30 May 2018 07:00
Marc Leblond, Patrick Couture and Annick Grondin | Photo : Denis Méthot
The Capital revampe its investment Account to increase its sales in this market. The product exists since 2006, but remains unknown to financial advisors. It, however, begun to gain traction, both in Quebec and elsewhere in the country.
The approach to the investment Account The Capital stands out from what is happening in the market. Or segregated fund or mutual fund, it is an annuity contract that combines the benefits of both, says the insurer.
The investment Account The Capital provides a capital guarantee at death, such as in a separate fund. This capital guarantee is 100 % of the amounts invested before age 75, regardless of the age at death thereafter. When the client dies, everything goes to the beneficiary named in the contract of the investment Account. The annuity contract allows for the designation of such beneficiary.
The choices available to the investor in the investment Account of The Capital are related to mutual funds. The Capital city offers 36 from 7 fund managers. The customer pays the same ratio of management fee from a common fund.
Patrick Couture, regional vice-president, sales, brokerage network, Quebec and the maritime provinces, refuses to catalogue the investment Account of The Capital as a hybrid product. The Journal of insurance the met at the head office of the insurer, in the company of Marc Leblond, the director of the actuarial science who has reviewed the product, as well asAnnick Grondin, director-marketing, which contributes to its market.
“The best of both worlds”
“The vision that we have, it is to get the best funds in the market and to make a preselection for the customer. It presents the same management expense ratio that a mutual fund, but with a death benefit guarantee as a separate fund. He has the best of both worlds, ” said Marc Leblond, of which the exact title is director of actuarial services, product development, annuities and financial services, individual insurance and financial services.
The sales of the product have been slow to take off. Several years passed before The Capital reaches the milestone of 20 million of dollars ($M) in annual sales. But in 2018, the insurer expects to achieve for$ 400 Million across Canada. At this time, the assets under management of The Capital fund is 2 billion dollars (G$), of which$ 1.5 billion in its investment Accounts. Mr. Leblond adds that the sales represent about one-third of the force at this time.
Why this sudden boom ? In 2006, the investment Account included before any of the funds to passive management and index. It was reserved to the sales network for internal Capital. The platform has grown over time, and its categories of assets are varied, to the point where The Capital now offers five profiles of investors, ranging from conservative to aggressive, ” says Mr. Leblond.
Mr. Couture added that the investment Account allows the advisor who does not have his permit mutual funds to sell, as it requires an insurance license to distribute it, since this is an annuity contract with a death benefit guarantee. The holder of the licence in collective savings, which has also a license in life insurance will also get access to a product similar to a mutual fund, but which offers guarantees. “It not distort his sales pitch. “The advisor who has only one licence a mutual fund may not sell it,” said Mr. Couture.
Another characteristic is the investment Account The Capital is available only to registered investments, such a savings plan, registered retirement (RRSP), a tax-free savings (TFSA) or a registered fund retirement income fund (RRIF), which covers the needs of 80 % of the population, ” said Mr. Leblond. “It’s like a self-administered fund. The client can move from one manager to another without penalty, ” says Mr. Couture.
Two new options expenses
The Capital introduces two new options, without redemption fee, a three-year-old and the other about five years. “There is currently a pressure on the redemption fee in the market, said Mr. Leblond. Clients are more aware of the fees they pay, and regulators to analyze it carefully. Our approach is instead to add these two new options to those already offered. “
Mr. Leblond points out that the adviser does not have to talk about costs in this mode. “There’s a transparency that comes with options without a redemption fee. This is something that our sales channels, both internal and external, we were asking for. “
These two new options are available since the 23rd of April. They have been well received by the sales network, say MESSRS. Sewing and Leblond.
Sales in the investment Account of The Capital are mostly made in Quebec. For some time, they are in equal parts between the Belle Province and other canadian provinces.
Locomotive for The Capital
“It is a locomotive for us,” says Mr. Couture. It allows us to establish in Quebec. It helps in our development in Ontario. It is the engine of our growth in savings. Several thousand of our consultants have access to it, but there are a few hundred that sell it religiously and actively. This product is not mature. It wins again to make it known. It has not touched the tip of the iceberg in Québec. This is even more true in Ontario. It also makes beautiful sales in Alberta and British Columbia. “
Mr smith also pointed out that it has not yet the force of striking of some of its competitors. He mentions having two sales managers in Quebec and two in Ontario.
“We have a small team and we remain a small player in savings. Also, our notoriety is not the same outside of Quebec. In Quebec, it is more easy to explain what is The Capital city, ” said Mr. Couture.
Mr. Couture does not hesitate to qualify the investment Account of The Capital as a product of blue-collar workers, where the insurer has a strong penetration. “It is the closest to our genetic as launching a mutual fund. This is a natural evolution for us and a more logical investment. It remains, above all, an insurer, ” he says.
By doing the analysis of the financial needs of the client, the advisor can as well watch his RRSP. As it is an easy product to explain to customers, according to Mr Couture, it fits well in the discussion.
Moreover, its entry level is $ 500 for the first year. “It is an easy gateway. It has a lot of small packs. We see everything, including locked-in retirement accounts (LIRA) in the amount of $ 800,000, ” said Mr. Couture.
Annick Grondin, director, marketing at The Capital, underlines, moreover, that the investment Account is a good example of what the insurer wishes to take as the curve in terms of customer experience. Through its partnership with Google, the insurer will bring about innovation in its projects.
“It takes a technological turn. We feel more of the effects by the end of the year. This will be more easy to communicate with us, either through the Web or by phone. One wants to break down silos and respond to individual needs, ” she said.