IGM Financial Inc.

Thank you, Betsy. Good morning, everyone, and welcome to today's call.

Joining me on the call today, we have James O'Sullivan, President and CEO of IGM Financial; Damon Murchison, President and CEO of IGM Wealth Management; Luke Gould, President and CEO, Mackenzie Investments; and Keith Potter, Executive Vice President and CFO of IGM Financial. Before we get started, I would like to draw your attention to our cautions concerning forward-looking statements on Slide 3 of the presentation.

Slide 4 and five summarizes non-IFRS financial measures and other financial measures used in the material. And on Slide 6, we provide a list of documents that are available on our website related to IGM's Q4 results.

I will take us to Slide 9 and turn it over to James.

Thank you, Kyle, and good morning, everyone. During 2024, we continued to execute on our growth strategy at IGM Financial with important progress and success across all our businesses.

We achieved adjusted EPS of $3.95, up 12% relative to 2023 and our second highest year on record and we returned over $650 million of capital to shareholders through our common dividend and share repurchase program. We grew our client assets, including our proportionate share for strategic investments by 24%, reaching over $480 billion at the end of the year.

Our core businesses, IG Wealth and Mackenzie made up a large portion of our growth in assets and drove the majority of our earnings growth in the year, demonstrating the strength of our core. Our strategic investments also delivered strong client asset growth, including significant new inflows across each of the 4 businesses.

We have the businesses that we want, and 2024 results support our belief that we are well positioned and have architected IGM to deliver growth. Turning to Slide 10.

As we look ahead to 2025, we will continue to invest in our wealth and asset management businesses, building on recent success in supporting their long-term growth. At IG Wealth Management, we will leverage our leading adviser platform and strong momentum to drive further gains in the mass affluent and high net worth segments.

And Mackenzie remains focused on delivering investment excellence, leveraging and expanding our distribution advantage and elevating the client and adviser experience. We will continue to return capital to shareholders with our strong dividend and share repurchase program.

And as we've said for over a year, from an M&A perspective, we expect to be most focused on investing in the strategic investments that we own today. Shifting to our fourth quarter results on Slide 11.

Adjusted EPS of $1.05 was up 22% relative to the prior year and was the second best fourth quarter on record quarter ending assets at each of our wealth and asset management companies reached record period ending lines. During the fourth quarter, we renewed our normal course issuer bid and continued returning capital to shareholders.

During the quarter, IGM Financial was once again recognized as a top sustainable company as well as one of Canada's top employers. We are proud of these awards and view them as a reflection of the dedication and commitment that our employees deliver each and every day.

Turning to Slide 12. Financial markets remained strong throughout 2024 with positive returns in all major equity markets.

IG and Mackenzie's average client return, which represents our diversified asset mix across global asset classes and currency exposures was an impressive 15.5% for the year. As shown on Slide 13, the industry backdrop clearly improved during 2024, helped by strong financial markets that supported investor confidence as the bite of high inflation and interest rates began to ease.

Absent financial market volatility, we would expect 2025 to show continued improvement. But the prospect of volatility is real and has been experienced this week with the announcement and then delay of tariffs, South Canada and Mexico.

Across IGM, we are prepared for uncertainty, surrounding how the U S. chooses to engage with Canada and the rest of the world, and the potential financial impact, market volatility that may come from it.

Our client assets are well diversified, and our clients will continue to benefit from our focus on financial planning and advice. IGM also benefits from a range of growth drivers, both within our core businesses and our strategic investments, which continue position us for near- and long-term success.

Keith will speak more to our earnings results later in the call. So, on Slide 14, I'll just quickly highlight that IGM's double-digit earnings growth for the quarter and the year were both driven by the wealth and asset management segments.

And on Slide 15, we see how each of the six wealth and asset management businesses contributed to IGM's asset growth over the course of 2024, which Damon and Luke will each speak to next. So, Damon, over to you.

Thank you, James, and good morning, everyone. Turn to Slide 17 and Wealth Management's fourth quarter highlights, including IG Wealth, Rockefeller and Wealthsimple.

During the quarter, we saw record high ending AUM&A as well as fourth quarter records for total gross inflows, total sales and inflows from existing clients. The fourth quarter set another all-time record for inflow for new clients.

IG Wealth ended the quarter with AUA of $140.4 billion, up a solid 16% year-over-year and 2.9% during the fourth quarter, driven by financial markets. Gross inflows from the fourth quarter were $3.9 billion with gross sales into IGM products at $3.8 billion.

Net inflows from the quarter were $553 million, and net sales into IGM product were $384 million. January was a strong month ending with a record AUM&A record gross inflows and record gross sales as we continue momentum we started in the second half of 2024.

Total gross inflows from newly acquired clients were $1.3 billion with clients with more than 250,000 financial assets, representing 78% of these flows. During the quarter, we elevated our adviser experience by giving our advisers and clients access to a leading edge, a state planning settlement and executive services platform through our strategic partnership with Clearestate, a leading fintech estate planning provider.

Also, during the quarter, we ranked number one in earned media share of voice in the Canadian wealth marketplace. And during 2024, IG was the most prominent wealth brand for earned media share of voice among both independent firms and bank-based wealth advisers.

This ranking confirms our voice is being heard by both our current and prospective clients as we share our views on leading financial planning and investment topics. This further validates that our thought leadership and best-in-class advice platform is resonating in the marketplace.

Both Rockefille and Wealthsimple had strong quarters, and I'll speak to both in coming slides. Turning to Slide 18.

We you can see IG's Q4 flows. As you can see on the left, in January and the fourth quarter and in 2024, we delivered strong gross inflows with both fourth quarter and 2024 being records for IG.

On the right-hand side is our last 12-month net flows. As you can see, all lines are moving solidly in the right direction as IGM product net flows returned to positive territory and approach total net flows.

As it moved through 2025, our advisors will continue to build on the investments we've made and extend our momentum as we work with our clients to both build, quantify, preserve and distribute well. Turning to Slide 19.

I'll make two brief comments here. On the top left, you will see strong increase in gross inflows, which were up 27% during the quarter and once again complemented by a year-over-year decrease in our gross outflows rate.

On the bottom right, you can see continued upward trend in our 2024 net flows rate, which returned to positive territory during the fourth quarter. Turning to Slide 20.

In 2024, our gross inflows from newly acquired plant, exceeded $1 billion per quarter on average, while new clients with more than $250,000 in financial assets have represented over 3/4 of those flows over that same period. These solid gross inflows have helped contribute to our AUA for clients with over $250,000 in financial -- to $250,000 in financial assets, which now stands in excess of $117 billion will clients with financial assets greater than $1 million represent 44% of our total AU&A, which is up 38% from a year ago.

Turning to Slide 21. I and our strong momentum in mortgage and insurance.

Two quick points I'll make on this slide. One, our mortgage funding was up 17% during 2024, a strong result given the heightened competition and sluggish growth in this market.

And two, along with the strong growth in new annualized insurance premiums of 31%, I'll also highlight that both our average case side and the number of cases were up in 2024. We have more adviser selling insurers and our advisers selling larger policies as we go upmarket.

Turning to Slide 22 and an update on how we intend to capitalize on the industry's key wealth drivers. Our partnership with ClearEstate provides multiple opportunities to further address these drivers and are conditioning these opportunities is supported by a minority investment in this company.

Half of Canadians do not have a will, and those that do, approximately one third need to have their estate plans in the world updating. ClearEstate's intuitive state-of-the-art platform is a key market differentiator that can help us further address the financial needs of -- high-net-worth Canadians.

Access to a leading edge of state planning, settlement and executive services can give our advisers a complete view of our clients' wealth, providing opportunities for share of wallet growth and insurance protection while helping clients bullet proof and execute their financial plans as they prepare for well transfer to the next generation. This partnership will further extend our best-in-class advice platform.

Turning to Slide 23. Some updates on Rockefeller's progress.

Client assets were up 24% during 2024 driven by inorganic and organic growth as well as capital markets. Organic growth drove $6.6 billion in client assets in 2024, while Rockefeller continues to add to their private adviser network with 54 new advisers being added in 2024.

Turning to Slide 24. It was another record-setting quarter of AUA growth at Wealthsimple.

Wealthsimple AUA increased by $11.9 billion during the quarter, yet another new quarterly record with assets ending in 2024, up and observed 106%. With that, I'll turn it over to Luke Gould.

Thank you, Damon, good morning, everyone. On Page 26, you'll see a few highlights for Mackenzie and Asset Management for the quarter.

Record quarter-end high AUM of $213 billion is up 9% versus last year and approximately 1% in the quarter, driven by client returns. Investment fund net redemptions of $377 million in the quarter were a significant improvement, relative to the $826 million last year and January continued this trend with net redemptions of $65 million improved from $172 million last January.

In the top right, I'd highlight that we had some meaningful institutional wins of around $4 billion in aggregate, which are expected to fund during February and March. I'll speak a bit to this in coming slides and would note here that they primarily relate to our global quantitative equity team, and they are diversified across mandates, client types and geographies.

I'd also highlight that we continue to scale our Mackenzie Northleaf private asset products for retail with over $300 million at year-end. The products have had very strong performance and we're going to continue our focus in 2025 in bringing these important asset classes to retail investors.

Also noteworthy, you can see that we launched a US. small-cap fund managed by our quant team as well as two liquid funds our Mackenzie Global dividend enhanced yield and enhanced yield Plus funds.

These funds are managed by our global equity and income team and used an option writing strategy to enhance income while reducing volatility. We've also highlighted that we've launched our US.

all-cap growth fund to our Primerica Future Path Fund family. This fund is a 5-star mandate that we're excited to bring to Pramerica.

And at the bottom, you can see China had strong growth during 2024 with long-term investment fund assets up 42% and market share increases from 5.1% to 6.2%, largely as a result of strong net sales of KRW 225 billion or CAD 45 billion. And Northleaf continued its consistent trend of new commitments of around $1 billion per quarter in each quarter since our partnership began 4 years ago, and they had just under $5 billion of new commitments in 2024, diversified across private equity, private credit and infrastructure offerings.

Turn to Page 27, you can see the trended history of Mackenzie's net flows. As mentioned, we've continued to see Europe year sales improvements and our gross sales were up 26% in Q4, and these improvements have continued in January in the context of a continued improving industry environment.

Redemption rates are stable. And on the right, you can see this has translated into improving net sales.

On Page 28, at the top, you can see that retail gross sales were up 24% from last year. And Morningstar ratings overall were relatively unchanged from September.

In the table at the bottom left, you can see improvements across client segments in the quarter. Turning to Page 29.

Here, you can see our performance in net sales for our retail mutual funds and ETFs by boutique, as we've spoken to over prior quarters. In the current environment, we're seeing short-term relative underperformance in our Blue Water growth and Greenship boutiques.

These teams continue to manage in line with their proven approaches. Across all of our other boutiques, we continue to see improvement in net sales on a year-over-year basis and in our quant and global equity and income boutiques, they continue to deliver compelling performance within large product categories, and we're seeing growing positive net sales.

We're also seeing improvement net sales within our fixed income ETF mandates and have a very strong US. CAP growth made advised by Putnam that we're going to be continuing to emphasize in 2025.

Turning to Page 30. We're turning the spotlight on our global activity, which we last profiled at our Investor Day about 1.5 years ago.

This team was added in 2017. And over the seven years, they've built exceptional track records across 25 mandates using their holistic quant approach, promoting all weather risk-adjusted outperformance across cycles and environments.

The team is now managing over $13 billion, diversified across client types and pro forma for recent awards, they're at $17 billion. On the top right, we've highlighted the early and growing momentum we're seeing in retail under the banner of trailblazing Quant in Canadian Retail.

We have launched nine new mutual funds in ETFs for this quantum in retail in 2024, and we have another 4 coming in early 2025. And in retail, we've had net sales of just over $500 million in 2024 and we see significant upside here with regards to large categories these mandates compete in.

We've also highlighted in the bottom right, the $4 billion in partnership and institutional awards that are funding in early 2025. As mentioned, these awards are across five different mandates diversified across client types and geographies.

And I'd also highlight that our quite approach is really well suited to customization to client needs, and we're very pleased with the pipeline we have here as we enter 2025. I'd also highlight that before Keith takes it, I'd remind that these wins, this $4 billion, these are large blocks of business.

And so, when you think about pricing, on Page 40, we've got the trending of our fee rates. And you can expect these to be obviously higher than the fee rates at IG and Canada Life, but lower than the average third-party fees that we enjoy.

Going to Page 31. A few comments on the Chinese investment fund industry.

On the left side, the fourth quarter exhibited modest net flows, driven almost entirely by money market funds. Industry long-term assets were flat during the quarter and up 17% year-over-year, driven by both market and strong net flows during the year.

And on the right, I'd remind and highlight that China's position remains very strong as the second largest fund manager in terms of long-term and investment funds, and they did experience market share gains in both long-term funds and overall in the past year. On Page 32, you can see continued growth in China MC's AUM with year-over-year long-term investment fund AUM up 42% more than twice the industry rate.

due to strong net sales of KRW 225 billion or $45 billion over the last 12 months. I'd also highlight the growth of 5% overall relative to Q3.

I China MC is a leader in ETFs in the Chinese marketplace. And in this space, they enjoy a market share of 17%.

We did announce these materials that during the fourth quarter to ensure ongoing competitiveness and market share leads, China MC made pricing changes across a series of broad market ETFs, and this represented about 40% of their long-term mutual fund assets. We're very supportive of these changes and believe it positions China MC well to continuous leading position and to capture ongoing growth in this space.

The impact of these fee changes was included in the fourth quarter -- half of which was included in the fourth quarter, and Keith is going to provide more detail and an outlook on a later slide. On Page 33, you can see another quarter of strong growth at Northleaf with $0.9 billion in new commitments in the quarter and $4.9 billion over 2024.

One noteworthy item I highlight is that 2024 was a milestone year for Northleaf in expanding their distribution reach globally. This reflected the first year where a majority of their new third price commitments were from clientele outside of Canada, and we're really pleased to see these efforts in them executing on this strategy.

As mentioned earlier, the fundraising during the quarter and year was across infrastructure, private credit and private equity, and we're pleased with this continued strong growth. I'll now turn the call over to Keith Potter.

Thank you, Luke, and good morning, everyone. On Slide 35, you can see key highlights for Q4.

Adjusted EPS was $1.05, up 22% year-over-year, our second highest fourth quarter on record is driven by strong results at both IG and Mackenzie. We returned a total of $180 million to shareholders in the quarter.

In addition to the quarterly dividend, we continue to be active with our NCIB program, repurchasing $47 million in shares. As noted by James, we have renewed our NCIB during the quarter.

Our operations and support and business development expense growth over 2023 came in at 3.8% and versus our guidance of 4%, and we are guiding to 2025 expense growth of 4%. I'll speak to this in a moment.

Turning to Slide 36. You can see our AUM and flows as seen on the left-hand side, 2024 was a solid year for asset growth with ending assets up 12.6% year-over-year and 2.1% in the fourth quarter.

And during 2024, average assets were up 10% and January saw continued solid growth with ending assets at an all-time high of $278.1 billion. Turning to Slide 37.

As I mentioned, we have our consolidated earnings up 22% year-over-year, 2% sequentially, driven by our wealth and asset management businesses. On Slide 38, we present the key profitability drivers for IG Wealth and I'll highlight a few points here.

On the left-hand side, you can see that average AUM&A was up 4.8% over last quarter, driven by investment returns and net inflows. And on the right, the advisory fee rate is in line with our guidance and reflects market returns during the period as clients moved up wealth bands.

And looking into 2025, we continue to expect about 0.5 basis point downward pressure on the rate per quarter driven by a mix shift towards high net worth and mass affluent client. And this rate may also be impacted by product mix shifts, such as cash and cash-like deposits.

Products and program fees remained stable, and we expect this trend to continue moving forward. And finally, asset-based compensation rate was up during the quarter.

And as we move into Q1, we do expect this rate to come down and be closer to Q3 levels, driven by our annual grid reset. On Slide 39, IG's overall earnings were $135.3 million in Q4, up 33% year-over-year and 78% sequentially.

On point one, adviser and product program fees are up year-over-year relative to last quarter, driven by asset growth. On point two, other financial planning revenues reflect strong performance in our insurance business and mortgage results that were in line with our expectations.

And looking forward, we continue to expect the mortgage business to contribute $6 million to $8 million per quarter, and that will be excluding the impact of any fair value adjustments. And the insurance business, we expect growth.

Moving to Slide 40. We have Mackenzie's AUM by client and product type as well as net revenue rates.

On the left, you can see average AUM was up 3.1% and, on the right, we continue to see strength in our wealth management partnerships contributing to a mix shift in third-party rate, excluding Canada Life, while the overall all rate remained relatively flat versus last quarter. As a reminder, as we look forward to Q1, we have two fewer days upon which we charge revenues.

However, our asset-based compensation paid to distributors and advisers is based upon 1 quarter of the year and the combination of the two will have a negative impact on our revenue rate in Q1. And just for some context, historically, in Q1, this has had approximately a 0.3 basis point impact on that rate.

Turning to Slide 41. You can see Mackenzie's earnings of $61.9 million, up 25% year-over-year and 4.2% sequentially year-over-year and relative Q3, net asset management fees were up, driven by higher assets and a 0.2 million higher net investment income was primarily driven by seed capital returns.

Turning to Slide 42. We are guiding to 4% growth in operations and support and business development in 2024.

With respect to IG, we've made meaningful investments in the business over the past several years. And during 2025, we will leverage the momentum we are seeing.

Our investments will build out our adviser technology leadership, enhance our segment advice model and build out solution focused on key wealth drivers that Damon spoke to. IG expense growth of approximately 2.5% also recognized the efficiencies that we have gained through real estate optimization and decommissioning all systems and processes that we replace with new technologies.

Mackenzie's expense growth of 6% will drive progress on a number of fronts during 2025, including client and adviser experience, through enhancements to the back office, adviser portal and other technologies, investment management through mid-office platform development and investments in distribution and product capabilities. Slide 43 has China MC results.

First, on the left, AUM increased by 4.5% versus last quarter. And on the right, you can see China MC's earnings of $25.4 million for the fourth quarter.

We have three main points here relative to Q3. First, as I spoke to on last quarter, there were significant seed capital gains in Q3.

And excluding these onetime items, Q3 earnings would have been more in line with Q2 of about $28 million. Second, as we look to Q4 results, earnings were lower as well due to seasonality of higher expenses.

And then finally, as Luke mentioned, in the quarter, mid-November, Chinese MC did announce fee reductions on broad-based market ETFs, which impacted earnings. And these changes were made to better service clients and has the company's number one position in the ETFs and capture future growth.

As we look forward to 2025, our best estimate is that we expect full year earnings to be in line with 2024. Slide 44 has the earnings contribution from the company's in each segment.

A couple of comments on strategic investments. First, Rockefeller, had strong performance through its core global family office business during the quarter.

it was offset somewhat by earnings -- lower earnings and asset management and investment banking segments. Northleaf's earnings of $3.1 million reflect continued investment in the business to globalize its distribution and reach its clientele.

As a reminder, the Q4 2023 comparative period has a positive onetime adjustment for a lower effective tax rate in this quarter and actually had a negative adjustment on the tax rate. Slide 45 provides a summary view of earnings and the ownership and value of our strategic investments by segment.

The first main point is that the carrying value of Northleaf increased in the quarter, reflecting earnings and the change in the fair value estimate of the earn-out related to our 2020 purchase transaction. The estimated net of noncontrolling interest was $32 million, which you can reference in the notes of the financial statements.

And just to be clear, the ERO is capitalized and adjustment to cost that does not have an impact on earnings. And finally, at the end of Q4, our strategic investments now represent $6.2 billion in value.

Slide 46 highlights execution against our capital allocation priorities. Our 12-month trailing dividend payout ratio 64% of adjusted cash earnings at the end of the quarter, and we've added a slide in the appendix with details of the calculation.

We continue to execute on our share repurchases during the quarter while maintaining our financial flexibility and IGM's leverage ended 2024 at 1.6x debt to EBITDA, and unallocated capital increased to $531 million. That concludes my remarks, and I'll turn it over for questions.

Yeah, thanks. Just want to go back to the remarks about pricing changes that were enacted at China AMC in the quarter.

Just a couple of questions on that. One, was that driven by competitive considerations as opposed to any further regulatory action?

And two, are you able to quantify the expected impact on run rate earnings to China AMC.

Yes. It's Luke.

Yes, I'll say in those two dimensions. When those are competitive changes.

And so again, to retain their leading market share position, they want to make sure that the prices are competitive and in line with all those others competing. So that was the nature of them.

On the magnitude, you can expect for Q1 earnings just down very slightly from Q4. We -- and so I think Keith gave full year guidance that 2025 should see earnings full year in line with 2024 and then continued growth beyond.

So you shouldn't expect material changes.

Yes. And Nick, just Keith here just adding to that is on Page 41, you can kind of expect a pattern of what we'd expect similar to Q4 from 2023 as we move through the year.

Okay. And then I also want to drill into the economics attached to AUA growth at Wealthsimple.

A very strong quarter and a very strong year. But can you just expand a bit on how balanced that growth is across product lines?

And I guess what I'm really trying to understand is whether the revenue growth has been essentially commensurate with the asset growth.

Yes, it's James. Like most growth companies, what I'd observe is companies often start by focusing on growth clients and then growth in assets, growth in revenue, growth and EBITDA, and ultimately, kind of it reveals itself in growth in IFRS earnings.

Wealthsimple is demonstrating remarkable growth in clients, in assets, in revenue and in EBITDA. As I described or said in previous calls, I think they are fully in control of their financial future, Nick.

So, we're seeing growth not just in those items that we disclosed quarterly, but we're seeing it right down through EBITDA.

Okay. Very good.

And just last 1 for me, just a quick point of clarification. I think there was a comment made on the economics attached to the $4 billion of mandate wins that will be funded in the future months.

And I think the comment, if I caught it correctly, was that the economics attached to those would be somewhere between the Canada Life fee rates and the overall third-party fee rates at Mackenzie. So that would put us somewhere between 15 basis points and 50 basis points.

Did I catch that correctly?

Luke. Yes, you sure did.

So, you can think of Canada life and IG and the rate they enjoy based upon their skilled their business with Mackenzie. -- as being kind of a floor.

And these are large institutional mandates. So, in that range of kind of 50 to 16, you can think of it being closer to the 16 than the 50, in line with what these mandates are with these large institutions.

Yeah, thanks. First question is just with respect to the buybacks.

$3 million share buyback fully utilized and that was offset any kind of potential dilution from option exercises. So, no change in share count.

You've upped it now to $5 million. Is the thinking here that you would -- this would be more than needed to offset any dilution from option exercising and you'd actually fully utilize this and possibly decrease the share count going forward?

And I have a follow-up.

Yes. Tom, it's James.

That's exactly what I'd like to see us do. As you noticed, we now disclose quarterly and annually, the capital that we've returned to shareholders, which some, obviously, of the dividend and the share buyback, and I would very much like to see that number increase.

And we've also disclosed this quarter cash earnings we show the dividend and the payout ratio on a couple of different bases. And so, cash earnings minus the dividend is a growing number.

Unallocated capital is a growing number. And so, I think we're in a position here where we have optionality.

We have some flexibility. And so, as we look at a year ahead that may present some volatility, I would view that volatility as an opportunity for us to buy back more and return even more capital to shareholders in '25 than we did in '24.

Okay. And just with respect to the dividend, as I think you have mentioned before that if that payout ratio and cash guide around $60, you'd have a look at the dividend thoughts there.

I mean we got volatile times, you've got flexibility with the buyback. How is your thinking there?

Yes. I mean as we approach that, Mark, and we're getting closer to be sure as that page discloses.

We'll take that question, that discussion to our Board. But I don't know how much more upside there is in the share price from a higher dividend relative to share buybacks.

I think again, in a world of volatility opportunistically buying back shares, I think is a powerful way of supporting both the share price and ongoing shareholders. So, sitting here today, Tom, there's a bit of a bias towards share buybacks.

Good morning. Could I just ask you to maybe just elaborate a little bit?

You said you're Mackenzie, you're looking to invest in your product and distribution capabilities and then you're also looking to invest in your middle office solution for investment management. Can you maybe just give us some examples or further context on what that means?

Yes, absolutely. So, I'll start with the middle office, and we profiled did a bit at an Investor Day.

So there, we're excited in 2025 and 2026, we're bringing to you a multiyear program. we've been working with BNY Mellon to really provide a world-class environment for our investment teams to do the rest of work.

So that is adding some extra cost in 2025 and in 2026, which is in these numbers. And of course, those changes are meant to enhance alpha capabilities and really provide our investment professionals with the best data and the best environment to generate alpha.

The other big piece of investment we're making is really around the theme of enhancing client experience and making sure we administer a lot of plans for advisers and their clients across Canada. And we want to make sure that every touch point with Mackenzie is an excellent one.

And so that's where the investment is happening is primarily in the web access that advisers and clients enjoy with Mackenzie and in the broader client experience processes to make sure every experience with us is delightful.

Okay. Understood.

And then there was also a reference at Mackenzie about growth within your wealth management partnerships as having an impact on your net asset management fees. Is this a reference to growth sort of within Wealthsimple and Primerica?

Or is it beyond that? And it's a suggestion that these are slightly lower fee mandates.

So that's what's having an impact on your overall.

Keith made the comment, it's Luke speaking. It was a reflection of the strong net flows that we've had at Primerica and Wealthsimple.

We've been participating in the growth first Wealthsimple and second, the Primerica relationship, which we started two years ago. And because those business lines or those relationships have been growing at a faster rate than retail.

-- that's put -- that's had a consequence on the effect of fee rate.

Yes. Okay.

And do those flows get captured within your retail investment funds? Or do they get captured within that institutional investment funds line?

Those flows, I don't know which slide you're looking at. They are in our investment fund numbers though.

So, we actually do have two numbers on a bunch of the line graphs. One has retail and on the overall there in our overall investment fund numbers.

And on Page 28, there's a line of institutional investment funds. They are included in that line.

Yes, that was my question. Okay.

Perfect. That it for me.

Thank you very much.

Thank you. Can you provide an update on your expectations for Rockefeller and Northleaf's earning contribution in 2025 on Rockefeller, do you still anticipate its contribution to replace the income lost from IPC this year?

And for Northleaf could we just assume the 15% annual growth implied at your Investor Day?

Yes. On on Rockefeller, we'd expect early -- going into Q1 in a similar range, we're right now in turning earnings positive in 2025.

Don't know what's going to fully replace the IPC earnings in 2025, but make progress towards that. What was the second question relates to Northleaf.

Yes, for Northleaf, should we expect like a 15% annual growth for their earnings as it was implied in your Investor Day?

Yes. I think for Northeast, if you look at this past quarter, enter going into Q1, somewhere in the range of about $5 million per quarter would be a reasonable estimate.

So that's a reasonable estimate for that.

Yes. And I would just add to those two points.

First on Rockefeller, the core wealth franchise, which is what principally attracted us to the business is performing very, very well. They have a strategic advisory business, and M&A business, if you will, that like every M&A business on the planet these days is a bit slow.

And they have an asset management business that has grown a bit slower than we might have initially expected. But I want to emphasize the core wealth franchise is performing very, very well.

And so we're seeing great growth in Rockefeller not just on the basis that we disclosed in the -- in our deck, but also in down to EBITDA. And on Northleaf, I want to emphasize that Northleaf has a 5-year kind of Board approved strategic plan that I'm very excited about.

They want to do three things over five years. One is double their assets.

Two is positioned the next generation of leadership within Northleaf, that business is 20 years plus. And there's a next gen that will be assuming important roles in the coming years.

And the third I would describe as finishing the globalization play. I mean, this is something that Luke spoke to a little bit.

But we have been very supportive of Northleaf actually increasing their expenses in the past few years. They've hired up.

They've opened offices in Japan, in Korea, in Australia, several offices in North America and Europe. And this is increasingly a business that is global in nature.

And so that's been a choice. I think the Board would have had an opportunity to focus more on short-term profits.

But we really want to see North fleet positioned for success over the long term. And so finishing that globalization play is a priority for Northleaf, and it's one that has our whole heart of support.

And to a certain extent, we should acknowledge that has been reflected in the earnings.

Hey, good morning. Just looking at Slide 20, what do you attribute some of the accelerated penetration in the high-net-worth clients.

It looks like clients with over 1 million. We contributed more than maybe 30% of gross sales last year.

I guess I'm just kind of wondering, has that reached its natural share or where do you see that going?

Yes, Phil, it's Damon. A little way tribute to the fact that what we're focusing on which is making sure that our clients can navigate the wealth drivers and our advice platform is aligned with helping our advisers navigate those drivers for our clients.

We believe our capabilities, there's an inception between what we're providing and where there's traffic in the marketplace and will there be traffic in the marketplace going forward. So, we're quite excited about that.

Clearly, the business has momentum, and we've caught our stride. There's no doubt about that.

But when you take a look at where we are relative to where we will be in the future, our penetration of the high-net-worth space is still very, very small. So, we have a very long runway here, and we're building this business to really execute against that runway.

So, I believe that over the next five years, you're going to see significant growth at this organization in both the mass affluent and high net worth space.

So maybe if I can then turn it over as well. I mean, what are the opportunities for Mackenzie to capitalize on that trend, again, either directly with IG Wealth or maybe more broadly into that third-party advisor channel?

Yes, good question, Phil. We're so fortunate to be a provider of choice and the key investment manager fueling the shelf at IG.

So, we're cheerleading and helping every single day to make sure that they're winning for their clients, and they've got the most competitive investment offering that they can possibly have to serve these client segments.

Thanks. Good morning.

Just wanted to clarify on the China AMC guidance for flat growth in '25 versus '24. Is that entirely driven by the fee rate changes on ETF?

Or are there some other factors that we should be thinking about?

It's Keith here, Jane. Yes, part of it is changes to the fee rates, but there's also China agencies demonstrated an ability to really grow their assets.

They're up 35% this year. We expect strong growth next year, maybe not in line with 35% growth, but that's also part of the story here.

You're up 4.5% this past quarter with strong institutional flows, money market flows. So, they're diversified, and we continue to expect strong asset growth when you kind of net the strong asset growth, what that does your revenue plus the fee changes, that combination, we expect earnings to be in line in 2025 and 2024.

James, it's James. I'd just add, if earnings are flat in '25 to '24, I'll be very pleased.

I will view that as as a strong result. Of course, earnings were up 9% in '24 versus '23.

And when you consider what's happened to equity markets in China, top to bottom, and they've recovered somewhat clearly. And you also take into account reductions in fees for active equity as well as more recently passive products.

I think for China AMC to grow earnings in '24, which they did and have flat earnings in '25 is overall is a really good result, and it speaks it speaks principally to the quality of the franchise and the quality of the management. We've always said it was a remarkable asset in what is currently a challenging market, and we stand by that.

It's a special property.

Okay. And a follow-up on the fee rates.

I understand competitive versus the Chinese market. Just wanted to get a sense as to the industry as a whole.

How the fee rates in China, maybe across ETF and other products compared to global fee rates. Like if we look at like the U.S., for example.

So just trying to understand whether there's potential for more pressure in future years on those fee rates.

Good question on -- it's Luke. On active equity and balance pro forma for the changes made about two years ago, they're competitive in retail space with global markets.

On passive, the changes they just made really puts them more in line with global where I'd say, prior to these changes, it was a bit expensive in China relative to what you'd expect. And these changes actually put it in line with, I would say, global levels.

Okay. And then separate thinking about the CapEx outlook and the focus for capital allocation after dividends and buybacks on reinvestment in the business and the strategic investments.

obviously, we should expect some acceleration, I guess, in that CapEx. But in terms of the unallocated capital as well, is there sort of like a base level of excess capital that you're looking to hold and would increasing stakes in some of these investments be an alternative that is at the top of the list as well?

Yes. I mean we would probably look to hold maybe $200 million of unallocated capital.

I mean, we're well through that north of 5%, and we expect it to grow from here. So, as I said earlier, I think we're sitting on a fair bit of optionality and financial flexibility.

I would expect that to be expressed through -- we do have an ongoing program of investment in the business, and this year's levels will be similar to last year's. But I would expect us to express that flexibility through a higher level of share buybacks this year.

We said in December of '23 that we'd be focused internally for a couple of years, strengthening our core businesses, and we'd be less active in M&A. And as we sit here today, that very much remains our outlook and our expectation.

So sitting here today, I'm not expecting this to be a year of M&A. I expect it year of ongoing investment in the business to support the current dividend and grow -- do more share buybacks opportunistically.

Good morning, everyone. First, I want to say thanks for the continued excellent disclosure and transparency.

It really is quite good relative to other North American asset managers, wealth management firms outstanding. So, my question as it relates to Northleaf.

I think that Keith had said $5 million per quarter potentially. But I recall that there was some seasonality with regards to the earnings at Northleaf that Q1 was often higher than other quarters due to incentive compensation.

Is that still the case?

Yes. That's right.

It's Keith here. There is incentive fees that are part of the Q1 earnings.

They are Northleaf are also growing their AUM that will drive future quarters beyond that, but Q1 can be a little bit higher with incentive fees.

It's still on average, so $5 million per quarter is what you were guiding for?

Yes. I'd say that would be a good estimate.

Thank you, Betsy, and thanks, everyone, again, for joining us on the call this morning. And Betsy, with that, we can close out today's call.