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  • richardmkiernicki

The Unconventional Conventional, Part X

Updated: Aug 6, 2019

As we slide below -10C today in the big smoke, some rather chilling facts seem to be arising in the dying days of RSP season 12/13.

Most chilling is another story reported in (Feb. 20, ’13) is the headline “More Canadians to Work Past 65 ‘to pay for basic living expenses’”. They say that more Canadians “need” rather than “want” to keep working. In the study by Sun Life Financial, get

this, there’s an annual Unretirement Index, is that like the “un-cola nut”?, “shows that the number of Canadians who expect to be living the retired life at age 66 has dropped by nearly half between 2008 and 2012, from 51 per cent to 27 per cent.”

The number of people who think they will be working full-time at age 66 rose 10 per cent to 26 per cent between 2008 and 2012. As well, 32 per cent of survey respondents said they expect to be working part-time at age 66. That being said, clearly identifies that RSP’s and TFSA’s are not solving the retirement puzzle for many Canadians.

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To add insult to injury, in the RRSP Guide in Metronews on February 5th, 2013, there is a large advertisement bought by RBC Royal Bank on page 35 that states “When you’ve finally got the time-have the money too”. which makes no sense to me but hey, we’re not bashing the ad industry here, and shows a graph based on “Regularly investing $75 a week opens up

extraordinary possibilities.” It shows that the future value of that contribution, 25 years away, growing to am amazing $264,146.00. This of course raised my eyebrows, and I wondered how they could post that. Then of course, my professional due diligence took over and I look at the fine print which states “The example assumes a 7% annual rate of return in a Registered Retirement Savings Plan”. And then the additional blah blah blah disclaimer. Seven percent. Can you believe it? RBC uses a 7% illustration for a projection of growth in an RSP. Please show me the money. In fact, please feel free to comment and show me where any RBC investment has been able to provide a 7% return for a 25 year period.

Take notice you independent advisors. No wonder the masses continue to buy bank product. With rates posted like that, you have little chance to compete. And we all know who spends the time to read the fine print on any investment advertisement or offering. However, the next big issue is this, how much disclaimer do you independents have to place on any ad that you run before you are permitted to post ads that “assume” a certain return? With a caption like “Advice you can bank on.” it is clear to see who has the advantage.

Next weeks column will be the “last bash” at the annual RSP campaign for this year, which I look forward to because I am already thinking about writing other controversial stuff in the weeks that follow RSP season. I wish someone was doing something new and exciting for this last hurrah, if you know of something that may speak to being different, please post a comment. Until next week.

Copyright 2013 Richard M. Kiernicki. All Rights Reserved.

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