RBC Guaranteed Investment Funds
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Transcript of RBC Guaranteed Investment Funds
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RBC Guaranteed Investment Funds
PRESENTED BY:
Santo P. Filice, CHS
Date: January 22th, 2014
Investing with Confidence
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What’s Under Your Client’s Mattress?
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Alternative to the Mattress
1Yr. Redeemable GIC 1.05% 1 Yr. Non – Redeemable GIC 1.3%
5 Yr. Redeemable GIC 1.95% 5 Yr. Non-Redeemable GIC 2.2%
*CPI September 2013 – 1.1%
RBC rates on November 17th, 2013
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That Mattress can be Expensive
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Agenda
Why Segregated Funds - Value Proposition The Market Opportunity for You Whose Mattress do we need to look under? Why RBC GIF – Strength, Value, Advice New Product Offerings Next Steps
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The Uncertain Road – TSX MARKET DOWNTURN
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Emotional Irrational investing
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A Little Refresher – Why Segregated Funds?
• Investment with Principal Guarantees/Resets
• Estate Planning/ Potential for Creditor
protection
• Underlying Investments
• Maturity and Death Benefit Guarantees• Gains when market goes up, protected
when market goes down
• Ability to bypass probate• Passes directly to named beneficiaries• It is an insurance contract therefore
beneficiaries take precedence over creditors
• Diversify by asset class
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A Seatbelt for the Uncertain Road
RBC Guaranteed Investment Funds
New Maturity Guarantee = $81,750 (75% of $109,000)
Initial Maturity Guarantee = $75,000 (75% of $100,000)
Note: Assumes no withdrawals. Assumes that the deposit was made on or before age 80.
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Death Benefit Guarantee
RBC Guaranteed Investment Funds
Note: Assumes no withdrawals. Assumes that the deposit was made on or before age 80.
Death
Death Guarantee$118,000
Mutual Fund Value$80,000
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• More opportunities
• Ongoing renewal commission
• Build a fence
Enhancing Your Value Proposition
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Thoughts Clients May Have
I’m Self Employed
I’ve lost money in the markets
I want to participate in market
growth but I’m worried I will
lose on my investment
I want my loved ones tohave enough when I’m gone
I don’t know if I’ll haveenough money for retirement
I’m not eligible for Life Insurance
All my investments are in GICs
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Age 45+, Pre-retirees and retirees
Saving for retirement Looking for efficient
transfer of wealth
Target Clients
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The $738 Billion Inheritance Windfall
Source; Investor Economics – Canadian Retirement Market / 2011 Household Balance Sheet
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Case Study #1 – Preserving an Estate
Profile Assessment Preserving wealth to maximize transfer to
beneficiaries
Recommendation Transfer her Non Reg. savings to RBC GIF Series 2.
Martha, 68, retired widow
$400K Non Reg. in a conservative Mutual Fund portfolio
Does not like the volatility of the markets
Would like to leave the money for her family
* All case studies are for illustrative purposes only and are not true accounts. This document is being provided for general information purposes only and the contents should not be relied upon as containing specific financial, investment, tax or related advice. Client must seek their own independent advice."
Benefits 100% death benefit, which can be reset annually
Avoidance of the length of probate – from a few months to weeks.
Avoidance of the costs of probate (probate fees, executor fees, legal fees) – Up to 20% of her assets.
Financial affairs remain private.
Assuming a $100,000 segregated fund portfolio for the province of Ontario. Probate fees vary by province. Source for Ontario probate is the Estate Administration Tax Act, 1998 S.O. 1998, Chapter 34. The costs displayed represent a typical range for fees that may be incurred by clients utilizing third-party assistance in managing their estate. This example assumes the only assets the client has are in segregated funds.
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Protection for the Uninsurable
100% Death
Benefit Maturity -
ensures no surprises
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Previously Married Self Employed Income Splitting
Protection for your Family
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Case Study #2 – Potential for Creditor Protection
Profile Assessment Joe, 46, self-employed
contractor, married with 2 children
His business is non-incorporated
Nest egg of $200,000 in non-registered assets
Ensure his family is protected should anything happen to his business or himself
Protecting family and assets
Recommendation RBC GIF Series 1 GIF
* All case studies are for illustrative purposes only and are not true accounts. This document is being provided for general information purposes only and the contents should not be relied upon as containing specific financial, investment, tax or related advice. Client must seek their own independent advice."
Benefits Potential for creditor protection should his business fail
100% death benefit protects investment against market volatility
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Segregated Fund Assets (in Billions)
$72
$74
$76
$78
$80
$82
$84
$86
$88
$90
$92
Dec.2009 Dec.2010 Dec.2011 Dec.2012
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$295 Billion AUM
TrustSimplicityStrength
WHY RBC?
Simple product structure RBC, a trusted brand,
a Canadian institution
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RBC Global Asset Management
Manager of the underlying mutual funds Over 1.2 million clients Proven track record Approximately $295 billion in assets under management 60 investment professionals
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Comparing MERs
Pre-HST RBC GIF 75/100 Industry
Average
RBC Canadian Money Market GIF 0.42 1.31
RBC Canadian Short-Term Income GIF 1.82 -
RBC Bond GIF 1.82 2.33
RBC PH&N Total Return Bond GIF 1.85 2.33
RBC Global Bond GIF 2.21 2.68
RBC Balanced GIF 2.66 2.92
RBC PH&N Monthly Income GIF 2.62 2.96
RBC Balanced Growth GIF 2.67 2.98
RBC Canadian Dividend GIF 2.64 2.88
RBC Canadian Equity GIF 2.89 2.98
RBC O'Shaugh. All-Cdn Equity GIF 2.96 3.05
RBC US Dividend GIF 2.96 2.80
RBC North American Growth GIF 2.90 2.86
RBC U.S. Equity GIF 3.07 3.12
RBC O’Shaughnessy U.S. Value GIF 3.03 3.12
RBC U.S. Mid-Cap Equity GIF 2.96 2.71
RBC Global Dividend Growth GIF 3.22 2.98
RBC O’Shaugh. Inter.l Equity GIF 3.22 3.21
RBC Select Conservative GIP 2.41 2.80
RBC Select Balanced GIP 2.59 3.07
RBC Select Growth GIP 2.82 3.15
RBC Select Aggressive Growth GIP 3.07 3.13
Source of competitor MERs: Paltrak December 31, 2012 and product material.MERs for the RBC GIF are as published in the December 31, 2011 audited financial statements. These MERs are subject to change at anytime and may increase. Actual MERs including HST will be published in the annual audited financial statements.
Series 2 RBC GIF Industry Average
RBC Select Conservative GIP 2.60 2.80
RBC Select Balanced GIP 2.79 3.07
RBC Select Growth GIP 3.05 3.15
RBC Select Aggr. Growth GIP 3.39 3.13
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RBC Insurance
RBC High Yield Bond
Fund
RBC North American
Value Fund
RBC PH&N Canadian Income Fund
Introducing 3 new funds for your clients!
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RBC GIF – Competitive Advantage
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RBC Payout Annuities – Product Design at a Glance
Life
Single Life Joint Life
TermCertain
3-25 years
• Guaranteed period (0-25 years)• Immediate• Prescribed
• Guaranteed term (3-25 years)• Immediate• Prescribed
Payments for aFixed period
Paymentsfor life
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So, Now It’s YOUR Turn . . .
And remember . . .
Choice, Not ChanceChoice, Not ChanceShould Determine Ones DestinyShould Determine Ones Destiny
Advice Driven Sales Ideas
Let’s meet 1 on 1
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QUESTIONS!