Smart Investing with AWM – Mutual Funds, GICs & More

Segregated Funds or GIFs (Guaranteed Income Funds)

A segregated fund or a GIF is a type of investment administered by Canadian insurance companies in the form of individual, variable insurance contracts, offering certain guarantees to the policy holder such as reimbursement of capital upon death. As required by law, these funds are fully segregated from the company's general investment funds, hence the name segregated. A segregated fund is an investment fund that combines the growth of a mutual fund with the security of an insurance policy, sometimes referred to as mutual funds with an insurance policy wrapper.

Like mutual funds, segregated funds consist of a pool of investments in securities such as bonds, debentures and stocks. They can be held in RRSPs, TFSAs, LIFs, LIRAs, SRSPs and open accounts.


Maturity Dates: All GIFs have a maturity date, which is not to be confused with maturity guarantees (outlined below). The maturity date is the date at which the maturity guarantee is available to the contract holder. In either case, the annuitant or the beneficiary will receive the greater of the guarantee or the investment's current market value.

Maturity and Death Benefit Guarantees: Guarantee amounts are offered in all GIFs whereby no less than a percentage of the initial investment in a contract is 100% and will be paid out at death or contract maturity. In either case, the annuitant or beneficiary will receive the greater of the guarantee or the investment's current market value.

Reset Option: A reset option allows the contract holder to lock in investment gains if the market value of the GIF contract increases. This resets the contract's deposit value to equal the greater of the deposit value or the current market value. You can invest in the market with up to 100% of your assets in equity funds for your estate and can select from a wide range of investment funds across all asset classes and risk tolerance. Some GIFs offer up to 100% death benefit guarantee with automatic annual resets until age 80. This means that each year, the GIF will look at the market value of the investment and if the markets have performed well, the guaranteed amount available to the beneficiaries (the death benefit) will automatically increase. Automatic annual resets are a valuable tool to help make the most of market gains and because you don't know when the death benefit will be passed on, automatic annual resets take the worry out of timing. With annual resets, your investment captures and protects growth more frequently.

Creditor Protection: Granted certain qualifications are met, GIFs may be protected from seizure from creditors. This is an important feature for business owners or professionals whose assets may have a high exposure to creditors.

Probate Protection: If a beneficiary is named, the GIF may be exempt from probate and executors fees and pass directly to the beneficiary. If the beneficiary is a family member such as a spouse, child or parent, the investment may also be secure from creditors in the case of bankruptcy. The proceeds pass quickly and privately to beneficiaries and no legal, estate or administration fees.

Cost of Guarantees: Today the cost of these guarantees has gone down substantially over the years. With the advent of the large volume discounts and the use of short term maturity guarantees on investments, the cost of the MER (management expense ratio) has added to this large decline in expenses. Today the MERs are about the same as mutual funds or just slightly higher, which is worth all the guarantees.

PPI Valet Investments

What is a robo-advisor?

Robo-advisors give advisors and their clients the tools to manage investment portfolios online. The investments included in their portfolios can vary, but their general purpose is to provide efficient, low-cost portfolio management.

Does that mean my current advisor is obsolete?

Not at all. Your current advisor already knows your situation and has insights that can help you meet your goals. A robo-advisor is just another tool on their belt. They may offer a selection of investment products including ETFs (Exchange Traded Funds) or other funds. They can balance investment across these funds to ensure the right mix of risk, return and volatility based on answers you provide about your individual circumstances and goals. The actual portfolios are managed and rebalanced by people, not computer algorithms. Together with your financial advisor they’re able to provide you with great service and competitive fees.

What is an ETF?

An ETF – or Exchange Traded Fund – is a tradable fund that can track an index, bonds, commodities, or even a basket of assets. Rather then being invested directly into the stocks contained within a fund or market index, an ETF allows an investor to buy a share of the entire fund. The virtue of this is it allows an investor to easily buy and sell a stake in a fund. Beyond this, ETFs typically have much lower fees than investing directly in a mutual fund. Where a mutual fund might charge 2% or more annually, a similar ETF might only be 0.50% or less. By utilizing ETFs, a robo-advisor can diversify your portfolio and continually rebalance the investments to ensure that it maintains your desired mix of attributes.

So, why should I use a robo-advisor?

Robo-advisors can free up your financial advisor to spend time on the things that matter most to you. By outsourcing investment selection and rebalancing, it allows them to focus on your holistic financial planning and your retirement and investment goals. Robo-advisors also tend to have lower minimum investments and allow the investor to access asset classes and pools typically reserved for those investing $250k and above. Combine this with lower fees and it makes it practical and effective for people looking to invest $1,000 in their TFSA or even $1M and above. On top of the savings, some robo-advisors also offer apps and online tools, so you can see in real-time your financial position, how your portfolio is invested, and quickly and easily move money in and out of your account – even from your phone or tablet.

Which robo-advisor is best for me?

Not all robo-advisors are created equal. Firms can offer a wide variety of different services and pricing, so finding the right one for you is important. Some robo-advisors such as WealthBar, provide access to a wider range of portfolios such as private wealth pools that are exclusively available through your financial advisor. These private wealth pools can allow you to include hard asset real estate, mortgages, and private equity to help diversify your portfolio. Your best bet is to talk to your financial advisor about your investment options and whether a robo-advisor may be right for you.

We use one of the largest independent discretionary investing for high net worth investors. These investors are looking for the highest standard of investing. This firm is designed exclusively for high new worth individuals and families. The firm is privately owned with over 2.8 billion in assets under management and the owners invest along with their clients. Call me for more information about this outstanding company..

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