When it comes to saving for your child's post-secondary education, a Registered Education Savings Plan (RESP) is one of the best investments you can make, because this allows your money to grow tax-free while in the plan.  Once you decide to open an RESP for your child, you’ll need to choose where to open your plan. Between banks, mutual funds, credit unions and other specialized RESP providers, there are many options out there. As a parent, how do you decide where to go? Here are 5 important questions to ask before you open your child’s RESP.

1.      What kind of investment experience does the company have? 

Many providers can help you open an RESP for your child(ren). So, look for a company with history and experience in helping Canadian families save for post-secondary education. For instance, not only does CST Foundation (CSTF)   have over a 60-year history in RESPs, but CSTF is the creator of Education Savings Plans  and lobbied for tax incentives and grants for Canadians. Currently, CST has over $4.8 billion in assets. Can other RESP providers say the same?

2.      Who’s looking after my RESP account?

When you choose a financial institution   for your child’s RESP, you   will   be getting that one company’s investment perspective. What if you could have a mix of top money managers guiding your investments?   With CST,     RESPs are specifically designed for education savings. When you invest in a CST RESP, you get access to some of Canada’s top money managers1 including Black Rock Asset Management, Fiera Capital, BMO Asset Management, CIBC Asset Management and TD Asset Management managing your RESP. That’s a lot of expertise guiding your RESP investment!

3. What is the company’s RESP investment strategy?

At CST our RESPs are designed  for education savings. We invest your money   with the goal of principal protection and long-term growth to ensure that funds are there for when your child needs them. Our diversified portfolio holds a mix of equities, bonds and other asset classes to help reduce overall investment risk. At the same time, we strive for growth by investing across the globe including Canadian, US, international and emerging market economies.

While an  investment strategy is important, you’ll also want to know whether a plan offers any unique benefits. For example, the CST Advantage Plan comes with benefits like a flexible contribution schedule that lets you skip contributions if you need to, extra money through Advantage Plan Benefits and more.

4. How will my RESP funds be protected against market volatility? 

A diversified investment approach can help cushion against market bumps. That’s why we invest your funds across asset classes and global regions to help balance highs and lows. It is helpful to remember that return and risk are tied together. The CST investment strategy uses a reasonable amount of managed risk to generate returns over the long term. 

5. What fees will I pay if I open an RESP?

All RESP providers charge fees to cover plan administration, investment management and commissions. These fees may be marketed   under different names like a Management Expense Ratio (MER). MERs are calculated as a percentage of the total value of a fund. In order words, the more the fund grows, the more fees you pay. Besides the MER, you may also be charged for trading activity and account maintenance, so ask for a clear explanation of fees.

Nobody likes surprises – especially when it comes to fees. At CST, we make sure to explain our fees up front, such as our upfront sales charges and our fund account maintenance fees, all-inclusive management fee, and IRC Fees. Plus, here’s something no other RESP provider does:  CST refunds 50% of sales charges paid when your CST Advantage Plan reaches maturity . We are the only RESP provider who sets aside money to do this!  Consider it a   CST™ Loyalty bonus for your student reaching this major milestone! In 2022, we paid $23.2 million to our students when they’ve enrolled in qualified post-secondary education.

So, when you’re shopping around for an RESP, be sure to ask the questions. And if you’re not getting answers – or don’t like the answers you’re getting – keep on shopping for a plan that meets your needs. To find out more about CST RESPs, contact us online.