Personal Finance

Anyone with experience with Knowledge First Financial - RESP??

  • Last Updated:
  • Oct 4th, 2018 5:11 pm
Tags:
None
Newbie
Aug 7, 2016
1 posts
I'd not recommend using Knowledge First Financial for RESP. When the plan is mature in summer, other institutes use direct deposit to make the payment in June/July. Knowledge First Financial only uses mailed cheque, which will arrive at the end of August. Given a few days of holding period for regular cheques by the bank, it means the fund won't be available before the university payment due date. I called them asking if there is any other payment option. The answer, as everybody expected, is "no". They are not helping at all!
Newbie
User avatar
Sep 10, 2016
2 posts
Its amazing to read this forum (that started over 4 years BTW), that if you look at the whole thing from a larger perspective, there hasn't been any change with the originating company (KFF), the RESP laws, or the knowledge that is out there regarding RESP's.

What I do notice however, is the fact that the fees are completely hidden between the agents and the clients. Probably (and I can only speculate) this is because the agents don't fully understand the fees and/or products they are representing and the agent doesn't provide proper value to the clients. I don't work with this company (nor will I ever) and there is nothing wrong with this company (they are under federal regulation, just like every other financial institution in Canada). What it seems like to me, is the fact that the information, that is being presented, is getting screwed up and the knowledge isn't being delivered (which is kind of ironic considering its the company's name). I can only speculate that the agents are probably looking to fill a quota to fulfill their duties as a representative of KFF (or any other financial institution for that matter). Not that I have a problem with commission sales, but I do have a problem with quotas being the driving force behind the agents intentions. We all need to stop and think for a moment before posting, "Is what I am saying helping or hindering the forum's conversation?" and "Is there a solution to the problem at hand?" so in light of all this, and in closing, I would like to answer the originating question.

Anyone with experience with Knowledge First Financial - RESP??
No I have not personally have had experience with this company, However if the information that you receive from the representing agent is satisfactory, you are happy with the fee schedules, terms and conditions, AND you have had time to consider OTHER ALTERNATIVES to weight out the pros and cons, then I would go with the product that suites your family the best.
"If you cant FLY then RUN, If you can't RUN then WALK, If you can't WALK then CRAWL, but whatever you do, you have to keep MOVING forward." - Martin Luther King jr.
Jr. Member
User avatar
Jun 17, 2007
189 posts
38 upvotes
I just received a sales pitch from one of the sales from KFF. My wife signed up for some free samples for Similac and one of the check boxes was if we wanted to be contacted to talk about government grants.
Anyway, this agent laid out all of the fees up front for us and said that it's all we will pay. For example, over 206 months, a $20,000 principle will incur about $1950 in fees, with $1000 in loyal rebates. For people who are in KFF, did you get told all the fees up front or this is just a sales pitch and there are more fees and hidden fees down the road?

Of course after reading this thread (and thanks to all RFDer's sharing their experience) I won't be going with this company but still curious about their antics today.
Jr. Member
User avatar
Oct 25, 2016
157 posts
85 upvotes
Max out your TFSA instead and stick it in an index fund. RESP are not that good and are taxed. If your child goes to school you can use the TFSA. Only RESP is everything else is maxed
Member since Feb 19, 2008
Deal Addict
Nov 22, 2015
3233 posts
2151 upvotes
ElliottGalt wrote:
Oct 27th, 2016 2:04 am
Max out your TFSA instead and stick it in an index fund. RESP are not that good and are taxed. If your child goes to school you can use the TFSA. Only RESP is everything else is maxed
Lmao.... What?

Are you forgetting the 20% government grant? As well, EAP withdrawals are taxed in the child's name...so no, just no.

RESP is also one of the account types that FIs offer free brokerage accounts for. It's super easy to set up an RESP with some simple ETFs.
Last edited by superfresh89 on Oct 27th, 2016 11:25 am, edited 1 time in total.
Deal Addict
User avatar
Dec 4, 2009
3868 posts
630 upvotes
Aurora
Ashock wrote:
Oct 25th, 2016 7:35 pm
I just received a sales pitch from one of the sales from KFF. My wife signed up for some free samples for Similac and one of the check boxes was if we wanted to be contacted to talk about government grants.
Anyway, this agent laid out all of the fees up front for us and said that it's all we will pay. For example, over 206 months, a $20,000 principle will incur about $1950 in fees, with $1000 in loyal rebates. For people who are in KFF, did you get told all the fees up front or this is just a sales pitch and there are more fees and hidden fees down the road?

Of course after reading this thread (and thanks to all RFDer's sharing their experience) I won't be going with this company but still curious about their antics today.
How about spending an hour or two looking into your kids education funding, setting up a self-directed RESP and putting that extra $1000 or 2 into the RESP itself, instead of "fees" (not you personally, just sayin' generally).

These people are all shysters. This is one of the few areas where I think government regulation would be useful.
"I'm a bit upset. I've been grab by the back without any alert and lubrification"
Lucky
Newbie
Aug 9, 2015
76 posts
39 upvotes
Parksville, BC
ElliottGalt wrote:
Oct 27th, 2016 2:04 am
Max out your TFSA instead and stick it in an index fund. RESP are not that good and are taxed. If your child goes to school you can use the TFSA. Only RESP is everything else is maxed
NO! Just use a bank! RESPs have gotten a bad reputation due to the efforts of these group providers. Open an account at a bank... Get your 20-40% bonus from the government, taxable to the student. Stay away from these group providers!!!
"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning. " - Warren Buffett
Jr. Member
User avatar
Oct 25, 2016
157 posts
85 upvotes
TheClone13 wrote:
Oct 27th, 2016 2:52 pm
ElliottGalt wrote:
Oct 27th, 2016 2:04 am
Max out your TFSA instead and stick it in an index fund. RESP are not that good and are taxed. If your child goes to school you can use the TFSA. Only RESP is everything else is maxed
NO! Just use a bank! RESPs have gotten a bad reputation due to the efforts of these group providers. Open an account at a bank... Get your 20-40% bonus from the government, taxable to the student. Stay away from these group providers!!!
I have no idea why you are talking about group providers and a bank. TFSA account through a broker and put it in a index fund so you can be lazy.

RESP were fine before the TFSA existed, now it sucks. Money is taxed and if taken out you lose 100% of the matched money, 20% of the gains and whatever is left is taxed. Do a TFSA and get no tax, pull out at any time, no fees. Use it for whatever you want--no restrictions
Member since Feb 19, 2008
Jr. Member
User avatar
Oct 25, 2016
157 posts
85 upvotes
superfresh89 wrote:
Oct 27th, 2016 9:35 am
ElliottGalt wrote:
Oct 27th, 2016 2:04 am
Max out your TFSA instead and stick it in an index fund. RESP are not that good and are taxed. If your child goes to school you can use the TFSA. Only RESP is everything else is maxed
Lmao.... What?

Are you forgetting the 20% government grant? As well, EAP withdrawals are taxed in the child's name...so no, just no.

RESP is also one of the account types that FIs offer free brokerage accounts for. It's super easy to set up an RESP with some simple ETFs.
Not forgetting it, or its cap($7200 over the lifetime of the child) There is one advantage of RESP and that is the match--assuming you get to keep it.

Your kid goes to college the money is taxed. If they don't go... you still get taxed, you lose the matched money and 20% of the gains.

TFSA has an advantage in every way except the match. No tax, can be used for anything at any time with no penalty. Don't lose gains either. It is better.

Taxes go up--not down and 7k is nothing in the lifetime of a child. Little reward for a lot of risk--and even if everything works out and the go to school it is still taxed which reduces your total investment.
Member since Feb 19, 2008
Jr. Member
Mar 14, 2015
154 posts
30 upvotes
Montreal, QC
ElliottGalt wrote:
Oct 31st, 2016 2:41 am
superfresh89 wrote:
Oct 27th, 2016 9:35 am
ElliottGalt wrote:
Oct 27th, 2016 2:04 am
Max out your TFSA instead and stick it in an index fund. RESP are not that good and are taxed. If your child goes to school you can use the TFSA. Only RESP is everything else is maxed
Lmao.... What?

Are you forgetting the 20% government grant? As well, EAP withdrawals are taxed in the child's name...so no, just no.

RESP is also one of the account types that FIs offer free brokerage accounts for. It's super easy to set up an RESP with some simple ETFs.
Not forgetting it, or its cap($7200 over the lifetime of the child) There is one advantage of RESP and that is the match--assuming you get to keep it.

Your kid goes to college the money is taxed. If they don't go... you still get taxed, you lose the matched money and 20% of the gains.

TFSA has an advantage in every way except the match. No tax, can be used for anything at any time with no penalty. Don't lose gains either. It is better.

Taxes go up--not down and 7k is nothing in the lifetime of a child. Little reward for a lot of risk--and even if everything works out and the go to school it is still taxed which reduces your total investment.
The kid is taxed only on earnings and subventions, not the contributions you made. You can also roll your RESP, minus the subventions, into an rrsp if you still have the room available if you're kids doesn't go beyond high school. Seriously, RESP are great and should definitely be used. The only time wehre you might lose out using an resp is if you only have a kid who doesn't go to school, no rrsp room and no other kid to to send the subvention to. Your advice only apply if you know your kid won't go far in school, which is almost impossible to know if you start it at the birth of your child.
Deal Addict
User avatar
Jan 2, 2012
2741 posts
671 upvotes
NORTH YORK
ElliottGalt wrote:
Oct 27th, 2016 2:04 am

Not forgetting it, or its cap($7200 over the lifetime of the child) There is one advantage of RESP and that is the match--assuming you get to keep it.

Your kid goes to college the money is taxed. If they don't go... you still get taxed, you lose the matched money and 20% of the gains.

TFSA has an advantage in every way except the match. No tax, can be used for anything at any time with no penalty. Don't lose gains either. It is better.

Taxes go up--not down and 7k is nothing in the lifetime of a child. Little reward for a lot of risk--and even if everything works out and the go to school it is still taxed which reduces your total investment.
First off, the aim of an RESP is for EDUCATION, NOT for an account that you can "use for anything at anytime". If you want a generic tax-free account for whatever, then sure use a TFSA. But for an account specifically targeted for education, then an RESP is far superior.

Just run a basic simulation - 16 years @ 5% return, depositing 2500+500=$3000 per year into RESP (2700 and 2500 in final 2 years when 7200 CESG max is met), compared to $2500 per year in a TFSA. At the end of 16 years, the RESP will have just under $12,000 more in it. If you're a good investor and make 10% per year, the RESP would have $19,000 more.

And when the child goes to school and withdrawals the money over several years, while making none or limited income and having huge tuition credits to use, their income tax paid on the RESP will most likely be in the 0% range. But they will have more than $10K extra in their pockets.

As mentioned there are many other alternatives even if the child doesn't go to school. But to base your TFSA recommendation here on the very small chance a child won't pursue any qualifying post secondary education at all, and that there will be no alternatives to roll the RESP money elsewhere, is very bad advice IMO.
Deal Addict
Nov 22, 2015
3233 posts
2151 upvotes
ElliottGalt wrote:
Oct 31st, 2016 2:41 am
superfresh89 wrote:
Oct 27th, 2016 9:35 am
ElliottGalt wrote:
Oct 27th, 2016 2:04 am
Max out your TFSA instead and stick it in an index fund. RESP are not that good and are taxed. If your child goes to school you can use the TFSA. Only RESP is everything else is maxed
Lmao.... What?

Are you forgetting the 20% government grant? As well, EAP withdrawals are taxed in the child's name...so no, just no.

RESP is also one of the account types that FIs offer free brokerage accounts for. It's super easy to set up an RESP with some simple ETFs.
Not forgetting it, or its cap($7200 over the lifetime of the child) There is one advantage of RESP and that is the match--assuming you get to keep it.

Your kid goes to college the money is taxed. If they don't go... you still get taxed, you lose the matched money and 20% of the gains.

TFSA has an advantage in every way except the match. No tax, can be used for anything at any time with no penalty. Don't lose gains either. It is better.

Taxes go up--not down and 7k is nothing in the lifetime of a child. Little reward for a lot of risk--and even if everything works out and the go to school it is still taxed which reduces your total investment.
Umm no... You've got it all wrong.

Only EAP withdrawals are taxed in the child's hands. EAP can consist of government grants and the return on your investment.

When you withdraw what you originally put in, it's called a refund of contributions, which is not taxable.

So, if your kid goes to college, you get back what you put in, tax free, and any grant money and growth can be withdrawn as income in the child's hands. Teens don't usually make enough income to get taxed, so it's basically tax free too.

If your kid doesn't go to college, you still get back what you put in, tax free, and the rest you can put towards another child, or donate it.

Ideally, TFSA and RRSPs should already be maxed out anyways. At a minimum, you should have an RESP and contribute the minimum $2500/yr to get the grant.
Jr. Member
User avatar
Oct 25, 2016
157 posts
85 upvotes
The kid is taxed only on earnings and subventions, not the contributions you made. You can also roll your RESP, minus the subventions, into an rrsp if you still have the room available if you're kids doesn't go beyond high school. Seriously, RESP are great and should definitely be used. The only time wehre you might lose out using an resp is if you only have a kid who doesn't go to school, no rrsp room and no other kid to to send the subvention to. Your advice only apply if you know your kid won't go far in school, which is almost impossible to know if you start it at the birth of your child.
I am replying on my phone--please excuse any missed points, it is a cumbersome process, especially with so many people to respond too.

We agree:
Student is taxed on the government "free" money
Student is taxed on any return on investments
You can roll the RESP into your RRSP
--you lose your government "free" money
--you will pay tax on the money earned in the RESP at your marginal rate +an additional 20%
RESP are better than a TFSA IF your child goes to a qualifying school.
However IF they do not, TFSAs are far better.

This is all about choice on how people deal with risk.

Because I don't know the future, I don't know if my child will use the grant, I would rather be in the position of not having the grant money, yet having it all tax free and able to be used in a way that can benefit my child in anyway I want vs being restricted and having a reduced overall return and no grant money if they don't go to school.

If TFSA and RRSP are already maxed--yeah do a RESP
Member since Feb 19, 2008
Jr. Member
User avatar
Oct 25, 2016
157 posts
85 upvotes
I replied to the other poster which I believe addresses most of what you said.

I disagree with you 10% return comments, if your going to be that aggressive you have to calculate losses as well. Additionally it would apply to both the RESP and the TFSA

I also hope my child does earn money when going to school--I would want that for them--so they would be taxed.

You are right, it is for education and does not offer the freedom of the TFSA--which is my point.

If your kid goes to school it is a win. If they don't it is a loss vs the TFSA.
Member since Feb 19, 2008
Jr. Member
User avatar
Oct 25, 2016
157 posts
85 upvotes
I replied to the other poster which addresses what you wrote. I agree ideally we would have everything maxed but I still maintain that the RESP is only better IF your kid goes to school and is worse if they don't.

I hedge my bets and do TFSA as it give less down side
Member since Feb 19, 2008

Top