Winnipeg-based insurer Canada Life and Mississauga, Ont.–headquartered managing general agent Primerica Canada signed a distribution agreement that provides Primerica’s advisors access to a “curated” segregated fund shelf, the insurer said Friday.
Primerica serves many new and working-class Canadians, and will extend the market reach of Canada Life’s existing distribution, David Stewart, senior vice-president of independent distribution with Canada Life, told Investment Executive in an interview. “This is going to be an opportunity for us to really help the underserved mass market.”
Stewart said the product shelf includes a “core group of funds” with different fund managers.
The training and onboarding of Primerica Canada advisors will be phased beginning in 2025. Stewart said advisors must have an appropriate understanding of segregated funds and where they fit in a financial plan to provide the right advice to clients.
Primerica has more than 10,000 licensed financial reps, the firm’s website says. Canada Life says it has more than 16,000 advisor relationships.
“At Canada Life, there is no impact to existing distribution or advisors,” the insurer said in a release.
Last year, Canada Life acquired wealth management firms Investment Planning Counsel (a fellow Power Corp. subsidiary) and Value Partners Group. The distribution agreement with Primerica will complement the insurer’s strategy to bring more wealth management products through new sales channels, Stewart said.
In its second-quarter report to shareholders, Great-West Lifeco, Canada Life’s parent company, reported individual wealth management sales in its Canada segment of $4.6 billion, up from $2.4 billion a year earlier. The increase was attributed primarily to strong segregated funds and mutual funds sales, both proprietary and third party, as well as the addition of IPC and Value Partners.
Canada Life’s contractual service margin (CSM), or the value of unearned profits, in its segregated funds on June 30 was $1.90 billion, down $41 million from the previous quarter, attributable to “unfavourable experience” in seg funds.
Great-West Lifeco’s CSM in its segregated funds was $3.35 billion, down by $76 million from the previous quarter. The drop was attributed to market impacts in Europe and net outflows in Canada.
“If you look at the overall seg fund market, yes, it has been challenged, but we feel very optimistic that this is a growth opportunity,” Stewart said.
Segregated funds account for more than one-third of Great-West Lifeco’s total assets under administration in Canada.