When the Government of Canada began giving parents matching grants for money deposited to an RESP account for their children’s future education, an industry was born and thousands of people chose a career as an RESP advisor.
Everything was fantastic for twenty years. Thousands of advisors built their entire career just selling RESP’s to parents. They built personal practices and RESP agencies with other advisors to service families, open RESP accounts and made a great income doing it.
Every time a baby was born, an RESP advisor contacted the parents and asked if they wanted free money from the Government. Who would say NO?
The key component in this great relationship set up by the Government was that parents had to work with an advisor who’s role was to set up the RESP account.
Since 1998 RESP companies and banks had to have advisors speak with parents and get their consent to open RESP accounts. Banks and RESP companies couldn’t open RESP accounts without an advisor and parents couldn’t open RESP accounts without an RESP advisor.
All that changed in last week’s Government of Canada 2024 budget, when the Government of Canada decided it was time to eliminate the advisor component of the RESP industry and simply give banks a free RESP client without even the need for an advisor to speak to a parent.
“Budget 2024 announces the government’s intention to amend the Canada Education Savings Act to introduce automatic enrolment in the CLB for eligible children who do not have a Registered Education Savings Plan (RESP) opened for them by the time the child turns four.Apr 16, 2024”
(source; Sun Life Global Investments)
Starting 2028 any child who is four years old which means children born in 2024 who qualify for the CLB and don’t have an RESP account, The Government of Canada will automatically open an RESP account for them, likely at the banks since that’s where the CCB payments of the parents are already going and deposit the money into the RESP account on their behalf, without an advisor.
Starting 2028, there will be no need for parents to speak with RESP advisor any longer to open an RESP account. The Government of Canada simply decided the process of parents speaking with an advisor in order to save for their children’s education was to complicated and they believe the reason parents aren’t saving for their children’s education is the advisor in this relationship and the best way to help parents was to eliminate the advisor from this equation.
When Was The Last Time You Used A Travel Agent?
The Government of Canada has decided it’s time to do to RESP advisors what airlines and the travel industry did to travel agents and connect parents directly to banks to open RESP accounts.
The Government of Canada feels advisors don’t add value and aren’t necessary any longer. For those who believe this will only be for the CLB families, it’s where it will start. It will take the banks no longer than another year to convince the Government to simply allow them to open accounts automatically online without an advisor.
But while there is gloom in this new direction the Government has taken against RESP advisors at least they gave the advisors four years to find a new career. The airlines barely gave travel agents three months advance notice when they opened their websites for clients to book their airline tickets directly.
How Can I Continue Doing What I Love. Helping Families Save For Their Children’s Education And Future?
What’s old is new again. Participating Whole Life was the only tax-free investment parents could open for their children in Canada from 1847 to 1998 when the RESP grants began. And now they’re making a raging comeback.
Participating Whole Life can only be sold and offered by advisors
While there is automation going on in the life insurance industry as well, and insurance companies are offering insurance plans directly to consumers. Participating Whole Life is the only insurance plan insurance companies will never allow clients to purchase without an advisor, because it’s permanent. Once the insurance company accepts the application, they can never get out of it and it’s critical for them that an advisor take the application as the plan is complicated and they don’t trust parents to tell them the complete story when they fill in the application.
The other great news for RESP advisors who want to now offer participating whole life to parents. Participating Whole Life is the one insurance plan banks can’t offer families at the bank branches. Under the Insurance Act when banks were given the license to sell insurance through branches the Government ensured that life insurance is never offered or discussed with clients at the bank or even mention “life insurance” also they can’t refer them to their insurance division.
When it comes to Participating Whole Life. The Advisor is the critical component life insurance companies need and will never replace.
In the Participating Whole Life market for children, Child Plan TM is the fastest growing alternative to RESP and a great opportunity for advisors who see the writing on the wall and are smart enough to begin planning for their future.
In the past ten years Child Plan TM has trained over 500 advisors to educate families on how to invest for their children’s futures. While I believe that RESP’s are good for some families, Child Plan TM families are high income aspirational professional families who want a flexible investment their child can use for anything in life and not only education.
Child Plan TM, For Education and For Life
Child Plan TM is the fastest growing alternative to RESP and only tax-free investment parents and grandparents can open for their children in Canada. From the day they open a Child Plan TM their child or grandchild will get an annual tax-free dividend for life! And they can use the cash value for;
- Any education, anywhere in the world without Government restrictions.
- Buy their first home
- Start a company one day, if that’s their dream
- For any financial need in life
Is that of interest to you?
The great news is there are 389,000 children born in Canada every year and 1.9 Million children in Canada under the age of 4, every year. Child Plan TM has parents contacting us every day looking to connect with advisors to learn more how to invest for their children’s future.
If you’d like to learn more about becoming a Child Plan TM advisor or Partner Agency and connect with families across Canada, please click HERE, submit your information and an Insurance Brands associate will contact you to answer all your questions.
