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YOUR ADVISOR
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Only an advisor licensed to sell life insurance by the province or territory in
which you live can sell you a segregated fund contract. He or she may work
independently, for a specific insurance company or for a financial services firm.
Your advisor may also be licensed to sell other types of insurance and/or
investment products, such as property and casualty insurance, stocks, bonds
and mutual funds.
Your advisor will provide you with written disclosure about the companies he/she
represents, any conflicts of interest and how he/she is paid. The insurance
advisor's professional qualifications permit him/her to help you analyze your
retirement income planning, estate planning and insurance needs, make
recommendations that meet those needs and provide ongoing services, such as
beneficiary changes, reviewing and updating your investment strategy and
rebalancing your portfolio.
Your advisor will normally get a commission when you enter into the contract and
direct contributions to a fund. These commissions are typically paid from part of
any front-end loads and/or annual expenses. He/she may also get an ongoing
service commission for as long as you hold the fund. This is called a "trailing" or
"trailer" commission and is included in the MER charged to your fund.
No-load funds, i.e., funds that don't charge front- or back-end loads, generally
carry higher trailing commissions, which may be reflected in a higher MER. The
information you receive at time of purchase gives details of trailing commissions,
including how they are calculated by the segregated fund issuer and what services
investors can expect in return.
Your advisor can tell you the commission rates for the funds you are considering,
and how they compare with similar funds.
