Individual Wealth case studies
Asset rebalancing
Householding
Segregated funds vs. mutual funds
Opportunity
Strategy
Outcome
Benefits & considerations
Resets
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Meet David
David, a 52-year-old investor, held a balanced segregated fund portfolio with an initial asset allocation of 60% equities and 40% fixed income, aligned with his moderate risk tolerance and 10-year time horizon to retirement.
The problem: portfolio drift
Over time, market performance caused his portfolio to drift — equities grew faster than fixed income, increasing his risk exposure beyond his comfort level.
Target allocation
After drift
Risk exposure higher than original tolerance
Equities 20%
Fixed income 80%
Equities 40%
Fixed income 60%
In line with risk tolerance
David: active rebalancing
David and his advisor decided to implement an asset allocation rebalancing strategy for his segregated fund contract. On a quarterly basis, his portfolio was automatically rebalanced to restore the original 60/40 allocation to help ensure his investment remained aligned with his goals and risk tolerance.
Ann: no rebalancing
Meanwhile, another client, Ann, began with the same 60/40 portfolio allocation but opted not to use asset rebalancing. She preferred a “set it and forget it” approach, assuming the fund’s diversification alone would be sufficient over time.
David’s result
David’s portfolio consistently maintained a 60/40 balance through regular rebalancing. His annualized return was 4.02% with moderate volatility and he stayed within his risk comfort zone.
Ann’s result
Ann’s portfolio, left unmonitored, had drifted to 76% equities and 24% fixed income due to strong stock market performance. While her annualized return was slightly higher at 5.20%, she experienced greater volatility, especially during downturns.
Risk alignment
Stayed aligned
Drifted above comfort
Volatility
Moderate
Higher
Final allocation
60/40
76/24
Metric
David (rebalancing)
Ann (no rebalancing)
Annualized return
4.02%
5.20%
After 10 years
Reduces emotional decision-making and can help prevent reactive changes during market highs or lows.
Equitable offers automatic rebalancing as an option. Clients can choose to add this feature at any time.
Asset rebalancing maintains intended risk profile and helps to ensure portfolios don’t become unintentionally aggressive or conservative.
Rebalancing may limit short-term gains in booming markets, as it involves selling outperforming assets.
Benefits
Considerations
Supports long-term discipline, helping to keep investors aligned with their original investment strategy.
On non-registered contracts, a capital gain/loss may apply on units sold due to asset rebalancing and will be considered taxable income for the client.
Asset rebalancing can be applied when completing the application on EZcomplete® or any time after using EZtransact®.
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Important information
This case study is for information purposes only. Actual fees and performance will vary.
Equitable has made every effort to make sure what is covered in this document is correct. However, the policy contract governs in all cases.
The information in this document is consistent with current tax legislation, which is subject to change without notice.
This document does not count as legal, tax, investment or other expert advice. Advisors must determine whether this concept/product is suitable for a specific client based on the client’s circumstances and needs.
How David avoided unintended risk
Asset rebalancing is a simple, effective strategy that supports consistent, goal-based investing — especially valuable as investors approach key milestones like retirement.
Important
Had Ann been close to retirement, even a temporary dip in contract value could have impacted her significantly.
Mark
Mark prioritized market performance and cost‑efficiency. His objective was to focus on achieving strong returns while minimizing fees.
Mark’s approach: mutual fund
Mark selected a balanced mutual fund through his bank because it offered a low management expense ratio (MER) of 2.25%. He aimed to maximize long‑term returns and accepted the market risk associated with this strategy.
Julia's approach: segregated fund contract
Her advisor recommended a segregated fund contract with a slightly higher MER of 3.50%, which included a 100% death benefit guarantee, potential creditor protection due to her business‑owner status and the ability to bypass probate through named beneficiaries.
Bypass probate with named beneficiaries, reducing delays and legal fees. The payment to beneficiaries remains private.
Segregated funds are not always suitable for short-term investors or those focused strictly on lowest-cost solutions.
Death and maturity guarantees can provide a safety net in down markets.
Segregated funds often have slightly higher fees due to additional insurance features.
Potential creditor protection for business owners or professionals (conditions apply).
Potential creditor protection is subject to provincial laws and specific circumstances.
Reset options to lock in market gains for future guarantees.
How segregated funds compare to mutual funds
Segregated funds are not just about performance — they’re about helping investors protect, plan and preserve wealth. For many investors, particularly those nearing retirement or with complex financial needs, these features can far outweigh the slightly higher fees.
Julia
Julia, a small business owner, prioritized estate planning and protection against market downturns. Her objective was to preserve wealth, streamline the transfer to beneficiaries and safeguard assets where possible.
Investment horizon
10 Years
Risk tolerance
Initial investment
$250K
Two investors, Mark (age 55) and Julia (age 56), were both looking to invest $250,000. Both had moderate risk tolerance and a 10‑year investment horizon — but different priorities.
Julia’s result
Upon her unexpected passing at 66, beneficiaries received the full contract value within weeks, outside probate. Business creditors could not make claims against the policy.
$398K
Mutual fund annualized return
Final value
If both investors pass away the same year markets drop 25%, Julia’s beneficiaries would receive $360,000. The death benefit guarantee exceeded market value and she had used two resets, increasing her guaranteed amount over time.
What happens in a down‑market scenario?
$360K
+$50K
Mark’s result
Upon his unexpected passing at 65, his estate went through probate, creating delays and fees for beneficiaries.
$310K
-$137K
$442K
6.00%
If both investors pass away the same year markets drop 25%, Mark's beneficiaries would receive around $310,000 after losses and probate fees.
4.75%
Segregated fund guarantees only apply at maturity or death (and under contract terms).
Ideal for investors seeking estate planning and risk protection.
Mutual funds may offer lower costs and similar market exposure, but no insurance protection.
Family members
4
Tier 4
$1,000,000 - $1,999,999
0.25%
Tier 3
$740,000 - $999,999
0.20%
Tier 1
$250,000 - $499,999
0.10%
Tier
Market value threshold
Annual MFR
Tier 2
$500,000 - $749,999
0.15%
After grouping their contract values, the Flores household's combined assets exceeded $500,000, placing them in Tier 2 of Equitable’s Preferred Pricing program:
Individual family members maintain control of their own contracts.
Eligible clients must reside at the same address (when householding is set up).
Significant cost savings through reduced management fees and faster asset growth potential due to lower ongoing costs.
Adult kids included in the household can keep the MFRs even after moving out.
Maximum 10 eligible family members in a household.
Simple implementation — Householding can be completed online using EZtransact. No paperwork, no account restructuring.
Eligible household members include the household owner, spouse, children and parents living at the same address.
How the Flores family reduced costs
A household account grouping is a powerful strategy that can lead to significant cost savings for families investing in Equitable Guaranteed Investment Funds™ (Equitable GIF). It allows clients to group the value of eligible assets owned by multiple family members living at the same address to qualify for the Preferred Pricing program1. Each eligible family member who is part of the household benefits from a management fee reduction (MFR) sooner.
1 Equitable reserves the right to change or cancel the Preferred Pricing program at any time without notice.
The challenge
Individually, they haven't met the $250,000 minimum to qualify for Preferred Pricing. Each family member was paying standard management fees without any reductions.
Meet the Flores family
In household account
Total savings
$900
Saved annually in fees
Key benefits of this strategy:
No account merging required — each member retains full ownership and control over their own contract
Their advisor identified the opportunity to group the value of all four Equitable GIF contracts into a household, a feature offered by Equitable.
Household account grouping
Combined value calculation — the total value of all contracts is used to determine eligibility for reduced, tiered pricing
Everyone benefits — each eligible family member receives a MFR sooner
For the MFR calculation, the total combined value of $600,000 would be used to determine eligibility for the Preferred Pricing program.
Tier 5
Greater than $2,000,000
0.30%
Individual cost reductions
The Flores family — parents Diego and Sarah, along with their adult children Daniela and Jon — each have Equitable GIF contracts with different contract values. They all live at the same address, have independently-owned contracts and pay individual management fees.
Householding to determine the MFR is only available for Equitable GIF. However Pivotal SelectTM contract values can be used to determine the Preferred Pricing tier for household members. In force Pivotal Select contracts will continue to qualify for the Preferred Pricing program.
Death benefit growth over time
How Cindy was able to grow her death benefit by 15%
By using the annual reset1 option on Equitable GIF, investors can take advantage of market gains and increase the value of the death benefit for their beneficiaries — making this type of investment a useful part of an overall estate plan.
Primary goal
Leave as much money as possible to beneficiaries.
Cindy
$100,000
Time horizon
9 years
Risk profile
Balanced
Age at start
65
Current age
74
First reset
$110,000
Second reset
$115,000
Third reset
$120,000
Fourth reset
$130,000
Fifth reset
$142,000
Sixth reset
$150,000
1 Annual resets are permitted up to the annuitant’s 80th birthday. See the Contract Provisions and Information Folder for more information on resets and guarantees.
Once reset, the new death benefit value is guaranteed regardless of market dips that may follow.
Resets can help lock in market gains and protect against losses.
Resets can happen once a year, at any time.
By age 74, Cindy used six annual resets to increase the guaranteed death benefit to $150,000. By using resets strategically, Cindy and her advisor captured a 15% increase in death benefit value.
Death benefit growth
Inital
Final
This means Cindy's beneficiaries would receive the secured higher death benefit even if the markets took a downturn after her last reset.
Resets over time
Year 2
Year 1
Year 3
Year 4
Year 5
Year 6
$125,000
Year 7
$140,000
Year 8
$145,000
Year 9
How it works
Using an annual reset can lock in gains and increase the death benefit to 100% of the then-current market value.
2 The death benefit guarantee is applied upon the death of the annuitant. See the Contract Provisions and Information Folder.
Cindy selected an Equitable GIF with a 100% death benefit guarantee2 which allows for resets. Cindy and her advisor meet when markets are up to discuss using the annual reset.
Note: The stepped line shows how each reset locked in the current market value as the new death benefit guarantee, protecting gains even when market values declined.
