B.C. investor fears $1 million at risk in GIC

A British Columbia man says he was shocked to learn that a large amount of money he’d put into a Guaranteed Investment Certificate, or GIC, could be at risk, and he was never adequately warned about the risks.

Robert Bidner says he wishes his financial adviser had been clearer about what “guaranteed” meant before putting his nest egg of more than $1 million in a GIC. Bidner had invested all of his money, more than $1 million, from a condo sale into a Home Trust Guaranteed Investment Certificate. Home Trust Company is the principal subsidiary of Home Capital Group, which made headlines in April as shares plunged deeply after investors started pulling their money.

“I saw all this money disappearing,” Bidner said.

Of Bidner’s $1,117, 963,99 investment, all he is guaranteed is the 1.75 per cent in interest, with the promise to pay at the end of 18 months.

But the Canada Deposit Insurance Corporation only covers up to $100,000 in GICs and doesn’t protect money in GICs that have a term longer than 60 months.

“I wasn’t given all the information,” Bidner said. “Had I been told that I was secured to $100,000, I would never have invested in that.”

Bidner says he needs the money to pay for a new condo in the fall.

According to the Consumer Financial Agency of Canada disclosure on term deposits or GICs must be provided orally and in writing, including all terms and conditions and if the product is not insured by the Canada Deposit Insurance Corporation. Bidner said, when he learned that his investment could be at risk, he called his adviser and “started demanding my money back.”

His adviser works for Investors Group, which has now launched an investigation into the matter. Ron Arnst, a spokesperson for Investor Group told CTV Vancouver that “if there is any loss and … we did not meet our obligations, we would take responsibility for any loss caused by us.”

Bidner is nervous because he can’t redeem his deposit until October. Home Capital Group didn’t respond to a question on whether they would redeem Bidner’s GIC early, however, they did offer to transfer $100,000 of his GIC into Home Trust Deposit account, which would be CDIC insured. That would fully protect $200,000 of his investment.

He wants to warn consumers before they invest in GICs. “I would like it to say, “Guaranteed Investment Certificate up to $100,000.”

CTV Vancouver reached out to regulators and industry insiders, who said that, to fully protect your money, consumers shouldn’t invest more than $100,000 in a GIC, and should spread it among several insured accounts.

With a report by CTV Vancouver’s Ross McLaughlin

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