BIG MARKET, BIG OPPORTUNITIES, BIG CHANGES

For the better part of this past year the Investor Economics team has been hard at work researching Canada’s group retirement and savings (GRS) market. During that process we have designed new data-gathering mechanisms and developed a new measurement and analytical framework for Canada’s GRS market. Along the way we have conducted myriad surveys and interviews with key industry participants—such as insurance companies, banks, fund companies, asset managers and industry consultants—with the objective of capturing the perspectives and intentions of key players. We have been quite busy to say the least. Set out below is the preliminary table of contents for the Group Retirement and Savings Market Report, which we believe to be the first and only comprehensive and multi-faceted study on the subject—winding its way from the macro view of trends in Canada’s retirement market, and then measuring and drilling into the supply side and competitive makeup of the market. The major section on asset management presents a highly detailed and comprehensive view of the asset management structure, competitive makeup and unfolding trends in insurance company CAP platforms.

The thrust of our work is that GRS is certainly a large and expanding market but also one that is being subjected to important structural changes brought about by market forces as well as regulatory influences. These changes will inevitably create new growth opportunities for many but—paralleling other segments of the financial services industry—there will also be heightened competitive challenges. We believe this study will equip subscribers with the knowledge and fact base to monitor their success, track changes, and better position their organizations for the opportunities and challenges that lie ahead.

The supply‐side analysis places emphasis on the evolution and current state of the unitized product shelf at selected fund competitors, with articulated strategies for growing their HNW footprint. Particular attention is paid to the availability of and growth in pooled fund offerings. As part of the research process for this report, Investor Economics has constructed a special database of pooled fund products (non‐PIC), which tracks selected prospectused and offering memorandum (OM) pools, including alternative pools, sold by intermediated advisors.

The third section of the report provides a detailed overview of income-oriented funds and compares the growth and sales momentum of income-oriented asset classes with that of other asset classes. This section also provides a detailed profile for each fund category within the fixed income, income balanced and equity income asset classes. The section concludes with an overview on income-oriented fund wrap portfolios.

The fourth section examines the fixed income competitive landscape through detailed competitive intelligence capsules on the income-oriented business of three leading companies.

The report concludes with a summary of the key research findings. The commentary considers the common “links” between leading firms and/or individual products with a view to identifying key success factors in building a presence in the income-oriented funds arena.

Particular attention is given to those companies and specific programs with a documented track record in building presence in the HEFW category and those with emerging momentum. The goal is to identify the common links in the areas of program design, distribution, pricing, brand and advisor support among successful programs.

The report includes competitive profiles of leading programs and program providers, including an in-depth look at the composition of the fund wrap shelf of companies competing in the HEFW segment.

The report offers a customizable section permitting a specific SMW program, or a specific SMW focus (strategic or tactical), to be evaluated on the basis of business focus and mix, asset growth and mix, shelf of managers and manager presence. The report also examines the economics underlying SMW programs, providing information on pricing, turn rates and cost drivers. A profit and loss statement model is included to illustrate the dynamic between scale and profitability.

The study includes profiles of leading SMW and UMA programs and providers, and identifies the common links among successful programs. Particular attention is given to companies and programs with a track record in building presence in the SMW and UMA categories and those with emerging momentum. In addition, a brief overview of the SMW industry in the United States is included in order to provide a basis on which to compare SMW programs in Canada.

The report concludes with a summary section, which highlights the key takeaways for SMW program participants and suppliers.

Secondly, the report examines the branch advice channel from the broader perspective of its role as the primary gateway in the servicing of mass affluent clientele, and its contribution to the growth of the banks’ wealth management/investment product manufacturing operations. The discussion concludes with an in-depth look at the future opportunities and challenges facing the branch advice channel.

The analysis includes a foundation piece on the mass affluent segment, the targeted cohort of the branch advice models, and highlights the differences in the target segments among the Big Six bank-owned branch advice organizations.

While the primary focus of the report is branch advice, the study addresses other bank-owned delivery conduits (i.e. branch direct, full-service brokerage, private banking) which are adjacent to the branch advice delivery channel on the banks’ client progression pathways.

The report combines the proprietary research of Investor Economics with a comprehensive mystery shopping venture, publicly available information, and interviews held with individuals at key positions at various banks. These resources contribute to Investor Economics' view of the  relevance of and potential implications on the branch advice channel.