[EXPIRED] $500 bonus to new member opening chequing (conditions apply) | Page 2 | Coast Capital Savings | Discussion forum

I don’t know if I have put this in the right spot.

So here it goes.

They are making fools out of themselves by going federal and not treating every customer the same.

In speaking with a real advisor he tells me that Coast Capital needs to get out there and get their funds built up.

Why?

Because they have numerous investors that have well over $100,000, $200,000, $500,0000 invested. And once their customers renew....they won’t renew, as Coast Capital no longer has UNLIMITED insurance. The customers and advisers will and have found alternative FI’s to move their investments to.

Loonie said

I think you must have meant "fools", not "folks"?

What you are saying makes total sense. Some of us thought of it as a kind of downgrade when they decided to forfeit their higher insurance but others may have thought CDIC superior if limited.
It's only natural that people would start moving out matured GICs. And it shows that people are paying attention.

But it doesn't explain why they are restricting the $500 incentive to residents of BC.  

As part of their communication with members, Coast Capital Savings estimated that, at the time, which was late 2017 (as I recall), 97.5-98% of customers' deposits would be within CDIC insurance limits. So, they estimated that only 2-2.5% of deposits would be in excess of CDIC limits. But, it's reasonable theory.

Also, you have to consider that Coast doesn't really need our deposits. They've got an established brokerage channel, where they're even hawking GIC rates at premiums to the branch channel (which is atypical!) - at least for the past 6-8 months or so. And, back in 2018, they did two institutional deposit note and/or bond placements paying 5-5.5% per annum with maturity in 2029 or 2030. And, even without GIC rate specials, their ability to raise deposits exceeds their ability to grow their loan book, so I suspect as GICs mature, they'll have a "take it or leave it" attitude. 🙁

Cheers,
Doug

Doug said

As part of their communication with members, Coast Capital Savings estimated that, at the time, which was late 2017 (as I recall), 97.5-98% of customers' deposits would be within CDIC insurance limits. So, they estimated that only 2-2.5% of deposits would be in excess of CDIC limits. But, it's reasonable theory.

Also, you have to consider that Coast doesn't really need our deposits. They've got an established brokerage channel, where they're even hawking GIC rates at premiums to the branch channel (which is atypical!) - at least for the past 6-8 months or so. And, back in 2018, they did two institutional deposit note and/or bond placements paying 5-5.5% per annum with maturity in 2029 or 2030. And, even without GIC rate specials, their ability to raise deposits exceeds their ability to grow their loan book, so I suspect as GICs mature, they'll have a "take it or leave it" attitude. 🙁

Cheers,
Doug  

Yes but I am dealing with on of those brokers for my mother in law. He always did Coast Capital 90% of the time but he too must now choose from a long list of other FIs. Sure a big network of brokers.....but same issue.....any maturing GICs will fall under CDIC. And the limits will be on at the brokers too.

And Doug think about it. It does not matter who brought the funds in. It is whoever is over $100,000 will move on to another FI. And they need to replace it plus more.

Lol. And when you go through a broker you will get a higher rate than the in branch no haggle rate. Yes higher!

In hindsight they may do ok if they get as many as possible brokers online from across Canada first.

I am talking about an investment advisor. He always gave us Coast Capital or who ever else was higher.....but usually Coast Capital. And think about how Coast Capital super screws their in branch customers as I was receiving higher rates than the in branch rate AND my advisor was also receiving .25% on top of that.

Stats can be designed to say this or that by stating inclusions, exclusions etc. Bottom line, not a company to be trusted. And who wrote the stats?

Loonie said
Are you guys talking about deposit brokers or investment brokers?
I find it's not unusual for deposit brokers to offer rates better than the bank/CU directly, although not consistent. I wonder if some deposit brokers may have more leverage. Some of them deal with very large deposit sums from corporate entities who obviously find it worthwhile.

Thanks for the additional info, Doug, about CC's projections etc. Maybe they've lost more than they expected, not just due to change of insurance. Perhaps dissatisfied members are moving their money out at the same time. From what you and others have said, this sounds very plausible to me.

Thanks for the reply, Loonie. Since I replied to your first part (above) already, I won't repeat my answers.

Are they really going to target Ontario next? It makes sense on some levels perhaps, but it might also make sense to start with a smaller province and see how it works out. That said, MB appears saturated with CUs, some with better rates than CC (and better service!) so not a good place to start.

According to @Shawguy, they have enabled the Ontario version of their full website, so it seems likely. I suspect they will go to Ontario first, then Alberta (I'd have that they'd go Alberta second and move east), then Saskatchewan, and then Manitoba. I suspect Quebec and the Maritimes will be at least 5 and more likely 10 years out from getting Coast actively targeting them virtually and certainly with branches.

I'm wondering if Coast is biding their time, hoping a provincial credit union will propose to wed, so they too can go national (albeit under the Coast banner)? If they don't have any "takers," I think they may go with their "backup" (and original) plan of launching 1-2 branches per year in one province per year and then roll out gradually. In tandem with those 1-2 branches per year, they would also roll out their full website and begin paid marketing campaigns in each province. What do you think?

Your stats are interesting, Doug. I somehow doubt that other FIs have larger GIC deposit totals. It's likely about the same across the board. And this presumably includes RSPs, where you expect people to have a larger portion of their cash than non-reg'd. No doubt a lot has gone to investment brokerages. The amount in GIC deposits may also depend on the popularity of other investments, which is something that ebbs and flows with the markets.
Once the next Recession hits, many "investors" will start running for the hills (or, in this case, "Escalators"), beefing up GIC deposits.

I like Escalating GICs too. I'm not opposed to them...it all depends if they work into my GIC maturity profile and if they offer as good, or better, return than conventional GICs. Similarly, I'm also not completely opposed to stock market-linked GICs, so long as there is a minimum rate of return that is equal to the BoC Policy Interest Rate at the time of purchase (1.75%), per annum, or better.

That said, Coast has grown their deposit book by fully 25% in the past 3 years or so. So, even if GICs are rolling off their books, they've got plenty of deposits rushing in the doors, so to speak. In fact, I wouldn't be surprised to see Coast top Vancity as the largest credit union by assets (which would be historic and for which they'll expend great sums lauding this "achievement") by next year if not by year's end. Sadly, Vancity, despite being so large, is ironically, more closely rooted to the credit union ethos of putting people before profits. Coast, meanwhile, is a credit union by letters patent only. 🙁

It would be interesting, although probably inaccessible, to know how much Oaken is losing on registered GICs maturing due to their failure to offer savings accounts. Perhaps not (yet) enough to make them sit up and make notice. I have moved out one reg'd GIC so far, and will not be finished the transition until 2022. I imagine I'm typical of a certain kind of depositor. i stopped buying more registered GICs from Oaken (with regret) when I realized the problem they were creating for me.  

I hate to say it, but sadly, I think not much. Well, not anything that is material and not picked up elsewhere. I don't know why they don't offer a registered HISA, even at a 0.25% discount to the non-registered HISA, as I think there'd be some good take up and deposit "stickiness". It's not like it would add much cost since it would be marketed and branded as the registered version of an existing product.

Cheers,
Doug