The investment industry was offered up a bold new proposal Friday aimed at making the most of the federal government’s upcoming registered disability savings plan (RDSP). It involves a unique plan based on cooperation among firms.

Jamie Golombek, vice president of taxation and estate planning at AIM Trimark, presented the idea for the first time Friday at an RDSP seminar hosted by the Investment Funds Institute of Canada (IFIC) in Toronto.

The federal government introduced the RDSP in its 2007 budget. It is similar to an RESP in function, but it was one caveat in particular that drove Golombek to think in innovative ways.

Under the current draft legislation, RDSP holders are only allowed to purchase a plan from one firm. Unlike RRSPs, RESPs, or RIFs, investors can only have one account relationship, making it a one holder-one plan system. “This is a real stumbling block for our industry,” said Golombek. “It means you cannot have a RDSP at AGF and at AIC and at AIM and at Mackenzie and at CIBC. You’ve got to choose one company.”

To combat this problem, he suggested today that IFIC members work together to create one umbrella plan, for which a consortium of firms becomes the issuer.

“This is totally open. It’s never been done before,” he told the breakfast crowd of about 80 industry participants. “What if the industry as a whole got together and we hired a lawyer and a back office provider and a specimen plan. And we put someone in charge of education and put together all the marketing materials and created an industry wide RDSP.”

Golombek, along with his colleague Doug Carroll, assistant vp of tax estate planning at AIM, floated the idea today in hopes of eliciting feedback and gauging interest. “This is just a question mark,” he said. “This was something that was brainstormed a few months ago.” Golombek wants to hear from the industry on the idea and then make a decision about whether or not to proceed.

He said it would mean voluntary involvement in a so-called “industry solution,” which every fund company could offer. There would be a standard application form and any financial advisor could sell the product, but all the administration would be sub-contracted out.

“The ultimate goal is to think about something brand new in the industry,” said Golombek. “Whether or not it might make sense for there to be an industry RDSP, where all the members of IFIC get together and have one specimen plan, one back office system.”

He explained his vision of a multi-tiered program where all of a company’s funds could be put on a platform and an investor could choose to buy the new plan and then be able to participate in any of the products available, with the group as issuer of the plan.

“Just imagine if we as an industry could actually cooperate on something and combine our resources. I know we are all in competition. We all want money and the banks are going to launch some of these themselves anyway.”

In his presentation, Golombek hearkened back to the early days of RESPs, when brochures lined the counters at retail outlets and were handed out at hospitals by specialized, niche players offering plans. “This could turn out to be the same way if we don’t do anything about it,” he warned. “If we don’t as an industry step up to the plate and say we are going to offer some kind of self-directed type, multi-fund plan then that I think is a very real thing.”

When asked after the presentation about the reality of companies in a highly competitive marketplace coming together to offer a product, Golombek pointed to other potential scenarios. “The alternative is that everyone spends literally hundreds of thousands of dollars developing their own systems and developing their own infrastructure to facilitate a plan, in which case they may get very little take-up on it,” he said. “At the end of the day if someone really wants a wide selection of investments they are going to have to go with a self-directed type plan, which will be offered probably primarily by the banks if the banks choose to enter this space.”

Golombek said he will be gathering feedback over the next week and based on reaction within the industry, will decide how to proceed. He said the next step would be to put together a working group to study the feasibility and practicality of the idea as well as the legal, technical and back office issues.

@page_break@IFIC says the process of testing the feasibility of the proposal will be long and complicated but it will begin the task immediately.

The federal government has said RDSPs will be up and available by the end of this year.

“I think this is part of a much bigger picture in terms of financial planning and it’s an amazing opportunity,” said Golombek. “Imagine a client says, ‘You’ve just offered me this great, new, easy-to-administer RDSP program. Now I want to transfer my RRSP to you as well and my RESP and all my other non-registered assets.’ ”