So I have talked ad nauseam about TD Waterhouse and the fun I have had with them about their RDSP investing options, however, they seem to be winning the one horse race that is being run for folks that want to have an RDSP where they are not locked into: buying GICs, using a savings account or buying ONLY the banks Mutual Funds.
I have a reader who has asked me questions, and yesterday he said, “Hey I am ready to jump to TD Waterhouse under your advice”. As soon as I read that warning sirens went off in my head, as I am very leery about giving out advice to individual folks (and my lawyer has lectured me as well), so I attempted to give the better advice:
No you should be able to create an investment RDSP for your child with all of the major banks.
I then went on-line to look and see who else offers an investment RDSP, to help the reader out and found out:
- BMO Nesbitt/Burns does not offer it, BMO offers a standard package of GICs, Savings and Mutual Funds (only).
- Scotiabank? ditto to BMO
- RBC? meme chose as BMO
- National Bank? I don’t know, I can’t tell (but my guess is no)
- CIBC? Not sure either, they have it on their website, but it looks a lot like everyone else
- Questrade, sorry you are out of luck there too (I asked them in an e-mail, they said they were thinking about it).
- TD Waterhouse? Only one who will allow me to invest in ETFs, Index Funds, or whatever else I wish to help grow my son’s savings.
Anybody at any of these banks (other than TD Waterhouse) feel free to Comment and use the form of:
The BCM’s statements are full of crap because…. and then explain how you have a program that allows me to buy VANGUARD FTSE CAN HGH DIV YD IDX ETF (for example) in your RDSP offering.
If I am wrong, I will gladly retract anything said above, and I will happily talk about your RDSP program to help folks looking around, however, if all you have is something that sells your GICS, Savings and Mutual Funds, I will stand by my statements.
Congratulations TD Waterhouse, for all my complaining and whining about your program, at least you have one, and for that I am very thankful.
Shameless plug, go check out my RDSP page for more info if you want to know more about RDSPs.
Robo advisors would be a great way to go. Relatively low cost. Somewhat managed– largely algorithmically. It is still something that I would consider. BUT– not a single Robo advisor offers the RDSP and there are about a dozen of them. The community of the disabled is not well served by the financial industry. I view it as systemic discrimination. Imagine phoning an airline to book an economy seat and being told that they don’t sell seats to folks with a disability or that they only sell high cost first class seats [mutual funds].
Their belief is there is not enough money in this, however, this is a very long-term savings plan. The money is going to stay there a good long time. It is despicable that this program is not better served, but you can’t force the financial firms to do it. I have asked every bank who have contacted me, and have heard nothing back (ever). TD offers the better account, but ideally it would be better if it was a Robo-advisor model.
Robo advisors blocked from offering RDSP by ESDC Economic and Social Development Canada.
Robo advisors hold promise of low cost advisory and low cost ETF products.
Robo advisors attain some efficiencies and nimblness by operating electronically. They all offer accounts for RRSP, RESP, TFSA and that is fine with the various government departments they deal with including the CRA who accept electronic signatures . Robos don’t offer the RDSP because ESDC does not accept electronic signatures for the RDSP. So ask ESDC why they have this roadblock for the disabled to invest in low cost ETF’s through robo advisors. Post your question:
directly with ESDChttps://www.canada.ca/en/employment-social-development/corporate/contact/program.html (select Canada Disability Savings Program) and scroll to the bottom for their message form. Specifically, you can request that they accept e-signed forms so that service providers can serve the community of the disabled. Be sure and ask for an email reply as it is like pulling teeth to get the government to put anything in writing.
National Bank Direct Investing does offer an RDSP. It took a bit of time to move mine from BMO asset management [where it was in mutual funds] to NBDB where I invest in ETF’s. I managed to do this all on-line and via phone. They have a secure internal message system, which TD Direct Investing does not.
When I speak to prospective clients, I tell them if they are comfortable managing their own investment selections, Waterhouse may be the best place for them but they should prepare themselves for little guidance on RDSP rules. Clients that come to me from the banks have often been put into a wrap balanced fund demonstrating little thought behind investment selection. Independent mutual fund advisors (like myself) are able to offer the RDSP through BMO Mutual Funds and Mackenzie. The challenge is finding one who understands the RDSP (and fund selection for that matter!).
You write a great blog. I hope you don’t mind me throwing in my thoughts as I am an advisor. I just appreciate being a part of the conversation.
I don’t have a problem with these kind of comments, as long as I think they will help my readers NOT get trapped into odd investing vehicles (for all kinds of things like RDSPs, RESPs, Trusts, etc., etc., )
I think we will be fine! Don’t know if you have ever looked at the articles I have on my blog, but they will give you an idea of how I approach my work and what I do for my clients.
TD Waterhouse is the only investment house that offers individual securities and index funds for the RDSP. The major banks, some credit unions, investors group and Mackenzie Investments offer mutual funds and GICs. My experience from talking to others is that you need to be reasonably financially literate and understand the RDSP rules. In other words, the advice and guidance at TD Waterhouse for the RDSP is somewhat spotty. Is that your experience BCM?
I have been told a financial institution a great deal of investment to set up the systems and processes to manage the RDSP. When they see most families will invest $1500 a year and the government contributions are $4500 per year they don’t see the return on investment. I think this is somewhat short-sighted on their part. But the reality is you need to know more that investment selection; you also need to understand RDSP rules to properly service clients. Most financial professionals are not interested in learning the rules.
TD Waterhouse I don’t ask for investing advice, and their understanding of the RDSP program is spotty. If you went into a TD Branch I am sure they would try to set you up with a Mutual Fund RDSP, and claim they don’t know much about the TD Waterhouse solution.
Big banks don’t see the money in supporting this vehicle, so you end up with secondary institutions getting involved, and then you have the questionable benefits of a lot of the firms that claim to be helping in these situations as well. All in all, not helping folks who really do need help.
They usually follow one another, for good and bad,, waiting if someone got news for us else what a shame!
I’m surprised so few brokerages are offering RDSPs. They must think the demand is too low–but how will they know if they never offer the product! Kudos to TD DI for leading the way.
They offer it via their Mutual Funds wing, and I think they are trying to see if there is a big “pick up” which doesn’t seem to be happening.