Q4 2023 IGM Financial Inc Earnings Call
Operator: www.fema.gov Thank you for standing by. This is the conference operator. Welcome to the IGM Financial Fourth Quarter 2023 Analyst Call and Webcast. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad.
Thank you for standing by this is the conference operator.
Welcome to the <unk> financial fourth quarter, 2023 analyst call and webcast.
As a reminder, all participants are in a listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions.
To join the question queue you May Press Star then one on your telephone keypad.
Operator: Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Kyle Martin, Treasurer and Head of Investor Relations. Please go ahead.
Should you need assistance during the conference call you May signal, an operator by pressing Star then zero.
I would now like to turn the conference over to call Martin Treasurer and head of Investor Relations. Please go ahead.
Thank you Betsy.
Kyle Martin: Thank you, Betsy. Good morning, everyone, and welcome to IGM Financial's 2023 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 IG Wealth Management; and Greg Group, president and CEO of McKinney Industries.
Morning, everyone and welcome to <unk> financials for 2023 fourth quarter earnings call. Joining me on the call today, we have James O'sullivan, President and CEO of IGN financial David <unk>, President and CEO of <unk> wealth management group.
President and CEO of Mackenzie investments. Thank you.
Dave Potter: I'm Dave Potter, Executive Vice President and CFO, IGM Financial. Before we get started, I would like to draw your attention to our cautions concerning forward-looking statements on slide 3 of the presentation. Slides 4 and 5 summarize non-IFRS financial measures and other financial measures used in this material. And on slide 6, we provide a list of documents that are incorporated by reference and available on our website related to the IGF. This is a test. This is a very important test. This is a test. I'll now turn it over to Jake. Thank you, Kyle.
Poddar Executive Vice President and CFO, Jim financial.
Before we get started I would like to draw your attention to our cautions concerning forward looking statements on slide three of the presentation.
Slides four and five summarize no one item for.
<unk> financial measures and other financial measures used in this material and.
And on slide six we provide a list of documents that are incorporated.
I referenced and available on our web site related charge of financials fourth quarter results.
I'll now turn it over to James.
Jake: And good morning, everyone. Turning to slide eight. 2023 was an important year for IGM Financial. We made significant progress positioning IGM for meaningful growth, including efforts during the year to streamline our organization and two important pairs of transactions. First, of course, with the closing of an increased investment in China AMC and a partial sale of our Great West Life Co. equity stake. And the second was the equity investment in Rockefeller Capital Management in April and the sale of IPC to Canada Life, which closed during the fourth quarter. To capture the cumulative efforts to reposition IGM, we've introduced a new brand image and realigned our segments to represent our focus on wealth and asset management with a combined total of $389 billion in assets under management and advisory.
Thank you Kyle and good morning, everyone.
Turning to slide eight.
2023 was an important year for ITM financial.
We made significant progress positioning IGN for meaningful growth include.
Including efforts during the year to streamline our organization and two important pairs of transactions.
First of course Elisa.
With the closing.
Increased investment in China, AMC and.
And a partial sale of our great West life co equity stake.
And the second was the equity investment in Rockefeller capital management in April.
And the sale of IPC to Canada life.
Which closed during the fourth quarter.
To capture the cumulative efforts to reposition AGM, we've introduced a new brand image and realigned our segments to represent our focus on wealth and asset management with a combined total of 389 billion.
And assets under management and advisement.
Turning to slide nine.
James O'Sullivan: Looking ahead to 2024, we will be focused on leaning into our businesses and leveraging their competitive advantages to win in their respective market segments. Across our segments, we will continue to drive operational excellence, executing consistently, and seeking to continuously improve our products and capabilities. In terms of capital allocation... At our Investor Day in early December, our top priority is to invest in the long term, IT Wealth Management, and McKinsey Investments. This will include investing in IG Wealth's segmented advice model and the leading middle office solution being implemented at McKinsey. We have an attractive dividend that we are committed to and that we know is valued by our shareholders. And with the renewal of our normal course issuer bid during December, we will look to offset stock option dilution and potentially take advantage of opportunities to repurchase shares at attractive levels during 2024. Turning to the results for the fourth quarter, on slide 10, adjusted EPS of 84 cents excludes the gain recognized on the sale of IPC to Canada Life.
<unk> ahead to 2024, we will be focused on leaning into our businesses supporting them and leveraging our competitive advantages to win in their respective market segments.
Across our segments, we will continue to drive operational excellence executing consistently and seeking to continuously elevate our products and capabilities.
In terms of capital allocation.
As we articulated at our Investor day in early December our top priority is to invest in the long term success of our core businesses.
Wealth management and Mackenzie investments.
This will include investing in it well segmented advice model and the leading middle office solution being implemented at Mackenzie.
We have an attractive dividend that we're committed to and.
And we know is valued by our shareholders.
And with the renewal of our normal course issuer bid during December we will look to offset stock option dilution and potentially take advantage of opportunities to repurchase shares at attractive levels during 2024.
Turning to the results for the fourth quarter on slide 10.
Adjusted EPS of <unk> 84 <unk>.
Excludes the gain recognized on the sale of IPC to Canada life.
James O'Sullivan: But it includes the impact of a negative fair value adjustment within IG Wealth's mortgage banking operations. Keith will speak to this later in the call. Our AUM&A, including strategic investments, grew by 4.4% during the fourth quarter, driven by strong financial market returns and significant net inflows across most of our wealth and asset management business. IG Wealth and McKenzie's Net Flows results continue to be influenced by the current operating environment, partially offset by growth from strong client returns. IGM Financial was once again recognized by Corporate Night as one of the 100 most sustainable companies in the world. We were also recognized as a top 100 employer in Canada. Part of this recognition relates to how we engage with our local communities and our talent.
But it includes the impact of a negative fair value adjustment within the Iga wealth mortgage banking operations.
Keith will speak to this later in the call.
Our M&A, including strategic investments grew by four 4% during the fourth quarter.
Driven by strong financial market returns and significant net inflows across most of our wealth and asset management businesses.
Well and Mackenzie is net flows results continue to be influenced by the current operating environment and partially offset the growth from strong client returns.
IGN financial was once again recognized by corporate Knights.
As one of the 100, most sustainable companies in the world.
We were also recognized as a top 100 employer in Canada.
This recognition relates to how we engage with our local communities and our talent.
James O'Sullivan: Our talent is comprised of great people and leadership teams working across our business. They drove our businesses to new heights during 2023. We are grateful for all of their hard work, dedication, and continued commitment.
Our talent is comprised of great people and leadership teams working across our businesses.
They drove our business to new Heights. During 2023, we are grateful for all of their hard work dedication and continued commitment.
Turning to slide 11, we remind everyone. How strong the market's finished in 2023 with significant increases across most equity markets and the Canadian fixed income market.
James O'Sullivan: Turning to slide 11, we remind everyone how strong the markets finished in 2023 with significant increases across most equity markets and the Canadian fixed income market. Slide 12 speaks to the Canadian operating environment from the perspective of mutual fund flows. Canadians continued to redeem from mutual funds on a net basis during the fourth quarter. The High Interest Rate and Inflationary Environment Continue to Weigh on Housing
Slide 12 speaks to the Canadian operating environment from the perspective of mutual fund flows.
Canadians continue to redeem from mutual funds on a net basis during the fourth quarter is the high interest rates and inflationary environment continued to weigh on households.
Looking forward to 2024 with a strong equity and fixed income market performance in 2023.
James O'Sullivan: Looking forward to 2024, with a strong equity and fixed income market performance in 2023, will serve to improve investor sentiment and support a more constructive net flows view for 2024. However, we anticipate the current economic environment to continue to weigh on Canadian households' ability to save for their long-term financial objectives over the near term. This is temporary.
We will serve to improve investor sentiment.
And supports a more constructive net flows for you for 2024. However, we anticipate the current economic environment to continue to weigh on Canadian households ability to save for their long term financial objectives over the near term.
This is temporary.
James O'Sullivan: As the economic picture evolves and interest rates find a normalized level, Canadians will turn their attention back to their long-term financial health and adjust as required to achieve their goals. Our focus on financial planning and advice is relevant throughout market cycles. As we move through this phase of the current cycle, financial advisors are there to help clients navigate this period of change. Slide 13 presents IGM's Consolidated Average AUM&A and earnings results, both of which I spoke about in my opening comments. Slide 14 now presents an adjusted net earnings view based on our realigned segment, while as our core businesses benefit from focused investments and or other companies execute against their growth-driven strategies. We look forward to presenting the strength of each segment as we work towards the medium-term earnings growth objective of 9% or better, which we outlined at our investor day. Slide 15 shows the Q4 ending AUM&A across our companies. Including the investments that we have made over 2023 and excluding IPC, our ending AUM&A was up by 35% versus Q4 2022. I'll now invite Damon to speak to the results of our Wealth Management Segment. Thank you, James, and good morning, everyone.
As the economic picture evolves and the interest rates find a normalized level Canadians will turn their attention back to their long term financial health and adjust as required to achieve their goals.
Our focus on financial planning and advice is relevant throughout market cycles as.
As we move through this phase of the current cycle financial advisers are there to help clients navigate this period of change.
Slide 13 presents Agm's consolidated average M&A.
And the earnings results.
Both of which I spoke to in my opening comments.
Slide 14, now presents an adjusted net earnings view based on our on our realigned segments.
As our core businesses benefit.
From focused investment in our other companies execute against their growth driven strategies.
We look forward to presenting the strength of each segment as we work towards the medium term earnings growth objective of 9% or better, which we outlined at our Investor day.
Slide 15 shows the Q4 ending AUM in M&A.
M&A across our companies.
Including the investments that we've made over 2023, and excluding IPC, our ending AUM in Asia was up by 35% versus Q4 2022.
I'll now invite David to speak to the results of our wealth management segment.
Thank you James and good morning, everyone turning to slide 17 in wealth management fourth quarter highlights, including Iga will Rockefeller and well simple.
Damon Murchison: Turn to slide 17 of Wealth Management's fourth-quarter highlights, including IG Wealth, Rockefeller, and Wealthsimple. IG Wealth ended the quarter with an AUA of $121.2 billion, a solid increase of 6.1% driven by financial markets. Gross inflows of $3.1 billion represent another strong quarter. Net outflows were $228 million during the fourth quarter as we continue to see partial redemptions by our clients as they navigate the current environment. Including paying down debt and funding their lifestyles in a higher cost environment.
<unk> ended the quarter with AUM of $121 2 billion, a solid increase of six 1% driven by financial markets gross inflows of $3 1 billion represented another strong quarter.
Net outflows were $228 million during the fourth quarter as we continue to see partial redemptions by our clients as they navigate the current environment, including paying down debt and funding their lifestyles and a higher cost environment.
Damon Murchison: IG's gross outflows as a percentage of average AUA over the last 12 months remain well below the industry and into the quarter at 11%, while the industry redemption rate was 16%. Both these rates remain relatively unchanged versus Q3. Client acquisition during Q4 continued to see our $1 million-plus new client gross inflows represent more than 25% of total new client gross inflows. Also, during the quarter, we were pleased to launch the iProfile Enhanced Monthly Income Portfolios. These portfolios are a great example of our capabilities, showcasing the ability to create new products that address the needs of our clients today and into the future. I'll speak to more of this on an upcoming slide.
Gross outflows as a percentage of average over the last 12 months remained well below the industry and ended the quarter at 11%, while the industry redemption rate was 16% both of these rates remained relatively unchanged versus Q3.
Client acquisition during Q4 continue to see our one $1 million plus new client growth inflows represent more than 25% of total new client gross inflows also during the quarter. We were pleased to launch the high profile enhanced monthly income portfolio. These portfolios are a great example of our capabilities showcasing the ability to.
New products that address the needs of our clients today and into the future I'll speak to more of this on an upcoming slide also on a later slide I'll also provide an update on our wealth managers Rockefeller well simple both companies continue to show strong execution, while our Rockefeller relationship continues to grow operating new opportunities for <unk>.
Damon Murchison: Also, on a later slide, I'll also provide an update on our Wealth Managers, Rockefeller and Wealthsimple. Both companies continue to show strong execution while our Rockefeller relationship continues to grow, offering new opportunities for both IG and Rockefeller alike. Turn to slide 18.
Both IGN Rockefeller alike.
Turning to slide 18, you can see our Q4 flows our gross inflows continue to remain strong with both the fourth quarter and full year remaining relatively in line with 2022.
Damon Murchison: You can see our Q4 flows. Our growth and flows continue to remain strong, with both the fourth quarter and full year remaining relatively in line with 2022. However, outflows continue to be partial in nature, reflecting what we're seeing within the industry and similar to the last two quarters.
Outflows continue to be partial in nature, reflecting what we're seeing within the industry and similar to the last two quarters.
Damon Murchison: January growth inflows represented our highest growth inflows in the last 10 years. I will note that our net outflow for the month included $177 million related to a transfer of a mandate within the IG-defined benefit plan over to McKenzie. Turn to slide 19.
January gross inflows represented our highest growth inflows in the last 10 years.
I will note that our net outflow for the months included a $177 million related to a transfer of a mandate within the Iga defined benefit.
Benefit plan over to Mackenzie.
Turning to slide 19.
Damon Murchison: You will see that our IGM solutions to the percentage of total AUA remain strong. Client Cash, GIC's Heise positions continue to represent an opportunity, including dollar average costing back into the market over time. We continue to believe that we're winning market share through new client acquisition and greater share of wallet. Lastly, our investments continue to deliver strong relative investment performance, with 59% of our assets ranked 4 and 5 stars and 92% plus rated 3 stars or higher by Morningstar. Turn to slide 20.
You will see that our IBM solutions as a percentage of total AOA remained strong.
Client cash Gic's hydro positions continue to represent an opportunity, including dollar average costing back into the market over time, we continue to believe that we are winning market share through new client acquisition and greater share of wallet.
Lastly, our investments continue to deliver strong relative investment performance with 59% of our assets ranked four and five star and 92% plus rated three stars or higher by Morningstar.
Turning to slide 20.
Damon Murchison: We continue to see strong new client acquisition, particularly with clients over $500,000, as our value proposition continues to resonate with the marketplace. During the fourth quarter, we had $244 million in growth inflows from newly acquired clients with over $1 million, representing over 25% of gross inflows from newly acquired clients during this quarter, a significant increase from 17% during Q4 2018. Over the course of 2023, you can see a continuation of our success within this segment, representing just under $1 billion in gross inflows for the year. This represents our best high net worth prospecting year in our history against this sector. As I spoke about at Investor Day, we are very pleased with our continued progress in the high net worth segment, and we fully expect to see these percentages increase over time as we execute our high net worth strategy. Turn to slide 21.
We continue to see strong new client acquisition, particularly with clients over $500000 as our value proposition continues to resonate with the marketplace. During the fourth quarter, we had $244 million in gross inflows from newly acquired clients with over $1 million.
Representing over 25% of gross inflows from newly acquired clients. During this quarter a significant increase from 17% during Q4 2018.
Over the course of 2023, you can see a continuation of our success within this segment, representing just under $1 billion in gross inflows for the year.
This represents our best high net worth prospecting year in our history against this segment.
As I spoke to at Investor Day, we are very pleased with our continued progress and the network high net worth segment and we fully expect to see these percentages increase over time as we execute our high net worth strategy.
Turning to slide 21.
Damon Murchison: I want to take a moment to speak to the industry's wealth driver. As a reminder, we view these drivers as representing a set of key financial challenges that we believe high net worth Canadians are going to have to navigate over the next 10 to 15 years, which I spoke to at length at Investor Day. The fourth quarter launch of the I-Profile Enhanced Monthly Income Portfolios was developed with these in mind, and with a focus on performance and growth, it's a prime candidate for those preparing for and entering into retirement. The greater tax efficiency of these portfolios versus alternative solutions in the marketplace also touches on another important driver, tax planning and optimization. As we further migrate our business to work, key high network segments, investing in our current and future suite of managed solutions will continue to provide significant opportunities for growth for our firm. Turn to slide 22.
Want to take a moment to speak to the industry well drivers as a reminder, we view. These drivers is representing a set of key financial challenges that we believe high net worth Canadians are going to have to navigate over the next 10 to 15 years, which I spoke to at length at Investor Day.
The fourth quarter launch of the high profile enhanced monthly income portfolios were developed with these in mind.
With its predictable income and focus on performance and growth. It is a prime candidate for those preparing for and entering into retirement.
The greater tax efficiency these portfolios versus alternative solutions in the marketplace also touches on another important driver and tax planning and optimization.
As we further migrate our business towards key high net worth segments investing in our current and future suite of managed solutions will continue to provide significant opportunities for growth for our firm.
Turning to slide 22.
Damon Murchison: This shows the productivity of our advisors, an increasingly important metric as we grow the business and focus on scaling our segmented advice model. The investments we are making, whether it be further digitalization of our business, providing our advisors with next-gen financial planning tools and support, or leveraging our private wealth planning experience, have all fueled the ability of our advisors to do more business in more ways, with more complex clients. This emphasis on Advisory Productivity and Operational Excellence is a focus throughout all divisions of IG Wealth, and we look forward to continued strong productivity growth. Now, let's turn to slide 23.
This shows the productivity of our advisors and increasingly important metric as we grow the business and focus on scaling our segmented advice model.
The investments, we're making whether it be further digitalization of our business, providing the advisers with Nextgen financial planning tools and support or leveraging our private wealth planning experience have all fueled the ability for advisers to do more business.
In more ways.
With more complex clients.
This emphasis on advisor productivity and operational excellence is a focus throughout all divisions of Iga wealth and we look forward to continued strong productivity growth.
Now, let's turn to slide 23.
Damon Murchison: Here are some important updates on Rockefeller's progress over the course of 2023. Client assets were up approximately 9.4% during the quarter, driven by strong markets as well as continued inorganic and organic growth. During 2023, client assets grew by 24.7%, year-to-date organic growth has driven $3.9 billion in client assets or approximately $1 billion a quarter on average. Five new advisor teams arrived during the quarter for a total of 21 during
Here, it's important updates on <unk> progress over the course of 2023.
Slide assets were up approximately nine 4% during the quarter driven by strong markets as well as continued inorganic and organic growth during 2023 client assets grew by 24, 7%.
Year to date organic growth is driven.
$3 9 billion in client assets were approximately $1 billion a quarter on average.
Five new advisor teams were added during the quarter for a total of 21 during 2023.
Damon Murchison: Over $120 million of acquired production was achieved during the quarter, as the teams that joined Rockefeller averaged a larger asset base than the initial forecast. During December, the management teams of Rockefeller and IG Wealth Management engaged at Rockefeller's offices in New York to share best practices and strategies that can benefit both organizations. This is one of the key strategic benefits we highlighted in April last year and again at our Investor Day. We believe collaboration will provide opportunities to build and strengthen a mutually beneficial relationship.
Over $120 million of acquired production was achieved during the quarter as the team that joined Rockefeller average a larger asset base than the initial forecast.
Lastly, I'm happy we're happy to report that during December the management teams of Rockefeller and IV wealth management engaged at Rockefeller has offices in New York to share best practices and strategies that can benefit both organizations.
This is one of the key strategic benefits, we highlighted in April last year and again at our Investor Day, We believe collaboration will provide opportunities to build and strengthen our mutual mutually beneficial relationship.
Damon Murchison: The fourth quarter was an incredibly strong quarter for Wealthsimple as they continue to reinforce themselves as an important part of the Canadian wealth management ecosystem. WellSimple's AUA in Q4 ended at $31 billion, advancing by an incredible 24%, or $6.1 billion, which represented record quarterly growth. On a year-over-year basis, AUA is up 69%. They continue to serve approximately 2.2 million clients and have experienced client growth of approximately 10% year-over-year. WellSimple is proving their ability to execute, and they continue to deliver strong results. With that, I'll turn it over to Luke Gould. Great. Thanks, Damon. Good morning, everyone.
Turning to slide 20 for the fourth quarter was an incredibly strong quarter for well simple as they continue to reinforce themselves as an important part of the Canadian wealth management ecosystem.
While simple in Q4 ended at 31 billion.
And advancing by an incredible 24% or $6 1 billion.
Which represented record quarterly growth.
On a year over year basis, <unk> was up 69%.
They continue to serve approximately $2 2 million clients and have experienced client growth of approximately 10% year over year.
While simple is proving their ability to execute and they continued to deliver strong results.
With that I'll turn it over to Luke Gould.
Thanks, Steven good morning, everyone.
Page six a few comments on the quarter.
First our ending AUM was up 5% driven primarily by strong investment returns of six 5% for our clients, which was 10% during the year on.
Luke Gould: Turn to page 26, for a few comments in the quarter. First, our ending AUM was up 5%, driven primarily by strong investment returns of 6.5% for our clients, which was 10% during the year. On point two, investment funds experienced net redemptions of $826 million during the quarter, which continues to be in line with the industry environment. While the returns generated for clients in 2023 rewarded clients for remaining committed to their financial plans despite market volatility, we haven't yet seen improvements in investor confidence. In Point 3, we're very pleased to see a meaningful increase in the share of our assets in 4 and 5 star funds, increasing to 51% from 43% in September as we enter the RRSP season. As we closed out January, we saw further improvements to 54% of our assets in 4 and 5 star funds.
<unk> investment funds experienced net redemptions of 826 million during the quarter, which continues to be in line with the industry environment.
While the returns generate for clients in 2023 rewarded clients for remaining committed to their financial plans to market volatility, we havent, yet seen improvements in investor confidence.
And three we're very pleased to see a meaningful increase in the share of our assets in four and five star funds, increasing 51% from 43% at September as we enter the RSP season, as we closed out January we saw further improvements to 54% of our assets and four and five star funds.
<unk> four you can see some of our fourth quarter business developments.
Most important as indicated at Investor day, we're pleased to announce a deal with <unk> Mellon to bring a leading innovative and global Middle Office solutions Mackenzie.
This middle office partnership creates an environment for our investor professionals that puts us among global leaders.
On the right, China Mc's long term mutual fund net sales continued to impress with a 3% increase during the fourth quarter driven by net sales of $40 9 billion, one or $9 billion that overcame weak market performance and reflected further market share gains.
Luke Gould: In point four, you can see some of our fourth quarter business development. Most important, as indicated at Investor Day, we are pleased to announce a deal with BNY Millon to bring a leading, innovative, and global middle office solution to McKinsey. This middle office partnership creates an environment for our investor professionals that puts us among global leaders. On the right, China EMC's long-term mutual fund net sales continued to impress, with a 3% increase during the fourth quarter driven by net sales of $49.1 billion, or $9 billion, that overcame weak market performance and reflected further market share gains. And Northleaf delivered $800 million in new commitments.
And normally delivered $800 million in new commitments since our investment in North we've 12 quarters ago Norfleet fabric has averaged 1 billion in commitments each quarter.
Turning to page 27, you can see the trended history Mckenzie as net flows.
As you can see during the quarter, we experienced don't close that were in line with the industry and on both the charts on the left and the right you can see the trend is stable over the last 12 months.
We believe their business is very well positioned for when investor confidence levels improve.
Turning to page 28 on the bottom left again, you can see our net sales rate is in line with the industry with our boutique approach and diversified suite Mackenzie tends to have the most consistent net sales among peers.
Luke Gould: Since our investment in Northleaf 12 quarters ago, Northleaf has averaged $1 billion in commitments each quarter. Turning to page 27, you can see the trended history of McKinsey's net flows. As you can see, during the quarter, we experienced outflows that were in line with the industry. And on both the charts on the left and the right, you can see the trend is stable over the last 12 months. We believe their business is very well positioned for when investor confidence levels improve. On the bottom left again, you can see our net sales rate is in line with the industry. With our boutique approach and diversified suite, McKenzie tends to have the most consistent net sales among peers.
And as mentioned on the right you can see the improvement in mortgage Morningstar ratings to 51% and four and five stars and as mentioned we did see a further improvement in January.
I'd remind that we target 60% of assets important parts.
Our funds with our boutique approach.
And the overall performance at December is the highest level, we've had in over a year.
Turning to page 29, you can see our performance in net sales for our retail mutual funds by boutique.
I'm going to make a couple of points on this slide first you can see strong long term performance and evolving performance across a number of boutiques and we believe that we have a lot of compelling mandates in categories and demand to lean into through RSP season.
I would highly in the middle our global Quant equity boutique that we profile in Investor Day. This Boston based team now has a five year track record and have really delivered with the emerging market mandates being ranked among the top in the world as well as the very top quad and the investment database.
Luke Gould: And as mentioned on the right, you can see the improvement in Morningstar ratings, to 51% in 4 and 5 stars, and as mentioned, we did see a further improvement in January. I'd remind you that we target 60% of assets in 4 and 5 star funds with our boutique approach, and the overall performance in December is the highest level we've had in over a year. Turn to page 29, and you can see our performance in net sales for our retail mutual funds by Boutique. I'm going to make a couple of points on this slide.
While we are marketing this boutique in institutional they also advised to the emerging markets mandates and our core global equity mandate on a retail shelf that we're actively promoting it.
I also do want to indicate that included in the slide but embedded into our fixed income and multi strategies boutiques as net sales of $40 million into our four norfleet private asset funds that we pioneered for Canadian retail.
These funds are scaling and now have over $200 million in assets and have delivered very strong track record since launch with a return of 28% of private equity and ongoing yield of over 10% in our private credit and return of 11% on our infrastructure fund.
Luke Gould: First, you can see strong long-term performance and evolving performance across a number of boutiques, and we believe that we have a lot of compelling mandates in categories and demand to lean into through our SBCs. I would highlight, in the middle, our Global Quant Equity Boutique that we profiled yesterday. This Boston-based team now has a five-year track record and has really delivered, with their emerging market mandates being ranked among the top in the world, as well as the very top quant in the EVESPA database.
On page 30, it's an interesting time for the Chinese mutual fund industry.
In spite of equity market declines during the last three quarters. The industry continues to generate strong net sales and growth in long term mutual fund assets.
At the bottom left you can see that in Q4 net sales were 318 billion, one overall and 494 billion, one or 90 billion Canadian dollars into long term mutual funds.
Full year long term mutual fund net sales were 135 trillion won representing a net sales rate in excess of 10% of assets.
Luke Gould: While remarketing this boutique and institutional, they also advised on an emerging markets mandate and a core global equity mandate on a retail shelf that we're actually promoting. I also do want to indicate that included in this slide, but embedded into our fixed income and multi-strategies boutiques, are net sales of $40 million into our four Northleaf private asset funds that we pioneered for Canadian retail. These funds are scaling and now have $200 million in assets and have delivered very strong track records since launch, with a return of 28% on private equity, an ongoing yield of over 10% on our private credit, and a return of 11% on our infrastructure fund. On page 30, it's an interesting time for the Chinese mutual fund industry.
The net sales for both the quarter and the full year were largely into fixed income funds and their net outflows and active equity and balanced funds being offset by net inflows into Etfs.
On the right you can see the Chinese <unk> market position continue to strengthen they are now second largest in both long term funds and over a mutual funds with market share increasing to five 1% from four 6% a year ago.
On page 31, you can see continued growth in China of <unk> long term mutual fund assets up 3% in the quarter and 16% in the year there.
They are long term mutual fund net sales in the quarter were 49 billion, one as I've mentioned or 9 billion Canadian in the quarter and 172 billion water is 32 billion during the year.
This represents an annualized net sales rate of 24% of assets during both the quarter and the full year.
Like the industry, China experienced good net sales into both fixed income funds and Etfs.
Luke Gould: In spite of equity market declines during the last three quarters, the industry continues to generate strong net sales and growth in long-term mutual fund assets. On the bottom left, you can see that in Q4, net sales were $318.1 billion overall and $494.1 billion, or $90 billion Canadian dollars, into long-term mutual funds. For the full year, long-term mutual fund net sales were 1.35 trillion won, representing a net sales rate in excess of 10% of assets. The net sales for both the quarter and the full year were largely into fixed income funds.
And in spite of volatile financial markets, we're confident Chinese <unk> ability to continue to grow market share as a bold innovator with a broad offering and strong distribution reach within the Chinese asset management industry.
And on page 32, you can see continued strong growth at normally with just under $1 billion of new commitments in the quarter and $3 6 billion in the year.
Fundraising continues to be diversified across private credit infrastructure and private equity offerings and I'll now turn the call over to Keith Potter. Thank you Luc and good morning, everyone. On Slide 34, you can see key highlights for Q4 EPS of $1 76 reflects a gain on sale of IPC and excluding excluding Q4 adjusted earnings came in at 80.
Luke Gould: And there are net outflows in active equity and balance funds being offset by net inflows into ETFs. On the right, you can see that Chinemc's market position continues to strengthen. They're now second largest in both long-term funds and overall mutual funds, with market share increasing to 5.1% from 4.6% a year ago.
<unk> per share.
I would also highlight that we paid down the short term credit facility during the fourth quarter and both ITC earnings and the financing costs up to November 30th are reported in discontinued operations.
Adjusted earnings did include a negative fair value adjustment in the mortgage operations, which had an after tax impact of almost <unk> <unk> per share and I'll speak to this more in a moment on.
Luke Gould: On page 31, you can see continued growth in China EMC's long-term mutual fund assets, up 3% in the quarter and 16% in the year. Their long-term mutual fund net sales in the quarter were $49.1 billion, as I mentioned, or $9.0 billion Canadian in the quarter, and $172.1 billion, or $32.0 billion during the year. This represents an annualized net sales rate of 24% of assets during both the quarter and the full year. Like the industry, China needs to experience good net sales into both fixed income funds and ETFs.
<unk> expenses are our 2023 operations as part of business development expense came in at one 7% for the full year slightly below our annual guidance.
We're also updating our 2024 guidance to three 5% growth plus an additional <unk>, 5% related to what I would call a geography change we were changing certain advisor programs at <unk> wealth management that will move approximately $5 million in expenses from asset based and sales based compensation to business development as Jamie mentioned and as we signaled.
At Investor Day, we have realigned how we present our results to better characterize it simplify <unk> business as a wealth and asset management company.
Luke Gould: And in spite of volatile financial markets, we're confident in China AMC's ability to continue to grow market share as a bold innovator with a broad offering and strong distribution reach within the Chinese asset management industry. And on page 32, you can see continued strong growth at Northleaf, with just under a billion dollars in new commitments in the quarter and 3.6 billion in the year. Fundraising continues to be diversified across private credit infrastructure and private equity offerings. And I'll now turn the call over to Keith Potter. Thank you, Luke, and good morning, everyone.
And finally during the quarter, we marked up the fair value of our investment in wealth simple by 20% and as a reminder, this is fair value through other comprehensive income.
On Slide 35, you can see our M&A and flows which now include IPC and during the fourth quarter, we experienced volatility in our M&A and closed the quarter up five 6%, while average assets were down slightly relative to Q3.
Turning to slide 36, we have our consolidated earnings at IGN on to the quarter over quarter improvement in our share of associates earnings is driven by North Lea is a combination of higher revenue or expenses and a lower tax rate.
Keith Potter: On slide 34, you can see key highlights for Q4. EPS of $1.76 reflects a gain on the sale of IPC, and excluding this, Q4 adjusted earnings came in at $0.84 per share. I would also highlight that we paid down the short-term credit facility during the fourth quarter, and both IPC earnings and the financing costs up to November 30th are reported in discontinued operations. Adjusted earnings did include a negative fair value adjustment in the mortgage operations, which had an after-tax impact of almost 3 cents per share.
Year over year change is a combination of the change in ownership position at lifestyle in China, AMC lower run rate earnings at China FC After the fee reductions we spoke to in Q2 call and higher earnings at lifeboat during Q4 of 2022.
I'd also like to point out that the timing of earnings release has reverted back to following life over 2024 and as a result, we are recording <unk> share of earnings based on actual results.
Three our operations and support and business development expenses for the quarter were up both on a sequential and year over year basis, which is in line with our previous guidance.
Keith Potter: On expenses, our 2023 Operations and Support and Business Development expense came in at 1.7% for the full year, slightly below our annual guidance. We are also updating our 2024 guidance to 3.5% growth, plus an additional 0.5% related to what I would call a geography change, where we are changing certain advisory programs at IG Wealth Management that will move approximately $5 million in expenses from asset-based and sales-based compensation to business development. As we signaled at Investor Day, we have realigned how we present our results to better characterize and simplify IGM's business as a wealth and asset management company. And finally, during the quarter, we marked up the fair value of our investment in WealthSimple by 20%. And as a reminder, this is fair value through other comprehensive income.
On page 37, we present, the key profitability drivers for Igene wealth, our advisory and product and program fee rates were flat quarter over quarter and as a reminder, the advisory fee rate will vary based on mix of clientele and product mix, such as cash and cash like assets.
The asset based compensation rate was down six basis points during the quarter, a contributing factor to the drop is a change in certain programs that will result in lower ongoing asset based compensation and this reduction will be offset by programs that are part of business development expense I will speak more to that as it relates to our guidance for 2000.
Four.
On Slide 38, you can see <unk> overall earnings of $101 $7 million is down two 8% relative to Q4 2022, and this is primarily due to the impact of the negative fair value adjustment and our mortgage operations. The primary driver of the negative fair value adjustment was due to an effective economic hedging our mortgage.
House that did not qualify for hedge accounting under <unk>.
Keith Potter: On slide 35, you can see our AUM&A and flows, which now include IPC, and during the fourth quarter, we experienced volatility in our AUM&A and closed the quarter up 5.6%, while average assets were down slightly relative to Q3. Turning to slide 36, we have our consolidated earnings at IGM. On point two, the quarter-over-quarter improvement in our share of associate earnings is driven by This is a combination of higher revenue, lower expenses, and a lower tax rate. The year-over-year change is a combination of the change in ownership position at LifeCo and ShinyMC. Lower run rate earnings at ChineMC after the few reductions we spoke about in Q2 Call and higher earnings at LifeCo during Q4 of 2022. I'd also like to point out that the timing of earnings release has reverted back to following LifeCo for 2024, and as a result, we are recording LifeCo's share of earnings based on actual results.
The hedge locked in a fixed rate cost of funds and as rates fell in December we've recognized a fair value loss upfront. However, as we securitize the mortgages at lower interest rates will reduce funding costs and allow us to realize higher net interest income over the life of the mortgage.
On to the combination of business development and operations and support expenses were up one 9% on a full year basis in line with our previous guidance and relative to Q4 2022, the increase in operations and support and business development expenses were driven primarily by investments in technology and just general operate.
Operating costs.
Lastly, you'll see at the bottom right of the slide we are presenting EBITDA. This is not a new disclosure and we're bringing it forward for completeness for both subtract this metric.
Going to slide 39, you can see Mckenzie as our AUM by client and product type as well as net revenue rates.
Focusing on the top right you can see the net.
Keith Potter: On Point 3, our operations and support and business development expenses for the quarter were up both on a sequential and year-over-year basis, which is in line with our previous guidance. On page 37, we present the key profitability drivers for IG Wealth, our advisory and product and program fee rates for flat quarter over quarter, and as a reminder, the advisory fee rate will vary based on the mix of clientele and product mix, such as cash and cash-like assets. The asset-based compensation rate was down 0.6 basis points during the quarter.
Management fee rate for third party clients, excluding Canada life was 84 basis points down from Q3, and this was driven by a mix shift and Mackenzie.
Is it strategic partnerships.
Turning to slide 40, you can see Mackenzie earnings of $49 4 million on one operations and support this development expenses were up by one 4% on a full year basis.
This is below our previous guidance of 2% to two 5% relative to 2022.
Relative to Q4 2022 operations to support business development expenses increased by 0.3%.
Part of the lower expected expenses are related to timing and are expected to shift into 2024.
Turning to slide 31 on 2024 guidance for operating.
Keith Potter: A contributing factor to the drop is a change in certain programs that will result in lower ongoing asset-based compensation, and this reduction will be offset by programs that are part of the business development expense. I'll speak more to that as it relates to our guidance for 2024. On slide 38, you can see IG's overall earnings of $101.7 million are down 2.8% relative to Q4 2022, primarily due to the impact of the negative fair value adjustment in the mortgage operation. The primary driver of the negative fair value adjustment was due to an effective economic hedge in our mortgage warehouse that did not qualify for hedge accounting under IFRS. The hedge locked in a fixed rate cost of funds, and as rates fell in December, we recognized a fair value loss up front. However, as we securitize the mortgages at lower interest rates, it will reduce funding costs and allow us to realize higher net interest income over the life of the mortgage.
Operations and support this development expenses. There are two components that are important to focus on first.
First we have revised revising our base operations and support business development expense growth guidance to three 5% over 2023. This includes 4% at Mackenzie and a base 3% growth at IAG.
As mentioned Mckinsey as expenses were slightly lower in 2023 and will shift some of the investment into the business into 2024.
In addition to the 3% base growth.
E.
As I commented a moment ago. There will also be a change in programs that will reduce asset based compensation and sales based cups station expense by approximately $5 million.
But it will be offset by programs that will increase business development expense by the same amount in.
And this will result in an additional 1% growth and business development expense at IAG or approximately 5% at the item level for 2024, and we view this as a geography change as we adjust programs versus net new incremental spend.
Keith Potter: On point two, the combination of business development and operations and support expenses was up 1.9% on a full year basis, in line with our previous guidance. Relative to Q4 2022, the increase in operations and support and development expenses was driven primarily by investments in technology and just general operating costs. Lastly, you'll see on the bottom right of the slide that we are presenting EBITDA; this is not a new disclosure, and we are bringing it forward for completeness for those who track this metric. Moving to slide 39, you can see McKenzie's AUM by client and product type, as well as its net revenue rate. Focusing on the top right, you can see the net management fee rate for third-party clients excluding Canada Life with 80.4 basis points down from Q3, and this is driven by a mixed shift in McKenzie's AOM Strategic Partnership. Turning to slide 40, you can see McKinsey's earnings of $49.4 million. On point one, operations and support business development expenses were up by 1.4 percent on a full year basis, but this is below our previous guidance of 2 to 2.5% relative to 2022. Relative to Q4 2022, operations and support visit development expenses increased by 0.3%.
Slide 42 has Chinese <unk> results on the left ending AUM of RMB, one eight trillion was flat quarter over quarter, our average assets were down 3% in the quarter.
Expect earnings on the rate the sequential decrease is in line with total average assets being down and as we've commented Chinese she continues to strengthen its leadership position in the China asset management industry in a tough market environment.
On Slide 43, you can see our new segmented view of earnings contributions from our respective companies in each segment.
If management includes Iga wealth Rockefeller wealth simple in Nashville.
Asset management includes Mackenzie, China, and see and normally in corporate and other includes lifestyle and Portage up.
Two other comments first on Rockefeller earnings are in line with our expectations and second on normally earnings of $6 9 million. After non controlling interest are up over last quarter and down from last year and as a reminder in 2022.
Some one time items as well as the lower effective tax rate in 2023, we've also experienced a lower effective tax rate and as.
As we progress into 2024, we expect earnings to be closer to $4 million per quarter.
Slide 44 builds on the previous slide providing a summarized view of our ownership and value of our strategic investments by segment two points.
As I commented you can see the revised valuable simple.
The change in fair value reflects an increase public peer valuations during the quarter strong performance.
Well simple, which statement touched on in our revised revenue forecast for the company.
To help give consideration to ibm's value through some of the parts at the bottom right of the slide you can see the value of our strategic investments across our segments is approximately $5 billion.
Keith Potter: Part of the lower expected expenses is related to timing and is expected to shift into 2024. Turning to slide 31 on 2024 Guidance for Operations in Support of Business Development Expenses, there are two components that are important to focus on. First, we are revising our base operation and support business development expense growth guidance to 3.5% over 2023. This includes 4% at McKenzie and a base 3% growth at IG. As mentioned, McKinsey's expenses will be slightly lower in 2023 and will shift some of the investment into the business into 2024. In addition to the 3% base growth at IG, as I commented a moment ago, there will also be a change in programs that will reduce asset-based compensation and sales-based compensation expense by approximately $5 million, but it will be offset by programs that will increase business development expense by the same amount.
We'd also like to highlight that the supplemental package falls the realigned segments for strategic investments and we have provided a mapping in the appendix I think and please reach out to the IR team. If you have any questions related to this that concludes my remarks, and I'll turn it over for questions.
We will now begin the question and answer session.
Joining the question queue you May Press Star then one on your telephone keypad.
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We will pause for a moment as callers join the queue. Thank you for your patience.
The first question today comes from Geoffrey Kwan with RBC capital markets. Please go ahead.
Hi, good morning.
First question was just on.
RSP season, I mean, it sounds like the comments on unit given the current market environment, just wondering if there's any Indians.
Any insight you have on what you think.
Thank you very much shaped up to be like do you think it could be a positive month for the industry and or with an ITM and then.
Any thoughts youre getting anecdotes or those sorts of things when you think that monthly close numbers for the industry might actually eventually turn positive.
Hey, Jeff It's David So RSP season. This year is is a little muted relative to what we expect from in the past, but we are seeing a pickup in in February which is traditionally where you get.
Keith Potter: This will result in an additional 1% growth in business development expense at IG or approximately 0.5% at the IGM level for 2024, and we view this as a geography change as we adjust programs versus net new incremental spend. Slide 42 has China EMC results on the left. Ending AUM of RMB 1.8 trillion was flat quarter over quarter. However, average assets were down 3% in the quarter.
One of the best months of the year in terms of being positive.
There is a number of things that would impact that but we are we're feeling good about RSV season, and relative to where we are I know Luke will jump in and talk about it as well in terms of the near term outlook for the rest of the year. It is going to be a little bit of a tough year.
The near term as James talked about Theres, just not a lot of cash on hand for a lot of Canadians right now and many of them have to renew their mortgages in the upcoming year and thats going to impact things, but.
Keith Potter: In respect to earnings on the right, the sequential decrease is in line with total average assets being down. And, as Luke commented, China EMC continues to strengthen its leadership position in the Chinese asset management industry in a tough market environment. On slide 43, you can see our new segmented view of earnings and contributions from our respective companies in the segment. Wealth Management includes IG Wealth, Rockefeller, Wealthsimple, and Nesto. Asset Management includes McKenzie and Chinatown North, and corporate and other includes LifeCo and Portage. I have two other comments.
At the same token we do look at the over two trillion dollars that's sitting on the sidelines.
And we do expect at some point for that money to start to be reinvested for the long term, obviously not not all of it is long term money, but as that starts to roll and you should start to see the industry's net sales start to pick up Luke.
Yes, sure David Demas view, Jeff we have been.
February will be positive we're focused on the the last 12 trailing like the year over year improvement, we haven't seen things start to improve yet, but there are some signs of life in places.
Keith Potter: First, on Rockefeller, earnings are in line with our expectations. Earnings of $6.9 million after non-controlling interest are up over the last quarter and down from last year. And as a reminder, in 2022, there were some one-time items, as well as a lower effective tax rate. In 2023, we also experienced a lower effective tax rate, and as we progress into 2024, we expect earnings to be closer to about $4 million per quarter. Slide 44 builds on the previous slide, providing a summarized view of our ownership and value of our strategic investments by segment. To point out, First, as I commented, you can see the revised value of Wealthsimple. The change in fair value reflects an increase in public peer valuations during the quarter, strong performance of Wealthsimple, which Damon touched on, and a revised revenue forecast for the company. To help give consideration to IGM's value, through some of the parts at the bottom right of the slide.
But yes, right now, we just haven't seen it picking up and.
I remind everybody there's two trillion dollars of deposits sitting a lot of on the sidelines. We haven't seen that may start going back the clients sure have been rewarded for sticking to the plan to 'twenty three.
Okay. Thanks for that and just my second question.
Was unwell simple.
<unk> was up quite a bit quarter over quarter in Q4 number of accounts was actually I think marginally down quarter over quarter.
From the positive market performance, what maybe drove that net flow increase I think that there was some promotional activity has happened during the quarter I'm not sure if that was really what was driving it.
If there was there was some promotional activity Jeff to be sure.
And I would say that was a contributing factor, but not the only factor I mean might catch on and team have been working for.
Many quarters to evolve that business model to diversify the business to strengthen that and I think what Mike displayed at the Investor Day was it was really early progress in that regard.
Keith Potter: The value of our strategic investments across our statements is approximately $5 billion. We would also like to highlight that the Supplemental Package follows the Realigned Segments for Strategic Investments, and we've provided a mapping in the appendix, so you can please reach out to our team if you have any questions related to this.
As we sit here today this is a.
This is clearly once again, a fast growing and very well diversified business.
Okay. Thank you.
Once again, if you have a question. Please press star one to enter the question queue.
The next question comes from Graham Ryding with TD Securities. Please go ahead.
Operator: That concludes my remarks, and I'll turn it over to you for questions. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing any keys.
Okay.
Sorry.
Okay.
Just with the well simple up 24% quarter over quarter, but it sounds good.
Clients were down.
Actually a little bit quarter over quarter, what's what's behind that.
Operator: To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue. Thank you for your patience. The first question today comes from Joffrey Kwan with RBC Capital Markets. Please go ahead.
Yes. Thanks for the question Graham I can really only answer that question in a N a.
General.
Manner, and what I would say generally is that.
Joffrey Kwan: Hi, good morning. My first question was on RRSP season. It sounds like the comments are muted given the current market environment. Just wondering if there's any insight you have on what you think February might shape up to be.
As companies.
Including well simple.
All of our go to market strategies.
Their client bases will evolve and wealth simple as actively evolving their offering they are strengthening their business.
Damon Murchison: Like, do you think it could be a positive month for the industry and, or within IGM? And then, any thoughts you're getting in anecdotes or those sorts of things when you think the monthly close numbers for the industry might actually eventually turn positive? Hey Jeff, it's Damon.
I would describe everything that has happened at well simple as as a thoughtful and deliberative.
Okay, and then I think you mentioned that you increased your.
Damon Murchison: So RSVC season this year is a little muted relative to what we've seen in the past, but we are seeing a pickup in February, which is traditionally where you get one of the best months of the year. In terms of being positive, there's a number of things that would impact that, but we're feeling good about RSVC season relative to where we are. I know Luke will jump in and talk about it as well.
Investment how material was that or did you flagged that what that number was.
Yes, great.
The actual.
Transaction is details confidential, but it was an immaterial amount we increased our percentage ownership by about 4%.
Okay, so not over.
On the material and then just on the <unk> side.
Luke Gould: In terms of the near-term outlook and for the rest of the year, it is going to be a little bit of a tough year in the near term. As James talked about, there's just not a lot of cash on hand for a lot of Canadians right now, and many of them have to renew their mortgages in the upcoming year, and that's going to impact things. But at the same token, we do look at the over $2 trillion that's sitting on the sidelines, and we do expect at some point for that money to start to be reinvested for the long term. Obviously, not all of it is long-term money, but as that starts to roll in, you should start to see the industry's net sales start to pick up. Yeah, I share Damon's view, Jeff. We're focused on the last one trailing, like the year over year improvement. We haven't seen things start to improve yet, but there are some signs of life in places.
I realize it.
Theres still some headwinds.
Industry wide for long term plans for that.
There has been a known knowns will drop off as well on just the flows into your cash type products.
Yes.
12 month basis is that.
It's a reflection of.
High interest rates inflation, and deleveraging of Canadian households, or what do you attribute it sort of the drop off into cash type products.
Yes, it's a combination of the fact that.
Our advisers are doing a very good job of really trying to make sure that we.
We dollar average cost back into into the markets.
We are a shop, because we're a shop of financial planners, we preach time and the time in the market not timing the market. So you do have that and you do have the fact that our advisors are not just using cash they are using <unk>, they're using gic's are using money market funds.
Luke Gould: But yeah, right now, we just haven't seen it picking up. And I remind everybody, there's $2 trillion of deposits that's sitting a lot on the sidelines. We haven't seen that money start coming back. The clients sure have been rewarded for sticking to the plans at 2025. Thanks for that.
As well.
Okay. That's it for me thanks.
This.
A question and answer session I would like to turn the conference back over to Kyle Martin for any closing remarks.
Joffrey Kwan: And just my second question. The AUA was up quite a bit quarter over quarter in Q4. But the number of accounts was actually, I think, marginally down quarter over quarter. Aside from the positive market performance, what really drove that net flow increase? I think that there was some promotional activity that was happening during the quarter. But I'm not sure if that was really what was driving it.
Thank you Betsy and thank you everyone for taking the time with US this morning, and with that we can close off today's call.
Okay.
This concludes today's conference call you may disconnect your lines.
Thank you for participating and have a pleasant day.
Okay.
Yes.
[music].
Yes.
Luke Gould: There was some promotional activity, Jeff, to be sure, uh... and I would say that was a contributing factor, but not the only factor. I mean, my catch in a team of people working to evolve that business model, to diversify the business, to strengthen it. And I think what Mike displayed at Investor Day was really early progress in that regard. So as we sit here today, this is clearly, once again, a fast-growing and very well-diversified business. OK. Once again, if you have a question, please press star, then 1 to enter the question queue. The next question comes from Graham Riding with TV Security. Please go ahead.
Yes.
[music].
Yes.
[music].
Okay.
[music].
Okay.
Okay.
Graham Riding: Thank you. Hi, sorry. Just with the Wealthsimple up 24% quarter to quarter, but I saw the number of clients was down, actually a little bit quarterly. What's behind that? Yeah, thanks for the question, Graham. I can really only answer that question in a general manner.
Yes.
Yes.
[music].
Luke Gould: And what I would say generally is that as companies, including Wealthsimple, evolve their go-to-market strategies, their client bases will evolve, and Wealthsimple is actively evolving their offering. They're strengthening their business. I would describe everything that has happened at Wealthsimple as thoughtful and deliberative. Okay, and then I think you mentioned that you increased your investment. How much was that?
No.
[music].
Luke Gould: Did you flag what that number was? The actual transaction is confidential, but it was an immaterial amount. We increased our percentage ownership by 0.4%. Okay, so not over the material.
Graham Riding: And then just on the IG wealth side, you know, I realized that there are still some headwinds industry-wide for long-term funds, but there's been a noticeable drop-off as well in just the flows into your cash-type products on a last 12 month basis. Is that just a reflection of interest rates, inflation, the leveraging of Canadian households, or what do you attribute the drop-off into cash-type products?
Okay.
[music].
Okay.
Yes.
Damon Murchison: Yeah, it's a combination of the fact that our advisors are doing a very good job of really trying to make sure that we dollar average cost back into the markets. We're a shop because we're a shop of financial planners. We preach time in the market, not timing the market. So you do have that, and you do have the fact that our advisors are not just using cash; they're using HIZs, they're using GICs, they're using money market funds as well. Yep, that's it for me, thanks.
Kyle Martin: This concludes our question and answer session. I would like to turn the conference back over to Kyle Martin for any closing remarks. Thank you Betsy and thank you everyone for taking the time with us this morning. With that, we can close out today's call. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
Okay.