As you have read over the past 2 months I have learned a great deal about the inner workings of TD and TD Mutual Funds and some more about how the RESP program actually works, and from these I have put together a Lessons Learned as much for myself as for other folks that may be thinking about RESPs.
A lot of these points are commenting on TD Mutual Funds, and you may have guessed that I am not happy with the process of dealing with this part of TD Canada Trust:
Lesson 1: RESPs Do Make Sense
Given the amount of money in the CESG and Growth Portion of my daughters’ RESPs, I think putting money into RESPs for them was a good idea. I don’t want anyone to construe the issues I had dealing with the Systems put in place by TD as me saying that RESPs are a mistake, they were a good idea for me, and I think they are a good idea if you are pretty sure your kids are going to go to University or College when they get older.
Lesson 2: TD Mutual Funds Were Not Where to Leave My Money
For those of you who are not aware you can buy Mutual Funds at TD from the TD Mutual Funds portion of TD, or you can open a TD Waterhouse Trading account and buy any Mutual Fund, Index Fund, ETF, etc., that you want (TD Waterhouse may charge you fees on the accounts themselves however). I don’t think (and this is my opinion) that the TD Mutual Funds service is of much use for me. It has a limited number of Funds (mostly only TD funds) that have higher MERs, and you can’t access the E-series TD Index funds from there (which seems strange, given it is a TD product).
The reason I had funds there is that I opened these RESPs when I was a Canada Trust customer (and had less experience in investing), and then when TD bought Canada Trust, the accounts swung over the the TD Mutual Fund Group. At that point I should have moved the accounts to TD Waterhouse and be done with it, but I was lazy and this is my own fault.
I will be opening a TD Waterhouse RESP for my son in the next few weeks.
Lesson 3: Read about RESPs and Learn More
I still am learning about RESPs and I have been talking about them for 6 years now, so learning as much as possible about any investment vehicle, while a motherhood statement, is essential. I kept misusing terms (and most likely still do) when talking about the Principle, Growth, and CESG portion of the account.
Lesson 4: TD Needs to Automate The Redemption Process
The cashing in of the funds in the RESPs was painful. It is a paper-heavy, process that should be automated. The argument that going into the Local Branch of my bank is needed to make sure no mistakes are made is just not good enough. It seemed more a “cover our backsides” exercise by TD, to make sure folks aren’t fraudulently taking funds for kids who are not at Post Secondary institutions. If I produce the Letter stating my kid is at an accredited institution (and FAX it to them, or e-mail it), why must I then have to sit with a “Mutual Fund Specialist” for an hour to finally get the money out?
How does TD Waterhouse do this? Must I find a TD Waterhouse office to cash in one of their RESPs?
Am I Done?
I hope my rants and comments have helped folks understand RESPs a little more and maybe taught a few lessons to folks who weren’t sure what to do with money for their kids future.
Hopefully this is the last post about RESPs (this year) on this blog (but don’t bet on it).
The Saga’s Other Stories
The other posts about this particular attempt at extricating money includes: