| Investors
Group Inc.
Outlook
MEETING COMPETITIVE CHALLENGES
Due to globalization and consolidation, some of the
Company’s competitors may have greater financial
or other resources than Investors Group Inc. on a consolidated
basis. However, Investors Group and Mackenzie are well
positioned to enhance the Company’s competitive
position in both the mutual fund and the financial services
industries. In order to be successful in this environment,
the Company must continue to be innovative and to provide
excellent service to its clients.
Investors Group – Mackenzie Transition
Investors Group and Mackenzie continue to pursue additional
opportunities for product and service enhancements and
operating efficiencies.
During 2003:
- Management met its transition plan objective which
was to achieve $100 million (pre-tax basis) of synergies
per year on a run rate basis in the second year following
acquisition. This consisted of $75 million per year
in synergies to the Company’s shareholders and
$25 million per year in synergies to Investors Group
and Mackenzie mutual fund clients. Synergies realized
by mutual fund clients are based upon reductions in
fund operating costs.
- The Company completed the largest systems conversion
in the history of the Canadian mutual fund industry
in November 2003. After a comparative analysis, Mackenzie
and Investors Group merged their transfer agency and
unitholder recordkeeping systems into one shareholder
administration system, preserving the integrity and
privacy of their respective client bases. Both Mackenzie
and Investors Group unitholders will benefit from
economies of scale from the combined platform.
Expanded Product and Service Offering
Offering a broader range of financial products and
increasing the diversification of the Company’s
core products have strengthened existing client relationships
and have attracted new clients. During 2003, both Mackenzie
and Investors Group developed innovative products and
strategic investment planning tools to assist clients
in building optimal investment portfolios. Products
and services introduced by both Investors Group and
Mackenzie during 2003 were discussed more fully in their
respective Segment reviews. This strategy continues
to enhance the extent and quality of the Company’s
client relationships, protect its client base and expand
its market share.
Integrated Business Model
The highly developed nature of the Company’s
integrated business model and the scale of our operations
give us a distinct advantage over our competition. The
Company is well positioned to meet increased competition
for distribution shelf-space. The synergies achieved
through the Company’s acquisition of Mackenzie
and its association with Great-West Life, London Life
and Canada Life further strengthen our scale of operations
and position in the marketplace.
While competitors may attempt to replicate Investors
Group Inc.’s business model, management is confident
that the Company will maintain its leadership position
as a primary distributor of a broad and diverse range
of financial products and services.
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