONEY TO INVEST THROUGH A DEPOSIT BROKER?

No. Minimum deposits as low as $500. can be invested in GICs or RRSP eligible products. For short term deposits from 30-364 days, the minimum amount is normally $5,000.** The minimum deposit amounts are not unlike the minimums an institution would accept if approached directly. Regardless of the amount you have to invest, a Deposit Broker will provide you with the same professional service.
** Note: Some Deposit Brokers may not offer short term investments or minimums may vary.

WHAT TYPE OF FINANCIAL PRODUCTS CAN I INVEST IN THROUGH A DEPOSIT BROKER?

Most members of the Federation of Canadian Independent Deposit Brokers offer a wide range of financial services such as Term Deposits, GICs (Guaranteed Investment Certificates) paying either annual, semi-annual, monthly or compounding interest, Short-term Deposits, Cashable Certificates, RRSPs RRIFs LIFs and Annuities. Some Deposit Brokers may also offer Mutual Funds and Life Insurance products. New products and services are continually being added to reflect changes in today's financial marketplace.

WHY ARE INTEREST RATES QUOTED THROUGH A DEPOSIT BROKER OFTEN HIGHER THAN THOSE OFFERED LOCALLY?

Deposit Brokers receive daily information on current interest rates of financial institutions from across the country. The demand for money varies by institution almost every day and an institution seeking deposit funds will offer better rates. Deposit Brokers are constantly reviewing the available investment products of all institutions represented to find the best rates and terms for you.

WHY ARE INTEREST RATES QUOTED BY SOME FINANCIAL INSTITUTIONS OFTEN HIGHER THAN DEPOSIT INTEREST RATES OFFERED BY MAJOR CHARTERED BANKS?

Some banks and trusts companies minimize their overhead costs by receiving deposits from a network of independent deposit brokers. They can offer higher rates of interest because they don't have to open and staff expensive branches of their own. Companies that use Deposit Brokers pay acquisition costs only when they require deposits, and they pass the savings on to you in the form of higher interest rates. Often smaller companies will offer premium rates or other advantages such as no fees on RRSP transfers to attract funds away from larger instutions.

HOW ARE THE MONIES WHICH I INVEST THROUGH A DEPOSIT BROKER DEPOSITED?

When placing deposits through a Deposit Broker, you will in most instances make your cheque payable to the financial institution. (Exceptions occur when the Deposit Broker has received authorization from the local provincial securities commission or other applicable regulatory body. In these cases, your cheque is payable to the Deposit Broker in Trust.*) Deposits are then made on a daily basis to the banks where each financial institution has its own account established to receive your funds. * NOTE: When a Broker is depositing in Trust Accounts, ask for suitable acknowledgment that the Trust Account is approved and subject to suitable bonding procedures.

DOES MY INVESTMENT START THE SAME DAY THAT I COMPLETE AN APPLICATION AND SUBMIT MY CHEQUE?

Yes, providing the investment is made prior to the Deposit Broker's banking deposit cut-off time, otherwise your investment will be effective on the next banking day. The only exception might be the case of a Deposit Broker in a more remote location where a direct deposit is unavailable but these cases should be rare.

HOW DO I RECEIVE THE INTEREST EARNED ON MY INVESTMENT?

You may have your interest deposited at the financial institution of your choice. If you prefer, it can be mailed directly to you payable annually. semi-annually, quarterly, monthly or left to compound to maturity.

HOW DO I KNOW THAT MY DEPOSIT IS SECURE?

Deposit insurance is available for qualifying deposits. Banks, Trust Companies and Mortgage and Loan Companies must be members of the Canada Deposit Insurance Corporation or similar provincial Deposit Insurance Corporations eg DISCO. Life and Health Insurance Companies can be members of the Assuris. Published listings of these member instutions 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 CDIC or Assuris coverage, or any changes in a institution's status, contact your your member of the FCIDB for brochures published by CDIC and Assuris. Toll-free numbers are also available for questions not covered by the brochures.

SHOULD I BE CONCERNED IF AN INSTITUTION IS NOT A MEMBER OF CDIC, DISCO OR ASSURIS?

Yes. membership in CDIC, DISCO or Assuris should be a consumer consideration when choosing to place your investments. Special attention should be paid to the maximum insurable amount. Small financial institutions are subject to the same regulation and scrutiny as the large corporations. Some financial institution 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 future term and the balance sheet reflects historical or at best current situations. Unforeseeable events such as new ownership and 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 Assuris were originally introduced.

ARE MEMBERS OF THE CDIC AND ASSURIS REGULATED? WHO REGULATES DEPOSIT BROKERS?

Federally and provincially incorporated financial instutions 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 strong supporter of a regulated industry and is working closely with provincial governments and other regulators to insure consumer safety.

CAN A DEPOSIT BROKER COORDINATE MY INVESTMENT PORTFOLIO?

Some investments like RRSPs and RRIFs 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 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 avoid or remove services fees. Our member Deposit Brokers will take the time coordinate this for you, maximizing your returns through a diversified portfolio approach while protecting your investments within the security of CDIC, DISCO and Assuris limits. See related item

HOW DO I GO ABOUT DEPOSITING WITH A DEPOSIT BROKER?

It's simple. After a consultation with your member of the FCIDB the paperwork is completed for the financial institution of your choice. All investment purchases are made in your name. You then make a cheque payable to that institution (or Deposit Broker's Trust Clearing Account mentioned in question 8), and you are provided with a receipt. Your funds are deposited directly with with that company. Within two or three weeks, you will receive the certificate or confirmation issued by the institution and registered in your name.

Prior to maturity of the investment you will be contacted by your Deposit Broker to return the certificate if necessary. A post dated cheque payable directly to you will be issued by the institution so that you receive your funds, with interest, on the maturity date. All principal and interest cheques are made out in the client's name.

You should consult with your Deposit Broker just prior to maturity to discuss your reinvestment decisions. Our mandate is to provide the best possible service and products available to match your individual needs.

QUALIFICATIONS FOR MEMBERSHIP IN THE FEDERATION OF CANADIAN INDEPENDENT DEPOSIT BROKERS

(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 or partner;
Be engaged in the deposit brokerage business or a financially related business on a full-time basis;
Have qualified personnel available at place of business during normal business hours;
Have an acceptable office or place of business;
Be financially stable;
Provide character references from at least three sources, two of whom must be either a trust company, savings and loan, 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.

WHAT ARE OUR OBJECTIVES?

To provide the best possible interest rates, selection and services to our clients; placing our client's investment interest first.
To set a high standard of ethical and sound business practices.
To establish a liaison with the Trust Companies and Chartered Banks as well as other Financial Institutions that we represent and to resolve any areas of mutual consumer and corporate concern.
To make effective representations to both federal and provincial government departments involved in financial regulations in order to demonstrate that we are a responsible group capable of self-regulation.
To represent consumer concerns in the financial marketplace

Federation of Canadian
Independent Deposit Brokers

www.fcidb.com for more info

This information is presented as a public service by:

Fiscal Agents - Savings & Investment Centre
25 Lakeshore Road West
Oakville, Ontario
(905) 844-7700
Fax (905) 844-8552
mailroom@fiscalagents.com

Fiscal Agents are members of The FCIDB

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