Personal Finance

Anyone with experience with Knowledge First Financial - RESP??

  • Last Updated:
  • Dec 27th, 2017 5:31 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
540 posts
57 upvotes
Victoria
Every bank has this RESP, why not just pick one?
New Koodo User
Sr. Member
Nov 13, 2013
815 posts
268 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
7925 posts
767 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.
Newbie
Nov 19, 2017
7 posts
1 upvote
Montreal
I am new here, so bare with me :)

I subscribed with Knowledge First about 13 years ago for my 1st kid, and then also for the 2nd one 2 years later.

I was totally surprised and not well impressed when I found out (about 10 years ago) that my 1st year of RESP deposits went towards the agent commission, for each kid, so the money that supposed to compound the most are lost.
NOBODY told us about this when we subscribed! They lied to us.

Now, we continued to contribute each month .... and we'll see what happens when we'll get there.

Would I do it again? NO WAY!

As I do not like to have all my eggs in one basket, I have the other half of my RESP as self managed ...

I'll be back with updated here in few years ... LOL
Deal Addict
Aug 19, 2016
1015 posts
350 upvotes
User073965 wrote:
Nov 21st, 2017 2:51 pm
I am new here, so bare with me :)

I subscribed with Knowledge First about 13 years ago for my 1st kid, and then also for the 2nd one 2 years later.

I was totally surprised and not well impressed when I found out (about 10 years ago) that my 1st year of RESP deposits went towards the agent commission, for each kid, so the money that supposed to compound the most are lost.
NOBODY told us about this when we subscribed! They lied to us.

Now, we continued to contribute each month .... and we'll see what happens when we'll get there.

Would I do it again? NO WAY!

As I do not like to have all my eggs in one basket, I have the other half of my RESP as self managed ...

I'll be back with updated here in few years ... LOL
You will e surprised that the government grants all went to their management fees. And most of your earnings went to their management fee as well.
What you will get back is the amount you contributed plus 0.01% annual rate of return (which is the better ending).
Newbie
Nov 19, 2017
7 posts
1 upvote
Montreal
Just to have an idea (for whomever interested) what a $100 / month, after 13 years look like ....
RESP view.png
Sr. Member
Mar 10, 2010
916 posts
105 upvotes
Ouch, that sucks to have such horrible numbers, it's just barely ahead of where my 3-year old son's RESP is and with an extra 10 years of growth.
User073965 wrote:
Nov 21st, 2017 5:22 pm
Just to have an idea (for whomever interested) what a $100 / month, after 13 years look like ....

RESP view.png
Deal Addict
Mar 10, 2011
2039 posts
238 upvotes
Toronto
User073965 wrote:
Nov 21st, 2017 5:22 pm
Just to have an idea (for whomever interested) what a $100 / month, after 13 years look like ....

RESP view.png
What’s the insurance fee for? Also what is a Depository fee?
Deal Addict
User avatar
Nov 18, 2007
3361 posts
404 upvotes
Valleywood
Depository fee, that is a misprint.

It should have been Suppository fee.
Newbie
Nov 19, 2017
7 posts
1 upvote
Montreal
Insurance fee - if me and/or my wife pass away until the kids go to university, they will not consider that we do not break the contract :). And the kids will be able to cash the money.
I think they will also continue with the monthly deposits (I do not remember).

Depository fee - some sort of hidden fee. Never this was mentionned

They never mentionned any fees when we are going to withdraw
Deal Fanatic
Jul 1, 2007
7925 posts
767 upvotes
All of these fees are completely made up.

I'm not a "non profit" like they are, I operate in the for profit wealth management industry, but I'm not allowed to make up fees myself; why is that?
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.
Jr. Member
Sep 28, 2003
164 posts
20 upvotes
User073965 wrote:
Nov 21st, 2017 2:51 pm
I am new here, so bare with me :)

I subscribed with Knowledge First about 13 years ago for my 1st kid, and then also for the 2nd one 2 years later.

I was totally surprised and not well impressed when I found out (about 10 years ago) that my 1st year of RESP deposits went towards the agent commission, for each kid, so the money that supposed to compound the most are lost.
NOBODY told us about this when we subscribed! They lied to us.

Now, we continued to contribute each month .... and we'll see what happens when we'll get there.

Would I do it again? NO WAY!

As I do not like to have all my eggs in one basket, I have the other half of my RESP as self managed ...

I'll be back with updated here in few years ... LOL
That's sales people for ya. No matter what the sales person says to you, it's still up to you to actually read the document they give you with all that information in there. Nowadays it's on a USB stick they give to potential clients, or the prospectus/disclosure is right on their website.

I just helped a relative get out of Knowledge First. They just had a kid and a sales person appeared out of no where and sweet talked them into it. When I heard about it, I asked to take a look at the documents they were given. Once you get to the meat of the document, it's plain to see how horrible a deal Knowledge First is, so I told them to get out of it ASAP. Luckily, they were still well within the 60 day cancellation window so they were able to get out easily and without any loss of funds. That still didn't stop the sales person from coming back on them hard with claims that I was "misinformed" as to the nature of their fees, etc. A quick google search to pull up charts illustrating the harsh effect of their fees over the long term and citing THEIR OWN DISCLOSURE DOCUMENT put an end to that quickly though. This doesn't even consider the possibly overly conservative investments they appear to typically put people in.

In the end, it turned out my relative simply had not read the prospectus document they had been given. They said they had taken the sales person at their word.
Jr. Member
Sep 28, 2003
164 posts
20 upvotes
Biff88 wrote:
Nov 21st, 2017 10:58 pm
What’s the insurance fee for?
There's a disability insurance plan embedded in what they sell to you. If you can't make contributions for awhile, they (actually Sun Life) continues them on your behalf. That's another caveat, if you stop regularly contributing, your previous contributions are at risk. I forget exactly how and I don't feel like digging through the document again, but it's all in there in black and white if you want to look yourself.
Biff88 wrote:
Nov 21st, 2017 10:58 pm
Also what is a Depository fee?
Simply a fee for Knowledge First to process your deposit and place it in the bank that actually holds your money. (RBC)
Deal Fanatic
Jul 1, 2007
7925 posts
767 upvotes
They just had a kid and a sales person appeared out of no where
LOL, that's how it always happens. They're like ambulance chasers. I keep telling clients "I can open an RESP for you, but if you find it more convenient to open one where you bank, you can do that too. Just know that as soon as you have that child you're probably going to be approached by a salesperson selling something called a 'scholarship trust' or 'group RESP'. Run."
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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