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Wealth Professional | 30 Sep 2015, 08:15 AM Agree 0
With the Cummings report expected next month, an industry insider is convinced the DSC fund’s days are numbered
  • Brad Jardine | 30 Sep 2015, 10:02 AM Agree 0
    If this passes as discussed here it's going to take a lot longer to fully "phase out" DSC holdings. Typically it'll be 5-6 years from now in full. Certainly the regulators can phase out "new" purchases of DSC funds in that short of a time frame but suppliers are going to need time to adapt. For example most firms offer a 10% free privilege annually for DSC holdings which tends to facilitate most ongoing income situations and lump sum withdrawals. If regulators leave "low-load" offerings intact so advisors can make a little upfront, particularly helpful for new advisors and smaller account sizes, then the ironic twist is this-most fund firms DON'T allow any 10% free privileges from low-load offerings whatsoever. Everyone's going to have to adapt. New advisors? Good luck! Net Income Starvation and that "cushy" side counter job at your local Bank Branch are squarely in your future.
  • Will Ashworth | 30 Sep 2015, 11:00 AM Agree 0
    Brad, all very good points. If, and it's still very much up in the air, DSC funds are eliminated there are many things that will have to happen in order to make the transition. It won't be easy that's for sure.
  • BC Advisor | 30 Sep 2015, 11:41 AM Agree 0
    You'll certainly see a large movement of DSC advisors to the insurance seg fund industry.
  • Brad Jardine | 30 Sep 2015, 12:45 PM Agree 0
    Sad but likely already happening. Seg funds have their use for some situations but not for everyone-MER's can be brutal. Better to be dually licensed and have a conscience. What's best for the client??
  • TOAdvisor | 04 Oct 2015, 11:33 PM Agree 0
    DSC may be phasing out slowly in the future, but many options for "commission" style compensation still exist. I don't see Seg funds being a solutions for my client to this particular problem - the premium on the guarantee of the Seg fund is far too expensive for what it is worth over the life of the investment (may as well buy the DSC mutual version for a fraction of the total Seg fun price). Embedded pricing (which CRM2 will not address) is a major concern and with the dissolve of DSC mutuals, be careful of fee layering and alternative service fee solutions. Australia - I feel your pain!
  • Jake | 05 Oct 2015, 09:24 AM Agree 0
    Getting rid of DSC is long overdue. Hope the regulators realize that Low Load funds are no different and capture those too.
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