cst

[Aquaria]

Has anyone heard of Canadian scholorship trust foundation? If yes do u know anyone who has used the program?looking for opinions on them really wery of investing in the resp with them but there way cheaper then my bank

[Cameron]

I would highly recommend to avoid at all costs. They aren't cheaper than your bank, the CST salesman is paid a $2000 commission to sign you up first of all. Your payments go directly to his/her commission before your funds are invested. If you stop payments, or not contribute for a couple years they close the account and seize the funds, yes its true. Read the small print.

They invest in government bonds and money market securities, which are very low cost, because they will tell you the average mutual fund has fees of 2.25% or more, and its true for the most part. But CST is not very accommodating with withdrawals.

There are other imitators out there also, it's group RESPs, which the salesmen are very well commissioned to sell.

Take a look at Heritage Funds, or CEFI, or CST, they are all the same. Very high fees, huge commissions.

http://www.straight.com/article-1164...rests-at-heart

http://www.cbc.ca/news/canada/story/...oup-resps.html

What a group RESP essentially is, is a 18yr contract of contributions.


I run a private wealth management practice, and these are to be avoided at all costs. I also do not sell mutual funds, they are stealth wealth killers also.

[Aquaria]

First off they are cheaper then a bank after 18 years with a bank ill have paid cibc 16000 dollars in fees. Bank couldn't even explain what a MER was The financial advisor was like a deer caught in the headlights with the questions I was askin Now that said Iknow there's horror stories but they ALL come from people who took there money early I wanna hear stories from people who haven't got out early. I mean if it works ill gladly pay him 2000 over the banks 16000 that's 14000 more going to my son in 18 year. For the record the other group plans are not as transparent as CST nor are they non profit. All the concerns u raised he actually told me about so I don't feel he was hiding anything from me and he even told me if I wanted time to go over the papers he would sit with me in case I had questions about the "small print". of course I told him to call me in a few months so I could do some research first. I have no intention of signing those papers till I hear from people who have actually reached maturity. Till then my tfsa will have to do

[Cameron]

Do some searches online about group RESPs. I wouldn't be entering into any 18 year contract.

Mutual funds, are what bank advisors are pushed to sell, high fees, and generally poor performance on the funds they are pushed to sell. Not to mention your bank advisor will probably change every 18months if not less.

[paddyob]

Originally Posted by Cameron

Do some searches online about group RESPs. I wouldn't be entering into any 18 year contract.

Mutual funds, are what bank advisors are pushed to sell, high fees, and generally poor performance on the funds they are pushed to sell. Not to mention your bank advisor will probably change every 18months if not less.

Bank advisors seem highly under trained these days. I sold rrsp/gic/mutuals for CIBC years ago... And all I did was regurgitate what CIBC told me.

When I see a 22 year old telling me how to plan, I shudder. Life experience is lacking, as is the age to back up the stats they sell you.

Good on you for doing research.

I'm going to follow along as I also need more info to plan for my own little
One.

[paddyob]

Which company do you run? Maybe somebody here could benefit by calling you at your office.

Originally Posted by Cameron

I would highly recommend to avoid at all costs. They aren't cheaper than your bank, the CST salesman is paid a $2000 commission to sign you up first of all. Your payments go directly to his/her commission before your funds are invested. If you stop payments, or not contribute for a couple years they close the account and seize the funds, yes its true. Read the small print.

They invest in government bonds and money market securities, which are very low cost, because they will tell you the average mutual fund has fees of 2.25% or more, and its true for the most part. But CST is not very accommodating with withdrawals.

There are other imitators out there also, it's group RESPs, which the salesmen are very well commissioned to sell.

Take a look at Heritage Funds, or CEFI, or CST, they are all the same. Very high fees, huge commissions.

http://www.straight.com/article-1164...rests-at-heart

http://www.cbc.ca/news/canada/story/...oup-resps.html

What a group RESP essentially is, is a 18yr contract of contributions.


I run a private wealth management practice, and these are to be avoided at all costs. I also do not sell mutual funds, they are stealth wealth killers also.

[Cameron]

Do some searches online about group RESPs. I wouldn't be entering into any 18 year contract.

Mutual funds, are what bank advisors are pushed to sell, high fees, and generally poor performance on the funds they are pushed to sell. Not to mention your bank advisor will probably change every 18months if not less.

Doing some reading on their site, as I have had a couple clients have these plans in the past..
http://www.cst.org/index.cfm?pagepat...ange_&id=14211
What if things change....devil the in details, your child doesn't go to school, transfer to another child, that's normal. #2 Transfer the income to your RRSP, NOT THE PRINCIPAL. And the income is not going to be a lot since it's mainly invested in gov't bonds.

Implications of Transferring to Another RESP Provider
• We will transfer your Contributions (less enrolment fees, account maintenance fees and a transfer fee) to the other RESP provider (see “Transferring to Another RESP Provider” on page 25)
• Your income will stay in the Plan and be transferred to the Education Assistance Payment Fund to be shared among Beneficiaries who remain in the Plan.

So you lose all your 'growth' and only get whats left of your principal, after they deduct all their fees.

Terminating Your Plan
• You can terminate your Education Savings Plan Agreement at any time by writing to us (see “Terminating Your Plan” on page 25)
• If we receive your written request within 60 days of the date you signed the Application, we will return all your Contributions
• If we receive your written request more than 60 days after the date you signed the Application, we will return your Contributions less enrolment fees and account maintenance fees...
If you wait longer than 60 days, you will owe them money.

Another gem from the prospectus:

Transfer or Termination by Us
Failure to make a required Contribution: If you miss a required Contribution and are unable to make that Contribution within 30 days of receiving written notice that you have missed it, we will automatically transfer you to a Self-determined Plan if:
• you have been enrolled in Group Savings Plan 2001 for at least three years; and
• your Plan has not reached Maturity.

What if You Can’t Make the Required
Contributions?
If you are unable to continue making Contributions in the short term, you should contact us to discuss options that may allow you to continue in the Plan. You must make all Contributions required to complete your Contribution schedule in order for your Beneficiary to be eligible for Education Assistance Payments.

If you don't stick to the contract you will lose your EAP eligibility.



What I'm saying is read the prospectus and understand it. Do your due diligence, remember this is likely a 18 year commitment and there are many other options out there.
Banks will offer RESP accounts: banks can hold mutual funds or GIC's. Brokerages can hold any investments. Group RESP providers will only offer group plans. Insurance agents will offer RESPs as well as Seg funds.
You may want to look into an insurance policy also, this is a strategy that HNW families use. Child won't have the undergo underwriting if they are under a certain age, then when they decide to go to school they can cash in the policy, or not go to school, use the policy for a down payment, or start a business, or just keep it as the premiums are likely all paid up.

Do proper due diligence.

[Aquaria]

Thx for the advice I have decided NOT to go that route I got a pm this morning from a guy who had to jump through hoops to get the cash so he could go to school and they lost the interest on it because he took 2 years to start post secondary after high school no way do I want my son to have to go through that crap thx guys. On another note I agree with paddy what's ur.company name n number I'm sure more then a few could use advice LOL Cameron can I acsess the gov resp bonuses with a tfsa? Or does it need to be a fed resp program?

[Cameron]

Depending on your personal/family income can make the difference between a TFSA or RESP.

They are two separate type of accounts.

You can only access the CESG/CLB through the RESP.