Personal Investment Options

Build a Financial Future That Makes Sense

Your Orr Insurance & Investment Advisor will get you started, and help you stay on track with a plan and high-quality investments that are right for you and your family

With the uncertainty in the investment markets of the past five years, it’s more important than ever to have a long-term savings and investment plan that is clear, consistent and tax-efficient. Your Orr representative has the expertise and experience to show you how.

The financial world has seen a perplexing mix of historically low interest rates and market swings over the past few years, with both peaks and corrections, surges and doldrums. One thing it isn’t: consistent. Which is why it’s crucial to build your own constants and consistencies into your long-term savings and investments by making wise choices along the way. Your Orr Insurance and Investment Advisor can show you how to balance and stabilize your financial future with investment options that are right for today, and then adjust as time goes along.

The one thing that’s always certain is that you won’t get anywhere by not starting, so call your Orr representative and find out what makes sense for you and your family’s future. Here’s a quick, general overview, but there’s more to show you once we’ve talked about your needs and plans.

Mutual Funds

Segregated Funds

Guaranteed Investment Certificates (GIC)

Life Annuities

Savings Account

Corporate Class Structure

 

Mutual Funds

A mutual fund is a pooled investment where many individuals own shares, or units, in a large portfolio of investments that has been professionally researched, diversified and managed. You can get started with small amounts, buy and accumulate units over time, and reinvest the fund’s returns in additional units to compound your gains.

You can find just about any kind of mutual fund to suit your interests – the bond or short-term money markets, different types of industries, countries or economic regions, preferred investment styles from aggressive to conservative, income or capital growth goals, etc. The mutual fund’s professional managers do extensive research to make their buying, holding and selling decisions on behalf of the investors.

Deciding between mutual funds depends on your risk tolerance, time horizon, goals and objectives. There are thousands of mutual funds out there, so it is important to work with your Orr investment advisor to determine the best investment products for you and your family.

Mutual Fund Advantages

The key advantage here is the professional management of your money. The fund’s holdings are selected by experienced professionals that have the resources to trace the markets, analyze the underlying investments and implement a consistent investment strategy.

Because the fund’s portfolio is a blend of investments (and some cash for liquidity), owning units in a mutual fund automatically diversifies your investment and spreads out the risk. As a unit holder, you can invest in shares in numerous companies but only have to monitor the progress of one mutual fund. And you get regular reports of performance, investment mix, and so on.  

Mutual funds can be useful for a number of investment goals, like establishing an emergency fund, saving for children’s education, saving for a down payment or retirement. With such a variety of choices, it is important to get the right information. Your Orr Insurance & Investment Advisor has been following a range of funds and will take the time to make sure that the investments line up with your personal investment needs. 

 

Segregated Funds

Segregated funds are similar, often identical, to mutual funds in that there is a pool of investments held by unitholders, and professional managers invest the funds according to stated objectives – in fact, the better known mutual funds often offer segregated versions of the same investment products. Like mutual funds, the market value of segregated fund units fluctuate with the fund portfolio. However, segregated fund units often come with a guaranteed minimum value as high as 75% or 100% of the original purchase, as a protection for their investors.

But the key difference is that segregated fund units are contracted as a life insurance benefit passing immediately to a named beneficiary, separately from the estate, probate and taxes. Because of this feature, segregated funds can only be purchased through life insurance companies.

Segregated funds can also offer creditor protection, in many cases sheltering a beneficiary from creditors of the estate. Business owners and professionals find this feature particularly interesting.

These and other features can vary from fund to fund, but your Orr representative knows the segregated fund market well and can give specific guidance to suit your goals.

 

Guaranteed Investment Certificates (GIC)

GICs provide a guaranteed rate of interest with high security. Among its numerous benefits are:

  • confidence from knowing one is earning a guaranteed rate of interest
  • flexibility of choosing from a variety of payment options and terms
  • planning options with terms ranging from 30 days to 10 years
  • income that can be paid monthly, semi-annually, annually, or compounded annually and paid at maturity
  • liquidity to cash GICs before maturity subject to an adjustment.

 

GICs issued by insurance companies offer unique advantages over those of other financial institutions, specifically creditor protection under certain circumstances where a preferred (family class) beneficiary has been named. Nominated beneficiaries in GIC contracts will receive death proceeds directly eliminating delays and costs due to probate.

 

Life Annuities

These are contracts arranged by insurers that guarantee a fixed income for the life of the purchaser, or annuitant. The stability of this product has increased its popularity after the market volatility of the past decade and the low interest rate environment that have decreased the investment income streams of many retirees.

 

Savings Account

A savings account earns interest on the money that is within the account. The interest rate is calculated from the company and it changes as interest rates increase or decrease. It’s simple, liquid and insured up to $100,000.

 

Corporate Class Structure

Corporate Class Funds are designed to provide tax advantages for non-registered assets by giving their investments the potential to grow without being impeded by taxes. Unlike individual mutual funds where each fund is taxed as a separate entity, a mutual fund corporation exists as one legal and taxable entity. When an investor purchases a Corporate Class Fund, they are, from a tax perspective, purchasing shares of a particular class of shares.

Corporate Class Funds are specifically designed to provide the following advantages for non-registered money:

Tax-deferred rebalancing – Buying and selling mutual fund units to move between funds can result in a taxable disposition, but corporate class funds are all held within the same corporation so investors can move their money from one class fund to another class fund without triggering immediate tax consequences. It is only when you sell the units and leave the shelter of the corporation that tax becomes payable on capital gains. The ability to control when to trigger taxable dispositions can be a very powerful tax planning tool because you can control when gains or losses are realized.

Tax efficient growth – The corporation exists as one entity for tax purposes, so the tax can be managed within the corporate class structure in a way that other investment vehicles cannot. The corporation does this in two ways:

  • using capital losses realized by the corporate class funds to offset capital gains by the corporation,
  • using expenses from corporate class funds to offset income generated within the corporation.

Managing the tax in this way means that corporate class funds may reduce the amount of tax liability. The taxes are minimized or deferred, leaving more money in an investor’s account to benefit from compound growth on a pre-tax basis.