Personal Finance

Anyone with experience with Knowledge First Financial - RESP??

  • Last Updated:
  • Nov 18th, 2017 7:23 pm
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Newbie
Nov 8, 2017
1 posts
1 upvote
Do not open accounts with this organization!!! I was contacted in early Oct. this year by one of the agents. He told me I could open multiple RESP accounts and the government will match maximum CESG(which is 7200$) per account just to lure me to open an account with them. Later when I found out it was a lie and called the agent. He tried to cover up by making me believe this was my misunderstanding. Ok fine, I guess I got some tolerance for that. But later when the agreement was mailed to me, I found under the fee section, they were going to charge 1.5% management fee per annum based on fund balance. The agent never told me about this management fee that was written on my agreement eventhough I asked him to explain everything related to numbers when he came to my house to sell the plan. To give you a brief idea, if you were to contribute 50k in total and given a flat interest rate of 5% per year, your fund balance gonna roll to around 70k to 80k in the last 2 years ( I did my own calculation with spread sheets), so in the last few years before your plan are ready to withdraw money, you are to be charged like over 1k per year.

When I text my agent about this, he was like oh maybe I told you about the fees but you somehow did not remember or if I forgot to tell you sorry my bad but this is an industrial charge in the world of RESP. Ok, Both my wife and I did not remember he mentioned about anything about this management fee (my wife had an amazing memory, she lost quite a bit after giving birth but still decent). And I did not buy the idea that a professional agent would forgot to tell customer such an important information by mistake. The only explanation was he deliberately hide this information from us and hope we were careless enough to ignore the management fee on the written agreement until my plan pass the free trail period and become difficult and costy to withdraw. After I realize what a terrible plan I had drawn into, I made up my mind to cancel it right away.

So don't ever open an account with KFF. The kind of things you need to consider before opening an RESP account with anyone, according to my own experience, would be (from most to least important),
1. The flexibility when you withdraw EAP (some plans doesn't give you full EAP if your kid went to a program under and including 3 years), make sure your kid could get all EAP regardless of program length.
2. Ask your peer mom/dad friends for suggestions who already opened an account before, or ask a relative whose kid already go to university and has start to receive EAP.
3. The volatility of the return rate, An extreme example would be the market went really really bad during these final years just before your kids need the EAP. If this happens a fund with a relatively flat return or smooth out technique could really save your life, otherwise it might take a big bite and lose huge in value. So if you don't want to expose your fund to any risk, choose one that has a flat return rate(but probably with a lower return overall)
4. Sales charge, fees, contribution flexibility and so on (The banks' will have no sales charge in general but comes with a higher management fee around 2% charge annually on your balance)
Sr. Member
Aug 31, 2010
529 posts
56 upvotes
Victoria
Every bank has this RESP, why not just pick one?
New Koodo User
Sr. Member
Nov 13, 2013
714 posts
244 upvotes
OTTAWA
alias_neo wrote:
Nov 4th, 2017 11:36 pm
Sorry to bump an old thread but do NOT believe any of the positive reviews on this thread. Notice how they're all low count post accounts. They are absolutely shill accounts. Now tell me, who would go out of their way to create an account to praise a company?? I certainly dont know any people that loyal to a company known to scam people

Again, take it from me, do NOT ever EVER give your money to these guys. They are the scum of the earth and they deserve no money. I was honestly almost out of options for paying for school in my final semester. OSAP didnt give me money, and I was ready to get a crappy line of credit after Ryerson called me I'd be kicked out the semester if I didnt' pay up soon. Thankfully my parents pitched in as a last ditch effort. I do not wish this financial stress upon anyone, I am still furious looking back and thinking how I almost didnt graduate because of these opportunistic leeches.

On a separate side note, is there any chance I can get my last installment back, even if its back to my parents and not the full invested amount? I graduated and now debt free no thanks to these dickless mf'ers but it pains me to know that they have my last installment on hold still, Should I go to Ombudsmen or something? I honestly dont remember how much it was, it mightve been a little amount but I just dont want these guys to have my money
I don't have any experience with this particular company but these group plans in general are looked down upon by many but they can have good returns especially in a poor performing market. Pooling the gains of those who don't use it is beneficial if your kids are more likely to attend university. And is a little bit like insurance as if they don't go you don't need the money anyway.

All that said I have a self directed RESP mostly because I prefer to be in control of things and like investing.
Deal Fanatic
Jul 1, 2007
7886 posts
742 upvotes
As far as I know, throughout history whenever humans had a choice between freedom and communism they usually chose freedom, and have flourished under it. Why on earth would someone purposefully choose some sort of communal RESP with tons and tons of rules, over choosing from a vast array of "freedom" RESPs at various banks and brokerages? Usually the reason comes down to people not knowing any better; it's the first time they ever heard of an RESP and they're not aware of the freedom RESP. Sort of like how the people in Russia 100 years ago never tasted liberal democracy, so they chose communism.
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.

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