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RBC Insurance announces management fee reductions across several segregated funds

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@RBCInsurance announces a 20bps management fee reduction to our Balanced Seg Funds

Summary: RBC insurance has reduced management fees on seven of its balanced Seg Funds by 20 basis points. This fee reduction is a first for RBC Insurance because it requires no eligibility or minimum investment requirements, meaning lower fees for every client from the very first dollar invested.

TORONTO, June 5, 2017 - RBC Insurance is reducing the management fee across seven of its balanced funds within their segregated fund portfolio by 20 basis points. Sixty per cent of Canadian segregated fund investors chose the Balanced Fund class as their funds of choice1, which is why RBC Insurance has reduced management fees within this asset class. The changes are effective June 5, 2017 and are available to all new and existing clients with no restrictions.

“We are pleased to be able to offer this type of fee reduction ensuring lower fees for everyone invested in these funds,” says Jean Salvadore, director of Wealth Insurance at RBC Insurance. “Our 20 basis point fee reduction will be available to all existing and new clients, regardless of their portfolio size keeping our funds competitive and easy to understand for clients.”

Lower fees for investors
Effective, June 5th, 2017 customers will see a 20 basis point management fee reduction across the following seven segregated funds:


  RBC GIF
Invest Series
RBC GIF
Series 1
RBC GIF
Series 2
MER2
Before
Fee
Reduction
(%)
MER2
After
Fee
Reduction
(%)
MER2
Before
Fee
Reduction
(%)
MER2
After
Fee
Reduction
(%)

MER2
Before
Fee
Reduction
(%)

MER2
After
Fee
Reduction
(%)
RBC Balanced GIF 2.48 2.25 2.79 2.57 2.97 2.74
RBC Conservative Growth & Income GIF 2.20 1.99 2.46 2.24 2.61 2.38
RBC Balanced Growth & Income GIF 2.41 2.20 2.60 2.39 2.80 2.59
RBC PH&N Monthly Income GIF 2.37 2.15 2.76 2.54 2.88 2.66
RBC Global Balanced GIF 2.48 2.25 2.72 2.51 2.84 2.62
RBC Select Conservative GIP 2.26 2.04 2.64 >2.42 2.83 2.61
RBC Select Balanced GIP 2.41 2.19 2.70 2.48 2.89 2.67

“Lower fees allow us to keep more money in our clients’ portfolios, providing even more value for the additional benefits that segregated funds provide to our clients,” added Salvadore. “And with no eligibility requirements, no tiers and no additional paperwork, advisors will find it easier than ever to do business with us.”

What is a Seg Fund
Seg Funds combine the growth potential of mutual funds with the comfort of an insurance contract securing principal guarantees at maturity and at death, allowing investors to save for the future with peace of mind. According to a recent RBC Insurance survey, 87 per cent of Canadians aged 55 and over agree that they’d like an investment product with guarantees on their principal that also offers growth opportunities, but 60 per cent are unaware this option exists with Seg Funds that are available from insurance companies.

“Our research shows that there’s a general lack of awareness and understanding around Seg Funds in Canada. Our fee reduction maintains the simplicity of our Seg Fund offering while allowing even more clients to explore Seg Funds and determine if they makes sense for their overall retirement plan,” concluded Salvadore.

About RBC Insurance
RBC Insurance® offers a wide range of life, health, home, auto, travel, wealth and reinsurance advice and solutions, as well as creditor and business insurance services to individual, business and group clients. RBC Insurance is the brand name for the insurance operating entities of Royal Bank of Canada, one of North America’s leading diversified financial services companies. RBC Insurance is among the largest Canadian bank-owned insurance organizations, with approximately 2,500 employees who serve more than four million clients globally. For more information, please visit rbcinsurance.com.

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For more information, please contact:
Greg Skinner, RBC Corporate Communications, 416-294-5579


1 Strategic Insights, Insurance Advisory Service, January 2017. Traditional Segregated Funds’ Balanced Funds gross sales in 2016 as a percentage of all long term funds’ gross sales.

2 The 2016 Management Expense Ratios (MERs) Before fee reduction are the actual MERs for the year ended December 31, 2016. The 2016 MERs After fee reduction recalculate the 2016 MERs as if the new management fee percentages had been in effect throughout 2016. The MERs for 2017 are expected to be between the 2016 MERs Before fee reduction and 2016 MERs After fee reduction since the reduced management fee percentages will take effect partway into 2017.