At IGM, our business is about improving the lives of Canadians through better planning and managing their money. Our clients are more motivated than ever to build their resilience against potential uncertainties and are making the connection between how their money is managed and how it can improve all aspects of their lives, today and down the road. They’re also looking for their investments to have a farther-reaching impact – to help tackle climate change, to promote equity and inclusion, and more.
We’re proud to have been there for our clients as they dealt with the challenges of the pandemic and looked to the future. Thanks to the outstanding efforts of our employees and advisors, our clients did very well in 2021 – as did our shareholders – and we have clear business momentum.
We ended the year with record-high assets under management and advisement (AUM&A) of $277 billion, up 16 per cent from last year. Net inflows for the year of $8.7 billion were also a record high, up from $7.1 billion in 2020. Annual net earnings of $978.9 million or $4.08 per share are an all-time record high and up 28 per cent from 2020.
For Canadians, IGM’s ability to demystify the growing complexity of financial markets – to provide clear holistic guidance across all aspects of our clients’ financial lives, while also bringing institutional-style solutions to retail investors – has set us apart in our sector. As a result, the two big engines that drive our business, wealth management and asset management, delivered strong performance and are on clear paths to continued growth. What’s more, our strategic investments continued to help us enhance growth profile and expand capabilities.
With the pandemic persisting and inflation concerns rising, it was essential for IG Wealth Management and Investment Planning Counsel to stay close to clients and help them navigate evolving market conditions that directly affected their investment portfolios.
Under Damon Murchison’s leadership, IG Wealth Management continued to experience strong and sustainable growth. Client assets under advisement grew to a record high $119.6 billion, an increase of 16 per cent from 2020, while full year net inflows were a record high $3.7 billion, up from $795 million last year.
To build on the momentum, IG solidified its leadership team, adding recognized investment and client experience expertise. IG’s Private Wealth Management offering continued to support the affluent mass-market and high-net-worth (HNW) segments. In 2021, investment product sales to households with more than $500k invested at IG was up 46 per cent from 2020, with this segment representing 59 per cent of our sales, up from 54 per cent in 2020.
Client relationships were enhanced with the rollout of the Conquest financial planning software, which uses artificial intelligence, advanced analytics and allows both real-time and remote collaboration to provide an increasingly sophisticated level of planning. The technology enables advisors to create and stress test different scenarios, complex situations and adapt plans quickly to reflect changes in clients’ lives. Investments like this no doubt contributed to IG improving its scores in 26 of the 27 business categories in the Investment Executive 2021 Dealers’ Report Card, more than any company in the study. These scores are based on feedback from advisors about their firms.
The launch of IG’s Climate Action Portfolio was another significant step forward in our commitment to being a leader in sustainable initiatives, providing clients with a new way to support the world’s transition to net zero carbon emissions and take advantage of the growth opportunities therein. Launched in late October 2021, the suite of four diversified managed solutions has been very well received.
Investment Planning Counsel (IPC) delivered strong financial results in 2021. With net earnings up 34 per cent and at an all-time record high level, they are poised for even greater success in the future. To take advantage of emerging opportunities, IPC strengthened its leadership team with Chris Reynolds moving into the newly created position of Executive Chair, and Blaine Shewchuk, who was previously IGM’s Chief Strategy and Corporate Development Officer, assuming the role of President and Chief Executive Officer.
IPC continued to grow its corporate branch office model and is well positioned as a generation of independent advisors look to retire and transition their business to a strategic partner. Results were enhanced by IPC’s reputation with its financial advisors; the firm received stellar ratings – 9.1 out of 10 – in the Dealers’ Report Card.
President and Chief Executive Officer
Mackenzie Investments, led by Barry McInerney, rolled out innovative, forward-thinking products and solutions, while delivering a second consecutive year of record results.
Total AUM hit new highs of $210.3 billion, up 14 per cent from $185.1 billion at the end of 2020. Mackenzie saw record-high investment fund net sales of $5.4 billion and total net sales (including institutional) of $5.1 billion in 2021.
Sustainable investing is one of Mackenzie’s main growth drivers as institutional and retail investors alike look to achieve better risk-adjusted returns, while contributing to positive social and environmental change. The firm continues to build its capabilities and solutions – and make a name for itself – in this growing space. Having acquired Greenchip Financial, which specializes in environmental thematic investing, in late 2020, Mackenzie added the Mackenzie Betterworld sustainability-focused boutique and launched its two inaugural funds in 2021.
Alternative investments are expected to account for about 50 per cent of the global asset management revenue pool by 2024. In an effort to make this asset class more accessible to retail investors, Mackenzie launched the Mackenzie Northleaf Private Credit Fund and the Mackenzie Northleaf Private Infrastructure Fund in 2021. In January 2022 we launched an industry- first interval fund, which gives retail investors a new way to access illiquid private credit investment strategies.
Exchange-traded funds (ETFs) continue to be a core part of Mackenzie’s business and grew by nearly 50 per cent in one year. What’s more, the firm continued to roll out industry-leading innovations including two first-of-their-kind-in-Canada funds that expand Canadians’ access to growth opportunities in China, and a balanced fund with cryptocurrency exposure.
Our strategic investments give us access to new sectors, enhance the capabilities of our core business operations and, as we’re finding, open doors to opportunities across the various companies. These investments include, for example, Wealthsimple, where we are the largest shareholder, and Portag3 Ventures, a global fintech- focused venture capital investor. Following an equity fundraising in 2021, IGM’s investment in Wealthsimple is valued at $1.15 billion which, including distributions of $294 million, represents an approximate eight-fold increase in the value of IGM’s cumulative investment of $187 million.
Solidifying our position in the Chinese asset management industry – one of the largest and fastest growing markets in the world – we announced an agreement in January 2022 to increase our investment in China Asset Management Co. Ltd (ChinaAMC). By acquiring Power Corporation of Canada’s 13.9 per cent equity interest in the company, we’ll have a 27.8 per cent stake in one of the top three asset managers in China. We see our continued partnership as the best opportunity to accelerate growth and diversify our business.
IGM was particularly well positioned to succeed over the past two years thanks to an ongoing strategic business initiative to modernize our employee, consultant, advisor and client experience. When COVID-19 emerged, our digital transformation enabled us to move quickly to an online business model. Since then, we have continued to adopt sophisticated digital tools and new processes working with industry leaders such as IBM and Google, and a new partner, CapIntel, whose digital application will improve IG advisors’ ability to deliver advice and tailored know-your-product proposals to clients quickly, simply and transparently.
In our workplace, we increased our focus on health and wellness, leadership communications and regularly surveying our people to ensure we were meeting their needs in a timely manner. Many of the programs and practices introduced in 2020 have since become the new normal at IGM. We were most pleased that our attention to our people was recognized, both by them and externally – all three IGM companies were ranked as Top 100 Employers, nationally for IG Wealth Management and in the Greater Toronto Area for Mackenzie and IPC.
Social issues have taken centre stage in the last couple of years – in part because of the pandemic, but also because of the troubling instances of racial injustice that have come to light. We recognize our responsibility to meet the moment. In 2021, IG Wealth Management and Power Corporation announced a partnership with the National Centre for Truth and Reconciliation in an effort to be part of the Indigenous reconciliation process. This was also the second year of our IG Empower Your Tomorrow Indigenous Commitment, which will deliver $5 million over five years to Indigenous communities across Canada in the form of financial empowerment tools, resources and partnerships.
More broadly, we continued to promote diversity, equity and inclusion in our workplace and our communities, through performance targets, hiring initiatives, training and community investments. Mackenzie Together is a prime example of our efforts to build a more equitable economy and a fairer world; this community platform is dedicated to creating a more inclusive investment world by advancing women through education, financial security and career opportunities.
While social issues demanded attention in 2021, the growing threat posed by climate change could not be ignored. Canadians witnessed the real impact of climate change in the extreme weather events in British Columbia and around the world. In November we released our first Climate Position Statement, declaring our support for a stronger global response to climate change. Through our wealth and asset management businesses, we aspire to play a significant role in the transition to a low-carbon economy. Our position statement outlines our three climate commitments, which are to invest in a greener, climate-resilient economy, to collaborate and engage to help shape the global transition, and to demonstrate alignment through corporate actions such as achieving carbon neutrality in our own operations by 2022.
Everything we do today is designed to create better tomorrows, whether it be securing the financial future of our clients, advancing careers for our employees and advisors, contributing to the communities where we live and work, or using our position as a large financial services company to fight climate change.
That’s why we were so proud to be recognized among the world’s most sustainable organizations for the third consecutive year. IGM was the top-rated capital markets and asset management company in Corporate Knights’ 2022 Global 100 Most Sustainable Corporations listing, a study that evaluates the sustainability performance of more than 6,900 publicly traded companies worldwide.
Looking ahead, our primary growth strategy will be to continue attracting great employees, advisors and clients. But with surplus capital and significant senior debt capacity available, the leadership team is also actively looking for M&A options that are strategically aligned, solid businesses – focusing on companies that would help us advance our HNW and ultra HNW strategies in Canada or grow our presence in the global asset management space.
We’re excited by the prospect of 2022 being the year that the world moves past the pandemic. We believe we have the right strategy, the right team and the right culture to better the lives of Canadians and to help us achieve higher and more sustainable returns for our shareholders. Thank you for your continued confidence in us.
On behalf of the Board of Directors,
President and Chief Executive Officer
R. Jeffrey Orr
Chair of the Board
R. Jeffrey Orr
Chair of the Board