AGF Management Limited

Blake Goldring - Chairman of the Board and Chief Executive Officer Robert Bogart - Chief Financial Officer, Executive Vice President and Member of Executive Committee Mario Causarano - President of AGF Trust Company and Chief Operating Officer of AGF Trust Company

Doug Young - TD Newcrest Capital Inc. Jason Chen John Reucassel - BMO Capital Markets Canada Paul Holden - CIBC World Markets Inc.

Geoffrey Kwan - RBC Capital Markets, LLC Stephen Boland - GMP Securities, Ltd. Scott Chan - Canaccord Genuity

Thank you, operator. Good morning, everyone.

I'm Bob Bogart, CFO of AGF Management Limited, and it's my pleasure to have you join us for today's call. Please note that the slides supporting today's call and webcast can be found in the Investor Relations section of agf.com.

Today, Blake Goldring, Chairman and CEO, and I will discuss AGF's 2010 fiscal year and fourth quarter results. Also joining us on the call and available to answer questions is Mario Causarano, President and COO of AGF Trust.

I'll now turn the call over to Blake.

Thank you, Bob, and welcome to everyone listening to today's conference call. Since our last update in late September, AGF has taken an important step to growing our company with the acquisition of Acuity Funds Ltd.

We expected that the deal will close next week on February 1. When completed, the acquisition will strengthen our position as one of the largest independent investment management firms in Canada with total assets under management increasing to over $51 billion.

This important acquisition comes during a sluggish year of recovery for the global economy. After signs of improvement during the first quarter of 2010, the second and third quarter brought a return to global market volatility.

Internationally, we saw a sovereign debt crisis in Europe, while domestically, Canada's growth became more subdued by the end of year. There was cooling of the housing market, slowdown in exports and slower job growth.

Despite that, AGF continued to forge ahead with growth plans and strategic initiatives, believing that our long-term focus will overcome short-term volatility. Let me begin by providing you with our financial highlights from the past year.

From a financial standpoint, 2010 was a positive year, despite the ups and downs face the economy. Investment Management assets remained stable at $43 billion.

Year-over-year consolidated revenue increased 4.9% to $614 million. Our EBITDA rose 17% to almost $257 million.

We also saw an increase in earnings per share to $1.30 compared to $1.09. We returned 58.3% of our cash flow to shareholders through dividends and share buybacks.

On the downside, mutual funds remained in net redemptions, and I'll speak to that and our strategy to address that in a moment. Trust loan assets declined 11.1% from 2009, reflecting our strategy to a slow growth in the Trust segment, while profitability rose sharply, with the EBITDA increasing 31%.

Bob's going to speak more about that shortly. Moving to the next slide.

Let's turn to assets under management. As I mentioned, our investment assets didn't change much year-over-year.

The acquisition of Acuity will boost our assets under management to more than $51 billion. We continue to work hard to turning redemptions around, and the acquisition is part of our overall growth strategy.

As you know, balance and fixed income categories are still popular with clients. Acuity has a well-known reputation for excellent offerings in these areas.

At AGF, we filled out our product suite in this area in 2010, where we launched five new funds in the fixed income and balance categories, and these continues to garner investor attention. We're particularly excited about the emerging market bond and balanced funds, which we launched just in November and are being well received by advisers.

We also continue to spend a lot of time focusing on relationships. For example, I've just been on the road, hosting a number of dinners across the country, and our sales team and fund managers are in the midst of a multi-city tour that is taking them from coast-to-coast.

Our enhanced product lineup, combined with our strong advisor relationships and our focus on strategic partnerships, positioned us well for the future. I should note, too, that when investors return to equities, AGF, with our Acuity wages [ph] lineup, is poised to benefit even more.

Another key part of our growth strategy is to increase our institutional assets by leveraging our Investment Management capabilities. You'll notice from the slide that the institutional assets have remained relatively stable.

As I've noted in the past, institutional mandates take longer to work their way through the business cycle, and adding remaining mandates will be more evident than in the retail space. As well, you've heard me talk about our expansion into other markets.

You will recall that it was last year that we opened a new office in Hong Kong to foster business development, and we've added new resources in Europe. Recently, we've been awarded several new mandates in the last quarter, and we continue to gain traction in the United States.

I'd like now to turn to a slide on AGF Trust. Loan assets declined year-over-year at deliberate results of our strategy to reduce our loan assets and refocusd how we sell mortgage and loans following the credit crisis.

We're committed to enhancing credit quality of our loan portfolios. In 2010, we focused on building a strategy that leverages existing relationships and new partnerships to once again ramp up for growth.

For example, in the first half of 2010, we worked with one of our largest strategic partners in the advisor channel to determine what kind of product they needed for their clients. As a result, we launched our smart loan program, which we subsequently expanded across the country and is being very well received.

As shown in the slides, our mortgage loan originations in the second half of 2010 increased significantly. Late last year, we also announced new license agreement with an important mortgage broker channel, which became available just this month.

All of this activity bodes well for AGF Trust to continue to be a profitable, stand-alone contributor to AGF. Now let me turn it over to Bob to discuss our financials in greater detail.

Thank you, Blake. On Slide 7, we have provided a summary of our consolidated financial results for fiscal year 2010 compared to 2009.

AUM has declined 3.6% year-over-year. Our Retail business experienced net redemptions throughout the year, offset by improving equity markets.

On the institutional side, we also experienced outflows in our EP mandates. However, that was offset by good traction in our EM, global and resource mandates being distributed on both in international and domestic bases.

However, in late in Q4, we lost a low margin account managed by Cypress Capital Management Vancouver. So while ending AUM was down, our average AUM in 2010 was actually higher, driving increases in revenue.

Consolidated revenue was up 4.9%, and overall SG&A was down 1.8%. I'll provide further color by segment in a moment.

EBITDA was up almost 17% end the year at $256.8 million, while margins improved to 41.8%. Net income for the year was $116.8 million, up nearly 19.5% year-over-year.

2009 included a favorable one-time $9.8 million income tax reduction. And by excluding this, net income increased almost 33%.

Diluted earnings per share were $1.30 as compared to $1.09 a year ago. And finally, free cash flow increased 14.6% to almost $174 million, which we used to pay down debt, pay dividends and buyback shares.

Moving to Slide 8. Let's look at the Investment Management segment.

Revenues in our Investment Management segment were up 9.3% to end the year at $520 million. As previously mentioned, this was driven by the higher average AUM year-over-year.

On a full year view, Investment Management SG&A expenses declined compared to 2009. Compensation-related expenses were higher in 2010, reflecting higher share-based compensation, including the introduction of our partners incentive program.

Additionally, 2010 SG&A expenses included a one-time $3.5 million charge for a settlement related to legal proceedings, and this was offset by lower investment performance, as well as [ph] bonuses in 2010, declines in fund absorption expenses of $7.6 million compared to 2009. And then finally, in comparisons to 2009, which it included cost related to severance and restructuring, which were not present in 2010 at those levels.

We should note for the quarter that SG&A expenses reflects some Acuity-related transaction cost in advance of the close of that transaction next week. EBITDA of $216 million for the year was 19.1% higher than 2009.

And overall EBITDA margins improved to 41.6% and were exiting the quarter with expanding margins due to the favorable market tailwinds. Turning to Slide 9.

This slide lets you see our segment performance on a longer trended basis and smoothing out some of the impacts of market in quarterly expense volatility. It shows our Investment Management segment revenue operating expenses and EBITDA as a percentage of average AUM on the current quarter, a trailing 12-month basis in the prior year's quarter.

Note that the quarters have been annualized. Compared to the trailing 12-month period, average AUM is relatively flat.

This reflects market growth offset by retail net redemptions, institutional net redemptions that I noted earlier and the negative impact of a higher Canadian dollar on the international funds. Our revenue described in basis points has trended slightly higher, reflecting the loss of several lower margin institutional assets.

SG&A has remained stable during the quarter in the trailing 12-month period. Q4 '09 SG&A includes a favorable one-time true up of bonus, which resulted in lower expenses for that particular quarter.

EBITDA is at 51 basis points during the quarter, compared to 49 basis points on a trailing 12-month basis, reflecting the impact of expanding revenue due to positive market action. Moving to Slide 12 (sic) [Slide 10], we'll take a look at Trust results.

Trust revenue for fiscal year 2010 is $95.8 million. That's a decline of 8.1% on a year-over-year basis.

Q4 revenue of $22.8 million represents a 6.2% reduction on a sequential quarter basis. The revenue decline is attributable to lower average loan balances, as previously discussed.

SG&A expenses for 2010 were 4.8% higher year-over-year, while loan loss provisions were down 53%, reflecting improved economic conditions. The resulting EBITDA increased 31% to $41 million.

Turning to Slide 11. We see Trust annual net interest margin reflecting an increase to 2.6% from 2.4% a year earlier.

While NIM has remained constant in 2010, we do expect to see and experience some compression on NIM in 2011, as the quality of loan book improves as Trust ramps up its mortgage originations in the AUM mortgage space. Turning to Slide 12.

Slide 12 shows the stability in the provision for loan losses since last year, which is contributed to more consistent results at Trust. Allowance for loan losses, although not depicted on the slide, were $32 million, reflecting a significant decline from almost $40 million at the end of 2009.

Also shown on the slide, represented by the top line, is Trust's efficiency ratio. Compared to the 2009 ratio of 36.4%, Trust efficiency ratio was 40.8% in 2010.

We anticipate that the efficiency ratio will continue to trend up in the short term, as Trust increases its operational staff for RSP seasonality in addition to growing loan originations to the mortgage broker channel. On Slide 13, we see our EPS trajectory on an actual and on an adjusted basis for the last five quarters.

When one-time impacts are removed, our adjusted EPS for 2010 was $1.38 as compared to an adjusted $0.98 from a year ago. And with that, I'll turn the call back to Blake for some closing remarks.

Thanks, Bob. I'd like to come back to the Acuity transaction.

When this deal closes, our assets are going to be over $51 billion. At this point, everything appears to be on track with required approvals, and we expect to close on February 1.

As I mentioned, the Acuity transaction is an important development for our firm. It significantly enhances our retail and institutional business and diversifies AGF's product lineup.

The acquisition extends our presence in the fixed income and balance products, and introduces our clients to the growing world of socially responsible investing. We've grown our company and added investing expertise that will allow AGF to continue to thrive in the future as one of Canada's leading independent investment management firms.

So what does all this mean for our shareholders? We're happy to report that we will maintain our dividend in 2011, which we feel is prudent, given the current markets and our acquisition of Acuity.

The current yield on the dividend is over 5%. As you can see on Slide 15, dividend has grown by a compounded annual rate of 19%.

Despite a lumpy economy, we've managed our expenses prudently and are on solid financial ground. We recognize that we have work to do to return to a positive sales, and we're focusing our strategy to move forward.

Our relationships with advisers and our strategic partners are strong, and we continue to win mandates in the institutional arena. Our trust operations continue to be profitable, and we'll leverage our relationships with strategic partners to continue to grow that business.

We have over 50 years of history, providing investors with leading products to help them grow their wealth. We'll continue to do what has made us strong, earn our investors' trust, managed our money well and build relationships.

That concludes our formal remarks for today. Now we'll open it up to questions.

Just want to clarify, Blake, with respect to maintaining the dividend. I know you're increasing in Q1, but sounds like you're not contemplating an increase for all of fiscal 2011.

Is that correct?

Why would you infer that? We're -- just because traditionally we've used this particular moment to announce any increases, all we're saying is we're maintaining and not making a change for now, but we're maintaining.

So if the integration with Acuity is going well, a couple of quarters from now, you might review the dividend policy again?

We review it every quarter.

With respect to the emerging market funds that you recently launched, can you give us any insight into early sales progress?

Well, I can say that daily, there's strong flow. And there's a lot of buzz out there.

I mean, it's interesting. Institutional investors have been strongly moving into this area, and it's great to see this particular category resonate with retail.

And then one of your key objectives for 2011 is to improve financial performance of the Investment Management Operations. Can you maybe provide us more color with respect to that objective?

Where do you see the opportunities to improve financial performance?

Financial performance, not investment performance. You're talking financial performance?

Correct.

I think with the addition of Acuity, certainly, that scale will -- based on what we're planning for in terms of extracting synergies, both in the revenue side and expense side, will actually manifest itself into improved margins.

But in terms of existing operations, there's nothing in particular that you're targeting for integration?

We continue to work at it every day in terms of our back-office and efficiency on the front. So nothing in particular, Paul.

And with respect to fund absorption costs, is there room for those to come down further, or is it mostly dependent on market returns, i.e. appreciation and AUM?

Yes, I think we made some headway on fund absorption, both in terms of the cost of the back-office outsourcing last year. And so I would expect that the future reductions in fund absorption would be primarily driven by the market.

And final question, you provided some details regarding fund performance in terms of what percentage of AUM was above median for the AGF funds. Do you happen to have comparative numbers for the Acuity funds?

What I've got, for instance, on one-year periods, you have 78% of their funds versus the second quarter, so it's extremely strong.

First question I had was, can you provide, in terms of the Institutional business, if you were to exclude that mandate that Cypress had lost at the end of year, what the institutional net flows might have looked like for 2010?

Well, Jeff, we don't, as in the past, we don't give away specific in terms of the Institutional business. And with -- but you can see through the AUM, both on the retail side and the institutional side, you should be able to draw a conclusion in terms of what's happening, what the institutional flows.

But it would've been kind of -- would it be directionally positive or negative?

I can say directionally, it's positive. And just my sharing, you know that the new mandates serve in Q4.

So they're looking for funding sometime this first quarter. We've got a European-based pension plan, and we've got a Canadian-based financial institution.

We also have a U.S.-based top partly [ph] plan as well. These are all transactions that we're going to be funding.

So these will be the ones funded. Not talking about a very rich pipeline.

And just kind of expanding on that, I know I've asked it on previous conference calls, but directionally say, over the quarter-over-quarter basis or quarter over two quarters basis, the institutional pipeline in terms of RFPs and the like, are you finding that it's getting better or is it kind of flat, and both for you guys and just in general in the market?

The pipeline is, I think we're gaining traction on the pipeline, so it is improving both on domestic as well as international fronts.

You can see and notice that ongoing support in the emerging markets, the global, the global resource equity strategies, and this continues to be robust.

And last question I have was for Mario. You'd mentioned about wanting to get positive loan growth some time in 2011.

Is it something where it may be more towards the end of 2011 that you would have positive loan growth? Or are you looking at being a little bit more, trying to gain more origination momentum earlier in the year?

Well, Jeff, I mean, we're going to try and get that started as obviously as soon as we can. To Blake's comments, we just launched with a national distributor on the mortgage side.

We're starting to see a little bit of momentum in that already, and we're out doing sales activity in that channel. And we'll continue to push that first.

So as soon as we can get it happening, the earlier the better.

Just a follow-up question on the institutional side. I think, Bob, you mentioned that you won a mandate in emerging markets and global resource.

Was that in Q4 or was that kind of after Q4, after November 30?

It's after Q4.

It was after Q4? Was it material or kind of just small mandates?

Material. So I'll just re-emphasize, we’re gaining, we've got good traction in the three or four mandates, both on a domestic and international basis.

Yes. And Scott, all our clients are material.

And I guess with the Acuity acquisition, on the institutional front, they are pretty big players on that side. How do you plan to leverage the institutional platform with Acuity?

Well, I guess part of me wants to stay tuned. We can't really go into too much detail given that we haven't closed that transaction.

So we'll have a lot more to say about that at our next conference call.

Just one final question, just on the retail side, last year, you had kind of the list of focus funds that you guys were focusing on for our species in terms of advisers and client. The focus funds changed this year or is it more the same of income and balance for 2011?

Yes, they are the same focus for us because we find getting the message out time and time again, really, it's important to have that focus. We’ve also added the two new products, the emerging markets products I referred to earlier.

Just, Bob, with the loans coming down, or Mario, in the Trust, I know you want to growth there, but is there a chance that there's going to be a dividend out of the Trust to reallocate some of that cash towards the holding company?

Well, John, I mean, we're always looking at what we can do from a dividend perspective. So we'll continue to look at that.

I mean, we've got lots of capital in the organization and kind of given where we see projections, we also do a bunch of stress tests on the portfolio as well. So we think we've got opportunity to consider that for sure.

And Bob, on the 38 basis points, which includes the advisory fees, is that 38, you seem to mention with Acuity that 38 should start to come down or should we not interpret that on the SG&A expenses? Is 38 the right number, or is that coming down with Acuity?

It would come down effective Acuity, once we're post-integration, John.

And remind me again, Bob, are there integration costs that we should expect? And have you, have I just forgot what they are?

Are you going to highlight those to us when they come in?

We'll highlight those to you as they come in, correct. And you didn't forget.

We didn't disclose.

And then, Bob, on the IFRS, when we look at the balance sheet next, we see IFRS numbers next quarter or is that really going to be a 2000 -- is that going to be a next year issue because your year end's November?

That's correct. It will be next year, 2012.

And then last question for Blake. With the Acuity in the platform, what would be a sustainable EBITDA or EPS growth that you would target for AGF, Blake?

What would you give us a number that you're comfortable with?

Well, again, we're going to have a lot more to talk about later on because, clearly, until we close and what we are going to be doing as far as looking at certain fund rationalization, that sort of thing. I really can't comment at this point of [ph] view forward-looking.

Then excluding what would you said to me prior to Acuity, sustainable earnings or EBITDA growth? Is it 10% or 12% or 15% or?

Well, I mean, John, we'd obviously look for both margin expansion as the revenue line trended up. Aftermarket action, we're more focused on the institutional business and getting retail redemption problem fixed.

I think the margins will take care of themselves once we fix the top line. So we haven't set forth any specific targets other than knowing, as we discussed in prior quarters, that this is an ever competitive environment, and that margin expansion has its limit, and I wouldn't expect to get into the 50% kind of margin range.

Just on the investment management side, on the expenses, just, I guess, two questions. There is an increase in comp, I think you mentioned of $7 million.

I'm just curious as what drove that year-over-year? And then you also mentioned there was some Acuity-related transaction costs and just wondering if you could quantify that?

And then maybe, Bob, on the same breath, when I look at Page or Slide 9, your EBITDA on a basis points is 51 basis points. And I guess I'm on the same question as John, like where should we be looking to get -- for you to get that to -- I think you give us prior to the Acuity some ideas before, I'm wondering if you can maybe enlighten us again?

I'll take the second, first. Again, with Acuity, we'll see our expectation is that it will be expanding the margins.

Again, post-integration. I won't give you a target, but our expectation is that it will be at or greater than the 51 that we're reflecting as part of AGF's operations.

Secondly, on your first question, compensation is up. We've got a new program that we've put in place, the partners incentives program.

It replaces the current RSU program and stock option plans and has accounted for approximately $4 million of incremental expense this year. That's not a cash expense.

It's just the accounting required that we recognize this kind of on a graded basis, so the expense is heavily weighted to the front end. So that's the majority of the Delta, the stock price increased, so that also had impact on our RSU expense or compensation expense.

And the Acuity-related transaction costs in quarter?

Just slightly less than a $1 million.

And then, Mario, I guess on the -- you have signed a new agreement with, I think it was VERICO. Is this just simply a prime mortgage product that you're putting through this?

Or is this, are you doing loans through this agreement as well?

Well, we're doing both prime and off prime. So both an A and B product were taken into that channel.

On the mortgage side, not on the investment loan side, right? This is a mortgage distribution company that we're working with here.

And have you -- I mean, I think we've talked about is in the past, but you've gotten back into the no margin loan product again. I know there was some contemplation of that, can you just update us where you are with that?

Yes, my view on that product is that there's been a substantial change in appetite out in the marketplace, and that has a lot to do with kind of the last cycle and everybody's -- an advisor's ability to convince clients to use that as a way to get back into the market. And so we're not seeing a lot of appetite there.

And as a result, we've got a shift in terms of where we're putting our energy. And the housing market in this country is strong and we see lots of opportunity there.

So we reoriented in terms of where our focus will be for 2011.

So to focus more on the mortgage side versus, let's say, the loan side essentially?

Definitely. With the exception of our RSP program, which we launched a month or so ago, and that will take us through RSP season obviously.

That will be kind of our loan focus, and then the rest of it is all going to be on the mortgage side.

And just last, I guess, for Bob, the tax rate, 28%, any reason to believe that should change? And, Blake, on the Smith & Williamson, any updates on the plans with that investment?

Maybe I'll go first, Bob. Yes, it was Smith & Williamson as steady as she goes, I mean, it continues to have very solid growth in the actual assets under management and £10.5 billion now, so it continues to grow strongly.

But there are no biz or anything that -- as steady as she goes, I guess, is the best comment for...

I know there was talk of IPO, anything around that?

We review that regularly. And the market over there is not conducive.

And we spent time last board meeting discussing this. And the markets are just not right to maximize the value for that.

But it's still on the drawing board, and I know it's been there for a long time, but U.K. is a very different market than the Canadian market.

With respect to the tax rate, Doug, that's a good number to utilize for fiscal '11.

I guess when I look at your gross sales in 2010 compared to 2009 and the redemptions, the gross sales have stayed the same, but redemptions were up about $1 billion year-over-year. You've mentioned launching new products.

So when you look at getting back to net sales, is it more gross of going into the complex or less redemptions or a combination, like what is your sort of guidance there?

Clearly, gross sales have been the issue. And we know to -- I mean, people try to overanalyze the business.

I mean, you've got to have product in the categories that are selling, number one. And two, you've got to have performing products in those areas.

So we're taking active steps, and that was really what we did over the course of last year to rectify those areas where we knew we could sort of move ahead, Steve, and so that's part of it. Clearly, it's not any surprise investor.

Some are remaining cautious about returning to Acuity. So it's a way to still very present in people's minds, and it takes a little bit longer for cycles to recover and people to start to come back to areas like the Acuity.

So I think that we'll just make sure we got competitive products in those key areas. And working hard, I can tell you having come off the road that our relationships are very strong with our clients.

So it's not any issue regarding not getting advisor support. I can see that -- I watch out to see very closely daily what our progressions being, and I can tell you that our gross continues to decline.

I'm very excited by what Acuity has in particularly popular areas. You can check that for yourselves, what type of offerings they have there, say, strong performers.

I'm very optimistic as we start to the future.

If you just remind me on Acuity again. I think at the time of the announcement, you mentioned it would be accretive, and that's year one, I presume.

And as you're getting closer at closing this, can you give a magnitude either year one, year two?

We won't, Steve, but we will re-affirm that our expectations, even on a prorated basis, will be accretive to its earnings in year one.

And just lastly, I guess for Mario on the Trust and that distribution alliance with VERICO. How is that going to impact your, I guess, net interest margin?

I believe there is some sort of trail or component to that agreement, if I'm correct?

Right. So with respect to the NIM, and this kind of goes a bit to my answer to Doug's question, I mean, we're in that channel with both an A and a B product.

And if you look at our existing book, it was all built on B spreads. And Bob alluded a bit to this as well in his comments.

Over time, you got to see that starts to compress depending on what that mix looks like. So we're going to be in the channel, obviously, getting -- looking for as much volume as we can and then managing the mix as we're in there.

So I mean you are going to see on a forward going basis, some compression in the NIM, it'll just happen automatically with respect to the mix in the business. With respect to the trailers, it's a different model.

And it allows you to be in that -- there are not many institutions that are offering that model in the broker channel. There's only a small handful of them.

And so it's an entrée into getting into the channel, starting relationships. We will offer both a trailer comp and a one-time comp.

So again, it'll be the mix. But we think we can manage those costs over and spread them over the book, particularly, as you look at renewals in that program.

We're looking for kind of the business a lot stickier and to keep it a lot longer over a couple terms.

I guess, Mario, just one, when I look at your originations, even that slide you put up, pretty flat first half to the second half. I mean is the function of the net growth going to be from some of the older products rolling off that when you had more robust growth, or is there going to be a more material growth in the originations?

Well, I mean, we've got to change that line, right? I mean, today, as Blake said, we've come out fairly cautiously in terms of where we're focused, how we're doing it, increasing the quality of the book.

I mean you can actually see it in terms of the quality adjustment that we've had with respect to the book that we already put on. And so even last year, when we got out, we worked with one key distributor that was on the advisors side.

I mean, that's worked out well for us. Good margins, good quality book.

And we've got to start growing that at a different rate. I mean, when you get a book that's matured like our existing, our legacy book, I mean, it starts to runoff in terms of payments over time, and that's why we've got to start outpacing that.

So you will see us do more of that work in 2011.

Got a couple of quick follow-ons on the Trust business. With regard to the growth, approximately how much of the loan originations have to grow in order to do offset the runoffs on a quarterly basis, do you think?

Our forecast is you need to put on probably about $1 billion to keep the balance sheet kind of flat is where the number will need to come in.

So that's about $250 million a quarter then, roughly? But...

I mean, it doesn't go off linearly, right? I mean, I'm talking about over a 12-month cycle.

Also, with respect to the VERICO co-branding, did the mortgage brokers actually have the ability to take their loan to a different funding source other than yourself? Or do you get the right of first refusal on those?

Well, I mean we're working with VERICO as a distributor and we're preferred partner. And it's the same kind of strategy that we do in our advisor business and we'd be doing for 50 years at AGF.

And we're taking the same strategy in the mortgage area. So are there other providers on the platform?

Yes. Are they all equal in terms of being preferred providers?

No. And so it gives you different access to the channel, we're working differently with the head offices and the broker-dealers.

And when they think our offerings are better as well. So all of that will help us to get back to some of these origination volumes that we're talking about.

Also, are there any thoughts on becoming a CMHC approved issuer so that you can sort of improve the margins on the prime products?

I mean, we can utilize the CMHC and MBS program. I mean, we can put pools into the programs.

So we are approved to do that. And so we always are looking at our liquidity sources and cost of funds.

So we will continue to look at those in terms of what it's costing us to raise money in traditional ways through a deposit program and how we can take assets and liquidate them in a different way.

Just one quick question on the Investment Management. Not sure if you guys can talked over this, but can you talk about the distribution channels between Acuity and AGF?

Are there crossovers or overlaps?

In fact, one of the questions at the dinners I've been hosting, I asked the question. How many, by show of hands, how many in the room are using Acuity products today?

And the answer, the uniform almost, about 1/3, which means there's a big, big uptake of people who have never been using or exposed to Acuity products. I'm sure that if I were to be in an Acuity meeting and ask the same question of how many are using AGF funds, there would be an interesting show as well.

So I think there's a great opportunity there. And of course, we've done the mapping of the broader numbers of advisors, so it'll be probably a common, about 1/3 or so.

Thank you, operator. That concludes our call today.

We'll look forward to all of you joining us for our next earnings call, discussing first quarter results on Wednesday, March 30. Thank you, and good day.