Since the Canadian government introduced the RESP Group plans, many parents have considered utilizing the program. The program is under the regulation of dealers such as the Higher Education Funds.
The bodies represent the parents who are members of the RESP Group plans. The program has been doing well, until recently when many parents started complaining about the program.
There are those parents who are complaining about barriers when you want to stop contributing to the program. Another issue is the sharp reduction that is imposed in the amount you receive in the end.
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While parents can transfer their savings to other platforms, the program will charge a lot to do the operation. Some of the charges that you will incur include an enrollment fee and transfer charges. Many people have complained about the high rate of interest, lack of transparency in salespeople and the charges involved.
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Although there have been some changes, there are still complaints coming from parents. There have been increased complaints from parents as reported by a government agency based in Ottawa.
These problems are seen because the dealers make the decisions on behalf of the parents. They also set a contribution schedule for you.
The program requires parents to pay extra fee if they miss to contribute on time and there are instances when your account can be terminated. You will be required to pay enrollment fee, trustee fee, and other charges.
The program doesn’t offer a lot of flexibility. You can’t decide the amount of money you can withdraw and when to do so.
Some mutual fund brokers and banks have joined together to start offering parents with self-directed saving plans. With a self-directed plan, you can decide which amount to contribute and the kind of investment you want.
The main advantage of the self-directed plan is that you can get your contribution at any given time. While the government can still give a grant to your child, this money won’t go to their school fees.
Many mutual fund dealers have a certain fee but the fee keeps on reducing and after seven years, you are not charged anything. This is a benefit as you will save for your child’s education with no charges involved.
The RESP program was formed by the Canadian government to help parents save for their children’s education. Many parents joined the program and the program has helped many of them. But with the high number of parents complaining about the dealers controlling the program, there are high chances that many parents will opt out of the program.