Why is the cost of investing so important this RRSP season?


As a result, many investors have two pressing concerns. First, are the returns on their investments keeping pace with inflation? Second, how much do fees take out of their returns? At the same time, they demand more from their investment products – for example, forcing them to focus on sustainability and deliver excellent performance.

It can be difficult for advisors to meet all client needs at once, but today’s lower-cost insurance risk management solutions are a potential solution, suggests Michael Rogers, senior vice president. , Brokerage distribution networks, at Beneva, the company created by the merger of La Capitale and SSQ Assurance.

Interest-bearing investments can also be risky

Some people have responded to the stress of the pandemic and anxiety over volatile markets by limiting their investments to interest-bearing fixed income products. The good news is that these products tend to come with relatively low fees. However, in the current low interest rate environment, bond investors are right to ask if they are gaining ground in the face of inflation. And, as advisers know all too well, there’s another big risk, too.

“Customers who sit on the sidelines and use this as a risk management tactic don’t know that it avoids one type of risk, but creates another type of risk: opportunity risk,” says Rogers. “We are in what is probably a great bull market. We won’t know until the end, but it works very, very well. And, by staying away from money markets or treasury bills, clients are missing out on that growth.

Unprotected mutual funds are vulnerable to volatility

On the flip side, clients who have stayed in diversified mutual funds, with exposure to investment markets, are more likely to earn returns above inflation, but they are also at risk. important market. As Rogers says, “While mutual funds have great advantages in pooling investments and portfolio management, they are subject to the same market or economic forces and, if a correction were to occur, they could. be caught off guard. “

Protection against downside risk is essential, but in the past the convenience and security of collateral tended to come at a significant price – and today’s price-conscious investors want to avoid additional costs.

Insurance-Based Products Can Help Balance Customer Needs

“Advisors are in a unique position to think outside the box by providing growth potential within insurance risk management solutions,” says Rogers. “It allows you to have the best of both worlds, and their price is very, very competitive, which was not the case historically. . . Risk pools have evolved for insurance companies, performance has worked well and we have had the ability to adjust our positioning and find a great place, if you will, where clients can get the benefits without the costs. higher.

Now, investors may not have to pay anything for the peace of mind that insurance protection offers – so they’re essentially getting extra value for free. Some insurers’ products also tick other items on investor wish lists, with an emphasis on sustainability and a solid performance history.

For investors concerned about rising prices and advisers looking to meet the needs of their clients, it’s a victory on many levels, Rogers says.

Market returns and guarantees at a reasonable price

La Capitale investment accounts1 SSQ Insurance Guaranteed Investment Fund2
Insurance protection Capital 100% guaranteed at death on contributions paid before age 75 75% / 75% guaranteed capital maturity / death 75% / 100% guaranteed capital maturity / death 100% / 100% guaranteed capital maturity / death
Managers / Index AGF branded funds, CI Investments, Dynamic, Fidelity, TDAM and more Institutional financial management from Beutel Goodman, BlackRock Asset Management, Jarislowsky Fraser, PIMCO and more
Management fees Range 1.41% to 2.60% Range from 1.30% to 3.30% May be reduced by more than 1% in the Private Wealth Management offer3
Added value of guarantees No additional costs charged for the capital guarantee Offers more generous protection, including capital guarantees on maturity and death

Michael rogers
Senior Vice President, Distribution Network Brokerage, Beneva

1 Offered by La Capitale, insurer of the public service inc.
2 Offered by SSQ, Life Insurance Company Inc.
3 Available with a minimum pooled investment of $ 500,000.
Certain terms, conditions and exclusions may apply.


Comments are closed.