My beef with Group RRSP

It seems that most group RRSP plans only offer mutual funds which have much higher management fees than ETF.  Even for the mutual fund, the choice is limited.  ETF was not available for their group RRSP for quite a few people I know.

It might be a good idea to open an RRSP account with an online discount brokerage firm such as WealthSimple or Questrade. Then transfer the mutual fund in kind to the new RRSP account. Make sure it is transfer in kind. This will not sell the mutual fund but transfer the mutual fund you already owned to the new account. It might take a month for the money to show up on your new account. If the mutual fund is sold, the market might be up already in a month. You have to buy whatever you want at a higher price. We don’t want that.

Perhaps group RRSP is one way the banks keep people buying their mutual funds and earning the high management fees. We, as investors, need to minimize it.

Published by Worthfy

Financial literacy and counselling

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