IGM Financial Inc.

Paul Hancock - VP, Finance and IR Kevin Regan - EVP and CFO Jeff Carney - President and CEO Barry McInerney - President and CEO, Mackenzie Investments

Gary Ho - Desjardins Capital Markets Geoff Kwan - RBC Capital Markets Graham Ryding - TD Securities Tom MacKinnon - BMO Capital Markets Paul Holden - CIBC World Markets

Thank you, Alana. Good morning everybody.

I'm Paul Hancock, Vice President of Finance and Investor Relations. I'm joined today by Kevin Regan, Executive Vice President and CFO of IGM Financial; Jeff Carney, President and CEO of Investors Group and President and CEO of IGM Financial; and Barry McInerney, President and CEO of Mackenzie Investments.

Before we get started, I'd like to draw your attention to our cautions related to forward-looking statements on Page three of our presentation. Non-IFRS financial measures that we have used in this material are summarized for your reference on Page four.

And finally, on Page five we provide a list of documents that are available to the public on our Web site related to the third quarter results for IGM Financial. Kevin Regan will now take us through a summary of IGM Financial's results and the industry environment, starting on Page seven.

Kevin?

Yes, thank you, Paul, and good morning everyone, and thank you for joining us today. We'll begin on page seven, and for the quarter operating earnings were $197.6 million, which resulted in operating earnings per share of $0.82.

Earlier today, or earlier yesterday, the Board declared a dividend of $0.5625, maintaining a level of dividend, and this reflects a dividend yield of 6.31% based on yesterday's close of $35.64. Net sales were negative in the quarter, but have improved in October as we've experienced positive momentum in sales activity in Investors Group particularly.

And as you know from our press release, gross sales for IGM are up 11% in October, with contributions coming from all three of the operating companies. Finally in this page, we made additional Fintech investments in the quarter that built on our investment in Personal Capital, and Jeff will discuss this with you shortly.

We move to page eight, a few comments on the operating environment. The S&P TSX Composite Index rose 4.7% in the quarter thanks to strong performance of basic material stocks, and is now up 10.7% over the last 12 months.

Major global equity industries were also strong over the quarter, particularly Asian markets, which rose over 8%. The weakness in the Canadian dollar offered an additional boost to foreign equity returns.

Gross sales in the advice channel declined 4.2%, while net sales fell by $2.6 billion. Deposit takers experienced a 1.5% increase in gross sales, and increase in net sales of $600 million.

On page nine, we summarize regulatory developments in the quarter. It's been a relatively quite quarter in terms of these developments; however two items are worth mentioning.

The first is that as part of the CSA's ongoing modernization project which is reviewing parameters of product regulation that apply to publicly offered [indiscernible] investment funds. The CSA issued a notice and request for comment on a proposal that would broaden access to alternative investing strategies.

We fully support the intention to expand access to alternative funds, as this is an area that IGM, and in particular McKenzie is a leader in terms of product innovation and alternative solutions. So modernizing regulation of these types of products will only improve access for clients.

The second point is the IGM companies all submitted comment letters in the quarter to CSA on the best interest standard proposal. These comment letters are public, so we would encourage you to read our submissions.

And finally, we're anticipating that the CSA is going to issue a consultation paper on the option of discontinuing embedded commissions quite soon, and we'll be actively engaged in these discussions. So with that, I'll now turn over to Jeff Carney to talk about the Fintech investments in the quarter, and do the review of the Investors Group results.

Jeff?

Thank you, Kevin, and good morning everybody. We said at the last quarterly call that we had made an investment in Personal Capital, and we're very pleased with that investment.

But we've also been active beyond that initial investment with that firm. We've announced that we're entering into a partnership with the new venture fund called Portag, and it will be led by Paul Desmarais III, and headed by Adam Felesky.

And we are in an ecosystem of talent when it comes to those two individuals. And the reach that they have, not just within Canada but global context as far as what's going on in Fintech and the developments, and we get to participate in everything that they're learning across the spectrum of financial services.

So, we feel very leveraged into the evolution of our industry and where it's going, and being a part of that through Portag3. And we'll have opportunities to invest in companies that they identify if they go forward.

And we look forward to sharing those stories with you as we evolve it. We also announced that we are now a shareholder of Wealthsimple.

And Wealthsimple is the leading global advisor in Canada. It's the dominant leader in the industry.

It's been recognized as one of their top 100 most innovative companies in the world, and has a dynamic team that's continuing to evolve their model as they go forward to serve Canadians, and we feel very fortunate to be a part of that investment as well. Turning to results, starting on page 12, on our previous call, I think it was early in my days at Investors Group, so I have a little more knowledge now than I did last time.

And I talked about going around the country and visiting a number of our associates everywhere, and spending a lot of time with the consultants themselves. And I really enjoyed getting to know our teams and our management in the field, and learning more about our company as a result.

And we've started to look at where we go with our organization as we go forward. And we're very focused on the commitment that our consultants and employees to our financial planning model.

We think that is a critical piece of our value proposition. We are a market leader already in that space as far as the number of planners we have in the education that we've brought to our advisors and the sophistication they could bring to their clients when it comes to their needs, and what they're trying to achieve in their lives.

And so that's a very exciting foundation that we have that we're continuing to build on. In early October, we held a very successful strategic planning session to sort of reflect on the work that was done before I arrived, but also look at where we could go going forward.

And we'll look forward to sharing that with you as we go forward. We had senior leaders from the -- the network to join us on that, and really focused in on our differentiation as we go forward.

And so stay tuned on that, and I'll update you as we work through those opportunities going forward. But all of it is around the value proposition and our competitive advantage long-term against our competitive set.

So we'll share updates on that in the future. And then we did make a significant decision, and a key strategic decision for us in the quarter, to eliminate the DSC purchase option on our mutual funds, and reduced our fees on our no-load funds, which has enhanced our competitive position in the marketplace and really freed our advisors up to have these discussion with their clients going forward.

And, we are very pleased with at how that has been received by our advisors and our clients as a result and you can see on page 13. Eliminating the DSC option removes a significant competitive barrier.

It is not easy to sell DSC. And by eliminating it, it simplified our offering.

And it's making it easy for our clients to do business with us, and they are starting to do that. The response from our consultant network has been overwhelmingly positive in terms of both feedback and sales activity.

And they are seeing new opportunities they just didn't get before as a result of this. So you can see in the chart that gross sales was tracking lower in the quarter up to the day we announced the DSC change.

However, post to the announcement through to the end of October, we have seen a significant pickup in activity with gross sales now tracking 5% higher compared to last year and net sales in October up 92 million and we were negative a quarter before. We expect that the impact of these changes on earnings and redemptions to be neutral with upside potential as a result of the sales activities I just described and again these are early days of that impact.

Turning to slide 14, our consultant networks did 5,380 individuals at the end of the quarter. Investors Group has been successful in growing the network over the past several years.

And as we move forward, we will be very focused on increasing the productivity of the consultant practices and building a strong team approach. And driving increased productivity is going to be one of my core legacy as I work through this company.

Ensuring we are providing our clients the highest quality of planning and advice is another area of focus. So, I am pleased to report that the number of consultants getting to be are qualified at CFPs or FPI is up to 34% from September 2015 to 2,692 which is a record high for our company.

So, I am really pleased with the efforts of our consultants to achieve those standards, and we look forward to all our consultants having CFPs or FDIs going forward. Turning to slide 15, and our flows, you can see mutual fund gross sales were 1.63 billion in the quarter.

We have added the month of October to the sales to redemptions chart to illustrate the improvement since the announcement we made and in gross sales and the elimination of DSC. The sales momentum was strong in October as we experienced 92 million in net sale.

Turning to slide 16, our focus on high net worth segment continues to show strength attracting 1.4 billion in gross sales year-to-date. Twenty five percent of gross sales year-to-date has gone into high net worth series versus 22% in 2015.

We are attracting higher quality clients. We continue to expand our unbundled fee structures which at the end of the quarter accounted for 8% of mutual fund assets, an increase of 34% from last year.

On Slide 17, you can see our insurance & mortgage business and product. They play a key role in our client's financial planning needs.

And we have seen continued growth here as well. Insurance is up 25% year-over-year.

New mortgages business activities exceeded 2.2 billion this year, which includes our all-in-one solutions banking product. Mortgages outstanding rose to 12.6 billion, an 8.4% increase compared to the prior year, and we are not anticipating that the government's recently announced policy changes around mortgage underwriting and insurance will have a material impact on our mortgage operation.

As we have highlighted in the past, our mortgage operation has high underwriting standards, strong credit metrics, primarily due to the long-term relationships we have with our client and a deep understanding we have of our clients as well. And we have diverse funding sources which we believe position us very well going forward.

Turning to slide 18, our median client returns have improved this year as financial markets rebounded from earlier lows. Our one, three, and five year median returns have all improved and are in a range of approximately 6-7%.

On slide 19, our relative performance over the one-year period has been challenged by our long term -- but our long term performance remains competitive, particularly in our portfolio funds which accounts for roughly a third of our assets and the majority of our gross sales these days. Turning to slide 20, Investors Group management and admin fee rate has been relatively stable over the last 12 months and also highlights the continued increase in our high net worth series as a proportion of our mutual fund AUM which grows to clearly 8.8% over the quarter.

Turning to our EBITs and non-commission expenses, they increased 5.8% over Q3 in 2016 which was largely due to investments in initiatives that's part of networks such as growth in a specialist network marketing programs and our apex conference which was held this quarter. We continue to expect the increase in expenses for the full year 2016 to be about 8% excluding the Q2 5 million extraordinary items related to the leadership transition that we had highlighted last quarter.

and we expect to growth in 2017 to be below that 8% number going forward. On that, I will now turn it over to Barry McInerney to go through Mackenzie's results.

Thank you, Jeff, and good morning everyone. I just finished off my first quarter here at Mackenzie, and very pleased to be here and very excited about our future rescuing our strategy and you can see the momentum build each and every quarter and I'd like to take you through some of these highlights.

On slide 23, speaking of just some highlights, we did continue a strong momentum in both flows and buys engagement in the quarter. Our mutual fund AUM entered the quarter $50.3 billion just under our all-time high.

Retails flows improved, left strong sales from our balanced and foreign equity funds. Our score in the Environics Annual Perception Study APS rose again this year, validating our efforts to prove our position in market place; worked very hard on that and more -- I'll speak more on that in a moment.

Our newly launched ETF products have been well received by advisors and our institutional business experienced positive net sales in the quarter, and we are running our tool kit, in September we launched three more smart beautifully ETFs and corresponding mutual funds. These were our maximum diversification ETFs and that's with the partnership and I'll speak to in a moment, they're just terrific award winning management firm-based in Paris.

On 24 in terms of mutual fund flows, our gross sales during the third quarter were $1.65 billion, up 11.2% relative to last year. And we look in the retail channel in our gross sales ramped 7.7% and this was led by our Ivy global balance and our Ivy foreign equity funds.

And we thought this as particularly strong results as industry sales were down 4.2% within the vice channels Kevin previously mentioned. And the strong momentum continues in October and did continue in October.

Our mutual fund net flows improved by $110 million relative to Q3 2015 of $305 million as compared to last quarter. And our redemption rate on long term mutual funds remain below peers at 14.8% during third quarter.

On slide 25, looking at gross sales by asset class, our balance funds continue to sell very well the sales in the quarter of $669 million. Our core balance funds which excluded symmetry funds ramped 20% compared with same period last year.

And our four and five star rated balance fund mandates attractive inflows of $204 million this quarter up 73% over last year. And finally foreign equity growth sales continued to be strong at $553 million again led by our Ivy foreign equity funds.

And now on 26, this shows our net sales by asset class and again our overall net sales were positive $55 million for the third quarter, an improvement of a $181 million compared to Q3 2015. And we experienced positive sales just about most categories so our balance net sales excluding the symmetry funds turned positive this quarter next to an $85 million improvement compared to last year.

In our ETF business is up to a really solid start given that recent product launches and a cross country road show in September with $25 million in accretions in the quarter, $70 million year-to-date. Institutional net sales were a $100 million in the quarter.

On slide 27, I mentioned our how we did with the APS scores and we are really pleased the results were released in the quarter. This is a survey of approximately 3000 advisors on histories trends and company performance.

These advisors are across the country and MacKenzie is one of only two top ranked companies to experience the increase in its overall score in 2016. Our overall ranking now is fifth a solid fifth place that's up from 11th in 2014 and 12th in 2013, and a couple of highlights are sales penetration ranking moved to second from third place, and we have a really strong brand equity ranking at second now across our peer group.

So it's transformation of Mackenzie that clearly resonates with advisors and clients. We continue to work really hard to reach our goal of being ranked the top three firms in the perception study by 2019.

On to our performance and flows on slide 28, some of the key highlights you can see we continue to have our strong performance on our Ivy and growth-oriented strategies. And then on Cundill, Cundill continues to face performance challenges based on its Morningstar rankings.

But as you know, we have a new team in place, they're doing really well. And the three-month performance is -- which is owned by the new team, is in the top quartile.

And we've also seen substantial declines in redemptions, some within 20% range to 14% this quarter, and actually a majority of our boutiques across the board, saw a nice pickup in performance the last three to six months. On slide 29, in terms of our Morningstar rankings, 35% of our mutual fund assets are in four and five star funds, which is a slight decline from last quarter, but up from 31% at the end of last year.

And the percentage of assets in five star funds improved over the quarter as our McKenzie Canadian growth fund was upgraded to five stars by Morningstar. Slide 30, again, mentioning a little bit about our terrific partnership with TOBAM.

We broadened our suite during the quarter. Again, we launched Smart Beta ETFs mutual funds in the quarter through unique categories in the international, Europe, and global equity areas which covenant the Canadian and U.S.

equity. ETF mutual funds we launched in June with TOBAM.

And this is an exclusive partnership with TOBAM, as I mentioned, an award-winning asset management firm. And through TOBAM or through McKenzie rather we can offer a proven methodology design to protect portfolios from structural bias and unmanaged risks, which are often found in cap-weighted indices.

TOBAM is recognized with industry awards across the Board and its innovative maximum diversification approach is supported by processes that are patented across multiple jurisdictions. And then as I mentioned, we completed a very extensive cross-country road show in September.

We had over 1,200 advisors attend 20 presentations in 10 cities. And we had the TOBAM Founder and CEO, Yves Choueifaty, joined us.

And the feedback was really, really strong from the advisors, and it's early days still, but we're pleased with the $30 million in net creations in our maximum diversified ETFs to date. On 31, our average AUM, it is up 4.4% in Q3 compared to Q2 of '16.

And you could see our net revenue rate is held stable at 76.9%. Net revenue we define as the -- all the line items that are primarily driven by AUM levels, including all fee revenues less all commission expenses, so a stable performance on that metric, on slide 31.

And finally, on 32, you can see we had higher average total assets, and a slightly higher net revenue rate. And that resulted in our net revenue increases 5.5% relative to the prior quarter.

Our non-commission expenses are up 10.2% compared to the same period last year, but this just reflects some higher marketing spend associated with our ETF launch, and some technology and other timing-related items. As guided last quarter, we expect non-commission expense at McKenzie to increase by about 6% for 2016, which includes the annualization of important new investments we made last year and our ETF launches.

So with that, I'll turn it over it over to the operator for questions.

Good morning. Jeff, maybe to start off with the feedback from your Listening Tour, you've eliminated the DCS purchase option, but it sounds like there are more changes to come.

Can you give us a glimpse of what you're thinking there?

I think the biggest thing that I can impact is the productivity of our advisors. And so that sounds simple, but not necessarily easy to do, but I see a lot of opportunity there.

So if you ask me where am I focused on, it's that productivity. Now, improved investment performance can help productivity, new product capabilities can help productivity.

As you know, we're investing in new systems to enable us to serve higher-end clients that can enable productivity compensation in structure, and enable productivity. So there's all these tools that are available to me to utilize.

And I'm looking at all of those options as we go forward. And then I think the other big opportunity for us is taking that financial planning to a whole new level, but also segmentation, and really understanding our clients better.

And we've started some segmentation with high net worth, but I think there's a lot more sophistication we can bring to that. And when you segment well then it allows you to bring a better value proposition to that particular group of clients in the way that they need it.

And you can create competitive advantages against marketplace, and really differentiate ourselves. So I see -- I could talk all day today, but I see a tremendous amount of opportunities to get more leverage out of our model than we have in the past.

And I'm looking at all the opportunities to enable that.

And I think last quarter you mentioned that you'd favored growth over pricing. Any more update on that?

How do you feel about pricing on the IT side now that you have another three months to look at that?

Breaking up the management fees?

Yes.

We're doing work on that right now. We've got products more recently that have a better probably in them, but we're going to look at all of our opportunities, and how we can do that over time.

And there is new launches -- we're probably going to have to look at our pricing model and say what do we do at new launches versus the existing products, and then with the existing products where do we go, and how fast to do that. But I want to make sure that ultimately that the price of our products is not a reason why we would ever lose a client, especially in our model, because you work so hard to get the client.

You've got this great financial plan, they've invested in us and we've invested in them, and so we have a loss for management fee, which would be surprising. And I think the other thing is, we're so good at gamma [ph], and which is really our value proposition through financial planning and the training of our advisors and their passion for their clients.

And it overwhelms the management issue and its impact on the client's long-term economics and the ability to generate kind of an income. And so, if -- for our model, but also for our earnings, and then also for our client outcomes, focusing more on the gamma right now is more important than focusing on the cost of our investment products.

Perfect.

[Indiscernible] do on our clients and our P&L.

Yes, okay. And then maybe the last question, for both Investors Group and McKenzie.

As we look out to 2017 who should we think about non-commission expenses? I think, Jeff, you mentioned below 8%.

But should we think of the change to be more in line with changes in AUM levels or are there other expense initiatives that you're contemplating for 2017?

No, I would think it's more -- because if you look at both models, it's been because we've been investing in a business model. And the foundation that's been laid at McKenzie, and Gary, we'll have some more things they all want to do, but there's a lot of work that's been done.

And then we've got –- we've announced things that we're doing here, but they are still going through our P&L. And so building out new platforms and all the things that we've been doing, so agreeing it, we experience that, and once like it I think we can come in a little bit lower than the 8% we've been running, but there's still more work to do that's going to go through the P&L to get to where we want to be.

And I'm also taking a look at all of our expenses across Investors Group, and making sure that -- and IGM as a whole. And very nice -- I have great conversations.

We understand that it's our job to deliver strong, growing earnings over the long term. So we're looking at every dollar of our spending and say, is there a better way to do it.

And if we can find opportunities to then returning that back to the shareholders of our stock, then that's what we're going to do. So I think we'll share our ideas on that as we go forward.

But I think there are opportunities for things like that.

If I could add on the McKenzie side, and the short answer is we expect to be lower than 6% 2017 versus the sixish we'll in on 2016. As if now we have a lot of smart investments made at McKenzie last two, three years, really foundational initiatives to just to enhance the brand, and to launch really a really innovative product to we expand distribution very nicely, 30% across the Board in terms of number of whole selling teams in the retail side, and still a young team, by the way, but they're doing very, very well, with good traction.

And we deepened our investment talent. So those foundational investments are essentially done.

We have little more work on -- obviously the ETF business is important to us strategically, and so little bit build for 2017, but rather than that, it's pretty much business as usual, and focus on execution. And so we're early in our planning cycle, but we'll be below the 6% for 2017.

Perfect. Thanks for the detailed answer.

Hi, good morning. The first question I had was, when you talked earlier, Jeff, on the Fintech strategy, is that -- I guess the way that you want to go about it is to stand top of all these developments through these investments that you are doing.

In other words is there any sense of you guys looking to maybe do some time kind of in-house trying to innovate the industry and build that capability on a proprietary basis?

I think what's powerful about Portag is you have got sort of -- think of it as the creative people within Power and we are getting into this eco state, as I said, just going out trying to be innovative. We are great in that infrastructure headed up by Adam Felesky, and I know Adam very well, he is a very creative person.

He built Portag from scratch. He is a great entrepreneur and a great leader.

And so we have got someone heading up Portag working closely with the operators and it's an ecosystem. And so he gets to come in and sort of learn about what we are trying to accomplish and where we are going.

He is traveling around the world looking at every Fintech opportunity that's out there and working with some of the smartest people in that space and so for free other than we are making investment in something that's going to give us returns over time, we are part of that ecosystem. And so that's exciting and they are, Adam is excited about it having us participate as we are about him running it and because he's got time and he is dedicated to this where Berry and I are sort of running around everyday doing our day jobs.

So it's really scaling I think to the future and where the world's going and being participating in that, I think we have competitive advantage against the banks, I think we are better teamed than any other banks put together and we have got the perspectives from U.S. assets, we have got people in Ireland, the company is all over the world that are part of Power.

And I think it's a long term of being events for us so we can utilize here at ICM and again TM in ITC and then investors group as we go forward. And we are already in that with Personal Capital and we get into board meetings, I boarded and you are learning from some of the best technologists in the world where the market is going.

And so it's been very fast in the way its evolved and it's exciting and Portag3 [ph] has been a huge force in this as well in sort of second division.

Okay. And just my other question I had was we saw earlier this week CI had made an acquisition in Australia, a month ago we saw Henderson buying Janis, just from a broader picture perspective the global industry for asset management, increasing regulatory headwinds and feed the pressure with the Nordstrom passes [ph] or not.

So it seems like scales seems to be one of the key reasons for these types of transactions and just one to get your thoughts on this sort of I guess, maybe I don't know if it's an early trend or not and then also what it means for how you look at IGM going forward?

The service fact, we do have financial flexibility, and so that's available to us. Two, we will obviously have proactive calls coming into us all the time in different opportunities.

We like being more proactive and sort of having a strategy and then going out and finding where we want to go and being adjustable with that. So we have done all that and I think I shared with all of you before that another way I think about it is sort of innovative opportunities to grow our breadth in the marketplace or prepared to be scaled.

And they are all my favorites in their own sort of ways and we don't have as much capital, so we have to think about where do we focus and obviously with investments we just made in the syntax road that we talked about, that's sort of innovation world. And we haven't had to spend a ton of money to get access to that ecosystem that I just described you now in future investments and opportunity to make some money there.

And then on the breadth side we think that could be a huge opportunity for us and we are always monitoring developments in companies all over the world. So we will continue to do that and if we see something that makes sense we are going to jump on it.

So you shouldn't be shocked if we make some announcements in the future because we are always looking and trying to find something that's differentiated and would bring tremendous value to our shareholders.

Okay. Thank you.

Good morning.

Good morning.

Your McKinsey platform it consistently delivers very solid sales percentage of UVUM around the 5% mark, what is it about that platform that's able to deliver such consistent results and is there anything there that you can translate into investors group or your McKinsey platforms?

Great question. I think Chris Reynolds has done a great job, I think he has a really good platform.

He knows the industry so well. He knows advisories incredibly well and they just got a machine and they look at their earnings and it just keeps ploughing for it and why can't we deliver that just the way he has, but he's -- good culture, he's got a nice strong team and just executes really well.

And I don't want to say it's simple model, but he knows what his model is, he is consistent at it and the market knows it. And so I think, and then he's had so many relationships and his people and his team has relationships and so we know the market really well and they are just able to identify these opportunities and I think the advisors are coming into a better environment.

They know that IGM is behind it and they know that they got resources at IPC to serve their clients well and they got a strong value proposition for the advisor and for the influence.

Okay, great. You made reference to the regulatory 33-44 the best interest standard, I apologize I have not read your comments yet but is there anyway you just give us a quick summary of where you stand on that issue?

My view on that I have been with regularities, I don't need you to tell me to have best interest standard because I am going to hold myself to that and when I look at investors group we are in such a great position to do that like the best interest standard is to have a financial plan that the clients engaged in so you know where their life is going, that they feel confident their children's education and their plans for their legacy and whatever else they want to do. That's the best interest standard and also doing the right thing to the client.

So for us, I said that in front of all the advisors that I don't want to wait for [indiscernible] with the client first. I have already said that to everybody in this company, the whole off site was about focusing on the client, and so the regulatory is going to do what the regulatory is going to do, and we have to inform them and educate them and they are very good at asking us for our thoughts.

And we have Rhonda Goldberg here and she's terrific and she -- so we are -- I have been meeting with senior people on the commissions and Jeff Ward as well and others, and so they certainly know our thoughts and [indiscernible] any conversations we have representing our GM is what's right for the client and like every meeting I have been in its music to the ears of the people at the admissions because we are buying. And so when best interest standards idea comes along whether it's put in place or not I want to make sure that our model doesn't have to [indiscernible] because we do put the client first and that's our focus.

Okay, appreciate that. So when I think about both your investors group and McKinsey platforms, do you see any potential negative implications or on the flipside do you see any opportunities if regulation side to go down that path?

It's complicated because what it's doing is creating a new legal structure if it was put in place and you can look to the U.S. model I guess, Canada is different in structuring and everything else but it's been around, like you look at the growth of the rest of investment advisory business in U.S., it's been massive and they have a fiduciary responsibility and they are growing and doing fantastically well.

I feel confident in whatever happens and we are going to have to share our thoughts before it but whatever happens, our model is well-positioned to be successful.

Thank you.

Yes, thanks very much. Good morning.

Jeff, slide 8 is interesting where you talk about the client in the advice channel and the growth in the deposit takers channel. So just in light of that how are you going to compete going forward and what do you think is driving this and what do you think will change that?

And then I have a follow up?

I like our cassettes and stuff like that. There is sort of two themes that I am working for, one is even more focus on our clients and two is how do we position ourselves as the alternative to the bank.

And when you look at the sale and the scope of our brands which we're basically the top four banks and then we're the fifth most recognized brands for financial services in this country and then we're in every community across Canada and we have value proposition that's differentiated in the marketplace. And so I think there is ways for us to -- and we have banking and we have mortgages, we offer pretty much everything that banks could offer.

We've more work to do there and I think there is more creativeness we can bring to that innovation we bring to that, but I'd like to think that we are very well-positioned to disrupt the banks and bring more their money, the client's money to their drawer because we can do a better job and give them better experience over times. That's everything that I need to be working on because they have all the money.

So if I am trying to drill this company and gain market share long-term and drive long term revenue growth it's going to have to come from the banks.

Okay. And then Barry, Jeff shared with us what October net sales were and I am wondering if you can share what they were at Mackenzie?

Yes, they were -- first of all October was good on the retail side on the gross side I can't remember the number our gross sales for October I believe we're in the at least mid teens growth year-over-year that's momentum continues. What's really encouraging with our sales is the fact that they've been improving every quarter this year so we're getting that momentum Q1, 2, 3 and we saw that in October and they've done well year-over-year.

And of course this is in a challenging environment where we're even accelerating where the industry actually has been having a soft year. For October, our total net sales were negative for $31.7 million, but there were some little rebalancing going on in our twofold accounts and the retail side again continues to have strong momentum so that's the number for October.

Thank you.

Great thank you. So first of all good results on the advisor perception study for Mackenzie.

So when you think about the four companies that currently rank ahead of you and your objective of top three by 2019 what are the sort of key hurdles you need to overcome to get to the top three.

Good question. There is a lot of stats and metrics in those studies but if you look at our ranking almost across every metric for every top three from a sales to brand, to inside wholesalers who all those host of metrics.

The area that we're improving on but we're focused on in is the investment side and that's an area we see, we get about 34%, 35% of our assets, for instance, like Morningstar funds that's a hugely important metric for us. And that's poised to go up.

As I mentioned the performance in the last three to six months of most of boutiques has been strong and we have two large pools of assets with condo and cemetery that are improving but they're not at the four or five star level so that's a real lever to point for us. The condo team as you know has been retooled and they're off to a really strong start and the cemetery team, cemetery multi asset class approach that we instituted a couple of years ago it's really replicating what the most sophisticated pension plans do around the world.

It's difficult time to get that in place in terms of transitioning of the various tools and processes that is embedded in that approach but that's picking some nice momentum as well. So that's where we're keenly focused on.

We want to keep doing really all the good stuff we're doing on brand and sales and some ports and all the ranking were already in top three and investment side we're just keep focused everyday and you could see us with those two pools of assets reached their potential then you'll see our metrics really accelerate quickly and allow us to enter the top three overall.

Okay good. And then how closely would you say this study correlates to placing on distributor's product shelf?

They have a 20 plus year record now in that area and its correlative, so the correlation of your overall EPS score as well as the subcomponents is correlated for a future net sales growth. And they've proven that year-over-year.

So we really take a lot of pride in our EPS results, and we really focus on organizationally, it's better than everyone's compensation as well, because it's so rich the approach that they take over that time period. And they have proven with the really deep data set they have is show the correlations that occur.

And the correlations are right there, they're front and center. So you do well in EPS, that's a harbinger of good things to come in terms of net sales in the advisor community.

Okay, good. A couple of questions then for Jeff, so first off, would you consider selling an ETF product whether it's smart beta or some other kind of form of ETF into the Investors Group channel?

So, as part of our strategic work, we're going through those exact question, but if it's McKenzie's, for sure. No, we obviously are looking at expanding our product offering.

No, we obviously are looking at expanding our product offering and do some of those things from learning the past, and we're looking at those issues. And I think that the clients have their access to those products over time, and it's just how do we do that instructionally?

Okay, good. And then similar type question, but this time with respect to Wealthsimple, so there's some interesting things or capabilities that Wealthsimple has that go beyond simple asset allocation, so wondering if there's an opportunity for you to exploit some of those capabilities in the IG channel?

Yes, we're looking at that now. And that continues the segmentation conversation that I touched on earlier, and there's a -- we've learned a lot in Wealthsimple already around our -- they measure everything.

They're a very sophisticated team, and they know everything. So we know that there's clients that are at IG that may be smaller balances that maybe belong in Wealthsimple as far as the value proposition of a client, and so is there opportunities for us to identify opportunities to that.

And also is there -- which could then make our people more productive because they're going into mass affluent and higher-end clients. And then also help Wealthsimple grow, and so that's good for us, because eventually money, we will need more sophistication than that model offers.

And if they want a full financial plan and all those kind of things, then obviously we can have a relationship with Wealthsimple, where they [indiscernible]. So it's back to that ecosystem, it's very early days.

So we've got these component pieces with Personal Capital and with Wealthsimple available to us, and it's sort of what do we do with that now going forward, and how do we bring that and [indiscernible] Investors Group as well, and our model, and our technology in everything else that we're doing. So we're very excited about the access we have, and the learnings that we have right now.

And it's sort of coming into our strategy, and how we're thinking about where we go from here. And I think you'll see us being -- utilizing either the [indiscernible] within that company or pulling ideas out of them, and bringing it into our funnels [ph].

Okay, good. And then just final question for you, Jeff, with respect to the increase in sales after you announced that you're eliminating DSC.

I guess the pessimistic view or the -- one view might be that is this simply a bump of DSC-type sales ahead of elimination of that product. So maybe you can give us some color on the mix of commission structure on those increased sales.

We're very pleased with the increased sales, and we think they're real. So there's no -- there was no gaining or anything whether we're waiting for [indiscernible] this is tangible, real growth coming directly into our model as a result of that change.

And we've heard stories [indiscernible] very significant wins or clients that we were talking to but we couldn't land. And we're now landing it.

And we're really pleased about that.

Okay. So, simply Investors Group consultants selling more DSC product while it's still there?

Yes, absolutely.

Okay, good. Thank you.

That's all I had.

Thank you.

Okay, thank you Alana. Thank you everyone for your participation this morning, and we wish you a good day.