Setting up a RESP

[eddly]

I tried setting up a RESP today. It was one of the most painful experiences I've gone through for quite a while. The person at CIBC that tried to do it seemed to not know what he was doing at all. After two hours of working with the CIBC guy to set it up, we got to the point where my wife now has to come in and sign some of the documents as she is the primary caregiver. I don't even want to bother with it anymore. I'll try another bank.

Throughout my meeting with the CIBC guy, he left to ask his coworkers questions just leaving me there to twiddle my thumbs. At one point he was gone for about 15 minutes and he came back with a folder (did he really spend 15 minutes looking for one?). Right at the beginning of our meeting he booted up a livestream of the canucks game (from this morning) through justin.tv and he watched it off and on through our meeting (just him). I also asked him what the admin fees etc were in the beginning and he said none. Near the end of the meeting he found out that he was wrong and he informed me that it is actually zero for the first year, but every year after it is $50. He also said I had to make a lump sum payment and I had to set up weekly payments.

I really just want to take advantage of the grants that are available and build up the RESPs when I've paid down my student loans...

I know, great story bro, right?

I just want to get some feedback here from other people that have setup a RESP for their kids. Did you have a yearly admin fee? Were you required to make a lump sum payment to start? Weekly payments? Which bank did you go with?

Thanks.

[Bend it like Bourgeois]

I went with an investment advisor.

We pay monthly. There was a tonne of paperwork but he took care of it all in one go and we didn't have to physically go anywhere. I don't recall a lump sum to start, though it may have been first month.

[MoneyGuy]

I'd tell you to contact Slava, there may not be enough value for him to do this for you. You're better off not dealing with a bank, but if all you want to do is set up a small RESP then a good independent planner won't be interested unless you also have RRSP needs, insurance needs and other needs. There should be no admin fees. I'd go to another bank or ask for someone at this bank who actually knows what he's talking about and takes you seriously. Sometimes the idiot banks are the best marketers for advisors such as us. Best advice is to stay clear of the scholarship RESPs.

Do your parents have an advisor? If so, maybe that person will take you on as a favour, even he doesn't make enough money to make it worthwhile from just an RESP.

[GGG]

Did one at scotiabank, No fees, got the $500 from the government. Other then getting the grants you are you are better off putting the money in a TSFA as the money earned in an RESP is taxable albeit by the student pulling out the money but still taxable in a TSFA it is not.

Sounds like CIBC is giving you the run-around though.

[Deegee]

Make sure where you eventually set up your RESP, it offers all the grants.

http://www.heritageresp.com/government_grants.html

After a quick google...

Credit Unions that utilize Concentra Financial in Alberta offer all of the grants. I don't know about BC, sorry.

[Deegee]

Originally Posted by fotze

I don't believe ours have any fees. Tell them to suck your balls if they want you to pay fees.

Well, it is CIBC after all.

[ricoFlame]

we just did this at the end of november through the royal bank...super easy, and the grants showed up in there a couple weeks ago.

[eddly]

Some great info guys, thanks.

I just remembered at one point he said "well if you don't make a lump sum payment now you have to do it before the March 1st deadline." I said isn't that the deadline for RRSPs? He replied "oh ya..." lol.. sigh..

This guy isn't new either, I dealt with him for some other things over a year and a half ago. Due to this and numerous other problems I've had with CIBC in the past 15+ years... I'm going to close my accounts with them within the next few months.

[Eric Vail]

I set up our through CIBC and really had no problem. We were not charged any fees either. If I were you, I'd ask to work with someone else next time you go to the bank.

My experience with banks is the workers really do not have much background and are not paid very much. One girl we worked with for awhile quit to go be a stewardess with Westjet. That confirmed what we already expected. The other thing I have learned, is some work for the bank, and some work for the customer. If you get one that really seems to put the bank sales as their priority, try to find someone else to work with. Last year, the lady I was working with kept trying to get me to lock in my mortgage even as rates were falling every month. I don't have any use for her any more. I should mention she was with TD.

The lady we work with at CIBC has been around awhile. My father in law has worked with her for several years and that is why we can get in to see her. The recommendation to see someone who has worked with your parents is a good one.

[Peanut]

Originally Posted by ricoFlame

we just did this at the end of november through the royal bank...super easy, and the grants showed up in there a couple weeks ago.

Same with us.

The deadline for 2009 contributions was December 31 as far as I know.

[7uongo]

Originally Posted by eddly

I know, great story bro, right?

I just want to get some feedback here from other people that have setup a RESP for their kids. Did you have a yearly admin fee? Were you required to make a lump sum payment to start? Weekly payments? Which bank did you go with?

Thanks.

Yeah, great story bro

It sounds like you've had it in for CIBC from the beginning, so why dont you call the thread as it and just announce "DONT BANK AT CIBC" from the start. If you've been banking there for over 15 years and had problems with them, why didnt you switch before this RESP setup?

Im banking with CIBC too, and although I've had some run ins with new people who didnt know how to do their job, they've always found a way to make it right with me

If you had a problem with this banker, why not request to see a more senior banker, or a manager? I had to a few times. No but wait... you've already made up your mind cause you're closing out your accounts in a few months. Have fun with TD, Scotia, RBC or BMO because they wont be facing the same turnover problem you've had at CIBC

[Incinerator]

Well I'd say your first mistake was to bank with a Canucks fan lol...

[eddly]

Originally Posted by 7uongo

Yeah, great story bro

It sounds like you've had it in for CIBC from the beginning, so why dont you call the thread as it and just announce "DONT BANK AT CIBC" from the start. If you've been banking there for over 15 years and had problems with them, why didnt you switch before this RESP setup?

Im banking with CIBC too, and although I've had some run ins with new people who didnt know how to do their job, they've always found a way to make it right with me

If you had a problem with this banker, why not request to see a more senior banker, or a manager? I had to a few times. No but wait... you've already made up your mind cause you're closing out your accounts in a few months. Have fun with TD, Scotia, RBC or BMO because they wont be facing the same turnover problem you've had at CIBC

My intent was to get more info related to the process of setting up a RESP as they made it a little unclear.

[Starfishy]

I just got a run down on RESPs from a Canadian Scholarship Trust lady. It seemed pretty good. They are a "not for profit" organization and the largest RESP provider in Canada. I would love to hear if anyone has dealt with them before, and/or any opinions as to why I should deal with someone else.

[Starfishy]

Originally Posted by fotze

Run away from CST.

Less descriptive than i would have liked. Any elaboration would be nice. Now is the time to hear it, as i have yet to do any paperwork.

[Gobsgraham]

CST is not that bad as long as you don't intend to pull the money out early 9if you do you're screwed). They are also very conservative and actually made 6% last year. I'm not sure how much other people lost but I don't think too many people made any money last year.

[ah123]

I've heard bad things about CST as well, so we went through a bank. Most banks will take care of applying of all the grants, so that makes life easier.

[Ryan Coke]

I've heard bad things about CST as well. Can't remember details, but not the best way to go. Whoever you go with, really ask carefully about fees. Most places do charge them for RESP's based on my research.

I went with TDcantrust. No fees for administering the plan, and some good basic fund options with low fees as well. I just happened to get a great girl who knoew what she was talking about, sounds like that is your biggest problem.

[Slava]

If you have specific questions on the RESP feel free to either PM me, or post them and I will happily answer them. I wouldn't go with the CST plan for a number of reasons, but one of the major reasons is that the flexibility of the investments are really not there, and when/if you want to move money somewhere else you're stuck. Might not seem like a big deal at first, but after 10-15 years of contributions and grants you could be talking about $50-$100k...not exactly chump change that you want to have no control over!

There are other reasons, but rather than just bash that plan I'll just leave it at that for now! I know that they made 6% last year, and that is because they were in bonds. Not many people lost in 2009, so I assume that comment was about 2008...which is fair enough. You have to recognize that with that "portfolio" though you are going to be lagging the market through the majority of the years just because of its nature.

As far as fees go I don't really no of anywhere that charges a fee for an RESP (aside from the normal investment fees). There are no real fees for the accounts themselves and certainly none on the ones that I deal with. As some have mentioned there is a lot of paperwork to set one of these accounts up, but if you are dealing with someone who is organized its really not a big deal. You just end up signing a form for all of the grants, investment applications and things like that. Its kind of annoying...but then again its just more signatures, so its not that bad either.

The only other thing I should address is the idea of the TFSA vs. RESP. I'm a big fan of the RESP (not to say that I don't love the TFSA...just not for my kids education!). The reason I say this is that, yes its true the money coming out of the RESP is taxable to the beneficiary; however the tax rate for a student is basically zero. They can write off the tuition, books and other expenses and pay almost nothing in taxes. With the ever increasing cost of tuition the problem for kids 15 years from now is not that they are withdrawing from an RESP and paying tax. Instead the issue will be a question of how much tuition costs and how little the RESP is worth for them to withdraw from!

The TFSA though is designed for the high tax payer to be able to withdraw money from with out tax consequences being a factor. I think that the average wage in Calgary is around $60k/year, which is the 32% tax bracket. That bracket begins at about $35k....and I would suggest that not many student relying on an RESP for their education earns more than this. After deductions and write-offs most students are well under $20k per year and many more are under $15k. So the value of that money being tax-free is really lost on them...not to mention the government grants that are added in the RESP.

Anyway, just thought that I would put a few thoughts in here. Hopefully this provides a little clarity of my position on RESPs in general, but feel free to ask away if you have other questions in general.

[macker]

If you are using a bank make sure that they are applying for the centennial grant http://www.albertacentennial.ca/programs/cesp.html as I have heard that they don't/won't always do this and expect you to remind/tell them If you are going to use a bank they are going to limit you to only the funds that the bank offers for the most part. RBC has Jim O'Shaughnessy managed funds so that would be my first choice for banks and RBC has the lowest fees (MER's) out of all of the banks. MER's are even more important for RESP planning as you have a short planning time horizon. I use Scotia I-Trade after setting up with E-Trade thinking I was distancing myself from the banks and then Scotia Bank came along and swallowed them up....So far they haven't changed anything but the potential is there for sure! It really is too bad that one of the most important areas of planning is so mixed up. Do you really think the guy at CIBC cares if you are properly planning for your kids RESP. He can't even get the paper work straight. Other planners shun RESP business as they don't make enough commission on these accounts so the consumer is shuffled around in a circle. A bit of a mess imo. For basic info on RESP's go to : http://www.canlearn.ca/eng/index.shtml or call CESG @ 1-888-276-3624 and sign up with someone who shows genuine interest in dealing with you no matter what amount you are putting into the account. Also as mentioned stay away from the pooled or group plans as the advisors will show interest in you but that is because they are making a significant front end commission off of you and you are getting watered down bond returns. They are the ones driving around town with the RESP decals on their vehicles who have a tough time with disclosure....http://www.canadiancapitalist.com/is...right-for-you/ The comments section below the article should be enough to make anyone steer clear While I am being random...why not move your accounts from CIBC....go to PC Financial if they aren't going to offer you service as they are owned by CIBC anyway and you are doing it yourself anyway....meanwhile McCaughey is taking a nice bonus of 6.4 million for his performance in 2009 but don't worry that is off 24% from 2008. I am sure he has his kids RESP at CIBC