RRSP Myths And Misconceptions

If you have a financial plan, then you will not be fretting about the deadline because you will already have (or have not) made your contribution.

If you don't have a plan, best get on it. But don't come to us now, Bianca (our Certified Financial Planning, CFP, professional) will kill me, she is already dealing with a bunch of last minute issues.

1) You are not "buying" an RRSP. You are contributing to your RRSP account. The contribution you make can be invested in a number of different assets. If your bank advisor tries to sell you anything, run away. Or better yet, seek out Larry Bates' best selling book Beat The Bank.

2) If you are doing it last minute (you have 4 days left), go to where you already have an account open and make your deposit/contribution to get your tax deduction. You can leave it in cash for the moment (i.e. you don't have to "buy" anything or even invest it in anything immediately). When you have determined (if you come to High Rock, Bianca will be willing and able to get you started, but after the March 1 deadline is past), via your plan, what the best strategy is for investing the cash and when.

 3) You can find out how much room you have by checking your 2017 CRA notice assessment (or go online here).

4) The folks at Questrade did a recent survey that turned up some interesting tidbits, have a peak: it still blows us away at how misleading the big banks and investing institutions can be and what passes for a their attempts at pushing their versions of financial literacy on the unsuspecting public.

5) Most important of these is that you can transfer your RRSP simply and easily without any tax consequences. For example, if you like Bianca's plan for you and want High Rock to manage your RRSP investment strategy (with fiduciary responsibility), we simply prepare and have you sign a form that authorizes Raymond James (our custodian for client accounts) to transfer your account to your new or pre-existing RRSP (that is under High Rock management). The institution that, at that particular moment, holds the RRSP is then legally obliged to send it (unless they can convince you to change your mind, and they may well try with all sorts of methods and tricks, believe me I have heard it all: right down to the besmirching of my character! The nerve of some advisors!) within 10 business days. They may charge a "transfer-out" fee, but we always reimburse our clients for those. You don't even have to have that uncomfortable conversation with your former advisor (as per the Questrade adds you may have seen on the TV).

6) According to the Questrade survey: 2/3 of Canadians tend to either choose a mutual fund or a savings account to use as their RRSP investment vehicle. Yikes! There are so many other, less expensive or more advantageous ways to invest. 

There are alternatives to the banks! And like High Rock, they are less costly, offer high caliber service (in High Rock's case including financial planning that may other-wise cost $2,000 and up with a fee for service planner) and fiduciary responsibility, well beyond what you can get from your bank / financial institution.

We need to talk it up out there friends!

(Bianca gets a big assist for this blog!)