A unique seg-fund solution for Canadian families

One core mission that Empire Life has long adhered to is encapsulated in a straight-to-the-point slogan: “Insurance & investments: Simple. Fast. Easy.” And that was the tenet that drove the company to enter a three-way partnership that seeks to provide a one-of-a-kind seg-fund solution.

Recently, the company announced that in collaboration with Canoe Financial, it was introducing the Canoe EL Protection Portfolios, a set of seg-fund portfolio solutions that would be made available to Canadian households exclusively through World Financial Group.

“World Financial Group Insurance Agency (WFG) has been a distribution partner of Empire Life for a number of years, and both companies share a common focus on providing investment and insurance solutions to help Canadian families meet their financial goals,” said Mark Sylvia, president and CEO of Empire Life.

Sylvia explained that Canoe Financial, a leading independent Canadian asset manager, had a number of mutual funds – some sub-advised by Aegon Asset Management – that were not available in any other segregated fund solution. For its part, Canoe Financial saw a great opportunity to continue expanding the scope of its investment management capabilities.

“Both of our organizations are focused exclusively on the Canadian market so we each brought to the table a strong understanding of what the Canadian investor is looking for in an investment solution,” said Canoe Financial President and CEO Darcy Hulston.

With the growth of managed investment solutions over the past few years, advisors have been more able to devote time to their client relationships that otherwise would be spent reviewing and selecting individual funds for their clients to invest in. With the experienced professionals at Canoe and Empire Life taking charge of investment decisions within the Canoe EL Protection Portfolios, WFG agents will be able to provide a better long-term customer experience to their clients.

“Canoe and Empire Life have done an incredible job creating investment solutions that allow for growth with protection for all Canadians, in a way that will allow our agents to continue to focus on providing incredible service to their clients,” said Rick Williams, president, WFG Canada. “World Financial Group Insurance Agency is very excited to become the exclusive distributor of the Canoe EL Protection Portfolios.”

The suite of Canoe EL Protection Portfolios includes three offerings: Canoe EL Conservative Protection Portfolio, Canoe EL Balanced Protection Portfolio, and Canoe EL Moderate Growth Protection Portfolio. Using different formulations of fixed-income and equity exposures, they’re designed to satisfy objectives ranging from capital protection to growth, taking into account investors’ individual time frame horizons, risk tolerance, and goals for investment.

“Each Canoe EL Protection Portfolio invests in a blend of actively managed funds: five Canoe Financial mutual funds and one segregated fund managed by Empire Life,” Sylvia said. These include:

• Canoe Equity Portfolio Class and Empire Life Global Equity GIF, which provide a value tilt;
• Canoe Global Equity Fund, which adds some growth;
• Canoe Bond Advantage Fund, which comprises the portfolios’ Canadian core fixed-income exposure; and
• Canoe Global Income Fund and Canoe Credit Opportunity Fund, which offer exposure to global, investment-grade corporate and high-yield bonds.

While portfolio managers will make tactical decisions within the underlying active funds, the portfolios’ overall strategic asset mix will remain relatively consistent and be subject to annual assessment. Geographically, they are currently overweighted toward U.S. equities, though they still offer global diversification through good exposure to Europe and Asia.

Looking at the equity sleeve shows exposure across the spectrum of GICS sectors, with investment styles balanced between core, growth, and value, as well as large-, mid-, and small-cap companies. The fixed income component also offers a healthy amount of geographic diversification.

The partnership offers another dimension of simple, fast, and easy access to insurance and investment through the use of a fully digital onboarding and application process. That capability was built off of Empire Life’s Fast & Full Investment Application process, the segregated fund industry’s first 100% digital online application for independent financial advisors, which was introduced in 2017.

“Since then Empire Life has continued to be a leader in the segregated fund digital application space,” Sylvia said.

The customized digital application that Empire Life built for the Canoe EL Protection Portfolios incorporated the sales practices followed by WFG agents during the sale of a segregated fund product. It allows customers to digitally sign their application as well as receive their regulatory documents digitally, with an integrated screen sharing solution that enables a fully non-face-to-face interaction.

“We believe that this totally digital onboarding and application process allows us to provide a superior customer experience to our clients,” Williams said.

As a multi-year trend toward transparency, liquidity, and low cost continues to drive many investing decisions, there’s been a continuing rise in the appeal of ETFs, as shown by substantial increases in inflows and consistently growing asset levels. But as Sylvia asserts, segregated funds still deserve consideration in every investor’s portfolio as they fulfill a vital function.

“The ups and downs of the market over the past year have demonstrated both the importance of growth, but also the need for protection in an investment portfolio,” he said. “Segregated funds, which combine the ability to participate in the market with valuable guarantees and benefits, provide Canadians with the opportunity to build wealth, generate income, and achieve the financial security they are looking for.”