Response to CCIR’s consultation on upfront commissions in sales of segregated funds
Release Date: 11/07/2022 Staff Reference: Luke O'ConnorCLHIA has responded to the CCIR/CISRO consultation on upfront commissions in sales of segregated funds.
The arguments include: that segregated funds and mutual funds are complementary within an investor's portfolio (not substitutes); that providing advice to the mass market will be uneconomical and advice is more important for segregated funds due to their unique features; and the risk of conflict is low since fund switches without incurring chargebacks are allowed to optimize holdings and segregated funds have a long average hold time of nearly 8 years.
The submission also includes the results of market research conducted by Abacus Data for the industry which show strong satisfaction among buyers of segregated fund products and insurance brokers.
