What right do investors have concerning segregated fund contracts?

Investors in segregated fund contracts have specific rights that are unique to this type of investment product. One of the key rights is the right to rescind the contract, which allows investors to cancel the contract within a specified time frame, typically two days, without incurring penalties. This right is designed to protect investors by giving them a short period to reconsider their investment decision immediately after entering into the contract.

Segregated funds, often linked to life insurance products, offer certain guarantees and protections that regular mutual funds do not. The ability to rescind ensures that investors can have peace of mind, knowing they have the option to withdraw from the agreement shortly after purchase if they have doubts or are unsatisfied with their decision.

While the ability to increase investments, change beneficiaries, and cash out are aspects related to the flexible management of investment products, they do not carry the same consumer protection function as the right to rescind. Rescinding a contract serves as a critical safeguard for investors entering into these financial commitments.