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Solid growth of sales of segregated funds ; the TFSA also growing

by

Alain Thériault

March 14, 2018 07:00

Photo : Freepik

Despite a third quarter in a quiet, segregated fund deposits have shown solid growth since the beginning of last year until September 30, 2017.

According to the latest report from LIMRA on annuities, segregated fund sales increased by 8 % during the first three quarters of 2017, compared to the first three quarters of 2016. They totaled $ 7.9 billion dollars (G$) during this period.

The third quarter of 2017, however, leaves one to expect a slowdown. The segregated fund sales of$ 2.3 billion carried out during this period represent a growth of 1 % compared to the same period of 2016.

For their part, sales of fixed annuity (annuities, annuity, and investment products in the form of a deposit at guaranteed interest rate) have undergone a significant decline, from 11 % during the first three quarters of 2017. This decline was 9 % in the third quarter of 2017. Sales of fixed annuities reached$ 1.4 billion from January 1 to September 30, 2017, of which $ 438 million dollars ($M) in the third quarter of 2017.

The products combined, of which 85% of deposits went to segregated funds and the rest to fixed annuities, experienced a growth of 11 % during the first three quarters of 2017. This growth is 6 % in the third quarter of 2017. Total sales of annuities combined reached$ 2.4 billion in the first three quarters of 2017, of which 743 M$ in the third quarter of 2017.

In addition, 8 % of the deposits directed to the annuities based on segregated funds were due to the accounts tax-free savings (TFSA) in the first three quarters, while 12 % are of investment funds registered retirement income fund (RRIF), and 5 % of the life income fund. In the segregated fund in accumulation, 42 % of deposits went to registered retirement savings plans (RRSPS) and 33 % to non-registered accounts.

The fixed annuities are polarized especially around the products of disbursement (70 %). This is 30% of the sales that resulted from annuities in the accumulation phase, always in the first three quarters of 2017.

In all categories, the total assets of individual pensions was $ 137,4 billion as at 30 September 2017, compared to 136,9 G$ as at September 30, 2016. It is a growth of 0.4 %. The RRSP account for 47 % of this asset, the non-registered plans to 30 % and the RRIF to 15 %. The TFSA and life income funds, and close walking with each 4 % of assets. Remember that the TFSA has gone from zero in 2009.

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