A friend just finally settled her divorce and now has ~$200k cash and ~15k in a TFSA to essentially try and start fresh. She wants to use the money to have an emergency fund (10-15k) accessible for car breakdowns or other of life's un-expectancies, a down payment for a house (currently living back at home), and an RESP for her 2 kids aged 9 and 7. She is conservative and can't stand the thought of losing any principle on investments. She also wants to be very hands off as she doesn't understand much of anything about investing and isn't interested in learning.
She went to a Fidelity advisor referred by another friend who wants her to transfer in her TFSA maximize it and then open a family RESP and buy Fidelity Conservative Income Fund (Series B).
So - Do we just let her role with that? I was thinking she should open a Wealth Simple account, possibly managed, or at the very least get an advisor who will allow her to purchase ETF's.
I was thinking of suggesting:
* Wealthsimple Savings - $15k (Emergency Fund)
* Weathsimple TFSA - Transfer in current one then max it and purchase cash.to or zmmk.to . This would be a holding place for the downpayment (~$90k to add need to check her CRA account?)
* Wealthsimple RESP - $5000 per kid to start to get back a year of government grants. Try to structure this so she can buy back a year next year too so she would need to plan another $10k for this next year and can hold it in the savings account.
* Wealthsimple FHSA - Contribute $8k and again do cash.to or zmmk.to. It could be a year or two before she buys a house but this would save her a little tax in the meantime.
That should leave ~$67000 - I would consider having her hold this in a non-registered account with VCIP of VCNS. She could then use this money each year to continue maxing her TFSA's/RESP's or to use RSP's if needed for tax efficiency?
I think the toughest part is she may not like the idea of doing any of this as it may overwhelm her. I just think the Fidelity option is not great.. especially with the recommendation of the backend loaded mutual fund.
Anyway - Curious what I missed and if anyone has any other good ideas to help her?
Thanks
If I missed any info let me know. We're planning to chat over the weekend where I will try and get more details on certain things like if the dad set up an RESP already or anything.