Parenting & Family

RESP - Any insight/review of current provider?

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  • Jul 13th, 2020 2:35 pm
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Feb 1, 2006
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RESP - Any insight/review of current provider?

Hi all - first time mom here interested in finding out more about the providers you currently have signed up with for your lil' ones' RESP accounts. Hoping you can shed some light on whether to stick with our current banking institution or divert to an independent company. What, if any, negative experiences have you experienced? Any tips? Is family, or self-initiated, individual plans more worthwhile? We currently have 1 baby, and planning for one more in the next couple of years.

Currently, my husband and I are with TD for all banking needs. After our RESP consultation, we felt that (obviously) the TD mutual funds products explained were heavily focused on an individual level, and the rep seemed a bit closed off on the stipulations surrounding it.
I'm waiting on an appointment for CEFI (Children Education Fund) - they were very "in your face" at the Baby show (lol). Have also heard of CST. We're also aware of the Government contribution regardless of where we go.

Still becoming familiar with this type of investment, so any help is greatly appreciated.. TIA :)
~snow white~
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Do a search on the independent companies here and elsewhere and you'll find threads and threads of people mostly suggesting you avoid them because of the penalties they charge if you stop paying into it, and various other ridiculous things.

Stick with a plan through your bank or another solid financial institution. Ours is through a bank, but lots of people are also doing self-directed stuff entirely. But I wouldn't waste my time hearing any independent providers' sales pitch.
Deal Guru
Jun 15, 2012
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We just use the bank, CIBC, you choose the level of risk.
We've put in $36K starting 12y ago and our last valuation was almost $60K (gov't portion = $7200, 20%). In retrospect, could have made a lot more in real estate, I guess we all could have dammit lol.
[OP]
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AncasterRFD wrote: We just use the bank, CIBC, you choose the level of risk.
We've put in $36K starting 12y ago and our last valuation was almost $60K (gov't portion = $7200, 20%). In retrospect, could have made a lot more in real estate, I guess we all could have dammit lol.
Yeap, done deal for another house investment 5 years ago would've paid for education with a resale now... lol...
Thanks two both above for sticking with bank. Did you both go at a higher risk level? I mean since I have 18 years to have $$$ grow and all.
~snow white~
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Nov 13, 2013
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Most people here will suggest self managed probably with a discount broker. Watch their account fees as these can be steep especially in the beginning when a $50 a year account fee can be 5% of the account total.
Although I don't personally use them don't throw out the group plans entirely. To me they are a bit like insurance they benefit those that actual study and continue in the program. In other words if you stay in the plan your kids go to university they will get some of the contributions from those that don't study or drop out of the funds. On a risk adjusted basis I think their returns might beat a lot of self investors. That said I personally have a self managed plan that mostly has low cost ETFs and some fixed income.
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snow_white wrote: Yeap, done deal for another house investment 5 years ago would've paid for education with a resale now... lol...
Thanks two both above for sticking with bank. Did you both go at a higher risk level? I mean since I have 18 years to have $$$ grow and all.
RESP companies are predators.... the 'Investors Group of RESPs'. Absolutely do not consider using these services unless you enjoy being gouged and getting trapped.

My order of preference:

1. Self-directed ETFs or stocks/bonds
2. Bank index mutual funds
3. Bank mutual funds
4. Investment firms like IG, EJ, etc.
5. RESP GICs/HISA
6. RESP Companies
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Nov 13, 2013
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superfresh89 wrote: RESP companies are predators.... the 'Investors Group of RESPs'. Absolutely do not consider using these services unless you enjoy being gouged and getting trapped.

My order of preference:

1. Self-directed ETFs or stocks/bonds
2. Bank index mutual funds
3. Bank mutual funds
4. Investment firms like IG, EJ, etc.
5. RESP GICs/HISA
6. RESP Companies
Really a GIC is better? How are they predatory? Not arguing they aren't but that hasn't been my understanding. I know a lot of less educated people get the hard sell and put their money into them but this is actually an advantage if your kid is more likely to go to school because you get some of their earnings. I'll admit I don't know much about them and haven't bought on myself but they seem to provide about 200% return over 18 years which is not bad assuming they invest in very safe assets. I am on track to beat that with my self directed RESP but a market crash next week and I could be back to even with a huge correction.
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fogetmylogin wrote: Really a GIC is better? How are they predatory? Not arguing they aren't but that hasn't been my understanding. I know a lot of less educated people get the hard sell and put their money into them but this is actually an advantage if your kid is more likely to go to school because you get some of their earnings. I'll admit I don't know much about them and haven't bought on myself but they seem to provide about 200% return over 18 years which is not bad assuming they invest in very safe assets. I am on track to beat that with my self directed RESP but a market crash next week and I could be back to even with a huge correction.
Rate of return can be very misleading as RESP companies use only your contributions to calculate returns, and include the government grants as "returns". Without investing any of your money, you've already made "120% rate of return" just by receiving the CESG.

RESP companies use high-pressure sales tactics to attract uninformed investors, and sign them up for high-fee mutual funds or segregated funds. I've seen clients who have had their money sitting in a low-risk Money Market Mutual Fund for 10+ years earning next to nothing, while paying 1%+ in fees and watching their investment slowly dwindle away. In addition, RESP companies include all kinds of clauses in their contracts to prevent you from leaving without paying hefty fees or DSC.
Deal Guru
Jun 15, 2012
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Southern Ontario
snow_white wrote: Yeap, done deal for another house investment 5 years ago would've paid for education with a resale now... lol...
Thanks two both above for sticking with bank. Did you both go at a higher risk level? I mean since I have 18 years to have $$$ grow and all.
When we first started $2K each child/year was the max for 20% government match, I think it's a higher ceiling now but we're not contributing greater than that. We chose moderate risk, haven't changed it, a safe bet so far.

The bank is possibly false security? I don't know, maybe we could make more through 3rd party or other financial methods, we're ok not doing that and staying with CIBC.
Last edited by AncasterRFD on Apr 24th, 2017 9:32 pm, edited 2 times in total.
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we're at a higher risk now, will be moving to lower risk soon as the kids are getting older :)
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Dec 5, 2016
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I just opened one up recently through TD and made a deposit.
It was very easy and I would recommend going this route.

Just wondering how long before you get the government match on your deposit? Will they match on a monthly basis?
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Feb 8, 2017
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alucky17 wrote: I just opened one up recently through TD and made a deposit.
It was very easy and I would recommend going this route.

Just wondering how long before you get the government match on your deposit? Will they match on a monthly basis?
i get the 20% gov't grant at the end of the month for that month's contribution (i.e. make deposit to resp on Apr 1 and i get the 20% related to that deposit around the 28/29)
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Aug 16, 2009
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We go through TD for our 2 kids' RESP. It was painless and easy. The TD monthly income seems to be doing better than the TD Comfort Growth Portfolio. Either way, the 20% from the government is nice.
[OP]
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Feb 1, 2006
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Thank you all for your input!!!
Looks like steer away from 3rd parties. Most likely wont opt for non-resp investment (do you still get gov. grant?) and we'll revisit with TD :) perhaps our rep was inexperienced or not in the know lol.
~snow white~

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