Using the RDSP to its full potential

Currently, nearly 27% of eligible Quebecers hold an RDSP, compared to 30% to 40% in the other provinces. Quebec also has one of the lowest RDSP contribution rates in Canada. The average value of assets in RDSPs is lower there. It sits at $17,360, compared to $22,250 nationally.

“We can conclude that in addition to serving fewer Quebecers and covering fewer potentially eligible people, the holders do not optimize the financial product and derive less benefit than in other provinces of Canada”, indicates Jean-Philippe Brosseau, expert from the firm Raymond Chabot Grant Thornton (RCGT), which carried out the study.

Appetite for personalized advice

Financial institutions have an important role to play in turning the tide. In this regard, the study reveals that the type of institution that issues the RDSP influences the quality of the advice clients receive.

Desjardins is the largest provider and issuer in Quebec, with nearly a third of RDSP holders surveyed by Finautonome, followed by RBC (16%) and BMO (12%). About 14% of beneficiaries said they do business with Mackenzie, 12% have retained the services of firms and 7% hold their plan with an independent advisor.

Clients who do business with a bank or credit union say they are less satisfied than those who deal with a specialized firm or an independent advisor.

“Access to RDSPs in bank branches is rare and difficult due to advisors’ lack of knowledge of the plan. Several institutions offer the plan by phone or online, which represents an accessibility issue for some people,” the report reads.

In addition, “access to a few riskier products is limited in some institutions, which reduces access to high returns and the possibility of accumulating greater assets in the RDSP”, add the analysts.

Lack of access to knowledgeable advisors to answer questions and provide investment advice is the main reason for the dissatisfaction of many RDSP holders, the report notes.

“I can’t reach an advisor by phone who can answer my questions”, “The types of investments don’t suit me. I have to call to make my investments because my branch advisor can’t,” one respondent said of his financial institution. “No accompaniment is offered. There is no way to understand the best decisions to invest your money wisely,” reports another.

Despite the appetite for personalized advice, few people with disabilities have the level of financial literacy or the resources to seek it, the study finds.

Complicated procedures

In addition to access to relevant advice, several barriers limit access to the plan. Most of the approximately 250 people surveyed (beneficiaries and family) are unaware of the benefits of the RDSP. Some do not have enough funds to open a plan. Others are limited by their disability. Many fear that their social benefits will be cut when they withdraw funds from the RDSP.

The requirement to first obtain the Disability Tax Credit (DTC) to open an RDSP represents another barrier to entry, according to RCGT analysts. The complicated procedures as well as the difficulty in finding accredited professionals to issue the certificate necessary to obtain the DTC are cited as the main obstacles by the beneficiaries.

These obstacles are added to the already complex steps to subscribe to an RDSP. Result: It can take nearly six months from when someone hears about the plan to when it is opened, the study says, longer than it typically takes to open a Registered Education Savings Plan (RESP) or a registered tax-free account (TFSA), for example.

Simplify withdrawal mechanisms

The study concludes that simplifications to the plan could allow more eligible clients to access it. In particular, she suggests considering other gateways to the RDSP than the DTC, encouraging financial institutions to further promote the plan and planning awareness-raising efforts for each stage of the process.

We would also benefit from simplifying the withdrawal mechanisms, reducing the penalties for early withdrawals, and drawing inspiration from the RESP for the formulas for grant amounts and withdrawals.

The report also recommends increasing or even eliminating the annual withdrawal limits for Disability Assistance Payments (DAPs) and Lifetime Disability Assistance Payments (LDAPs), in order to prevent the funds accumulated in the plan are subject to a high rate of taxation at the time of the succession.

The stakes are high, as the number of incapacitated persons is expected to increase considerably over the next few years in Quebec due to the aging of the population. Easier access to the RDSP could enable a greater number of seniors to benefit from additional sources of income to ensure their retirement.


In 2017, Canadians contributed $223 million (M$) to their RDSPs, for a total amount of $1.2 billion (B$) accumulated in the plan.

Source: Employment and Social Development Canada, RCGT analysis

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