# Who has a great RESP plan?



## maxandrelax (Jul 11, 2012)

I have seen that in the past, many finance bloggers have suggested that the TD Mutual fund ---> E-series funds RESP option is the best low cost option to hold index funds. 0.33 mer. No trade fee, no yearly fee. 

The Waterhouse RESP option has a yearly $50 fee. Now that Vanguard is bringing fees down eg. 0.05 mer for a Canadian fund, is this more appealing as a long term strategy with trading and yearly fee? I will most likely make a yearly lump sum contribution to one of 4 etfs. 

Third option, I am tempted to use Waterhouse RESP and buy one: bank, consumer disc, telecom, rail -(that I don't already own. As I get close to the redemption date 20 years from now, I will move them to a bond fund. 

I understand that I am working with a couple different philosophies here, but I am interested to hear what some CMFers are up to. Thanks!


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## uptoolate (Oct 9, 2011)

Whatever brokerage you use, if you have holdings over their threshold, you shouldn't have to pay any fees other than trading. Look at your time frame and decide on asset allocation then go with low MER ETFs. It's hard to get decent diversification holding stocks in a RESP in the initial stages because there's just so little money in there though I guess you could take the entire 2500.00 each year and buy one stock.


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## Video_Frank (Aug 2, 2013)

Our RESP is an account with Investorline. Right now it's 50% XIC, 50% XBB. We'll be shifting it more to XBB as our kids' ages approach the age that they'll need the funds. We add the funds in January and buy what we need to bring the AA into line.


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## maxandrelax (Jul 11, 2012)

uptoolate said:


> Whatever brokerage you use, if you have holdings over their threshold, you shouldn't have to pay any fees other than trading.]
> 
> Sadly, it looks like TD had a $50 yearly fee (plus tax!) Has anyone had luck negotiating these fees?


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## Guban (Jul 5, 2011)

I think that the TD e-series mutual fund option may be recommended for people that have relatively lower assets and/or comfort levels. Once you have enough investable cash, changing to a brokerage account to invest in individual stocks or ETFs is more cost efficient. You can do the math to see when the cost threshold is reached by looking at the higher MER of the mutual fund vs the (possible) annual fee plus the trading costs.

Personally, I treat the RESP as just another tax deferred account, and don't plan on any changes closer towards when the money will be withdrawn; it is just lumped together with the entire portfolio as just another part of the overall asset allocation. If there is a deficit in the RESP due to a market just before it is needed, the money will have to come from another account. Don't most parents help pay for post secondary education costs irrespective if they have an RESP anyways?


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## maxandrelax (Jul 11, 2012)

Guban said:


> I think that the TD e-series mutual fund option may be recommended for people that have relatively lower assets and/or comfort levels. Once you have enough investable cash, changing to a brokerage account to invest in individual stocks or ETFs is more cost efficient. You can do the math to see when the cost threshold is reached by looking at the higher MER of the mutual fund vs the (possible) annual fee plus the trading costs.


I figure this is around $18 000 in assets including one trade a year - using CDN index -e at .34% mer. After this, move it to individual stocks... But who knows, in the next 10 years, mers, regs, might change.


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## uptoolate (Oct 9, 2011)

Guban said:


> Personally, I treat the RESP as just another tax deferred account, and don't plan on any changes closer towards when the money will be withdrawn; it is just lumped together with the entire portfolio as just another part of the overall asset allocation. If there is a deficit in the RESP due to a market just before it is needed, the money will have to come from another account. Don't most parents help pay for post secondary education costs irrespective if they have an RESP anyways?


I do this as well. Family RESP with TDDI for 4 children. All in XSP for quite awhile now. Would have been in VSP, VFV or VTI but for inertia. I'm not sure what the current asset threshold is at TDDI for no fees but we don't pay any fee for our accounts outside trades.


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## maxandrelax (Jul 11, 2012)

^^^ 25 g I believe.


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## Plugging Along (Jan 3, 2011)

Agree, it's $25k for an resp, but if you have enough in other accounts they may waive it.


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## uptoolate (Oct 9, 2011)

I think Plugging Along is correct. And if not he sure should be!


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## maxandrelax (Jul 11, 2012)

I sat down with a TD rep, he looked at my accounts much greater than 25grand, and said that the Waterhouse account with a $50 RESP fee was a bad choice and suggested e-series mutual funds. I will go back and ask them to waive the fee and see what they say.


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## amitdi (May 31, 2012)

My RESP strategy. I use a relative strength strategy to buy top 2 from a bunch of different ETFs

1) Gather a bunch of distinct ETFs - VBU.TO, ZEF.TO, VSP.TO, VCE.TO, VEF.TO, ZEM.TO, VRE.TO, ZEB.TO, ZEO.TO, ZUT.TO, XHC.TO, XGI.TO
2) Avg the 3m, 6m, 9m and 12m returns (Excel and VBA to download yahoo data)
3) Buy the top 2 with highest returns
4) Repeat after 2 months. (the paper re-balances every month, but I have changed that to 2 months for this strategy).

Comm - Questrade. None for buying, $10 for selling 2 ETFs.


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## Jungle (Feb 17, 2010)

couch potato in questrade. No fees. Buy, hold rebalance. Dca monthly.


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## larry81 (Nov 22, 2010)

Unless you are with a brokerage with free ETF trading, TD e-series is still the most viable option for RESP (if you can get the 50$ fee waived!)

Suppose a portfolio composed of a minimum of 3 ETF's (ex: VXC, VCN, VAB). At 10$ per buy operation this this 30$ for the first year, assuming you are contributing the suggested 2,500$ to get maximum kickback from the gov. Trading fee's represent a cost of 1.2% on top of the ETF' MER. You will also need to perform another buy operation to invest the 500$ kickback so at 40$ for trafing fee's this represent 1.33% cost drag.

ETF are viable only once you reach 5 digits RESP...

And for the record, yes TDDI waive the fee if you have significant assets with them (or if you are good at negotiating with banks in general).

Disclosure: about to open a TDDI e-series RESP.

Edit: RESP for minors under 10y old should be 100-90 % in equities so you might be able to use only two ETF (VXC, VCN)


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## gibor365 (Apr 1, 2011)

maxandrelax said:


> I sat down with a TD rep, he looked at my accounts much greater than 25grand, and said that the Waterhouse account with a $50 RESP fee was a bad choice and suggested e-series mutual funds. I will go back and ask them to waive the fee and see what they say.


When i was thinking to transfer RESP to TDW, I was also told by rep that on every withdrawal I also need to pay $, so i decided to leave it in TD mutual funds....
The problem with TD reps...that from my experience no one knows how RESP excatly works, esp if it's for more than 1 kids and mix of MF and Term RESP... I lectured several reps already on meaning of PSE vs EAP redemptions and what is it CESG 
The worst part, even back office doens't know it and they don't have calculator to tell you exactly how much EAP you should redeem in order to get specific amount of CESG (that is the most important figure from CRA point of view - as you canot exceed it and cannot leave it on gthe account)....


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## gibor365 (Apr 1, 2011)

larry81 said:


> Unless you are with a brokerage with free ETF trading, TD e-series is still the most viable option for RESP (if you can get the 50$ fee waived!)


The biggest disadvantage of TD MF.... when child age approaches 16-17 and you want to have big portion of your $ in Cash, the only option you have is MM that pays nothing ....in TDDI you can at least get TDB8150 with 1.25%...same with GIC, in TDDI you may get much better rates


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## larry81 (Nov 22, 2010)

FYI, just confirmed with TDDI rep, 100k household assets required to waive the 50$ fee on RESP account.


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## maxandrelax (Jul 11, 2012)

gibor said:


> The problem with TD reps...that from my experience no one knows how RESP excatly works, esp if it's for more than 1 kids and mix of MF and Term RESP... I lectured several reps already on meaning of PSE vs EAP redemptions and what is it CESG
> ...


This is the impression that I have got. I have seen a couple of reps at different banks and haven't been satisfied with the level of expertise. Guy looked at my account value and told me to avoid the $50 dollar Waterhouse resp. He should have told me that the fee would have been waived.


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## maxandrelax (Jul 11, 2012)

larry81 said:


> FYI, just confirmed with TDDI rep, 100k household assets required to waive the 50$ fee on RESP account.


On the line with a TDWaterhouse rep who doesn't have a clue about this RESP account. I have been on hold twice now as he talks to someone. He confirmed from "head office" that the specific RESP account has to have $25 000 in order to have the fee waived. They don't care about the three other accounts that I have with them. Not impressed. This contradicts what Larry has said.


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## larry81 (Nov 22, 2010)

maxandrelax said:


> On the line with a TDWaterhouse rep who doesn't have a clue about this RESP account. I have been on hold twice now as he talks to someone. He confirmed from "head office" that the specific RESP account has to have $25 000 in order to have the fee waived. They don't care about the three other accounts that I have with them. Not impressed. This contradicts what Larry has said.


Call your local TDWH branch and ask directly.


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## gibor365 (Apr 1, 2011)

larry81 said:


> Call your local TDWH branch and ask directly.


there are no TDW branches  another reason why I didn't transfer RESP into TDW and stayed with TD.... in TD at least you can yell at manager


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## uptoolate (Oct 9, 2011)

There should be some threshold AUM for all of your household TDDI accounts. If you bank with TD your manager may call TDDI on your behalf. There definitely are still some perks to be had for stay with one provider but if you aren't above or at least near the threshold you may not get them. It helps to be pushy and perhaps even threatening to walk.


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## gibor365 (Apr 1, 2011)

imho even bigger concern than admin fees, will be redemption fees...you need exactly know if they charge and how much


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## uptoolate (Oct 9, 2011)

No redemption fees on our TDDI RESP over the last 3 years as we've started to utilize it. I was going to say draw it down but it's actually been growing faster than we're using it so far. Hoping that continues!


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## canucklehead (Jan 18, 2014)

I'm going to go into the TD branch next week to set up a TD RESP for our third child. The first two are in separate Family RESPs. Is this fine, or should all three kids be in a single Family RESP? If they are all separate, will I still be able to transfer monies (aside from Government contribution) in case one kid doesn't use it?


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## Guban (Jul 5, 2011)

It seems to me that a single family RESP is easier to manage, and does allow the flexibility to move money around between kids as required (besides the grant, as you point out). Why would you not combine them? Not sure if the new plan would also reset the clock on the maximum time that the RESP can exist.

Hopefully somebody else who has taken money out will comment.


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## cashinstinct (Apr 4, 2009)

Seemed to me that a single account per child might make easier to track PSE Vs EAP redemption...

Since they seem to have no clue about PSE or EAP anyway, might not make a difference to have many accounts or a single one !


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## uptoolate (Oct 9, 2011)

No trouble tracking the various components with a joint plan for 4 with 3 making withdrawals so far.


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## blin10 (Jun 27, 2011)

anybody with CIBC investors edge for their resp account? they got no fee resp account


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## Guban (Jul 5, 2011)

uptoolate said:


> No trouble tracking the various components with a joint plan for 4 with 3 making withdrawals so far.


Doesn't the institution do the tracking for you? What sort of paperwork do you have to keep?


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## kcowan (Jul 1, 2010)

Guban said:


> Doesn't the institution do the tracking for you? What sort of paperwork do you have to keep?


Yes they tell you the splits so you know how much of each to withdraw.


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## Xoron (Jun 22, 2010)

This is my plan in a nutshell. With TDWH / DI (not at the bank). Kids are 7 and 5, so in the near future I'll be moving my equity money into safer instruments:

http://www.milliondollarjourney.com/the-resp-strategy.htm


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