Transparent Costs Ahead 2025: FSRA’s New Rules for Seg Fund Statements

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Transparent Costs Ahead 2025: FSRA’s Seg Fund Fee Reform for 2027

Jul 22, 2025

New reporting rules will make fees and guarantees clearer to clients — starting 2027

Canada’s segregated fund industry is set to undergo a major change. The Financial Services Regulatory Authority of Ontario (FSRA) has released its finalized proposed rule for Total Cost Reporting (TCR) for seg funds. If approved by Ontario’s finance minister, this rule will introduce detailed annual disclosures for clients — giving them greater transparency into the fees they pay and the guarantees attached to their contracts.

The rule, submitted on April 5, builds on a previous round of consultations. It requires insurers to provide clear breakdowns of fees and performance data going back to when the client contract began. These updates will appear in annual client statements starting with the 2026 calendar year, meaning the first enhanced statements will be issued in early 2027.

The enhanced disclosures aim to help clients better compare segregated funds with mutual funds and ETFs by aligning reporting standards across the insurance and securities industries.

What Will Be Disclosed?

The TCR rule mandates that 12 specific types of fees must be disclosed. These include embedded fees inside the insurance contract — but not fees that clients pay directly to their life insurance advisor (e.g., advice-only fees outside the policy).

Also included is clearer disclosure around guarantees: the cost of protections against market downturns, and how certain actions like early withdrawals could reduce or void those guarantees.

Annual statements will use plain language, and insurers are expected to design reports that non-specialists can understand. But this is easier said than done.

Geopolitics, Not Weather, Drives the Shift

This isn’t about snowbirds avoiding the Florida heat or pandemic-era health fears. Instead, it’s a clear reaction to economic policies and growing geopolitical unease. The chill in cross-border travel is closely tied to ongoing tariff threats, trade war dynamics, and a decline in diplomatic goodwill.

The impact of the U.S.–Canada trade relationship now goes beyond supply chains and stock tickers — it’s hitting vacation plans and border traffic.

Travel Diversification: Canadians Look Beyond the U.S.

Notably, Canadians are redirecting their travel budgets to other international destinations. According to Statistics Canada, arrivals to Canada from non-U.S. countries remained flat, indicating that global travelers still view Canada as a stable and attractive destination.

Meanwhile, Canadians are broadening their horizons — a potential economic boost for Europe, Asia, and domestic tourism within Canada. Airlines and travel operators could see new opportunities in long-haul routes and intercontinental travel packages.

What This Means for Investors and Planners

This shift in consumer behavior is more than just a footnote in a tourism report — it has economic and portfolio-level implications:

Retail & Hospitality Investors: Businesses in Canadian border towns and U.S. destinations may feel a pinch. This could impact hotel REITs, transportation stocks, or retail chains that depend on Canadian tourists.
Currency Watchers: Cross-border spending is often tied to exchange rate dynamics. A decrease in Canadian tourist spending abroad could subtly influence CAD-USD flows.
Policy Analysts & Advisors: The data suggests a sustained trend, not a temporary blip. As geopolitical tension persists, this could reshape tourism-related forecasts in upcoming quarters.

Final Thoughts: A Wake-Up Call for Border Economies

The message from June’s cross-border travel data is clear: Canadians are intentionally shifting their travel preferences, motivated by both sentiment and sovereignty. While not all Americans are staying away, the overall trend is one of cooling mobility.

For policymakers, investors, and cross-border business operators, this is a signal worth monitoring as the landscape of travel, diplomacy, and economic exchange continues to evolve in 2025.