Insurance Advisory Service December 2021—Special Feature

Segregated Funds: From Stagnation to Renaissance

In step with the overall mutual fund and ETF markets over the past year, segregated funds have experienced extraordinary times in terms of asset growth, sales volumes, and product evolution. The near future, however, may bring back challenges to the fore. The confluence of events that made 2021 such a strong performer is not expected to persist. The coming tides will not ride as high, nor lift all boats.

The choppy waters ahead will require intensified focus on multiple fronts. The requisite for harmonization with the securities industry continues to press on, as does drafting cost disclosure policies, the final verdict on DSC is still pending, even if most firms have adapted to its potential inevitability. Slowly but surely, the product shelf is falling in-line with broader market trends and developments.

All of these forces, whether organic or not, will need to be anticipated and if possible, contingencies planned to mitigate the impact to sponsors’ bottom lines and advisors’ practices. The focus will be on uncovering opportunities to differentiate product offerings that resonate with specific audiences. This article explores product features and trends that may guide the way during this period of changing tides.