Quote:
Originally Posted by kl83
We are planning to put $2500 a year (208.33/month) into this plan. Am little biased since I sell the product. Main advantage is education bonus of up to 15% of the contributions to the RESP will increase the income paid as Educational Assistance Payments (EAPs) to go along with any the fund and any growth plus the grants.
http://www.inalco.com/pdf/particuliers/13-441A.pdf |
I am always leery of structured plans like this - they are designed to make more money for the manager, not for the investor.
One thing that struck me immediately when flipping through it was that 85% of the portfolio would be invested in money market and fixed income funds in the secondary plan. No one knows what interest rates will be in the future of course, but based on current rates - and assuming the 3.5% MERs that were mentioned in another post - that would mean that 85% of the portfolio would not be expected to cover the MER. In other words, a negative net return.
I would be curious to know more about the 'bonus', but for me, a sound investment plan will always be better than any structured investment like this. The headwinds from higher fees are simply too strong.