False. Segregated funds can guarantee your investment starting at 75% to 100%, at death or 10 years from the initial deposit/investment. Most people are only interested in the 100% guarantee of investment at death. I will explain why later.

How is this possible? Segregated funds are different from any other investment. It is a contract between the insurance company and the investor/client. An insurance company can offer these guarantees; a financial institution, such as a bank, cannot offer this investment.  Segregated funds are identical in how they operate.

A client once informed me he was told to stay away from segregated funds because they have a higher fee (MER, management expense ratio). Which is true, but it isn’t as high as you may think. I compared two similar investment funds, the MER for the mutual fund is 2.50%, the segregated fund is 2.62%.