These positive developments, however, were also accompanied by new challenges, including rising inflation and interest rates, market volatility and geo‑political uncertainty. We are proud of the way our team and our clients rose to the occasion together. It truly represented the best of IGM.
The environment we faced demonstrated the importance of a sound strategy and determined execution. It also demonstrated the value that thoughtful, well-considered planning plays in helping deliver the best results for our clients, while moving our business forward.
As our clients navigated the year, we provided them with the guidance and support they required. Thanks to the exceptional work and commitment of our employees and advisors, our clients – and our shareholders – are well-positioned to benefit as market volatility begins to subside in 2023.
Support for our employees continued as we emerged from the pandemic. By providing individual team hybrid work flexibility, special days off, and ensuring a living wage, we’ve maintained our ongoing focus on people’s emotional, financial, physical, and social wellbeing. This focus contributed to IGM being named a Top 100 Employer in Canada by MediaCorp Canada Inc. in its annual ranking of leading workplaces.
A key priority for us in 2022 was to keep a prudent eye on expenses. We are a market-sensitive business. As markets drove revenues down sharply, we revised our full-year expense guidance, which includes operations and business development expenses, down from approximately 5% to no more than 3% growth on a year-over-year basis. In fact, we ended the year lower still. These efforts are not only responding to the current environment, but also helping lay the foundation for building an even stronger organization.
During the year, we were pleased to welcome new people to new roles. Luke Gould, formerly IGM’s Chief Financial Officer, assumed the role of President and CEO of Mackenzie Investments. Keith Potter succeeded Luke as Executive Vice-President and Chief Financial Officer, having most recently served as Head of Mortgage, Insurance and Banking for IG Wealth Management. Finally, Kelly Hepher joined IGM Financial as Chief Risk Officer in April. We are fortunate to have these individuals on our team.
We ended 2022 with assets under management and advisement (AUM&A) of $249 billion, compared to $277 billion last year. Net inflows for the year were $1.2 billion compared to inflows of $8.7 billion in 2021. Annual net earnings were $867 million or $3.63 per share, which is the second highest in company history.
President and Chief Executive Officer
Against a more challenging economic background, IG Wealth Management and Investment Planning Counsel provided their clients with the guidance they required by remaining focused on the value of financial planning and being responsive to market opportunities.
IG Wealth Management
Led by President and CEO Damon Murchison, IG Wealth Management continued to demonstrate strength and adaptability. Client AUM&A were a robust $110.8 billion, and net inflows remained strong at $2.7 billion. We maintained our momentum in attracting and serving clients from the high net worth (HNW) and mass affluent market segments. Further, inflows of IG-managed investments to new affluent clients with investments of more than $500,000 has grown by 59% since 2019. During 2022, we benefited from IG clients’ inclination to stay committed to their tailored financial plans even during periods of significant market volatility.
As we continued to drive advisor productivity (as measured by gross new assets per advisor), we also kept a strong focus on enhancing our client service and engagement. These efforts helped IG score at or ahead of the industry average across all measures in the J.D. Power Canada 2022 Full-Service Investor Satisfaction Study.
IG continues to leverage technology on behalf of clients and advisors. In December, IG announced a partnership with nesto, Canada’s leading digital mortgage lending platform. Starting in the first half of 2023, by integrating nesto’s Mortgage Cloud solution in our mortgage solutions business, IG advisors will begin providing clients with an easier, faster and best-in-class digital mortgage experience. We also launched a new online Tax Centre for clients and expanded the range of digital forms and tools for advisors to manage client accounts. Our overall commitment to improving the advisor experience over the last few years helped IG become the top-rated, full-service mutual fund dealer in the 2022 Investment Executive Dealer Report Card, an annual study that is based on feedback from advisors about their firms and the overall wealth management industry.
Investment Planning Counsel
In 2022, Investment Planning Counsel (IPC) continued to provide support and services to more than 650 advisors who manage close to $30 billion in investments for over 200,000 Canadians. IPC, guided by President and CEO Blaine Shewchuk, achieved solid financial results in 2022, with net earnings of $11 million.
IPC delivered positive net flows on assets under administration (AUA) despite market volatility. In addition, to provide savings to our clients, we lowered management fees across 30 Counsel investment solutions. These changes, coupled with asset allocation changes by our portfolio management team, have enhanced the overall attractiveness of our investment portfolio.
Further, we continued to evolve IPC One, our discretionary wealth management platform for Portfolio Managers. The platform, which was launched in 2021, ended the year with $2.2 billion in assets.
On July 1, 2022, Luke Gould took on the role of President and CEO of Mackenzie Investments, succeeding Barry McInerney who announced his retirement. We thank Barry for his contributions. Drawing upon more than 25 years of experience in executive roles across IGM, Luke is well-positioned to guide the firm into the future.
Despite significant market turbulence and an environment in which the industry experienced investment fund net outflows of $50.2 billion, Mackenzie delivered solid results, relative to other firms. Total AUM stood at $186.6 billion, compared to $210.3 billion at the end of 2021. Mackenzie saw investment fund net redemptions of $1.0 billion and total net redemptions (including institutional) of $1.9 billion in 2022.
Challenging market conditions are nothing new for Mackenzie. We are confident in our strategy and look forward to continuing to capitalize on key opportunities, such as our exciting new partnership with Primerica. Together we launched the Mackenzie FuturePath product suite: 25 exclusive funds designed to meet the needs of Primerica’s network of 7,000 advisors and 250,000 clients.
Retail and institutional investors continued to look for sustainable investment options that deliver dependable risk-adjusted returns and support positive social and environmental change. During the year, Mackenzie’s Greenchip boutique, which focuses on environmental thematic investing, continued to be among our top-performing and best‑selling capabilities.
Alternative investments, which are expected to account for approximately 50% of the global asset management pool by 2024, are an important asset class that retail investors in Canada have only recently been able to access. Through our partnership with Northleaf Capital, we are democratizing alternative investments, including private equity, private credit and infrastructure, by making these types of opportunities more available to retail investors. This included the launch of the Mackenzie Northleaf Private Credit Interval Fund (a first-of-its-kind retail offering in Canada), and the Mackenzie Northleaf Global Private Equity Fund, which further expanded retail investor access to private market investment solutions.
Strategic investments are an effective way for IGM and our businesses to enter new sectors, expand our core operations, and create rewarding investment opportunities across our various businesses. On January 12, 2023, we completed the acquisition of an additional 13.9% equity interest in ChinaAMC, increasing our holdings to 27.8%. Among other things, this further enhances our participation in the rapidly growing Chinese asset management industry, through a meaningful ownership position in one of the country’s leading asset managers.
In addition to our ownership stake in ChinaAMC, we are the largest shareholder in Wealthsimple, which grew its number of clients by 16% to almost two million (excluding Weathsimple Tax users). As part of our new agreement with nesto, we also made a minority equity investment in the company. Further, we are a key investor in Portag3 Ventures, a global venture capital investor targeting the fintech sector, which enables IGM to participate in the growth of these companies and leverage expertise and learnings in our core business.
Over the last several years, IGM has pursued a strategic digital transformation to modernize and enhance the experience we provide to employees, advisors, and clients.
We built on this foundation during the year by partnering with recognized leaders in innovation and service, including Google Cloud and Salesforce. In July, we announced a strategic agreement with CGI to deliver the next generation of mutual fund transfer agency platforms in Canada. Later in August, we announced a collaboration with Microsoft Canada, choosing the company’s Azure cloud computing platform to support our ongoing modernization of key infrastructure and practices. In October, we transitioned the IG Contact Centre to a digital platform, Salesforce Service Cloud Voice, a foundational step in our modernization story.
One of the defining workplace changes to come out of the pandemic is the shift to new ways of working. In partnership with our employees, IGM adopted a hybrid work model based on flexibility for our leaders and the needs of their teams. This has allowed our people to balance their professional and personal lives while still providing external advisors and clients with exceptional levels of support and service. Additionally, special days off and wellness programs that accommodate both virtual and in-person activities contributed to impressive employee engagement results in 2022
Working to build a just, equitable and inclusive society is a priority for IGM, our employees and advisors. We recognize that we have a role to play and are committed to doing so. Across our operations and communities, IGM continued to foster diversity, equity and inclusion (DEI) through performance targets, hiring initiatives, training and community investments.
We have set targets for increasing the number of employees from underrepresented groups across IGM within the next three years, including women executives, Black executives and Indigenous employees. To help build a more diverse and inclusive culture, we support seven Business Resource Groups – 2SLGBTQIA+, Black Advisory Council, DiverseAbility, Green, Indigenous, Pan-Asian and Women – aligning their programs and initiatives with IGM’s DEI strategy and business priorities.
As part of our ongoing reconciliation journey, in 2022 IGM provided 4 Seasons of Reconciliation training to all employees and field members. This included time to reflect and honour Canada’s National Day for Truth and Reconciliation in the workplace and in the community. We continue to partner with Prosper Canada in helping to ensure First Nations have access to services that help build their financial confidence. A common thread that runs through IGM is helping
people prepare for the future. A similar focus guides our effort to help address the global issue of climate change, which we recognize as a defining challenge of our time. In 2022, we continued implementing the Task Force on Climate-related Financial Disclosure recommendations, including enhancing reporting on investment-related carbon emissions. Additionally, we set interim climate targets at Mackenzie to engage companies in which we invest and encourage wider adoption of science-based targets. Further, IGM engages with portfolio companies across a range of sustainability-related issues, including climate. We are proudly Canadian and strive to advance the decarbonization and resilience of the Canadian economy.
Our efforts are being recognized. We were once again named by Corporate Knights as one of the Best 50 Corporate Citizens in Canada, as one of the Global 100 Most Sustainable Global Corporations, and also as a leader in climate action and disclosure by CDP. These awards reflect our sustainability focus and performance and our commitment to engage our business in serving the interests of people and our planet.
In an ever-changing world, IGM continues to be guided by our values and our purpose. Throughout the year, we worked to ensure the financial well-being of our clients, to help our employees and advisors build their careers, to support the communities where we live and work, and to use our influence and capacity to fight climate change and drive positive social impact.
Looking ahead, we will remain focused on driving growth by working to attract and support great employees, advisors and clients and continuing to build a high-performing, engaged and diverse workforce. We will also advance our modernization initiatives and continue to look for opportunities to strengthen our ability to compete with global asset managers and grow our wealth management business with HNW and ultra-HNW clients. Thoughtfully, prudently, and strategically, we will keep moving forward.
The world is adopting new ways of working and collaborating to move past the pandemic. While market and macroeconomic factors impacted results, we are pleased with the underlying performance of our businesses and are well positioned to come out even stronger as markets recover. Equally, we are delighted by the ongoing commitment and determination of our leaders, employees, and advisors to navigate these times. Heading into 2023, we are confident in our strategy, people and culture, and sure in the belief that we will continue to better the lives of Canadians and deliver lasting value for our shareholders.
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