This is what I keep seeing and reading, and it makes me (as a Father of 3 smart sophisticated young ladies, and a wife who is much smarter than me) absolutely irate. The dumbing down of most things (OK everything) is annoying enough, but the portrayal that Mothers and Parents (in general) can’t understand a simple financial idea like an RESP is insulting.
The case in point I am displeased with is Giraffe and Friends RESP, which is an insurance company that is offering a Guaranteed Growth RESP (and also insurance for children). This company has been getting a lot of Mainstream Media play and many financial bloggers seem to think that it is a godsend for families.
Let me be clear, “Giraffe Feces“.
They are simply selling an RESP Bond Fund, with insurance thrown in, which most families can easily set up themselves.
When did RESPs get complicated? You get a Social Insurance Number for your child, and you set up the RESP with your favorite financial institution, you do a little research, beforehand and there you have it. Evidently it is much more complicated than that, as the Giraffe and Friends site explains:
We use direct, simple language. We take the worry out of big decisions by giving you all the information like our frequently asked questions you need to make the right choice for your family. We want you to understand how your savings work so you can feel confident, not confused. giraffe & friends is online, and our mission is to be so easy that you can set up your child’s RESP during a single naptime.
Is it just me, or is this someone being condescending to the consumer? When I read simple language, I get the feeling someone is calling me Simple (but then again, I am also known for being a hot-head).
Another question that arose after seeing this was when did RESPs become risky? The site makes the statement:
A giraffe & friends RESP is for parents who don’t want to take chances with their children’s education savings. There’s enough uncertainty in the world.
- Your personal savings are 100% guaranteed to grow, no matter what happens out there in the stock market jungle.
- We go a step further by offering insurance for YOU, the parents. So if the unthinkable happens like a death or permanent disability, and you can’t make your RESP contributions, giraffe & friends will still meet your RESP goal.
What kind of growth are we talking about here? I couldn’t really find a lot of information about what growth meant, but the guarantee seems to be a 2% growth per annum, but given the government kicks in 20% every year in CESG, for your first $2500 deposited each year (more possible depending on your income), is this on top of the kick in? (I hope so).
To those folks out there clutching their stuffed animals reading this, you do realize you can buy GICs, or set up a savings account type RESP that will never lose money as well, right? The FAQ on the site says they invest your money in Bonds mostly, ” We back your RESP with dependable Canadian government and corporate bonds as well as a small percentage of equities.“, you know you can buy Canada Savings Bonds in an RESP too?
The really telling part of the web site is in the Terms and Conditions page, which states:
Except for on-line applications, the Website is provided for informational purposes only, and is not guaranteed to be accurate, complete, or timely. You should obtain appropriate, qualified professional advice before acting or omitting to act based upon any information provided on or though the Website.
It is also important to read the Exclusion of Liability section very carefully as well (as you should with all similar products).
Am I missing something here, is the concept of an RESP something that is causing parents to stay up late at night worrying that they don’t know what to do? I must also give Mrs. C8j her “props” on this, as this article was her idea, and, yes, she does feel insulted by the tone of the service.
Maybe I need to start the Friendly Big Cajun Man RESP fund, and I could get Jerome the Giraffe and Rusty the Rooster to help explain things to folks?
Look up… waaaay up… and now let’s talk about RESPs….