CONDOMINIUM CORPORATIONS
We understand – The challenges of working on a condominium board are many, including managing the financial affairs of the corporation. Your time is valuable.
Your responsibilities include:
- stewardship of the reserve fund
- balancing security and returns
- staying within the corporation’s investment guidelines
- keeping within the insurance deposit limits so the money is protected
You need to:
- demonstrate good financial management with the corporation’s reserve fund
- not expose the reserve fund to risk
- have the money continue to grow for the future
You want the guaranteed investment and security of GIC’s, along with the highest rates, without having to spend a considerable amount of your time shopping around for this solution.
We survey a broad spectrum of the Canadian GIC marketplace so you don’t have to.
Working with GICPlus gives you:
- Access to superior rates from a broad spectrum of Canadian financial institutions – typically higher than the big 5 banks
- Efficient use of your time – we survey the GIC marketplace for you, manage the paperwork to multiple financial institutions, and assist with re-investment of funds at time of maturity.
- Knowledge - that due diligence has been done to meet your corporation’s specific investment policy
- A GIC investment plan - that meets your objectives for short-term liquidity needs and longer-term compound growth.
Case Study - A Condominium Corporation managing its Reserve Fund
The Director of Finance for their Condominium Corporation had done a solid job of creating and managing the operating and reserve funds. The condominium corporation wants to ensure a portion of the money invested in the reserve fund is safe and guaranteed, while achieving the best rates of return.
SCENARIO
The Director of Finance for their Condominium Corporation had done a solid job of creating and managing the operating and reserve funds. The condominium corporation wants to ensure a portion of the money invested in the reserve fund is safe and guaranteed, while achieving the best rates of return.
The Board of Directors need to demonstrate good financial management with the corporation’s reserve fund and not expose it to risk, while having the money continue to grow for the future.
The reserve fund needs to be of an adequate amount with funds available to pay for future major unit repairs and other items and projects.
The Condominium Corporation needs a strategy for part of their reserve fund that has investment security with attractive returns. There is an unknown time frame when the money may need to be accessed, and the best rates are desired without having to shop around.
SOLUTION
Our GICPlus advisor met with the Director of Finance of the Condominium Corporation. She gained a clear understanding of the current investment policy and the objectives of the corporation for short-term liquidity and longer-term compound growth.
The GICPlus advisor also helped create a simple and clear summary of the investment approach so the Director of Finance could re-assure the Board of Directors their money was being prudently invested so it would grow, help maintain adequate funding level, and be available to fund the major repairs and projects.
The majority of the condominium corporation’s funds had been sitting in a low yield cash account and there were several GICs that were invested at standard retail rates through the corporation’s bank.
Some of the money was invested in low volatility mutual funds.
A new portfolio of GICs were created with the proceeds of the cash account and the existing GICs.
The new GICs were placed with 3 different financial institutions for increased safety.
The GICs had different maturity dates and income options
RESULT
The effective return in the cash/GIC portfolio was nearly tripled by properly investing the cash and the old GICs at the premium interest rates that GICPlus can offer.
A laddered portfolio of GICs was created so the condominium corporation had liquidity if they quickly needed cash, and compound long-term growth that is guaranteed.
The portfolio of GICs matched their Investment Policy and helped maintain an adequate funding level of the reserve fund.
The Director of Finance could confidently reassure the Board of Directors that their money was being responsibly managed in a protective strategy, while achieving the highest guaranteed rates available in Canada.
Click here to see the benefits of a laddered GIC portfolio.
