The vast majority of these plans are setup with one of the big three insurance companies since it’s the easiest (ie. Least amount of work for the advisor selling it) but these plans have some serious drawbacks. And of course, if you don’t yet have an employee retirement plan, we would be more than happy to provide you information as well as it is a great way to retain employees.
Our investment management process utilized for Group RRSPs is truly unique here at WMB SPEIR Financial Services and we wanted to take a minute of your time to explain what sets us apart without going into too much technical detail (though we are happy to provide more technical info if desired).
Being truly independent, we have no pressure from above to place your investments with a particular firm or products and are able to choose whatever option we feel is the very best fit for you. This allows us to search all investment suppliers and options across Canada to find the ideal investment features at the best costs. Instead of finding the plan that requires minimal effort on our end, we use full featured investment plan options that provide a significantly better investment experience (ie. Lower fees and higher returns) to your employees.
More importantly, being independent instead of affiliated with one of the big three insurance companies allows us to invest globally without being tied down to self-serving domestic biases. Canada’s investment marketplace represents approximately 3% of the global landscape yet 93% of all Canadian’s invested money is held within our borders – largely in self-serving proprietary investment products. This provides a huge lack of diversity and unnecessarily increases the volatility and risk of most investment accounts.
Our investment management process looks to broadly and truly diversify assets across multiple geographic, industry and asset areas with the goal to provide steady and consistent returns regardless of market volatilities. We often describe our management style to our clients like this “We are ok to give up a little bit on the upside in order to significantly outperform when the markets go down. If the markets go up +15% in a given year and our accounts only go up +13% we are ok with that as long as we’re positioned to go down -2% when everyone else is down -10% or more”. That statement in a nutshell is the best way to describe what we look to achieve when selecting investments and building customized portfolios for our Group RRSP clients.
Depending on the size or your organization we also have the unique ability to brand your fund selection under your trademark. Ask us for details!
Another way to illustrate this is to show you a sample portfolio, in this case a “moderate risk” profile that is globally diversified. Below compares how a typical WMB SPEIR portfolio for a moderate risk client would fare against a typical Group RRSP offering:
|WMB SPEIR Balanced Port.||Manulife Balanced||Sunlife Granite Balanced||RBC Balanced Fund||Why This Matters:|
|3 Yr Avg Rate of Return||7%||3.2%||3.2%||2.5%||A 4% vs 8% rate of return each year for 25 years, investing $10,000 per year would be the difference of a portfolio value of $428,270 vs $792,205. It may seem like a small difference in one year but over time, the outperformance really adds up.|
|5 Yr Avg Rate of Return||11.5%||6%||7%||5.5%|
|% held inside Canada||15%||50%||45%||75%||Most investments will be far too heavily weighted in Canadian content|
|Risk||6%||5.7%||6%||5.5%||Confirmed standard deviation (risk measure) on all three to ensure a fair comparison. Standard deviation runs from 3-15% on typical investments|
*These returns are all net of fees.
A comparison like the one shown above would be far easier to explain properly in person, but we wanted to give you an idea of just how different we are (and just how similar the average group RRSPs are to one another). We would be happy to run through a more detailed comparative analysis in person.
Please let us know if you have any questions or if we can go into more detail about any part of our investment management process! Contact us today for a no-cost and no-obligation review of your current employee retirement plan or to discuss setting up a new one if you don’t have a plan in place already.