Q4 2021 IGM Financial Inc Earnings Call

Thank you for standing by this is the conference operator, welcome to the I G M financial fourth quarter 2021 analyst call.

Speaker 1: Thank you for standing by. This is the conference operator. Welcome to the IGM Financial 4th Quarter 2021 Analyst Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions.

As a reminder, all participants are in listen only mode and the conference is being recorded.

After the presentation there'll be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad.

Speaker 1: To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Keith Potter, Senior Vice President, Finance. Please go ahead.

Should you need assistance during the conference call you May signal, an operator by pressing star Zero I would now like to turn the conference over to Keith Potter Senior Vice President Finance. Please go ahead.

Thank you Ariel and good morning, everyone and welcome to <unk> financial 2021 fourth quarter earnings call. Joining me on the call today are James Osullivan, President and CEO of <unk> financial.

Speaker 2: Thank you, Ariel, and good morning, everyone, and welcome to IGM Financial's 2021 fourth quarter earnings call. Joining me on the call today are James O'Sullivan, President and CEO of IGM Financial, Damon Murchison, President and CEO of I.G. Wealth Management, Barry McInerney, President and CEO of McKinsey Investments, and Luke Gould, Executive Vice President and CFO of IGM Financial.

Damon Murchison, President and CEO of <unk> wealth management.

Barry Mcinerney, President and CEO of Mackenzie investments and Luke Gould Executive Vice President and CFO by GM financial.

Before we get started I'd like to draw your attention to the cautions concerning forward looking states statements on slide three of the presentation slide four summarizes not different financial measures used in this material on slide five we provide a list of documents that are available to the public on our website related to the fourth quarter results for IGF financial I will now.

Speaker 2: Before we get started, I'd like to draw your attention to the cautions concerning forward-looking statements. On slide 3 of the presentation, slide 4 summarizes non-difference financial measures used in this material. And on slide 5, we provide a list of documents that are available to the public on our website related to the fourth quarter results for IGM Financial. I will now turn it over to James O'Sullivan.

I'll turn it over to James Sullivan.

Well, thank you Keith and good morning, everyone.

Speaker 3: Well, thank you, Keith, and good morning, everyone. I'd like to start the call, if I may, by reviewing a few 2021 highlights.

I'd like to start the call if I may by reviewing a few.

<unk> 2021 highlights.

And we have discussed on previous calls that this management team is here to build and grow our businesses and to grow our earnings.

Speaker 3: We've discussed on previous calls that this management team is here to build and grow our businesses and to grow our earnings.

Today I am very pleased to report that we accomplished during 2021.

Speaker 3: Today I'm very pleased to report that we accomplished both during 2021.

Record high reported earnings per share of $4.08.

Speaker 3: record high reported earnings per share of $4.08.

It represents a meaningful breakout from historical profitability levels.

Speaker 3: represents a meaningful breakout from historical profitability levels.

Adjusted EPS of $4 five.

Speaker 3: Adjusted EPS of $4.05 increased 27% year-over-year, with strong growth from all three of our segments and across all of our businesses.

Increased 27% year over year with strong growth from all three of our segments and across all of our businesses.

Assets under management and advisement ended the year up 15%, reaching a record high 277 billion.

Speaker 3: Assets under management and advisement end of the year up 15%, reaching a record high $277 billion.

Contributing to the growth of M&A, where strong client investment returns of 11, 9%.

Speaker 3: Contributing to the growth of AUM&A were strong client investment returns of 11.9%.

As well as record high net flows of $8 $7 billion.

Speaker 3: as well as record high net flows of $8.7 billion.

Each of <unk> wealth IPC at Mackenzie achieved strong net inflows.

Speaker 3: Each of IG Wealth, IPC, and McKinsey achieved strong net inflow.

During may of 2021, well simple announced equity offerings as part of our financing round that resulted in roughly a $900 million revaluation of <unk> equity interest in the company.

Speaker 3: During May of 2021 Wealthsimple announced equity offerings as part of a financing round that resulted in roughly a $900 million revaluation of IGM's equity interest in the company.

And we recently announced that we will be acquiring power Corporation of Canada equity interest in China AMC.

Speaker 3: And we recently announced that we will be acquiring Power Corporation of Canada's equity interest in China AMC, doubling McKenzie's current equity stake to 27.8%.

Doubling Mackenzie current equity stake to 27, 8%.

We're proud of the results we have collectively accomplished for our clients and our shareholders during 2021.

Speaker 3: We're proud of the results we've collectively accomplished for our clients and our shareholders during 2021.

And so on behalf of the leadership team across AGM.

Speaker 3: So on behalf of the leadership team across IGM, I'd like to sincerely thank our employees, consultants and advisors for their extraordinary efforts this past year and into 2022.

Like to sincerely, thank our employees consultants and advisors for their extraordinary efforts this past year and enter 2022.

And before getting into the results for the quarter.

Speaker 3: And before getting into the results for the quarter, I'll take us to slide eight where I'll share a bit about our outlook and priorities for 2022.

Take us to slide eight where I'll share a bit about our outlook and priorities for 2022.

In terms of outlook last year was clearly extra ordinary for the asset and wealth management industries in Canada.

Speaker 3: In terms of outlook, last year was clearly extraordinary for the asset and wealth management industries in Canada.

Many records were broken.

We have observed industry net sales slow during the final months of 2021 and January industry sales look similar.

Speaker 3: We have observed industry net sales slow during the final months of 2021, and January industry sales look similar.

That said Canadian still have a significant sum of money on the sidelines and cash and low yielding financial instruments.

Speaker 3: That said, Canadians still have a significant sum of money on the sidelines in cash and low yielding financial instruments.

Based on these observations I fully expect to see an attractive get perhaps more moderate operating environment as we head into 2022.

Speaker 3: Based on these observations, I fully expect to see an attractive, yet perhaps more moderate operating environment as we head into 2022.

And we have significant momentum in our companies that has continued into January .

Speaker 3: And we have significant momentum in our companies that has continued into January .

I've spoken about our commitment to delivering earnings growth many times in the past.

Speaker 3: I've spoken about our commitment to delivering earnings growth many times in the past.

We believe we delivered on that during 2021, and we intend to continue to deliver.

Speaker 3: We believe we delivered on that during 2021, and we intend to continue to deliver.

Luke will walk you through the details of where we are investing and managing costs across our businesses.

Speaker 3: Luke will walk you through the details of where we are investing and managing costs across our business.

I'd also like to reiterate our capital allocation priorities.

Speaker 3: I'd also like to reiterate our capital allocation priorities.

Our first priority is to continue investing in our businesses to position each of them for long term growth and success.

Speaker 3: Our first priority is to continue investing in our businesses, to position each of them for long term growth and success.

This comes through both organic growth investments and exploring business development opportunities for.

Speaker 3: This comes through both organic growth investments and exploring business development opportunities.

With a focus on further building our wealth platforms in Canada.

Speaker 3: with a focus on further building our wealth platforms in Canada and investing in our global asset management capability.

And investing in our global asset management capabilities.

We also view share buybacks as an important capital allocation priority as we head into 2022.

Speaker 3: We also view share buybacks as an important capital allocation priority as we head into 2022.

Yesterday, we announced our intention to file an NCI beat this quarter and we expect share repurchases.

Speaker 3: Yesterday we announced our intention to file an NCIB this quarter and we expect share repurchases under the planned NCIB to at a minimum offset the dilutive impact of stock options.

Under the planned in CIB.

At a minimum offset the dilutive impact of stock options.

Finally, we will consider increasing our common dividend over time.

Speaker 3: Finally, we will consider increasing our common dividend over time.

As earnings continue to grow and our payout ratio on cash earnings approaches 60%.

Speaker 3: as earnings continue to grow and our payout ratio on cash earnings approaches 60%.

Turning to slide nine for the fourth quarter of 2021, adjusted EPS of $1 right.

Speaker 3: Turning to slide nine for the fourth quarter of 2021 adjusted EPS of $1.08 is up 26% from adjusted EPS of $0.86 last year.

Is up 26% from adjusted EPS of <unk> 86 last year.

Reported EPS of $1 11 includes a $7 $7 million after tax gain.

Speaker 3: Reported EPS of $1.11 includes a $7.7 million after-tax gain.

Relating to an earn out on the sale of personal capital to empower.

Speaker 3: relating to an earn-out on the sale of personal capital to Empower.

This amount is incremental to the $31 $4 million gain that was recorded.

Speaker 3: This amount is incremental to the $31.4 million gain that was recorded during the third quarter of 2020.

During the third quarter of 2020.

<unk> grew by four 5% during the fourth quarter driven by strong client investment returns and total net flows of $1 2 billion.

Speaker 3: AUM&A grew by 4.5% during the fourth quarter, driven by strong client investment returns and total net flows of $1.2 billion.

I want to point out the RSP season has started off strong.

Speaker 3: I want to point out the RSP season has started off strong.

We were pleased to report January 2022 investment fund net sales of $1 2 billion and.

Speaker 3: We were pleased to report January 2022 investment fund net sales of $1.2 billion and total net flows of $1.1 billion last week.

In total net flows of $1 $1 billion last week.

I'm also proud to announce that <unk> has once again been recognized as one of corporate Knights Global 100, most sustainable corporations.

Speaker 3: I'm also proud to announce that IGM has once again been recognized as one of Corporate Night's Global 100 Most Sustainable Corporations.

This is our third consecutive year of being a part of the top 100 in.

Speaker 3: This is our third consecutive year being a part of the top 100. And IGM Financial is ranked as the top rated capital markets and asset management company globally.

GM financial is ranked as the top rated capital markets and asset management companies globally.

And the top financial services firm in North America.

Speaker 3: and the top financial services firm in North America.

Turning to slide 10 markets were strong in Q4 with significant returns in North America, and Europe and stable overall returns in fixed income.

Speaker 3: Turning to slide 10, markets were strong in Q4 with significant returns in North America and Europe and stable overall returns in...

Overall <unk> average client investment returns were positive four 3% in the quarter and as I said 11, 9% for the full year 2021.

Speaker 3: Overall, IGM average client investment returns were positive 4.3% in the quarter, and as I said 11.9% for the full year 2021.

The new year has brought with it some market volatility not unexpected with most major equity indices and fixed income indices correcting for the month of January .

Speaker 3: The new year has brought with it some market volatility, not unexpected, with most major equity indices and fixed income indices correcting for the month of January .

Turning to slide 11 on the industry operating environment Q4 long term mutual fund net sales were $12 $1 billion for the industry overall and $5 9 billion for industry asset management peers.

Speaker 3: Turning to slide 11 on the industry operating environment, Q4 long-term mutual fund net sales were $12.1 billion for the industry overall and $5.9 billion for industry asset management peers.

2021 overall was an extraordinary year for the fund industry in terms of net sales and asset growth.

Speaker 3: 2021 overall was an extraordinary year for the fund industry in terms of net sales and as it grows.

Turning to slide 12 on <unk> results for the fourth quarter average M&A was up one 7% sequentially and adjusted EPS increased 26% compared to last year.

Speaker 3: Turning to slide 12 on IGM's results for the fourth quarter, average AUM&A was up 1.7% sequentially, and adjusted EPS increased 26% compared to last year.

Slide 13 demonstrates how adjusted net earnings from each and every one of our businesses.

Speaker 3: Slide 13 demonstrates how adjusted net earnings from each and every one of our businesses, IG Wealth, IPC, and McKenzie, along with our proportionate share of affiliates, Great West Life Co., China AMC, and Northleaf.

Well IPC and Mackenzie, along with our proportionate share of affiliates, great West Lifeco, China AMC in north leaf.

All increased meaningfully during both the fourth quarter and full year 2021.

Speaker 3: all increased meaningfully during both the fourth quarter and full year 2021.

Slide 14 outlines outlines Q4 and full year net flows for our operating companies.

Speaker 3: Slide 14 outlines Q4 and full year net flows for our operating company.

Each of IAG, IPC and Mackenzie reported strong net flows for the year and the fourth quarter.

Speaker 3: Each of IG, IPC, and McKinsey reported strong net flows for the year and the fourth quarter.

Within the institutional SMA category.

Speaker 3: Within the institutional SMA category, I'd note the $576 million of net redemption for Q4 was isolated to a single client.

Out of $576 million of net redemptions for Q4 was isolated to a single client.

And with that I will turn it over to Damon and then Barry to discuss <unk> wealth management and Mackenzie results.

Speaker 3: And with that, I will turn it over to Damon and then Barry to discuss IG Wealth Management and McKenzie's results.

Thank you James turning to slide 16, and <unk> wealth management's fourth quarter highlights we ended the quarter with AUM of $119 6 billion, an increase of four 9% during the quarter driven by strong Q4, net inflows of $1 billion in client investment returns of four 1%.

Speaker 4: Thank you, James. Turn to slide 16 in IG Wealth Management's fourth quarter highlights. We did the quarter with a way of $119.6 billion, an increase of 4.9% during the quarter, during by strong Q4 net inflows of $1 billion in client investment returns of 4.1%. We also experienced strong net sales into IGM products of $493 million in the fourth quarter and $2.2 billion for the full year.

We also experienced strong net sales into IGN products of $493 million in the fourth quarter and $2 2 billion for the full year.

We continue to make strides in both the high net worth and mass affluent market segment, where inflows from newly acquired clients over $500000 increased just shy of 50% during 2021.

Speaker 4: We continue to make strides in both the high net worth and mass affluent market segments, where inflows for newly acquired clients over $500,000 increased just shy of 50% during 2021.

<unk> had terrific results in the quarter and for the full year 2021, and underpinning. This success was our continued execution of our strategy and the investments we're making in the business.

Speaker 4: IG had terrific results in the quarter and for the full year 2021. And underpinning this success was our continued execution of our strategy and the investments we're making in the business.

During the fourth quarter, we launched a new digital adviser application to deliver tailored client investment proposals with integrated compliance management.

Speaker 4: During the fourth quarter, we launched a new digital advisor application to deliver tailored client investment proposals with integrated compliance management.

Making our advisers more competitive in the marketplace and helping us address the new client focus reform requirements I will touch on this in greater detail in the coming slides.

Speaker 4: making our advisors more competitive in the marketplace, and helping us address the new client focus reform requirements. I'll touch on this in greater detail in a coming slide. And we were very proud to be recognized as one of Canada's top 100 employers, which was based on several factors including work atmosphere, overall benefits, training, communications, and community involvement.

And we were very proud to be recognized as one of Canada's top 100 employers.

Which was based on several factors, including work atmosphere overall benefits training communications and community involvement.

Turning to slide 17.

You can see the record high results for the fourth quarter and full year 2021.

Speaker 4: You can see the record high results for the fourth quarter and full year 2021. Our strong momentum continued in January , where we had another record month with net inflows of $326 million and net sales into IGM managed products of $424 million.

Our strong momentum continued in January where we had another record month with net inflows of $326 million in net sales in the IGN managed products of $424 million.

January marked the 14th consecutive month of positive net inflows for <unk> and 13th consecutive months of positive net sales into IGN products.

Speaker 4: January marked the 14th consecutive month of positive net inflows for I.G. Wells and 13 consecutive months of positive net sales into I.G.M. products.

The 12 month trailing line chart on the right shows the continued upward trajectory in both net sales and net flow.

Speaker 4: The 12-month trailing line chart on the right shows a continued upward trajectory in both net sales and net flow.

Turning to slide 18.

Q4, 2021 record high gross inflows were up 17% year over year.

Speaker 4: Q4 2021 record high growth inflows were up 17% year over year. On the line chart, you'll see our trailing 12 month net flows rate has now reached 3.3%.

On the line chart Youll see our trailing 12 months net flows rate has now reached three 3%.

Our client net inflows of approximately $1 billion of broken down in more detail in the net flows table, where you can see significant increase in net sales in the IGN products, which were $493 million during the fourth quarter.

Speaker 4: Our client net inflows of approximately $1 billion are broken down in more detail in the Net Flows table, where you can see significant increase in net sales in the IGM products, which were $493 million during the fourth quarter.

Slide 19 demonstrates a very strong year in new client acquisition and in particular clients over $500000.

Speaker 4: Slide 19 demonstrates a very strong year in new client acquisition, and in particular, clients over $500,000.

We have $1 7 billion in gross inflows for newly acquired clients with over $500000, which represents 49% increase year over year and a 40% increase over the past five years on.

Speaker 4: We have $1.7 billion in gross inflows for newly acquired clients with over $500,000, which represents 49% increase year over year and a 400% increase over the past five years.

On the right hand chart you can see the trend of how we are executing on our increased focus on the mass affluent and high net worth segments relative to the mass market segment.

Speaker 4: On the right-hand chart, you can see the trend of how we are executing on our increased focus on the mass effluent and high net worth segments relative to the mass market segment.

Turning to slide 20.

Like last quarter, you will see significant improvements in advisor productivity for both our new advisors and more experienced advisor practices.

Speaker 4: Like last quarter, you'll see significant improvements in advisor productivity for both our new advisors and more experienced advisor practices.

Our investments over the past several years pay off and we continue to highlight some initiatives that we attribute to the increased productivity.

Speaker 4: We're seeing our investments over the past several years pay off, and we continue to highlight some initiatives that we attribute to the increased productivity.

Lastly on slide 21.

During the fourth quarter as the launch of a digital application cap Intel to deliver tailored quite investment proposals.

Speaker 4: Moving the fourth quarter is the launch of a digital application, Cap Intel, to deliver tailored client investment proposals.

Intel provides our advisors access to a powerful investment analysis and proposal tool.

Speaker 4: Cap Intel provides our advisors access to a powerful investment analysis and proposal tool.

Portfolio comparisons and product information and integrated with our Salesforce powered CRM to quickly and transparently deliver on demand analysis and generate complaint and compelling investment proposals to our client.

Speaker 4: portfolio comparisons and product information integrated with our Salesforce powered CRM to quickly and transparently deliver on-demand analysis and generate compliant and compelling investment proposals to our clients.

Intel also helps moderate your investment funds and equity holdings on an ongoing basis and notified our advisors through their CRM any significant changes to the investments that should be redeemed for example material changes reports change in risk category fund mergers and corporate actions.

Speaker 4: Cap Intel also helps monitor investment funds and equity holdings on an ongoing basis and notify their advisors through their CRM of any significant changes to the investments that should be reviewed. For example, material changes reports, change in risk category, fund mergers and corporate options.

We're on the leading edge with this technology solution.

Tap Intel integrates with our leading adviser tools, enabling our advisors to efficiently address the expanded low year client know your product and suitability requirements under the new client focused reforms and most importantly spend more time with their clients focused on their financial planning needs, which we believe will only accelerate our ability to drive new client.

Speaker 4: Cap Intel integrates with our leading advisor tools, enabling our advisors to efficiently address the expanded Know Your Client, Know Your Product and suitability requirements under the new client focus performance. And most importantly, spend more time with their clients focused on their financial planning needs, which we believe will only accelerate our ability to drive new client acquisition, increase share of wallet and advisor recruitment. Now I'll turn over to Barry Mack and I need to discuss Mackenzie's results.

Acquisition increase share of wallet and advisor recruitment.

Now I'll turn it over to Barry Mcinerney discussed Mackenzie result.

Thank you Damon and good morning, everyone.

I will take us to slide 23 to review Mackenzie is Q4 results.

Speaker 3: I'll take us to slide 23 to review Mackenzie's Q4 results.

Total AUM as of December 31, 2021 reached a record high of $210 3 billion up three 4% during the quarter with continued strong net sales and investment returns.

Speaker 3: Total AUM as of December 31, 2021 reached a record high of $210.3 billion, up 3.4% during the quarter with continued strong net sales and investment returns.

Fourth quarter investment fund net sales of $750 7 million for the second best on record for.

Speaker 3: Fourth quarter investment fund net sales of $757 million were the second best on record.

For the full year 2021, Mackenzie recorded a record high five $4 billion investment fund net sales.

Speaker 3: For the full year 2021, McKinsey reported a record high $5.4 billion investment fund that

Q4 marked our 20 <unk> consecutive quarter of positive retail investment fund net sales.

Speaker 3: Q4 marked our 21st consecutive quarter of positive retail investment fund at $2.

And for 2022, we look forward to delivering continued strong results building on recent momentum.

Speaker 3: And for 2022, we look forward to delivering continued strong results building on recent economy through 2020.

We have entered into a new long term strategic partnership with Prime Erika. We're Mackenzie will serve as one of two exclusive investment solution providers to this fast growing Canadian distributor.

Speaker 3: We have entered into a new long-term strategic partnership with Prime America, where McKinsey will serve as one of two exclusive investment solution providers to this fast-growing Canadian distributor.

As part of the partnership Mackenzie plans to launch a new suite of funds in the coming months that will be designed to address the specific needs of primerica advisors and their clients.

Speaker 3: As part of the partnership, McKinsey plans to launch a new suite of funds in the coming months that will be designed to address the specific needs of Prime America advisors and their clients.

Late last month, we introduced the first ever retail interval fund in Canada, combining Mackenzie, leading retail product expertise with northeast robust private credit capabilities.

Speaker 3: Late last month, we introduced the first ever retail interval fund in Canada, combining Mackenzie's leading retail product expertise with NorthLeaf's robust private credit capabilities. I'll expand on this.

I'll expand on this on our coming slide.

Lastly in early January Mackenzie announced the acquisition of Power Corporation of Kansas, 13, 9% equity interest in China AMC.

Speaker 3: Lastly, in early January , McKinsey announced the acquisition of Power Corporation of Kansas' 13.9% equity interest in China AMC.

We believe this investment enhances <unk> growth profile and provides leading China asset management industry exposure within a public vehicle the.

Speaker 3: We believe this investment enhances IGM's growth profile and provides leading China asset management industry exposure within a public vehicle.

Transaction will also simplify IGN and the power group and strengthen distribution opportunities for Mackenzie in China as we become recognized as one of the leading foreign investors in the China asset management industry.

Speaker 3: The transaction will also simplify IGM and the power group and strengthen distribution opportunities for McKinsey and China as we become recognized as one of the leading foreign investors in the China asset management industry.

Turning to slide 24, where we outline a trended history of Mackenzie as net flows.

Speaker 3: Turn to slide 24 where we outline a trended history of Mackenzie's net flows.

2021 was a year that will no doubt go down in the record books as a unique and special period and exchanging investment fund industry.

Speaker 3: 2021 was a year that will no doubt go down in the record books as a unique and special period in the Canadian investment fund industry.

I already spoke to Mackenzie is record breaking investment fund net sales last year.

Speaker 3: I already spoke to McKenzie's Record Breaking Investments Fund Net Fills last year.

Gross sales 2021 was also an all time high for Mackenzie when we exclude historical sales into the cloud just group of funds, which was sold to Canada life in the very at the very end of 2020.

Speaker 3: And in terms of gross sales, 2021 was also an all-time high for Mackenzie when we exclude historical sales into the Quadris group of funds which was sold to Candlelight at the very end of 2020.

And as you can see in the Middle chart on the left Mackenzie is fourth quarter investment fund net flows of $757 million also standout compared to past years. It was our second best Q4 on record second only to the extraordinary fourth quarter of 2020.

Speaker 3: And as you can see in the middle chart on the left, McKinsey's fourth quarter investment fund net flows of $757 million also stand out compared to past years.

Speaker 3: It was our second best Q4 on record, second only to the extraordinary fourth quarter of 2020.

In January Mackenzie reported solid investment fund net inflows of $817 million, which includes $675 million of inflows from wealth simple during the March excluding these amounts investment fund net sales of $142 million were still the second best January in our history.

Speaker 3: In January , McKinsey reported solid investment fund net inflows of $817 million, which includes $675 million of inflows from Wealthsimple during the month.

Speaker 3: Excluding these amounts, investment fund net sales of $142 million were still the second best January in our history.

Slide 25 summarizes Mackenzie as Q4 2021 operating results.

Speaker 3: Flight 25 summarizes McKinsey's Q4 2021 operating results.

Retail investment fund net flows of $653 million for the second best on record and well above the levels seen in 2019.

Speaker 3: Retail investment fund net flows of $653 million were the second best on record and are well above the level seen in 2019.

The Kansas continues to gain market share as demonstrated by our 9% long term investment fund net sales rate as of December 31.

Speaker 3: Kennedy continues to gain market share as demonstrated by our 9% long-term investment fund net sales rate as at December 31st.

Within institutional SMA net sales, we had one client redeemed $667 million during Q2 2021.

Speaker 3: within institutional SMA net sales. We had one client redeem 667 million during Q2 2021. I remind you that this business is lumpy and we had 2 billion of net inflows during 2020 and overall 300 million of net redemptions during 2020.

Mind, you that this business is lumpy and we have we had $2 billion of net inflows during 2020 and overall $300 million of net redemptions during 2021.

And 51% and Mackenzie AUM rated by Morningstar were in four or five star funds in line with last quarter and 15 of our top 20 mutual funds were rated four or five stars for series F.

Speaker 3: And 51% of Mackenzie's AUM rated by Morningstar were in 4 or 5 star funds in line with last quarter and 15 of our top 20 mutual funds were rated 4 or 5 stars for series.

Slide 26 shows our retail mutual fund AUM investment performance and net sales across our investment boutiques are growth oriented teams global equity boutiques and fixed income group continue to deliver strong relative performance.

Speaker 3: Slide 26 shows our retail mutual fund AUM, investment performance, and net sales across our investment boutique.

Speaker 3: Our growth-oriented teams, global equity boutiques, and fixed income group continue to deliver strong relative performance.

As well the Green ship boutiques flagship fund achieved its three year track record during the fourth quarter and earned his first five star rating.

Speaker 3: As well, the Greenship Boutique's flagship fund achieved its three-year track record during the fourth quarter and earned its first five-star rating.

Our strong Q4, 2021 retail net sales were spread across a number of investment boutiques, including the growth bluewater fixed income and sustainable teams.

Speaker 3: Our strong Q4 2021 retail net sales were spread across a number of investment boutiques, including the growth, blue water, fixed income and sustainable team.

Looking ahead to 2022, we've seen products across a variety of investment boutiques, attracting flows with our managed solutions growth Bluewater Green chip and global equity income change generating strong net inflows during the month of January .

Speaker 3: Looking ahead to 2022, we've seen products across a variety of investment boutiques attracting flows with our managed solutions, growth, blue water, green chip, and global equity income teams generating strong net inflows during the month of January .

Also during January we expanded our product shelf with two new funds managed by the Bluewater chain.

Speaker 3: Also during January , we expanded our product shelf with two new funds managed by the Blue Water team.

Slide 27 highlights the growth catalyst, we identified at Mackenzie either reshaping the global asset management industry like to spend a moment recapping select highlights in 2021 in these important areas.

Speaker 3: Slide 27 highlights the growth catalyst we identified at McKinsey that are reshaping the global asset management industry. I'd like to spend a moment recapping select highlights in 2021 in these important areas.

Continuing to invest in and expand our sustainable investing capabilities, which attracted net inflows of over $1 billion in the year.

Speaker 3: We continue to invest in and expand our sustainable investing capabilities, which attracted net inflows of over $1 billion a year.

Mackenzie, nor fleece interval fund I spoke to earlier is the latest addition to our growing suite of accessible alternatives for retail financial advisors and their clients.

Speaker 3: The new McKenzie-Norfleet Interval Fund I spoke to earlier is the latest addition to our growing suite of accessible alternatives for retail financial advisors and their clients.

While offering memorandum or OEM products are typically only available to accredited investors. This new 81, why don't you non redeemable investment funds will not have such restrictions.

Speaker 3: While offering memorandum or OM products are typically only available to accredited investors, this new 81-102 non-redeemable investment fund will not have such restrictions.

This flexibility combined with a relatively low minimum investment requirement.

Speaker 3: This flexibility, combined with a relatively low minimum investment requirement, delivers unprecedented access for Canadian retail investors to institutional private credit investment.

Rivers unprecedented access for Canadian retail investors to institutional private credit investments a major step forward in our goal to them democratize private markets for retail investors and Canada.

Speaker 3: major step forward in our goal to democratize private markets for retail investors in Canada.

Interval funds have been part of the U S market for quite some time. The recent demand for illiquid investment strategies has driven an interval fund assets in the U S to grow by over six fold since 2014.

Speaker 3: Interval funds have been part of the US market for quite some time, though recent demand for illiquid investment strategies has driven interval fund assets in the US to grow by over six fold since 2014.

And finally, our ETF business continues to grow at a rapid pace and is the sixth largest in Canada in terms of AUM.

Speaker 3: And finally, our ETF business continues to grow at a rapid pace and is the sixth largest in Canada in terms of AU.

Continuing on slide 28, the growth from the Chinese mutual fund industry has continued with long term mutual funds growing 34% over last 12 months and 10, 4% in the fourth quarter net sales drove most of this growth with a new <unk>.

Speaker 3: Continuing on slide 28, the growth in the Chinese mutual fund industry has continued with long-term mutual funds growing 34% over the last 12 months and 10.4% in the fourth quarter.

Speaker 3: Net sales drove most of this growth with a new, rather with a net sales rate of roughly 25% over the past year.

With our net sales rate of roughly 25% over the past year you can see net sales in Q4 alone for one for one two trillion renminbi.

Speaker 3: see net sales in Q4 alone for 1.2 trillion...

China AMC as a consistent top contender across all major asset classes and ranked second overall in terms of long term mutual fund assets under management in China.

Speaker 3: China AMC is a consistent top contender across all major asset classes and ranks second overall in terms of long-term mutual fund assets under management in China.

Lastly, slide 29 highlights Norfleet capital partners 19, 5 billion in assets under management across their private equity private credit and infrastructure offerings.

Speaker 3: Lastly, slide 29 highlights Northleaf Capital Partners' $19.5 billion in assets under management across their private equity, private credit, and infrastructure offers.

2021 northeast grew AUM by 34% driven by strong fundraising of $1 2 billion during the fourth quarter and $5 5 billion for the year.

Speaker 3: 2021, Northeast grew AUM by 34%, driven by strong fundraising of $1.2 billion during the fourth quarter and $5.5 billion for the year.

I'll now turn the call over to Luke.

Great. Thanks, Greg Good morning, everybody.

Moving to page 31, I'd just highlight here that M&A increased by four 8% of the period driven by investment returns and strong net sales activity. We've circled the full year overall net sales rate and investment which are great. I'd also note that M&A declined by about 2% in January to 277 billion and were up slightly from this in February .

Speaker 4: We're going to page 31. I just highlight here that AUM&A increased by 4.8% in the period driven by investment returns and strong net sales activity. We've circled the full year overall net sales rate and investment return rate. I'd also note that AUM&A declined by about 2% in January to $270.7 billion and we're up slightly from this in February . Where we are right now in average assets in Q1, we're looking pretty close to Q4.

We are right now in average assets in Q1 were looking pretty close to Q4.

Going to page 32, I just remarked that was a very clean quarter on the right you can see the consolidated gross and net fee rates are stable at 124 basis points, and 87 basis points, respectively, and unit costs as well as stable and obviously impacted by seasonality in Q4.

Speaker 4: Going to page 32, I just remarked it was a very clean quarter. On the right you can see that consolidated gross and net fee rates are stable at 124 basis points and 87 basis points respectively. And unit costs as well are stable and obviously impacted by seasonality in Q4. I'd also remind that the acquisition of GLC occurred December 31st of 2020 and that's the reason for the change of these rates in Q1.

I'd also remind that the acquisition of GLC occurred December 31, 2020, and Thats. The reason for the change in these rates in Q1.

Slide 33 has jumped consolidated statement of earnings we have three highlights on this slide.

Speaker 4: Slide 33 has IGEM's consolidated statement of earnings. We have three highlights on this slide. First, we're pleased to have come in with operations and support and business development expenses about $6 million better than our previous guidance. We've highlighted this in the first bullet point that these four-year expenses were up 2.2% relative to last year and that compares to earlier guidance of 2.75%.

First.

We're pleased to have come in with operations and support and business development expenses of about $6 million better than our previous guidance.

We've highlighted this in the first bullet point that these full year expenses were up two 2% relative to last year and that compares to earlier guidance of 275%.

Second we've highlighted two that we had an extra 800000.

Speaker 4: Second, we've highlighted in point two that we had an extra 800,000 average diluted shares outstanding as delusions from in-the-money options increased due to share price increases in the period. As James mentioned, we were pleased to announce our normal course issuer bid yesterday, which we believe is a very good use of capital at this time and will be accreted to earnings and cash flow.

Average diluted shares outstanding as dilutions from in the money options increased due to share price increases in the period as James mentioned, we are pleased to announce our normal course issuer bid yesterday, which we believe is a very good use of capital at this time and will be accretive to earnings and cash flow.

Lastly, our last 12 month trailing dividend payout rate is currently 67% and as we indicated last quarter, we would consider dividend increases at levels close to 60%.

Speaker 4: Lastly, our last 12 month trailing dividend payout rate is currently 67%. And as we indicated last quarter, we would consider dividend increases at levels closer to 60%.

What are the page 34, you can see <unk> rates and expense rates as basis points that their respective drivers on the right.

Speaker 4: But on page 34, you can see IG Wealth's fee rates and expense rates as basis points of their respective drivers on the right.

I'll, let remark on this page is the change in advisory fees in Q4 reflected a much more normal level at eight basis points decline and was driven by having a greater share of high net worth clients on the business.

Speaker 4: Our lead remark on this page is the change in advisory fees in Q4 reflected a much more normal level at 0.8 basis points decline and was driven by having a greater share of high net worth clientele in the business.

I'd remind that in Q3, the change was a bit higher as a result of the average client account balances increasing significantly by 4% in Q3 relative to Q2, which made many clients eligible for lower rates on their fee schedules going forward, we'd expect about five basis points to glide per quarter. If we keep on bringing on high net worth clientele at the rate that.

Speaker 4: I'd remind that in Q3, the change was a bit higher as a result of the average client account balance is increasing significantly by 4% in Q3 relative to Q2, which made many clients eligible for lower rates on their fee schedules. Going forward, we'd expect about 0.5 basis points to glide per quarter if we keep on bringing on high net worth clientele at the rate that we have.

We have been.

As you move to page three slide you can see <unk> income statement.

Speaker 4: As you move to page 35, you can see I.G. Wealth income statement. Debt earnings increased by 20% relative to last year. The only item I want to mark on here is you'll see a pull out on other financial planning revenues and related other product commissions on the right.

Net earnings increased by 20% relative to last year, the only item I want your mark on here is you'll see I'll pull out on other financial planning revenues and related other product commissions on the right.

Youll remember that these revenues consist large net revenue from our mortgage and insurance product line.

Speaker 4: You'll remember that these revenues consist largely of revenue from our mortgage and insurance product line. And we have a pull-up table that you can see. I just note that when you look at this revenue line, it was down relative to Q3 and last year. And you can see in the table that was as a result of lower mortgage income.

Pool table that you can see.

I just note that when you look at this revenue line. It was down relative to Q3 and last year and you can see in the table that was as a result of lower mortgage income.

As you look to the disclosure of mortgage income within our MD&A, you'll see that this was a result of lower gains on sale and thereby adjustments and these two items were impacted by interest rate increases in the period.

Speaker 4: As you look at the disclosure of mortgage income within our MD&A, you'll see that this was a result of lower gains on sale and fair buy adjustments and these two items were impacted by interest rate increases in the period. This was non-recurring and was worth about $2 million in the quarter versus Q3. When you look at the table, you also see insurance and other revenues. That's $32.9 million or up nicely in the quarter from last year as are the associated product commission.

This was nonrecurring was worth about 2 million in the quarter versus Q3.

When you look at the table you also see insurance and other revenues of $32 9 million are up nicely in the quarter from last year as are the associated product commissions.

Would it be 36, we wanted to highlight that we've made some disclosure enhancements in the period to profile Mackenzie sub advisory relationship with Canada life.

Speaker 4: When it page 36, we wanted to highlight that we've made some disclosure enhancements in the period to profile Mackenzie's sub advisory relationship with candlelight.

On the chart on the left you can see that we've segmented the institutional SMA line between the $52 $8 billion candlelight relationship and a $7 9 billion and other institutional assets.

Speaker 4: On the chart on the left, you can see that we've segmented the institutional SMA line between the $52.8 billion candlelight relationship and the $7.9 billion in other institutional assets.

Beside the chart, we've indicated the key metrics upon which we assess performance of these respective asset categories.

Speaker 4: Beside the chart, we've indicated the key metrics upon which we assess performance of these respective asset categories.

For a sub advised relationships to <unk> wealth management firms and our sub advisory relationship with Ken life, We measure Mackenzie share of their AUM, which you can see at the bottom our 69, 9% and 49, 2% respectively.

Speaker 4: For a subdivided relationship to IGM's wealth management firms and our subdivided relationship to Candlelight, we measure McKinsey's share of their AUM, which you can see at the bottom are 69.9% and 49.2% respectively.

On the right. We've included within our supplemental disclosures the assets under management within catalyst individual and group channels.

Speaker 4: On the right, we've included within our supplemental disclosures the assets under management within Canada Life's individual and group channels. Great Wolf LifeCo has made disclosure enhancements regularly and they publish these disclosures quarterly along with the net sales activity to these channels. I'd also note that in these disclosures, we've also identified the revenue associated with this Canada Life relationship.

What <unk> has done has made disclosure enhancements regularly and they publish these disclosures quarterly along with the net sales activity to these channels.

I would also note that in these disclosures. We've also identified the revenue associated with this candidate relationship.

I'd also note. We are very pleased the relationship was still advised assets, increasing 11, 9% since the GLC acquisition and a slight increase in Mackenzie share of assets.

Speaker 4: I'd also note we're very pleased with the relationship with some advised assets increasing 11.9% since the GLC acquisition and a slight increase in McKinsey's share of assets.

Moving to page 37, you can see Mackenzie is fee rates by client type and you can see that we've reflected the enhanced disclosure of the candidate relationship here.

Speaker 4: Moving to page 37, you can see Mackenzie's fee rates by client type, and you can see that we've reflected the enhanced disclosure of the candlelight relationship here.

I'd note that weighed average fees are very stable and when you look at the top right you can see on the third party, which is substantially retail.

Speaker 4: I note that weight average fees are very stable and when you look at the top right, you can see on the third party, which is substantially retail, that fees are up very slightly in the quarter because of the strength in retail.

Fees were up very slightly in the quarter because of the strength in retail.

Page 38 Mackenzie statement of income I'd, just highlight that Mackenzie as net earnings were up 60% from last year.

Speaker 4: On page 38, McKinsey's Statement of Income, I just highlight that McKinsey's net earnings are up 60% from last year. Most of this improvement is as a result of the significant organic growth in the retail business. Average assets in retail are 25% year over year, and this reflects the net sales activity as well as investment returns in the year.

Most of this improvement is as a result of the significant organic growth in the retail business average assets and retail are 25% year over year.

This reflects the net sales activity as well as investment returns in the year.

You can see here that revenues are up 25, 5% just like the increase in the retail business and due to the operating leverage and financial leverage inherent business, 25% increase in revenue translates into 60% growth in earnings.

Speaker 4: You can see here that revenues are up 25.5% just like the increase in the retail business and due to the operating leverage and financial leverage inherited in the business, 25% increase in revenue translates into 60% growth in earnings.

Moving to page 39, we.

Speaker 4: Moving to page 39. We've also enhanced our disclosures on China's asset management this quarter, with quarterly reporting of China AMC's AUM broken down by component. You saw earlier from Barry the significant industry net sales activity into long-term funds in China in the quarter. China MC had a very strong quarter and you can see her long-term mutual fund assets increased by 14% in the quarter as a result of the strong net sales activity and market share gains.

We've also enhanced our disclosures I'm trying to ask the management this quarter with quarterly reporting of China, Amc's AUM broken down by component you.

You saw earlier from Barry the significant industry net sales activity into long term funds in China in the quarter.

China and she had a very strong quarter and you can see her long term mutual fund assets increased by 14% in the quarter as a result of the strong net sales activity and market share gains.

On the right, we present IGN share of Chinese see earnings.

Speaker 4: On the right, we present IGM's share of China EMC earnings.

We'd highlight that on the strength of the growth in long term financing and.

Speaker 4: We'd highlight that on the strength of the growth in long-term finance assets and the operating leverage in the business, China MC's net earnings, excluding one-time unfavorable tax adjustment, increased by 24% from Q3's level to $21 million.

And the operating leverage in the business, China six net earnings excluding onetime unfavorable tax adjustment increased by 24% from Q3's level to $21 million.

We've called out this 4 million tax adjustment on that.

Speaker 4: We've called out this $4 million tax adjustment on the chart on the right. And I would remind normalizing this, China entities' earnings are up 24% in the quarter and 80% in the last year.

On the chart on the right and I would remind normalizing to the China <unk> earnings are up 24% quarter and 80% in the last year.

But to slide 40, we highlight the earnings growth by company and we highlight the relevant values of these strategic investments.

Speaker 4: We're just like 40. We highlight the earnings growth by company and we highlight the relevant values of the strategic investment.

We've highlighted a few of the items that are affected by the acquisition of China and see from our parent and the partial disposition of our stake in great West Lifeco to our parent company and those transactions are on track to close in the second quarter.

Speaker 4: We've highlighted a few of the items that are affected by the acquisition of China MC from our parent and the partial disposition of our stake in Great West Life Co. to our parent company and those transactions are on track to close in the second quarter. Under Wealthsimple and Portage, you'll see that we have a mark of 1.291 billion on these investments.

Andrew will simple in Portage Youll see that we have a mark of one point to 91 billion on these investments.

Assess the valuable simple at yearend and we've kept the Merck consistent with the value achieved in our May 2021 fund raising.

Speaker 4: We've assessed the value while simple at year end, and we've kept the mark consistent with the value achieved in the May 2021 fundraising.

Yes.

In the appendix we've provided the usual disclosures on will simply business and I. Just note. The company has been performing very well.

Speaker 4: In the appendix, we've provided the usual disclosures on Wellsimple's business. And I just note the company's been performing very well. The AUM is up over 50% since last fundraising, and the number of clients is also up 50% since the last fundraising.

AUM is up over 50% since last fund raising and the number of clients is also up 50% since the last fundraising.

Moving to page 41, you can see the sum of the parts of your of IGN.

Speaker 4: Moving to page 41, you can see the sum of the parts view of IGM.

The January 31, 2022 share price and deducting off what we view as conservative values for our strategic investments implies a p/e on IGN Mackenzie of six four times.

Speaker 4: Using the January 31st, 2022 share price and deducting off what we view as conservative values for our strategic investments implies a P.E. on I.G. and McKinsey of 6.4 times.

Circle these items and rate below the $6 four we've put.

Speaker 4: We've circled these items and right below the 6.4 we've put these multiples compared to the average multiples for global wealth and asset management peers of 14.3 times and 12.1 times respectively.

These multiples compared to the average multiples for global wealth and asset management peers up for $14 three times and 12, one times respectively.

We see considerable value in IGN shares, particularly in relation to the strong earnings growth put on and the outlook for future growth and as mentioned, we're very pleased to announce today in CIB yesterday.

Speaker 4: We see considerable value in IGM shares, particularly in relation to the strong earnings growth put on and the outlook for future growth. And as mentioned, we're very pleased to have announced our NCIB yesterday.

Moving to page 42, you can see guidance on our operations and support and business development expenses in 2022.

Speaker 4: We're going to page 42. You can see guidance on our operations and support and business development expenses in 2022.

One highlight again that we came in slightly better than our guidance in 2021.

Speaker 4: Point one highlights again that we came in slightly better than our guidance in 2021. Under point two, you can see we're going to 3% increase to fund growth initiatives, plus up to 2% for post pandemic normalization activities.

And your 0.2, you can see we're guiding to 3% increase to fund growth initiatives plus up to 2% for post pandemic normalization activities.

We have detailed in the sub bullet type of activity. This includes and winning some conferences travel and entertainment and returned to office expenses like.

Speaker 4: We've detailed in the sub-bullet the type of activities that this includes and would include conferences, travel and entertainment, and return to office expenses. Like each of you, we're going to navigate the year and actively manage these activities. We just want to provide you with some context on the maximum level that could come on during the period.

Each of you we're going to navigate the year and actively manage these activities. We just want to provide you with some context on the maximum level that could come on during the period.

<unk> three and four outlined the growth initiatives, we're investing in IGN Mackenzie within the 3%.

Speaker 4: Points three and four outline the growth initiatives we're investing in IJ and Mackenzie within the 3%. Before commenting on this, I did want to acknowledge that like everybody else, we're not immune to inflationary pressures in many parts of our business. I note that we've managed this inflation through efficiencies in our operations. We also have slightly lower pension expense in the period.

Before commenting on this I did want to acknowledge that like everybody else, we're not immune to inflationary pressures in many parts of our business.

Note that we manage this inflation through efficiencies in our operations. We also have slightly lower pension expense in the period.

This 3% is entirely growth initiatives to drive revenues and includes many items that bring clear incremental near term revenues like to set up a multiyear product and distribution relationship with American from Mackenzie and like investments in advanced financial planning capabilities at IAG.

Speaker 4: This 3% is entirely growth initiatives to drive revenues and includes many items that bring clear incremental near-term revenues like the setup of our multi-year product and distribution relationship with Primerica for McKinsey and like investments in advanced financial planning capabilities at IG.

And to reiterate as Barry said, we're very excited for our partnership with Primerica distributor around 16 billion of mutual funds and your business has been growing very nicely.

Speaker 4: I reiterate, as Barry said, we're very excited for the partnership with Primerica. They distributed around $16 billion in mutual funds and their business has been growing very nicely.

In the bottom half of the page we provide the expense guidance by line and by company you would make a few points.

Speaker 4: In the bottom half of the page, we provide the expense guidance by line and by company. Here I make a few points.

First we've indicated that retail wholesale and commissions within Mackenzie business development line are anchored to $2 75 billion of retail net sales and we provide the sensitivity for every $1 billion change in net sales and you can see further information on this in the appendix.

Speaker 4: First, we've indicated that retail wholesaling commissions within McKinsey's business development line are anchored to $2.75 billion in retail net sales. And we provide the sensitivity for every $1 billion change in net sales, and you can see further information on this in the appendix.

This $2 seven 5 billion of mutual fund net sales would be a 5% net sales rate, which we believe is conservative and we would expect in any circumstance to continue to gain noticeable market share in the period.

Speaker 4: This $2.75 billion in mutual fund net sales would be a 5% net sales rate, which we believe is conservative, and we would expect in any circumstance to continue to gain noticeable market share in the period.

Second in the case of IPC most of the increase relates to amortization and other costs related to the purchases of advisor practices that wed expect to do in the period should these purchases occur they come with earnings accretion right away and you'll be able to see amortization of these prospective purchases within our disclosures.

Speaker 4: Second, in the case of IPC, most of the increase relates to amortization and other costs related to purchases of advisor practices that we'd expect to do in the period. Should these purchases occur, they come with earnings accretion right away and you'll be able to see amortization of these prospective purchases within our disclosures.

The last comment I'd make is when it comes to the travel and entertainment and conference expenses that may occur in the period. This would be in the business development lines.

Speaker 4: The last comment I make is when it comes to the travel and entertainment and conference expenses that may occur in the period, this would be in the business development lines. That concludes my comment. I will now open it up.

That concludes my comments, we'll open it up for a question Gerald.

Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request. If you are using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.

Speaker 1: Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any

Speaker 1: To withdraw your question, please press star, then two. We'll pause for a moment as callers join the queue.

We will pause for a moment as callers join the queue.

Our first question comes from Gary Ho of <unk> capital markets. Please go ahead.

Speaker 1: Our first question comes from Gary Ho of Desjardins Capital Markets. Please go ahead.

Great Thanks, and good morning.

Speaker 5: Great, thanks and good morning. Just the first question, not sure if it's for Damon or Luke. Just on the advisory fees, 101.8 basis point, that's down 3.2 basis point year over year.

Just the first question not sure if it's for Damon or Luke just on the advisory fees.

101, eight basis point, that's down 3.2 basis point year over year, and you're guiding to I think half a basis point decline per quarter. I know you are acquiring high net worth clients with lower fees.

Speaker 5: and you're guiding to, I think half a basis point decline per quarter. I know you're acquiring high net worth clients with lower fees. That transition is still happening.

That transition is still happening. So when you look at the gross sales that came through in Q4 can you give us an indicator of kind of what those advisory fees right will be just wanted to see kind of longer term, where where that could trend.

Speaker 5: So when you look at the gross sales that came through in Q4.

Speaker 5: Can you give us an indicator of kind of what those advisory fees rate will be? I just want to see kind of longer term where that could trend.

Yeah, sure Hi, curious Luke I'll take that one yes.

Speaker 4: Yeah, sure. Hi, Gary. It's Luke. I'll take that one. After the 0.5 basis points, the two factors is really bring on clients who have lower fee rates in the high net worth categories. And you can see the slide that Damon presented showing the success we've had there. The other driver is going to be investment returns, like you saw in Q3, that as client account balances rise, that we have fee schedules for every client. And every single day, people fall into the relevant categories.

So the 0.5 basis points to two factors is really bring on clients, who have lower fee rates.

In the high net worth categories and you can see the slide that BMO presented showing the success. We've had there. The other driver is going to be investment returns like you saw in Q3 that as client account balances rise that we have fee schedules for every client in every single day people, let people fall into the relevant categories.

0.5 basis points, a quarter is our best outlook for 2022, and we will expect attract track there and keep you update every single quarter on how we're doing.

Speaker 4: So point five basis points a quarter is our best outlook for 2022. And we'll expect to track there and keep you updated every single quarter on how we're doing.

But can you provide what the Q4 the new <unk>.

Speaker 5: Can you provide the queue for the new growth sales that you onboarded generated?

<unk> sales.

<unk> on boarded them.

Generate it.

I don't have that handy, Gary and again, it's a separate theory for each and every client based upon on where their asset levels are and those rates change daily. So it's not as simple as saying we brought these clients on an here's here's the fees that they attracted but we will give guidance on the weighted average and with the extent to which we're hiring.

Speaker 4: I don't have that handy, Gary. Again, it's a separate fee rate for each and every client based upon where their asset levels are, and those rates change daily. It's not as simple as saying we brought these clients on and here's the fees that they attracted, but we will give guidance on the weighted average. With the extent to which we're acquiring Hine worth right now, it's about 0.5 basis points of what we'd expect.

Acquiring high net worth right now it's about 25 basis points of what is what wed expect in terms of quarterly change.

Got it and then look why have you hear just unexposed guidance here.

Speaker 5: And then Luke, while I have you here, just on the expense guidance here, particularly the business dev expense, and you referenced slide 45 in the appendix.

The Biz Dev expense and you referenced kind of slide 45 in the appendix.

And that's very helpful. So can you explain kind of the drivers a bit more is it more gross sales or net sales.

Speaker 5: And that's very helpful. So can you explain kind of the drivers a bit more? Is it more gross sales or net sales? You know, when I compare the slide versus last year's sensitivity, it just seems like the correlation in terms of percentages at least has been magnified a little bit. Meaning, you know, lower growth drives a higher biz dev expense. I was under the impression that these hurdles would reset higher in 2022.

When I compare the slide versus last year sensitivity. It seems like the correlation in terms of percentages at least has been magnified a little bit.

Meaning lower growth drives a higher biz Dev expense.

I was under the impression that these hurdles.

Is that higher in 'twenty two.

Great question, Greg So turning to page 45, so as Barry highlighted we raise the bar every single year on the wholesale and commission and wholesale and commissions as a majority of this line item, but not yet, but it's a very small majority of the line.

Speaker 4: Great question, Greg. So yeah, turning to page 45. So as Barry highlighted, we raise the bar every single year on the Wholesale Land Commission and Wholesale Land Commission is a majority of this line item, but it's a very small majority of the line. The other thing that we've done is this line is more variable to net sales as opposed to gross.

The other thing that we've done is this line is more variable to.

Net sales as opposed to growth.

So we've given those sensitivities there I'd also highlight when it comes to those kind of post pandemic transition cost like travel and entertainment conferences et cetera, they're in this line as well so what youre seeing here with our guidance.

Speaker 4: And so we've given those sensitivities there. I'd also highlight, when it comes to those kind of post-pandemic transition costs, like travel and entertainment, conferences, et cetera, they're in this line as well. So what you're seeing here with our guidance,

Sales commissions has come down we've given the sensitivity.

Speaker 4: Sales commissions has come down. We've given the sensitivity of the sales commissions to different sales levels. And we do have the travel and entertainment and conference costs coming in. And as mentioned, we're gonna navigate the year and we've given a maximum that may come in as we navigate the pandemic.

Of those sales commissions to different as sales levels and we do have the travel and entertainment and conference costs coming in and as mentioned, we're going to navigate the year and we've given them maximum that may come in.

As we navigate the pandemic.

So look up here pretty face that correctly, if I look at that chart. The middle bar that you have although the $2 5 billion net sales is lower than the three eight that should be in and of itself a lower comp number but offsetting that is your travel and entertainment expectations for.

Speaker 5: So Luke, if I paraphrase that correctly, if I look at that chart, the middle bar that you have, although the 2.75 billion net sales is lower than the 3.8, that should be in and of itself a lower comp number. By offsetting that is your travel and entertainment expectations for the year. That's why it's right. Exactly. Exactly, Gary. The whole thing commissions has come down and there's other costs post-pandemic related that have come up. Exactly.

For the year, that's why exactly exactly Gary the wholesale commissions have come down and Theres other costs post pandemic related that have come up exactly.

Okay, and then I got it.

Expenses may not be incurred but we did want to give guidance of the maximum debt that we might incur as we navigate the pandemic.

Speaker 4: Okay, and as I mentioned, those expenses may not be incurred, but we did want to give guidance to the maximum that we might incur as we navigate the pandemic.

Okay. That's helpful. And then maybe just one more question from me James High level.

Speaker 5: Okay, that's helpful. And then maybe just one more question for me. James, high level on your comments on earnings growth, given my last two questions, just some fee compression on the advisory side and then you have the expense growth at 5%, if markets kind of hum long where we are, kind of no significant gains like last year, where are you most optimistic about driving that earnings higher?

On your comments on earnings earnings growth.

Given my last two questions just some.

Fee compression on the advisory side, and then you have to expense growth of 5% if markets kind of harm long, where we are kind of no significant gains like last year, where are you most optimistic about driving that earnings higher.

Yes, Thanks Kerry.

As I sit here today.

Speaker 3: You know, as I sit here today, I'm quite positive on the year. I believe we're going to have a strong year.

<unk> positive on the year I believe we're going to have a strong year.

And January talents in January is off to a great start isn't it with $1 1 billion in inflows so.

Speaker 3: And January counts and January is off to a great start, isn't it, with $1.1 billion in flows. So my expectation would be for IG Wealth to...

My expectation would be for well too.

Not just kind of hold its own from here, but in fact to strengthen from here in terms in terms of net flows.

Speaker 3: not just kind of hold its own from here, but in fact to strengthen from here in terms of net flows. On the McKenzie side, clearly there's room for some moderation across the industry from 2021 levels, so we are planning for that.

On the Mackenzie side, clearly there is room for some moderation across the industry from from 2021 level and so we are planning for that.

And.

Reiterate what Luc said, we will be disciplined I promise you in expense growth.

Speaker 3: And I reiterate what Luke said, we will be disciplined, I promise you, in expense growth.

I am sure at every quarter now our North Star is I call, it which is that the path to a higher share price for <unk> financial is through higher earnings.

Speaker 3: I've shared every quarter now our North Star as I call it, which is that the path to a higher share price for IGM Financial is through...

We are collectively committed to that Gary.

Speaker 3: We are collectively committed to that, Gary.

And then my.

Mike.

Would be this overall I mean, we have I think we provide rich disclosures.

Speaker 3: sense would be this overall, I mean we have, I think we provide rich disclosures. This is a relatively transparent business. I think your models will sort of guide you well, but and I think they will align with my qualitative words of a strong year lies ahead for IGM

This is a relatively transparent business side I think your models, we'll sort of guide, you'll well, but and I think they will align with with my qualitative word.

Our strong year lies ahead for <unk> financial.

Okay great. Thanks, Thanks, James those are my questions. Thank you.

Yeah.

Our next question comes from Geoff Kwan of RBC capital markets. Please go ahead.

Speaker 1: Our next question comes from Jeff Kwan of RBC Capital Markets. Please go ahead.

Good morning.

Jason first question was on M&A.

Speaker 5: The first question was on M&A. If something came up that was an opportunity of size, how do you think about how much leverage you'd feel comfortable putting on the business?

Came up that was in.

<unk> of size.

How do you think about how much leverage you'd feel comfortable putting on the business.

That's a good question I would.

I would feel very comfortable at two times.

And I think pro forma China AMC were at roughly 135 times, so theres clearly.

Speaker 3: And I think pro forma China AMC, we're at roughly 1.35 times, so there's clearly a capacity.

Capacity for leverage.

And I would not altogether rule out.

Speaker 3: And I would not altogether rule out going somewhat higher depending on the nature of the opportunity, the profile of the free cash flow and our confidence in them.

Going somewhat higher depending on the nature of the opportunity the profile of the free cash flow and our confidence in them.

But as I said in the past.

Speaker 3: You know, as I said in the past, I think our highest priority...

I think our highest priority.

From a capital management perspective is to properly position. These businesses for long term success and so in that regard.

Speaker 3: uh... you know from a capital management perspective it's properly position these businesses for for long-term success and so you know in that regard

T. J M&A is our first priority and I would view that capacity surplus surplus capital and our remaining stake in $22 million of Ishares and great West life as potential sources of funding as fully as we firm.

Speaker 3: strategic M&A is our first priority and I would view debt capacity, surplus capital and our remaining stake in 22 million odd shares in Great West Life as potential sources of funding as we further position these businesses for success.

Other position these businesses for success.

Okay.

Gary I had a question just on the primary co relationship can you clarify is it open architecture.

Speaker 5: Barry had a question just on the Primerica relationship. Can you clarify, is it open to architecture? And you and another asset manager.

And you and another asset manager you have some sort of preferred access or is it just the two of you on the shelf and then the second part of that question is.

Speaker 5: access or is it just the two of you on the shelf? And then the second part of that question is...

The other asset manager I think has had a long term preferred relationship with primary care. So what aspirations do you have in terms of being able to gain material share from that other asset manager who is.

Speaker 5: The other asset manager I think has had a long-term preferred relationship with Primerica. So what aspirations do you have for the future of the company?

Speaker 5: being able to gain material share from that other asset manager who, as I mentioned, I think has been

As I mentioned I think it's been an incumbent at primerica for decades.

Yeah, Great question. Thanks.

You can expect going forward for primerica that the.

Speaker 6: You can expect going forward for Prime America that the fund options would be driven principally by the two partners, us and AGF. And so as Luke mentioned, it's a sizable platform actually, $16 billion in mutual funds, $4 billion in SEG and I believe last year there were a billion net inflows on the mutual fund side so they're growing at a nice...

Options would be driven principally by the two partners Hudson and Ags.

And so as Luc mentioned, it's a that's.

It's a sizable platform actually a $16 billion mutual funds 4 billion, a segue and I believe last year. There were 1 billion net inflows from the mutual fund side. So they are growing at a nice.

Niche markets and the kind of lower mass affluent area. So we're really.

Speaker 6: niche markets in the lower mass affluent area. So we're really encouraged by it and excited by it.

Encouraged by it and excited by it.

Look as you know we have experienced Mackenzie at other strategic partners.

Speaker 6: Look, as you know, we have experienced McKinsey at other strategic partners. Laurentian's been a longstanding partnership for us. So we know how to do this and develop a...

As I mentioned has been a longstanding partnership for us. So we know how to do this in and develop.

Branded products for them multi asset along the spectrum and single asset as well and it gave us a primerica advisers choice now ratio they have two leading investment firms.

Speaker 6: branded products for them, multi-asset along the spectrum and single asset as well. And it gives the Primerica advisors choice now, right? So they have two leading investment firms, which is, I think, the intention of Primerica to.

Which is I think the intention of primerica to to.

To provide that so.

We if you look at the size of Prime Erica and the fact that going forward the option should be driven principally by the two.

Speaker 6: If you look at the size of Primerica and the fact that going forward the options would be driven principally by the two asset management companies,

Asset management companies and we have very high aspirations.

All boats rise with the tide right in terms of penetration. So you probably should look for this relationship for Mackenzie with Prime Erika too probably after four five years to exceed that of Laurentian, just because of the size and the growth.

Speaker 6: all boats rise with the tide right in terms of AUM penetration. So you probably should look for this relationship for McKenzie with Prime America to probably after four or five years exceed that of Laurentian just because of the size and the growth.

Trajectory of Primerica, so very exciting.

Speaker 6: So, very exciting.

There, we already know that well we were able to have a 1 billion on their platform and Mackenzie mutual funds. So we know them very well over the years and great culture, great partner and will be launched.

Speaker 6: we already know them well. We already have a billion on their platform, on the Kansas Mutual Fund. So we know them very well over the years.

Speaker 6: great culture, great partner and we'll be...

Launching these new funds both parties.

Speaker 6: launching these new funds, both parties, in May, June .

In the May June timeframe.

Okay, great. Thanks, and maybe one if I could sneak in one last question maybe for Damon on slide 19.

Speaker 5: Great, thanks. And maybe one, if I can take in one last question.

Speaker 5: On slide 19, the flows from clients with less than 100,000, is that legacy clients that are investing or is it taking in new clients that have that less than 100,000,

The flows from clients with less than 100.

Thousand.

Legacy clients that are investing or is it taking a new clients that have less than 100000.

It's maybe more so the latter is that then a strategy of targeting high net worth but still willing to attract perhaps being I guess less affluent clients that.

Speaker 5: If it's, you know, maybe more so the latter, is that then a strategy of targeting high net worth but still willing to attract perhaps some, I guess, less affluent clients that the company is, you know, targeting?

The company is.

Sometimes attracted are targeted in the past.

Yes, Jeff.

It's a number of factors that would drive this drive this number first off it is it is us bringing on new clients and a lot of times, new clients, even though they might be mass affluent and high net worth they want to try you out so theyre not going to give you all of their money and they will start with with a little bit of money and get to know you and your team. The second is it would be some existing.

Speaker 7: Yeah, Jeff, it's a number of factors that would drive this member. First off, it is us springing on new clients and a lot of times new clients, even though they might be a massive bullet in high net worth, they want to try you out.

Speaker 7: So they're not going to give you all their money and they'll start with a little bit of money and get to know you and your team. The second is it would be some existing clients that we have that are already in that segment giving us some money. So there is some of that. And the third one is that we bring on and recruit new advisors and new advisors want to bring their entire book over and some of their book is in that segment. So that's something that we're going to continue to drive.

Clients that we have that are already in that segment, giving us some some money.

So there is some of that in the third one is that we bring on recruiting new advisors and new advisors want to bring their entire book over and some of their book is in that segment. So that's something that we're going to continue to drive and we're going to continue to grow here, but at a far less rate than we would at the mass affluent high net worth segment.

Speaker 7: and we're going to continue to grow here, but at a far less rate than we would at the massive bullet in the high net worth segment.

Great. Thank you.

Our next question comes from Graham Ryding of TD Securities. Please go ahead.

Speaker 1: Our next question comes from Graham Riding of TD Securities. Please go ahead.

Hi, good morning.

Look maybe I'll start with you just.

Speaker 7: Luke, maybe I'll start with you. I know you don't give expense guidance more than sort of one year out, but I just want to make sure I'm sort of understanding the 2% piece that you flagged as sort of post-pandemic normalization. Should we interpret that, that when we look into 2023, that this 2% piece may not repeat, this is arguably sort of a reset of your expenses that have been missing over the past two years.

I know you don't give expense guidance more than sort of one year out but.

We want to make sure im understanding the 2% piece.

You flagged it sort of post pandemic normalization should we interpret that that when we look into 2023, 2% piece may not repeat misses arguably.

Sort of a reset of your expenses that have been.

Over the past two years.

Yeah right right on Graham you've got it that's what it is is the transition back to back to normal basically it would be one time.

Speaker 4: Yeah, right on, Graham. You've got it. That's what it is, is the transition back to normal, basically it would be one time.

Okay great.

Speaker 7: Okay, great. Jump into your valuation of China and see on slide 41. I think you're flagging it just over 1.3 billion based off of a multiple, but last month, you know, when you announced the transaction, you're agreeing to pay 1.15 billion. So how do we square that up? I guess, you know, does that suggest that Power Corp might have left, you know, almost a couple hundred million on the table through this transaction?

Jumping to your valuation of China and see on slide 41.

I think you're flagging at just over $1 3 billion.

Based off of a multiple but last month when you announced the transaction transaction you paid you agreed to pay $1 <unk> 5 billion. So how do we square that up.

I guess does that suggested power cot might have left.

You know almost a couple of hundred million dollars on the table through this transaction.

Yes.

The value of established for the deal was fair.

Speaker 4: Yeah, no, the value established for the deal was fair.

The parties the last public comp or less comp. We do have is 17 five times next 12 months and so this is really apply that next 12 months and as the company continues to grow.

Speaker 4: between the parties. The last public comp or last comp we do have is 17.5 times next one month.

Speaker 4: And so this is really applying that next 12 months. And as the company continues to grow, the value is going to continue to increase. And that's what you can see here is just basically marking to market the value for the growth and earnings has happened. I would also highlight the value on page 41 is obviously understated. This reflects 17.5 times analyst estimates for next year. And that's before publishing the results that the company's actually put on and the outlook for the future that we have right now.

The value is going to continue to increase and that's what you can see here is just basically marketing marking to market the value for the growth in earnings Thats happened I would also highlight the value in page 41 is obviously understated. This reflects a 17 five times analyst estimates for next year and that's before publishing there was.

The company has actually put on and the outlook for the future that that we have right now.

Okay understood.

Speaker 7: Okay, understood. Gaiman, I'll jump to you if I could. Just looking at your slide 17, but you know, I guess my question is, are you still seeing evidence of a UA that's been brought in house it's ultimately translating into flows into the investment funds? Is that the message you're trying to get across on slide 17?

Damon.

Jump to you if I could.

Just looking at your slide 17, but.

Yes. My question is are you still seeing evidence.

That's been brought in house, it's ultimately translating into flows into the investment funds is that the message you're trying to get across on slide 17.

Yes, no it does.

Thats exactly the message, we're trying to get across.

Speaker 7: Yes, that's exactly the message we're trying to get across. At the end of the day, this business is growing, the momentum is accelerating. There's evidence that while the industry may be slowing down, we're speeding up.

At the end of the day. This business is is growing the momentum is accelerating there is evidence that Walter while the industry may be slowing down we're speeding up and.

The drivers of it are all the four aspects that you would look for in our wealth business. So number one we are bringing on new clients.

Speaker 7: The drivers of it are all the four aspects that you would look for in a wealth business. So number one, we're bringing on new clients.

And a lot of them are in our targeted segments of mass affluent and high net worth we're increasing our share of wallet of our existing clients. There is evidence that.

Speaker 7: And a lot of them are in our target segments of massive and high net worth. We're increasing our share of wallet over existing clients. There's evidence that.

Canadians are consolidating their advisors.

Speaker 7: that Canadians are consolidating their advisors. For a long time, they've diversified their advisors, but they're consolidating.

For a long time, they've diversified their advisers, but theyre consolidating.

And we are net net benefactors of that and we're recruiting advisors that want to be truly the best financial planners and their community and we're strengthening our relationships.

Speaker 7: And we're benefactors of that. And we're recruiting advisors that want to be truly the best financial planners in their community. And we're strengthening our relationship for our existing clients, which is leading to our redemption.

<unk> clients, which is leading to our redemption rates, where they are so all of those things allow us to really bring in new money to the organization and with all of the advancements we've made on our platform on our pricing and our products.

Speaker 3: where they are. So all of those things allow us to really bring in new money to the organization. And with all of the advancements we've made on our platform, on our pricing, and our products.

Alright advisers really are doing what's in the best interest of their clients and looking at their portfolios and figuring out where <unk> products fit in their overall plan and doing what's in the best interest of them and in doing so we have just a huge opportunity to drive flow and drive net sales.

Speaker 7: Our advisors really are doing what's in the best interest of their clients and looking at their portfolios and figuring out where IG products fit in their overall plan and doing what's in the best interest of them. And in doing so, we have just a huge opportunity to drive slow and drive net sales.

Perfect. That's it for me thank.

Thank you.

Our next question comes from Julia Cool of National Bank Financial. Please go ahead.

Speaker 1: Our next question comes from Julia Gould of National Bank Financial. Please go ahead.

Hi, a few questions with respect to Mackenzie what is the strategy to further penetrate the wealth simple channel and could you potentially size the market opportunity there.

Speaker 8: Hi, a few questions. With respect to Mackenzie, what is the strategy to further penetrate the Wealthsimple channel? And could you potentially size the market opportunity there?

Oh, Hi, it's fair I'll take thanks, Great question by the way.

Speaker 6: Oh, hi, it's beer. I'll take that. Great question, by the way. So Wealthsimple has become gradually for Mackenzie a nice strategic partner. And as you know, they embarked on launching some Wealthsimple branded ETFs about a year and a half ago. We are solely manufacturing those for Wealthsimple. We're the investment manager technically, so there are ETFs and an R.

So well.

Well simple spin become gradually for Mackenzie are nice strategic partner in.

As you know the embarked on on launching some wealth simple Brandon each yes, but a year and a half ago.

We are solely.

Any faction those forth for both ship all of those are where the where the investment manager typically so there are there are etfs and INR.

And our flows but well simple Brandon and so we launched the fourth one last month in January of the Green bond. So.

Speaker 6: and our flows, but Wellsimple branded. And so we launched the fourth one last month in January , the Greenblond. So they decide if and when they wanted to manufacture more of their own Wellsimple products.

They decide if and when they wanted to manufacture more of their own.

Their own.

Branded product and.

And we're their preferred provider in that regard and so that those four funds now I believe are approximately $1 3 billion or so in AUM growing very nicely with nice flows every day every week, which is good for liquidity for Etfs as well.

Speaker 6: their preferred provider in that regard. So those four funds now I believe are approximately 1.3 billion or so in AUM, growing very nicely with nice flows every day, every week, which is good for liquidity for ETFs as well. Then also, as you noted in our remarks last month of January , they also made a significant flow in.

And also.

As you noted in our remarks last month of January . They also made a significant flow into us Mackenzie Brandon ETF and so.

Speaker 6: McKenzie branded ETF. We're here to help them and partner with them obviously and they probably have three to four preferred partners they use on ETFs and as Luke may mention there are slides in the back.

We're here to help them and partner with some obviously and they probably have a three to four preferred partners to use on Etfs and <unk>.

As Luke mentioned in his slides back well simple the growth trajectory is.

Very strong so we're very pleased to continue to partner with them, we don't really put out.

Speaker 6: very strong. So we're very pleased to continue to partner with them. We don't really put a

Bigger in terms of what percentage of the shelf, we might end up having if that's their decision.

Speaker 6: bigger in terms of what percentage of the shelf we might end up having, that's their decision. But certainly right now we have a strong foothold on their platform. They're going very fast. We're working well together and we'd expect that growth to continue for us.

But certainly.

Right now we have a strong foothold on their platform. They are growing very fast, we're working well together and we would expect that growth to continue for us.

For the coming years.

Alright, Thank you and maybe you'll have to China or M. C. Do you have any indication of what the potential dividend will look like in Q1 and separately can you explain the 4 million.

Speaker 8: All right, thank you and move on to China AMC. Do you have any indication of what the potential dividend will look like in Q1 and separately can you explain the 4 million tax adjustment?

Tax adjustment.

Yeah, I'll take that one it's Luke.

So on the dividend, we expect via the payout rate to be at to be similar to last year.

Speaker 4: So on the dividend, we expect the payout rate to be similar to last year. So we will know that when declared. So I don't want to give guidance, but I would say you could extrapolate last 12-month earnings from 2020, the dividend we earned then, to last 12 months at 2021 and assume the rate will be the same.

So we are we will we will know that when that would declared so I don't want to give guidance, but I would say you could you could extrapolate last 12 months earnings from 2020, and the dividend. We are and then to the last 12 months of 2021 and assumed the peer rate will be the same.

And on.

On the tax yeah that was it basically was an adjustment for it for a change in sales tax that occurred on the distribution of mutual funds in China and so it was a onetime that onetime amount that was basically a true up of our position and that was worth $4 million, that's why Jim sure, but so that was a onetime item.

Speaker 4: On the tax, yeah, that was basically an adjustment for a change in sales tax that occurred on the distribution of mutual funds in China. And so it was a one-time amount that was basically a true up of a position, and that was worth $4 million. That's IGM's share of it. So that was a one-time item.

Alright.

So.

Speaker 8: All right, and so is that what's driving that huge step up in the earnings or is that kind of new run rate?

What's driving that.

Step up into earnings.

Kind of a new run rate run rate.

Yes, that's the run rates that we've put in that extraordinary item just to just to disclose how the business was actually traveling.

Speaker 4: Yeah, that's the run rate. So we've put in that extraordinary item just to disclose how the business was actually traveling.

So what.

What you can see there in the period is long term mutual fund assets were up 14% in the quarter from Q3.

Speaker 4: What you can see there in the period is long-term mutual fund assets were up 14% in the quarter from Q3. Revenues you could think of as being up in line with that. And because of the operating leverage in the business, the earnings were up 24% relative to Q3. So that was all the strength of the long-term fund asset growth during the quarter. And again, that was 14% growth in long-term fund assets just in the quarter, all driven by net sale activity. So really good growth in China.

Revenues you could you could think of as being up in line with that and and because of the operating leverage of the business where earnings were up 24% relative to Q3, so that was all the strengths.

The long term fund asset growth during the quarter and again that was 14% growth in long term fund assets just in the quarter all driven by net sale activity. So it's a really good growth in China.

Alright, thank you.

Once again, if you have a question. Please press Star then one our next question comes from Scott Chan of Canaccord Genuity. Please go ahead.

Speaker 1: Once again, if you have a question, please press star, then 1. Our next question comes from Scott Chan of Canaccord Genuity. Please go ahead.

Oh good morning.

Maybe I'll start with the last.

Speaker 9: Oh, good morning. Maybe I'll start with the last thoughts on China AMC just in terms of the earnings trajectory and you kind of talked about a good amount to go forward and the significant operating leverage in the business but you know when markets and assets are up it's fine but if it goes the other direction.

Thoughts on China AMC.

The earnings trajectory when you kind of talked about.

A good amount to the Gulf War, and the significant operating leverage in the business, but yeah when markets and assets are up that's fine, but if it goes the other direction.

Is that is it fair to assume theres more negative operating leverage on the downside person say your current business.

Speaker 10: Is it fair to assume there's more negative operating leverage on the downside versus your current business if you kind of look at the fore earnings potential?

If you kind of look at the forward earnings potential.

Yeah. Good question, Scott So, yes, we would.

Speaker 4: Yeah, good question Scott. We would expect to see that offering leverage just like you see Mackenzie. I'd take you back to page 28 and I'd highlight this is industry net flows in China. As Barry said, the industry has been net selling at 25% of assets per year. When you look at the growth on page 28 in long-term fund assets in that country.

We would expect to see that operating leverage just like just like you've seen Mackenzie I'd take you back to page 28.

And I'd I'd highlight we put this is industry net flows in China as Barry said the industry has been net selling it at 25% of assets per year and so when you look at the growth on page 28 in long term put assets in that country.

Importantly.

Speaker 4: importantly, it's been net flows that have been driving that growth, not investment returns. When you look in the fourth quarter's growth, all of that was net sales growth. Certainly there is operating leverage that's going to be impacted by financial markets, but right now there's a lot of momentum with net contributions happening to mutual funds in that country.

It's been net flows have been driving that growth not investment returns and so when you look in the fourth quarter as growth all of that was net sales growth. So certainly theres operating leverage that's going to be impacted by financial markets, but right now theres a lot of momentum with net contribution tapped into it to mutual funds in that country.

Okay.

And then going back to the Canada life and then your disclosure.

Speaker 10: And then going back to the Canada Life and then the disclosure, it seems like your proportionate share on the shelf has been increasing modestly and is now below 50%. Is 50% the right number in that channel or is it something that can increase over time similar to what we see at IG?

It seems like you're a proportionate share on the shelf has been increasing modestly.

And is now below 50% is 50% the right number in that channel or is it or is this something that can increase.

Over time similar to what we see.

It's very I mean look might chime in as Walter Great question. So.

Speaker 6: Great question. Again, things are going very well with CanLife Early Days. I might add that.

Again things are going very well at <unk> early days.

I might add that.

It's such a competitive advantage, we believe for Mackenzie to have these.

Speaker 6: It's such a competitive advantage, we believe, for McKinsey to have these, we call them sisters and cousins, that we can manage money for because it allows us, obviously, to create more scale.

<unk> sisters and cousins, so that we can manage money for it because it allows us obviously to create more scale in.

Stronger financial footing and ability to attract retain talent and launched products in greater C capital et cetera. So we're really fortunate to have <unk> and now Ken latest too significant.

Speaker 6: and stronger financial footing and ability to track and retain talent and launch products and greater seed capital, etc. So we're really fortunate to have IG and now CanLife is too significant.

Clients and partners for Mackenzie.

Speaker 6: clients and partners for McKinsey. Clearly it's their decision how they use us. We're quite excited for three reasons. One is the retirement business, when we announced this transaction initially with GLC coming into McKinsey.

Clearly the.

It's their decision how they how they use us.

We're quite excited.

For three reasons one is the the retirement business as we when we announced this transaction initially with GLC coming into Mackenzie.

We Mackenzie had very de Minimis de Minimis exposure to the group retirement business in Canada now we do.

Speaker 6: We, we, Mackenzie, we had very de minimis exposure to the group retirement business in Canada and now we do via Canada Life. And second of all, you've probably heard from Canada Life, they're really leaning in on their wealth business.

Yeah.

Can life, a second of all you've probably heard from kind of like they're really leaning in on their wealth business.

So obviously, we subset of is quite a bit for them in the wealth area and so as they grow will grow and then obviously the site funded from the balance sheet. So all told it just allows us to diversify our portfolio and diversify our channels and but.

Speaker 6: So obviously we sub-subvize quite a bit for them in the wealth area and so as they grow we'll grow and then obviously the SAG funds and the balance sheet. So all told this allows, diversifies our portfolio and diversifies our channels and but the percentage is you know we, you know with all of our clients sibling or otherwise we at McKenzie work hard and produce good results and bring new ideas right in terms of innovation.

But the percentage is.

With.

With all of our clients sibling, otherwise, we we Mackenzie work hard, but just good results and bring new ideas right in terms of innovation growth catalysts, and where we're thinking industry is growing and more importantly, where advisors and their client needs may find themselves.

Speaker 6: both catalyst and where we think the industry is going and more importantly where advisors and their client needs may find themselves...

Same as institutional investors. So that relationship is very robust and exchange of ideas and best practices.

Speaker 6: same as institutional investors. So that relationship is very robust in exchange of ideas and best practices.

And the percentages just lands nationally where depending on their business strategy and but.

Speaker 6: The percentage just lands naturally depending on their business strategy. But the partnership is early.

The partnership is early days couldn't be stronger.

Thanks, I remember maybe one last question for you just going back to the primary cat.

Speaker 10: Thanks, and then maybe 1 last question for you just going back to the primary.

Okay.

Laurentian Bank.

Speaker 10: Laurentian Bank agreement. I think that's been several years on that front. I wanted to maybe size up the opportunity. You talked about getting to LB's level in four to five years. What is LB's level right now and how has that trended over time with the partnership?

Agreement then.

I think thats been several several years on that front I wanted to maybe size up the opportunity as you talked about getting to all be level four to five years.

What does lp's level right now and how is that.

How has that trended over time with the partnership.

Yeah. Thank you great question.

Speaker 6: Yeah, thank you. Great question. I failed to say of course that our relationship with Laurentia could be stronger. It was just fantastic.

I failed to say of course with our relationship with Laurentian is couldn't be stronger just fantastic.

<unk> team and worry about $4 billion now Mackenzie AUM with Laurentian $4 billion, and so that started out for us too.

Speaker 6: We're about $4 billion now. Mackenzie's AUM with the mention, $4 billion. And so that started out for us to...

Obviously, the zero market share to work with them a partnership to get us up to a sort of a steady state level on their shelf that probably took.

Speaker 6: You know, obviously it's zero market share to work with them, a partnership to get us up to a sort of a steady state level on their shelf, so that probably took, you know, three, four, five years to get there. So and that's growing. We had a nice year last year with Laurentian and more to come this year and, you know, obviously wealth is important for their...

345 years to get there.

So and Thats growing we have nicely year last year with Laurentian and more to come this year and obviously wealth. This important for their multichannel strategy, but pride of America.

Speaker 6: multi-channel strategy. But Prime America is a pure wealth play, a bigger wealth business than Laurentian and growing as Laurentian is. Prime America has been putting out some heavy assets lately.

Sure well play a bigger wealth business, then laurentian and growing and as Lou mentioned is the prime Erica has been putting out some heavy assets lately. So.

Net net you're probably you should see probably.

Speaker 6: net net you probably you should see probably you know after four or five years and after ten years obviously the primary correlation will be much bigger and the fees are good for us. Think of them somewhere between a retail and institutional client just like Garenchen so you know it's good win-win for both parties

After four or five years and after 10 years, obviously the primary Felicia if it will be much bigger in the future good fresh thinking somewhere between a retail institutional client just like you mentioned so it's a good win win for both parties and we're just keen to get colonic and.

Speaker 6: and we're just keen to get going. And so we didn't want to tremble it too much because...

We wanted to be.

We didn't want to travel too much because.

Uh huh.

For them, we want to work hard for them and gain their trust and gain market share and traction on the shelf is what theyre, our partner EGF and so but look forward probably to match the $4 billion ish three.

Speaker 6: you know, for them, we want to work hard for them and gain their trust and gain market share and traction on the shelf as with our partner AGF. So, but look for it probably to match the 4 billion-ish in, you know, 3 to 4 years, or past the wrench and something because of the size of the wealth business at Prime America.

Three to four years surpassed laurentian something because of the size of the wealth business that primarily.

Yes.

Okay.

And we're open to other strategic partners Thats, a unique model that we think Mackenzie and skills that we have now to do these types of relationships.

Speaker 6: forward. And we're open to other surgery partners. It's a unique model that we think Mackenzie and the skillset we have now to do these types of relationships.

And just a follow up when does that partnership between the two.

Speaker 10: And just a follow-up, when does that partnership start, between the agreements officially? Mid-year? Yeah, the agreement is all signed and we're already working hard at McKinsey with technology and hiring, getting sales support in place and launching and building the product. So we'll be looking for it for mid-year at the latest, probably June-ish for the...

Yeah.

Alright officially.

Mid year or is it something.

The agreements all signings are already working we're already working hard at Mackenzie with technology and hiring getting sales support in place in Washington building of products. So we'll be looking for from midyear at the latest probably June ish for the the flows that come in because the funds. The new model will be launched in June July , but everything signed an agreement and we're just we're already working partnership.

Speaker 6: flows to come in because the funds, the new model will be launched in June , July . But everything signed in agreement and we're just, we're already working in partnership with them, getting it all ready over the next three, four months. Got it.

With them getting it already over the next three four months.

Got it great. Okay. Thanks, a lot guys.

Yes.

This concludes the question and answer session I would like to turn the conference back over to Mr. Potter for any closing remarks.

Speaker 1: This concludes the question and answer session. I would like to turn the conference back over to Mr. Potter for any closing remarks.

Thank you Ariel.

Speaker 2: I thank you, Ariel, that IGM we're really looking forward to continued strong momentum across our businesses in 2022. We thank you for joining the call today and hope you all have a great weekend. Ariel with that we'll close up the call.

At IGN, we're really looking forward to continued strong momentum.

Across our businesses in 2022.

We thank you for joining the call today and hope you all have a great weekend area with that we'll close up the call.

Thank you. This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

Speaker 1: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

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Speaker 11: The.

Yes.

Yeah.

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Yeah.

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Yeah.

Okay.

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