Canada’s segregated fund space has also evolved in many ways over the years. With more diverse options available – including fund-of-fund structures that invest in ETFs, seg funds underpinned by asset-allocation strategies, and others with an ESG component – the new breed of seg funds is gaining appeal among a growing cohort of investors.
“It really comes down to what are the needs of the client?” Gandhi says. “Do they see value in what the seg funds are providing?”
The answer, going by the Abacus research, is “yes.” It found that among seg-fund buyers, 85% were given clear and transparent information about the products. Another 88% said they were sold in a responsible, ethical way, and 92% said they were satisfied with the advice and service they received when they purchased the products.
Ultimately, Gandhi says clients who want to compare segregated funds with other investment products should get advice from someone with the right qualifications.
“They should have an advisor who isn’t only restricted to seg funds, but has the ability to offer various types of products, whether it be mutual funds, ETFs, or index funds,” he says. “Then the advisor should be able to have a more fulsome, unbiased conversation … and really see what’s best suited for the client’s situation.”