A recent Abacus Data study (July 18, 2025) surveyed 2,500 Canadian adults, including 1,000 mutual and segregated fund investors, to uncover what truly drives investor satisfaction, confidence, and future decisions.
A highlight of the survey outcomes includes:
1. Strong satisfaction, lingering uncertainties
Mutual fund holders report high satisfaction (~63%) and praise goals alignment, diversification, stability—but only 43% believe their funds will meet long-term objectives. Nineteen percent aren’t even sure.
Segregated fund holders show even stronger sentiment: 74% satisfaction, 61% confident in long-term goals—driven by added guarantees like death benefits and creditor protection.
2. Confidence gaps spark opportunity
Mutual fund investors are more satisfied than confident. Many don’t fully see the long-term value.
Seg fund holders feel safer, better-supported, and more in control—thanks to tangible protections.
3. Non‑investors remain on the sidelines
Only 32% of Canadians hold mutual funds, and a mere 3% are in segregated funds.
Barriers include: lack of knowledge (37%), perceived risk (24%), and uncertainty about getting started (30%) .
What would help? Personalized education on risks/returns (52%), transparent fee breakdowns (35%), goal alignment (35%), and clear protections (34%).
Segregated Fund vs. Mutual Fund: What’s the difference?
A segregated fund policy (also known as a guaranteed investment fund) is an insurance contract issued by a life insurance company. It features 2 parts:
- A pooled investment (similar to a mutual fund) managed by experts that helps you diversify your savings and protect them from market dips.
- An insurance policy that guarantees 75% to 100% of the money you invest. You pay an additional fee for this guarantee as part of the management expense ratio (MER).
Who should consider segregated fund policies?
- Conservative investors seeking a balance of growth potential and security, particularly those with a risk-averse profile, retirees, or individuals nearing retirement who want to protect their capital and ensure a steady income stream.
- Investors with little money available to invest, looking to achieve diversification, growth potential, and risk aversion through guarantees as they build future wealth.
- Blended families and seniors looking to protect their estate, secure a smooth estate transition, and avoid unnecessary fees.
- Business owners who wish to use the creditor protection feature of segregated fund policies to help separate personal savings from professional liabilities.
Segregated fund policy myths
They’re only for retirees
Though their principal protection and estate planning benefits make them a great choice for those close to or in retirement, they also offer growth potential through a variety of asset classes, including equities, making them suitable for a wide range of clients, including risk-conscious younger investors.
They lack investment flexibility
More comprehensive segregated fund line-ups now include several management styles, broader geographic coverages, and most major asset classes. Investors can build robust, diversified portfolios that can adapt to various market conditions.
They cost too much
Segregated fund fees are a valid consideration, but consider the added value they provide, including maturity and death benefit guarantees and the opportunity to lock in investment growth through regular resets.
Where can you hold segregated funds?
You can hold segregated funds in:
- Registered retirement savings plan (RRSP), spousal RRSP and locked-in RRSP
- Tax-free savings account (TFSA)
- Registered retirement income fund (RRIF), spousal RRIF, life income fund (LIF), locked-in retirement account (LIRA), restricted locked-in savings plan (RLSP), prescribed registered retirement income fund (PRRIF), restricted life income fund (RLIF), locked-in retirement income fund (LRIF)
- Non-registered plans
- Annuities
BIG benefits for segregated funds include:
Faster Payout
One of the most significant differences between Segregated Funds and other forms of investment is how quickly the funds are disbursed to beneficiaries.
Segregated Fund payouts are typically processed in 5 to 10 business days after all necessary documents are received by the insurer. This quick turnaround can provide families with financial support in a matter of days, which can be critical for covering immediate expenses or addressing other pressing financial needs. For folks without life insurance, this payout can have a significant impact on the family.
In contrast, investments that are part of an estate and go through probate require significantly more time. The probate process, especially when waiting for a Clearance Certificate from the Canada Revenue Agency (CRA), can take an average of 4 to 6 months, and in more complex cases, as long as 12 to 24 months. During this time, the funds remain inaccessible to beneficiaries, potentially creating financial strain during an already difficult period.
Remaining in Equities longer, with a safety net
As Canadians approach retirement or their later years, it is common to adopt a more conservative investment strategy, however, given the continued investment growth needed for smaller retirement portfolios to sustain the investor’s lifespan, segregated funds offer a compelling alternative to the traditional approach. With the built-in guarantees unique to Segregated Funds, investors can continue benefiting from higher-return equity investments without the same level of fear or risk. These guarantees ensure that a portion of your initial investment will be protected—even in the event of a market downturn—giving investors the confidence to stay in equities longer, with greater peace of mind and comfort.
According to a recent survey conducted by RBC Insurance, 87% of Canadians aged 55 and over agree that they would like an investment product that guarantees the money they invest but also provides growth potential. Unfortunately, 60% are not aware that such an option already exists in the form of Segregated Funds. This highlights a significant knowledge gap, underscoring the need to educate Canadians on the unique advantages that Segregated Funds provide.
Minimize fees so your beneficiaries receive more
Segregated fund death benefits are paid directly to your beneficiaries, allowing them to bypass the estate settlement and probate process and minimize probate, executor, legal, and accounting fees for assets held in these contracts. This means your beneficiaries receive their payout faster, and the costs associated with probate fees and taxes are avoided. Additionally, because of the privacy benefits, the payout remains confidential, further enhancing estate preservation.
Do you have questions about whether segregated funds are right for you, or your family members? Let’s chat!
Sources for this article include:
Abacus Data Study (July 18, 2025)
What are segregated funds and how do they work? (July 3, 2024)
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