Personal Finance

Anyone with experience with Knowledge First Financial - RESP??

  • Last Updated:
  • Nov 18th, 2017 7:23 pm
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Newbie
Nov 28, 2016
1 posts
Knowledge First Financial is a terrible company!!

I went on a leave in 2015 to take an internship for a year and didn't need my Education Assistance Payment (EAP). When I returned to school the following year (2016), they refuse to give me the $1,000 entitled to me simply because I didn't apply for the EAP in 2015.

They keep saying they sent out mail to remind me to submit my EAP request each year before it was due, but I've never received anything from them. I wasn't even aware of the consequences of not apply for my EAP. Who knew that if you don't request for money, they just keep it from you forever. Doesn't seem right.
Newbie
Mar 4, 2015
29 posts
8 upvotes
Montreal
My parents had a RESP for me in KFF back in the day, as a student I didn't have any issues collecting my EAP, I think I got 3 payments over 3 years, and that was it, even though I was in school for 4 years?

I did have to fill out the form each year, which I never got a reminder for either, I just kind of remembered at some point during the year (I'm amazed I never forgot completely)

I can't speak for whether it was worthwhile as an investment or not, as I have no idea how much my parents paid in, and they don't remember either since it was so long ago. I don't even remember how much the payments I got were, but it didn't seem like that much money, even as a broke college student. However, it was relatively painless to use, they contacted my parents at approximately the time I would be starting university and got everything set up, so at least there's that?

If I had kids I'd do my own RESP, I can't imagine their returns would be very high since they'll be chopping off a commission and handle a relatively small volume of assets from which they need to draw to pay employees and stuff
Deal Addict
User avatar
Jul 8, 2009
2028 posts
471 upvotes
Edmonton
dvd5 wrote:
Sep 19th, 2012 11:50 pm
For these RESP plans, once you are in, the cost to pull out is very high. Much like cashing out your life insurance.

That said, both our kids are currently on their system. One is already pulling funds out of the interest earned. The other just started post sec and we just got our deposit (less commission) back.

The subject of RESP is pretty complicated. I think most ppl do it just to get that 20% from the govt.

Just look at it as another form of forced savings. Like everything else in life, there is always something better elsewhere but you need to invest the time/effort to read/understand it. In the end, all investing carries risk. As we always say here, YMMV.
It's wayyyyy easier to get out of insurance than it is to escape these sad excuses for an RESP.
Newbie
Oct 14, 2015
12 posts
Guelph, ON
Hi All,

I'm new to this RESP business and i've read through some of the posts but i have specific questions..
1) my wife invited a kff rep to our house who tried to sell us on their flex plan which apparently has front loaded fees and then 1.5% charged to interest earned on principal and grant, and not the total amount sitting in our account. The rep explained that the plan money can be used for even our education if we choose to go back and there would be no fees for taking $$ out. Has anyone else gotten this same explanation and has anyone signed up with this plan and has reviews?

2) what's the difference between saving for education in RESP vs TFSA. both take after tax dollars. Sure you're losing out on 20% match by government, but your withdrawn money isn't taxed (at about 20%) and you can use it for anything. Has anyone looked into this and worked out the benefit of still using RESP vs TFSA?

3) what's the best / cheapest way to setup an RESP ? through a bank? if so, what do you suggest in terms of investment type? GIC or mutual fund?
3b) on a related note, how do mutual funds get the management fee charged? do they charge on the full growth of your investment? if so, then what's a good management fee % I should be expecting to pay?

I am looking forward to getting some feedback from you
Deal Addict
User avatar
Jan 2, 2012
2659 posts
620 upvotes
NORTH YORK
canucks316 wrote:
Feb 2nd, 2017 9:21 pm
1) my wife invited a kff rep to our house who tried to sell us on their flex plan which apparently has front loaded fees and then 1.5% charged to interest earned on principal and grant, and not the total amount sitting in our account. The rep explained that the plan money can be used for even our education if we choose to go back and there would be no fees for taking $$ out. Has anyone else gotten this same explanation and has anyone signed up with this plan and has reviews?
General consensus around these reps, is they tell you what you want to hear to sell the plan, and leave out key details around fees and cancellation penalties. Personally I wouldn't trust anything they say until you see the specific T&Cs you would be signing up to in writing.
2) what's the difference between saving for education in RESP vs TFSA. both take after tax dollars. Sure you're losing out on 20% match by government, but your withdrawn money isn't taxed (at about 20%) and you can use it for anything. Has anyone looked into this and worked out the benefit of still using RESP vs TFSA?
An RESP is not a "use for anything" plan. It's a plan intended to be specifically for a student attending school. Since the student would be withdrawing the RESP in their own name, are usually in full time school so income will be minimal or non-existant, and they have lots of education credits to apply in their tax return... the tax impact for the RESP withdrawals should be minimal or zero. Also remember only the interest earned is taxable, not the deposits.

As long as RESP is used by intended student, the 20% grants plus compound growth on the grants make them superior to a TFSA.
3) what's the best / cheapest way to setup an RESP ? through a bank? if so, what do you suggest in terms of investment type? GIC or mutual fund?
3b) on a related note, how do mutual funds get the management fee charged? do they charge on the full growth of your investment? if so, then what's a good management fee % I should be expecting to pay?
Easiest way is through your regular bank. However as you noted, GICs or mutual funds will be used here. GICs are an awful choice for RESP since it's a bad long-term investment strategy that will barely keep up with the inflation rate meaning you aren't really gaining anything. And mutual funds typically have high MERs in the 1-2% range which is charged on the full value of your investment.

A better option is to open a self-directed broker account, and then choose 2-3 ETF funds to buy as your main investments. With each deposit you make to the RESP, you just purchase more shares of the ETFs. ETF fees are typically very low (in the 0.1 - 0.3% range). Personally I use Questrade for my kid's RESP as there is no cost to purchase ETFs.
Newbie
Mar 19, 2017
1 posts
canucks316 wrote:
Feb 2nd, 2017 9:21 pm
Hi All,

I'm new to this RESP business and i've read through some of the posts but i have specific questions..
1) my wife invited a kff rep to our house who tried to sell us on their flex plan which apparently has front loaded fees and then 1.5% charged to interest earned on principal and grant, and not the total amount sitting in our account. The rep explained that the plan money can be used for even our education if we choose to go back and there would be no fees for taking $$ out. Has anyone else gotten this same explanation and has anyone signed up with this plan and has reviews?

2) what's the difference between saving for education in RESP vs TFSA. both take after tax dollars. Sure you're losing out on 20% match by government, but your withdrawn money isn't taxed (at about 20%) and you can use it for anything. Has anyone looked into this and worked out the benefit of still using RESP vs TFSA?

3) what's the best / cheapest way to setup an RESP ? through a bank? if so, what do you suggest in terms of investment type? GIC or mutual fund?
3b) on a related note, how do mutual funds get the management fee charged? do they charge on the full growth of your investment? if so, then what's a good management fee % I should be expecting to pay?

I am looking forward to getting some feedback from you
I would say be careful with KFF, I have enrolled my 2 kids, and I am frustrated.
I didn't do my facts check before joining, for each kid 19000 has been deposited from my checking account, 4200 has been deducted as fee and benefit on rest of the money is 1850. this status is after 5 years. I am frustrated, I have original estimated statement given by rep during explaining me the benefits and I don't see even touching 60% of that amount. I don't know if those estimates has any value in court of law as those are estimate. After 5 years if I break it, I will loose further. By asking you to be careful, I am doing harm to my policies as our policies are pool base. Anyways, I am stuck in this kind of illusion selling company, be careful and spread the word. I am open to share original estimate statements and current status of policies in public domain if someone wish to contest facts of my situation and ready to offer better solution.
Deal Fanatic
Jul 1, 2007
7891 posts
745 upvotes
I don't know how these group RESPs are even legal still. Like they're flying below the radar or something.
Money Smarts Blog wrote:
Nov 29th, 2010 11:18 am
I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Newbie
May 20, 2017
1 posts
Agree with Thalo. In addition, this KKF particularly is a rip off. When we had our first child, somehow they found our contact number and lady insisted to come to our house to explain something very promising for our child future. She pushed us to to this plan by showing so rosey picture. We signed up, and the next thing we learned was that first 15 monthly contributions ($3,000) go into their pocket. It was very frustrating. We learned our lesson, and for our next child we opened an RESP with the bank. Now 13 years after, the plan with the bank is making excellent profit compared to that with KKF. i decided to cancel the KKF plan and move it to the bank, but they told me that all the earning on my contributions will go to the group, that's an absolute rip off. Stay away from KKF.
Deal Fanatic
Jul 1, 2007
7891 posts
745 upvotes
We signed up, and the next thing we learned was that first 15 monthly contributions ($3,000) go into their pocket.
Absolutely criminal.

Parents beware of this and all other group RESPs/scholarship trusts.
Money Smarts Blog wrote:
Nov 29th, 2010 11:18 am
I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Newbie
May 30, 2014
2 posts
Mississauga, ON
I would strongly recommend to STAY AWAY from this KFF. Real pain. When they collect our money no issues for them. Each year when I collect for my daughter they give me hell a lot of head aches. Do not believe their salesman saying that we will get equivalent amount of what we deposit. What I get in terms of return of investments from them is a pittance. Your deposits+ Govt grants will be the main one that will be returned+ very very little interest/ return on investment.

I tell my relatives and friends to stay away from KFF.
Newbie
Aug 7, 2017
5 posts
There are appropriate methods to let the company know that you will be needing the money in the following year. If you did not follow them, nor make an effort to contact them to let them know that you will be needing it in the following year, I think it is unfair to say that. Just an opinion of course. I had no problems with my EAP.
Newbie
Aug 7, 2017
5 posts
Wherever you go, there is an embedded service charge regardless. That is how they run a business/manage a company. When you go to a bank, they don't charge you for an enrollment fee but they do charge you with something called a M.E.R fee. It is much higher, currently around 2.4% of any investment.
Newbie
Aug 7, 2017
5 posts
So, I've looked up the company on google and immediately I'm met with many many bad reviews which I think are unfair. I feel that a lot of people were not properly educated about the RESP plan that Knowledge First offers. I recently went through all the finances with my parents and I'll be going to first year university. Overall, in comparison to my friends who have gotten RESPs with banks, I seem to be getting a higher return. I am highly satisfied with their service and I encourage all parents to invest in RESPs. It is important to invest in your childs education and I don't think you will be let down by this company. My experience with them has been highly helpful.
Deal Fanatic
Jul 1, 2007
7891 posts
745 upvotes
How on earth do you get a higher return on a portfolio of bonds?

There are a lot of mutual funds available at banks with MERs around 2% and if you don't like that, you have the freedom of opening an RESP with a discount brokerage investing in ETFs averaging below 0.2%. There are so many ways you can invest an RESP when you open a NORMAL RESP, why handcuff yourself to a scholarship trust?
Money Smarts Blog wrote:
Nov 29th, 2010 11:18 am
I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Newbie
Aug 7, 2017
5 posts
Sorry that you've had a bad experience with the company. You are entitled to your opinion. I'm just stating what I know. My experience with them was great. No hassle, good returns great customer service and communication.

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