Good afternoon, everyone, and welcome to one of the final presentations for today at the Barclays Global Financial Services Conference. My name is Aria Samarzadeh, and I cover the Canadian asset managers with John Aiken at Barclays. I'm very pleased to have with me James O'Sullivan, who's the President and CEO of IGM Financial. We'll start the day off today with some opening remarks from James, and then we'll dive into a fireside chat. But if any of you have any questions for James, you can email them to me at arya.samarzade@barclays.com, or you can submit your questions to me in the box provided on your screen. And with that, James, welcome, and thank you very much for participating in our conference. Well, thank you, Aria. It's a pleasure to be here, and through you to our shareholders and prospective shareholders, thank you for joining us this afternoon. It's very much appreciated. So perhaps, Aria, given the global scope of the audience for this conference, I thought I would just start with a minute or two to just set the stage and provide some context for who IGM Financial is, for those who are not familiar with it. But we are Canadian-based. We are an integrated wealth management and asset management company. We're currently managing approximately CAD 270 billion of client funds. And I'd point out that we are primarily, as Aria knows, we're primarily, a wealth manager. That would be the largest part of our business. I point that out because, I think there's a stability, I think there's a resiliency to wealth management businesses that you don't find to the same extent in asset management, and it's important to make that distinction at the outset. We are, as some of you will know, the largest independent wealth management company in Canada, and we are the largest independent Canadian asset manager in Canada as well. So this is a business with, I think, Aria, as you know, with very substantial scale. It's also a business that is performing very well. The business. My message to you today is the business is strong. Indeed, it's very strong. We had record earnings in Q2 of CAD 0.99 per share, and we had record assets under management and advisement, as we call it, as I said, of approximately CAD 270 billion. We pay a strong dividend. The dividend yield, as I looked this morning, was about 4.75%, and that I'd point out, Aria, is after the stock has appreciated by about 50% over the past year. So with the 50% appreciation, there is still a dividend yield of approximately 4.75%. We have a strong and growing amount of stock of surplus capital. That's about CAD 600 million and growing. And so, you should think of us primarily as, financial planners and solution providers, Canadian-based, but a business that has, momentum. And finally, Aria, I would just say, by way of context and setting the stage for the business, as I sit here today, we have, myself and, and my operating committee have, two priorities. One is very simple. Perhaps it's easier said than done. It's just execute well. Our North Star, we've communicated very publicly, is this: The path to a higher share price for IGM Financial is through higher earnings, so we are very focused on executing well and delivering higher earnings for our shareholders. And I would say over the short term as well, we're gonna have a, you know, we're gonna have an opportunity to, deploy our surplus capital. And, we're looking forward to doing that in ways that grow the franchise, strengthen the franchise, and create even further value for our shareholders. So I've set the stage, Aria. Over to you for Q&A, as you see fit. Thank you, James. So first of all, congratulations on the new role. Well, not that new. It's been about a year now that you've been in the seat. Can you discuss a little bit about what attracted you to IGM? Sure. Aria, this just isn't any day. It's exactly a year. If today's September fourteenth, and I think it is t his was the starting day. So it's a pleasure to be here on the one-year anniversary. Three things really attracted me to this opportunity. The first, in a word, is quality. W hen I looked at this opportunity, I saw quality through and through. Quality in the franchises, in the form of our operating subsidiaries. Quality at the board level, quality in our controlling shareholder being Power Corp., and indeed, quality right through to the family that controls Power Corp. So for me, quality is something that I was very much looking for in my next opportunity, and I think I think I achieved that and then some, in that context. Second thing I was looking for, or that attracted me really, Aria, was just the market positioning, the underlying the market positioning, the strategies that each of IG Wealth, Mackenzie Financial and IPC were pursuing. I really see sound strategy. So under current leadership, which obviously was led by Jeff Carney, there was a very significant transformation of Mackenzie Financial, which started several years ago. We see the results of that today, but we've been seeing them now for a couple or a few years. Environics Advisor Perception Study positions this business as number two in the minds of advisors from coast to coast in this country. And I think Mackenzie, with its five growth levers of China, Alts, retirement, ETFs, responsible investing, w hen a Mackenzie wholesaler calls, that's a call that most advisors want to return, because in addition to having a really strong core, I think Mackenzie just has some really attractive growth levers for client advisors in the current environment. For IG Wealth, as you know, Aria, the transformation started later. Mackenzie first, then IG Wealth, but very, very substantial progress. This is not the business that it was five years ago. It's certainly not the business that it was 10 years ago. This is a business that's more focused, it's more lean, it's more client friendly, it's more digitally enabled, and, it is a business that I think is positioned, to compete and compete very, very well. And there's evidence of that, Aria. As you know, we publish, we publish results, certain results, sales and asset levels on a monthly basis. And I think a week ago Friday, we put out our, August release. And, you know, when I read our August release, I said, "You know what? It's time for our message to change a bit here." Because what I've been saying over the past year is Mackenzie has clear and evident momentum, and I've been saying IG Wealth has emerging momentum. Aria, that emerging momentum is now clear and evident momentum, in my opinion, at IG Wealth. So here's what I see. When I look at the August numbers for IG Wealth, you know, let's start with net sales, which is the AUM number. We show in the spreadsheet that attaches month by month, January 2020 through August 2021, so a 20-month period. August was the second best month in that 20-month period. And Aria, you know this business, it was August. August, who would have thought August? The only month that was better was February of 2021, which is an RSP month. But for August 2021 to be the second best month in net sales in IG Wealth tells you that there really indeed is momentum in this business. And the second thing, of course, given the nature of the business, is net flows, the AUA measure. Excuse me, there, too, what did we see? If you just annualize the August numbers, IG Wealth net flows number for August, and again, whoever annualizes August, you're pushing up against 4% as a net flows rate for IG Wealth. So my message to you and the viewers today is that this is a business where the two really large engines that drive the business, being IG Wealth and Mackenzie, each have clear and evident momentum. So number one was quality. Number two was just, I thought, the soundness of the strategies and where the management team was in terms of executing those strategies. And number three would be the management team itself. I think Jeff Carney's greatest accomplishment was assembling this management team. It's a great mix of people with Canadian experience, people with US experience, people with financial services experience, and people outside of financial experience, big bank, non-big bank. It 's a really nice team, and it's a pleasure to work with them. So one year in, exactly, those were the three reasons. I think those three reasons have proven to be very valid reasons, and that's reflected both in, indeed, it's reflected in asset levels. It's reflected in net sales, net flows, and we're seeing it in earnings now, and our job is to continue that. Thank you. And, you know, your appointment exactly a year ago, it, it came at a very challenging time for the world, and now, you know, more than a year into the pandemic and the lifting of some restrictions in Canada now, can you talk a little bit about how COVID-19 has been impacting IGM? How it's impacted, you know, you yourself starting, you know, the CEO seat during this time, and has there been anything coming out of the pandemic that has surprised you? Well, you know, it's interesting. Of course, IG Wealth, as you know, IGM is based in Toronto, but IG Wealth, the biggest business, is based in Winnipeg. And I got to Winnipeg last week for the first time and met some of my direct reports face-to-face for the first time. And indeed, as I look across the entirety of my operating committee, I still haven't met one person face-to-face, but I've only met all of them once or twice, and it's been over the course of the past couple of months as the third wave ebbed. And so it was a pleasure to be in Winnipeg. But what I would say, Aria, is this, these businesses, indeed, these industries, as you know, pivoted very, very well to a virtual world. We should truly, as an industry, be counting our blessings here, because not every industry pivoted well, but wealth management and asset management in Canada, in the US, I believe globally, pivoted very, very well. And there's no question these businesses were supported by government with strong fiscal support to consumers and by monetary support that happened very, very early in the pandemic. So overall, you know, the business has pivoted, I would say, very, very well. But I'd also say to you, it was more than just that. I think, as you know, IGM embarked on a multi-year investment program transformation going back several years. And some of the things that were done as part of that transformation, I think were very, very meaningful. So process automation in particular, you know, we made a lot of progress on process automation, and that automation really facilitated the move to a virtual environment. And I'd say we also invested very, very heavily in digital tools both for clients and for advisor. And again, the presence of our ability to or the fact that we had rolled out those tools and our ability to roll out upgrades to those tools during COVID, I think helped enormously as well. But I'd also, Aria, share with you that it's, you know, it's not all blue sky and sunshine in terms of COVID impact. I think the truth in addition to this being, you know, a challenge for each of us personally, and indeed for our employees, some aspects of the business were tougher. I think our advisors, our financial advisors, found sourcing or building new client relationships to be more difficult virtually than it was face-to-face. Now, I think many of them made, you know, remarkable progress over the course of the past 18 months in figuring that out. But still, I think the inability to sit down with a prospective client face-to-face and make the case, I think has been a negative and has had a bit of an impact. You don't see it in the numbers, but I think the numbers could be stronger still, I suppose, is the point. Then the other thing I'd say, Aria, with the passage of time, is that it's now becoming clear that there's parts of the business, particularly, say, in our operations and mid-office functions or in back office functions, where maybe some inefficiencies have crept in, where perhaps productivity isn't what it would be if we could move to a new normal. You know, say, a hybrid working environment, where we can get in front of employees with some frequency. Very hard to onboard, for instance, very hard to onboard employees and do it really, really well in a virtual world. Very hard to set up mentor-mentee relationships in a virtual world and for it to go well. So, you know, overall, very positive, but I think there's been some negatives as well. And so, you know, we're anxiously awaiting the ebbing of this wave and our ability to light up the new normal, which will be hybrid. And we're just really looking forward to it. We wanna create an even better employee experience around it, and that's something to look forward to for all of us. Totally. And you touched on this in your opening remarks about the robust sales that you've seen. What are your broad views on the industry right now, and how sustainable do you believe the current sales environment is, not just for the industry, but for IGM? I t's a good question. So I'd start—I think the industry and I think IGM has been somewhat reset. And what do I mean by that? A sset levels are reset, and they are reset at a higher level, full stop. Now, the market will have corrections, and it will continue to go up over time, but I do think asset levels and revenues have been reset at a higher level, and that is properly reflected, I think, in higher share prices. I think net sales and net flows are... You know, we saw, to be very frank, the net sales momentum that we saw in Mackenzie through the pandemic was, I think, greater than expected. Notwithstanding having those growth levers, and, you know, I think the, the higher household savings rate and the specific behavior of clients drove a higher net sales rate than perhaps we were, we were expecting. So, you know, as the old saying goes, "Trees don't grow to the sky." I think while asset levels are reset and reset higher, there is room for some moderation in Mackenzie in net sales. But I think we can still have a very substantially positive and attractive level of net sales. I think for IG Wealth, the story is different for the reasons I just mentioned, which is, again, you look at that August press release, and you look at the trend in net sales and the trend in net flows, and it's hard to conclude anything other than the momentum at IG Wealth is, it's real, and it's just building its head of steam. So, and then I, you know, perhaps a final thought, Aria, is, you know, what happens to the household savings rate as COVID draws to a close or becomes not epidemic, but say, endemic? Does the household savings rate return to where it was? Does it remain at a higher level for a period of time? I know some economists believe that, that... Again, it's not gonna be just in no part of our lives are we simply gonna go back to the way it used to be. Everything is gonna be a little bit different. So I think it's possible that a higher household savings rate will persist for some time, and that could continue to be a tailwind for the industry and for, you know, IGM. So but look, I'm watching IG Wealth. We have very clear goals to continue to deepen our share in high net worth. I get, you know, I get reports on that on a very regular basis, and again, I think that momentum is just building. And again, for Mackenzie, the way the business has been positioned for the future with those growth levers of China, Alts, retirement, ETFs, and responsible investing, I think there's this story has further to go, to be sure. But it would be foolish not to expect some moderation at some point in net sales in particular at Mackenzie, but we'll see. Absolutely. Thank you. And now, in response to the regulators' new rules with what the OSC is calling these new Client Focused Reforms, several of the banks have announced that they will no longer allow their advisors to sell third-party mutual funds. How do you expect this to impact IGM and Mackenzie? And to wealth management? Sure. So the banks, as you know, not all of your viewers may know, the banks are major participants in the wealth management industry in Canada and the asset management industry in Canada. But I think it's on the distribution side, or the wealth management side, I think it's very important to point out that it's not one big monolithic structure or channel. Every one of the big banks in this country has four to six channels that they distribute wealth products through. IIROC channels, MFDA channels, integrated channels, OEO channels. T hey have a plethora of distribution channels. So this move impacts one channel, to be sure. It is, for us, it has not been a material source of business for Mackenzie at all. And so, you know, what has been announced to date, I can assure you will have an immaterial, not material, immaterial impact on Mackenzie overall. For IG Wealth, it's more interesting. We're looking to grow our business. And to grow a business, you can grow it organically or you can grow it inorganically, but the organic growth is really about acquiring great advisors and acquiring clients who currently reside elsewhere. So I would say this: to the extent, what's happened here puts money in motion or puts advisors in motion, we will view that positively, we will view that as an opportunity, and we will continue to focus on recruiting advisors from bank branches and clients from bank branches, because we really do believe that our client value proposition at IG Wealth competes very effectively and is very strong. So, you know, add all of that up, immaterial to Mackenzie, I view it as a potential opportunity for IG Wealth. Interesting. Thank you. You know, you talked about the strong sales that IGM has been experiencing in its two main businesses, Mackenzie and IG Wealth. You talked a little bit about the drivers of that success. Can you talk about other parts of the business that you'd like to see accelerate, for example, IPC and your institutional business, and some of the successes that you're seeing there, or some things that you'd like to see going better in those businesses? N o, a very fair question, because not everything, you know, this is... If it's a 10-cylinder car, it's nice to have nine and a half cylinders, but it's actually more than nine and a half cylinders, 'cause as you know, but for the benefit of your viewers, IPC is an independent advisory business, a dealership. Manages about CAD 30 billion in assets, earns about CAD 15 million. And so while it's a meaningful amount of assets under advisement, it's less than 2% of our earnings. So it's a small business. But, Aria, I'm glad you raised... I spend way more than 2% of my time on IPC. I spend a multiple of my time on IPC, because I'm excited about what that business can be. I really am. So when I think about the wealth management industry in Canada, I think about a business that really grew up, that was formed, that was developed in the eighties and in the nineties. And there is a generation of advisors that built their practices and indeed built the industry architecture that these businesses reside in currently. And that generation of advisors are 57, 58, the plus. They are, they're getting ready to retire. They're thinking about practice succession. They're thinking about selling their practices. And Aria, that's gonna be a great opportunity for this industry, because as you know, there's a couple of models in the industry. There's, you know, the bank-owned IIROC model, where there's a certain grid and a certain payout. There's the independent advisor model, where there's a higher payout, but the advisors bear substantially all of their own expenses. But they tend to be direct drive business models, each of them. I think we're on the... As practice succession becomes a bigger and bigger aspect of the business, I think we're gonna see new industry models. I think we're gonna see new industry architecture, new industry archetypes. And so with IPC, we're gonna participate, our goal will be to participate meaningfully in the evolution of the industry as new industry models are built. Some of those models, for instance, may be models that are pure relationship model managements, where we purchase practices, we convert them to a relationship management model, where the advisor is paid a salary and a great bonus, depending on goals achieved, as opposed to a percentage of AUM. So when I look at IPC, I see ongoing opportunity to deliver more AUM, as they work more closely with our ecosystem, including Mackenzie. But I really see an opportunity to participate in the evolution of this industry. And it's been a while coming, but I think it's pretty clear that the passing of the baton generationally is upon us. So, 2% of our earnings, but way more than 2% of our potential going forward, and that, I'm just very intrigued by it, Aria. So thank you for raising IPC. Absolutely. Thank you. And can you give us an update on how the Northleaf business is doing, and any recent success that you've had in that space? So Northleaf would be the third largest of the private markets providers in Canada. Now, the top two would be substantially larger, to be sure, Brookfield and Onex. But Northleaf is an outstanding mid-market private markets player. The group has a 70% economic interest in it, and we have 80% of that 70%, so 56% and 49% of the votes. So, you know, one of the things I believe, Aria, is that if something's important, if something's strategic, don't joint venture, don't partner, take an ownership stake. So we've done that in Northleaf, because we really believe that there's a need to move private market solutions into retail channels and ultimately into retail hands. Northleaf is off to a great start. They would have AUM, you know, at the end of last year, in the CAD 15 billion range. Their fundraising already year to date is through CAD 3 billion. So that's, you know, 20% of their previous fiscal year-end AUM. The business has very strong leadership under Stuart Waugh, and a culture... You know, I've done wealth acquisitions all my life, Aria, and I can tell you nothing's more important than culture and cultural fit. This is an acquisition that a year in, really and truly feels right. We're starting to move these solutions into retail channels. We launched a Mackenzie Northleaf private credit fund about two months ago. We will be launching a Mackenzie Northleaf infrastructure fund shortly. Both of those are sold by way of offering memorandum, but they're sold by advisors, independent advisors, bank advisors from coast to coast. And so we see, you know, as I said, we have five growth levers. Alternatives is one of those growth levers. Northleaf is the vehicle, and we couldn't be more pleased with its success, and that's a tribute to the management team last year, who identified this opportunity and made this deal happen. Thank you. And, you know, you talked about the growth levers, and IGM's been pretty active in M&A perspective recently, and Northleaf is an example of that. But you still have significant dry powder available. How often and how aggressively are you looking at opportunities, and what are some areas that are of interest to you right now? So my message to my team, and indeed to the investment bankers that cover us, is that we want to see everything that trades. And we want to see it before it trades. We are interested in growing both our wealth management and our asset management businesses. I want to be clear that our primary strategies are organic. So for instance, when I talk about our desire to be a bigger player in high net worth and ultrahigh net worth in Canada, I want to reiterate that our primary strategies are going to be executed through IG Wealth and through IPC, but we're very, very open-minded to acquisitions as well. So on the acquisition front, wealth management, I view wealth management, if I look at how it's organized around the world, I view it as an industry that's organized regionally or perhaps out to nationally. It's not organized on a global scale. Whereas asset management is very different. Asset management is organized on a global scale, which is why you see some very large global players participating very successfully in the Canadian market. So for wealth management, our aspirations are Canadian. Okay? They do not, at this point, extend outside of Canada. We pivoted the IG Wealth business. You know, it was mass market, mass affluent. We have pivoted it very successfully. We show this in our quarterly results now regularly. We have pivoted it to mass affluent, high net worth. We want that to continue. But there's no question that, you know, in this country, we have a dozen, a couple of dozen private investment counselors managing anywhere from CAD 1 billion to CAD 10 billion. Those businesses are potentially of interest to us because we know that they're fee-based, they're discretionary, so they're built for where the puck has gone. And they tend to have a high net worth clientele as well, which is appealing. So in wealth management, that is certainly of interest. In asset management, I'd say, I'd say two things. First, we always wanna have a strong core. So we want our core of equity solutions, our core of fixed income solutions, to be as strong as possible. That may involve from time to time purchasing teams and or acquiring teams, and if it does, that's great. But we've always got a really sharp eye on where's the puck going? What are the solutions we wanna be delivering? Barry McInerney, who runs that business, is fond of saying that, you know, five years out, you know, the majority of sales are gonna be in products that have not been developed today. So again, that's why China, that's why Alts, that's why retirement, that's why ETFs, and that's why socially responsible investing, including the Greenchip acquisition that we made, late last year. As Barry grows those growth levers, on the other side, you've got Damon Murchison running IG Wealth, and he's rapidly bringing those capabilities into the managed solutions at IG Wealth. But I would say this, if you know, Mackenzie is gonna continue to identify, you know, where the puck is going, where sales are gonna be in three to five years out, and that could involve acquisitions. I think they always have to be mindful that they are participating not in a domestic industry, but in a truly global industry, and there are where there are some big global participants, you know, succeeding here in Canada. So they're gonna have to constantly think about the evolution of their business in acquiring more and more global investing capabilities to take to their distribution network. So, we have, again, primary strategy, organic; secondary strategy, inorganic. But we do have CAD 600 million of surplus capital to deploy, and we also have, we also have senior debt capacity, and we have other options as well. So, M&A is something that we're, we're not thinking about, it's something we're focused on, as we speak. Okay, great. Thank you. And, you know, with, with China being one of those, one of those levers, has there been any discussions with ChinaAMC recently to increase your, your ownership interest? And what would that look like for you? Is that something that you'd be interested in, and, and how would, how would that be structured given the, the dynamics within the Power Corporation structure? S o we have. You know, we changed our disclosure, as you well know, and we now have disclosure down to the net income level for wealth management, for asset management. And we substantially increased our disclosure around our portfolio of strategic investments, which includes the surplus capital. And I believe that's now north of CAD 4 billion in total value. So there is. So on China, I'm hard pressed to identify an investment that we have, a property that we have, that has a higher probability of really attractive medium-term growth and long-term growth than ChinaAMC. Aria, I really am. And I say that notwithstanding what's been in the news recently. That is a unique property. It is the product of a 50-year relationship between Power Corp and people in China. It's the product of a 50-year relationship between the controlling family of Power Corp and people in China. And it is a property to be proud of. It is the number three participant in their industry. It has been growing, as we disclose quarterly, you know, 40%+ rates for net sales. And when you think about that, you know, it's the number two economy, the number two fixed income market, the number two capital market globally, you know, it's, there's an enormous amount of potential there. One of the things that I remind people of is that China is still in the early stages of fully standing up, you know, the three-pillar retirement system. You know, we have that in Canada, obviously, where there's government support, there's employer support, and then there's individuals who achieve retirement savings through certain vehicles. That third pillar is just starting, so there's an awful lot of growth ahead. We have said publicly, Aria, that it's a property we have very, very high regard for, and if the opportunity presented itself, we are potentially interested in owning more of that. That position very much stands, but I really have nothing further to report beyond that today. Okay. I appreciate that. Now, James, we are bumping against time here, but I wanted to ask one final question about your dividend policy and your preference for repaying capital to shareholders. IGM has historically had the experience of considering dividend increases, what the payout ratio is approximately 65%. Given that right now that's around where IGM's hovering and earnings are growing, sales and asset levels are growing, what should investors expect in terms of future dividend increases? I t's a very relevant question, and look, we would never increase the ordinary dividend by virtue of having a bunch of surplus capital. We would increase the ordinary dividend because our confidence in the underlying momentum of the business supports that. And I wanna be clear, I'm very confident in the underlying momentum of these businesses, to be sure. So that is a decision, Aria, that is, that is ahead of us. I would point out that, and, you know, I made this remark at the outset, notwithstanding a 50% increase, roughly a 50% increase in the share price, year-over-year, we still have a dividend yield of 4.75%. W ho would have thought that your share price could increase 50%, and you'd still be able to produce a yield of 4.75%? Which on a pre-tax interest equivalent basis in Canada, must be north of 6%. I t's a very, very attractive yield. And so that is something that I do think about. So, you know, we're gonna have a conversation with our board in November about dividend policy, capital usage, generally. And, you know, I can share with you that I do have tremendous confidence in the underlying earnings and earnings momentum of these businesses. But I am also mindful that I think we are in for, you know, if confidence holds, if markets hold here, Aria, I think in both wealth management and asset management, we're in for a period of 18-24 months of very significant M&A opportunity. So we're gonna have to think about, you know, whether we increase the dividend. I know we're gonna wanna participate in M&A because, that is one of the ways that you truly, in an enduring way, strengthen the core franchises, that you're fortunate to own. So I don't mean to dodge. I tell you truthfully, that it is a conversation that is ahead, and, there's arguments in favor, and there's arguments that would suggest not so. But we're proud of that dividend at 4.75% as we sit here today, notwithstanding the substantial increase in the share price. And we are, you know, I'll just finish by saying, in respect of that, I've talked about our North Star. Our North Star is this: the path to a higher share price for IGM Financial is through higher earnings. And if we're faithful to that North Star, if we execute against that North Star, then very, very clearly, over time, that's going to open the door to dividend increases that our shareholders would benefit from. Great. Great. Well, James, thank you so much. Unfortunately, that's all the time we have for the session today, but thank you again for attending this year, and we look forward to hopefully hosting you in person next year. Well, I would absolutely love that, down in New York, and, it's a great conference you've put on, so I look forward to it. Aria, thank you. Thank you.