BMO Guaranteed Investment Funds

Transcription

1 A brief introduction to BMO Guaranteed Investment Funds October 1, 2014

2 Features of segregated funds Investment with Principal Guarantees Maturity and Death Benefit Guarantees Gains when market goes up, protected when market goes down Estate Planning Potential for Creditor protection Resets Ability to bypass probate* Passes directly to named beneficiaries* Protects the value or proceeds of the policy if a proper beneficiary designation is in place** Lock-in market gains * Probate fees do not apply in all provinces ** Creditor protection rules depend on legislation and vary by province. It cannot be guaranteed. Please consult a legal advisor for your specific situation. 1

3 BMO GIF Benefit Summary New features this Fall 1. Death Guarantee Reset Option 2. Prestige Class 3. Registered Locked-in Plan Types + TFSA 2

4 BMO GIF Benefit Summary BMO GIF Triple Protection Benefits 1. Up to 100% Maturity Benefit guarantee If the market goes down, up to 100%* of client s investment is protected for the term they select. 2. Up to 100% Death Benefit guarantee In the event of client s death when the market is down, named beneficiary is protected for up to 100%** of their investment. 3. BMO Volatility Control BMO GIFs automatically include BMO Volatility Control, our systematic asset allocation strategy which smooths out each fund s investment return volatility. * At Maturity: 100% on deposits made at least 15 years and 75% on deposits made less than 15 years from the Maturity Date, less a proportionate amount for withdrawals. ** At Death: 100% on deposits made before the Annuitant is age 75 and 75% on deposits made on or after age 75, less a proportionate amount for withdrawals. 3

5 BMO GIF Benefit Summary Plus secure market gains on a regular basis! Maturity Guarantee Resets: BMO makes it easy for you to take advantage of rising markets by resetting your Maturity Guarantee Amount automatically every month. No action is required by you or your client! Death Guarantee Resets: Optional benefit that offers your clients the opportunity to increase the Death Guarantee amount by providing automatic resets every 3 rd policy anniversary up to including the last policy anniversary before your client s 75 th birthday. ETF-based balanced fund options managed by BMO Asset Management Inc. BMO Brand Issued by BMO Life Assurance Company, a member of the BMO Financial Group, one of Canada s premier financial institutions. Automatic monthly resets of the Maturity Guarantee Amount occur up to and including 10 years from the Maturity Date. Must be selected at time of application. Additional fee applies. 4

6 Client Selected Maturity Date Policy owner selects the term of the Maturity Date Must be between 15 to 25 years in annual increments Maturity Date will be Dec 31st of the year selected Contract Issued Maturity Date 0 Minimum 15 years January 2014 Maximum 25 years December

7 Picking a Maturity Date 6

8 Maturity Benefit Guarantee Maturity Benefit = Greater of Market Value or Maturity Guarantee Amount Maturity Guarantee Amount = 100% of deposits made with 15 years or more to the client-selected maturity date 75% of deposits made with less than 15 years to the client- selected maturity date In this example, deposits made between ages 40 and 50 are 100% guaranteed yrs Withdrawals will proportionately reduce the Maturity and Death Guarantee Amount 7

9 Automatic Monthly Resets of the Maturity Guarantee Amount Maturity Guarantee Amount Resets are performed automatically each month-end until 10 years before the Maturity Date yrs In this example, the maturity guarantee amount for all deposits made before age 55 are reset up to age 55 8

10 Down Market Scenario Maturity Date BMO Insurance makes a top-up payment of $65,000 at maturity 9

11 Rising Market Scenario Maturity Date Client Benefited from 15 Years of automatic resets & slept better at night 10

12 Additional Deposit Scenario Maturity Date BMO Insurance makes a top-up payment of $15,000 11

13 Death Benefit Guarantee Death Benefit = Greater of Market Value or Death Guarantee amount Death Guarantee Amount = 100% for deposits made before age 75* 75% for deposits made at age 75 or older* * As of December 31 of the Annuitant s age shown 12

14 Death Benefit Guarantee Scenario BMO Insurance pays $95,000 Death Benefit to named Beneficiary 13

15 Death Guarantee Reset Option Option* selected at time of application Resets occur automatically on every 3 rd policy anniversary, up to and including the last policy anniversary before age 75 Can be cancelled at anytime (permanent decision) * Additional fee applies. 14

16 Death Benefit Guarantee Scenario (with Death Guarantee Reset Option selected) BMO Insurance pays $125,000 Death Benefit to named Beneficiary 15

17 Fund Options BMO Insurance has partnered with BMO Asset Management to create BMO GIFs BMO Asset Management is one of the world s largest 75 asset managers, with over $265 billion in combined AUM as at December 2013 BMO Asset Management distinguishes themselves through outstanding research, and focused diligence in the portfolio construction process BMO Asset Management is one of Canada s leading and fastest growing issuers of ETFs with over $14 billion in ETF managed assets as at May

18 BMO GIF Line Up 4 ETF-based balanced funds with exposure to equity income asset classes or to North American stock markets CANADIAN BALANCED GROWTH FUND U.S. BALANCED GROWTH FUND CANADIAN INCOME STRATEGY FUND NORTH AMERICAN INCOME STRATEGY FUND 17

19 BMO Volatility Control BMO GIFs automatically include BMO Volatility Control, our systematic asset allocation strategy which smoothes out each fund s investment return volatility. 18

20 Sales Charge Options 19

21 Prestige Class Minimum of $250,000 of eligible assets per household* Available on No-Load sales charge option only 40 bps reduction on MER All policyholders must complete a Prestige Class Agreement (646E) * Includes segregated fund contracts issued by BMO Insurance held in your client s name or members of your client s family living at the same address. Trailer commission is set at 0.75% with no change to deposit commission. 20

22 Fund MERs Actual Class A MER as of June 30, The Prestige Class MER is an estimate only based on the management fee, insurance fee, operating expenses and applicable taxes to be charged to the fund, and the actual Class A MER as of June 30, BMO Insurance is currently waiving a portion of the fees for these Funds. BMO Insurance has no obligation to continue waiving these fees and can terminate the waiver at any time without notice. For the period ending on June 30, 2014, the MER without the waiver is 0.30% for the Holding Money Market Fund and 1.39% for the Money Market Fund. 21

23 Account Types Now offering registered locked-in plans + TFSA Savings Plans: Non-registered, RSP, RLSP, LRSP, LIRA plus TFSA Retirement Income Plans: RIF, LIF, RLIF, LRIF and PRIF 22

24 Account Types - Continued 23

25 Transaction Processing Processed Daily Lump sum deposits to money market Switches to money market Unscheduled withdrawals Processed once a Month Lump sum deposits (other than to money market) Switches to Fund(s) (other than money market) PADs SWPs For lump sum deposits, all funds (other than money market) are placed in a money market holding fund until the monthly Transaction Date BMO GIF offers clients the richest maturity guarantee & reset benefit in the industry at an affordable MER. The monthly processing of new deposits and switches is one way BMO Insurance effectively manages this risk. 24

26 Disclaimer FOR ADVISOR USE ONLY This presentation is for general educational purposes only and should not be considered as investment, legal, tax or accounting advice. All charts and illustrations in this presentation are for illustrative purposes only and do not reflect future values or future performance of any segregated funds. To the extent of any inconsistencies between this presentation and the then current BMO Guaranteed Investment Funds Information Folder and Policy, the terms of the Information Folder and Policy prevail. For full product details and disclosure, refer to the Information Folder and Policy. BMO Life Assurance Company is the sole issuer and guarantor of the BMO GIF individual variable insurance contract. Any amount that is allocated to a segregated fund is invested at the risk of the policyowner and may increase or decrease in value. Registered trade-mark of Bank of Montreal, used under licence. Trade-mark of BMO Life Assurance Company. 25