Insurer Co-operators Group branches out to investment sector with launch of mutual fund business

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Property and casualty insurer Co-Operators Group Limited has expanded into the investment sector with the launch of its own mutual fund division that will offer clients funds from some of Canada’s largest independent asset managers.

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The Guelph, Ont.-based insurer has launched co-operators Financial Investment Services Inc., a financial services arm licensed to sell mutual funds to more than 600 advisors and a product shelf that includes funds from nine independent fund providers, including AGF. Are included. Investment , Fidelity Investments Canada, Franklin Templeton Investments and CI Financial.

“When we looked at our landscape, it was really clear to us that many of our existing clients and many Canadians were not getting the advice they needed to be able to make the best financial plan possible,” said co-chair and Chief Executive Officer Rob Wesseling said in an interview.

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Mr Wesseling said the company is looking to fill the gap for middle-income Canadians, who usually can’t get access to financial advice because they don’t have enough investable assets.

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The change in property management is a first for the insurer, which has focused largely on home and auto insurance since its inception in 1946.

Mr Wesseling said the insurer explored several options access to money Management business, including the possibility of obtaining a securities dealer’s license with the Investment Industry Regulatory Organization. But the company eventually decided to apply with the Mutual Fund Dealers Association for membership in early 2020, which would allow it to offer the funds to customers.

“Most of the needs of our clients can be met with a mutual fund dealer structure,” he added.

With more than $61.5 billion in assets under administration, the cooperative operators currently have 6,000 employees, including 2,500 representatives with insurance licenses. In addition to home and auto insurance, the company offers business, travel, farm and life insurance.

With its new lineup of mutual funds, the company will continue to offer annuities provided by insurers and investments in segregated funds. Exchange-traded funds are not currently part of the new product shelf, but may be included in the future, Mr Wesseling said.

“NS [COVID-19] The pandemic has made it incredibly clear that it is really important to plan and it is really important to focus on safety,” Mr Wesseling said. “COVID has shaken people across the world – in Canada – and prompted people to step back and think about where the financial risks and physical risks lie with them.”

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Over the past decade, Canadian banks and insurers have been turning their attention to wealth management as $1-trillion in personal holdings is set to be passed on by elderly investors to the younger generation in the coming years.

The new cooperative platform, which gives independent fund companies access to a wide range of companies, coincides with new regulatory regulations that have recently forced several Canadian banks to stop selling third-party investment products independent of their financial planning arms. inspired to try.

“With annuities and segregated fund products, Canadians need the full picture to protect what they have today and plan for tomorrow,” Mr Wesseling said.

But unlike some wealth management firms that are targeting Canada’s ultra-rich households, co-operators aim to provide financial plans to the low-savings population with little to no savings.

In a recent survey conducted by co-operators and conducted by Angus Reid, 55 percent of Canadians said the pandemic made them feel like they needed to rethink their financial plans, while 69 percent reported financial security and planning. But admitted to not being properly educated. as they progress in adulthood.

Co-Operators Chief Marketing Officer Emmy Fukuchi said that many “everyday Canadians” are not served well in today’s market and that this gap was one of the key drivers for the company to pivot into asset management.

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“For too long,” Ms Fukuchi continues, “Canadians have been made to feel like a number, bracketed into data sets, subsets and averages.”

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