Not All Group Savings Providers are Equal

Choosing the Right One for your People

Employers with a group savings plan or those considering adding one are unsure whether they have a provider with the right capabilities, investment lineup, and fees.

The group savings market has shifted in recent years, and the provider your organization chose years ago may no longer be the best fit. Especially with newer entrants, there’s a higher bar for better capabilities and fees.

Here's a plain-language breakdown of who the players are, what sets them apart, and how to decide between them.

Quick Read

• The top three providers hold around 80% of Canada’s assets and can handle every account type, fund style, and complex plan rules — but "capable" isn't the same as "optimal."

• Newer entrants (Wealthsimple, Commonwealth) compete on lower fees and modern user experience, but offer narrower fund lineups and are not yet able to support all plan-rule complexity.

• Fees vary widely and are negotiable. A 0.25% IMF difference compounds into tens of thousands per employee over a 25-year career. Consultants with scale are able to negotiate rates most employers – and many other advisors – can't access alone.

• Don't chase the lowest fee for its own sake — 2–3 bps on equivalent funds is noise. Ask whether the fee matches the value.

• Four questions to guide the choice: single sign-on with benefits, employee appetite for investment choice, complexity of plan rules, fee differential, and overall value received should guide your choice of provider.

Are the Top 3 an Obvious Choice?

The top three providers, measured by assets under management, have remained consistently the same in Canada over the last decade: Sun Life Financial, Manulife and Canada Life. Together, they hold about 80% of Canada’s non-Defined Benefit assets, such as DCPPs, RRSPs and DPSPs.

It’s tempting to stick with choosing one of the top 3, because they bring tangible benefits:

• Account types: They can handle all of the major group savings account types, including Defined Contribution Pension Plans, RRSPs, Deferred Profit Sharing Plans, TFSAs, and Non-Registered accounts.

• Fund lineup: Established providers excel at offering a full range of investment styles, including passive vs. active, value vs. growth, and specialty options such as real estate. This also makes moving providers easier, as an established provider can accurately match the features of the previous fund lineup.

• Complex Plan Rules: Many employers require matched contributions to remain in the savings plan for actively employed members, but allow withdrawals of “unmatched” or voluntary contributions. Established providers have systems in place to cater to these scenarios as well as vesting schedules.

• Client Care: The established providers have dedicated toll-free customer care centres available every weekday, typically 8 am to 8 pm ET.

That said, "capable" and "optimal" are not the same thing. Choosing one of the top three can be the right call — but only if you're getting capabilities to manage your plan design along with a competitive investment lineup.

Fees, fees, fees.

Every group savings investment option carries an Investment Management Fee (IMF): the annual percentage charged on the value of each fund. It's roughly equivalent to the Management Expense Ratio (MER) you'd see on a retail mutual fund.

Fees are never standard and can vary significantly between providers. Providers quote based on a range of factors:

A 0.25% difference in fees, compounded over a 25-year career, can mean tens of thousands of dollars in a single employee's retirement savings.

• The size of your employee group and average account balances.

• The contribution formula — how much the employer contributes on behalf of employees

• The overall mix of investment options selected for the plan.

•  The consulting relationship — provider fees are consistently more competitive for consultants who bring them meaningful, ongoing business.

That last point matters more than most plan sponsors realize. Because Leslie Consulting Group works with providers across hundreds of Canadian employer relationships, we're consistently able to negotiate fee levels that most employers cannot access on their own.

The difference between a well-negotiated IMF and a standard quoted rate can mean thousands of dollars in additional retirement savings for each of your employees over the course of their career.

The newer entrants: competitive on price, still evolving

In recent years, Wealthsimple and Commonwealth have entered the group savings space and have been aggressively competing for new clients, particularly among small and mid-sized employers. Their pitch is straightforward: lower fees, simpler technology, and a modern digital experience.

For some organizations, this is a genuinely compelling option. But there are important limitations to understand before making the switch:

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