IGM Financial Annual Report 2022

FY2022 Annual Report · IGM Financial

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Bettering
the lives of
Canadians

2022 Annual Report
IGM Financial | TSX: IGM

Contents

3 Our purpose
4 2022 highlights
Letter to
6
shareholders
Corporate
structure
Wealth
management
highlights
Asset
management
highlights
Strategic
investments
highlights
14 Our people
16

Our commitment
to sustainability
Management’s
discussion and
analysis
Consolidated
financial
statements

Visit

igmfinancial.com/en/corporate-sustainability

to learn more about our sustainability efforts.

Who we are

IGM Financial Inc. (TSX: IGM) is a leading wealth and
asset management company supporting financial
advisors and the clients they serve in Canada, and
institutional investors globally.

IGM’s family of companies provide a broad range
of financial planning and investment management
services to help Canadians meet their financial goals.
The company creates value for shareholders through
three key areas:

• Wealth management

• Asset management

• Strategic investments

Reasons to invest

• Bold steps taken to transform operating

companies resulting in market share gains
and operational efficiencies

• Experienced leadership team focused on driving

innovation, an agile culture and exceptional
client outcomes

• Exciting growth opportunities through investments
in fintech, private alternative markets and China

• Ability to benefit from financial strength and scale
and strong governance as a member of the Power
Corporation group of companies

• Long-term view to shareholder value creation and

demonstrated commitment to corporate responsibility

Readers are referred to the caution regarding Forward-Looking Statements and Non-IFRS Financial Measures and Other Financial Measures
on pages 18 and 19 of this report.

Unless otherwise noted, all figures mentioned in this report are in Canadian dollars and are as of, or for the year ending, December 31, 2022.

Our purpose

IGM Financial’s family of companies are committed
to bettering the lives of Canadians, by better planning
and managing their money.

We strive to do this through the pursuit of:

Better experiences

Better solutions

We bring together the best of both worlds for our
people – the accountability and agility of a smaller
organization with the scale and impact of a bigger
firm – while offering more room to grow, in a diverse
and inclusive work environment.

We believe in improving the financial well-being of
Canadians by making comprehensive investment
and wealth planning solutions more accessible;
built on lasting relationships, not transactions.

Better communities

Better ownership

We leverage our local connectivity coast-to-coast
and our global voice to better our communities,
the environment, and the world around us, creating
a collective impact that goes well beyond our
company walls.

As part of the Power Corporation group of companies,
we balance short-term needs with a long-term
perspective that is focused on creating enduring value
and a sustainable future for generations to come.

Our values guide how we engage with our people, our clients, our shareholders
and our communities. We are:

progressive

entrepreneurial

responsible

inclusive

We think beyond today
and challenge conventional
thinking to seek new and
improved ways of working.

We celebrate initiative and
encourage everyone to
own their actions.

We hold ourselves to the
highest standards and do
what’s right for today and
sustainable for our future.

We embrace and nurture
our unique perspectives as
an asset to be cultivated.

2022 IGM Financial Annual Report2022 highlights

Our clients

Our people

Our community

GLOBAL100 c

THE WORLD'S MOST SUSTAINABLE CORPORATIONS

GLOBAL100 c

THE WORLD'S MOST SUSTAINABLE CORPORATIONS

GLOBAL100 c

THE WORLD'S MOST SUSTAINABLE CORPORATIONS

GLOBAL100 c

THE WORLD'S MOST SUSTAINABLE CORPORATIONS

GLOBAL

100

THE WORLD'S MOST SUSTAINABLE CORPORATIONS

GLOBAL100 c

THE WORLD'S MOST SUSTAINABLE CORPORATIONS

GLOBAL100 c

THE WORLD'S MOST SUSTAINABLE CORPORATIONS

GLOBAL100

THE WORLD'S MOST SUSTAINABLE CORPORATIONS c

T H E W O R L D ' S MO S T S U S T A I N A B L E C O R P O R A T I O N S

GLOBAL100
IGM recognized as
one of the Top 100
GLOBAL100
Employers in Canada

THE WORLD'S MOST SUSTAINABLE CORPORATIONS c

4,010

employees across the IGM
family of companies

~4,000

IG and IPC advisors across
Canada helping Canadians
meet their financial goals

33%

of IGM senior leadership roles
(Vice-President level and higher)
held by women

550

IGM employees and field members
completed the 4 Seasons of
Reconciliation training

employee-led Business Resource
Groups across IGM focused
on promoting an inclusive
work environment

Recognized as one of Corporate Knights’ 2023
Global 100 Most Sustainable Corporations

IGM ranked 25th in Corporate Knights’
2022 Best 50 Corporate Citizens in Canada

$1.8 million raised through IGM Caring
Company Campaign, with increased
participation over 2021

Partnership has helped over 150 First
Nations community members gain
financial literacy through 19 workshops
and 110+ one-on-one learning sessions

IG and Mackenzie are part of the Climate
Action 100+, an investor-led initiative
to ensure the world’s largest corporate
greenhouse gas emitters take action on
climate change

1 million+

IG Wealth Management clients

198,000

Investment Planning Counsel clients

30,000+

external advisors serving more than
one million Mackenzie clients

$4.81 billion

assets under management in
Sustainable Solutions, up from
$4.32B in 2021

IG and Mackenzie are committed to
the PRI and require all sub-advisors
to be signatories

IGM has ranked at the leadership
level for the past five years for its
climate change disclosure

We are proud of our
commitments and
achievements in working
towards a sustainable future

From our IGM family to yoursShareholder highlights

Net earnings

$867.2 million
$3.63 per share

available to common shareholders
EPS 2nd highest in company history

Assets under management
& advisement

$249.4 billion

Net Inflows

$1.2 billion

Dividends declared

$536.1 million
$2.25 per share

per common share

IGM Financial earnings per share

$4.08

$3.63

$3.18

$3.12

$3.21

2018

2019

2020

2021

2022

Total assets under management and advisement ($B)

IG Wealth Management

Investment Planning Counsel

Mackenzie Investments

IGM Financial consolidated2

Opening

Net flows

Investment
returns & other

119.6

33.1

129.1

277.1

2.7

0.3

(1.9)

1.2

(11.5)

(3.9)

(14.1)1

(28.9)

Ending

110.8

29.5

113.1

249.4

1 Investment returns and other includes the change in sub-advised Canada Life assets under management.

2 Consolidated results eliminate double counting where business is reflected within multiple segments.

2022 IGM Financial Annual ReportLetter to
shareholders

In 2022 people moved forward by reconnecting and adapting
to new ways of working together. IGM responded as we
continued our focus on bettering the lives of Canadians,
by better planning and managing their money.

These positive developments, however, were also
accompanied by new challenges, including rising
inflation and interest rates, market volatility and
geo-political uncertainty. We are proud of the way
our team and our clients rose to the occasion together.
It truly represented the best of IGM.

The environment we faced demonstrated the
importance of a sound strategy and determined
execution. It also demonstrated the value that
thoughtful, well-considered planning plays in helping
deliver the best results for our clients, while moving
our business forward.

As our clients navigated the year, we provided
them with the guidance and support they required.
Thanks to the exceptional work and commitment
of our employees and advisors, our clients – and
our shareholders – are well-positioned to benefit as
market volatility begins to subside in 2023.

Support for our employees continued as we emerged
from the pandemic. By providing individual team
hybrid work flexibility, special days off, and ensuring
a living wage, we’ve maintained our ongoing focus on
people’s emotional, financial, physical, and social well-
being. This focus contributed to IGM being named a

Top 100 Employer in Canada by MediaCorp Canada
Inc. in its annual ranking of leading workplaces.

A key priority for us in 2022 was to keep a prudent eye
on expenses. We are a market-sensitive business. As
markets drove revenues down sharply, we revised our
full-year expense guidance, which includes operations
and business development expenses, down from
approximately 5% to no more than 3% growth on
a year-over-year basis. In fact, we ended the year
lower still. These efforts are not only responding to
the current environment, but also helping lay the
foundation for building an even stronger organization.

During the year, we were pleased to welcome new
people to new roles. Luke Gould, formerly IGM’s
Chief Financial Officer, assumed the role of President
and CEO of Mackenzie Investments. Keith Potter
succeeded Luke as Executive Vice-President and Chief
Financial Officer, having most recently served as Head
of Mortgage, Insurance and Banking for IG Wealth
Management. Finally, Kelly Hepher joined IGM Financial
as Chief Risk Officer in April. We are fortunate to have
these individuals on our team.

We ended 2022 with assets under management and
advisement (AUM&A) of $249 billion, compared to

A Strong Foundation – Our focus on the value of advice, and delivering strong
services and products, became increasingly relevant as we worked to help
Canadians through these times to preserve and build wealth over the long term.

From our IGM family to yours

mortgage lending platform. Starting in the first half of
2023, by integrating nesto’s Mortgage Cloud solution
in our mortgage solutions business, IG advisors will
begin providing clients with an easier, faster and best-
in-class digital mortgage experience. We also launched
a new online Tax Centre for clients and expanded the
range of digital forms and tools for advisors to manage
client accounts. Our overall commitment to improving
the advisor experience over the last few years helped
IG become the top-rated, full-service mutual fund
dealer in the 2022 Investment Executive Dealer Report
Card, an annual study that is based on feedback from
advisors about their firms and the overall wealth
management industry.

$277 billion last year. Net inflows for the year were
$1.2 billion compared to inflows of $8.7 billion in 2021.
Annual net earnings were $867 million or $3.63 per
share, which is the second highest in company history.

Wealth management

Against a more challenging economic background,
IG Wealth Management and Investment Planning
Counsel provided their clients with the guidance they
required by remaining focused on the value of financial
planning and being responsive to market opportunities.

IG Wealth Management
Led by President and CEO Damon Murchison,
IG Wealth Management continued to demonstrate
strength and adaptability. Client AUM&A were a
robust $110.8 billion, and net inflows remained
strong at $2.7 billion. We maintained our momentum
in attracting and serving clients from the high net
worth (HNW) and mass affluent market segments.
Further, inflows of IG-managed investments to
new affluent clients with investments of more than
$500,000 has grown by 59% since 2019. During
2022, we benefited from IG clients’ inclination to stay
committed to their tailored financial plans even during
periods of significant market volatility.

As we continued to drive advisor productivity (as
measured by gross new assets per advisor), we also
kept a strong focus on enhancing our client service
and engagement. These efforts helped IG score at
or ahead of the industry average across all measures
in the J.D. Power Canada 2022 Full-Service Investor
Satisfaction Study.

IG continues to leverage technology on behalf of
clients and advisors. In December, IG announced
a partnership with nesto, Canada’s leading digital

James O’Sullivan

President and
Chief Executive Officer

IGM Financial

2022 IGM Financial Annual ReportInvestment Planning Counsel
In 2022, Investment Planning Counsel (IPC) continued
to provide support and services to more than
650 advisors who manage close to $30 billion in
investments for over 200,000 Canadians. IPC, guided
by President and CEO Blaine Shewchuk, achieved
solid financial results in 2022, with net earnings of
$11 million.

IPC delivered positive net flows on assets under
administration (AUA) despite market volatility. In
addition, to provide savings to our clients, we lowered
management fees across 30 Counsel investment
solutions. These changes, coupled with asset
allocation changes by our portfolio management
team, have enhanced the overall attractiveness of
our investment portfolio.

Further, we continued to evolve IPC One, our
discretionary wealth management platform for
Portfolio Managers. The platform, which was launched
in 2021, ended the year with $2.2 billion in assets.

Asset management

On July 1, 2022, Luke Gould took on the role of
President and CEO of Mackenzie Investments,
succeeding Barry McInerney who announced his
retirement. We thank Barry for his contributions.
Drawing upon more than 25 years of experience in
executive roles across IGM, Luke is well-positioned
to guide the firm into the future.

Despite significant market turbulence and an
environment in which the industry experienced
investment fund net outflows of $50.2 billion,
Mackenzie delivered solid results, relative to other
firms. Total AUM stood at $186.6 billion, compared
to $210.3 billion at the end of 2021. Mackenzie saw
investment fund net redemptions of $1.0 billion
and total net redemptions (including institutional)
of $1.9 billion in 2022.

Challenging market conditions are nothing new
for Mackenzie. We are confident in our strategy
and look forward to continuing to capitalize on key
opportunities, such as our exciting new partnership
with Primerica. Together we launched the Mackenzie

FuturePath product suite: 25 exclusive funds designed
to meet the needs of Primerica’s network of 7,000
advisors and 250,000 clients.

Retail and institutional investors continued to look
for sustainable investment options that deliver
dependable risk-adjusted returns and support
positive social and environmental change. During
the year, Mackenzie’s Greenchip boutique, which
focuses on environmental thematic investing,
continued to be among our top-performing and
best-selling capabilities.

Alternative investments, which are expected to account
for approximately 50% of the global asset management
pool by 2024, are an important asset class that retail
investors in Canada have only recently been able to
access. Through our partnership with Northleaf Capital,
we are democratizing alternative investments, including
private equity, private credit and infrastructure, by
making these types of opportunities more available to
retail investors. This included the launch of the Mackenzie
Northleaf Private Credit Interval Fund (a first-of-its-kind
retail offering in Canada), and the Mackenzie Northleaf
Global Private Equity Fund, which further expanded retail
investor access to private market investment solutions.

Strategic investments

Strategic investments are an effective way for IGM
and our businesses to enter new sectors, expand our
core operations, and create rewarding investment
opportunities across our various businesses. On
January 12, 2023, we completed the acquisition of
an additional 13.9% equity interest in ChinaAMC,
increasing our holdings to 27.8%. Among other
things, this further enhances our participation in the
rapidly growing Chinese asset management industry,
through a meaningful ownership position in one of the
country’s leading asset managers.

In addition to our ownership stake in ChinaAMC, we
are the largest shareholder in Wealthsimple, which
grew its number of clients by 16% to almost two million
(excluding Weathsimple Tax users). As part of our new
agreement with nesto, we also made a minority equity
investment in the company. Further, we are a key
investor in Portag3 Ventures, a global venture capital

From our IGM family to yoursinvestor targeting the fintech sector, which enables IGM
to participate in the growth of these companies and
leverage expertise and learnings in our core business.

Digitizing to deliver a better
client and employee experience

Over the last several years, IGM has pursued a
strategic digital transformation to modernize and
enhance the experience we provide to employees,
advisors, and clients.

We built on this foundation during the year by
partnering with recognized leaders in innovation and
service, including Google Cloud and Salesforce. In
July, we announced a strategic agreement with CGI
to deliver the next generation of mutual fund transfer
agency platforms in Canada. Later in August, we
announced a collaboration with Microsoft Canada,
choosing the company’s Azure cloud computing
platform to support our ongoing modernization
of key infrastructure and practices. In October, we
transitioned the IG Contact Centre to a digital platform,
Salesforce Service Cloud Voice, a foundational step in
our modernization story.

While technological, social and
environmental changes were already
reshaping the way the world lives and
works, the pandemic has accelerated
many of these trends.

One of the defining workplace changes to come out
of the pandemic is the shift to new ways of working. In
partnership with our employees, IGM adopted a hybrid
work model based on flexibility for our leaders and the
needs of their teams. This has allowed our people to
balance their professional and personal lives while still
providing external advisors and clients with exceptional
levels of support and service. Additionally, special
days off and wellness programs that accommodate
both virtual and in-person activities contributed to
impressive employee engagement results in 2022.

Driving change for the better

Working to build a just, equitable and inclusive society
is a priority for IGM, our employees and advisors.
We recognize that we have a role to play and are
committed to doing so. Across our operations and
communities, IGM continued to foster diversity, equity
and inclusion (DEI) through performance targets, hiring
initiatives, training and community investments.

We have set targets for increasing the number of
employees from underrepresented groups across
IGM within the next three years, including women
executives, Black executives and Indigenous
employees. To help build a more diverse and inclusive
culture, we support seven Business Resource Groups
– 2SLGBTQIA+, Black Advisory Council, DiverseAbility,
Green, Indigenous, Pan-Asian and Women – aligning
their programs and initiatives with IGM’s DEI strategy
and business priorities.

As part of our ongoing reconciliation journey, in 2022
IGM provided 4 Seasons of Reconciliation training
to all employees and field members. This included
time to reflect and honour Canada’s National Day
for Truth and Reconciliation in the workplace and in
the community. We continue to partner with Prosper
Canada in helping to ensure First Nations have access
to services that help build their financial confidence.

A common thread that runs through IGM is helping
people prepare for the future. A similar focus guides
our effort to help address the global issue of climate
change, which we recognize as a defining challenge
of our time. In 2022, we continued implementing the
Task Force on Climate-related Financial Disclosure
recommendations, including enhancing reporting on
investment-related carbon emissions. Additionally,
we set interim climate targets at Mackenzie to
engage companies in which we invest and encourage
wider adoption of science-based targets. Further,
IGM engages with portfolio companies across a
range of sustainability-related issues, including
climate. We are proudly Canadian and strive to
advance the decarbonization and resilience of
the Canadian economy.

2022 IGM Financial Annual ReportOur efforts are being recognized. We were once again
named by Corporate Knights as one of the Best 50
Corporate Citizens in Canada, as one of the Global 100
Most Sustainable Global Corporations, and also as a
leader in climate action and disclosure by CDP. These
awards reflect our sustainability focus and performance
and our commitment to engage our business in serving
the interests of people and our planet.

In an ever-changing
world, IGM continues
to be guided by our
values and our purpose.

Looking forward

In an ever-changing world, IGM continues to be guided
by our values and our purpose. Throughout the year,
we worked to ensure the financial well-being of our
clients, to help our employees and advisors build their
careers, to support the communities where we live and
work, and to use our influence and capacity to fight
climate change and drive positive social impact.

Looking ahead, we will remain focused on driving growth
by working to attract and support great employees,
advisors and clients and continuing to build a high-
performing, engaged and diverse workforce. We will
also advance our modernization initiatives and continue
to look for opportunities to strengthen our ability to
compete with global asset managers and grow our
wealth management business with HNW and ultra-HNW
clients. Thoughtfully, prudently, and strategically, we will
keep moving forward.

and macroeconomic factors impacted results, we
are pleased with the underlying performance of our
businesses and are well positioned to come out even
stronger as markets recover. Equally, we are delighted
by the ongoing commitment and determination of our
leaders, employees, and advisors to navigate these
times. Heading into 2023, we are confident in our
strategy, people and culture, and sure in the belief that
we will continue to better the lives of Canadians and
deliver lasting value for our shareholders.

On behalf of the Board of Directors,

James O’Sullivan

R. Jeffrey Orr

President and
Chief Executive Officer

Chair of the Board

IGM Financial

The world is adopting new ways of working and
collaborating to move past the pandemic. While market

IGM Financial

We are confident in our strategy, people
and culture, and will continue to better
the lives of Canadians and deliver
lasting value for our shareholders.

R. Jeffrey Orr

Chair of the Board

IGM Financial

From our IGM family to yoursCorporate structure

IGM maintains the unique strategies of our individual businesses
while maximizing the value of shared knowledge and resources.

Strength and scale as part of the Power Corporation group of companies.

Power Corporation is an international management and holding
company that focuses on financial services in North America,
Europe and Asia.

Wealth management

Asset management

Strategic investments

We’ve seen first-hand the power of better

planned and managed money and how it

can change lives. It’s what motivates us

to drive our business forward.

2022 IGM Financial Annual ReportWealth management

IGM Financial is committed to improving
the financial well-being of Canadians.

IG Wealth Management and Investment Planning Counsel continued to focus on delivering holistic financial planning
and promoting a culture that places the financial well-being of Canadians at the centre of everything we do.

$110.8 billion
Total assets under
advisement

$12.9 billion
Gross client
inflows

$2.7 billion
Net client
inflows

Damon Murchison
President and
Chief Executive Officer

IG Wealth Management

84% mutual fund assets rated

3 stars or better by Morningstar†

5 FundGrade® A+ Awards

for Performance

Continued support for The

Alzheimer Society of Canada with
$5.7 million
raised nationally by more than

2,547 walkers and 5,050 donors

Ranked 6th in client engagement in
the 2022 J.D. Power Canada Full-Service

through the IG Wealth Management

Investor Satisfaction Study

Walk for Alzheimer’s

Top-ranked in 2022 Investment Executive
Dealer Report card, tying for first among

Full-Service and Mutual Fund Dealers

Blaine Shewchuk
President and
Chief Executive Officer

Investment Planning Counsel

$29.5 billion
Total assets
under advisement

$4.6 billion
Total assets under
management

$4.4 billion
Gross client
inflows

Corporate office model,
IPC Pinnacle reached
$5.3 billion

Discretionary Portfolio Management
platform launched for PM Advisors reached
$1.9 billion

Welcomed over 30 new
independent advisors

Employee engagement
score of 81 reflects
highly engaged head

office support team

From our IGM family to yours

Asset management

IGM Financial is committed to providing
innovative, high-quality investments.

Mackenzie Investments continue to help advisors and investors build strong portfolios that
meet today’s needs while anticipating future economic and capital market conditions.

Luke Gould
President and
Chief Executive Officer

Mackenzie Investments

$186.6 billion
Total assets
under management*

$1.9 billion
Total net
redemptions

$7.5 billion
Mutual fund
gross sales

Investment management
team earned 7 Refinitiv
Lipper Awards

Ontario’s Adanac Ski Hill and BC’s

Kimberley Alpine Resort crowned 2022

Mackenzie Top Peak winners

86%

of Mackenzie mutual fund assets reside in
funds rated 3 stars or better by Morningstar†

Launched suite of 25 funds designed to address the specific needs
of Primerica’s network of 7,000 advisors and 250,000 clients

Established Mackenzie Together Futures Initiatives, a new
female-driven educational partnership with Ivey Business School

to help the investment industry better engage and inspire women

8 FundGrade® A+ Awards for outstanding

investment performance

* Includes $73.5 billion in advisory fee mandates to wealth management.

Strategic investments

IGM Financial’s portfolio of strategic investments had another strong year, deriving value from previous
investments and integrating them in ways that generate new benefits to investors and clients.

ChinaAMC is one of the
leading asset managers
in China

Global private markets
solutions provider

and other

Fintech investments provide
innovative capabilities and
access to markets with
significant growth potential

27.8% ownership

interest1

56%

economic
interest

$603M

fair
value

1 As at transaction close on January 12, 2023.

Publicly traded,
international financial
services holding
company

2.4% ownership

interest1

2022 IGM Financial Annual Report 13

CROWNING CANADA’S MOST INVESTED SKI COMMUNITYOur people

We are building a strong, inclusive and progressive
culture, where people want to grow their careers and
do their best for clients, communities and one another.

During 2022, IGM Financial was proud to be recognized as one of Canada’s Top 100 employers.

One of our differentiating achievements was the move to a new hybrid work model that supports
working remotely and in the office.

We asked our employees how they wanted to work, and we aligned our hybrid model to their
answer. We also gave our leaders the freedom to learn, adapt and be flexible instead of driving
them to a set of structured rules.

Survey results

Highlights from our annual
employee engagement survey:

86%

see their people
leader as effective

85%

are proud to
work for IGM

83%

feel they get the training
needed to do their job

83%

would gladly recommend
IGM as a place to work

79% overall engagement score,

higher than global benchmarks

Throughout the year, we held activities and
events to bring IGM employees together.

These results are consistent with our advisor and
client surveys which remained stable or were up
during the past year, showing the link between
engaged employees and the people we support.

From our IGM family to yoursWellness at work

With the shift to hybrid work, our wellness programs now offer
virtual and in-person activities focusing on emotional, financial,
physical and social wellness.

Over 1,800 employees participated in wellness workshops, virtual
fitness classes, mental health training, financial literacy education
and “Wellness 101” information sessions about various benefits
available to employees.

Diversity, equity, inclusion

We are committed to advancing DEI across our industry,
and our strategy is focused on three pillars:

In 2022 we made
significant progress by:

• Establishing targets for CEOs
and leaders that focus on
underrepresented employees

• Holding events and training sessions
to foster learning and engagement

• Supporting seven business resource

groups to help advance the DEI strategy

• Furthering our reconciliation journey

through participation in the 4 Seasons
of Reconciliation training and taking
time to reflect and honour the National
Day for Truth and Reconciliation

Inclusive workplace
Nurture a culture of allyship
and inclusive leadership

Diverse talent
Attract, develop, retain
and accelerate

Clients & brand
Leverage DEI in
the marketplace

Employees took part in the Earth Day Shoreline
and Park Cleanup events across Canada.

1,900 employees and IG Consultants participated in
the IG Wealth Management Walk for Alzheimer’s.

2022 IGM Financial Annual ReportOur commitment
to sustainability

Bettering lives for tomorrow

IGM’s sustainability strategy helps us prioritize the topics that matter
most to our business and our stakeholders. It provides direction on
addressing these issues and holds us accountable for our progress
and outcomes.

Our strategy focuses on three areas where we – as wealth and asset
managers – can have the most significant impact. Underpinning
everything we do is a commitment to responsible business practices.

Our self-identification
initiative Count Me In!
is helping us better
direct our DEI goals,
resources and programs.

•

Focus areas

Highlights

IGM supports the recommendations
of the Task Force on Climate-related
Financial Disclosures (TCFD). Here are
some 2022 highlights as we continue
to progress our implementation:

Governance
• Management and Board had three

meetings on sustainability and climate

• Participated in consultations about
standardized climate reporting
(International Sustainability
Standards Board, Canadian Securities
Administrators, U.S. Securities
Exchange Commission)

Risk management
• Integrated IGM’s sustainability and
risk functions under one division

Strategy
• Enhanced capacity for climate-related
investment risk measurement and
scenario analysis

Metrics targets
• Mackenzie set interim targets for the Net
Zero Asset Managers initiative (NZAM)

Building
financial
wellness

Advancing
sustainable
investing

Accelerating
DEI in
finance

Responsible business practices

• Governance

• Talent and culture

• Ethics and compliance

• Community support

• Risk management

• Climate change

• Information security

• Environmental footprint

and privacy

From our IGM family to yoursFinancial Section

Management’s Discussion and Analysis

IGM Financial Inc.

Summary of Consolidated Operating Results

Wealth Management

Review of the Business

Review of Segment Operating Results

Asset Management

Review of the Business

Review of Segment Operating Results

Strategic Investments and Other

Review of Segment Operating Results

IGM Financial Inc.

Consolidated Financial Position

Consolidated Liquidity and Capital Resources

Risk Management

The Financial Services Environment

Critical Accounting Estimates and Policies

Disclosure Controls and Procedures

Internal Control Over Financial Reporting

Other Information

Financial Review

Consolidated Financial Statements

Management’s Responsibility for Financial Reporting

Independent Auditor’s Report

Consolidated Financial Statements

Notes to Consolidated Financial Statements

Supplementary Information

Quarterly Review

Ten Year Review

128

130

2022 IGM Financial Inc. Annual ReportManagement’s
Discussion and Analysis

The Management’s Discussion and Analysis (MD&A) presents management’s view of the results of operations and the financial

condition of IGM Financial Inc. (IGM Financial or the Company) as at and for the years ended December 31, 2022 and 2021 and

should be read in conjunction with the audited Consolidated Financial Statements. Commentary in the MD&A as at and for the

year ended December 31, 2022 is as of February 9, 2023.

Basis of Presentation and Summary of Accounting Policies

The Consolidated Financial Statements of IGM Financial, which are the basis of the information presented in the Company’s MD&A,

have been prepared in accordance with International Financial Reporting Standards (IFRS) and are presented in Canadian dollars

(Note 2 of the Consolidated Financial Statements).

Principal Holders of Voting Shares

As at December 31, 2022, Power Corporation of Canada (Power) and Great-West Lifeco Inc. (Lifeco), a subsidiary of Power, held

directly or indirectly 62.2% and 3.9%, respectively, of the outstanding common shares of IGM Financial.

Forward-looking Statements

Certain statements in this report, other than statements of historical
fact, are forward-looking statements based on certain assumptions
and reflect IGM Financial’s current expectations. Forward-looking
statements are provided to assist the reader in understanding the
Company’s financial position and results of operations as at and for
the periods ended on certain dates and to present information about
management’s current expectations and plans relating to the future.
Readers are cautioned that such statements may not be appropriate
for other purposes. These statements may include, without limitation,
statements regarding the operations, business, financial condition,
expected financial results, performance, prospects, opportunities,
priorities, targets, goals, ongoing objectives, strategies and outlook
of the Company, as well as the outlook for North American and
international economies, for the current fiscal year and subsequent
periods. Forward-looking statements include statements that are
predictive in nature, depend upon or refer to future events or
conditions, or include words such as “expects”, “anticipates”, “plans”,
“believes”, “estimates”, “seeks”, “intends”, “targets”, “projects”, “forecasts”
or negative versions thereof and other similar expressions, or future or
conditional verbs such as “may”, “will”, “should”, “would” and “could”.

This information is based upon certain material factors or assumptions
that were applied in drawing a conclusion or making a forecast or
projection as reflected in the forward-looking statements, including
the perception of historical trends, current conditions and expected
future developments, as well as other factors that are believed to be
appropriate in the circumstances. While the Company considers these
assumptions to be reasonable based on information currently available
to management, they may prove to be incorrect.

By its nature, this information is subject to inherent risks and
uncertainties that may be general or specific and which give rise to
the possibility that expectations, forecasts, predictions, projections
or conclusions will not prove to be accurate, that assumptions may
not be correct and that objectives, strategic goals and priorities will
not be achieved.

A variety of material factors, many of which are beyond the Company’s
and its subsidiaries’ control, affect the operations, performance and

results of the Company, and its subsidiaries, and their businesses,
and could cause actual results to differ materially from current
expectations of estimated or anticipated events or results. These
factors include, but are not limited to: the impact or unanticipated
impact of general economic, political and market factors in North
America and internationally, interest and foreign exchange rates,
global equity and capital markets, management of market liquidity
and funding risks, changes in accounting policies and methods used
to report financial condition (including uncertainties associated with
critical accounting assumptions and estimates), the effect of applying
future accounting changes, operational and reputational risks,
business competition, technological change, changes in government
regulations and legislation, changes in tax laws, unexpected judicial
or regulatory proceedings, catastrophic events, outbreaks of disease
or pandemics (such as COVID-19), the Company’s ability to complete
strategic transactions, integrate acquisitions and implement other
growth strategies, and the Company’s and its subsidiaries’ success
in anticipating and managing the foregoing factors.

The reader is cautioned that the foregoing list is not exhaustive of
the factors that may affect any of the Company’s forward-looking
statements. The reader is also cautioned to consider these and other
factors, uncertainties and potential events carefully and not place
undue reliance on forward-looking statements.

Other than as specifically required by applicable Canadian law, the
Company undertakes no obligation to update any forward-looking
statements to reflect events or circumstances after the date on which
such statements are made, or to reflect the occurrence of unanticipated
events, whether as a result of new information, future events or results,
or otherwise.

Additional information about the risks and uncertainties of the
Company’s business and material factors or assumptions on which
information contained in forward-looking statements is based is
provided in its disclosure materials, including this Management’s
Discussion and Analysis and its most recent Annual Information Form,
filed with the securities regulatory authorities in Canada, available at
www.sedar.com.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisRefer to the appropriate reconciliations of non-IFRS financial measures,
including as components of non-IFRS ratios, to reported results in
accordance with IFRS in Tables 1 to 4.

This report also contains other financial measures which include:

• Assets Under Management and Advisement (AUM&A) represents

the consolidated AUM and AUA of IGM Financial. In the Wealth
Management segment, AUM is a component part of AUA. All instances
where the asset management segment is providing investment
management services or distributing its products through the
Wealth Management segment are eliminated in our reporting such
that there is no double-counting of the same client savings held at
IGM Financial’s operating companies.

• Assets Under Advisement (AUA) are the key driver of the Wealth
Management segment. AUA are savings and investment products
held within client accounts of our Wealth Management segment
operating companies.

• Assets Under Management (AUM) are the key driver of the Asset

Management segment. AUM are a secondary driver of revenues and
expenses within the Wealth Management segment in relation to its
investment management activities. AUM are client assets where we
provide investment management services, and include investment
funds where we are the fund manager, investment advisory mandates
to institutions, and other client accounts where we have discretionary
portfolio management responsibilities.

• Working Capital which consists of current assets less current liabilities.

Non-IFRS Financial Measures and Other Financial Measures

This report contains Non-IFRS financial measures and non-IFRS ratios
that do not have standard meanings prescribed by IFRS and may not
be directly comparable to similar measures used by other companies.
These measures and ratios are used to provide management,
investors and investment analysts with additional measures to assess
earnings performance.

Non-IFRS financial measures include, but are not limited to, “adjusted
net earnings available to common shareholders”, “adjusted net earnings”,
“adjusted earnings before income taxes”, “adjusted earnings before
interest and taxes” (Adjusted EBIT), “earnings before interest, taxes,
depreciation and amortization before sales commissions” (EBITDA before
sales commissions), and “earnings before interest, taxes, depreciation
and amortization after sales commissions” (EBITDA after sales
commissions). These measures exclude other items which are items
of a non-recurring nature, or that could make the period-over-period
comparison of results from operations less meaningful. EBITDA before
sales commissions excludes all sales commissions. EBITDA after sales
commissions includes all sales commissions and highlights aggregate
cash flows.

Non-IFRS ratios include the following:

Ratio

Numerator

Denominator

Adjusted net
earnings available
to common
shareholders

Net earnings
(Adjusted net
earnings) available
to common
shareholders

Adjusted
earnings
per share
(Adjusted EPS)

Return (Adjusted
return) on
equity (ROE,
Adjusted ROE)

ROE (Adjusted
ROE) excluding
the impact
of fair value
through other
comprehensive
income
investments

Average number
of outstanding
common shares on
a diluted basis

Average shareholders’
equity excluding
non-controlling
interest

Average shareholders’
equity excluding
non-controlling
interest and the
impact of fair value
through other
comprehensive
income investments
net of tax

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportIGM Financial Inc.

Summary of Consolidated Operating Results

IGM Financial Inc. (TSX:IGM) is a leading wealth and asset

Annual net earnings per share in 2022 represented a decrease

management company supporting advisors and the clients

of 10.4% over annual adjusted net earnings per share in 2021.

they serve in Canada, and institutional investors throughout

Net earnings per share for the fourth quarter of 2022

North America, Europe and Asia. The Company operates

represented a decrease of 13.0% over adjusted net earnings

through a number of operating subsidiaries and also holds

per share (a non-IFRS ratio – see Non-IFRS Financial Measures

a number of strategic investments that provide benefits to

and Other Financial Measures) for the fourth quarter of 2021. In

these subsidiaries while furthering the Company’s growth

2021, adjusted net earnings available to common shareholders,

prospects. The Company’s principle operating subsidiaries are

excluding other items outlined below, were $971.2 million

wealth manager IG Wealth Management (IG) and asset manager

or $4.05 per share for the twelve month period and were

Mackenzie Investments (Mackenzie). The Company also

$260.8 million or $1.08 per share for the fourth quarter of 2021.

operates through wealth manager Investment Planning Counsel

(IPC) and has strategic investments in Great-West Lifeco

Inc. (Lifeco), China Asset Management Co., Ltd. (ChinaAMC),

Northleaf Capital Group Ltd. (Northleaf), and Wealthsimple

Financial Corp. (Wealthsimple) as described more fully later

in this MD&A.

IGM Financial’s assets under management and advisement

were $249.4 billion as at December 31, 2022, compared with

$277.1 billion at December 31, 2021, as detailed in Table 6.

Average total assets under management and advisement

for the year ended December 31, 2022 were $255.2 billion

compared to $259.7 billion in 2021. Average total assets under

management and advisement for the fourth quarter of 2022

were $247.8 billion compared to $272.0 billion in the fourth

quarter of 2021.

Total assets under management were $217.0 billion at

December 31, 2022, compared with $245.3 billion at

December 31, 2021. Average total assets under management

for the year ended December 31, 2022 were $224.6 billion

compared to $231.4 billion in 2021. Average total assets under

management for the fourth quarter of 2022 were $216.5 billion

Adjusted Net Earnings Available to Common
Shareholders(1) and Adjusted Earnings per Share(1)

For the financial year ($ millions, except per share amounts)

971

4.05

867

3.63

792

3.29

764

763

3.19

3.20

2018

2019

2020

2021

2022

Adjusted Net Earnings Available to Common Shareholders

Adjusted Earnings per Share

Adjusted net earnings available to common shareholders and adjusted

compared to $241.9 billion in the fourth quarter of 2021.

net earnings per share excluded the following after-tax amounts:

Net earnings available to common shareholders for the year

ended December 31, 2022 were $867.2 million or $3.63

per share compared to net earnings available to common

shareholders of $978.9 million or $4.08 per share in 2021,

representing a decrease of 11.0% in earnings per share. Net

earnings available to common shareholders for the three

months ended December 31, 2022 were $224.7 million

or $0.94 per share compared to net earnings available to

common shareholders of $268.5 million or $1.11 per share

for the comparative period in 2021, a decrease of 15.3% in

earnings per share.

2018 – charges related to restructuring and other and the premium

paid on the early redemption of debentures.

2019 – the Company’s proportionate share in Great-West Lifeco Inc.’s

one-time charges.

2020 – the gain on sale of Personal Capital, gain on sale of Quadrus

Group of Funds net of acqusition costs, the Company’s

proportionate share of associate’s adjustments and

restructuring and other.

2021 – additional consideration receivable related to the sale

of Personal Capital in 2020.

(1) A Non-IFRS financial measure – see Non-IFRS Financial Measures and

Other Financial Measures section of this document.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisOther items for the three and twelve months ended

interest in ChinaAMC from 13.9% to 27.8%. To partially fund the

December 31, 2021 consisted of additional consideration

transaction, IGM Financial sold 15,200,662 common shares of

receivable of $10.6 million ($7.7 million after-tax) related to

Lifeco to Power for cash consideration of $553 million which

the sale of the Company’s equity interest in Personal Capital

reduced the Company’s equity interest in Lifeco from 4% to

Corporation (Personal Capital) in 2020.

2.4%. The remaining $597 million of consideration was funded

Shareholders’ equity was $6.3 billion at December 31, 2022,

compared to $6.5 billion at December 31, 2021. Adjusted

ROE (a non-IFRS ratio – see Non-IFRS Financial Measures and

from the Company’s existing financial resources including

$22 million in dividends received after March 31, 2022 with

respect to the Lifeco shares that were sold.

Other Financial Measures) for the year ended December 31,

Benefits of the ChinaAMC acquisition include:

2022 was 14.0% compared with 16.4% for the comparative

period in 2021. Adjusted ROE excluding the impact of fair value

through other comprehensive income investments (a non-IFRS

ratio – see Non-IFRS Financial Measures and Other Financial

Measures) for the year ended December 31, 2022 was 15.2%

compared with 19.0% in 2021. The quarterly dividend per
common share was 56.25 cents in 2022, unchanged from the

end of 2021.

China Asset Management Co., Ltd. (ChinaAMC)

On January 12, 2023, the Company closed the previously

announced transaction to acquire Power Corporation of

Canada’s (Power) 13.9% interest in ChinaAMC for cash

consideration of $1.15 billion, increasing the Company’s equity

• Enhancing participation in the rapidly growing Chinese asset

management industry, through a meaningful ownership

position in one of the leading asset managers in China.

• Reinforcing relationships and business opportunities

between Mackenzie and ChinaAMC as Mackenzie builds

global, fully diversified and differentiated solutions for its

clients and strengthens distribution opportunities in China.

• Simplifying the IGM Financial and Power organization

structure by consolidating the ChinaAMC ownership position

at Mackenzie.

Market Overview

Following an extended period of strong financial market

returns that began during the second quarter of 2020, negative

Table 1: Reconciliation of Non-IFRS Financial Measures

($ millions except EPS)

Adjusted net earnings available to common shareholders(1)

Gain on sale of Personal Capital, net of tax

Net earnings available to common shareholders

Adjusted earnings per share(1)

Gain on sale of Personal Capital, net of tax

Earnings per share(2)

Three months ended

Twelve months ended

2022
Dec. 31

2022
Sep. 30

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

224.7

–

224.7

0.94

–

0.94

216.1

–

216.1

0.91

–

0.91

260.8

7.7

268.5

1.08

0.03

1.11

867.2

–

867.2

3.63

–

3.63

971.2

7.7

978.9

4.05

0.03

4.08

Average outstanding shares – Diluted (thousands)

237,958

237,808

241,443

238,996

240,019

EBITDA before sales commissions(1)

Sales–based commissions paid

EBITDA after sales commissions(1)

Sales–based commissions paid subject to amortization

Amortization of capitalized sales commissions

Amortization of capital, intangible and other assets

Adjusted earnings before interest and income taxes(1)

Interest expense(3)

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

Gain on sale of Personal Capital, net of tax

Net earnings

366.1

356.0

411.8

$ 1,425.6

$ 1,547.0

(22.2)

343.9

22.2

(20.9)

(26.2)

319.0

28.7

290.3

63.3

227.0

–

(25.6)

330.4

25.6

(20.1)

(26.4)

309.5

28.6

280.9

63.9

217.0

–

(42.9)

368.9

39.3

(16.2)

(25.4)

366.6

28.6

338.0

76.5

261.5

7.7

(130.8)

(170.5)

1,294.8

1,376.5

123.5

(77.6)

(104.0)

1,236.7

113.8

1,122.9

250.4

872.5

–

151.0

(56.7)

(99.8)

1,371.0

113.9

1,257.1

283.9

973.2

7.7

227.0

217.0

269.2

872.5

980.9

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.
(2) Diluted earnings per share.
(3) Interest expense includes interest on long-term debt and leases.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual Reportreturns during 2022 were reflective of the current volatility in

services are provided to a suite of investment funds

global markets:

• The S&P TSX Composite total return index increased by 6.0%

in the fourth quarter of 2022 and decreased by 5.8% for

the year.

that are distributed through third party dealers and

financial advisors, and through institutional advisory

mandates to financial institutions, pensions and other

institutional investors.

• U.S. equity markets, as measured by the S&P 500 total return

index, increased by 7.6% in the fourth quarter of 2022 and

• Strategic Investments and Other – primarily represents the
key strategic investments made by the Company, including

decreased by 18.1% for the year.

• European equity markets, as measured by the MSCI Europe

net total return index, increased by 9.6% in the fourth

quarter of 2022 and decreased by 9.5% for the year.

• Asian equity markets, as measured by the MSCI AC Asia

Pacific net total return index, increased by 12.5% in the

fourth quarter of 2022 and decreased by 17.2% for the year.

• The FTSE TMX Canada Universe Bond total return index

increased by 0.1% in the fourth quarter of 2022 and

decreased by 11.7% for the year.

• Our clients experienced an average investment return of

5.4% in the fourth quarter of 2022 and -9.9% for the year.

IGM Financial’s assets under management and advisement

decreased by 10.0% from $277.1 billion at December 31,

2021 to $249.4 billion at December 31, 2022. See Table 6 for

the breakdown of IGM Financial’s assets under management

and advisement.

Reportable Segments

China Asset Management Co., Ltd., Great-West Lifeco Inc.,

Northleaf Capital Group Ltd., Wealthsimple Financial Corp.,

and Portage Ventures LPs, as well as unallocated capital.

Investments are classified in this segment (as opposed to the

Wealth Management or Asset Management segment) when

warranted due to different market segments, growth profiles

or other unique characteristics.

Assets Under Management and Advisement (AUM&A)
represents the consolidated AUM and AUA of IGM Financial. In

the Wealth Management segment, AUM is a component part

of AUA. All instances where the asset management segment

is providing investment management services or distributing

its products through the Wealth Management segment are

eliminated in our reporting such that there is no double-

counting of the same client savings held at IGM Financial’s

operating companies.

Assets Under Advisement (AUA) are the key driver of
the Wealth Management segment. AUA are savings and

investment products held within client accounts of our

Wealth Management segment operating companies.

The Company’s reportable segments are Wealth Management,

Asset Management and Strategic Investments & Other

and reflect the Company’s internal financial reporting and

performance measurement (Tables 2, 3 and 4):

Assets Under Management (AUM) are the key driver of the
Asset Management segment. AUM are a secondary driver

of revenues and expenses within the Wealth Management

segment in relation to its investment management activities.

• Wealth Management – reflects the activities of operating

AUM are client assets where we provide investment

companies that are principally focused on providing financial

management services, and include investment funds where

planning and related services to Canadian households. This

segment includes the activities of IG Wealth Management

and Investment Planning Counsel. These firms are retail

distribution organizations that serve Canadian households

through their securities dealers, mutual fund dealers and

other subsidiaries licensed to distribute financial products

and services. A majority of the revenues of this segment

are derived from providing financial advice and distributing

financial products and services to Canadian households. This

segment also includes the investment management activities

of these organizations, including mutual fund management

and discretionary portfolio management services.

• Asset Management – reflects the activities of operating
companies primarily focused on providing investment

management services, and represents the operations

of Mackenzie Investments. Investment management

we are the fund manager, investment advisory mandates

to institutions, and other client accounts where we have

discretionary portfolio management responsibilities.

Financial Presentation

The financial presentation includes revenues and expenses to

align with the key drivers of business activity and to reflect our

emphasis on business growth and operational efficiency. The

categories are as follows:

• Wealth management revenue – revenues earned by the
Wealth Management segment for providing financial

planning, investment advisory and related financial services.

Revenues include financial advisory fees, investment

management and related administration fees, distribution

revenue associated with insurance and banking products and

services, and revenue relating to mortgage lending activities.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 2: Consolidated Operating Results by Segment – Q4 2022 vs. Q4 2021

Three months ended
($ millions)

Revenues

Wealth Management

Asset Management

Strategic Investments
& Other

Intersegment
Eliminations

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

Total

2021
Dec. 31

Wealth management

$ 610.8

$ 672.5

–

2.6

–

1.4

–

260.5

296.8

(76.9)

183.6

(91.7)

205.1

5.6

–

1.3

–

613.4

673.9

189.2

206.4

276.9

121.3

44.6

442.8

170.6

22.8

147.8

39.7

108.1

0.2

284.8

115.9

49.5

450.2

223.7

22.7

201.0

53.8

147.2

–

21.3

90.9

1.0

24.1

88.3

1.6

113.2

114.0

76.0

5.9

70.1

18.8

51.3

–

92.4

5.9

86.5

21.2

65.3

–

Asset management

Dealer compensation
expense

Net asset management

Net investment income
and other

Proportionate share of
associates’ earnings

Expenses

Advisory and business
development

Operations and support

Sub-advisory

Adjusted earnings before
interest and taxes(1)
Interest expense(2)

Adjusted earnings before
income taxes(1)

Income taxes

Adjusted net earnings(1)

Non-controlling interest

Adjusted net
earnings available to
common shareholders(1)

Other items(1), net of tax

Gain on sale of
Personal Capital

Net earnings available to
common shareholders

–

7.4

65.4

72.8

–

0.4

–

0.4

72.4

–

72.4

4.8

67.6

2.1

–

1.1

50.7

51.8

–

1.3

–

1.3

50.5

–

50.5

1.5

49.0

0.7

(4.6)

(5.0)

$ 606.2

$ 667.5

(27.3)

(30.0)

233.2

266.8

4.5

(22.8)

5.0

(25.0)

(72.4)

160.8

(86.7)

180.1

–

(27.4)

(30.0)

–

(0.1)

(27.3)

(27.4)

–

(30.0)

–

15.6

3.8

65.4

848.0

298.2

212.5

18.3

529.0

319.0

28.7

290.3

63.3

227.0

2.3

50.7

902.1

308.9

205.5

21.1

535.5

366.6

28.6

338.0

76.5

261.5

0.7

224.7

260.8

–

7.7

$ 224.7

$ 268.5

$ 107.9

147.2

51.3

65.3

65.5

48.3

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.
(2) Interest expense includes interest on long-term debt and leases.

• Asset management revenue – revenues earned by the Asset
Management segment related to investment management

planning specialists; expenses associated with facilities,

technology and training relating to our advisors and

advisory and administrative services.

• Dealer compensation – asset-based and sales-based

compensation paid to dealers by the Asset

Management segment.

• Advisory and business development expenses – expenses
incurred on activities directly associated with providing

financial planning services to clients of the Wealth
Management segment and wholesale distribution activities

performed by the Asset Management segment. Expenses

include compensation, recognition and other support

provided to our advisors, field management, product &

specialists; other business development activities including

direct marketing and advertising. A significant component

of these expenses varies directly with levels of assets

under management or advisement, business development

measures including sales and client acquisition, and the

number of advisor and client relationships.

• Operations and support expenses – expenses associated

with business operations, including technology and business

processes; in-house investment management and product

shelf management; corporate management and support

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTable 3: Consolidated Operating Results by Segment – Twelve Months Ended

Wealth Management

Asset Management

Strategic Investments
& Other

Intersegment
Eliminations

Twelve months ended
($ millions)

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

Total

2021
Dec. 31

Revenues

Wealth management

$ 2,484.0

$ 2,572.9

–

4.1

–

3.6

–

1,077.7

1,126.1

(327.6)

(355.3)

750.1

770.8

5.7

–

5.8

–

2,488.1

2,576.5

755.8

776.6

1,126.1

1,089.3

476.9

181.9

466.1

189.7

1,784.9

1,745.1

703.2

90.3

612.9

164.2

448.7

0.2

831.4

90.3

741.1

198.0

543.1

–

79.4

358.4

4.9

442.7

313.1

23.5

289.6

76.4

213.2

–

88.7

335.6

6.9

431.2

345.4

23.6

321.8

81.0

240.8

–

Asset management

Dealer compensation
expense

Net asset management

Net investment income
and other

Proportionate share of
associates’ earnings

Expenses

Advisory and business
development

Operations and support

Sub-advisory

Adjusted earnings before
interest and taxes(1)
Interest expense(2)

Adjusted earnings before
income taxes(1)

Income taxes

Adjusted net earnings(1)

Non-controlling interest

Adjusted net
earnings available to
common shareholders(1)

Other items(1), net of tax

Gain on sale of
Personal Capital

Net earnings available to
common shareholders

–

(18.7)

(19.3)

$ 2,465.3

$ 2,553.6

(111.7)

(114.6)

966.0

1,011.5

18.7

(93.0)

19.3

(95.3)

(308.9)

(336.0)

657.1

675.5

14.6

2.7

(0.3)

(0.2)

24.1

11.9

210.7

225.3

196.4

199.1

–

210.7

196.4

(112.0)

(114.8)

3,357.2

3,437.4

–

4.9

–

4.9

–

4.9

–

4.9

–

(0.3)

(111.7)

(112.0)

–

(0.2)

(114.6)

1,205.5

1,178.0

839.9

75.1

806.4

82.0

(114.8)

2,120.5

2,066.4

220.4

194.2

–

220.4

9.6

210.8

5.1

194.2

4.9

189.3

2.0

–

0.2

(0.2)

–

1,236.7

113.8

1,371.0

113.9

1,122.9

1,257.1

250.4

872.5

5.3

283.9

973.2

2.0

867.2

971.2

–

7.7

$ 867.2

$ 978.9

$ 448.5

$ 543.1

$ 213.2

$ 240.8

$ 205.7

187.3

(0.2)

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.
(2) Interest expense includes interest on long-term debt and leases.

functions. These expenses primarily reflect compensation,

Income taxes are reported in each segment. IGM Financial

technology and other service provider expenses.

consolidated changes in the effective tax rates are detailed

• Sub-advisory expenses – reflects fees relating to investment
management services provided by third party or related

party investment management organizations. These

fees typically are variable with the level of assets under

management. These fees include investment advisory

services performed for the Wealth Management segment

by the Asset Management segment.

Interest expense represents interest expense on long-term

debt and leases. Interest expense is allocated to each segment

based on management’s assessment of: i) capacity to service

the debt, and ii) where the debt is being serviced.

in Table 5.

Tax planning may result in the Company recording lower

levels of income taxes. Management monitors the status of its

income tax filings and regularly assesses the overall adequacy

of its provision for income taxes and, as a result, income

taxes recorded in prior years may be adjusted in the current
year. The effect of changes in management’s best estimates

reported in adjusted net earnings is reflected in Other, which

also includes, but is not limited to, the effect of lower effective

income tax rates on foreign operations.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 4: Consolidated Operating Results by Segment – Q4 2022 vs. Q3 2022

Three months ended
($ millions)

Revenues

Wealth Management

Asset Management

Strategic Investments
& Other

Intersegment
Eliminations

2022
Dec. 31

2022
Sep. 30

2022
Dec. 31

2022
Sep. 30

2022
Dec. 31

2022
Sep. 30

2022
Dec. 31

2022
Sep. 30

2022
Dec. 31

Total

2022
Sep. 30

Wealth management

$ 610.8

611.3

–

2.6

–

2.8

–

260.5

262.7

(76.9)

183.6

(77.5)

185.2

5.6

–

3.8

–

613.4

614.1

189.2

189.0

276.9

121.3

44.6

442.8

170.6

22.8

147.8

39.7

108.1

0.2

278.0

118.5

44.0

440.5

173.6

22.7

150.9

40.5

110.4

–

21.3

90.9

1.0

16.4

86.0

1.2

113.2

103.6

76.0

5.9

70.1

18.8

51.3

–

85.4

5.9

79.5

21.0

58.5

–

Asset management

Dealer compensation
expense

Net asset management

Net investment income
and other

Proportionate share of
associates’ earnings

Expenses

Advisory and business
development

Operations and support

Sub-advisory

Adjusted earnings before
interest and taxes(1)
Interest expense(2)

Adjusted earnings before
income taxes(1)

Income taxes

Adjusted net earnings(1)

Non-controlling interest

Adjusted net
earnings available to
common shareholders(1)

Other items(1), net of tax

Net earnings available to
common shareholders

–

7.4

65.4

72.8

–

0.4

–

0.4

72.4

–

72.4

4.8

67.6

2.1

–

4.7

46.9

51.6

–

1.1

–

1.1

50.5

–

50.5

2.4

48.1

0.9

(4.6)

(4.5)

$ 606.2

$ 606.8

(27.3)

233.2

235.4

4.5

(22.8)

4.6

(22.7)

(72.4)

160.8

(72.9)

162.5

(0.2)

15.6

11.1

–

(27.4)

–

(0.1)

(27.3)

(27.4)

–

(0.1)

(27.3)

(27.4)

–

65.4

848.0

298.2

212.5

18.3

529.0

319.0

28.7

290.3

63.3

227.0

2.3

46.9

827.3

294.4

205.5

17.9

517.8

309.5

28.6

280.9

63.9

217.0

0.9

224.7

216.1

–

$ 224.7

216.1

$ 107.9

110.4

51.3

58.5

65.5

47.2

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.
(2) Interest expense includes interest on long-term debt and leases.

Table 5: Effective Income Tax Rate

Income taxes at Canadian federal and provincial
statutory rates

Effect of:

Three months ended

Twelve months ended

2022
Dec. 31

2022
Sep. 30

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

26.61 %

26.62 %

26.64 %

26.62 %

26.63 %

Proportionate share of associates’ earnings

Other

(5.51)

0.70

(3.93)

0.05

(3.39)

(0.48)

(4.50)

0.18

(3.65)

(0.36)

Effective income tax rate – net earnings

21.80 %

22.74 %

22.77 %

22.30 %

22.62 %

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportOther items, as reflected in Tables 2 and 3, include the after-

quarter of 2021 included a gain on sale of Personal Capital of

tax impact of any item that management considers to be of

$10.6 million ($7.7 million after-tax) resulting from additional

a non-recurring nature or that could make the period-over-

consideration receivable related to the sale of the Company’s

period comparison of results from operations less meaningful

equity interest in Personal Capital in 2020. There were no Other

and are not allocated to segments. Other items in the fourth

items in the periods under review as reflected in Tables 2, 3

and 4.

Table 6: Assets Under Management and Advisement

($ millions)

Three months ended

Gross flows

Mutual fund gross sales(3)

Dealer gross inflows

Net flows

Mutual fund net sales(3)

ETF net creations

Investment fund net sales
Institutional SMA net sales(4)

Mackenzie net sales through
Wealth Management

IGM product net sales

Other dealer net flows

Total net flows

Twelve months ended

Gross flows

Mutual fund gross sales(3)

Dealer gross inflows

Net flows

Mutual fund net sales(3)(5)
ETF net creations(6)

Investment fund net sales
Institutional SMA net sales(4)

Mackenzie net sales through
Wealth Management

IGM product net sales

Other dealer net flows

Total net flows

Wealth Management

Asset Management(1)

IG Wealth
Management

Investment
Planning Counsel

Mackenzie
Investments

Intercompany

Eliminations(2)

Consolidated

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

$ 2,125 $ 2,959 $

138 $

174 $ 1,559 $ 2,592 $

– $

– $ 3,822 $ 5,725

3,031

3,437

1,157

1,509

–

(718)

–

(718)

–

(18)

(736)

1,165

429

457

–

457

–

493

492

985

(148)

–

(148)

–

(33)

(181)

226

(129)

–

(129)

–

(109)

232

123

(966)

134

(832)

(135)

–

(967)

–

(967)

512

245

757

(576)

–

181

–

181

–

(56)

(55)

4,188

4,946

(1,832)

134

(1,698)

(135)

–

(1,833)

1,393

(440)

840

245

1,085

(576)

–

509

725

1,234

$ 10,587 $ 11,845 $

621 $

774 $ 7,496 $ 12,022 $

– $

– $ 18,704 $ 24,641

12,872

13,434

4,424

5,366

–

1,813

(322)

(288)

(1,736)

–

705

1,813

(322)

(288)

(1,031)

3,908

1,532

5,440

–

(834)

(306)

(32)

2,679

2,690

431

2,244

1,440

3,684

(39)

(361)

616

255

180

–

(108)

(1,865)

5,134

596

488

–

(1,865)

5,134

–

(611)

(605)

17,296

18,800

(2,015)

705

(1,310)

(834)

–

(2,144)

3,301

1,157

5,433

1,532

6,965

(306)

–

6,659

2,042

8,701

(1) Asset Management flows activity excludes sub-advisory to Canada Life and the Wealth Management segment.

(2) Consolidated results eliminate double counting where business is reflected within multiple segments.

(3) IG Wealth Management and Investment Planning Counsel AUM and net sales include separately managed accounts.

(4) Sub-advisory, institutional and other accounts:

2022 Q1 – an institutional investor redeemed $291 million within products Mackenzie sub-advises.
2021 Q2 – Mackenzie was awarded $680 million of sub-advisory wins.
2021 Q4 – An institutional client re-assigned sub-advisory responsibilities on mandate advised by Mackenzie totalling $667 million.

(5) During the twelve month period in 2021, institutional clients, which include Mackenzie mutual funds within their investment offerings, made fund allocation changes

which resulted in redemptions and net redemptions of $361 million.

(6) ETFs – During the twelve month period of 2022, Wealthsimple made allocation changes which resulted in $675 million in purchases in Mackenzie ETFs.

2022 IGM Financial Inc. Annual Report | Management's Discussion and Analysis
Total Assets Under
Management and Advisement

Assets under management and advisement were

$249.4 billion at December 31, 2022 compared to

$277.1 billion at December 31, 2021, a decrease of 10.0%,

as detailed in Table 6. Total assets under management

were $217.0 billion at December 31, 2022 compared to

$245.3 billion at December 31, 2021, a decrease of 11.5%.

$7.0 billion in 2021. Net outflows in the fourth quarter of 2022

were $440 million compared to net inflows of $1.2 billion in the

fourth quarter of 2021, as detailed in Table 6. Fourth quarter

investment fund net redemptions were $1.7 billion compared

to net sales of $1.1 billion in 2021. Net flows and net sales

are based on assets under management and advisement

excluding sub-advisory assets to Canada Life and to the

Wealth Management segment.

The Company also benefits from the underlying assets under

Net inflows for the twelve months ended December 31, 2022

management of the Company’s investments in associates,

were $1.2 billion compared to $8.7 billion in 2021, as detailed in

including ChinaAMC and Northleaf. This AUM is not currently

Table 6. Investment fund net redemptions for the twelve month

reported as the Company’s AUM&A.

period were $1.3 billion in 2022 compared to net sales of

Table 6: Assets Under Management and Advisement (continued)

Wealth Management

Asset Management

IG Wealth
Management

Investment
Planning Counsel

Mackenzie
Investments

Intercompany

Eliminations(1)

Consolidated

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

($ millions)

Assets under Management
and Advisement

Wealth Management(2)

AUM

$ 99,275 $ 110,541 $ 4,622 $ 5,629

– $

– $103,897 $ 116,170

Mackenzie assets sold through
Wealth Management

Other AUA

AUA

Asset Management

Mutual funds

ETFs

Investment funds

Institutional SMA

Sub-advisory to Canada Life

Total Institutional SMA

Total ex sub-advisory to
Wealth Management

Sub-advisory to Wealth Management

Total AUM

ETFs

Distributed to third parties

Held within IGM managed products

Total ETFs

Consolidated

AUM

Mackenzie assets sold through
Wealth Management

Other AUA

AUM&A

850

957

3,195

3,640

10,691

8,059

21,730

23,808

110,816

119,557

29,547

33,077

–

(7)

–

(11)

4,045

4,597

32,414

31,856

140,356

152,623

$ 54,434 $ 62,969

5,219

5,393

59,653

68,362

6,422

7,948

47,023

52,805

53,445

60,753

113,098

129,115

73,514

81,228

186,612

210,343

54,434

62,969

5,219

5,393

59,653

68,362

6,422

7,948

47,023

52,805

53,445

60,753

113,098

129,115

73,514

81,228

186,612

210,343

5,219

7,176

5,393

7,281

(7,176)

(7,281)

–

5,219

5,393

12,395

12,674

(7,176)

(7,281)

5,219

5,393

99,275

110,541

4,622

5,629

186,612

210,343

(73,514)

(81,228)

216,995

245,285

850

957

3,195

3,640

10,691

8,059

21,730

23,808

–

(4,045)

(4,597)

–

(7)

(11)

32,414

31,856

110,816

119,557

29,547

33,077

186,612

210,343

(77,566)

(85,836)

249,409

277,141

(1) Consolidated results eliminate double counting where business is reflected within multiple segments.
(2) IG Wealth Management and Investment Planning Counsel AUM include separately managed accounts.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual Report
At December 31, 2022, ChinaAMC’s AUM was RMB¥

$277.1 billion in 2021 and decreased to $249.4 billion in 2022.

1,721.6 billion ($337.6 billion) compared to RMB¥ 1,661.6 billion

Changes were driven largely by changes in financial markets

($330.5 billion) at December 31, 2021, an increase of 3.6%

during the periods. Average total assets under management

(CAD$ 2.2%). IGM Financial held a 13.9% interest in ChinaAMC

and advisement for the year ended December 31, 2022 were

on December 31, 2022, which was increased to 27.8% on

$255.2 billion compared to $259.7 billion in 2021. The impact on

January 12, 2023.

At December 31, 2022, Northleaf’s AUM was $24.1 billion

compared to $19.5 billion at December 31, 2021, an increase

of 23.6%. IGM Financial holds a 56% economic interest

in Northleaf.

Changes in assets under management for the Wealth

Management and Asset Management segments are discussed

further in each of their respective Review of the Business

sections in the MD&A.

earnings and revenues of changes in average total assets under

management and advisement and other pertinent items are

discussed in the Review of Segment Operating Results sections

of the MD&A for both IG Wealth Management and Mackenzie.

Net earnings in future periods will largely be determined by the

level of assets under management and advisement which will

continue to be influenced by global market conditions.

Dividends per Common Share – Annual dividends per common
share were $2.25 in 2022, unchanged from 2021 and 2020.

Selected Annual Information

Summary of Quarterly results

Financial information for the three most recently completed

The Summary of Quarterly Results in Table 8 includes the

years is included in Table 7.

Net Earnings and Earnings per Share – Except as noted in the
reconciliation in Table 7, variations in net earnings and total

eight most recent quarters and the reconciliation of non-IFRS

financial measures to net earnings in accordance with IFRS.

Changes in average daily investment fund assets under

revenues result primarily from changes in average assets under

management over the eight most recent quarters, as shown in

management and advisement. Assets under management

Table 8, largely reflect the impact of changes in domestic and

and advisement were $240.0 billion in 2020, increased to

foreign markets and net sales of the Company.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 7: Selected Annual Information

Consolidated statements of earnings ($ millions)

Revenues

Wealth management

Net asset management

Net investment income and other

Proportionate share of associates’ earnings

Expenses

Gain on sale of Personal Capital

Gain on sale of Quadrus Group of Funds net of acquisition costs

Proportionate share of associate’s adjustments

Restructuring and other

Earnings before income taxes

Income taxes

Net earnings

Non-controlling interest

Net earnings available to common shareholders

Reconciliation of Non-IFRS financial measures ($ millions)
Adjusted net earnings available to common shareholders(1)

Other items:

Gain on sale of Personal Capital, net of tax

Gain on sale of Quadrus Group of Funds net of acquisition costs, net of tax

Proportionate share of associate’s adjustments

Restructuring and other, net of tax

Net earnings available to common shareholders

Earnings per share ($)

Adjusted earnings per share(1)

– Basic

– Diluted

Earnings per share

– Basic

– Diluted

Dividends per share ($)

Common

Average assets under management and advisement ($ billions)

Investment fund assets under management

Total assets under management

Total assets under management and advisement

Ending assets under management and advisement ($ billions)

Investment fund assets under management

Total assets under management

Total assets under management and advisement

Total corporate assets ($ millions)

Total long-term debt ($ millions)

Outstanding common shares (thousands)

Average outstanding shares – Diluted (thousands)

2022

2021

2020

2,465.3

2,553.6

2,259.6

657.1

24.1

210.7

3,357.2

2,234.3

1,122.9

–

675.5

11.9

196.4

3,437.4

2,180.3

1,257.1

10.6

–

1,122.9

1,267.7

250.4

872.5

(5.3)

867.2

–

286.8

980.9

(2.0)

978.9

971.2

7.7

–

867.2

978.9

3.64

3.63

3.64

3.63

2.25

168.9

224.6

255.2

163.6

217.0

249.4

18,873

2,100

237,668

238,996

4.07

4.05

4.10

4.08

2.25

173.4

231.4

259.7

184.5

245.3

277.1

17,661

2,100

239,679

240,019

529.8

11.0

147.0

2,947.4

1,973.4

974.0

37.2

25.2

3.4

(74.5)

965.3

200.7

764.6

(0.2)

764.4

762.9

31.4

21.4

3.4

(54.7)

764.4

3.20

3.21

2.25

161.7

168.5

191.2

159.5

214.0

240.0

16,062

2,100

238,308

238,307

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTable 8: Summary of Quarterly Results

Consolidated statements of earnings ($ millions)

Revenues

Wealth management

Asset management

Dealer compensation expense

Net asset management

Net investment income and other

Proportionate share of associates’ earnings

Expenses

Advisory and business development

Operations and support

Sub-advisory
Interest(1)

Earnings before undernoted

Gain on sale of Personal Capital

Earnings before income taxes

Income taxes

Net earnings

Non-controlling interest

2022
Q4

2022
Q3

2022
Q2

2022
Q1

2021
Q4

2021
Q3

2021
Q2

2021
Q1

$ 606.2 $ 606.8 $

611.1 $ 641.2 $ 667.5 $ 655.0 $

627.6 $ 603.5

233.2

(72.4)

160.8

15.6

65.4

235.4

(72.9)

162.5

11.1

46.9

241.6

(77.4)

164.2

(0.6)

50.0

255.8

(86.2)

169.6

(2.0)

48.4

266.8

(86.7)

180.1

3.8

50.7

263.4

(85.9)

177.5

2.5

55.9

248.3

(82.7)

165.6

2.5

48.2

233.0

(80.7)

152.3

3.1

41.6

848.0

827.3

824.7

857.2

902.1

890.9

843.9

800.5

298.2

212.5

18.3

28.7

557.7

290.3

–

290.3

63.3

227.0

2.3

294.4

205.5

17.9

28.6

546.4

280.9

–

280.9

63.9

217.0

0.9

303.8

206.4

18.3

28.4

556.9

267.8

–

267.8

59.4

208.4

1.3

309.1

215.5

20.6

28.1

573.3

283.9

–

283.9

63.8

220.1

0.8

308.9

205.5

21.1

28.6

564.1

338.0

10.6

348.6

79.4

269.2

0.7

294.0

197.6

20.7

28.7

541.0

349.9

–

349.9

78.4

271.5

0.7

291.1

196.8

20.4

28.5

536.8

307.1

–

307.1

69.3

237.8

0.4

284.0

206.5

19.8

28.1

538.4

262.1

–

262.1

59.7

202.4

0.2

Net earnings available to common shareholders

$ 224.7 $

216.1 $

207.1 $

219.3 $ 268.5 $ 270.8 $ 237.4 $ 202.2

Reconciliation of Non-IFRS financial measures ($ millions)
Adjusted net earnings available to common shareholders(2)

Other items:

$ 224.7 $

216.1 $

207.1 $

219.3 $ 260.8 $ 270.8 $ 237.4 $ 202.2

Gain on sale of Personal Capital, net of tax ($2.9 million)

–

7.7

–

Net earnings available to common shareholders

$ 224.7 $

216.1 $

207.1 $

219.3 $ 268.5 $ 270.8 $ 237.4 $ 202.2

Earnings per Share ($)
Adjusted earnings per share(2)

– Basic

– Diluted

Earnings per share

– Basic

– Diluted

0.95 $

0.91 $

0.87 $

0.91 $

1.09 $

1.13 $

0.99 $

0.85

0.94

0.91

0.87

0.91

1.08

1.13

0.99

0.85

0.95

0.94

0.91

0.87

0.91

1.12

1.11

1.13

0.99

0.85

Average outstanding shares – Diluted (thousands)

237,958

237,808

239,242

241,251

241,443

240,575

239,821

238,474

Average assets under management and advisement ($ billions)

Investment fund assets under management

$ 163.3 $ 164.3 $ 169.3 $

179.0 $

181.9 $ 178.6 $ 170.2 $

162.7

Total assets under management

Assets under management and advisement

216.5

247.8

217.3

247.2

225.2

255.3

238.4

269.5

241.9

272.0

238.3

267.4

227.8

255.4

217.6

243.9

Ending assets under management and advisement ($ billions)

Investment fund assets under management

$ 163.6 $

157.6 $ 160.2 $ 178.5 $ 184.5 $ 176.8 $

174.4 $ 165.5

Total assets under management

Assets under management and advisement

217.0

249.4

208.7

238.1

213.1

242.1

237.1

268.3

245.3

277.1

236.2

265.2

233.6

262.0

221.6

248.5

(1) Interest expense includes interest on long-term debt and leases.
(2) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisWealth Management

The Wealth Management segment consists of both IG Wealth

• Other financial planning revenues are fees related

Management (IG) and Investment Planning Counsel, Inc. (IPC).

to providing clients other financial products including

Wealth Management revenue consists of:

• Advisory fees are related to providing financial advice to

clients including fees related to the distribution of products

and depend largely on the level and composition of assets

under advisement.

• Product and program fees are related to the management

of investment products and include management,

administration and other related fees and depend largely

on the level and composition of assets under management.

mortgages, insurance and banking products.

Sub-advisory fees are paid between segments and to third

parties for investment management services provided to our

investment products. Wealth Management is considered a

client of the Asset Management segment and transfer pricing is

based on values for similar sized asset management mandates.

Debt and interest expense is allocated to each IGM Financial

segment based on management’s assessment of: i) capacity

to service the debt, and ii) where the debt is being serviced.

Income taxes are also reported in each segment.

Review of the Business

IG Wealth Management, founded in 1926, is a leading wealth

process that is typically complicated and costly. IG Wealth

management company in Canada that focuses on providing

Management has collaborated with industry leading investment

comprehensive personal financial planning to Canadians.

managers at Mackenzie and BlackRock Asset Management to

Investment Planning Counsel, founded in 1996, is an

independent distributor of financial products, services

and advice in Canada, with 653 advisors.

The Wealth Management segment provides a comprehensive

planning approach, through IG Wealth Management and IPC
advisors, by offering a broad range of financial products
and services.

deliver these suites of diversified investment solutions that

will offer Canadians new and innovative ways to meet their

financial goals.

IG Wealth Management and Nesto Inc. (nesto) have entered into

a strategic agreement to have nesto provide next generation

white label mortgage services to IG Wealth Management clients

across Canada through its Mortgage Cloud solution. The

initiative is part of IG Wealth Management’s ongoing strategy to

The review of the business in the Wealth Management section

transform its business and follows the firm’s modernization of

primarily relates to IG Wealth Management as it represents 98%

its investment management and financial planning platforms.

of adjusted net earnings available to common shareholders of

the total segment.

2022 Developments

nesto’s Mortgage Cloud solution will be integrated into

IG Wealth Management’s mortgage solutions business. It will

allow IG Wealth Management advisors to provide clients with

an enhanced mortgage experience through:

In April 2022, IG Wealth Management launched two new

• an online application process

suites of products, consisting of a total of eight funds.

• quick turnaround times

IG U.S. Taxpayer Portfolios (Portfolios) offer investors a

comprehensive investment solution that help simplify tax

reporting for Canadian residents who pay taxes in the U.S.

The second suite, IG Mackenzie U.S. Dollar Funds (Funds),
is designed for investors who are seeking to invest in U.S.

dollar investments. The new Funds will provide clients with

comprehensive diversification for their U.S. dollars and the new

Portfolios have been designed to help simplify a tax reporting

• live tracking and regular status updates

• dynamic tools such as the ability to upload mortgage

documents using a mobile device.

IG Wealth Management and nesto will begin offering the

newly integrated mortgage services on nesto Mortgage

Cloud solution in 2023.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportIG Wealth Management

Financial Advice

IG Wealth Management is one of the largest independent

financial planning firms in Canada, with advisors in every

community from coast to coast. We are driven by our mission

to inspire financial confidence that can transform the lives of

Our advisors focus on providing financial advice which is the

value of all efforts that sit outside the investment portfolio

construction. This includes the value that an advisor adds to

a client relationship and comes from the creation and follow

our clients and their families and we are deeply committed to

through of a well-constructed financial plan.

improving financial literacy in the communities where we work

and live.

Advisors

Our exclusive network is comprised of 3,235 advisors.

IG Wealth Management clients are more than one million

individuals, families and business owners.

Canadians hold $6.5 trillion in discretionary financial assets

with financial institutions at December 31, 2021, based on

the most recent report from Investor Economics, and we
view these savings as IG Wealth Management’s addressable

market. 77% of these savings are held by households with

over $1 million, which are referred to as high net worth, and

another 20% reside with households with between $100,000

and $1 million, which are referred to as mass affluent. These

segments tend to have more complicated financial needs, and

IG Wealth Management’s focus on providing comprehensive

financial planning solutions positions it well to compete and

grow in these segments.

Strategy

IG Wealth Management’s promise is to inspire financial

confidence.

IG Wealth has a client-centric strategy with a focus on high

net worth (HNW) and mass affluent client segments, which

we define as households with over $1 million and between

$100 thousand and $1 million, respectively.

IG Wealth Management has a national distribution network of

more than 3,000 advisors in communities throughout Canada.

Our advisory services are most suited to individuals with

complicated financial needs.

IG Wealth provides advice through two primary channels:

• IG Wealth Management entrepreneurial advisors are focused

on the high net worth and mass affluent segments of the

market, which we define as households with over $1 million

and between $100 thousand and $1 million, respectively.

• IG Wealth Management has a National Service Centre

focused on supporting approximately 240,000 clients

with less complex requirements, while allowing our

entrepreneurial advisor practices to focus on those clients

with more complex needs.

Our entrepreneurial advisor network creates a competitive

advantage and drives client engagement with a focus on

comprehensive financial planning and product solutions. Our

advantage is further enabled by hiring top quality advisors,

increasing proficiency, improving technology, implementing a

client segmentation approach and enhancing a strong brand.

Assets under advisement consists of the following:

• Clients with household assets greater than $1 million

(defined as “high net worth”) which totalled $37.7 billion at

December 31, 2022, a decrease of 13.3% from one year ago,

IG Wealth Management is committed to increasing the financial

and represented 34% of total assets under advisement.

confidence of all Canadians by leveraging our people, expertise

• Clients with household assets between $100 thousand

and resources because we believe it will help create stronger

and $1 million (defined as “mass affluent”) which totalled

communities and a better future for all.

We believe that Canadians deserve a high standard of advice

that takes into consideration all dimensions of their financial

lives with financial plans tailored to meet and adapt to

their needs.

Our strategic mandate is to be Canada’s financial partner

of choice.

We achieve our strategic mandate by focusing on providing

comprehensive financial advice and well-constructed
investment solutions designed to deliver returns and risks

that take into account each client’s needs and requirements.

$63.6 billion at December 31, 2022, a decrease of 4.4% from

one year ago, and represented 57% of total assets under

advisement.

• Clients with household assets less than $100 thousand

(defined as “mass market”) which totalled $9.5 billion at

December 31, 2022, a decrease of 0.6% from one year ago,

and represented 9% of total assets under advisement.

IG Wealth Management advisor practices are industry leaders

in holding a credentialed financial planning designation. These

designations are nationally recognized financial planning
qualifications that require an individual to demonstrate

financial planning competence through education, standardized

examinations, continuing education requirements, and

accountability to ethical standards.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisThe following provides a breakdown of the IG Wealth

of a client’s financial life. Clients are served by our mutual fund

Management advisor network into its significant components

licensed and securities licensed advisors and specialists.

at December 31, 2022:

• 1,741 advisor practices (1,761 at December 31, 2021), which

Client Experiences

reflect advisors with more than four years of experience.

These practices may include associates as described

below. The level and productivity of advisor practices is a

key measurement of our business as they serve clientele

representing approximately 96% of AUM.

• 333 new advisors (380 at December 31, 2021), which are

those advisors with less than four years of experience.

IG Wealth Management distinguishes itself from our

competition by offering comprehensive planning to our

clients that synchronize every aspect of their financial life.

IG Wealth Management serves approximately one million

clients located in communities throughout Canada. A primary

focus is on advising and attracting high net worth and mass

affluent clients.

• 1,161 associates and regional vice-presidents (1,137 at

For the distinct needs of the high net worth market, we offer

December 31, 2021). Associates are licensed team members

IG Private Wealth Management which includes investment

of advisor practices who provide financial planning services

management, retirement, tax and estate planning services.

and advice to the clientele served by the team.

• IG Wealth Management had a total advisor network of

3,235 (3,278 at December 31, 2021).

IG Wealth uses advisor productivity as a key performance

measure in evaluating its advisor network. The productivity is

measured based on gross inflows per advisor and is monitored

for both advisor recruits with less than 4 years experience and

advisor practices with greater than 4 years experience.

• The advisor recruit’s gross inflows were $0.66 million per

advisor in Q4 2022 compared to $0.60 million per advisor

in the comparative period of 2021.

• The advisory practice gross inflows were $1.49 million per

practice compared to $1.69 million in the comparative period

of 2021.

Key initiatives that impact advisor productivity are:

• Elimination of DSC in 2017 which removed competitive

impediment.

IG Living Plan™ allows clients to collaborate with an IG advisor

through an enhanced digital experience to develop and track

a financial plan which is unique to each client’s goals.

IG Wealth Management has a full range of products that allow

us to provide a tailored IG Living Plan that evolves over time.

These products include:

• Powerful financial solutions that include investment vehicles

that match risk and investment performance to each client’s

needs and requirements.

• Insurance products that include a variety of policy types

from the leading insurers in Canada.

• Mortgage and banking solutions that are offered as part

of a comprehensive financial plan.

The Charitable Giving Program is a donor-advised giving

program which enables Canadians to make donations and

build an enduring charitable giving legacy with considerably

less expense and complexity than setting up and administering

• Tightened recruiting standards that increased the likelihood

their own private foundation.

of success while also enhancing our culture and brand.

• National Service Centre that provides consistent service

levels to clients with less complex needs and creates capacity

for advisors.

• Product and pricing enhancements with a focus on the high

net worth and mass affluent segments.

The IG Advisory Account is a fee-based account that improves

client experience by offering the ability to simplify and

consolidate selected investments into a single account while

providing all our clients with a transparent advisory fee.

IGAA accounts increase fee transparency and can hold most

securities and investment products available in the marketplace

• Continued technology enhancements such as the Advisor

to individual investors.

Desktop powered by Salesforce.

• IG Living PlanTM and other client experience enhancements.

Financial Solutions

• Digital application to deliver tailored client investment

proposals (powered by CapIntel).

IG Wealth Management strives to achieve expected investment

returns for the lowest possible risk through well-constructed

We also support advisors and clients through our network of

investment portfolios, and to create value for clients through

product and planning specialists, who assist in the areas of

active management. To do this, we select and engage

advanced financial planning, mortgages and banking, insurance,

high-quality sub-advisors so our clients have access to a diverse

and securities. These specialists help to ensure that we are

range of investment products and solutions. Each asset manager

providing comprehensive financial planning across all elements

is selected through a proven and rigorous process. We oversee

all sub-advisors to ensure that their activities are consistent

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual Reportwith their investment philosophies and with the investment

iProfile Active Allocation Private Pools, iProfile Alternatives

objectives and strategies of the products they advise.

Private Pool with mandates including long-short, global

Our investment solutions leverage top global asset manager

relationships including Mackenzie Investments and other

world class investment firms such as Fidelity Investments

Canada, T. Rowe Price, Sagard, Beutel Goodman Investment

Counsel, PanAgora, PIMCO, Northleaf, BristolGate Capital

Partners, Aristotle Capital Boston, Putnam Investments,

Franklin Templeton Investments, Wellington Management,

Rockefeller Asset Management, JP Morgan Asset Management,

BlackRock, ClearBridge Investments, 1832 Asset Management,

and ChinaAMC.

We provide clients with an extensive suite of well-constructed

and competitively priced financial solutions that incorporate

public and private market investments as well as alternative

investment strategies. We regularly enhance the scope and

diversity of our investment offering with new funds and

product changes that enable clients to achieve their goals.

We believe that well-constructed managed solutions provide

advisors with the best opportunity to focus on providing

financial advice to their clients.

We provide portfolio construction with investment

solutions that include public markets, private markets

and alternative strategies.

Our investment solutions include:

• A deep and broad selection of mutual funds, diversified

by manager, asset category, investment style, geography,

market capitalization and sector.

macro and global equity hedge strategies, iProfile ETF Private

Pool providing exposure through exchange traded funds

(ETF) and iProfile Low Volatility Private Pool with Canadian,

U.S., International and Emerging Market geographic coverage.

• Segregated funds that provide for long-term investment

growth potential combined with risk management, benefit

guarantee features and estate planning efficiencies.

• Separately managed accounts (discretionary dealer-

managed accounts).

We have incorporated investments in private assets with

the introduction of a Private Credit Mandate in the iProfile

Fixed Income Private Pool. The pool has committed to

three Northleaf Capital Partners’ private credit investments

that focus on loans to middle market companies in North

America and Europe, as well as to investments managed by

BlackRock, PIMCO and Sagard. We have also introduced Private

Investment Mandates into both the iProfile Canadian Equity

Private Pool and the iProfile U.S. Equity Private Pool. Both of

these mandates intend to provide investors with enhanced

diversification and long-term capital appreciation through

exposure to investments in privately held companies. The

iProfile Canadian Equity Private Pool has currently made a

commitment to the Northleaf Growth Fund and the iProfile U.S.

Equity Private Pool has made a commitment to the Northleaf

Capital Opportunities Fund.

In support of the global goal to reach net zero by 2050,

IG Wealth Management is a founding Signatory to Responsible

• Managed solutions that rebalance investments to ensure

Investment Association’s Canadian Investor Statement

that a chosen mix of investments and risk and return is

on Climate Change. To support this initiative, IG Wealth

maintained. These solutions include IG Core Portfolios,

Management clients can invest in the IG Climate Action

IG Managed Payout Portfolios, Investors Portfolios,

Portfolios which is a suite of four diversified managed solutions.

IG Climate Action Portfolios, IG U.S. Taxpayer Portfolios

and IG Managed Risk Portfolios.

• iProfile™ Portfolios – iProfile Portfolios are a suite of

four managed solutions that provide comprehensive

diversification and are designed to suit personal preferences

for risk tolerance and investment goals. These portfolios

provide exposure similar to the investments of the iProfile

Private Pools.

• iProfile™ Private Portfolios – iProfile Private Portfolios are
model portfolios comprised of iProfile Private Pools,

available for households with investments held at IG Wealth

Management in excess of $250,000. iProfile Private Portfolios

have been designed to deliver strong risk-adjusted returns

by diversifying across asset classes, management styles

and geographic regions. Recent enhancements include the

launch of new discretionary model portfolios and six new

iProfile Private Pools to support the new models: three

IG Wealth Management monitors its investment performance
by comparing to certain benchmarks. Morningstar† fund
ranking service is one of the rankings monitored when

determining fund performance.

At December 31, 2022, 84.0% of IG Wealth Management

mutual fund assets had a rating of three stars or better from
Morningstar† fund ranking service and 55.4% had a rating of
four or five stars. This compared to the Morningstar† universe
of 84.0% for three stars or better and 53.3% for four and five
star funds at December 31, 2022. Morningstar Ratings† are an
objective, quantitative measure of a fund’s three, five and ten

year risk-adjusted performance relative to comparable funds.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisWealth Management Assets
Under Management and Advisement

IG Wealth Management Assets
Under Management and Advisement

Assets under management and advisement are key

Assets under advisement (AUA) are a key performance

performance indicators for the Wealth Management segment.

indicator for IG Wealth Management. AUA represents savings

Wealth Management’s assets under advisement were

$140.4 billion at December 31, 2022, a decrease of 8.0% from

December 31, 2021. The level of assets under advisement are

influenced by three factors: client inflows, client outflows and

investment returns.

and investment products, including assets under management

where we provide investment management services, that

are held within our clients’ accounts. Advisory fees are

charged based on an annual percentage of substantially all

AUA, through the IG Advisory Account fee, and represent the

majority of the fees earned from our clients. Our advisors’

Wealth Management’s assets under management were

compensation is also based on AUA and net assets contributed

$103.9 billion, a decrease of 10.6% from December 31, 2021.

by our clients.

The level of assets under management are influenced by sales,

redemptions and investment returns.

Assets under advisement were $110.8 billion at December 31,

2022, a decrease of 7.3% from December 31, 2021, and mutual

Changes in Wealth Management assets under advisement and

fund assets under management were $99.3 billion, a decrease

assets under management for the periods under review are

of 10.2%.

reflected in Tables 9 and 10.

Changes in IG Wealth Management assets under advisement

and management for the periods under review are reflected

in Tables 11 and 12.

Table 9: Change in Assets Under Advisement – Wealth Management

Three months ended
($ millions)

Gross client inflows

Gross client outflows

Net flows

Investment returns

Net change in assets

Beginning assets

Ending assets under advisement

IG Wealth Management

Investment Planning Counsel

Average assets under advisement

IG Wealth Management

Investment Planning Counsel

Twelve months ended
($ millions)

Gross client inflows

Gross client outflows

Net flows

Investment returns

Net change in assets

Beginning assets

Ending assets under advisement

IG Wealth Management

Investment Planning Counsel

Average assets under advisement

IG Wealth Management

Investment Planning Counsel

2021
Dec. 31

2022
Sep. 30

Change

2021
Dec. 31

2022
Dec. 31

4,188

3,712

476

6,571

7,047

2022
Sep. 30

3,655

3,209

446

(1,296)

(850)

4,946

3,837

1,109

6,052

7,161

133,309

134,159

145,462

14.6 %

(15.3)%

15.7

6.7

N/M

(0.6)

(3.3)

(57.1)

8.6

(1.6)

(8.4)

$ 140,356

$ 133,309

$ 152,623

5.3 %

(8.0)%

110,816

29,547

105,029

28,286

119,557

33,077

$ 139,155

$ 137,793

$ 149,702

109,638

29,524

108,549

29,251

117,379

32,334

2022
Dec. 31

5.5

4.5

1.0 %

1.0

0.9

2021
Dec. 31

17,296

$ 18,800

14,345

2,951

(15,218)

(12,267)

152,623

14,622

4,178

15,862

20,040

132,583

$ 140,356

$ 152,623

110,816

29,547

119,557

33,077

$ 141,530

$ 142,867

111,271

30,268

111,880

30,997

(7.3)

(10.7)

(7.0)%

(6.6)

(8.7)

Change

(8.0)%

(1.9)

(29.4)

N/M

15.1

(8.0)%

(7.3)

(10.7)

(0.9)%

(0.5)

(2.4)

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTable 10: Change in Assets Under Management – Wealth Management

Three months ended
($ millions)

Sales

Redemptions

Net sales (redemptions)

Investment returns

Net change in assets

Beginning assets

Ending assets under management

IG Wealth Management

Investment Planning Counsel

Daily average mutual fund assets

IG Wealth Management

Investment Planning Counsel

Twelve months ended
($ millions)

Sales

Redemptions

Net sales (redemptions)

Investment returns

Net change in assets

Beginning assets

Ending assets under management

IG Wealth Management

Investment Planning Counsel

Daily average mutual fund assets

IG Wealth Management

Investment Planning Counsel

2021
Dec. 31

2022
Sep. 30

Change

2021
Dec. 31

2022
Dec. 31

2,263

3,129

(866)

4,728

3,862

2022
Sep. 30

2,097

2,541

(444)

(759)

(1,203)

3,133

2,805

328

3,788

4,116

100,035

101,238

112,054

7.9 %

(27.8)%

23.1

(95.0)

N/M

(1.2)

11.6

N/M

24.8

(6.2)

(10.7)

$ 103,897

$ 100,035

$ 116,170

3.9 %

(10.6)%

99,275

4,622

95,460

4,575

110,541

5,629

4.0

1.0

(10.2)

(17.9)

$ 103,867

$ 103,874

$ 115,115

– %

(9.8)%

99,208

4,659

99,128

4,746

109,521

5,594

2022
Dec. 31

0.1

(1.8)

2021
Dec. 31

(9.4)

(16.7)

Change

11,208

12,619

(11.2)%

11,487

(279)

(11,994)

(12,273)

116,170

11,094

1,525

11,612

13,137

103,033

$ 103,897

$ 116,170

99,275

4,622

110,541

5,629

$ 106,768

$ 110,445

101,859

104,962

4,909

5,483

3.5

N/M

12.8

(10.6)%

(10.2)

(17.9)

(3.3)%

(3.0)

(10.5)

For the quarter ended December 31, 2022, gross client

resulted in a decrease of $11.4 billion in assets under

inflows of IG Wealth Management assets under advisement

advisement compared to an increase of $12.6 billion in 2021.

were $3.0 billion, a decrease of 11.8% from $3.4 billion in

the comparable period in 2021. Gross client inflows in 2022

were the second highest fourth quarter results in IG Wealth

Changes in mutual fund assets under management for the

periods under review are reflected in Table 12.

Management’s history. Net client inflows were $429 million,

At December 31, 2022, $76.7 billion, or 77% of IG Wealth

a decrease of 56.4% from net client inflows of $985 million

Management’s mutual fund assets under management, were

in the comparable period in 2021. During the fourth quarter,

in products with unbundled fee structures, down 1.4% from

investment returns resulted in an increase of $5.4 billion

$77.8 billion at December 31, 2021 which represented 70%

in assets under advisement compared to an increase of

of assets under management.

$4.6 billion in the fourth quarter of 2021.

Gross client inflows of IG Wealth Management assets under

advisement were $12.9 billion for the twelve months ended

December 31, 2022, and represented a decrease of 4.2%

from $13.4 billion in the comparable period in 2021. Gross

client inflows in 2022 were the second highest annual

results in IG Wealth Management’s history. Net client inflows

were $2.7 billion in the twelve month period, a decrease

of $1.0 billion from net client inflows of $3.7 billion in the

comparable period in 2021. During 2022, investment returns

Change in Assets Under Management
and Advisement – 2022 vs. 2021

IG Wealth Management’s assets under advisement were

$110.8 billion at December 31, 2022, a decrease of 7.3% from

$119.6 billion at December 31, 2021. IG Wealth Management’s
mutual fund assets under management were $99.3 billion at

December 31, 2022, representing a decrease of 10.2% from

$110.5 billion at December 31, 2021. Average daily mutual

fund assets were $99.2 billion in the fourth quarter of 2022,

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 11: Change in Assets Under Advisement – IG Wealth Management

Three months ended
($ millions)

Gross client inflows

Gross client outflows

Net flows

Investment returns

Net change in assets

Beginning assets

Ending assets

Daily average assets under advisement

Twelve months ended
($ millions)

Gross client inflows

Gross client outflows

Net flows

Investment returns

Net change in assets

Beginning assets

Ending assets

Average assets under advisement

Table 12: Change in Assets Under Management – IG Wealth Management

Three months ended
($ millions)

Sales

Redemptions

Net sales (redemptions)

Investment returns

Net change in assets

Beginning assets

Ending assets

Daily average assets under management

Managed asset net sales

Investment fund net sales

Mackenzie net sales through Wealth Management

Twelve months ended
($ millions)

Sales

Redemptions

Net sales (redemptions)

Investment returns

Net change in assets

Beginning assets

Ending assets

Daily average assets under management

Managed asset net sales

Investment fund net sales

Mackenzie net sales through Wealth Management

2021
Dec. 31

2022
Sep. 30

Change

2021
Dec. 31

9.3 %

(11.8)%

2022
Dec. 31

3,031

2,602

429

5,358

5,787

2022
Sep. 30

2,773

2,367

406

(851)

(445)

3,437

2,452

985

4,614

5,599

105,029

105,474

113,958

$ 110,816

$ 105,029

$ 119,557

$ 109,638

$ 108,549

$ 117,379

9.9

5.7

N/M

(0.4)

5.5 %

1.0 %

6.1

(56.4)

16.1

3.4

(7.8)

(7.3)%

(6.6)%

Change

(4.2)%

4.4

(27.0)

N/M

15.8

(7.3)%

(0.5)%

Change

2021
Dec. 31

2022
Dec. 31

2021
Dec. 31

12,872

13,434

10,182

2,690

(11,431)

(8,741)

9,750

3,684

12,600

16,284

119,557

103,273

$ 110,816

$ 119,557

$ 111,271

$ 111,880

2021
Dec. 31

2022
Sep. 30

2022
Dec. 31

2,125

2,843

(718)

4,533

3,815

95,460

2022
Sep. 30

1,970

2,374

(404)

(739)

(1,143)

96,603

2,959

2,502

457

3,533

3,990

106,551

99,275

$ 95,460

$ 110,541

99,208

99,128

$ 109,521

(718)

(18)

(736)

(404)

(13)

(417)

457

493

7.9 %

(28.2)%

19.8

(77.7)

N/M

(1.2)

4.0 %

0.1 %

(77.7)%

(38.5)

(76.5)%

13.6

N/M

28.3

(4.4)

(10.4)

(10.2)%

(9.4)%

N/M

2022
Dec. 31

2021
Dec. 31

Change

10,587

11,845

(10.6)%

10,544

(11,309)

(11,266)

110,541

10,032

1,813

11,015

12,828

97,713

99,275

$ 110,541

$ 101,859

$ 104,962

(32)

1,813

431

2,244

5.1

(97.6)

N/M

13.1

(10.2)%

(3.0)%

(97.6)%

N/M

(99.5)%

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual Reportdown 9.4% from $109.5 billion in the fourth quarter of 2021.

Mutual fund redemptions, which totalled $2.8 billion for the

Average daily mutual fund assets were $101.9 billion for the

fourth quarter, increased 19.8% from the previous quarter,

twelve months ended December 31, 2022, down 3.0% from

and the annualized quarterly redemption rate was 11.0% in

$105.0 billion in 2021.

For the quarter ended December 31, 2022, sales of IG Wealth

Management mutual funds through its advisor network were

$2.1 billion, a decrease of 28.2% from the comparable period in

2021. Mutual fund redemptions totalled $2.8 billion, an increase

of 13.6% from 2021. IG Wealth Management mutual fund net

redemptions for the fourth quarter of 2022 were $718 million

compared with net sales of $457 million in 2021. During the

fourth quarter, investment returns resulted in an increase of

$4.5 billion in mutual fund assets compared to an increase of

$3.5 billion in the fourth quarter of 2021.

IG Wealth Management’s annualized quarterly redemption

rate for long-term funds was 11.0% in the fourth quarter

of 2022, compared to 8.8% in the fourth quarter of 2021.

IG Wealth Management’s twelve month trailing redemption

rate for long-term funds was 10.0% at December 31, 2022,

compared to 9.2% at December 31, 2021, and remains well

below the corresponding average redemption rate for all

the fourth quarter compared to 9.3% in the third quarter of

2022. IG Wealth Management mutual fund net redemptions

were $718 million for the current quarter compared to net

redemptions of $404 million in the previous quarter.

IG Wealth Management
Other Products and Services

Segregated Funds

IG Wealth Management offers segregated funds which

include the IG Series of Guaranteed Investment Funds (GIFs).

Select GIF policies allow for a Lifetime Income Benefit (LIB)

option to provide guaranteed retirement income for life.

The investment components of these segregated funds are

managed by IG Wealth Management. At December 31, 2022,

total segregated fund assets were $1.3 billion, compared to

$1.5 billion at December 31, 2021.

other members of the Investment Funds Institute of Canada

(IFIC) of approximately 16.6% at December 31, 2022. IG Wealth

Insurance

Management’s redemption rate has been very stable compared

IG Wealth Management continues to be a leader in the

to the overall mutual fund industry, reflecting our focus on

distribution of life insurance in Canada. Through its

financial planning.

For the twelve months ended December 31, 2022, sales of

IG Wealth Management mutual funds through its advisor

network were $10.6 billion, a decrease of 10.6% from 2021.

arrangements with leading insurance companies, IG Wealth

Management offers a broad range of term, universal life,

whole life, disability, critical illness, long-term care, personal

health care coverage and group insurance.

Mutual fund redemptions totalled $10.5 billion, an increase of

At December 31, 2022, total in-force policies were

5.1% from 2021. Net sales of IG Wealth Management mutual

funds were $43 million compared with net sales of $1.8 billion

approximately 377 thousand with an insured value of

$103 billion, compared to approximately 379 thousand

in 2021. During 2022, investment returns resulted in a decrease

with an insured value of $102 billion at December 31, 2021.

of $11.3 billion in mutual fund assets compared to an increase

of $11.0 billion in 2021.

Change in Assets Under Management
and Advisement – Q4 2022 vs. Q3 2022

IG Wealth Management’s assets under advisement were

Distribution of insurance products is enhanced through

IG Wealth Management’s Insurance Planning Specialists,

located throughout Canada, who assist advisors with

advanced estate planning solutions for high net worth clients.

Securities Operations

$110.8 billion at December 31, 2022, an increase of 5.5% from

Investors Group Securities Inc. is an investment dealer

$105.0 billion at September 30, 2022. IG Wealth Management’s

mutual fund assets under management were $99.3 billion at

December 31, 2022, an increase of 4.0% from $95.5 billion

at September 30, 2022. Average daily mutual fund assets

registered in all Canadian provinces and territories providing

clients with securities services to complement their financial

and investment planning. IG Wealth Management advisors can

refer clients to one of our Wealth Planning Specialists available

were $99.2 billion in the fourth quarter of 2022 compared to

through Investors Group Securities Inc.

$99.1 billion in the third quarter of 2022, an increase of 0.1%.

For the quarter ended December 31, 2022, sales of IG Wealth

Mortgage and Banking Operations

Management mutual funds through its advisor network were

IG Wealth Management Mortgage Planning Specialists are

$2.1 billion, an increase of 7.9% from the third quarter of 2022.

located throughout each province in Canada, and work with

2022 IGM Financial Inc. Annual Report | Management's Discussion and Analysisour clients and their advisors to develop mortgage and other

ended December 31, 2022 were $74 million and $749 million,

lending strategies that meet the individual needs and goals of

respectively, compared to $276 million and $1.3 billion, in 2021.

each client as part of their comprehensive financial plan.

Mortgages are offered to clients by IG Wealth Management,

a national mortgage lender, and through IG Wealth
Management’s Solutions Banking†. An All-in-One product, a
comprehensive cash management solution that integrates the

features of a mortgage, term loan, revolving line of credit and
deposit account, is also offered through Solutions Banking†.

Mortgage fundings offered through IG Wealth Management
and through Solutions Banking† for the three and twelve
months ended December 31, 2022 were $122 million and

$732 million compared to $221 million and $1.08 billion in 2021,

a decrease of 44.7% and 32.5%, respectively. At December 31,

2022, mortgages offered through both sources totalled

$7.7 billion, compared to $8.4 billion at December 31, 2021,

a decrease of 7.8%.

Available credit associated with Solutions Banking† All-in-One
accounts originated for the three and twelve month periods

At December 31, 2022, the balance outstanding of Solutions
Banking† All-in-One products was $4.2 billion, compared to
$3.9 billion one year ago, and represented approximately 52%

of total available credit associated with these accounts.

Other products and services offered through IG Wealth
Management’s Solutions Banking† include investment loans,
lines of credit, personal loans, creditor insurance, deposit
accounts, and credit cards. Through Solutions Banking†,
clients have access to a network of banking machines, as

well as a private labelled client website and client service
centre. The Solutions Banking† offering supports IG Wealth
Management’s approach to delivering total financial solutions

for our clients through a broad financial planning platform.
Total outstanding lending products of IG Wealth Management
clients in the Solutions Banking† offering, including Solutions
Banking† mortgages totalled $5.8 billion at December 31, 2022,
compared to $5.7 billion at December 31, 2021.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportReview of Segment Operating Results

The Wealth Management segment’s adjusted net earnings are

prior quarter. Adjusted earnings before interest and taxes

presented in Table 13 and include the operations of IG Wealth

for the year ended December 31, 2022 were $686.9 million,

Management and Investment Planning Counsel.

a decrease of 14.4% from 2021.

IG Wealth Management

2022 vs. 2021

IG Wealth Management adjusted net earnings are presented

Fee Income

in Table 14. Adjusted net earnings for the fourth quarter of

2022 were $104.6 million, a decrease of 25.9% from the fourth

quarter in 2021 and a decrease of 4.5% from the prior quarter.

Adjusted net earnings for the year ended December 31, 2022

were $437.4 million, a decrease of 16.4% from 2021.

Adjusted earnings before interest and taxes for the fourth
quarter of 2022 were $165.4 million, a decrease of 23.1% from

the fourth quarter in 2021 and a decrease of 3.9% from the

Advisory fees include fees for providing financial advice to

clients including fees related to the distribution of products,

and depend largely on the level and composition of assets

under advisement. Advisory fees were $283.1 million in the

fourth quarter of 2022, a decrease of $18.0 million or 6.0%

from $301.1 million in 2021. For the twelve months ended

December 31, 2022, advisory fees were $1,140.4 million, a

decrease of $13.9 million or 1.2% from $1,154.3 million in 2021.

Table 13: Operating Results – Wealth Management

Three months ended
($ millions)

Revenues

Wealth Management

Advisory fees

Product and program fees

Redemption fees

Other financial planning revenues

Total Wealth Management

Net investment income and other

Expenses

Advisory and business development

Asset-based compensation

Sales-based compensation

Other

Other product commissions

Business development

Total advisory and business development

Operations and support

Sub-advisory

Adjusted earnings before interest and taxes(1)

Interest expense

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

Non-controlling interest

2022
Dec. 31

2022
Sep. 30

2021
Dec. 31

2022
Sep. 30

Change

2021
Dec. 31

$ 344.8

$ 341.8

$ 370.6

0.9 %

(7.0)%

225.8

570.6

0.7

39.5

610.8

2.6

613.4

187.5

20.4

19.7

49.3

69.0

276.9

121.3

44.6

442.8

170.6

22.8

147.8

39.7

108.1

0.2

225.5

567.3

0.8

43.2

611.3

2.8

614.1

184.5

19.7

19.5

54.3

73.8

278.0

118.5

44.0

440.5

173.6

22.7

150.9

40.5

110.4

–

252.8

623.4

1.7

47.4

672.5

1.4

673.9

195.2

15.9

21.3

52.4

73.7

284.8

115.9

49.5

450.2

223.7

22.7

201.0

53.8

147.2

0.1

0.6

(12.5)

(8.6)

(0.1)

(7.1)

(0.1)

1.6

3.6

1.0

(9.2)

(6.5)

(0.4)

2.4

1.4

0.5

(1.7)

0.4

(2.1)

(2.0)

(2.1)

–

N/M

(10.7)

(8.5)

(58.8)

(16.7)

(9.2)

85.7

(9.0)

(3.9)

28.3

(7.5)

(5.9)

(6.4)

(2.8)

4.7

(9.9)

(1.6)

(23.7)

0.4

(26.5)

(26.2)

(26.6)

N/M

Adjusted net earnings available to common shareholders(1)

$ 107.9

110.4

147.2

(2.3)%

(26.7)%

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 13: Operating Results – Wealth Management (continued)

Twelve months ended
($ millions)

Revenues

Wealth Management

Advisory fees

Product and program fees

Redemption fees

Other financial planning revenues

Total Wealth Management

Net investment income and other

Expenses

Advisory and business development

Asset-based compensation

Sales-based compensation

Other

Other product commissions

Business development

Total advisory and business development

Operations and support

Sub-advisory

Adjusted earnings before interest and taxes(1)

Interest expense

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

Non-controlling interest

2022
Dec. 31

2021
Dec. 31

Change

$ 1,391.5

$ 1,417.2

(1.8)%

923.9

961.1

2,315.4

2,378.3

4.0

164.6

10.0

184.6

2,484.0

2,572.9

4.1

3.6

2,488.1

2,576.5

754.0

76.1

76.8

219.2

296.0

740.1

56.1

75.5

217.6

293.1

1,126.1

1,089.3

476.9

181.9

466.1

189.7

1,784.9

1,745.1

703.2

90.3

612.9

164.2

448.7

0.2

831.4

90.3

741.1

198.0

543.1

–

(3.9)

(2.6)

(60.0)

(10.8)

(3.5)

13.9

(3.4)

1.9

35.7

1.7

0.7

1.0

3.4

2.3

(4.1)

2.3

(15.4)

–

(17.3)

(17.1)

(17.4)

N/M

Adjusted net earnings available to common shareholders(1)

$ 448.5

$ 543.1

(17.4)%

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.

The decrease in advisory fees in the three months ending

quarter, down 9.8% from $238.1 million a year ago primarily

December 31, 2022 was primarily due to the decrease in

due to the decrease in average assets under management

average assets under advisement of 6.6%, as shown in

of 9.4%, as shown in Table 12. Product and program fees

Table 11, partially offset by an increase in the advisory fee

were $875.1 million for the twelve month period ended

rate. The decrease in advisory fees in the twelve months

December 31, 2022 compared to $903.5 million in 2021, a

ending December 31, 2022 was primarily due to the decrease

decrease of 3.1% primarily due to the decrease in average

in average assets under advisement of 0.5%, as shown in

assets under management of 3.0%, as shown in Table 12. The

Table 11, and a decrease in the advisory fee rate. The average

average product and program fee rate for the fourth quarter

advisory fee rate for the fourth quarter was 102.4 basis points

was 85.9 basis points of assets under management compared

of average assets under advisement compared to 101.8 basis

to 86.3 basis points in 2021, and the rate for the twelve month

points in 2021, and for the twelve month period, the rate was

period of 2022 was 85.9 basis points of average assets under

102.5 basis points compared to 103.2 basis points in 2021.

management compared to 86.0 basis points in 2021, reflecting

The change in the average advisory fee rate for the three and

price reductions in certain funds and changes in product mix.

twelve month periods primarily reflects changes in client and

product mix.

Product and program fees depend largely on the level and

composition of mutual fund assets under management.

Product and program fees totalled $214.7 million in the current

Other financial planning revenues are primarily earned from:

• Mortgage banking operations

• Distribution of insurance products through I.G. Insurance

Services Inc.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTable 14: Operating Results – IG Wealth Management

Three months ended
($ millions)

Revenues

Wealth Management

Advisory fees

Product and program fees

Redemption fees

Other financial planning revenues

Total Wealth Management

Net investment income and other

Expenses

Advisory and business development

Asset-based compensation

Sales-based compensation

Other

Other product commissions

Business development

Total advisory and business development

Operations and support

Sub-advisory

Adjusted earnings before interest and taxes(1)

Interest expense

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

2022
Dec. 31

2022
Sep. 30

2021
Dec. 31

2022
Sep. 30

Change

2021
Dec. 31

283.1

214.7

497.8

0.6

32.4

530.8

2.1

532.9

140.3

20.4

16.8

39.7

56.5

217.2

108.8

41.5

367.5

165.4

22.6

142.8

38.2

280.4

214.1

494.5

0.8

37.3

532.6

2.2

534.8

136.6

19.7

16.9

45.5

62.4

218.7

102.9

41.0

362.6

172.2

22.6

149.6

40.1

301.1

238.1

539.2

1.7

41.7

582.6

1.3

583.9

142.0

15.9

18.0

43.8

61.8

219.7

103.6

45.6

368.9

215.0

22.5

192.5

51.4

1.0 %

(6.0)%

0.3

0.7

(25.0)

(13.1)

(0.3)

(4.5)

(0.4)

2.7

3.6

(0.6)

(12.7)

(9.5)

(0.7)

5.7

1.2

1.4

(3.9)

–

(4.5)

(4.7)

(9.8)

(7.7)

(64.7)

(22.3)

(8.9)

61.5

(8.7)

(1.2)

28.3

(6.7)

(9.4)

(8.6)

(1.1)

5.0

(9.0)

(0.4)

(23.1)

0.4

(25.8)

(25.7)

104.6

109.5

141.1

(4.5)%

(25.9)%

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.

• Securities trading services provided through Investors Group

and other income not related to our core business. It also

Securities Inc.

includes a charge from the Strategic Investments and Other

• Banking services provided through Solutions Banking†

segment for the use of unallocated capital.

Other financial planning revenues of $32.4 million for the fourth

Expenses

quarter of 2022 decreased by $9.3 million from $41.7 million

in 2021. For the twelve month period, other financial planning

revenues of $140.5 million decreased by $22.9 million from

$163.4 million in 2021. The decrease in both the three and

twelve month periods were primarily due to lower earnings

from mortgage banking operations.

A summary of mortgage banking operations for the three and

twelve month periods under review is presented in Table 15.

Net Investment Income and Other

Net investment income and other consists of unrealized gains

or losses on investments in proprietary funds in the three and

twelve months ended December 31, 2022, and investment

income earned on our cash and cash equivalents and securities

IG Wealth Management incurs advisory and business

development expenses that include compensation paid to our

advisors. The majority of these costs vary directly with asset or

sales levels. Also included are other distribution and business

development activities which do not vary directly with asset or

sales levels, such as direct marketing and advertising, financial

planning specialist support and other costs incurred to support

our advisor networks. These expenses tend to be discretionary

or vary based upon the number of advisors or clients.

Asset-based compensation fluctuates with the value of assets

under advisement. Asset-based compensation decreased by

$1.7 million for the three months ended December 31, 2022

to $140.3 million compared to 2021, primarily due to rate

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 14: Operating Results – IG Wealth Management (continued)

Twelve months ended
($ millions)

Revenues

Wealth Management

Advisory fees

Product and program fees

Redemption fees

Other financial planning revenues

Total Wealth Management

Net investment income and other

Expenses

Advisory and business development

Asset-based compensation

Sales-based compensation

Other

Other product commissions

Business development

Total advisory and business development

Operations and support

Sub-advisory

Adjusted earnings before interest and taxes(1)

Interest expense

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

2022
Dec.31

2021
Dec. 31

Change

$ 1,140.4

$ 1,154.3

(1.2)%

875.1

903.5

2,015.5

2,057.8

3.9

140.5

9.9

163.4

2,159.9

2,231.1

2.4

2.6

2,162.3

2,233.7

558.9

76.1

65.5

182.2

247.7

882.7

423.6

169.1

536.0

56.1

62.8

184.6

247.4

839.5

416.9

174.5

1,475.4

1,430.9

686.9

89.7

597.2

159.8

802.8

89.6

713.2

190.3

(3.1)

(2.1)

(60.6)

(14.0)

(3.2)

(7.7)

(3.2)

4.3

35.7

4.3

(1.3)

0.1

5.1

1.6

(3.1)

3.1

(14.4)

0.1

(16.3)

(16.0)

437.4

522.9

(16.4)%

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.

increases and decreased average assets under advisement.

Other advisory and business development expenses

For the twelve months ended December 31, 2022, asset-based

were $56.5 million in the fourth quarter of 2022, compared

compensation increased by $22.9 million to $558.9 million

to $61.8 million in 2021, a decrease of $5.3 million due

compared to 2021, primarily due to rate increases due to

to decreases in other advisor program expenses and

changes in advisor productivity.

IG Wealth Management sales-based compensation is based

upon the level of new assets contributed to client accounts at

IG Wealth Management (subject to eligibility requirements).

distribution of insurance products. Other advisory and

business development expenses were $247.7 million in the

twelve months ended December 31, 2022, compared to

$247.4 million in 2021.

All sales-based compensation payments are capitalized and

Operations and support includes costs that support our wealth

amortized as they reflect incremental costs to obtain a client

management and other general and administrative functions

contract. Sales-based compensation was $20.4 million for

such as product management, technology and operations, as

the fourth quarter of 2022, an increase of $4.5 million from

well as other functional business units and corporate expenses.

$15.9 million in 2021. For the twelve month period, sales-

Operations and support expenses were $108.8 million for the

based compensation expense was $76.1 million, an increase
of $20.0 million from $56.1 million in 2021. The increase in

fourth quarter of 2022 compared to $103.6 million in 2021,
an increase of $5.2 million. For the twelve month period,

expense is due to additional sales-based commission being

operations and support expenses were $423.6 million in 2022

capitalized and amortized throughout 2021 and 2022.

compared to $416.9 million in 2021, an increase of $6.7 million

or 1.6%.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTable 15: Mortgage Banking Operations – IG Wealth Management

Three months ended
($ millions)

Total mortgage banking income

Net interest income on securitized loans

Interest income

Interest expense

Net interest income

Gains on sales(1)

Fair value adjustments

Other

Average mortgages serviced

Securitizations

Other

Mortgage sales to:(2)

Securitizations
Other(1)

Twelve months ended
($ millions)

Total mortgage banking income

Net interest income on securitized loans

Interest income

Interest expense

Net interest income
(Losses) gains on sales(1)

Fair value adjustments

Other

Average mortgages serviced

Securitizations

Other

Mortgage sales to:(2)

Securitizations
Other(1)

34.1

29.5

4.6

–

(5.7)

4.0

2.9

4,567

2,357

6,924

359

–

359

2022
Dec. 31

2022
Sep. 30

2021
Dec. 31

2022
Sep. 30

32.2

25.7

33.1

25.5

Change

2021
Dec. 31

3.0 %

15.7

(39.5)

(100.0)

N/M

5.9 %

14.8

(29.2)

–

N/M

42.9

(65.1)%

(67.0)%

(1.5)%

(2.6)

(1.9)%

(10.6)%

(2.2)

(8.0)%

(32.9)%

20.9 %

–

(100.0)

(32.9)%

(24.1)%

7.6

0.5

–

0.7

8.8

5,111

2,411

7,522

297

176

473

2022
Dec. 31

2021
Dec. 31

Change

127.2

102.8

24.4

(3.5)

(3.1)

8.2

26.0

4,708

2,404

7,112

1,281

355

1,636

147.0

111.4

35.6

3.9

1.4

3.5

44.4

5,431

2,503

7,934

1,506

872

2,378

(13.5)%

(7.7)

(31.5)

N/M

134.3

(41.4)%

(13.3)%

(4.0)

(10.4)%

(14.9)%

(59.3)

(31.2)%

6.5

–

(1.0)

2.8

8.3

4,638

2,419

7,057

535

–

535

(1) Represents sales to institutional investors through private placements and to IG Mackenzie Mortgage and Short Term Income Fund, as well as gains (losses) realized

on those sales.

(2) Represents principal amounts sold.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisSub-advisory expenses were $41.5 million for the fourth

Other financial planning revenues of $32.4 million in the fourth

quarter of 2022 compared to $45.6 million in 2021, a

quarter of 2022 decreased by $4.9 million from $37.3 million

decrease of $4.1 million or 9.0%. For the twelve month period,

in the third quarter due to a decrease in earnings from the

sub-advisory expenses were $169.1 million in 2022 compared

mortgage banking operations.

to $174.5 million in 2021, a decrease of $5.4 million or 3.1%.

The decreases in both the three and twelve month periods

Expenses

are primarily due to lower assets under management.

Advisory and business development expenses in the current

Interest Expense

Interest expense, which includes allocated interest expense

on long-term debt and interest expense on leases, totalled

$22.6 million and $89.7 million in the three and twelve months

ended December 31, 2022, respectively, comparable to 2021.

Long-term debt interest expense is calculated based on a long-

term debt allocation of $1.7 billion to IG Wealth Management.

Q4 2022 vs. Q3 2022

Fee Income

Advisory fee income increased by $2.7 million or 1.0% to

$283.1 million in the fourth quarter of 2022 compared with

the third quarter. The increase in advisory fees in the fourth

quarter was primarily due to the increase in average assets

quarter were $217.2 million, a decrease of $1.5 million from

$218.7 million in the previous quarter.

Operations and support expenses were $108.8 million for

the fourth quarter of 2022 compared to $102.9 million in

the previous quarter, an increase of $5.9 million or 5.7%.

Investment Planning Counsel

2022 vs. 2021

Adjusted net earnings available to common shareholders

related to Investment Planning Counsel were $2.8 million and

$9.1 million lower in the three and twelve month periods ended

December 31, 2022 than the comparable periods in 2021.

under advisement of 1.0% for the quarter, as shown in Table 11.

Q4 2022 vs. Q3 2022

The average advisory fee rate for the fourth quarter was 102.4

basis points of average assets under management, compared

to 102.5 basis points in the third quarter.

Product and program fees were $214.7 million in the fourth

quarter of 2022, an increase of $0.6 million from $214.1 million

in the third quarter of 2022. The average product and program

fee rate was 85.9 basis points in the current quarter, compared

to 85.7 basis points in the third quarter.

Adjusted net earnings available to common shareholders

related to Investment Planning Counsel were $2.4 million higher

in the fourth quarter of 2022 compared to the prior quarter.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportAsset Management

The Asset Management segment includes Mackenzie

Management is considered a client of the Asset Management

Investments (Mackenzie).

Asset Management revenue reflects:

• Net asset management fees – third party includes fees

received from our mutual funds and fees from third parties

for investment management services. Compensation paid

to dealers offsets the fees earned.

• Asset management fees – Wealth Management includes

segment and transfer pricing is based on values for similar

sized asset management mandates.

Assets managed for IG Wealth Management are included in

the Asset Management segment’s assets under management.

Debt and interest expense is allocated to each IGM Financial

segment based on management’s assessment of: i) capacity

to service the debt, and ii) where the debt is being serviced.

fees received from the Wealth Management segment. Wealth

Income taxes are also reported in each segment.

Review of the Business

Mackenzie Investments is a diversified asset management

Mackenzie’s focus is based on five key strategies:

solutions provider founded in 1967. We provide investment

management and related services with a wide range of

investment mandates through a boutique structure and using

multiple distribution channels. We are committed to delivering

strong investment performance for our clients by drawing on

more than 50 years of investment management experience.

Mackenzie earns asset management fees primarily from:

• Management fees earned from its investment funds,

sub-advised accounts and institutional clients.

• Fees earned from its mutual funds for administrative

services.

• Redemption fees on deferred sales charge and low

load units.

The largest component of Mackenzie’s revenues is management

fees. The amount of management fees depends on the level

and composition of assets under management. Management

fee rates vary depending on the investment objective and the

account type of the underlying assets under management.

Equity based mandates have higher management fee rates

than fixed income mandates and retail mutual fund accounts

have higher management fee rates than exchange traded

funds, sub-advised accounts and institutional accounts.

Asset Management Strategy

• Win in retail in a segmented way

• Build a global institutional business with a targeted approach

• Deliver innovative investment solutions and performance

• Business processes that are simple, easy and digitized

• Continue to foster a high performance and diverse culture

These strategies impact our strategic priorities and drive future

business growth. We aim to achieve this by attracting and

fostering the best minds in the investment industry, responding

to changing needs of financial advisors and investors with

distinctive and innovative solutions, and continuing to deliver

institutional quality in everything we do.

Mackenzie seeks to maximize returns on business investment

by focusing our resources in areas that directly impact the

success of our strategic focus: investment management,

distribution and client experience.

Our investment management capabilities are delivered

through a boutique structure, with separate in-house teams

having distinct focuses and diverse styles. Our research and

portfolio management teams are located in Toronto, Winnipeg,

Vancouver, Boston, Dublin and Hong Kong. In addition, our

ownership interest in Northleaf enhances our investment

capabilities by offering global private equity, private credit

and infrastructure investment solutions to our clients and our

ownership interest in ChinaAMC offers our clients access to

Mackenzie’s mission is to create a more invested

Chinese capital markets. We also supplement our investment

world, together.

Mackenzie’s objective is to become Canada’s preferred global

asset management solutions provider and business partner.

capabilities with strategic partners (third party sub-advisors)

in selected areas. The development of a broad range of

2022 IGM Financial Inc. Annual Report | Management's Discussion and Analysisinvestment capabilities and products is a key strength in

broad product shelf, competitively priced products and our

supporting the evolving financial needs of investors.

focus on client experience and investment excellence.

Our business focuses on three key distribution channels: retail,

strategic alliances and institutional.

Assets Under Management

Mackenzie primarily distributes its retail investment products

The changes in total assets under management are

through third-party financial advisors. Our sales teams work

summarized in Table 16 and the changes in investment fund

with many of the more than 30,000 independent financial

advisors and their firms across Canada. Our innovative,

assets under management are summarized in Table 17. Assets

managed for the Wealth Management segment are included in

comprehensive lineup of investment solutions covers all asset

total assets under management.

classes and parts of the globe. We offer a range of relevant

products and investment solutions designed to help advisors

meet the evolving needs of their clients. We regularly introduce

new funds and we may merge or streamline our fund offerings

to provide enhanced investment solutions.

In addition to our retail distribution team, Mackenzie also

has specialty teams focused on strategic alliances and the

At December 31, 2022, Mackenzie’s total assets under

management were $186.6 billion, a decrease of 11.3% from

$210.3 billion last year. Mackenzie’s total assets under

management (excluding sub-advisory to Wealth Management)

were $113.1 billion, a decrease of 12.4% from $129.1 billion last

year. The change in Mackenzie’s assets under management is

determined by investment returns and net contributions from

institutional marketplace.

our clients.

Within the strategic alliance channel, Mackenzie offers

certain series of our mutual funds and provides sub-advisory

services to third-party and related party investment programs

Change in Assets Under Management –
2022 vs. 2021

offered by banks, insurance companies and other investment

Mackenzie’s total assets under management at December 31,

companies. Strategic alliances with related parties include

2022 were $186.6 billion, a decrease of 11.3% from

providing advisory services to IG Wealth Management,

$210.3 billion at December 31, 2021. Assets under management

Investment Planning Counsel and Great-West Lifeco Inc.

excluding sub-advisory to the Wealth Management segment

(Lifeco) subsidiaries. Mackenzie partners with Wealthsimple to

were $113.1 billion, a decrease of 12.4% from $129.1 billion at

distribute ETFs through their product shelf. In 2022, Mackenzie

December 31, 2021.

entered into a new multi-year product and services distribution

agreement with PFSL Investment Canada Ltd. (Primerica) where

Mackenzie serves as one of two exclusive investment solutions

providers and, on June 30, 2022, Mackenzie launched a suite of

25 funds designed to address the specific needs of Primerica

advisors and their clients. Within the strategic alliance channel,

Mackenzie’s primary distribution relationship is with the

head office of the respective bank, insurance company or

investment company.

Investment fund assets under management were $59.7 billion

at December 31, 2022, compared to $68.4 billion at

December 31, 2021, a decrease of 12.7%. Mackenzie’s mutual

fund assets under management of $54.4 billion decreased by

13.6% from $63.0 billion at December 31, 2021. Mackenzie’s

ETF assets excluding ETFs held within IGM Financial’s

managed products were $5.2 billion at December 31, 2022, a

decrease of 3.2% from $5.4 billion at December 31, 2021. ETF

assets inclusive of IGM Financial’s managed products were

In the institutional channel, Mackenzie provides investment

$12.4 billion at December 31, 2022 compared to $12.7 billion

management services to pension plans, foundations and other

at December 31, 2021.

institutions. We attract new institutional business through our

relationships with pension and management consultants.

In the three months ended December 31, 2022, Mackenzie’s

mutual fund gross sales were $1.6 billion, a decrease of 39.9%

Gross sales and redemption activity in strategic alliance and

from $2.6 billion in 2021. Mutual fund redemptions in the

institutional accounts can be more pronounced than in the

current quarter were $2.5 billion, an increase of 21.4% from last

retail channel, given the relative size and the nature of the

year. Mutual fund net redemptions for the three months ended

distribution relationships of these accounts. These accounts

December 31, 2022 were $966 million, compared to net sales of

are also subject to ongoing reviews and rebalance activities

$512 million last year. In the three months ended December 31,

which may result in a significant change in the level of assets
under management.

2022, ETF net creations were $134 million compared to
$245 million last year. Investment fund net redemptions in the

Mackenzie continues to be positioned to build and enhance

our distribution relationships given our team of experienced

investment professionals, strength of our distribution network,

current quarter were $832 million compared to net sales of

$757 million last year. During the current quarter, investment

returns resulted in investment fund assets increasing by

$2.9 billion compared to an increase of $2.8 billion last year.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTable 16: Change in Total Assets Under Management – Asset Management

Three months ended
($ millions)

Assets under management excluding sub-advisory to
Canada Life and the Wealth Management Segment

Net sales (redemptions)

Mutual funds

ETF net creations

Investment funds(1)
Sub-advisory, institutional and other accounts(2)

Total net sales (redemptions)

Investment returns

Net change in assets

Beginning assets

Ending assets

Consolidated assets under management

Mutual funds

ETFs

Investment funds(1)

Sub-advisory, institutional and other accounts

Sub-advisory to Canada Life

Total excluding sub-advisory to Wealth Management

Sub-advisory to Wealth Management

Consolidated assets under management

Average total assets under management(3)

Excluding sub-advisory to Wealth Management

Consolidated

Twelve months ended
($ millions)

2022
Dec. 31

2022
Sep. 30

2021
Dec. 31

2022
Sep. 30

(966)

(594)

134

(832)

(135)

(967)

3,385

2,418

63,657

(86)

(680)

(139)

(819)

(812)

(1,631)

65,288

512

245

757

(576)

181

3,162

3,343

72,967

(62.6)%

N/M

(22.4)

2.9

(18.1)

N/M

(2.5)

Change

2021
Dec. 31

N/M %

(45.3)

N/M

76.6

N/M

7.1

(27.7)

(12.8)

66,075

$ 63,657

76,310

3.8 %

(13.4)%

54,434

52,541

62,969

3.6 %

(13.6)%

5,219

59,653

6,422

66,075

47,023

113,098

73,514

5,010

57,551

6,106

63,657

45,015

108,672

71,834

5,393

68,362

7,948

76,310

52,805

129,115

81,228

4.2

3.7

5.2

3.8

4.5

4.1

2.3

(3.2)

(12.7)

(19.2)

(13.4)

(10.9)

(12.4)

(9.5)

$ 186,612

$ 180,506

$ 210,343

3.4 %

(11.3)%

$ 112,651

$ 113,448

$ 126,759

186,260

187,323

207,143

(0.7)%

(0.6)

(11.1)%

(10.1)

2022
Dec. 31

2021
Dec. 31

Change

Assets under management excluding sub-advisory to Canada Life and the Wealth Management Segment

Net sales (redemptions)

Mutual funds(4)
ETF net creations(5)

Investment funds(1)
Sub-advisory, institutional and other accounts(2)

Total net sales (redemptions)

Investment returns

Net change in assets

Beginning assets

Ending assets

Average total assets under management(3)

Excluding sub-advisory to Wealth Management

Consolidated

(1,736)

705

(1,031)

(834)

(1,865)

(8,370)

(10,235)

76,310

3,908

1,532

5,440

(306)

5,134

7,413

12,547

63,763

N/M %

(54.0)

N/M

(172.5)

N/M

19.7

66,075

76,310

(13.4)%

$ 117,801

$ 120,988

194,040

198,946

(2.6)%

(2.5)

(1) Investment fund assets under management and net sales exclude investments into Mackenzie mutual funds and ETFs by IGM Financial’s investment funds.
(2) Sub-advisory, institutional and other accounts:

2022 Q1 – an institutional investor redeemed $291 million within products Mackenzie sub-advises.
2021 Q2 – Mackenzie was awarded $680 million of sub-advisory wins.

Q4 – An institutional client re-assigned sub-advisory responsibilities on mandates advised by Mackenzie totalling $667 million.

(3) Based on daily average investment fund assets and month-end average sub-advisory, institutional and other assets.
(4) Mutual funds – Institutional clients, which include Mackenzie mutual funds within their investment offerings, made fund allocation changes:

2021 YTD – resulted in redemptions and net redemptions of $361 million.

(5) ETFs – During the first quarter of 2022, Wealthsimple made allocation changes which resulted in $675 million in purchases in Mackenzie ETFs.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 17: Change in Investment Fund Assets Under Management – Asset Management(1)

Three months ended
($ millions)

Sales

Redemptions

Mutual fund net sales (redemptions)

ETF net creations

Investment fund net sales (redemptions)(2)

Investment returns

Net change in assets

Beginning assets

Ending assets

Consists of:

Mutual funds

ETFs

Investment funds

Daily average investment fund assets

Twelve months ended
($ millions)

Sales

Redemptions

Mutual fund net sales (redemptions)(3)
ETF net creations(4)

Investment fund net sales (redemptions)(2)

Investment returns

Net change in assets

Beginning assets

Ending assets

Daily average investment fund assets

2022
Dec. 31

1,559

2,525

(966)

134

(832)

2,934

2,102

57,551

2022
Sep. 30

1,281

1,875

(594)

(86)

(680)

(713)

(1,393)

58,944

2021
Dec. 31

2,592

2,080

512

245

757

2,816

3,573

64,789

2022
Sep. 30

Change

2021
Dec. 31

21.7 %

(39.9)%

34.7

(62.6)

N/M

(22.4)

N/M

(2.4)

21.4

N/M

(45.3)

N/M

4.2

(41.2)

(11.2)

59,653

57,551

$ 68,362

3.7 %

(12.7)%

54,434

52,541

62,969

5,219

5,010

5,393

59,653

57,551

$ 68,362

59,421

$ 60,405

$ 66,833

3.6 %

4.2

3.7 %

(1.6)%

(13.6)%

(3.2)

(12.7)%

(11.1)%

2022
Dec. 31

7,496

9,232

(1,736)

705

(1,031)

(7,678)

(8,709)

68,362

2021
Dec. 31

Change

12,022

(37.6)%

8,114

3,908

1,532

5,440

6,452

11,892

56,470

13.8

N/M

(54.0)

N/M

21.1

(12.7)%

(1.4)%

59,653

$ 68,362

62,114

$ 63,003

(1) Investment fund assets under management and net sales excludes investments into Mackenzie mutual funds and ETFs by IGM Financial’s investment funds.
(2) Total investment fund net sales and assets under management exclude Mackenzie mutual fund investments in ETFs.
(3) Mutual funds – Institutional clients, which include Mackenzie mutual funds within their investment offerings, made fund allocation changes:

2021 YTD – resulted in redemptions and net redemptions of $361 million.

(4) ETFs – During the first quarter of 2022, Wealthsimple made allocation changes which resulted in $675 million in purchases in Mackenzie ETFs.

Total net redemptions excluding sub-advisory to Canada Life

December 31, 2022 were $1.7 billion, compared to net sales of

and to the Wealth Management segment for the three months

$3.9 billion in 2021. In the year ended December 31, 2022, ETF

ended December 31, 2022 were $967 million compared to

net creations were $705 million compared to $1.5 billion last

net sales of $181 million last year. During the fourth quarter

year. Investment fund net redemptions in the current period

of 2021, an institutional client re-assigned sub-advisory

were $1.0 billion compared to net sales of $5.4 billion last year.

responsibilities on mandates advised by Mackenzie totalling

During the current period, investment returns resulted in

$667 million. Excluding this transaction, net sales were

investment fund assets decreasing by $7.7 billion compared to

$848 million for the three months ended December 31, 2021.

an increase of $6.5 billion last year.

During the current quarter, investment returns resulted in

assets increasing by $3.4 billion compared to an increase of

$3.2 billion last year.

During the twelve months ended December 31, 2021, certain

third party programs, which include Mackenzie mutual funds,

made fund allocation changes resulting in redemptions and net

In the twelve months ended December 31, 2022, Mackenzie’s
mutual fund gross sales were $7.5 billion, a decrease of 37.6%

redemptions of $361 million. Excluding this transaction in 2021,
mutual fund redemptions increased by 19.1% in the twelve

from $12.0 billion in 2021. Mutual fund redemptions in the

months ended December 31, 2022 compared to 2021, and

current period were $9.2 billion, an increase of 13.8% from

mutual fund net redemptions of $1.7 billion in 2022 compared

last year. Mutual fund net redemptions for the year ended

to mutual fund net sales of $4.3 billion in 2021.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportRedemptions of long-term mutual funds in the three and

total Wealth Management assets under management compared

twelve months ended December 31, 2022, were $2.5 billion

to $81.2 billion or 69.9% of total Wealth Management assets

and $9.1 billion, respectively, compared to $2.0 billion and

under management at December 31, 2021.

$8.0 billion last year. Redemptions of long-term mutual

funds excluding mutual fund allocation changes made by

third party programs were $7.6 billion in the twelve months

ended December 31, 2021. Mackenzie’s annualized quarterly

redemption rate for long-term mutual funds was 18.2% in

the fourth quarter of 2022, compared to 13.3% in the fourth

quarter of 2021. Mackenzie’s twelve-month trailing redemption

rate for long-term mutual funds was 16.0% at December 31,

2022, compared to 13.6% last year. Mackenzie’s twelve month

trailing redemption rate for long-term funds, excluding

rebalance transactions, was 12.9% at December 31, 2021.

Change in Assets under Management –
Q4 2022 vs. Q3 2022

Mackenzie’s total assets under management at December 31,

2022 were $186.6 billion, an increase of 3.4% from $180.5 billion

at September 30, 2022. Assets under management excluding

sub-advisory to the Wealth Management segment were

$113.1 billion, an increase of 4.1% from $108.7 billion at

September 30, 2022.

Investment fund assets under management were $59.7 billion

The corresponding average twelve-month trailing redemption

at December 31, 2022, an increase of 3.7% from $57.6 billion

rate for long-term mutual funds for all other members of IFIC

was approximately 16.2% at December 31, 2022. Mackenzie’s

twelve-month trailing redemption rate is comprised of the

weighted average redemption rate for front-end load assets,

deferred sales charge and low load assets with redemption

fees, and deferred sales charge assets without redemption

fees (matured assets). Generally, redemption rates for front-

end load assets and matured assets are higher than the

redemption rates for deferred sales charge and low load

assets with redemption fees.

at September 30, 2022. Mackenzie’s mutual fund assets under

management were $54.4 billion at December 31, 2022, an

increase of 3.6% from $52.5 billion at September 30, 2022.

Mackenzie’s ETF assets were $5.2 billion at December 31,

2022 compared to $5.0 billion at September 30, 2022. ETF

assets inclusive of IGM Financial’s managed products were

$12.4 billion at December 31, 2022 compared to $11.5 billion

at September 30, 2022.

For the quarter ended December 31, 2022, Mackenzie mutual

fund gross sales were $1.6 billion, an increase of 21.7% from

Total net redemptions excluding sub-advisory to Canada Life

the third quarter of 2022. Mutual fund redemptions were

and to the Wealth Management segment for the twelve months

$2.5 billion, an increase of 34.7% from the third quarter

ended December 31, 2022 were $1.9 billion compared to net

sales of $5.1 billion last year. During the twelve month period,

of 2022. Net redemptions of Mackenzie mutual funds for

the current quarter were $966 million compared with net

investment returns resulted in assets decreasing by $8.4 billion

redemptions of $594 million in the previous quarter.

compared to an increase of $7.4 billion last year.

During 2021, Mackenzie was awarded $680 million of sub-

advisory mandates through our strategic partnership with

China Asset Management Co., Ltd. (ChinaAMC).

During the twelve months ended December 31, 2022, an

Redemptions of long-term mutual fund assets in the current

quarter were $2.5 billion, compared to $1.8 billion in the third

quarter. Mackenzie’s annualized quarterly redemption rate

for long-term mutual funds for the current quarter was 18.2%

compared to 13.4% in the third quarter.

institutional investor redeemed $291 million within products

For the quarter ended December 31, 2022, Mackenzie ETF net

that Mackenzie sub-advises and Wealthsimple made allocation

creations were $134 million compared to ($86) million in the

changes which resulted in $675 million in purchases in

third quarter.

Mackenzie ETFs. Excluding these two transactions and the

2021 ChinaAMC award and transactions previously mentioned,

total net redemptions excluding sub-advisory to Canada

Life and to the Wealth Management segment for the twelve

months ended December 31, 2022 were $2.3 billion compared

to net sales of $5.5 billion last year.

As at December 31, 2022, Mackenzie’s sub-advisory to

Canada Life were $47.0 billion compared to $52.8 billion
at December 31, 2021.

As at December 31, 2022, Mackenzie’s sub-advisory to the

Wealth Management segment were $73.5 billion or 70.8% of

Investment fund net redemptions in the current quarter were

$832 million compared to net redemptions of $680 million in

the third quarter.

As at December 31, 2022, Mackenzie’s sub-advisory to

Canada Life were $47.0 billion compared to $45.0 billion

at September 30, 2022.

As at December 31, 2022, Mackenzie’s sub-advisory to the
Wealth Management segment were $73.5 billion or 70.8% of

total Wealth Management assets under management compared

to $71.8 billion or 71.8% of total Wealth Management assets

under management at September 30, 2022.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisInvestment Management

Mackenzie has $186.6 billion in assets under management at

December 31, 2022, including $73.5 billion of sub-advisory

mandates to the Wealth Management segment. It has teams

located in Toronto, Winnipeg, Vancouver, Boston, Dublin and

Hong Kong.

We continue to deliver our investment offerings through a

boutique structure, with separate in-house investment teams

which each have a distinct focus and investment approach.

Our investment team currently consists of 17 boutiques. This

boutique approach promotes diversification of styles and

ideas and provides Mackenzie with a breadth of capabilities.

Oversight is conducted through a common process intended

to promote superior risk-adjusted returns over time. This

oversight process focuses on i) identifying and encouraging

each team’s performance edge, ii) promoting best practices in

portfolio construction, and iii) emphasizing risk management.

by Morningstar† had a rating of three stars or better and
57.1% had a rating of four or five stars. This compared to the
Morningstar† universe of 84.0% for three stars or better and
53.3% for four and five star funds at December 31, 2022.

Mackenzie was once again recognized for industry leading

performance during 2022 by winning the following awards:

• Refinitiv Lipper awards – seven awards in respect of six

mutual funds and one exchange traded fund. This award is

presented annually and honours funds that lead in delivering

strong, risk-adjusted performance relative to their peers.

• Fundata FundGrade A+ – eight awards in respect of four

mutual funds and four exchange traded funds. This award

is presented annually and honours funds that achieve

consistently high FundGrade scores throughout the

calendar year.

Products

Mackenzie’s 56% economic interest in Northleaf enhances its

Mackenzie continues to evolve its product shelf by providing

investment capabilities by offering global private equity, private

enhanced investment solutions for financial advisors to offer

credit and infrastructure investment solutions to our clients.

their clients. During 2022, Mackenzie launched thirty mutual

In addition to our own investment teams, Mackenzie

supplements investment capabilities through the use of third

party sub-advisors and strategic beta index providers in

selected areas. These include Putnam Investments, TOBAM,

ChinaAMC, and Impax Asset Management. During 2022, 1832

Asset Management, Addenda, Brandywine, Blackrock, and

T. Rowe Price were added as sub-advisors for the launch of

the suite of Mackenzie FuturePath Funds designed to address

the specific needs of Primerica advisors and their clients.

During 2022, Mackenzie undertook a number of initiatives on

climate change in support of the global goal to reach net zero

by 2050. This builds upon Mackenzie’s sustainability strategy,

and these items included the following:

• Released net zero 2030 interim targets.

• Commenced engagements with the 100 companies

responsible for the majority of the financed emissions

funds which included a suite of twenty-five FuturePath Funds

through its new partnership with Primerica Financial Services

Canada (PFSL), two alternative funds in collaboration with

Northleaf Capital Partners (Northleaf), and two ETFs, including

one in collaboration with Wealthsimple. In January 2023,

Mackenzie filed the preliminary prospectus for the upcoming

launch of an additional mutual fund and ETF in partnership

with Corporate Knights.

Mutual Funds

Mackenzie manages its product shelf through new fund

launches and fund mergers to streamline fund offerings for

advisors and investors. During the first three quarters of 2022,

Mackenzie launched 29 mutual funds:

• Mackenzie North American Equity Fund

• Mackenzie North American Balanced Fund

produced by companies Mackenzie invests in for its clients.

• Mackenzie Inflation-Focused Fund

• Continued to attract talent and enhance data and capabilities

• Mackenzie USD US Mid Cap Opportunities Fund

to address risks associated with climate change.

• 25 Mackenzie FuturePath funds supporting a new

Long-term investment performance is a key measure of

Mackenzie’s ongoing success. At December 31, 2022, 55.8%

of Mackenzie mutual fund assets were rated in the top two

performance quartiles for the one year time frame, 58.2%

partnership with Primerica. This new family of funds will

harness a wide selection of Mackenzie’s competitive

investment strategies and covers all major CIFSC categories

and investment styles.

for the three year time frame and 64.6% for the five year

During the fourth quarter of 2022, the Mackenzie Bluewater

time frame. Mackenzie also monitors its fund performance

Next Gen Growth Fund was launched. This global equity fund

relative to the ratings it receives on its mutual funds from
the Morningstar† fund ranking service. At December 31,
2022, 85.9% of Mackenzie mutual fund assets measured

invests in innovation leaders across geographies, sectors,

and market capitalizations who have a significant competitive

advantage, strong growth opportunities and a unique

value proposition.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportAlternative Funds

Mackenzie currently has ten funds in the alternatives space

including four products in collaboration with Northleaf Capital

Partners (Northleaf). During 2022, Mackenzie launched two

products in collaboration with Northleaf as part of its ongoing

commitment to expand retail investor access to private market

investment solutions.

• Mackenzie Northleaf Private Credit Interval Fund

During 2022, Mackenzie launched two new ETFs. These ETFs

further broadened our diverse offerings of ETFs:

• Wealthsimple North American Green Bond Index ETF

• Mackenzie Emerging Markets Equity Index ETF

Mackenzie’s current line-up consists of 45 ETFs: 24 active and

strategic beta ETFs and 21 traditional index ETFs. ETF assets

under management ended the quarter at $12.4 billion, inclusive

of $7.2 billion in investments from IGM managed products. This

• Mackenzie Northleaf Global Private Equity Fund

ranks Mackenzie in sixth place in the Canadian ETF industry for

Exchange Traded Funds

The addition of Exchange Traded Funds (ETF) has

assets under management.

2023 Launch

complemented Mackenzie’s broad and innovative fund

In January 2023, the launch of the Mackenzie Corporate

line-up and reflects its investor-focused vision to provide
advisors and investors with new solutions to drive investor

Knights Global 100 Index Mutual Fund and Mackenzie
Corporate Knights Global Index ETF was confirmed. These

outcomes and achieve their personal goals. These ETFs offer

funds will invest in equity securities in a manner that tracks

investors another investment option when building long-term

the Corporate Knights Global 100 index.

diversified portfolios.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisReview of Segment Operating Results

The Asset Management segment includes revenue earned on

advisory mandates to the Wealth Management segment and

2022 vs. 2021

investments into Mackenzie mutual funds and ETFs by the

Revenues

Wealth Management segment.

Asset management fees are classified as either Asset

The Asset Management segment adjusted net earnings are

management fees – third party or Asset management fees –

presented in Table 18. Adjusted net earnings for the fourth

Wealth Management.

quarter of 2022 were $51.3 million, a decrease of 21.4% from

• Net asset management fees – third party is comprised

the fourth quarter in 2021 and a decrease of 12.3% from

of the following:

the prior quarter. Adjusted net earnings for the year ended

December 31, 2022 were $213.2 million, a decrease of 11.5%

from 2021.

Adjusted earnings before interest and taxes for the fourth

quarter of 2022 were $76.0 million, a decrease of 17.7% from

the fourth quarter in 2021 and a decrease of 11.0% from the

prior quarter. Adjusted earnings before interest and taxes

for the year ended December 31, 2022 were $313.1 million,

a decrease of 9.4% from 2021.

Table 18: Operating Results – Asset Management

Three months ended
($ millions)

Revenues

Asset management

Asset management fees – third party

Redemption fees

Dealer compensation expenses

Asset-based compensation

Sales-based compensation

Net asset management fees – third party

Asset management fees – Wealth Management

Net asset management

Net investment income and other

Expenses

Advisory and business development

Operations and support

Sub-advisory

Adjusted earnings before interest and taxes(1)

Interest expense

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

- Asset management fees – third party consists of

management and administration fees earned from our

investment funds and management fees from our third

party sub-advisory, institutional and other accounts.

The largest component is management fees from our

investment funds. The amount of management fees

depends on the level and composition of assets under

management. Management fee rates vary depending

on the investment objective and the account type of

the underlying assets under management. For example,

equity-based mandates have higher management fee

2022
Dec. 31

2022
Sep. 30

2021
Dec. 31

2022
Sep. 30

Change

2021
Dec. 31

232.5

234.7

265.4

(0.9)%

(12.4)%

0.7

233.2

(76.9)

–

(76.9)

156.3

27.3

183.6

5.6

189.2

21.3

90.9

1.0

0.7

235.4

(77.5)

–

(77.5)

157.9

27.3

185.2

3.8

189.0

16.4

86.0

1.2

113.2

103.6

76.0

5.9

70.1

18.8

51.3

85.4

5.9

79.5

21.0

58.5

1.4

266.8

(88.1)

(3.6)

(91.7)

175.1

30.0

205.1

1.3

206.4

24.1

88.3

1.6

114.0

92.4

5.9

86.5

21.2

65.3

–

(0.9)

(0.8)

–

(0.8)

(1.0)

–

(0.9)

47.4

0.1

29.9

5.7

(16.7)

9.3

(11.0)

–

(11.8)

(10.5)

(50.0)

(12.6)

(12.7)

(100.0)

(16.1)

(10.7)

(9.0)

(10.5)

N/M

(8.3)

(11.6)

2.9

(37.5)

(0.7)

(17.7)

–

(19.0)

(11.3)

(12.3) %

(21.4)%

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTable 18: Operating Results – Asset Management (continued)

Twelve months ended
($ millions)

Revenues

Asset management

Asset management fees – third party

Redemption fees

Dealer compensation expenses

Asset-based compensation

Sales-based compensation

Net asset management fees – third party

Asset management fees – Wealth Management

Net asset management

Net investment income and other

Expenses

Advisory and business development

Operations and support

Sub-advisory

Adjusted earnings before interest and taxes(1)

Interest expense

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

2022
Dec. 31

2021
Dec. 31

Change

962.9

$ 1,007.0

3.1

966.0

(320.3)

(7.3)

(327.6)

638.4

111.7

750.1

5.7

755.8

79.4

358.4

4.9

442.7

313.1

23.5

289.6

76.4

4.5

1,011.5

(335.8)

(19.5)

(355.3)

656.2

114.6

770.8

5.8

776.6

88.7

335.6

6.9

431.2

345.4

23.6

321.8

81.0

(4.4)%

(31.1)

(4.5)

(4.6)

(62.6)

(7.8)

(2.7)

(2.5)

(2.7)

(1.7)

(2.7)

(10.5)

6.8

(29.0)

2.7

(9.4)

(0.4)

(10.0)

(5.7)

213.2

240.8

(11.5)%

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.

rates than exchange traded funds, fixed income mandates

and on a low load purchase option. Mackenzie stopped

and retail mutual fund accounts have higher management

selling deferred sales charge purchase options and low

fee rates than sub-advised and institutional accounts. The

load purchase options as of June 1, 2022, in accordance

majority of Mackenzie’s mutual fund assets are retail and

with regulatory changes.

sold through third party financial advisors.

• Asset management fees – Wealth Management

- Redemption fees – consists of fees earned from the

consists of sub-advisory fees earned from the Wealth

redemptions of mutual fund assets sold on a deferred

Management segment.

sales charge purchase option and on a low load purchase

option. Redemption fees charged for deferred sales charge

assets range from 5.5% in the first year and decrease

to zero after seven years. Redemption fees for low load

assets range from 2.0% to 3.0% in the first year and

decrease to zero after two or three years, depending on

the purchase option.

- Dealer compensation expenses – consists of asset-

based and sales-based compensation. Asset-based

compensation represents trailing commissions paid to

dealers on certain classes of retail mutual funds and are

calculated as a percentage of mutual fund assets under
management. These fees vary depending on the fund type

and the purchase option upon which the fund was sold:

front-end, deferred sales charge or low load. Sales-based

compensation are paid to dealers on the sale of mutual

funds under the deferred sales charge purchase option

Net asset management fees – third party were $156.3 million

for the three months ended December 31, 2022, a decrease

of $18.8 million or 10.7% from $175.1 million last year. The

decrease in net asset management fees – third party was due

to an 11.1% decrease in average assets under management,

as shown in Table 16, offset by an increase in the net asset

management fee rate. Mackenzie’s net asset management

fee rate was 55.1 basis points for the three months ended

December 31, 2022, compared to 54.8 basis points in the

comparative period in 2021. The increase in rate was mostly

driven by lower selling commissions.

Net asset management fees – third party were $638.4 million

for the twelve months ended December 31, 2022, a decrease of

$17.8 million or 2.7% from $656.2 million last year. The decrease

in net asset management fees – third party was primarily due

to a 2.6% decrease in average assets under management,

2022 IGM Financial Inc. Annual Report | Management's Discussion and Analysisas shown in Table 16. Mackenzie’s net asset management

Sub-advisory expenses were $1.0 million for the three months

fee rate was 54.2 basis points for the twelve months ended

ended December 31, 2022, compared to $1.6 million in 2021.

December 31, 2022, consistent with 2021.

Expenses for the twelve months ended December 31, 2022

Management fees – Wealth Management were $27.3 million

for the three months ended December 31, 2022, a decrease of

$2.7 million or 9.0% from $30.0 million last year. The decrease

in management fees was primarily due to an 8.4% decrease in

average assets under management. Mackenzie’s management

fee rate was 14.7 basis points for the three months ended

December 31, 2022 compared to 14.8 basis points in the

comparative period in 2021.

Management fees – Wealth Management were $111.7 million

for the twelve months ended December 31, 2022, a decrease

of $2.9 million or 2.5% from $114.6 million last year. The

decrease in management fees was due to a 2.2% decrease in

average assets under management. Mackenzie’s management

fee rate was 14.7 basis points for the twelve months ended

December 31, 2022, consistent with 2021.

Net investment income and other primarily includes investment

returns related to Mackenzie’s investments in proprietary

funds. These investments are generally made in the process of

launching a fund and are sold as third party investors subscribe.

Net investment income and other was $5.6 million for the three

months ended December 31, 2022 compared to $1.3 million

last year, and was $5.7 million for the twelve months ended

December 31, 2022 compared to $5.8 million last year.

Expenses

Mackenzie incurs advisory and business development

expenses that primarily include wholesale distribution

activities and these costs vary directly with assets or sales

levels. Advisory and business development expenses were

$21.3 million for the three months ended December 31, 2022,

a decrease of $2.8 million or 11.6% from $24.1 million in 2021.

Expenses for the twelve months ended December 31, 2022

were $4.9 million, compared to $6.9 million last year, due to

lower sub-advisory assets.

Interest Expense

Interest expense, which includes allocated interest expense

on long-term debt and interest expense on leases, totalled

$5.9 million in the fourth quarter of 2022, unchanged from the

comparative period in 2021. Interest expense for the twelve

month period was $23.5 million compared to $23.6 million in

2021. Long-term debt interest expense is calculated based on

a long-term debt allocation of $0.4 billion to Mackenzie.

Q4 2022 vs. Q3 2022
Revenues

Net asset management fees – third party were $156.3 million

for the current quarter, a decrease of $1.6 million or 1.0% from

$157.9 million in the third quarter. Factors contributing to the

net decrease are as follows:

• Average assets under management were $112.7 billion in the

current quarter, a decrease of 0.7% from the prior quarter.

• Net asset management fee rate was 55.1 basis points for

the current quarter compared to 55.2 basis points in the

third quarter.

Management fees – Wealth Management were $27.3 million

in the current quarter, unchanged from the prior quarter.

The decline in average assets under management was offset

by an increase in the management fee rate. Average assets

under management were $73.6 billion in the current quarter, a

decrease of 0.4% from the prior quarter. The management fee

rate was 14.7 basis points in the current quarter, compared to

14.6 basis points in the third quarter.

were $79.4 million, a decrease of $9.3 million or 10.5% from

Net investment income and other was $5.6 million for the

$88.7 million last year. The decline in the three and twelve

current quarter, compared to $3.8 million in the third quarter.

month periods was attributed to lower wholesaler commissions

consistent with the decline in net investment fund net sales.

Expenses

Operations and support includes costs associated with

business operations, including technology and business

processes, in-house investment management and product

shelf management, corporate management and support

functions. These expenses primarily reflect compensation,

technology and other service provider expenses. Operations

and support expenses were $90.9 million for the three months

ended December 31, 2022, an increase of $2.6 million or 2.9%

from $88.3 million in 2021. Expenses for the twelve months

ended December 31, 2022 were $358.4 million, an increase of

$22.8 million or 6.8% from $335.6 million last year.

Advisory and business development expenses were

$21.3 million for the current quarter, an increase of $4.9 million

or 29.9% from $16.4 million in the third quarter. The increase

in the current quarter is due to higher wholesaler commissions

and the timing of certain expenses.

Operations and support expenses were $90.9 million for
the current quarter, an increase of $4.9 million or 5.7% from

$86.0 million compared to the third quarter.

Sub-advisory expenses were $1.0 million for the current

quarter, compared to $1.2 million in the third quarter.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportStrategic Investments and Other

Review of Segment Operating Results

The Strategic Investments and Other segment includes

investments in Great-West Lifeco Inc. (Lifeco), China Asset

Management Co., Ltd. (ChinaAMC), Northleaf Capital Group

Ltd. (Northleaf), Wealthsimple Financial Corp. (Wealthsimple),

Portage Ventures LPs. (Portage), and unallocated capital.

Earnings from the Strategic Investments and Other segment

include the Company’s proportionate share of earnings of

its associates, Lifeco, ChinaAMC and Northleaf as well as net

investment income on unallocated capital.

On January 12, 2023, the Company closed the previously

announced transaction to acquire Power’s 13.9% interest in

ChinaAMC as discussed in the Consolidated Financial Position

section of this MD&A. To partially fund the transaction, IGM

Financial sold 1.6% of its 4% interest in Lifeco.

Assets held by the Strategic Investments and Other segment

2022 vs. 2021

The proportionate share of associates’ earnings increased

by $14.7 million in the fourth quarter of 2022 compared to

the fourth quarter of 2021 and increased by $14.3 million

in the twelve months ended December 31, 2022 compared

to 2021. These earnings reflect equity earnings from Lifeco,

ChinaAMC and Northleaf, as discussed in the Consolidated

Financial Position section of this MD&A. The increase in the

three month period was due to increases in the proportionate
share of Lifeco’s earnings of $10.5 million and Northleaf’s

earnings of $7.4 million, offset in part by a decrease in the

proportionate share of ChinaAMC’s earnings of $2.8 million.

The increase in the twelve month period was due to increases

in the proportionate share of Lifeco’s earnings of $3.1 million

and Northleaf’s earnings of $16.0 million, offset in part by a

decrease in the proportionate share of ChinaAMC’s earnings

are included in Table 19.

of $4.4 million.

Unallocated capital represents capital not allocated to any of

the operating companies and which would be available for

investment, debt repayment, distribution to shareholders or

other corporate purposes. This capital is invested in highly

liquid, high quality financial instruments in accordance with

the Company’s Investment Policy.

Strategic Investments and Other segment adjusted net

earnings are presented in Table 20.

Net investment income and other was $7.4 million in the

fourth quarter of 2022, an increase of $6.3 million from

$1.1 million in 2021. Net investment income and other was

$14.6 million for the twelve month period in 2022, an increase

of $11.9 million from $2.7 million in 2021. The increase in both

the three and twelve month periods from 2021 was primarily

related to interest rate increases earned on the Company’s

unallocated capital.

Table 19: Total Assets – Strategic Investments and Other

($ millions)

Investments in associates

Lifeco

ChinaAMC

Northleaf

Other

FVTOCI investments

Wealthsimple (direct investment only)

Portage and other investments

Unallocated capital and other

Total assets

Lifeco fair value

December 31, 2022

December 31, 2021

1,075.2

1,020.8

787.2

284.5

40.1

2,187.0

484.1

118.5

602.6

782.3

3,571.9

1,168.3

768.7

258.8

–

2,048.3

1,133.5

157.9

1,291.4

767.5

4,107.2

1,415.5

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 20: Operating Results – Strategic Investments and Other

Three months ended
($ millions)

Revenues

Net investment income and other

Proportionate share of associates’ earnings

Investment in Lifeco

Investment in ChinaAMC

Investment in Northleaf

Other

Expenses

Operations and support

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

Non-controlling interest

Adjusted net earnings available to common shareholders(1)

Twelve months ended
($ millions)

Revenues

Net investment income and other

Proportionate share of associates’ earnings

Investment in Lifeco

Investment in ChinaAMC

Investment in Northleaf

Other

Expenses

Operations and support

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

Non-controlling interest

2022
Dec. 31

2022
Sep. 30

2021
Dec. 31

2022
Sep. 30

Change

2021
Dec. 31

7.4

4.7

1.1

57.4 %

N/M %

40.9

14.2

10.7

(0.4)

65.4

72.8

0.4

72.4

4.8

67.6

2.1

65.5

27.6

14.7

4.6

–

46.9

51.6

1.1

50.5

2.4

48.1

0.9

47.2

30.4

17.0

3.3

–

50.7

51.8

1.3

50.5

1.5

49.0

0.7

48.3

48.2

(3.4)

132.6

N/M

39.4

41.1

34.5

(16.5)

224.2

N/M

29.0

40.5

(63.6)

(69.2)

43.4

100.0

40.5

133.3

43.4

220.0

38.0

200.0

38.8 %

35.6 %

2022
Dec. 31

2021
Dec. 31

Change

14.6

2.7

N/M %

128.2

57.2

25.7

(0.4)

210.7

225.3

4.9

220.4

9.6

210.8

5.1

125.1

61.6

9.7

–

196.4

199.1

4.9

194.2

4.9

189.3

2.0

2.5

(7.1)

164.9

N/M

7.3

13.2

–

13.5

95.9

11.4

155.0

Adjusted net earnings available to common shareholders(1)

205.7

187.3

9.8 %

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.

Q4 2022 vs. Q3 2022

The proportionate share of associates’ earnings was

$65.4 million in the fourth quarter of 2022, an increase of

$18.5 million from the third quarter of 2022, primarily due

to increases in the proportionate share of Lifeco earnings

and Northleaf earnings. Net investment income and other

was $7.4 million in the fourth quarter of 2022, an increase of

$2.7 million from $4.7 million in the third quarter. The increase

in Net investment income and other for the fourth quarter of

2022 compared to the prior quarter primarily related to interest

rate increases earned on the Company’s unallocated capital.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportIGM Financial Inc.

Consolidated Financial Position

IGM Financial’s total assets were $18.9 billion at December 31,

Portage consists of early-stage investment funds dedicated

2022, compared to $17.7 billion at December 31, 2021.

to backing innovating financial services companies and are

Other Investments

The composition of the Company’s securities holdings is

detailed in Table 21.

Fair Value Through Other
Comprehensive Income (FVTOCI)

Gains and losses on FVTOCI investments are recorded in Other

comprehensive income.

Corporate Investments

controlled by Power Corporation of Canada.

The total fair value of Corporate investments of $603 million

at December 31, 2022 is presented net of certain costs

incurred within the limited partnership structures holding

the underlying investments.

Fair Value Through Profit or Loss (FVTPL)

Securities classified as FVTPL include equity securities and

proprietary investment funds. Gains and losses are recorded

in Net investment income and other in the Consolidated

Statements of Earnings.

Corporate investments is primarily comprised of the Company’s

Certain proprietary investment funds are consolidated where

investments in Wealthsimple Financial Corp. (Wealthsimple),

the Company has made the assessment that it controls the

and Portag3 Ventures LP, Portag3 Ventures II LP and Portage

investment fund. The underlying securities of these funds are

Ventures III LP (Portage) and are recorded at FVTOCI.

classified as FVTPL.

Wealthsimple is a financial company that provides simple digital

tools for growing and managing your money.

Loans

The Company is the largest shareholder in Wealthsimple with

The composition of the Company’s loans is detailed in Table 22.

a combined direct and indirect interest of 24% and fair value

of $492 million at December 31, 2022, unchanged from the

prior quarter and a decline of $661 million from $1,153 million

at December 31, 2021. Fair value is determined by using

Loans consisted of residential mortgages and represented

26.6% of total assets at December 31, 2022, compared to 30.3%

at December 31, 2021.

observable transactions in the investments’ securities,

Loans measured at amortized cost are primarily comprised

where available, discounted cash flows, and other valuation

of residential mortgages sold to securitization programs

metrics, including revenue multiples, used in the valuation

sponsored by third parties that in turn issue securities to

of comparable public companies. This change in fair value is

investors. An offsetting liability, Obligations to securitization

consistent with changes in stock market valuations and public

entities, has been recorded and totalled $4.6 billion

market peer multiples, as well as company revenue and other

at December 31, 2022, compared to $5.1 billion at

financial forecasts.

December 31, 2021.

Table 21: Other Investments

($ millions)

Fair value through other comprehensive income

Corporate investments

Fair value through profit or loss

Equity securities

Proprietary investment funds

December 31, 2022

December 31, 2021

Cost

Fair Value

Cost

Fair Value

242.7

602.6

226.2

$ 1,291.4

12.7

156.7

169.4

12.9

159.0

171.9

1.2

101.3

102.5

1.6

105.0

106.6

412.1

774.5

328.7

$ 1,398.0

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 22: Loans

($ millions)

Amortized cost

Less: Allowance for expected credit losses

Fair value through profit or loss

December 31, 2022

December 31, 2021

5,022.3

5,297.0

0.8

5,021.5

–

0.6

5,296.4

57.4

5,021.5

5,353.8

The Company holds loans pending sale or securitization. Loans

term of the mortgages, ii) the component of swaps entered into

measured at fair value through profit or loss are residential

under the CMB Program whereby the Company pays coupons

mortgages held temporarily by the Company pending

on Canada Mortgage Bonds and receives investment returns

sale. Loans held for securitization are carried at amortized

on the reinvestment of repaid mortgage principal, are recorded

cost. Total loans being held pending sale or securitization

at fair value, and iii) cash reserves held under the ABCP

are $371.9 million at December 31, 2022, compared to
$315.8 million at December 31, 2021.

program are carried at amortized cost.

In the fourth quarter of 2022, the Company securitized loans

Residential mortgages originated by IG Wealth Management

through its mortgage banking operations with cash proceeds

are funded primarily through sales to third parties on a fully

of $351.4 million compared to $283.7 million in 2021. Additional

serviced basis, including Canada Mortgage and Housing

information related to the Company’s securitization activities,

Corporation (CMHC) or Canadian bank sponsored securitization

including the Company’s hedges of related reinvestment

programs. At December 31, 2022, IG Wealth Management

and interest rate risk, can be found in the Financial Risk

serviced $9.0 billion of residential mortgages, including

section of this MD&A and in Note 7 to the Consolidated

$2.2 billion originated by subsidiaries of Lifeco.

Financial Statements.

Securitization Arrangements

Through the Company’s mortgage banking operations,

residential mortgages originated by IG Wealth Management

mortgage planning specialists are sold to securitization trusts

sponsored by third parties that in turn issue securities to

investors. The Company securitizes residential mortgages

through the CMHC sponsored National Housing Act Mortgage-

Backed Securities (NHA MBS) and the Canada Mortgage

Bond Program (CMB Program) and through Canadian bank-

Investment in Associates
Great-West Lifeco Inc. (Lifeco)

At December 31, 2022, the Company held a 4.0% equity interest

in Lifeco. IGM Financial and Lifeco are controlled by Power

Corporation of Canada.

The equity method is used to account for IGM Financial’s

investment in Lifeco, as it exercises significant influence.

Changes in the carrying value for the three and twelve months

sponsored asset-backed commercial paper (ABCP) programs.

ended December 31, 2022 compared with 2021 are shown in

The Company retains servicing responsibilities and certain

Table 23.

elements of credit risk and prepayment risk associated with

the transferred assets. The Company’s credit risk on its

securitized mortgages is partially mitigated through the use

of insurance. Derecognition of financial assets in accordance

with IFRS is based on the transfer of risks and rewards of

ownership. As the Company has retained prepayment risk and

certain elements of credit risk associated with the Company’s

securitization transactions through the CMB and ABCP

programs, they are accounted for as secured borrowings. The

Company records the transactions under these programs as

follows: i) the mortgages and related obligations are carried
at amortized cost, with interest income and interest expense,

utilizing the effective interest rate method, recorded over the

On January 12, 2023, to partially fund the acquisition of an

additional 13.9% interest in ChinaAMC, the Company sold

15,200,662 common shares of Lifeco to Power for cash

consideration of $553 million, which reduced the Company’s

equity interest in Lifeco from 4.0% to 2.4%. The Company

will continue to equity account for its 2.4% interest in Lifeco.

IGM Financial’s accounting gain on sale of the Lifeco Shares

is approximately $124 million before tax. Lifeco will be

implementing IFRS 17 effective January 1, 2023, which will

impact the accounting gain ultimately recognized on the sale

of Lifeco shares.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTable 23: Investment in Associates

($ millions)

Three months ended

Lifeco

ChinaAMC

Northleaf

Other

Total

Lifeco

ChinaAMC

Northleaf

Total

December 31, 2022

December 31, 2021

Carrying value, October 1

$ 1,038.9

$ 764.8

$ 273.8

–

$ 2,077.5

$ 1,001.5

$ 742.6

$ 255.3

$ 1,999.4

Investment

Dividends

Proportionate share of:

Earnings(1)

Other comprehensive income (loss)
and other adjustments

–

(18.3)

40.9

13.7

–

14.2

8.2

–

40.5

–

10.7 (2)

(0.4)

–

40.5

(18.3)

65.4

21.9

–

(18.3)

30.4

7.2

–

17.0

9.1

0.2

–

0.2

(18.3)

3.3 (2)

50.7

–

16.3

Carrying value, December 31

$ 1,075.2

$ 787.2

$ 284.5

Twelve months ended

Carrying value, January 1

$ 1,020.8

$ 768.7

$ 258.8

40.1

$ 2,187.0

$ 1,020.8

$ 768.7

$ 258.8

$ 2,048.3

–

$ 2,048.3

$ 962.4

$ 720.3

$ 248.5

$ 1,931.2

Investment

Dividends

Proportionate share of:

Earnings(1)

–

(73.2)

(31.3)

–

40.5

–

40.5

(104.5)

–

(67.4)

128.2

57.2

25.7 (2)

(0.4)

210.7

125.1

Other comprehensive income (loss)
and other adjustments

(0.6)

(7.4)

–

(8.0)

0.7

–

(26.8)

61.6

13.6

0.6

–

0.6

(94.2)

9.7 (2)

196.4

–

14.3

Carrying value, December 31

$ 1,075.2

$ 787.2

$ 284.5

40.1

$ 2,187.0

$ 1,020.8

$ 768.7

$ 258.8

$ 2,048.3

(1) The proportionate share of earnings from the Company’s investment in associates is recorded in the Strategic Investments and Other segment.
(2) The Company’s proportionate share of Northleaf’s earnings, net of Non-controlling interest, was $8.6 million and $20.6 million, respectively, for the three and twelve

month periods in 2022 compared to $2.6 million and $7.7 million, respectively, in 2021.

China Asset Management Co., Ltd. (ChinaAMC)

Northleaf Capital Group Ltd. (Northleaf)

Founded in 1998 as one of the first fund management

The Company, through an acquisition vehicle held by the

companies in China, ChinaAMC has developed and maintained

Company’s subsidiary, Mackenzie, holds a 49.9% voting

a position among the market leaders in China’s asset

interest and a 70% economic interest in Northleaf. The

management industry.

ChinaAMC’s total assets under management, excluding

subsidiary assets under management, were RMB¥

acquisition vehicle is owned 80% by Mackenzie and 20%

by Lifeco. Northleaf is a global private equity, private credit

and infrastructure fund manager headquartered in Toronto.

1,721.6 billion ($337.6 billion) at December 31, 2022,

Mackenzie and Lifeco have an obligation and right to purchase

representing an increase of 3.6% (CAD$ 2.2%) from RMB¥

the remaining equity and voting interest in Northleaf

1,661.6 billion ($330.5 billion) at December 31, 2021.

commencing in approximately five years from the acquisition

The equity method is used to account for the Company’s

13.9% equity interest in ChinaAMC, as it exercises significant

influence. Changes in the carrying value for the three and

twelve months ended December 31, 2022 are shown in

Table 23. The increase in Other comprehensive income of

date and extending into future periods. The equity method

is used to account for the acquisition vehicle’s 70% economic

interest as it exercises significant influence. Significant

influence arises from board representation, participating in

the policy making process and shared strategic initiatives.

$8.1 million in the three months ended December 31, 2022,

The Company controls the acquisition vehicle therefore it

was due to a 1.0% appreciation of the Chinese yuan relative

recognizes the full 70% economic interest in Northleaf and

to the Canadian dollar.

recognizes Non-controlling interest (NCI) related to Lifeco’s

On January 12, 2023, the Company acquired an additional

net interest in Northleaf of 14%.

13.9% interest in ChinaAMC for cash consideration of

Northleaf’s assets under management, including invested

$1.15 billion from Power which increased the Company’s

capital and uninvested commitments, were $24.1 billion as at

equity interest in ChinaAMC from 13.9% to 27.8%. The

December 31, 2022, representing an increase of $4.6 billion or

Company will continue to equity account for its 27.8% interest

23.6% from $19.5 billion at December 31, 2021. The increase

in ChinaAMC.

during the twelve month period was driven by $3.8 billion in

new commitments and an increase of $1.2 billion related to

foreign exchange on USD denominated assets, offset in part by

a decrease of $0.4 billion related to return of capital and other.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisConsolidated Liquidity and Capital Resources

Liquidity

Cash and cash equivalents totalled $1,072.9 million at

December 31, 2022 compared with $1,292.4 million at

compared to $1,547.0 million for 2021. EBITDA before sales

commissions excludes the impact of both commissions paid

December 31, 2021. Cash and cash equivalents related

and commission amortization (refer to Table 1).

to the Company’s deposit operations were $0.8 million at

December 31, 2022, compared to $1.3 million at December 31,

2021, as shown in Table 24.

Client funds on deposit represents cash balances held by

clients within their investment accounts and with the offset

included in deposit liabilities.

Working capital, which consists of current assets less current

liabilities, totalled $846.8 million at December 31, 2022

compared with $908.0 million at December 31, 2021 (Table 25).

Working capital, which includes unallocated capital, is

utilized to:

• Finance ongoing operations, including the funding

of sales commissions.

• Temporarily finance mortgages in its mortgage

banking operations.

• Pay interest related to long-term debt.

• Maintain liquidity requirements for regulated entities.

• Pay quarterly dividends on its outstanding common shares.

• Finance common share repurchases and retirement of

long-term debt.

Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA)(1)

For the financial year ($ millions)

1,333

1,294

1,226

1,547

1,426

EBITDA before
sales commissions

1,145

1,129

1,087

1,377

1,295

EBITDA after
sales commissions

2018

2019

2020

2021

2022

EBITDA before and after sales commissions excluded the following:

2018 – charges related to restructuring and other and the premium

paid on the early redemption of debentures.

2019 – the Company’s proportionate share of associate’s

one-time charges.

• Capital investment in the business and business acquisitions.

2020 – the gain on sale of Personal Capital, gain on sale of Quadrus

IGM Financial continues to generate significant cash flows from

its operations. Earnings before interest, taxes, depreciation

and amortization before sales commissions (EBITDA before

sales commissions), a non-IFRS measure (see Non-IFRS

Financial Measures and Other Financial Measures), totalled

$1,425.6 million for the year ended December 31, 2022,

Group of Funds net of acqusition costs, the Company’s

proportionate share of associate’s adjustments and

restructuring and other.

2021 – additional consideration receivable related to the

sale of Personal Capital in 2020.

(1) A Non-IFRS financial measure – see Non-IFRS Financial Measures and

Other Financial Measures section of this document.

Table 24: Deposit Operations – Financial Position

As at December 31 ($ millions)

Assets

Cash and cash equivalents

Client funds on deposit

Accounts and other receivables

Loans

Total assets

Liabilities and shareholders’ equity

Deposit liabilities

Other liabilities

Shareholders’ equity

Total liabilities and shareholders’ equity

2022

2021

0.8

1.3

4,347.4

2,238.6

0.6

9.4

0.6

10.8

$ 4,358.2

$ 2,251.3

$ 4,334.0

$ 2,220.3

15.2

9.0

20.4

10.6

$ 4,358.2

$ 2,251.3

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTable 25: Working Capital

As at December 31 ($ millions)

Current assets

Cash and cash equivalents

Client funds on deposit

Accounts receivable and other assets

Current portion of securitized mortgages and other

Current liabilities

Accounts and other payables

Deposits and certificates

Current portion of obligations to securitization entities and other

Working capital

2022

2021

$ 1,072.9

$ 1,292.4

4,347.4

462.6

992.2

6,875.1

726.4

4,332.8

969.1

6,028.3

2,238.6

405.0

1,234.5

5,170.5

879.1

2,219.0

1,164.4

4,262.5

846.8

908.0

Earnings before interest, taxes, depreciation and amortization

after sales commissions (EBITDA after sales commissions),

a non-IFRS measure (see Non-IFRS Financial Measures and

Other Financial Measures), totalled $1,294.8 million for the year

ended December 31, 2022, compared to $1,376.5 million for

2021. EBITDA after sales commissions excludes the impact of

commission amortization (refer to Table 1).

Refer to the Financial Instruments Risk section of this MD&A

for information related to other sources of liquidity and to

the Company’s exposure to and management of liquidity and

funding risk.

Cash Flows

Cash and cash equivalents decreased by $219.5 million in 2022
compared to an increase of $520.8 million in 2021.

Adjustments to determine net cash from operating activities

during the year ended 2022 compared to 2021 consist of

non-cash operating activities offset by cash operating activities:

• The add-back of amortization of capitalized sales

commissions offset by the deduction of capitalized sales

commissions paid.

• The add-back of amortization of capital, intangible and

other assets.

• The deduction of investment in associates’ equity earnings

offset by dividends received.

• The add-back of pension and other post-employment

Table 26 – Cash Flows is a summary of the Consolidated

benefits offset by cash contributions.

Statements of Cash Flows which forms part of the Consolidated
Financial Statements for the year ended December 31, 2022.

• Changes in operating assets and liabilities and other.

• The deduction of restructuring provision cash payments.

Table 26: Cash Flows

Twelve months ended ($ millions)

Operating activities

Earnings before income taxes

Income taxes paid

Adjustments to determine net cash from operating activities

Financing activities

Investing activities

Change in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

2022
Dec. 31

2021
Dec. 31

Change

$ 1,122.9

$ 1,267.7

(330.9)

(54.3)

737.7

(1,091.9)

134.7

(219.5)

1,292.4

(153.5)

(170.6)

943.6

(1,521.9)

1,099.1

520.8

771.6

(11.4)%

(115.6)

68.2

(21.8)

28.3

(87.7)

N/M

67.5

$ 1,072.9

$ 1,292.4

(17.0)%

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisFinancing activities during the year ended December 31, 2022

compared to 2021 related to:

• An increase in obligations to securitization entities

of $1,171.0 million and repayments of obligations to

securitization entities of $1,626.9 million in 2022 compared

to an increase in obligations to securitization entities

of $1,428.9 million and repayments of obligations to

securitization entities of $2,442.7 million in 2021.

Accumulated Other
Comprehensive Income

Accumulated other comprehensive income totalled

$362.8 million at December 31, 2022, compared to

$883.1 million at December 31, 2021, as detailed in Table 27.

The gain/loss related to Employee benefits is primarily

driven by changes in discount rates. During the year ended

• The purchase of 2,890,000 common shares in 2022 under

December 31, 2022, discount rates have increased by

IGM Financial’s normal course issuer bid at a cost of

approximately 1.95%, resulting in a gain through Other

$115.7 million. There were no purchases in 2021.

comprehensive income of $137.0 million ($100.0 million

• The payment of regular common share dividends which

after tax).

totalled $537.2 million in 2022 compared to $537.0 million

in 2021.

The loss related to Other investments in 2022 relates primarily

to changes in fair value of Wealthsimple which is consistent with

Investing activities during the year ended December 31, 2022

the decline in stock markets and public market peer valuations,

compared to 2021 primarily related to:

and Wealthsimple focusing on its core business lines and

• The purchases of other investments totalling $150.5 million

revising revenue expectations.

and sales of other investments with proceeds of

$120.1 million in 2022 compared to $131.8 million and

$348.2 million, respectively, in 2021.

The loss for Investments in associates in 2022 relates to the

Company’s portion of the associates’ Other comprehensive

income which consists primarily of employee benefits, foreign

• An increase in loans of $1,274.4 million with repayments of

exchange translation and available for sale securities.

loans and other of $1,584.4 million in 2022 compared to

$1,776.1 million and $2,744.7 million, respectively, in 2021,

primarily related to residential mortgages in the Company’s

mortgage banking operations.

• Net cash used in additions to intangible assets and

acquisitions and other was $107.1 million in 2022 compared

to $75.3 million in 2021.

In 2022, realized gains of $27.8 million ($24.0 million after-

tax) related to other investments were transferred from

Accumulated other comprehensive income to Other retained

earnings. In 2021, IGM Financial Inc. disposed of a portion of its

investment in Wealthsimple and a realized gain of $241 million

($209 million after-tax) was transferred from Accumulated other

comprehensive income to Other retained earnings.

Table 27: Accumulated Other Comprehensive Income (Loss)

($ millions)

2022

Balance, January 1

Other comprehensive income (loss)

Transfer out of fair value through other comprehensive income

Balance, December 31

2021

Balance, January 1

Other comprehensive income (loss)

Transfer out of fair value through other comprehensive income

Balance, December 31

Employee
Benefits

Other
Investments

Investment
in Associates
and Other

(95.7)

919.2

100.0

–

4.3

(197.0)

101.3

–

(585.5)

(24.0)

309.7

293.5

834.5

(208.8)

(95.7)

919.2

59.6

(10.8)

–

48.8

39.9

19.7

–

59.6

Total

883.1

(496.3)

(24.0)

362.8

136.4

955.5

(208.8)

883.1

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportCapital Resources

The Company’s capital management objective is to maximize

shareholder returns while ensuring that the Company

is capitalized in a manner which appropriately supports

regulatory capital requirements, working capital needs and

business expansion. The Company’s capital management

practices are focused on preserving the quality of its financial

position by maintaining a solid capital base and a strong

balance sheet. Capital of the Company consists of long-

term debt and common shareholders’ equity which totalled

$8.3 billion at December 31, 2022, compared to $8.6 billion

at December 31, 2021. The Company regularly assesses

its capital management practices in response to changing

economic conditions.

The Company’s capital is primarily utilized in its ongoing

business operations to support working capital requirements,

long-term investments made by the Company, business

expansion and other strategic objectives. Subsidiaries subject

to regulatory capital requirements include investment dealers,

mutual fund dealers, exempt market dealers, portfolio

managers, investment fund managers and a trust company.

These subsidiaries are required to maintain minimum

levels of capital based on either working capital, liquidity

or shareholders’ equity. The Company’s subsidiaries have

complied with all regulatory capital requirements.

The total outstanding long-term debt was $2.1 billion at

December 31, 2022, unchanged from December 31, 2021.

Long-term debt is comprised of debentures which are senior

Other activities in 2022 included the declaration of common

share dividends of $536.1 million or $2.25 per share. Changes

in common share capital are reflected in the Consolidated

Statements of Changes in Shareholders’ Equity.

Standard & Poor’s (S&P) current rating on the Company’s

senior unsecured debentures is “A” with a stable outlook.

DBRS Morningstar’s current rating on the Company’s senior

unsecured debentures is “A (High)” with a stable rating trend.

Credit ratings are intended to provide investors with an

independent measure of the credit quality of the securities of

a company and are indicators of the likelihood of payment and

the capacity of a company to meet its obligations in accordance

with the terms of each obligation. Descriptions of the rating

categories for each of the agencies set forth below have been

obtained from the respective rating agencies’ websites.

These ratings are not a recommendation to buy, sell or hold

the securities of the Company and do not address market price

or other factors that might determine suitability of a specific

security for a particular investor. The ratings also may not

reflect the potential impact of all risks on the value of securities

and are subject to revision or withdrawal at any time by the

rating organization.

The A rating assigned to IGM Financial’s senior unsecured

debentures by S&P is the sixth highest of the 22 ratings used

for long-term debt. This rating indicates S&P’s view that the

Company’s capacity to meet its financial commitment on the

obligation is strong, but the obligation is somewhat more

unsecured debt obligations of the Company subject to standard

covenants, including negative pledges, but which do not include

Capital

any specified financial or operational covenants.

As at December 31 ($ millions)

The Company purchased 2,890,000 common shares during

the year ended December 31, 2022 at a cost of $115.7 million

under its normal course issuer bid (refer to Note 18 to the

Consolidated Financial Statements). The Company commenced

6,452

6,599

a normal course issuer bid on March 1, 2022 to purchase for

cancellation up to 6 million of its common shares to mitigate

1,850

2,100

the dilutive effect of stock options issued under the Company’s

stock option plan and for other capital management purposes.

150

8,601

7,143

2,100

8,363

2,100

In connection with its normal course issuer bid, the Company

has established an automatic securities purchase plan for

its common shares. The automatic securities purchase plan

provides standard instructions regarding how IGM Financial’s

common shares are to be purchased under its normal course

issuer bid during certain pre-determined trading blackout

periods. Outside of these pre-determined trading blackout

periods, purchases under the Company’s normal course issuer

bid will be completed based upon management’s discretion.

4,452

4,499

4,994

6,450

6,196

2018

2019

2020

2021

2022

Non-controlling Interest

Long-term Debt

Perpetual Preferred Shares

Common Shareholders’ Equity

2022 IGM Financial Inc. Annual Report | Management's Discussion and Analysissusceptible to the adverse effects of changes in circumstances

• Loans classified as held for trading are valued using market

and economic conditions than obligations in higher

interest rates for loans with similar credit risk and maturity,

rated categories.

specifically lending rates offered to retail borrowers by

The A (High) rating assigned to IGM Financial’s senior

unsecured debentures by DBRS Morningstar is the fifth highest

of the 26 ratings used for long-term debt. Under the DBRS

Morningstar long-term rating scale, debt securities rated

A (High) are of good credit quality and the capacity for the

payment of financial obligations is substantial, but of lesser

financial institutions.

• Loans classified as amortized cost are valued by discounting

the expected future cash flows at prevailing market yields.

• Valuation methods used for Other investments classified as

FVOCI include comparison to market transactions with arm’s

length third parties, use of market multiples, and discounted

credit quality than AA. While this is a favourable rating, entities

cash flow analysis.

in the A (High) category may be vulnerable to future events,

• Obligations to securitization entities are valued by

but qualifying negative factors are considered manageable.

discounting the expected future cash flows at prevailing

Financial Instruments

Table 28 presents the carrying amounts and fair values of

financial assets and financial liabilities. The table excludes fair

value information for financial assets and financial liabilities not

measured at fair value if the carrying amount is a reasonable

approximation of fair value. These items include cash and cash

equivalents, accounts and other receivables, certain other

financial assets, accounts payable and accrued liabilities and

certain other financial liabilities.

Fair value is determined using the following methods

and assumptions:

• Other investments and other financial assets and financial

liabilities are valued using quoted prices from active markets,

market yields for securities issued by these securitization

entities having similar terms and characteristics.

• Deposits and certificates are valued by discounting the

contractual cash flows using market interest rates currently

offered for deposits with similar terms and credit risks.

• Long-term debt is valued using quoted prices for each

debenture available in the market.

• Derivative financial instruments are valued based on quoted

market prices, where available, prevailing market rates for

instruments with similar characteristics and maturities, or

discounted cash flow analysis.

See Note 24 of the Annual Financial Statements which provides

additional discussion on the determination of fair value of

financial instruments.

when available. When a quoted market price is not readily

Although there were changes to both the carrying values and

available, valuation techniques are used that require

fair values of financial instruments, these changes did not have

assumptions related to discount rates and the timing and

a material impact on the financial condition of the Company for

amount of future cash flows. Wherever possible, observable

the twelve months ended December 31, 2022.

market inputs are used in the valuation techniques.

Table 28: Financial Instruments

($ millions)

Financial assets recorded at fair value

Other investments

December 31, 2022

December 31, 2021

Carrying Value

Fair Value

Carrying Value

Fair Value

– Fair value through other comprehensive income

– Fair value through profit or loss

602.6

171.9

602.6

171.9

$ 1,291.4

106.6

Loans

– Fair value through profit or loss

Derivative financial instruments

Financial assets recorded at amortized cost

Loans

– Amortized cost

Financial liabilities recorded at fair value

Derivative financial instruments

Financial liabilities recorded at amortized cost

Deposits and certificates

Obligations to securitization entities

Long-term debt

–

63.7

–

63.7

57.4

41.2

57.4

41.2

5,021.5

4,905.5

5,296.4

5,354.2

51.6

17.8

4,334.0

4,610.4

2,100.0

4,334.0

4,544.6

2,013.9

2,220.3

5,057.9

2,100.0

2,220.5

5,146.4

2,544.4

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportRisk Management

IGM Financial is exposed to a variety of risks that are inherent

• The Governance and Nominating Committee oversees

in our business activities. Our ability to manage these risks

corporate governance practices.

is key to our ongoing success. The Company emphasizes a

strong risk management culture and the implementation

of an effective risk management approach. Our approach

coordinates risk management across the organization and its

business units and seeks to ensure prudent and measured

risk-taking in order to achieve an appropriate balance

between risk and return. Fundamental to our enterprise

risk management program is protecting and enhancing

our reputation.

Risk Management Framework

The Company’s risk management approach is undertaken

through our comprehensive Enterprise Risk Management

(ERM) Framework which is composed of five core elements:

risk governance, risk appetite, risk principles, a defined risk

management process, and risk management culture. The

ERM Framework is established under our ERM Policy, which

is approved by the Executive Risk Management Committee.

Risk Governance

Our risk governance structure emphasizes ownership of

risk management in each business unit and oversight by an

Executive Risk Management Committee accountable to the Risk

Committee of the Board (Risk Committee) and ultimately to the

Board of Directors. Additional oversight is provided by the ERM,

Compliance and Internal Audit Departments.

The Risk Committee provides primary oversight and carries

out its risk management mandate. The Risk Committee is

responsible for assisting the Board in reviewing and overseeing

the risk governance structure and risk management program of

the Company by: i) ensuring that appropriate procedures are in

place to identify and manage risks and establish risk tolerances,

ii) ensuring that appropriate policies, procedures and controls

are implemented to manage risks, and iii) reviewing the risk

management process on a regular basis to ensure that it is

functioning effectively.

Other specific risks are managed with the support of the

following Board committees:

• The Audit Committee has specific risk oversight

responsibilities in relation to financial disclosure, internal

controls and the control environment as well as our
compliance activities, including administration of the Code

of Conduct.

• The Human Resource Committee oversees compensation

policies and practices.

• The Related Party and Conduct Review Committee oversees

conflicts of interest.

Management oversight for risk management resides with the

Executive Risk Management Committee which is comprised

of the Chief Executive Officers of IGM Financial, IG Wealth

Management, Mackenzie Investments and Investment Planning

Counsel, the Chief Financial Officer, the General Counsel,

the Chief Operating Officer, and the Chief Human Resources

Officer. In April 2022, the Company appointed its first Chief Risk

Officer who chairs the Executive Risk Management Committee.

The committee is responsible for oversight of IGM Financial’s

risk management process by: i) establishing and maintaining

the risk framework and policy; ii) defining the risk appetite;

iii) ensuring our risk profile and processes are aligned with

corporate strategy and risk appetite; and iv) establishing “tone

at the top” and reinforcing a strong culture of risk management.

The Chief Executive Officers of the operating companies have

overall responsibility for overseeing risk management of their

respective companies.

The Company has assigned responsibility for risk management

using the Three Lines of Defence model, with the First Line

reflecting the business units having primary responsibility

for risk management, supported by Second Line risk

management functions and a Third Line (the Internal Audit

function) providing assurance and validation of the design

and effectiveness of the ERM Framework.

First Line of Defence

The leaders of the various business units and support

functions have primary ownership and accountability for the

ongoing risk management associated with their respective

activities. Responsibilities of business unit and support function

leaders include: i) establishing and maintaining procedures for

the identification, assessment, documentation and escalation

of risks, ii) implementing control activities to mitigate risks,

iii) identifying opportunities for risk reduction or transfer, and

iv) aligning business and operational strategies with the risk

culture and risk appetite of the organization as established by

the Risk Management Committee.

Second Line of Defence

The Enterprise Risk Management (ERM) Department provides
oversight, analysis and reporting to the Risk Management

Committee on the level of risks relative to the established risk

appetite for all activities of the Company. Other responsibilities

include: i) developing and maintaining the enterprise risk

2022 IGM Financial Inc. Annual Report | Management's Discussion and Analysismanagement program and framework, ii) managing the

Significant risks that may adversely affect the Company’s ability

enterprise risk management process, and iii) providing guidance

to achieve its strategic and business objectives are identified

and training to business unit and support function leaders.

through the Company’s ongoing risk management process.

The Company has a number of committees of senior business

We use a consistent methodology across our organizations

leaders which provide oversight of specific business risks,

and business units for identification and assessment of risks.

including the Financial Risk Management and Operational

Risks are assessed by evaluating the impact and likelihood of

Risk Management committees. These committees perform

the potential risk event after consideration of controls and any

critical reviews of risk assessments, risk management practices

risk transfer activities. The results of these assessments are

and risk response plans developed by business units and

considered relative to risk appetite and tolerances and may

support functions.

result in action plans to adjust the risk profile.

Other oversight accountabilities reside with the Company’s

Risk assessments are monitored and reviewed on an

Legal and Compliance Departments which are responsible

ongoing basis by business units and by oversight areas

for ensuring compliance with policies, laws and regulations.

including the ERM Department. The ERM Department

Third Line of Defence

promotes and coordinates communication and consultation

to support effective risk management and escalation. The

The Internal Audit Department is the third line of defence and

ERM Department regularly reports on the results of risk

provides independent assurance to senior management and

assessments and on the assessment process to the Risk

the Board of Directors on the effectiveness of the Company’s

Management Committee and to the Board Risk Committee.

risk management policies, processes and practices.

Risk Appetite and Risk Principles

Risk Management Culture

Risk management is intended to be everyone’s responsibility

The Risk Management Committee establishes the Company’s

within the organization. The ERM Department engages

appetite for different types of risk through the Risk Appetite

all business units in risk workshops and surveys to foster

Framework. Under the Risk Appetite Framework, one of four

awareness and facilitate incorporation of our risk framework

appetite levels is established for each risk type and business

into our business activities.

activity of the Company. These appetite levels range from

those where the Company has no appetite for risk and seeks

to minimize any losses, to those where the Company readily

accepts exposure while seeking to ensure that risks are well

understood and managed. These appetite levels guide our

business units as they engage in business activities, and

We have an established business planning process which

reinforces our risk management culture. Our compensation

programs are typically objectives-based, and do not encourage

or reward excessive or inappropriate risk taking, and often are

aligned specifically with risk management objectives.

inform them in establishing policies, limits, controls and risk

Our risk management program emphasizes integrity, ethical

transfer activities.

A Risk Appetite Statement and Risk Principles provide further

guidance to business leaders and employees as they conduct

risk management activities. The Risk Appetite Statement’s

emphasis is to maintain the Company’s reputation and

brand, ensure financial flexibility, and focus on mitigating

operational risk.

Risk Management Process

The Company’s risk management process is designed to foster:

• Ongoing assessment of risks and tolerance in a changing

operating environment.

• Appropriate identification and understanding of existing

and emerging risks and risk response.

• Timely monitoring and escalation of risks based upon

changing circumstances.

practices, responsible management and measured risk-taking

with a long-term view. Our standards of integrity and ethics

are reflected within our Code of Conduct which applies to

directors, officers and employees.

Key Risks of the Business

Significant risks that may adversely affect our ability to achieve

strategic and business objectives are identified through our

ongoing risk management process.

We use a consistent methodology across our organizations and

business units to identify and assess risks, considering factors

both internal and external to the organization. These risks are

broadly grouped into five categories: financial, operational,
strategic, business, and environmental and social.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual Report1) Financial Risk

Liquidity and Funding Risk

This is the risk of an inability to generate or obtain sufficient

cash in a timely and cost-effective manner to meet contractual

or anticipated commitments as they come due or arise.

Our liquidity management practices include:

• Maintaining liquid assets and lines of credit to satisfy near

term liquidity needs.

• Ensuring effective controls over liquidity management

processes.

sales under the CMB Program consists of participation in new

CMB issues and reinvestment of principal repayments held in

the Principal Reinvestment Accounts. The Company’s continued

ability to fund residential mortgages through Canadian bank-

sponsored securitization trusts and NHA MBS is dependent on

securitization market conditions and government regulations

that are subject to change. A condition of the NHA MBS and

CMB Program is that securitized loans be insured by an

insurer that is approved by CMHC. The availability of mortgage

insurance is dependent upon market conditions and is subject

to change.

• Performing regular cash forecasts and stress testing.

The Company’s contractual obligations are reflected in

• Regular assessment of capital market conditions and the

Company’s ability to access bank and capital market funding.

Table 29.

The maturity schedule for long-term debt of $2.1 billion

• Ongoing efforts to diversify and expand long-term mortgage

is reflected in the accompanying chart (Long-Term Debt

funding sources.

Maturity Schedule).

• Oversight of liquidity management by the Financial Risk

Management Committee, a committee of finance and other

business leaders.

In addition to IGM Financial’s current balance of cash and

cash equivalents, liquidity is available through the Company’s

lines of credit. The Company’s lines of credit with various

A key funding requirement is the funding of advisor network

Schedule I Canadian chartered banks totalled $825 million at

compensation paid for the distribution of financial products

December 31, 2022, unchanged from December 31, 2021. The

and services. This compensation continues to be paid from

lines of credit at December 31, 2022 consisted of committed

operating cash flows.

The Company also maintains sufficient liquidity to fund and

temporarily hold mortgages pending sale or securitization

to long-term funding sources and to manage any derivative

collateral requirements. Through its mortgage banking

operations, residential mortgages are sold to third parties

lines of $650 million and uncommitted lines of $175 million,

unchanged from December 31, 2021. Any advances made by

a bank under the uncommitted lines of credit are at the bank’s

sole discretion. As at December 31, 2022 and December 31,

2021, the Company was not utilizing its committed lines of

credit or its uncommitted lines of credit.

including certain mutual funds, institutional investors through

The actuarial valuation for funding purposes related to the

private placements, Canadian bank-sponsored securitization

Company’s registered defined benefit pension plan, based

trusts, and by issuance and sale of National Housing Act

on a measurement date of December 31, 2021, was completed.

Mortgage-Backed Securities (NHA MBS) securities including

The valuation determines the plan surplus or deficit on

sales to Canada Housing Trust under the CMB Program.

both a solvency and going concern basis. The solvency basis

The Company maintains committed capacity within certain

determines the relationship between the plan assets and its

Canadian bank-sponsored securitization trusts. Capacity for

liabilities assuming that the plan is wound up and settled on

Table 29: Contractual Obligations

As at December 31, 2022
($ millions)

Derivative financial instruments
Deposits and certificates(1)

Obligations to securitization entities
Leases(2)

Long-term debt
Pension funding(3)

Demand

–

4,332.5

–

Less than
1 Year

21.3

0.3

947.8

31.5

–

2.0

1–5 Years

30.3

0.5

3,651.3

95.5

525.0

–

After
5 Years

–

0.7

11.3

118.8

1,575.0

–

Total

51.6

4,334.0

4,610.4

245.8

2,100.0

2.0

Total contractual obligations

4,332.5

1,002.9

4,302.6

1,705.8

$ 11,343.8

(1) Deposits and certificates due on demand are primarily offset by client funds held on deposit.
(2) Includes remaining lease payments related to office space and equipment used in the normal course of business.
(3) Pension funding requirements beyond 2023 are subject to significant variability and will be determined based on future actuarial valuations. Pension contribution

decisions are subject to change, as contributions are affected by many factors including market performance, regulatory requirements, changes in assumptions and
management’s ability to change funding policy.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisLong-Term Debt Maturity Schedule

($ millions)

525

175

150

200

450

250

200

2023 2024 2025 2026

2027

2028 2029 2030

2031

2032

2033 2034 2035 2036 2037 2038 2039

2040 2041 2042 2043 2044 2045 2046

2047

2048 2049

2050

Year

the valuation date. A going concern valuation compares the

liquidity position and its management of liquidity and funding

relationship between the plan assets and the present value of

risk have not changed materially since December 31, 2021.

the expected future benefit cash flows, assuming the plan will

be maintained indefinitely. Based on the actuarial valuation, the

Credit Risk

registered pension plan had a solvency surplus of $14.4 million

This is the risk of financial loss to the Company if a counterparty

compared to a solvency deficit of $61.3 million in the previous

to a transaction fails to meet its obligations.

actuarial valuation, which was based on a measurement date

of December 31, 2021. The improvement in the funded status

resulted largely from interest rate increases, as well as the

return on plan assets. The registered pension plan had a going

concern surplus of $95.0 million compared to $79.2 million

in the previous valuation. The next actuarial valuation will

be based on a measurement date of December 31, 2022.

During the year, the Company has made cash contributions

of $11.5 million (2021 – $14.3 million). IGM Financial expects

annual contributions of approximately $2.0 million in 2023.

Pension contribution decisions are subject to change, as

contributions are affected by many factors including market

performance, regulatory requirements, changes in assumptions

and management’s ability to change funding policy.

Management believes cash flows from operations, available

The Company’s cash and cash equivalents, other investment

holdings, mortgage portfolios, and derivatives are subject to

credit risk. The Company monitors its credit risk management

practices on an ongoing basis to evaluate their effectiveness.

Cash and Cash Equivalents and Client Funds on Deposit

At December 31, 2022, cash and cash equivalents of

$1,072.9 million (2021 – $1,292.4 million) consisted of cash

balances of $346.3 million (2021 – $326.2 million) on deposit

with Canadian chartered banks and cash equivalents of

$726.6 million (2021 – $966.2 million). Cash equivalents are

comprised of Government of Canada treasury bills totalling

$81.6 million (2021 – $358.7 million), provincial government

treasury bills and promissory notes of $306.8 million (2021 –

$350.6 million), bankers’ acceptances of $293.2 million (2021

cash balances and other sources of liquidity described above

– $198.3 million) and other corporate commercial paper of

are sufficient to meet the Company’s liquidity needs. The

$45.0 million (2021 – $58.6 million).

Company continues to have the ability to meet its operational

cash flow requirements, its contractual obligations, and its

declared dividends. The current practice of the Company is

to declare and pay dividends to common shareholders on a

quarterly basis at the discretion of the Board of Directors.

The declaration of dividends by the Board of Directors is
dependent on a variety of factors, including earnings which

Client funds on deposit of $4,347.4 million (2021 –

$2,238.6 million) represent cash balances held in client

accounts deposited at Canadian financial institutions.

The Company manages credit risk related to cash and cash

equivalents by adhering to its Investment Policy that outlines

credit risk parameters and concentration limits. The Company

are significantly influenced by the impact that debt and equity

market performance has on the Company’s fee income and

regularly reviews the credit ratings of its counterparties.

The maximum exposure to credit risk on these financial

commission and certain other expenses. The Company’s

instruments is their carrying value.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportThe Company’s exposure to and management of credit

Term Income Fund through an agreement to repurchase

risk related to cash and cash equivalents and fixed

mortgages in certain circumstances benefiting the funds.

income securities have not changed materially since

These loans are not recorded on the Company’s balance sheet

December 31, 2021.

Mortgage Portfolio

At December 31, 2022, residential mortgages, recorded on the

Company’s balance sheet, of $5.0 billion (2021 – $5.4 billion)

consisted of $4.6 billion sold to securitization programs (2021

as the Company has transferred substantially all of the risks

and rewards of ownership associated with these loans.

The Company regularly reviews the credit quality of the

mortgages and the adequacy of the allowance for expected

credit losses.

– $5.0 billion), $371.9 million held pending sale or securitization

The Company’s allowance for expected credit losses was

(2021 – $315.8 million) and $12.7 million related to the

$0.8 million at December 31, 2022, an increase of $0.2 million

Company’s intermediary operations (2021 – $13.7 million).

from December 31, 2021, and is considered adequate by

The Company manages credit risk related to residential

mortgages through:

• Adhering to its lending policy and underwriting standards;

• Its loan servicing capabilities;

management to absorb all credit-related losses in the mortgage

portfolios based on: i) historical credit performance experience,

ii) recent trends including increasing interest rates, iii) current

portfolio credit metrics and other relevant characteristics,

iv) our strong financial planning relationship with our clients,

• Use of client-insured mortgage default insurance

and v) stress testing of losses under adverse real estate

and mortgage portfolio default insurance held by the

market conditions.

Company; and

• Its practice of originating its mortgages exclusively through

a network of Mortgage Planning Specialists and IG Wealth

Management advisors as part of a client’s IG Living Plan.

In certain instances, credit risk is also limited by the terms

and nature of securitization transactions as described below:

• Under the NHA MBS program totalling $2.5 billion (2021

– $2.6 billion), the Company is obligated to make timely

payment of principal and coupons irrespective of whether

such payments were received from the mortgage borrower.

However, as required by the NHA MBS program, 100% of

the loans are insured by an approved insurer.

The Company’s exposure to and management of credit risk

related to mortgage portfolios have not changed materially

since December 31, 2021.

Derivatives

The Company is exposed to credit risk through derivative

contracts it utilizes to hedge interest rate risk, to facilitate

securitization transactions and to hedge market risk related

to certain stock-based compensation arrangements. These

derivatives are discussed more fully under the Market Risk

section of this MD&A.

To the extent that the fair value of the derivatives is in

• Credit risk for mortgages securitized by transfer to bank-

a gain position, the Company is exposed to credit risk

sponsored securitization trusts totalling $2.1 billion

that its counterparties fail to fulfil their obligations under

(2021 – $2.4 billion) is limited to amounts held in cash

these arrangements.

reserve accounts and future net interest income, the fair

values of which were $55.2 million (2021 – $67.6 million)

and $21.3 million (2021 – $34.1 million), respectively, at

December 31, 2022. Cash reserve accounts are reflected

on the balance sheet, whereas rights to future net interest

income are not reflected on the balance sheet and will be

recorded over the life of the mortgages.

The Company’s derivative activities are managed in accordance

with its Investment Policy which includes counterparty limits

and other parameters to manage counterparty risk. The

aggregate credit risk exposure related to derivatives that

are in a gain position of $71.2 million (2021 – $39.5 million)

does not give effect to any netting agreements or collateral

arrangements. The exposure to credit risk, considering netting

At December 31, 2022, residential mortgages recorded

agreements and collateral arrangements and including rights to

on balance sheet were 53.3% insured (2021 – 53.1%). At

future net interest income, was $10.5 million at December 31,

December 31, 2022, impaired mortgages on these portfolios

2022 (2021 – $0.7 million). Counterparties are all Canadian

were $2.2 million, compared to $2.8 million at December 31,

Schedule I chartered banks and, as a result, management

2021. Uninsured non-performing mortgages over 90 days

has determined that the Company’s overall credit risk related

on these portfolios were $1.7 million at December 31, 2022,

to derivatives was not significant at December 31, 2022.

compared to $1.5 million at December 31, 2021.

Management of credit risk related to derivatives has not

The Company also retains certain elements of credit risk on

mortgage loans sold to the IG Mackenzie Mortgage and Short

changed materially since December 31, 2021.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisAdditional information related to the Company’s securitization

Obligations to securitization entities. The fair value of these

activities and utilization of derivative contracts can be found in

swaps was $4.7 million (December 31, 2021 – $0.6 million)

Notes 2, 7 and 23 to the Annual Financial Statements.

on an outstanding notional amount of $191.6 million at

Market Risk

This is the risk of loss arising from changes in the values of the

Company’s financial instruments due to changes in interest

rates, equity prices or foreign exchange rates.

Interest Rate Risk

IGM Financial is exposed to interest rate risk on its mortgage

portfolio and on certain of the derivative financial instruments

used in our mortgage banking operations.

December 31, 2022 (December 31, 2021 – $128.6 million).

As at December 31, 2022, the impact to annual net earnings

of a 100 basis point increase in interest rates would have been

a decrease of approximately $1.7 million (December 31, 2021

– decrease of $3.0 million). The Company’s exposure to and

management of interest rate risk have not changed materially

since December 31, 2021.

Equity Price Risk

IGM Financial is exposed to equity price risk on our equity

The Company manages interest rate risk associated with its

investments which are classified as either fair value through

mortgage banking operations by entering into interest rate

swaps with Canadian Schedule I chartered banks as follows:

other comprehensive income or fair value through profit
or loss, and on our investments in associates, which are

• The Company has in certain instances funded floating rate

accounted for using the equity method. The fair value of the

mortgages with fixed rate Canada Mortgage Bonds as part

other investments was $0.8 billion at December 31, 2022

of the securitization transactions under the CMB Program.

(December 31, 2021 – $1.4 billion), as shown in Table 21,

As previously discussed, as part of the CMB Program, the

and the carrying value of the investment in associates was

Company is party to a swap whereby it is entitled to receive

$2.2 billion at December 31, 2022 (December 31, 2021 –

investment returns on reinvested mortgage principal

$2.0 billion), as shown in Table 23.

and is obligated to pay Canada Mortgage Bond coupons.

This swap had a fair value of $20.5 million (December 31,

2021 – $1.0 million) and an outstanding notional amount

of $0.2 billion at December 31, 2022 (December 31, 2021 –

$0.3 billion). The Company enters into interest rate swaps

with Canadian Schedule I chartered banks to hedge the risk

that the interest rates earned on floating rate mortgages

and reinvestment returns decline. The fair value of these

swaps totalled negative $19.6 million (December 31, 2021

– $3.5 million), on an outstanding notional amount of

$1.3 billion at December 31, 2022 (December 31, 2021 –

$1.3 billion). The net fair value of these swaps of $0.9 million

at December 31, 2022 (December 31, 2021 – $4.5 million)

is recorded on the balance sheet and has an outstanding

notional amount of $1.5 billion (December 31, 2021 –

$1.6 billion).

• The Company is exposed to the impact that changes

in interest rates may have on the value of mortgages

committed to or held pending sale or securitization to

long-term funding sources. The Company enters into

interest rate swaps to hedge the interest rate risk related

to funding costs for mortgages held by the Company

pending sale or securitization. Hedge accounting is applied

to the cost of funds on certain securitization activities. The

effective portion of fair value changes of the associated

interest rate swaps are initially recognized in Other

comprehensive income and subsequently recognized in

Wealth Management revenue over the term of the related

The Company sponsors a number of deferred compensation

arrangements for employees where payments to participants

are deferred and linked to the performance of the common

shares of IGM Financial Inc. The Company hedges its exposure

to this risk through the use of forward agreements and total

return swaps.

Foreign Exchange Risk

IGM Financial is exposed to foreign exchange risk on its

investment in ChinaAMC. Changes to the carrying value due

to changes in foreign exchange rates are recognized in Other

comprehensive income. As at December 31, 2022, a 5%

appreciation (depreciation) in Canadian currency relative to

foreign currencies would decrease (increase) the aggregate

carrying value of foreign investments by approximately

$37.2 million ($41.1 million).

The Company’s proportionate share of ChinaAMC’s earnings,

recorded in Proportionate share of associates’ earnings in

the Consolidated Statements of Earnings, is also affected

by changes in foreign exchange rates. For the year ended

December 31, 2022, the impact to net earnings of a 5%

appreciation (depreciation) in Canadian currency relative to

foreign currencies would decrease (increase) the Company’s

proportionate share of associates’ earnings (losses) by

approximately $2.7 million ($3.0 million).

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTable 30: IGM Financial Assets Under Management – Asset and Currency Mix

As at December 31, 2022

Cash

Short-term fixed income and mortgages

Other fixed income

Domestic equity

Foreign equity

Real Property

CAD

USD

Other

Investment
Funds

Total

1.5 %

1.3 %

3.3

22.8

20.5

49.0

2.9

3.5

22.8

25.4

44.7

2.3

100.0 %

54.0 %

58.5 %

32.4

13.6

29.5

12.0

100.0 %

Risks Related to Assets Under
Management and Advisement

At December 31, 2022, IGM Financial’s total assets under

management and advisement were $249.4 billion compared

to $277.1 billion at December 31, 2021.

2) Operational Risk

This is the risk of financial loss, reputational damage or

regulatory actions resulting from inadequate or failed internal

processes or systems, human interaction or external events.

This excludes business risk, which is a separate category in our

The Company’s primary sources of revenues are advisory fees

ERM framework.

and asset management fees which are applied as an annual

percentage of the level of assets under management and

advisement. As a result, the level of the Company’s revenues

and earnings are indirectly exposed to a number of financial

risks that affect the value of assets under management and

advisement on an ongoing basis. These include market risks,

We are exposed to a broad range of operational risks,

including information technology security and system failures,

errors relating to transaction processing, financial models

and valuations, fraud and misappropriation of assets, and

inadequate application of internal control processes.

such as changes in equity prices, interest rates and foreign

Operational risks relating to people and processes are

exchange rates, as well as credit risk on debt securities, loans

mitigated through policies and process controls. Oversight of

and credit exposures from other counterparties within our

risks and ongoing evaluation of the effectiveness of controls

client portfolios.

Changing financial market conditions may also lead to a change

is provided by the Company’s Compliance Department, ERM

Department and Internal Audit Department.

in the composition of the Company’s assets under management

The Company has an insurance review process where it

between equity and fixed income instruments, which could

assesses and determines the nature and extent of insurance

result in lower revenues depending upon the management fee

that is appropriate to provide adequate protection against

rates associated with different asset classes and mandates.

unexpected losses, and where it is required by law, regulators

The Company believes that over the long term, exposure

or contractual agreements.

to investment returns on its client portfolios is beneficial

Operational risk affects all business activities, including

to the Company’s results and consistent with stakeholder

the processes in place to manage other risks. As a result,

expectations, and generally it does not engage in risk transfer

operational risk can be difficult to measure, given that it forms

activities such as hedging in relation to these exposures.

part of other risks of the Company and may not always be

The Company’s exposure to the value of assets under

separately identified.

management and advisement aligns it with the experience of

The Company’s risk management framework emphasizes

its clients. Assets under management are broadly diversified
by asset class, geographic region, industry sector, investment

team and style. The Company regularly reviews the sensitivity

of its assets under management, revenues, earnings and cash

flow to changes in financial markets.

operational risk management and internal control. The
Company has a very low appetite for risk in this area.

The business unit leaders are responsible for management of

the day to day operational risks of their respective business

units. Specific programs, policies, training, standards and

2022 IGM Financial Inc. Annual Report | Management's Discussion and Analysisgovernance processes have been developed to help manage

continues to grow, we continue to enhance resources and

operational risk.

processes to support third party risk management.

The Company has a crisis response plan which outlines crisis

response coordination policies and procedures in the event

of a crisis that could significantly impact the organization’s

reputation, brands or business operations. The Company

executes simulation exercises on a regular basis. The Company

has a crisis assessment team comprised of senior leadership

who are responsible for crisis confirmation and management.

In addition, this team is responsible for setting strategy,

overseeing response and ensuring appropriate subject

matter experts are engaged in the scenario-dependent crisis

response team.

The Company also has a business continuity management

program to enable critical operations and processes to

function in the event of a business disruption.

The Company’s business continuity plan has been effective

at ensuring the Company is able to continue operations and

provide client service with minimal disruptions.

Technology and Cyber Risk

Model Risk

We use a variety of models to assist in: the valuation of financial

instruments, operational scenario testing, management of

cash flows, capital management, and assessment of potential

acquisitions. These models incorporate internal assumptions,

observable market inputs and available market prices. Effective

controls exist over the development, implementation and

application of these models. However, changes in the internal

assumptions or other factors affecting the models could have

an adverse effect on the Company’s consolidated financial

position and reputation.

Legal and Regulatory Compliance Risk

This is the risk of not complying with laws, contractual

agreements or regulatory requirements. These risks relate

to regulation governing product distribution, investment

management, accounting, reporting and communications.

IGM Financial is subject to complex and changing legal, taxation

and regulatory requirements, including the requirements of

We use systems and technology to support business

agencies of the federal, provincial and territorial governments

operations and the client and advisor experience. As a result,

in Canada which regulate the Company and its activities.

we are exposed to risks relating to technology and cyber

The Company and its subsidiaries are also subject to the

security such as data breaches, identity theft and hacking,

requirements of self-regulatory organizations to which they

including the risk of denial of service or malicious software

belong. These and other regulatory bodies regularly adopt new

attacks. The volume of these activities in our society has

laws, rules, regulations and policies that apply to the Company

increased since the onset of COVID-19. Such attacks could

and its subsidiaries. These requirements include those that

compromise confidential information of the Company and

apply to IGM Financial as a publicly traded company and those

that of clients or other stakeholders, and could result in

that apply to the Company’s subsidiaries based on the nature

negative consequences including lost revenue, litigation,

of their activities. They include regulations related to the

regulatory scrutiny or reputational damage. To remain resilient

management and provision of financial products and services,

to such threats, we have established enterprise-wide cyber

including securities, insurance and mortgages, and other

security programs, benchmarked capabilities to sound

activities carried on by the Company in the markets in which

industry practices, and implemented threat and vulnerability

it operates. Regulatory standards affecting the Company and

assessment and response capabilities. Extended duration

the financial services industry are significant and continually

of work from home programs introduces increased need to

evolve. The Company and its subsidiaries are subject to reviews

mitigate risk of potential data loss.

as part of the normal ongoing process of oversight by the

Third Party Risk

We regularly engage third parties to provide expertise and

efficiencies that support our operational activities. Our

exposure to third party service provider risk could include

reputational, regulatory and other operational risks. Policies,

standard operating procedures and dedicated resources,

including a supplier code of conduct and outsourcing policy,

have been developed and implemented to specifically address
third party service provider risk. We perform due diligence

and monitoring activities before entering into contractual

relationships with third-party service providers and on an

ongoing basis. As our reliance on external service providers

various regulators.

Failure to comply with laws, rules or regulations could lead

to regulatory sanctions and civil liability, and may have an

adverse reputational or financial effect on the Company.

The Company manages legal and regulatory compliance risk

through its efforts to promote a strong culture of compliance.

The monitoring of regulatory developments and their impact

on the Company is overseen by the Regulatory Initiatives
Committee chaired by the Executive Vice-President, General

Counsel. The Company also continues to develop and maintain

compliance policies, processes and oversight, including specific

communications on compliance and legal matters, training,

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual Reporttesting, monitoring and reporting. The Audit Committee of

and how to prevent, handle and report privacy breaches,

the Board receives regular reporting on compliance initiatives

complaints and access to information requests.

and issues.

IGM Financial promotes a strong culture of ethics and integrity

through its Code of Conduct approved by the Board of

Directors, which outlines standards of conduct that apply to

all IGM Financial directors, officers and employees. The Code

of Conduct references many policies relating to the conduct

of directors, officers and employees. Other corporate policies

cover anti-money laundering and privacy. Training is provided

on these policies on an annual basis. Individuals subject to

the Code of Conduct attest annually that they understand the

requirements and have complied with its provisions.

Contingencies

The Company is subject to legal actions arising in the normal

course of its business. In December 2018, a proposed

class action was filed in the Ontario Superior Court

against Mackenzie Financial Corporation which alleges that

the company should not have paid mutual fund trailing

commissions to order execution only dealers. In August 2022,

a second proposed class action concerning the same subject

matter was filed against Mackenzie Financial Corporation.

Although it is difficult to predict the outcome of any such legal

actions, based on current knowledge and consultation with

Business units are responsible for management of legal and

legal counsel, management does not expect the outcome

regulatory compliance risk, and implementing appropriate

of any of these matters, individually or in aggregate, to have

policies, procedures and controls. The Compliance Department

a material adverse effect on the Company’s consolidated

is responsible for providing oversight of all regulated

financial position.

compliance activities. The Internal Audit Department also

provides oversight concerning regulatory compliance matters.

3) Strategic Risk

Privacy Risk

Privacy risk is the potential for access to, collection, use,

transfer, disclosure and retention of personal information

in contravention of applicable laws, regulations and/or

This is the risk of potential adverse impacts resulting

from inadequate or inappropriate governance, oversight,

management of incentives and conflicts, regulatory

developments and strategy.

ethical standards. Our clients entrust us with their personal

IGM Financial believes in the importance of good corporate

information, and we have a regulatory and ethical responsibility

governance and the central role played by directors in

to protect it. We collect only the personal information that is

necessary to provide our products and services to clients, and

the governance process. We believe that sound corporate

governance is essential to the well-being of the Company

where we have consent to do so. We do not disclose or share

and our shareholders.

personal information about clients unless required by law,

when necessary to provide products or services to them, or

as otherwise authorized by them.

If we need to share clients’ personal information with
third-party service providers, we remain responsible for

that information and protect it through contractual and other

Oversight of IGM Financial is performed by the Board of

Directors directly and through its five committees. The

Company’s President and Chief Executive Officer has overall

responsibility for management of the Company. The Company’s

activities are carried out principally by three operating

companies – Investors Group Inc., Mackenzie Financial

measures that commit the service providers to maintain levels

Corporation and Investment Planning Counsel Inc. – each of

of protection comparable to ours.

IGM Financial has established an enterprise Privacy Risk

Management Framework to manage privacy risk. Our

Chief Privacy Officer (CPO) leads and oversees our privacy

program, partnering with cross-functional teams to develop

and implement enterprise-wide policies, standards and

controls regarding the handling and safeguarding of personal

information. Ultimately reporting to the CPO, enterprise and

operating company privacy delegates work with front-line

business units to address privacy matters.

Employees and advisors are required to complete mandatory

privacy training at onboarding, and annually thereafter. The

training includes our privacy obligations, privacy best practices,

which are managed by a President and Chief Executive Officer.

The Company also has a strategy execution oversight function

and committee that reviews and approves strategic initiative

business cases and oversees progress against our strategic

priorities and objectives.

The President and Chief Executive Officer of the Company,

in collaboration with the Board of Directors, is responsible

each year to develop, review and update the Company’s

strategic plan. The strategic plan sets out both the annual and

longer-term objectives for the Company in light of emerging
opportunities and risks and with a view to the Company’s

sustained profitable growth and long-term value creation.

The Board is responsible for approving the Company’s overall

2022 IGM Financial Inc. Annual Report | Management's Discussion and Analysisbusiness strategy. In carrying out this responsibility, the Board

4) Business Risk

reviews the short-, medium- and long-term risks associated

with the strategic plan, considers the strengths and potential

weaknesses of trends and opportunities, and approves the

Company’s annual business, financial and capital management

plans. A portion of each Board meeting is dedicated to

General Business Conditions

This risk refers to the potential for unfavourable impacts on

IGM Financial resulting from competitive or other external

factors relating to the marketplace.

discussion of strategic matters including receiving updates

Global economic conditions, changes in equity markets,

on the progress and implementation of the strategic plan.

inflation and demographics can affect investor confidence,

Regulatory Development Risk

This is the potential for changes to regulatory, legal, or tax

requirements that may have an adverse impact on the

Company’s business activities or financial results.

We are exposed to the risk of changes in laws, taxation and

regulation that could have an adverse impact on the Company.
Particular regulatory initiatives may have the effect of making

the products of the Company’s subsidiaries appear to be

less competitive than the products of other financial service

providers, to third party distribution channels and to clients.

Regulatory differences that may impact the competitiveness

of the Company’s products include regulatory costs, tax

income levels and savings. In addition, geopolitical risk,

government instability and other factors can influence

inflation, interest rates, global economic growth, and business

conditions in markets in which the Company operates. These

environments could result in reduced sales of IGM Financial’s

products and services and/or result in investors redeeming

their investments. These factors may also affect the level and

volatility of financial markets and the value of the Company’s

assets under management, as described more fully under

the Risks Related to Assets Under Management section of

this MD&A.

To manage this risk, the Company, across its operating

subsidiaries, communicates with clients and underscores

treatment, disclosure requirements, transaction processes or

the importance of financial planning across economic cycles.

other differences that may be as a result of differing regulation

The Company and the industry continue to take steps to

or application of regulation. Regulatory developments may

educate Canadian investors on the merits of financial planning,

also impact product structures, pricing, and dealer and advisor

diversification and long-term investing. In periods of volatility,

compensation. While the Company and its subsidiaries actively

Wealth Management advisors and independent financial

monitor such initiatives, and where feasible comment upon or

advisors play a key role in assisting investors in maintaining

discuss them with regulators, the ability of the Company and its

perspective and focus on their long-term objectives.

subsidiaries to mitigate the imposition of differential regulatory

treatment of financial products or services is limited.

Redemption rates for long-term funds are summarized in

Table 31 and are discussed in the Wealth Management and

The Company continuously monitors regulatory developments,

the Asset Management Segment Operating Results sections

guidance and communications.

of this MD&A.

Acquisition Risk

Catastrophic Events or Loss

The Company is exposed to risks related to its acquisitions

Catastrophic events or loss refers to the risk that events such

and strategic investments. The Company undertakes thorough

as earthquakes, floods, fire, tornadoes, pandemics, or terrorism

due diligence prior to completing an acquisition, but there

is no assurance that the Company will achieve the expected

strategic objectives or cost and revenue synergies subsequent

to an acquisition. Subsequent changes in the economic

environment and other unanticipated factors may affect the

Company’s ability to achieve expected earnings growth or

expense reductions. The success of an acquisition and of the

Company’s strategic investments is dependent on retaining

assets under management, clients, and key employees of an

acquired company.

could adversely affect the Company’s financial performance.

Catastrophic events can cause economic uncertainty, affect

investor confidence, income levels and financial planning

decisions. This could affect the level and volatility of financial

markets and the level of the Company’s assets under

management and advisement.

Product / Service Offering

This risk refers to the potential for unfavourable impacts on

IGM Financial resulting from inadequate product or service

performance, quality or breadth.

IGM Financial and its subsidiaries operate in a highly

competitive environment, competing with other financial

service providers, investment managers and product and

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTable 31: Twelve Month Trailing Redemption Rate for Long-term Funds

IGM Financial Inc.

IG Wealth Management

Mackenzie

Counsel

2022
Dec. 31

2021
Dec. 31

10.0 %

16.0 %

20.4 %

9.2 %

13.6 %

22.3 %

service types. Client development and retention can be

loss of client accounts which could have an adverse effect on

influenced by a number of factors, including investment

IG Wealth Management’s results of operations and business

performance, products and services offered by competitors,

prospects. IG Wealth Management is focused on strengthening

relative service levels, relative pricing, product attributes,

its distribution network of advisors and on responding to the

reputation and actions taken by competitors. This competition

complex financial needs of its clients by delivering a diverse

could have an adverse impact upon the Company’s financial
position and operating results. Please refer to The Competitive

range of products and services in the context of personalized
financial advice, as discussed in the Wealth Management

Landscape section of this MD&A for further discussion.

Review of the Business section of this MD&A.

We provide Wealth Management advisors, independent

financial advisors, as well as retail and institutional clients

Asset Management – Mackenzie derives the majority of its mutual
fund sales through third party financial advisors. Financial

with a high level of service and support and a broad range

advisors generally offer their clients investment products in

of investment products, with a focus on building enduring

addition to, and in competition with Mackenzie. Mackenzie also

relationships. The Company’s subsidiaries also continually

derives sales of its investment products and services from its

review their respective product and service offering and

strategic alliance and institutional clients. Due to the nature

pricing to ensure competitiveness in the marketplace.

of the distribution relationship in these relationships and the

We strive to deliver strong investment performance on our

products relative to benchmarks and peers. Poor investment

performance relative to benchmarks or peers could reduce

the level of assets under management and sales and asset

retention, as well as adversely impact our brands and

reputation. Meaningful and/or sustained underperformance

could affect the Company’s results. Our objective is to cultivate

investment processes and disciplines that give us a competitive

advantage, and we do this by diversifying our assets under

management and product shelf by investment team, brand,

asset class, mandate, style and geographic region.

Business / Client Relationships

This risk refers to the potential for unfavourable impacts on

IGM Financial resulting from changes to key business or client

relationships. These relationships primarily include IG Wealth

Management clients and advisors, Mackenzie retail distribution,

strategic and significant business partners, clients of Mackenzie

funds, and sub-advisors and other product suppliers.

IG Wealth Management advisor network – IG Wealth Management
derives all of its mutual fund sales through its advisor network.

IG Wealth Management advisors have regular direct contact
with clients which can lead to a strong and personal client

relationship based on the client’s confidence in that individual

advisor. The market for advisors is extremely competitive. The

loss of a significant number of key advisors could lead to the

relative size of these accounts, gross sale and redemption

activity can be more pronounced in these accounts than in a

retail relationship. Mackenzie’s ability to market its investment

products is highly dependent on continued access to these

distribution networks. Lack of access could have a material

adverse effect on Mackenzie’s operating results and business

prospects. Mackenzie is well positioned to manage this risk and

to continue to build and enhance its distribution relationships.

Mackenzie’s diverse portfolio of financial products and its long-

term investment performance record, marketing, educational

and service support has made Mackenzie one of Canada’s

leading investment management companies. These factors

are discussed further in the Asset Management Review of the

Business section of this MD&A.

People Risk

This risk refers to the potential inability to attract or retain

employees or Wealth Management advisors, develop them

to an appropriate level of proficiency, or manage engagement

and personnel succession or transition.

Management, investment and distribution personnel play

an important role in developing, implementing, managing

and distributing products and services offered by IGM

Financial. The loss of these individuals or an inability to

attract, retain and engage sufficient numbers of qualified

personnel could negatively affect IGM Financial’s business

and financial performance.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisWe have a Diversity, Equity and Inclusion Strategy with the

The Company’s Executive Risk Management Committee is

purpose of driving an inclusive, equitable and consistent

responsible for oversight of the risk management process,

experience for employees and clients that supports our

including E&S and climate change risks. Other management

business objectives now and into the future. To achieve the

committees provide oversight of specific risks including the

desired outcomes, we focus on three pillars of action: raising

Sustainability Committee and the Diversity and Inclusion

awareness; improving inclusive leadership behaviours; and

Executive Council. The Sustainability Committee is composed

building external partnerships and community engagement.

of senior executives who are responsible for ensuring

We also have a Wellness Strategy to support our employees’

wellbeing with a goal to ensure our employees are physically

thriving, emotionally balanced, socially connected and

implementation of policy and strategy, establishing goals and

initiatives, measuring progress, and approving annual reporting

for environmental, social and governance (ESG) matters.

financially secure.

Our commitment to responsible management is demonstrated

COVID-19 has caused significant disruption in peoples’ lives

both professionally and personally. The Company’s actions

have included:

• Implementing a work at home strategy to maintain the

health and safety of our employees and advisors through

social distancing.

• Providing tools and processes to enable our employees

and advisors to continue to operate effectively from home.

• Providing various wellness programs including Employee

Assistance Programs, e-Health and other programs

to support the mental and physical well-being of our

employees, advisors, and their families.

• Developing a return to office strategy including the

introduction of a hybrid working model to enhance work

life flexibility and to safely allow employees and advisors

to return to the office when appropriate.

5) Environmental and Social Risk

(Including Climate Change)

This is the potential for financial loss or other unfavourable

impacts resulting from environmental or social (E&S) issues

connected to our business operations, investment activities,

meeting our sustainability commitments, and increasingly for

regulatory compliance. We recognize that E&S risks can be

within our operations or impact stakeholders along our supply

chain, including clients, investee companies and suppliers.

Environmental risks include issues such as climate change,

biodiversity and land use, pollution, waste, and the

unsustainable use of energy, water and other resources.

Social risks include issues such as human rights; labour

standards; diversity, equity and inclusion; Indigenous

reconciliation; and community impacts.

IGM Financial has a long-standing commitment to responsible

management, as articulated in our Corporate Sustainability
Statement approved by the Board of Directors. Through its Risk

Committee, the Board is responsible for ensuring that material

E&S risks are appropriately identified, managed and monitored.

through various mechanisms. These include our Code of

Conduct for employees, contractors, and directors; our

Supplier Code of Conduct; our Workplace Harassment and

Discrimination Prevention Policy; our Diversity Policy; our
Environmental Policy; and other related policies.

IG Wealth Management and Mackenzie Investments, and their

investment sub-advisors, are signatories to the Principles for

Responsible Investment (PRI). Under the PRI, investors formally

commit to incorporate ESG issues into their investment

decision making and active ownership processes. In addition,

IG Wealth Management, Mackenzie Investments and

Investment Planning Counsel have implemented Sustainable

Investment Policies outlining the practices at each company.

IGM Financial reports annually on ESG management and

performance in its Sustainability Report available on our

website. The Company has been recognized for demonstrating

strong ESG performance through positions earned on the

FTSE4Good Index Series, Jantzi Social Index, Corporate Knights’

2023 Global 100 and 2022 Best 50 Corporate Citizens.

IGM Financial is a long-standing participant in the CDP

(formerly Carbon Disclosure Project), which promotes

corporate disclosures on greenhouse gas emissions and

climate change management including setting and monitoring

emission reduction targets. IGM Financial has been recognized

by CDP at the leadership level for the past five years for its

climate disclosures.

Global practices are continually evolving relating to the

identification, analysis, and management of climate risks

and opportunities. The Financial Stability Board’s Task

Force on Climate-related Financial Disclosures (TCFD) was

established in response to investor demand for enhanced

information on climate-related risks and opportunities.

IGM Financial and its operating companies support the TCFD

recommendations which include a framework for consistent,

voluntary climate-related financial disclosures that provide

decision-useful information to investors, analysts, rating

agencies and other stakeholders.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportTCFD Disclosure

to manage climate risks and create innovative solutions to

The TCFD recommends that organizations disclose

information about climate-related risks and opportunities

in four areas: governance, strategy, risk management, and

metrics and targets. Full implementation of TCFD will be a

multi-year journey.

Governance

our ongoing climate issues.

2. Collaborating and engaging to help shape the global transition –
We play a role in bringing climate-smart investment advice

and solutions to clients, helping companies adapt, and

participating in industry and policy advancements.

3. Demonstrating alignment through our corporate actions – We

Our Board is responsible for providing oversight on risk and

will hold ourselves to a similar standard that we expect from

strategy, which includes sustainability and climate-related

the companies we invest in and empower our employees to

matters. The Board meets with management at least annually

stand behind our commitments.

to discuss plans and emerging ESG issues. Through its Risk

Committee, the Board is responsible for ensuring that material

ESG risks are appropriately identified, managed and monitored.

The senior-most leaders at each of our operating companies
have primary ownership and accountability for the ongoing

Our operating companies are active participants in

collaborative industry groups that support our climate

commitments by engaging companies on improving climate

change governance, reducing emissions and strengthening
climate-related financial disclosures. IGM Financial also

climate risk and opportunity management associated with

joined the Partnership for Carbon Accounting Financials

their respective activities. IGM Financial’s Risk Management and

(PCAF) to support our journey to measure and disclose the

Sustainability Committees perform oversight functions, and our

greenhouse gas emissions associated with our mortgage

Chief Risk Officer oversees implementation of the Corporate

loans and investments.

Sustainability and Enterprise Risk Management programs.

Climate-related risks and opportunities are identified and

We have established a cross-functional, enterprise wide

assessed within IGM Financial through our business planning

TCFD Working Group of senior leaders to lead the planning

processes which define our strategic priorities, initiatives and

and implementation of the TCFD recommendations. This

budgets. Our climate-related risks and opportunities can be

working group is focused on enhancing our knowledge and

grouped into the physical impacts of climate change and the

tools to quantify climate risks in tandem with our industry,

impacts related to the transition to a low-carbon economy.

further integrating climate into our business strategy,

operations and product offering, evolving our engagement

approach with investee companies, and addressing increased

disclosure expectations.

The Mackenzie Sustainability Steering Committee is responsible

for approving and governing corporate and sustainability

related policies; approval and oversight for investment

stewardship priorities including climate; approval and

monitoring for targets related to climate change; and evaluation

of progress relative to key performance indicators, strategy

roadmap, and the market.

The IG Wealth Management Sustainable Investing Committee

is responsible for reviewing and approving sustainable investing

and ESG matters including but not limited to evaluating and

considering climate-related risks and opportunities.

Strategy

Through IGM Financial’s wealth and asset management

businesses, the company plays a role in the global transition

to a low-carbon economy. In November 2021, IGM Financial
detailed its climate commitments in a position statement on

our website, with a focus on three key areas:

Risks

Our climate risks relate primarily to the potential for physical

or transition risks to: negatively affect the performance of

our clients’ investments, resulting in reduced fee revenue;

harm our reputation; create market risks through shifts in

product demand; or lead to new regulatory, legal or disclosure

requirements that could affect our business. Diversification

within and across our investment portfolios aids in managing

exposure to any one company, sector or geographic region that

might be exposed to climate-related risks. We are also exposed

to the impact of extreme weather events on our corporate

properties which could lead to business disruption, and on

the valuations of investment properties and client mortgages,

which if not addressed proactively, could affect financial

performance and the ability to use the assets long-term.

Our operating companies are committed to sustainable

investing programs and policies that include a focus on climate

risk. We provide data and tools for our investment teams to

carry out current and forward-looking climate analysis and

we integrate material climate risks into our investment and

oversight processes for investment management sub-advisors.

As part of the hiring process and ongoing assessment of

1. Investing in a greener, climate resilient economy – Our

sub-advisors, our teams request information about how ESG,

investment processes and products give us the opportunity

including climate risks and opportunities, is resourced, what

2022 IGM Financial Inc. Annual Report | Management's Discussion and Analysisprocesses and tools are used, metrics and targets, and how

focused on defining the relationship of climate risk to other

strategy and governance are influenced. As we continue to

material risks.

implement the TCFD recommendations, we are devoting

increased resources to areas such as training, analysis,

metrics, target-setting, strategy planning and working with

collaborative organizations.

Opportunities

We are focused on meeting growing demand for sustainable

investing and the opportunity to invest in the transition to

a net-zero economy. We are also increasing our focus on

educating and communicating with clients and advisors on

sustainable investing and climate change.

At Mackenzie Investments, each boutique investment team is

responsible for determining when and how climate transition

and physical risks are material, and for incorporating these

risks into their investment process. At IG Wealth Management

and IPC, management evaluates the sustainable investing

practices of investment manager sub-advisors, including the

integration of climate risks into their investment and active

ownership practice.

Engagement

To maximize stewardship efforts, engagement at Mackenzie is

At Mackenzie Investments, sustainable investing is an area of

undertaken both internally and by a third-party engagement

strategic emphasis, and we have established a dedicated team
within Mackenzie who bring focus to ESG and climate across

specialist where climate change is a priority engagement
topic. At IPC, a pooled engagement service provider is used

the organization. Mackenzie has two investment boutiques with

to work with companies to enhance corporate behaviour and

this focus; Greenchip and Betterworld. The Greenchip boutique

strategy related to topics including climate change. At IG Wealth

focuses on thematic investing to combat climate change and

Management, investment management sub-advisors including

the Betterworld boutique focuses on solutions centered on

Mackenzie are responsible for engagement activities and

sustainable objectives that incorporate environmental, social

IG Wealth Management monitors their practices as part of

and governance factors.

regular due diligence and oversight.

At IG Wealth Management, we have integrated environmental

Mackenzie Investments is a founding participant in Climate

and climate issues into our sub-advisory selection and

Engagement Canada and participates in CERES’ Investor

oversight processes, and product development strategy. In

Network on Climate Risk. Both Mackenzie and IG joined Climate

October 2021, IG Wealth Management launched its Climate

Action 100+ and became founding signatories to the Canadian

Action Portfolios, a suite of four diversified managed solutions

Investor Statement on Climate Change.

which aim to provide clients with the opportunity to support

and benefit from the global transition to net zero emissions.

Metrics and Targets

Scenarios

We set, monitor and report on climate change-related metrics

and targets annually in our CDP response and our Sustainability

We have implemented a tool for our investment funds to

Report which are available on our website.

enhance our quantitative assessment of climate risks by

analyzing emissions and other climate-related information

at the investee company and portfolio levels. This system

enables us to model potential transition pathways and track

our portfolios against the goal of limiting global warming to

2°C above pre-industrial levels and examine the adequacy of

emissions reductions over time in meeting the goals of the

We currently report Scope 1, 2 and 3 GHG emissions, where

possible, including Scope 3 investment emissions related to

our real assets in the IG Real Property Fund. We are continuing

to expand and enhance our measurement and reporting of

emissions related to our investment portfolios as tools and

information improves.

Paris Agreement. We are exploring scenario analysis tools with

During the year, IGM Financial achieved its 2022 target of

external data providers to support us in our efforts to run

being climate neutral in its corporate offices and travel.

climate-related scenario analysis across our business.

This was achieved by reducing emissions over time, using

Risk Management

renewable energy sources and purchasing carbon offsets.

Mackenzie Investments also set interim targets for investment

Assessment and management of climate-related risks is

portfolios as part of its commitment to the Net Zero Asset

integrated into our ERM framework. We use a consistent

Managers Initiative. The long-term nature of these targets

methodology across our organizations and business units for
identification and assessment of risks, considering factors both

require significant judgement and the Company will provide
updates on its progress through the Sustainability Report

internal and external to the organization. Risks are broadly

and CDP disclosure.

grouped into five categories: financial, operational, strategic,

business, and environmental and social. We are increasingly

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportThe Financial Services Environment

Canadians held $6.5 trillion in discretionary financial assets

Canadian banks distribute financial products and services

with financial institutions at December 31, 2021 based on

through their traditional bank branches, as well as through

the most recent report from Investor Economics. The nature

their full service and discount brokerage subsidiaries. Bank

of holdings was diverse, ranging from demand deposits held

branches continue to place increased emphasis on both

for short-term cash management purposes to longer-term

financial planning and mutual funds. In addition, each of the

investments held for retirement purposes. Approximately

“big six” banks has one or more mutual fund management

64% ($4.1 trillion) of these financial assets are held within

subsidiaries. Collectively, mutual fund assets of the “big six”

the context of a relationship with a financial advisor, and

bank-owned mutual fund managers and affiliated firms

this is the primary channel serving the longer-term savings

represented 46% of total industry long-term mutual fund

needs of Canadians. Of the $2.3 trillion held outside of a

assets at December 31, 2022.

financial advisory relationship, approximately 53% consisted

of bank deposits.

The Canadian mutual fund industry continues to be very

concentrated, with the 10 largest firms and their subsidiaries

Financial advisors represent the primary distribution channel

representing 71% of industry long-term mutual fund assets

for IGM Financial’s products and services, and the core

and 71% of total mutual fund assets under management at

emphasis of our business model is to support these financial

December 31, 2022. We anticipate continuing consolidation

advisors as they work with clients to plan for and achieve their

in this segment of the industry as smaller participants are

financial goals. Multiple sources of emerging research show

acquired by larger organizations.

significantly better financial outcomes for Canadians who use

financial advisors compared to those who do not. We actively

promote the value of financial advice and the importance of a

relationship with an advisor to develop and remain focused on

long-term financial plans and goals.

Approximately 41% of Canadian discretionary financial assets

or $2.6 trillion resided in investment funds at December 31,

2021, making it the largest financial asset class held by

Canadians. Other asset types include deposit products and

We believe that the financial services industry will continue

to be influenced by the following trends:

• Shifting demographics as the number of Canadians in their

prime savings and retirement years continues to increase.

• Changes in investor attitudes based on economic conditions.

• Continued importance of the role of the financial advisor.

• Public policy related to retirement savings.

• Changes in the regulatory environment.

direct securities such as stocks and bonds. Approximately 75%

• A highly competitive landscape.

of investment funds are comprised of mutual fund products,

with other product categories including segregated funds,

hedge funds, pooled funds, closed end funds and exchange

traded funds. With $164 billion in investment fund assets under

• Advancing and changing technology.

The Competitive Landscape

management at December 31, 2022, IGM Financial is among

Our subsidiaries, IG Wealth Management and Investment

the country’s largest investment fund managers. We believe

Planning Counsel, compete directly with other retail financial

that investment funds are likely to remain the preferred savings

service providers in the advice segment, including other

vehicle of Canadians. They offer the benefits of diversification,

financial planning firms, as well as full service brokerages,

professional management, flexibility and convenience, and are

banks and insurance companies. Our asset management

available in a broad range of mandates and structures to meet

subsidiary, Mackenzie Investments, competes directly with

most investor requirements and preferences.

other investment managers for assets under management,

Traditional distinctions between bank branches, full-service

brokerages, financial planning firms and insurance agent sales

and our products compete with stocks, bonds and other asset

classes for a share of Canadians’ investment assets.

forces have become obscured as many of these financial

Competition from other financial service providers, alternative

service providers strive to offer comprehensive financial

product types or delivery channels, and changes in regulations

advice implemented through access to a broad product

or public preferences could impact the characteristics of

shelf. Accordingly, the Canadian financial services industry
is characterized by a number of large, diversified, vertically-

our product and service offerings, including pricing, product
structures, dealer and advisor compensation and disclosure.

integrated participants, similar to IGM Financial, that offer

We monitor developments on an ongoing basis, and engage in

both financial planning and investment management services.

policy discussions and develop product and service responses

as appropriate.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisIGM Financial continues to focus on our commitment to provide

Broad and Diversified Distribution

quality investment advice and financial products, service

innovations, effective and responsible management of the

Company and long-term value for our clients and shareholders.

This includes efforts to modernize our digital platforms and

technology infrastructure to enhance operations, achieve

efficiencies and improve the service experience for our

clients. We believe that IGM Financial is well-positioned

to meet competitive challenges and capitalize on future

growth opportunities.

Our competitive strength includes:

• Broad and diversified distribution through more

than 35,000 financial advisors, with an emphasis on

comprehensive financial planning.

In addition to owning two of Canada’s largest financial planning

organizations, IG Wealth Management and Investment Planning

Counsel, IGM Financial has, through Mackenzie, access to

distribution through over 30,000 independent financial

advisors. Mackenzie also, in its growing strategic alliance

business, partners with global manufacturing and distribution

entities to provide investment management services.

Broad Product Capabilities

Our subsidiaries continue to develop and launch innovative

products and strategic investment planning tools to assist
advisors in building optimized portfolios for clients.

• Broad product capabilities, leading brands and quality

Enduring Client Relationships

sub-advisory relationships.

• Enduring client relationships and the long-standing

heritages and cultures of its subsidiaries.

• Benefits of being part of the Power Corporation group

of companies.

IGM Financial enjoys significant advantages as a result of

the enduring relationships that advisors have developed with

clients. In addition, our subsidiaries have strong heritages

and cultures which are challenging for competitors to replicate.

Part of the Power Corporation
Group of Companies

As part of the Power Corporation group of companies,

IGM Financial benefits through expense savings from shared

service arrangements, as well as through access to distribution,

products and capital.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportCritical Accounting Estimates and Policies

Summary of Critical
Accounting Estimates

The preparation of financial statements in accordance with IFRS

requires management to exercise judgment in the process of

applying accounting policies and requires management to make

estimates and assumptions that affect amounts reported in the

Consolidated Financial Statements and accompanying notes.

In applying these policies, management makes subjective and

complex judgments that frequently require estimates about

matters that are inherently uncertain. Many of these policies

are common in the financial services industry; others are

specific to IGM Financial’s businesses and operations. IGM

Financial’s significant accounting policies are described in

detail in Note 2 of the Consolidated Financial Statements.

Critical accounting estimates relate to the fair value of financial

instruments, goodwill and intangibles, income taxes, capitalized

sales commissions, provisions and employee benefits.

The major critical accounting estimates are summarized below:

• Fair value of financial instruments – The Company’s financial
instruments are carried at fair value, except for loans,

deposits and certificates, obligations to securitization

entities, and long-term debt which are all carried at

amortized cost. The fair value of publicly traded financial

instruments is determined using published market prices.

The fair value of financial instruments where published

market prices are not available, including Corporate

investments and derivatives related to the Company’s

securitized loans, are determined using various valuation

models which maximize the use of observable market inputs

where available. Valuation methodologies and assumptions

used in valuation models are reviewed on an ongoing basis.

Changes in these assumptions or valuation methodologies

could result in significant changes in net earnings.

• Goodwill and intangible assets – Goodwill, indefinite life
intangible assets, and definite life intangible assets

are reflected in Note 12 of the Consolidated Financial

Statements. The Company tests the fair value of goodwill

and indefinite life intangible assets for impairment at least

once a year and more frequently if an event or circumstance

indicates the asset may be impaired. An impairment loss

is recognized if the amount of the asset’s carrying amount

exceeds its recoverable amount. The recoverable amount is

the higher of an asset’s fair value less costs of disposal and
its value in use. For the purposes of assessing impairment,

assets are grouped at the lowest levels for which there

are separately identifiable cash inflows (cash generating

units). Finite life intangible assets are tested for impairment

whenever events or changes in circumstances indicate

that the carrying amounts may not be recoverable.

These tests involve the use of estimates and assumptions

appropriate in the circumstances. In assessing the

recoverable amounts, valuation approaches are used that

include discounted cash flow analysis and application of

capitalization multiples to financial and operating metrics

based upon precedent acquisition transactions and trading

comparables. Assumptions and estimates employed include

future changes in assets under management resulting from

net sales and investment returns, pricing and profit margin

changes, discount rates, and capitalization multiples.

The Company completed its annual impairment tests of

goodwill and indefinite life intangible assets as at April 1,

2022, and determined there was no impairment in the value

of those assets.

• Income taxes – The provision for income taxes is determined
on the basis of the anticipated tax treatment of transactions

recorded in the Consolidated Statements of Earnings. The

determination of the provision for income taxes requires

interpretation of tax legislation in a number of jurisdictions.

Tax planning may allow the Company to record lower income

taxes in the current year and income taxes recorded in

prior years may be adjusted in the current year to reflect

management’s best estimates of the overall adequacy

of its provisions. Any related tax benefits or changes in

management’s best estimates are reflected in the provision

for income taxes. The recognition of deferred tax assets

depends on management’s assumption that future earnings

will be sufficient to realize the future benefit. The amount

of the deferred tax asset or liability recorded is based on

management’s best estimate of the timing of the realization

of the assets or liabilities. If our interpretation of tax

legislation differs from that of the tax authorities or if timing

of reversals is not as anticipated, the provision for income

taxes could increase or decrease in future periods. Additional

information related to income taxes is included in the

Summary of Consolidated Operating Results in this MD&A

and in Note 16 to the Consolidated Financial Statements.

• Capitalized sales commissions – Commissions paid directly by
the client on the sale of certain mutual fund products are

deferred and amortized over a maximum period of seven

years. The Company regularly reviews the carrying value of

capitalized sales commissions with respect to any events
or circumstances that indicate impairment. Among the

tests performed by the Company to assess recoverability

is the comparison of the future economic benefits derived

from the capitalized sales commission asset in relation to

2022 IGM Financial Inc. Annual Report | Management's Discussion and Analysisits carrying value. At December 31, 2022, there were no

plan obligation decreased to $423.9 million at December 31,

indications of impairment to capitalized sales commissions.

2022 from $588.4 million at December 31, 2021, primarily

• Provisions – A provision is recognized when there is a present

obligation as a result of a past transaction or event, it is

“probable” that an outflow of resources will be required

to settle the obligation and a reliable estimate can be

made of the obligation. In determining the best estimate

for a provision, a single estimate, a weighted average of all

possible outcomes, or the midpoint where there is a range

of equally possible outcomes are all considered. A significant

change in assessment of the likelihood or the best estimate

may result in additional adjustments to net earnings.

• Employee benefits – The Company maintains a number of
employee benefit plans. These plans include a funded

registered defined benefit pension plan for all eligible

employees, unfunded supplementary executive retirement

plans for certain executive officers (SERPs) and an unfunded

post-employment health care and life insurance plan for

eligible retirees. The funded registered defined benefit

pension plan provides pensions based on length of service

and final average earnings. The measurement date for the

due to the increase in the discount rate. The defined benefit

pension plan had an accrued benefit asset of $86.8 million

at December 31, 2022 compared to an accrued benefit

liability of $21.7 million at December 31, 2021. Actuarial

gains or losses recorded in Other comprehensive income,

including the defined benefit pension plan, the SERPs and

post-employment benefit plans, were gains of $137.0 million

($100.0 million after tax) for the twelve months ended

December 31, 2022.

A decrease of 0.25% in the discount rate utilized in 2022

would result in a change of $17.9 million in the accrued

pension obligation, $16.0 million in other comprehensive

income, and $1.9 million in pension expense. Additional

information regarding the Company’s accounting and

sensitivities related to pensions and other post-retirement

benefits is included in Notes 2 and 15 of the Consolidated

Financial Statements.

Changes in Accounting Policies

Company’s defined benefit pension plan assets and for the

IGM Financial has not adopted any changes in accounting

accrued benefit obligations on all defined benefit plans is

policies in 2022.

December 31.

Due to the long-term nature of these plans, the calculation

of the accrued benefit asset or liability depends on various

assumptions including discount rates, rates of return on

assets, the level and types of benefits provided, healthcare

cost trend rates, projected salary increases, retirement

age, mortality and termination rates. The discount rate

assumption is determined using a yield curve of AA

corporate debt securities. All other assumptions are

determined by management and reviewed by independent

actuaries who calculate the pension and other future

benefits expenses and accrued benefit obligations. Actual

experience that differs from the actuarial assumptions

will result in actuarial gains or losses as well as changes in

benefits expense. The Company records actuarial gains

and losses on all of its defined benefit plans in Other

comprehensive income.

Discount rates have increased significantly since

December 31, 2021. The discount rate on the Company’s

RPP at December 31, 2022 was 5.25% compared to 3.30%

at December 31, 2021. The pension plan assets decreased

to $510.7 million at December 31, 2022 from $566.7 million

at December 31, 2021 due to declines in the markets partly

offset by contributions. The total defined benefit pension

Future Accounting Changes

The Company continuously monitors the potential changes

proposed by the International Accounting Standards Board

(IASB) and analyzes the effect that changes in the standards

may have on the Company’s operations.

The IASB is currently undertaking a number of projects which

will result in changes to existing IFRS standards that may affect

the Company. Updates will be provided as the projects develop.

IFRS 17 Insurance Contracts

The IASB issued IFRS 17 which requires insurance contracts to

be measured using updated estimates and assumptions that

reflect the timing of cash flows and any uncertainty relating to

insurance contracts and is effective for periods beginning on

or after January 1, 2023. Adoption of this standard is expected

to affect the accounting for the carrying value of the Company’s

investment in Great-West Lifeco Inc. (Lifeco) and the amount

that the Company records for its proportionate share of

associate’s earnings. Additional information of the impact on

Lifeco is available in its public disclosures.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportDisclosure Controls and Procedures

The Company’s disclosure controls and procedures are

The Company’s management, under the supervision of the

designed to provide reasonable assurance that (a) material

President and Chief Executive Officer and the Chief Financial

information relating to the Company is made known to the

Officer, has evaluated the effectiveness of the Company’s

President and Chief Executive Officer and the Chief Financial

disclosure controls and procedures. Based on their evaluations

Officer by others, particularly during the period in which the

as of December 31, 2022, the President and Chief Executive

annual filings are being prepared, and (b) information required

Officer and the Chief Financial Officer have concluded that the

to be disclosed by the Company in its annual filings, interim

Company’s disclosure controls and procedures are effective.

filings or other reports filed or submitted by it under securities

legislation is recorded, processed, summarized and reported

within the time periods specified in securities legislation.

Internal Control Over Financial Reporting

The Company’s internal control over financial reporting is

designed to provide reasonable assurance regarding the

Control – Integrated Framework (COSO 2013 Framework)

published by The Committee of Sponsoring Organizations of

reliability of financial reporting and the preparation of financial

the Treadway Commission. The Company transitioned to the

statements for external purposes in accordance with IFRS. The

COSO 2013 Framework during 2014. Based on their evaluations

Company’s management is responsible for establishing and

as of December 31, 2022, the President and Chief Executive

maintaining adequate internal control over financial reporting.

Officer and the Chief Financial Officer have concluded that the

All internal control systems have inherent limitations and

may become inadequate because of changes in conditions.

Therefore, even those systems determined to be effective can

provide only reasonable assurance with respect to financial

statement preparation and presentation.

The Company’s management, under the supervision of the

President and Chief Executive Officer and the Chief Financial

Officer, has evaluated the effectiveness of the Company’s

internal control over financial reporting based on the Internal

Company’s internal control over financial reporting is effective

in providing reasonable assurance regarding the reliability of

financial reporting and the preparation of financial statements

for external purposes in accordance with IFRS.

Notwithstanding the above, during the fourth quarter of 2022,

there have been no changes in the Company’s internal control

over financial reporting that have materially affected, or are

reasonably likely to materially affect, the Company’s internal

control over financial reporting.

2022 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisOther Information

Transactions with Related Parties

Outstanding Share Data

IGM Financial enters into transactions with The Canada Life

Outstanding common shares of IGM Financial as at

Assurance Company (Canada Life), which is a subsidiary of its

December 31, 2022 totalled 237,668,062. Outstanding

affiliate, Lifeco, which is a subsidiary of Power Corporation

stock options as at December 31, 2022 totalled 11,725,342

of Canada. These transactions are in the normal course of

of which 6,596,299 were exercisable. As at February 3,

operations and have been recorded at fair value:

2022, outstanding common shares totalled 237,780,120

and outstanding stock options totalled 11,575,766 of which

6,461,906 were exercisable.

SEDAR

Additional information relating to IGM Financial, including

the Company’s most recent financial statements and Annual

Information Form, is available at www.sedar.com.

• During 2022 and 2021, the Company provided to and

received from Canada Life certain administrative services

enabling each organization to take advantage of economies

of scale and areas of expertise.

• The Company distributes insurance products under a

distribution agreement with Canada Life and received
$48.7 million in distribution fees (2021 – $52.7 million).

The Company received $61.4 million (2021 – $63.3 million)

and paid $19.5 million (2021 – $22.6 million) to Canada Life

and related subsidiary companies for the provision of sub-

advisory services for certain investment funds. The Company

paid $0.6 million (2021 – $15.5 million) to Canada Life related

to the distribution of certain mutual funds of the Company.

• In order to manage its overall liquidity position, the

Company’s mortgage banking operation is active in the

securitization market and also sells residential mortgage

loans to third parties, on a fully serviced basis. During 2022,

no residential mortgage loans were sold by the Company to

Canada Life, compared to $11.9 million in 2021.

On January 12, 2023, the Company acquired an additional

interest in ChinaAMC from Power and sold a portion of its

investment in Lifeco to Power.

For further information on transactions involving related

parties, see Notes 9, 27 and 29 to the Company’s Consolidated

Financial Statements.

Management's Discussion and Analysis | 2022 IGM Financial Inc. Annual ReportConsolidated Financial Statements

Management’s Responsibility for Financial Reporting

Independent Auditor’s Report

Consolidated Statements of Earnings

Consolidated Statements of Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Changes in Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Note 1 Corporate information

Note 2

Summary of significant accounting policies

Note 3 Revenues from contracts with customers

Note 4

Expenses

Note 5 Other investments

Note 6

Loans

Note 7

Securitizations

Note 8 Other assets

Note 9

Investment in associates

Note 10 Capital assets

Note 11 Capitalized sales commissions

Note 12 Goodwill and intangible assets

Note 13 Deposits and certificates

Note 14 Other liabilities

Note 15 Employee benefits

Note 16

Income taxes

Note 17 Long-term debt

Note 18 Share capital

Note 19 Capital management

Note 20 Share-based payments

Note 21 Accumulated other comprehensive income (loss)

Note 22 Risk management

Note 23 Derivative financial instruments

Note 24 Fair value of financial instruments

Note 25 Earnings per common share

Note 26 Contingent liabilities and guarantees

Note 27 Related party transactions

Note 28 Segmented information

Note 29 Subsequent event

101

102

103

104

105

107

108

109

112

113

114

115

116

117

120

121

124

125

127

2022 IGM Financial Inc. Annual ReportManagement’s Responsibility
for Financial Reporting

The Consolidated Financial Statements of IGM Financial Inc. have been prepared by Management, which is responsible for the

integrity, objectivity and reliability of the information presented, including selecting appropriate accounting principles and making

judgments and estimates. These Consolidated Financial Statements have been prepared in accordance with International Financial

Reporting Standards. Financial information presented elsewhere in this Annual Report is consistent with that in the Consolidated

Financial Statements for comparable periods.

Systems of internal control and supporting procedures are maintained to provide reasonable assurance of the reliability of financial

information and the safeguarding of all assets controlled by the Company. These controls and supporting procedures include

quality standards in hiring and training employees, the establishment of organizational structures providing a well-defined division

of responsibilities and accountability for performance, and the communication of policies and guidelines through the organization.

Internal controls are reviewed and evaluated extensively by the internal auditor and are subject to scrutiny by the external auditors.

Ultimate responsibility for the Consolidated Financial Statements rests with the Board of Directors. The Board is assisted in

discharging this responsibility by an Audit Committee, consisting entirely of independent directors. This Committee reviews the

Consolidated Financial Statements and recommends them for approval by the Board. In addition, the Audit Committee reviews

the recommendations of the internal auditor and the external auditors for improvements in internal control and the action of

Management to implement such recommendations. In carrying out its duties and responsibilities, the Committee meets regularly

with Management and with both the internal auditor and the external auditors to review the scope and timing of their respective

audits, to review their findings and to satisfy itself that their responsibilities have been properly discharged.

Deloitte LLP, independent auditors appointed by the shareholders, have examined the Consolidated Financial Statements of the

Company in accordance with Canadian generally accepted auditing standards, and have expressed their opinion upon the completion

of their examination in their Report to the Shareholders. The external auditors have full and free access to the Audit Committee to

discuss their audit and related findings.

James O’Sullivan
President and

Chief Executive Officer

Keith Potter
Executive Vice-President and

Chief Financial Officer

Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportIndependent Auditor’s Report

To the Shareholders of IGM Financial Inc.

Opinion

We have audited the consolidated financial statements of IGM Financial Inc. (the “Company”), which comprise the consolidated

balance sheets as at December 31, 2022 and 2021, and the consolidated statements of earnings, comprehensive income, changes

in shareholders’ equity and cash flows for the years then ended, and notes to the consolidated financial statements, including

a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company

as at December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with

International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial

statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe

that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the consolidated financial

statements for the year ended December 31, 2022. This matter was addressed in the context of our audit of the consolidated

financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

Other investments – Wealthsimple Financial Corp. (“Wealthsimple”) – Refer to Notes 2, 5 and 24
to the financial statements

Key Audit Matter Description

The Company’s Other investments balance includes an equity investment in Wealthsimple, which is recognized at fair value through

other comprehensive income. Given that Wealthsimple is a private company, significant management judgment is required in the

determination of the fair value of the investment. In determining fair value, a market approach using observable valuation metrics,

including revenue multiples, and a discounted cash flow analysis were considered by management. Significant management judgment

was required in determining the most appropriate valuation approaches and inputs used in each, including revenue multiples applied

in the market approach.

Auditing the fair value of Wealthsimple required a high degree of auditor judgment which resulted in an increased extent of audit

effort, including the use of fair value specialists.

2022 IGM Financial Inc. Annual Report | Consolidated Financial StatementsHow the Key Audit Matter Was Addressed in the Audit

With the assistance of fair value specialists, our audit procedures related to the fair value of Wealthsimple included the following,

among others:

• We evaluated the appropriateness of fair value approaches and developed independent fair value estimates using an independent

market approach by analyzing comparable public company revenue multiples and using revenue and financial forecasts provided

to the Company by Wealthsimple.

• We evaluated relevant internal and external information, including industry information, and assessed the reasonability of

unobservable inputs in instances where these inputs were more subjective.

• We compared the independent fair value estimate to management’s fair value estimate.

• We independently performed a retrospective evaluation and analyzed Wealthsimple’s financial performance using revenue and

financial forecasts provided to the Company by Wealthsimple in order to determine the impact on the fair value determination.

• We evaluated other available information and considered whether this information corroborated or contradicted the

Company’s conclusions.

Other Information

Management is responsible for the other information. The other information comprises:

• Management’s Discussion and Analysis

• The information, other than the financial statements and our auditor’s report thereon, in the Annual Report.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of

assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other

information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial

statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed

on this other information, we conclude that there is a material misstatement of this other information, we are required to report that

fact in this auditor’s report. We have nothing to report in this regard.

The Annual Report is expected to be made available to us after the date of the auditor’s report. If, based on the work we will perform

on this other information, we conclude that there is a material misstatement of this other information, we are required to report that

fact to those charged with governance.

Responsibilities of Management and Those Charged with
Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for

such internal control as management determines is necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either

intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportAuditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect

a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually

or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these

financial statements.

As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism

throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and

perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis

for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,

as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures

made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence

obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s

ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our

auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or

conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the

financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the

Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance

of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit

and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding

independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our

independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in

the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these

matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare

circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing

so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor’s report is David Dalziel.

Chartered Professional Accountants
Winnipeg, Manitoba
February 9, 2023

2022 IGM Financial Inc. Annual Report | Consolidated Financial StatementsConsolidated Statements of Earnings

(in thousands of Canadian dollars, except per share amounts)

For the years ended December 31

Revenues

Wealth management (Note 3)

Asset management

Dealer compensation expense

Net asset management (Note 3)

Net investment income and other

Proportionate share of associates’ earnings (Note 9)

Expenses (Note 4)

Advisory and business development

Operations and support

Sub-advisory

Interest (Note 17)

Earnings before income taxes

Income taxes (Note 16)

Net earnings

Non-controlling interest (Note 9)

Net earnings available to common shareholders

Earnings per share (in dollars) (Note 25)

– Basic

– Diluted

(See accompanying notes to consolidated financial statements)

2022

2021

$ 2,465,306

$ 2,553,600

965,984

(308,871)

1,011,456

(335,970)

657,113

675,486

24,068

210,762

22,542

196,367

3,357,249

3,447,995

1,205,472

1,178,009

839,941

75,125

113,768

806,380

82,020

113,936

2,234,306

2,180,345

1,122,943

1,267,650

250,365

872,578

(5,334)

867,244

3.64

3.63

286,763

980,887

(1,938)

978,949

4.10

4.08

Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportConsolidated Statements of Comprehensive Income

(in thousands of Canadian dollars)

For the years ended December 31

Net earnings

Other comprehensive income (loss), net of tax

Items that will not be reclassified to Net earnings

Fair value through other comprehensive income investments

2022

2021

872,578

980,887

Other comprehensive income (loss) (Note 5), net of tax of $92,009 and $(130,242)

(585,515)

834,519

Employee benefits

Net actuarial gains (losses), net of tax of $(36,950) and $(37,466)

Investment in associates – employee benefits and other

Other comprehensive income (loss), net of tax of nil

Items that may be reclassified subsequently to Net earnings

Investment in associates and other

Other comprehensive income (loss), net of tax of $2,541 and $(4,284)

Total comprehensive income

(See accompanying notes to consolidated financial statements)

100,049

101,283

12,689

23,519

(23,508)

(3,787)

(496,285)

955,534

376,293

$ 1,936,421

2022 IGM Financial Inc. Annual Report | Consolidated Financial StatementsConsolidated Balance Sheets

(in thousands of Canadian dollars)

As at December 31

Assets

Cash and cash equivalents

Other investments (Note 5)

Client funds on deposit

Accounts and other receivables

Income taxes recoverable

Loans (Note 6)

Derivative financial instruments (Note 23)

Other assets (Note 8)

Investment in associates (Note 9)

Capital assets (Note 10)

Capitalized sales commissions (Note 11)

Deferred income taxes (Note 16)

Intangible assets (Note 12)

Goodwill (Note 12)

Liabilities

Accounts payable and accrued liabilities

Income taxes payable

Derivative financial instruments (Note 23)

Deposits and certificates (Note 13)

Other liabilities (Note 14)

Obligations to securitization entities (Note 7)

Lease obligations

Deferred income taxes (Note 16)

Long-term debt (Note 17)

Shareholders’ Equity

Share capital (Note 18)

Common shares

Contributed surplus

Retained earnings

Accumulated other comprehensive income (loss) (Note 21)

Non-controlling interest (Note 9)

These financial statements were approved and authorized for issuance by the Board of Directors on February 9, 2023.

James O’Sullivan
Director

John McCallum
Director

(See accompanying notes to consolidated financial statements)

2022

2021

1,072,892

1,292,446

774,536

4,347,354

368,806

15,544

1,398,023

2,238,624

387,157

17,344

5,021,483

5,353,842

63,665

156,240

41,172

54,298

2,186,961

2,048,255

326,288

372,173

1,419

1,363,642

2,802,173

315,964

325,424

29,269

1,356,704

2,802,066

$ 18,873,176

$ 17,660,588

507,573

553,429

7,122

51,581

4,333,997

355,577

4,610,438

192,793

451,005

104,113

17,773

2,220,274

382,466

5,057,917

197,969

525,476

2,100,000

12,610,086

11,159,417

1,672,799

1,658,680

54,134

51,069

4,106,714

3,856,996

362,766

66,677

883,083

51,343

6,263,090

6,501,171

$ 18,873,176

$ 17,660,588

Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportConsolidated Statements of Changes in Shareholders’ Equity

(in thousands of Canadian dollars)

Share capital
– Common
shares
(Note 18)

Contributed
surplus

Retained
earnings

Accumulated
other
comprehensive
income (loss)
(Note 21)

Non-
controlling
interest

Total
shareholders’
equity

2022

Balance, beginning of year

$ 1,658,680

51,069

$ 3,856,996

883,083

51,343

$ 6,501,171

Net earnings

Other comprehensive income (loss), net of tax

Total comprehensive income

Common shares

Issued under stock option plan

Purchased for cancellation

Stock options

Current period expense

Exercised

Common share dividends

Non-controlling interest

Transfer out of fair value through other
comprehensive income (Note 5)

Common share cancellation excess and other

–

34,429

(20,310)

–

4,941

(1,876)

–

872,578

–

(496,285)

872,578

(496,285)

–

(536,069)

(5,334)

24,032

(105,489)

–

(24,032)

–

15,334

–

872,578

(496,285)

376,293

34,429

(20,310)

4,941

(1,876)

(536,069)

10,000

–

(105,489)

Balance, end of year

$ 1,672,799

54,134

$ 4,106,714

362,766

66,677

$ 6,263,090

2021

Balance, beginning of year

$ 1,598,381

51,663

$ 3,207,469

136,364

48,913

$ 5,042,790

Net earnings

Other comprehensive income (loss), net of tax

Total comprehensive income

Common shares

–

Issued under stock option plan

60,299

–

3,802

(4,396)

–

980,887

–

980,887

–

955,534

–

(537,795)

(1,938)

–

208,815

(208,815)

(442)

–

2,430

–

980,887

955,534

1,936,421

60,299

3,802

(4,396)

(537,795)

492

–

(442)

–

$ 1,658,680

51,069

$ 3,856,996

883,083

51,343

$ 6,501,171

Stock options

Current period expense

Exercised

Common share dividends

Non-controlling interest

Transfer out of fair value through other
comprehensive income (Note 5)

Other

Balance, end of year

(See accompanying notes to consolidated financial statements)

2022 IGM Financial Inc. Annual Report | Consolidated Financial StatementsConsolidated Statements of Cash Flows

(in thousands of Canadian dollars)

For the years ended December 31

Operating activities

Earnings before income taxes

Income taxes paid

Adjustments to determine net cash from operating activities

Capitalized sales commission amortization

Capitalized sales commissions paid

Amortization of capital, intangible and other assets

Proportionate share of associates’ earnings, net of dividends received

Pension and other post-employment benefits

Changes in operating assets and liabilities and other

Cash from operating activities before restructuring provision payments

Restructuring provision cash payments

Financing activities

Net decrease in deposits and certificates

Increase in obligations to securitization entities

Repayments of obligations to securitization entities and other

Repayment of lease obligations

Issue of common shares

Common shares purchased for cancellation

Common share dividends paid

Investing activities

Purchase of other investments

Proceeds from the sale of other investments

Increase in loans

Repayment of loans and other

Net additions to capital assets

Net cash used in additions to intangible assets and other

(Decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

Cash

Cash equivalents

Supplemental disclosure of cash flow information related to operating activities

Interest and dividends received

Interest paid

(See accompanying notes to consolidated financial statements)

2022

2021

$ 1,122,943

$ 1,267,650

(330,869)

(153,501)

77,587

(123,513)

103,994

(106,262)

5,855

(3,680)

746,055

(8,385)

737,670

56,683

(151,022)

99,818

(102,134)

14,403

(38,342)

993,555

(49,965)

943,590

(160)

(3,861)

1,171,025

1,428,861

(1,626,896)

(2,442,698)

(25,592)

42,553

(115,667)

(537,197)

(23,023)

55,904

–

(537,027)

(1,091,934)

(1,521,844)

(150,508)

120,070

(131,778)

348,206

(1,274,427)

(1,776,070)

1,584,354

2,744,676

(37,672)

(107,107)

(10,643)

(75,276)

134,710

1,099,115

(219,554)

1,292,446

520,861

771,585

$ 1,072,892

$ 1,292,446

346,257

326,225

726,635

966,221

$ 1,072,892

$ 1,292,446

253,558

201,741

247,377

221,129

Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportNotes to Consolidated Financial Statements
December 31, 2022 and 2021 (In thousands of Canadian dollars, except shares and per share amounts)

Note 1. Corporate information

IGM Financial Inc. (the Company) is a publicly listed company (TSX: IGM), incorporated and domiciled in Canada. The registered address

of the Company is 447 Portage Avenue, Winnipeg, Manitoba, Canada. The Company is controlled by Power Corporation of Canada.

IGM Financial Inc. is a wealth and asset management company which serves the financial needs of Canadians through its principal

subsidiaries, each operating distinctly within the advice segment of the financial services market. The Company’s wholly-owned

principal subsidiaries are Investors Group Inc. and Mackenzie Financial Corporation (Mackenzie).

Note 2. Summary of significant accounting policies

The Consolidated Financial Statements of the Company have been prepared in accordance with International Financial Reporting

Standards (IFRS), as issued by the International Accounting Standards Board (IASB). The policies set out below were consistently

applied to all the periods presented unless otherwise noted.

Use of judgment, estimates and assumptions

The preparation of financial statements in conformity with IFRS requires management to exercise judgment in the process of

applying accounting policies and requires management to make estimates and assumptions that affect the amounts reported in the

Consolidated Financial Statements. The key areas where judgment has been applied include: the determination of which financial

assets should be derecognized; the assessment of the appropriate classification of financial instruments, including those classified as

fair value through profit or loss; and the assessment that significant influence exists for its investment in associates. Key components

of the financial statements requiring management to make estimates include: the fair value of financial instruments, goodwill,

intangible assets, income taxes, capitalized sales commissions, provisions and employee benefits. Actual results may differ from such

estimates. Further detail of judgments and estimates are found in the remainder of Note 2 and in Notes 5, 7, 9, 11, 12, 14, 15, 16 and 24.

Basis of consolidation

The Consolidated Financial Statements include the accounts of the Company and all subsidiaries on a consolidated basis after

elimination of intercompany transactions and balances. Subsidiaries are entities the Company controls when it is exposed, or has

rights, to variable returns from its involvement and has the ability to affect those returns through its power to direct the relevant

activities of the entity.

The Company’s investments in Great-West Lifeco Inc. (Lifeco), China Asset Management Co., Ltd. (ChinaAMC) and Northleaf Capital

Group Ltd. (Northleaf) are accounted for using the equity method. The investments were initially recorded at cost and the carrying

amounts are increased or decreased to recognize the Company’s share of the investments’ comprehensive income (loss) and the

dividends received since the date of acquisition.

Revenue recognition

Wealth management revenue is earned for providing financial planning, investment advisory and related financial services. Revenues

from financial advisory fees and investment management and related administration fees are based on the net asset value of

investment funds or other assets under advisement and are accrued as services are performed. Distribution revenue associated with

insurance and banking products and services are also recognized on an accrual basis while distribution fees derived from investment
fund and securities transactions are recognized on a trade date basis.

Asset management revenue related to investment management advisory and administrative services is based on the net asset value

of investment funds and other assets under management and is accrued as services are performed.

2022 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsFinancial instruments

All financial assets are initially recognized at fair value in the Consolidated Balance Sheets and are subsequently classified as

measured at fair value through profit or loss (FVTPL), fair value through other comprehensive income (FVTOCI) or amortized cost

based on the Company’s assessment of the business model within which the financial asset is managed and the financial asset’s

contractual cash flow characteristics.

A financial asset is measured at amortized cost if it is held within a business model of holding financial assets and collecting

contractual cash flows and those cash flows are comprised solely of payments of principal and interest. A financial asset is measured

at FVTOCI if the financial asset is held within a business model of both collecting contractual cash flows and selling the financial

assets or through an irrevocable election for equity instruments that are not held for trading. All other financial assets are measured

at FVTPL. A financial asset that would otherwise be measured at amortized cost or FVTOCI can be designated as FVTPL through an

irrevocable election if doing so eliminates or significantly reduces an accounting mismatch.

Financial assets can only be reclassified when there is a change to the business model within which they are managed. Such

reclassifications are applied on a prospective basis.

Financial liabilities are classified either as measured at amortized cost using the effective interest method or as FVTPL, which are

recorded at fair value.

Unrealized gains and losses on financial assets classified as FVTOCI as well as other comprehensive income amounts, including

unrealized foreign currency translation gains and losses related to the Company’s investment in its associates, are recorded in the

Consolidated Statements of Comprehensive Income on a net of tax basis. Accumulated other comprehensive income forms part

of Shareholders’ equity.

Cash and cash equivalents

Cash and cash equivalents comprise cash and temporary investments consisting of highly liquid investments with short-term

maturities. Interest income is recorded on an accrual basis in Net investment income and other in the Consolidated Statements

of Earnings.

Other investments

Other investments, which are recorded on a trade date basis, are classified as either FVTOCI or FVTPL.

The Company has elected to classify certain equity investments that are not held for trading as FVTOCI. Unrealized gains and losses

on these FVTOCI investments are recorded in Other comprehensive income and transferred directly to retained earnings when

realized without being recorded through profit or loss. Dividends declared are recorded in Net investment income and other in the

Consolidated Statements of Earnings.

FVTPL investments are held for trading and are comprised of fixed income and equity investments and investments in proprietary

investment funds. Unrealized and realized gains and losses, dividends declared, and interest income on these investments are

recorded in Net investment income and other in the Consolidated Statements of Earnings.

Loans

Loans are classified as either FVTPL or amortized cost, based on the Company’s assessment of the business model within which the

loan is managed. Revenues from mortgage activities are included in Wealth management revenues in the Consolidated Statement

of Earnings.

Changes in fair value of loans measured at FVTPL are recorded in Wealth management revenue in the Consolidated Statements

of Earnings. Loans measured at amortized cost are recorded net of an allowance for expected credit losses. Interest income is

accounted for on the accrual basis using the effective interest method for all loans and is recorded in Wealth management revenue
in the Consolidated Statements of Earnings.

The Company applies a three-stage impairment approach to measure expected credit losses on loans: 1) On origination, an allowance

for 12-month expected credit losses is established, 2) Lifetime expected credit losses are recognized where there is a significant

deterioration of credit quality, and 3) A loan is considered credit impaired when there is no longer reasonable assurance of collection.

Notes to the Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportDerecognition

The Company enters into transactions where it transfers financial assets recognized on its balance sheet. The determination of

whether the financial assets are derecognized is based on the extent to which the risks and rewards of ownership are transferred.

The gains or losses and the servicing fee revenue for financial assets that are derecognized are reported in Wealth management

revenue in the Consolidated Statements of Earnings. The transactions for financial assets that are not derecognized are accounted

for as secured financing transactions.

Sales commissions

Commissions are paid on investment product sales where the Company either receives a fee directly from the client or where

it receives a fee directly from the investment fund.

Commissions paid on investment product sales where the Company earns fees from a client are capitalized and amortized over their

estimated useful lives, not exceeding a period of seven years. The Company regularly reviews the carrying value of capitalized selling

commissions with respect to any events or circumstances that indicate impairment. Among the tests performed by the Company

to assess recoverability is the comparison of the future economic benefits derived from the capitalized selling commission asset in
relation to its carrying value.

All other commissions paid on investment product sales are expensed as incurred.

Capital assets

Capital assets are comprised of Property and equipment and Right-of-use assets.

Property and equipment

Buildings, furnishings and equipment are amortized on a straight-line basis over their estimated useful lives, which range from 3 to 17

years for equipment and furnishings and 10 to 50 years for the building and its components. Capital assets are tested for impairment

whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Right-of-use assets

A right-of-use asset representing the Company’s property leases is depreciated using the straight-line method from the

commencement date to the end of the lease term and is recorded in Advisory and business development and Operations

and support expenses.

Leases

For contracts that contain a lease, the Company recognizes a right-of-use asset and a lease liability. Imputed interest on the lease

liability is recorded in Interest expense.

Lease payments included in the measurement of the lease liability comprises fixed payments less any lease incentives receivable,

variable payments that depend on an index or a rate, and payments or penalties for terminating the lease, if any. The lease

payments are discounted using the Company’s incremental borrowing rate, which is applied to portfolios of leases with reasonably

similar characteristics.

The Company does not recognize a right-of-use asset or lease liability for leases that, at commencement date, have a lease term of

12 months or less, and leases for which the underlying asset is of low value. The Company recognizes the payments associated with

these leases as an expense on a straight-line basis over the term of the lease.

2022 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsGoodwill and intangible assets

The Company tests the carrying value of goodwill and indefinite life intangible assets for impairment at least once a year and more

frequently if an event or circumstance indicates the asset may be impaired. An impairment loss is recognized if the amount of the

asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs

of disposal or its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there

are separately identifiable cash inflows (cash generating units).

Investment fund management contracts have been assessed to have an indefinite useful life as the contractual right to manage

the assets has no fixed term.

Trade names have been assessed to have an indefinite useful life as they contribute to the revenues of the Company’s integrated

asset management business as a whole and the Company intends to utilize them for the foreseeable future.

Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. Software assets are

amortized over a period not exceeding 7 years and distribution and other management contracts are amortized over a period not

exceeding 20 years. Finite life intangible assets are tested for impairment whenever events or changes in circumstances indicate

that the carrying amounts may not be recoverable.

Employee benefits

The Company maintains a number of employee benefit plans including defined benefit plans and defined contribution pension

plans for eligible employees. These plans are related parties in accordance with IFRS. The Company’s defined benefit plans include

a funded defined benefit pension plan for eligible employees, unfunded supplementary executive retirement plans (SERP) for certain

executive officers, and an unfunded post-employment health care, dental and life insurance plan for eligible retirees.

The defined benefit pension plan provides pensions based on length of service and final average earnings.

The cost of the defined benefit plans is actuarially determined using the projected unit credit method prorated on service based

upon management’s assumptions about discount rates, compensation increases, retirement ages of employees, mortality and

expected health care costs. Any changes in these assumptions will impact the carrying amount of the pension asset. The Company’s

accrued benefit asset or liability in respect of defined benefit plans is calculated separately for each plan by discounting the amount

of the benefit that employees have earned in return for their service in current and prior periods and deducting the fair value of any

plan assets. The Company determines the net interest component of the pension expense for the period by applying the discount

rate used to measure the accrued benefit asset or liability at the beginning of the annual period to the net accrued benefit asset or

liability. The discount rate used to value assets or liabilities is determined using a yield curve of AA corporate debt securities.

If the plan benefits are changed, or a plan is curtailed, any past service costs or curtailment gains or losses are recognized

immediately in net earnings.

Current service costs, past service costs and curtailment gains or losses are included in Operations and support expenses.

Remeasurements arising from defined benefit plans represent actuarial gains and losses and the actual return on plan assets, less

interest calculated at the discount rate. Remeasurements are recognized immediately through Other comprehensive income (OCI)

and are not reclassified to net earnings.

The accrued benefit asset represents the surplus related to defined benefit pension plan and is included in Other assets. The

accrued benefit liability represents the deficit of the SERPs and post-employment health care plan and is included in Other liabilities.

Payments to the defined contribution pension plans are expensed as incurred.

Notes to the Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportShare-based payments

The Company uses the fair value based method to account for stock options granted to employees. The fair value of stock options

is determined on each grant date. Compensation expense is recognized over the period that the stock options vest, with a

corresponding increase in Contributed surplus. When stock options are exercised, the proceeds together with the amount recorded

in Contributed surplus are added to Share capital.

The Company recognizes a liability for cash settled awards including those granted under the Performance Share Unit, Restricted

Share Unit and Deferred Share Unit plans. Compensation expense is recognized over the vesting period, net of related hedges.

The liability is remeasured at fair value at each reporting period.

Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation where a reliable estimate can be made,

and it is probable that an outflow of resources will be required to settle the obligation.

Income taxes

The Company uses the liability method in accounting for income taxes whereby deferred income tax assets and liabilities reflect

the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities and their

tax bases and tax loss carryforwards. Deferred income tax assets and liabilities are measured based on the enacted or substantively

enacted tax rates which are anticipated to be in effect when the temporary differences are expected to reverse.

Earnings per share

Basic earnings per share is determined by dividing Net earnings available to common shareholders by the weighted average number

of common shares outstanding for the year. Diluted earnings per share is determined using the same method as basic earnings per

share except that the average number of common shares outstanding includes the potential dilutive effect of outstanding stock

options granted by the Company as determined by the treasury stock method.

Derivative financial instruments

Derivative financial instruments are utilized by the Company in the management of equity price and interest rate risks. The Company

does not utilize derivative financial instruments for speculative purposes.

The Company formally documents all hedging relationships, as well as its risk management objective and strategy for undertaking

various hedging transactions. This process includes linking all derivatives to specific assets and liabilities on the Consolidated Balance

Sheets or to anticipated future transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing

basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash

flows of hedged items. Derivative financial instruments are recorded at fair value in the Consolidated Balance Sheets.

Derivative financial instruments specifically designated as a hedge and meeting the criteria for hedge effectiveness offset the

changes in fair values or cash flows of hedged items. A hedge is designated either as a cash flow hedge or a fair value hedge. A

cash flow hedge requires the change in fair value of the derivative, to the extent effective, to be recorded in Other comprehensive

income, which is reclassified to the Consolidated Statements of Earnings when the hedged item affects earnings. The change in fair

value of the ineffective portion of the derivative in a cash flow hedge is recorded in the Consolidated Statements of Earnings. A fair

value hedge requires the change in fair value of the hedging derivative and the change in fair value of the hedged item relating to

the hedged risk to both be recorded in the Consolidated Statements of Earnings.

The Company enters into interest rate swaps as part of its mortgage banking and intermediary operations. These swap agreements

require the periodic exchange of net interest payments without the exchange of the notional principal amount on which the

payments are based. Swaps entered into to hedge the costs of funds on certain securitization activities are designated as hedging
instruments (Note 23). The effective portion of changes in fair value are initially recorded in Other comprehensive income and

subsequently recorded in Wealth management revenue in the Consolidated Statements of Earnings over the term of the associated

Obligations to securitization entities. Remaining mortgage related swaps are not designated as hedging instruments and changes in

fair value are recorded directly in Wealth management revenue in the Consolidated Statements of Earnings.

100

2022 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsThe Company also enters into total return swaps and forward agreements to manage its exposure to fluctuations in the total return

of its common shares related to deferred compensation arrangements. Total return swap and forward agreements require the

exchange of net contractual payments periodically or at maturity without the exchange of the notional principal amounts on which

the payments are based. Certain of these derivatives are not designated as hedging instruments and changes in fair value are

recorded in Operations and support expenses in the Consolidated Statements of Earnings.

Derivatives continue to be utilized on a basis consistent with the risk management policies of the Company and are monitored

by the Company for effectiveness as economic hedges even if specific hedge accounting requirements are not met.

Offsetting of financial assets and liabilities

Financial assets and liabilities are offset and the net amount is presented on the Consolidated Balance Sheets when the Company has

a legally enforceable right to set off the recognized amounts and intends to settle on a net basis or to realize the assets and settle the

liabilities simultaneously.

Future accounting changes

The Company continuously monitors changes proposed by the International Accounting Standards Board (IASB) and analyzes the

effect that changes in the standards may have on the Company’s operations.

IFRS 17 Insurance Contracts

The IASB issued IFRS 17 which requires insurance contracts to be measured using updated estimates and assumptions that reflect

the timing of cash flows and any uncertainty relating to insurance contracts and is effective for periods beginning on or after

January 1, 2023. Adoption of this standard is expected to affect the accounting for the carrying value of the Company’s investment

in Great-West Lifeco Inc. (Lifeco) and the amount that the Company records for its proportionate share of associate’s earnings.

Additional information of the impact on Lifeco is available in its public disclosures.

Note 3. Revenues from contracts with customers

Advisory fees

Product and program fees

Redemption fees

Other financial planning revenues

Wealth management

Asset management

Dealer compensation expense

Net asset management

Net revenues from contracts with customers

2022

2021

$ 1,372,815

$ 1,397,859

923,856

961,122

2,296,671

2,358,981

4,005

164,630

10,029

184,590

2,465,306

2,553,600

965,984

(308,871)

1,011,456

(335,970)

657,113

675,486

$ 3,122,419

$ 3,229,086

Wealth management revenue is earned by providing financial planning, investment advisory and related financial services. Advisory

fees, related to financial planning, are associated with assets under management and advisement. Product and program fees, related

to investment management and administration services, are associated with assets under management. Other financial planning

revenues include insurance, banking products and services, and mortgage lending activities.

Asset management revenue, related to investment management advisory and administrative services, depends on the level and

composition of assets under management.

101

Notes to the Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportNote 4. Expenses

Commissions

Salaries and employee benefits

Occupancy

Amortization of capital, intangible and other assets

Other

Sub-advisory

Interest

Note 5. Other investments

Fair value through other comprehensive income (FVTOCI)

Corporate investments

Fair value through profit or loss (FVTPL)

Equity securities

Proprietary investment funds

2022

2021

932,018

918,793

609,341

25,949

103,994

374,111

590,388

27,117

99,818

348,273

2,045,413

1,984,389

75,125

113,768

82,020

113,936

$ 2,234,306

$ 2,180,345

2022

2021

Cost

Fair value

Cost

Fair value

242,704

602,612

226,220

$ 1,291,434

12,689

156,663

169,352

12,933

158,991

171,924

1,173

101,327

102,500

1,552

105,037

106,589

412,056

774,536

328,720

$ 1,398,023

Fair value through other comprehensive income

Corporate investments is primarily comprised of the Company’s investments in Wealthsimple Financial Corp. (Wealthsimple),

and Portag3 Ventures LP, Portag3 Ventures II LP and Portage Ventures III LP (Portage). Portage is an early-stage investment

fund dedicated to backing innovating financial services companies. Portage is controlled by Power Corporation of Canada.

The total fair value of Corporate investments of $602.6 million is presented net of certain costs incurred within the limited

partnership structures holding the underlying investments.

Investment in Wealthsimple

Wealthsimple Financial Corp. (Wealthsimple) is a financial company that provides simple digital tools for growing and managing your

money. The Company’s investment in Wealthsimple is held through a limited partnership controlled by Power Corporation of Canada.

The investment is classified at Fair Value Through Other Comprehensive Income. IGM Financial Inc. holds directly and indirectly a

24% interest in Wealthsimple (2021 – 23%) valued at $492 million at December 31, 2022 (2021 – $1,153 million). The investment in

Wealthsimple decreased $661 million for the twelve months ending December 31, 2022. Fair value is determined by using observable

transactions in the investments’ securities where available, discounted cash flows, and other valuation metrics, including revenue

multiples used in the valuation of comparable public companies. This change in fair value is consistent with changes in stock market

valuations and public market peer multiples, as well as company revenue and other financial forecasts.

In 2022, realized gains of $27.8 million ($24.0 million after-tax) related to Other investments were transferred from Accumulated other

comprehensive income to Other retained earnings. In 2021, IGM Financial Inc. disposed of a portion of its investment in Wealthsimple

and a realized gain of $241 million ($209 million after-tax) was transferred from Accumulated other comprehensive income to Other
retained earnings.

102

2022 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsFair value through profit or loss

Proprietary investment funds

The Company manages and provides services and earns management and administration fees, in respect of investment funds

that are not recognized in the Consolidated Balance Sheets. As at December 31, 2022, there were $163.6 billion in investment fund

assets under management (2021 – $184.5 billion). The Company’s investments in proprietary investment funds are classified on the

Company’s Consolidated Balance Sheets as fair value through profit or loss. These investments are generally made in the process

of launching a new fund and are sold as third-party investors subscribe. The Company’s maximum exposure to loss is limited to its

direct investment in the proprietary investment funds.

Certain investment funds are consolidated where the Company has made the assessment that it controls the investment fund.

As at December 31, 2022, the underlying investments related to these consolidated investment funds primarily consisted of cash

and short-term investments of $14.6 million (2021 – $25.1 million), equity securities of $97.5 million (2021 – $50.9 million) and

fixed income securities of $22.3 million (2021 – $13.0 million). The underlying securities of these funds are classified as FVTPL

and recognized at fair value.

Note 6. Loans

Amortized cost

Residential mortgages

Less: Allowance for expected credit losses

Fair value through profit or loss

The change in the allowance for expected credit losses is as follows:

Balance, beginning of year

Write-offs, net of recoveries

Expected credit losses

Balance, end of year

1 year
or less

Contractual maturity

1 – 5
years

Over
5 years

2022
Total

2021
Total

963,837

$ 4,056,068

2,393

$ 5,022,298

$ 5,297,054

815

648

5,021,483

5,296,406

–

57,436

$ 5,021,483

$ 5,353,842

648

(689)

856

815

778

(407)

277

648

Total credit impaired loans as at December 31, 2022 were $2,159 (2021 – $2,822).

Total interest income on loans was $138.8 million (2021 – $154.7 million). Total interest expense on obligations to securitization

entities, related to securitized loans, was $102.8 million (2021 – $111.4 million). Losses realized on the sale of residential mortgages

totalled $3.5 million (2021 – gains of $3.9 million). Fair value adjustments related to mortgage banking operations totalled negative

$3.1 million (2021 – positive $1.4 million). These amounts were included in Wealth management revenue. Wealth management

revenue also includes other mortgage banking related items including portfolio insurance, issue costs, and other items.

103

Notes to the Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportNote 7. Securitizations

The Company securitizes residential mortgages through the Canada Mortgage and Housing Corporation (CMHC) sponsored

National Housing Act Mortgage-Backed Securities (NHA MBS) Program and Canada Mortgage Bond (CMB) Program and through

Canadian bank-sponsored asset-backed commercial paper (ABCP) programs. These transactions do not meet the requirements for

derecognition as the Company retains prepayment risk and certain elements of credit risk. Accordingly, the Company has retained

these mortgages on its balance sheets and has recorded offsetting liabilities for the net proceeds received as Obligations to

securitization entities which are recorded at amortized cost.

The Company earns interest on the mortgages and pays interest on the obligations to securitization entities. As part of the CMB

transactions, the Company enters into a swap transaction whereby the Company pays coupons on CMBs and receives investment

returns on the NHA MBS and the reinvestment of repaid mortgage principal. A component of this swap, related to the obligation to

pay CMB coupons and receive investment returns on repaid mortgage principal, and the hedging swap used to manage exposure to

changes in variable rate investment returns, are recorded as derivatives with a fair value of $0.9 million at December 31, 2022 (2021 –

$4.5 million).

All mortgages securitized under the NHA MBS and CMB Program are insured by CMHC or another approved insurer under the

program. As part of the ABCP transactions, the Company has provided cash reserves for credit enhancement which are recorded

at cost. Credit risk is limited to these cash reserves and future net interest income as the ABCP Trusts have no recourse to the

Company’s other assets for failure to make payments when due.

2022

Carrying value

NHA MBS and CMB Program

Bank sponsored ABCP

Total

Fair value

2021

Carrying value

NHA MBS and CMB Program

Bank sponsored ABCP

Total

Fair value

Securitized
mortgages

Obligations to
securitization
entities

$ 2,494,400

$ 2,459,828

2,143,241

2,150,610

$ 4,637,641

$ 4,610,438

$ 4,532,493

$ 4,544,609

$ 2,653,682

$ 2,651,293

2,371,320

2,406,624

$ 5,025,002

$ 5,057,917

$ 5,083,991

$ 5,146,420

Net

34,572

(7,369)

27,203

(12,116)

2,389

(35,304)

(32,915)

(62,429)

The carrying value of Obligations to securitization entities, which is recorded net of issue costs, includes principal payments received

on securitized mortgages that are not due to be settled until after the reporting period. Issue costs are amortized over the life of the

obligation on an effective interest rate basis.

Note 8. Other assets

Accrued benefit asset (Note 15)

Deferred and prepaid expenses

Other

2022

86,779

56,412

13,049

2021

–

52,225

2,073

156,240

54,298

Total other assets of $33.1 million as at December 31, 2022 (2021 – $29.6 million) are expected to be realized within one year.

104

2022 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsNote 9. Investment in associates

2022

Balance, beginning of year

Additions

Dividends

Proportionate share of:

Earnings

Other comprehensive income (loss) and other adjustments

Balance, end of year

2021

Balance, beginning of year

Additions

Dividends

Proportionate share of:

Earnings

Other comprehensive income (loss) and other adjustments

Lifeco

ChinaAMC

Northleaf

Other

Total

$ 1,020,700

768,724

258,831

–

$ 2,048,255

–

(73,181)

(31,319)

–

40,430

–

40,430

(104,500)

128,227

(521)

57,231

(7,465)

25,668 (1)

–

(364)

–

210,762

(7,986)

$ 1,075,225

787,171

284,499

40,066

$ 2,186,961

962,388

720,282

248,498

–

(67,356)

(26,877)

125,103

565

61,574

13,745

643

–

9,690 (1)

–

$ 1,931,168

643

(94,233)

196,367

14,310

$ 2,048,255

Balance, end of year

$ 1,020,700

768,724

258,831

(1) The Company’s proportionate share of Northleaf’s earnings, net of Non-controlling interest, was $20,534 in 2022 (2021 – $7,752).

The Company uses the equity method to account for its investments in associates, which include Great-West Lifeco Inc. (Lifeco),

China Asset Management Co., Ltd. (ChinaAMC) and Northleaf Capital Group Ltd. (Northleaf), as it exercises significant influence.

On January 12, 2023, the Company acquired an additional 13.9% interest in ChinaAMC from Power Corporation of Canada (Power)

and sold a portion of its investment in Lifeco to Power (Note 29).

Great-West Lifeco Inc. (Lifeco)

Lifeco is a publicly listed company that is incorporated and domiciled in Canada and is controlled by Power Corporation of Canada.

Lifeco is a financial services holding company with interests in the life insurance, health insurance, retirement savings, investment

management and reinsurance businesses, primarily in Canada, the United States, Europe and Asia.

At December 31, 2022, the Company held 37,337,133 (2021 – 37,337,133) shares of Lifeco, which represented an equity interest

of 4.0% (2021 – 4.0%). Significant influence arises from several factors, including but not limited to the following: common control

of Lifeco by Power Corporation of Canada, directors common to the boards of the Company and Lifeco, certain shared strategic

alliances and significant intercompany transactions that influence the financial and operating policies of both companies. The

Company’s proportionate share of Lifeco’s earnings is recorded in the Consolidated Statements of Earnings.

The fair value of the Company’s investment in Lifeco totalled $1,168.3 million at December 31, 2022 (2021 – $1,415.5 million). The
Company has elected to apply the exemption in IFRS 4 Insurance Contracts to retain Lifeco’s relevant accounting policies related
to Lifeco’s deferral of the adoption of IFRS 9 Financial Instruments.

Lifeco directly owned 9,200,000 shares of the Company at December 31, 2022 (2021 – 9,200,000).

Lifeco’s financial information as at December 31, 2022 can be obtained in its publicly available information.

105

Notes to the Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportChina Asset Management Co., Ltd. (ChinaAMC)

ChinaAMC is an asset management company established in Beijing, China and is controlled by CITIC Securities Company Limited.

As at December 31, 2022, the Company held a 13.9% ownership interest in ChinaAMC (2021 – 13.9%). Significant influence arises

from board representation, participating in the policy making process, shared strategic initiatives including joint product launches

and collaboration between management and investment teams.

The following table sets forth certain summary financial information from ChinaAMC:

(millions)

As at December 31

Total assets

Total liabilities

For the year ended December 31

Revenue

Net earnings available to common shareholders

Total comprehensive income

Northleaf Capital Group Ltd. (Northleaf)

Canadian
Dollars

3,461

1,032

1,446

418

434

2022

Chinese
Yuan

17,650

5,261

7,475

2,163

2,248

Canadian
Dollars

3,241

996

1,560

449

444

2021

Chinese
Yuan

16,295

5,007

8,015

2,312

2,287

The Company, through an acquisition vehicle held by the Company’s subsidiary, Mackenzie, holds a 49.9% voting interest and a 70%

economic interest in Northleaf. The acquisition vehicle is owned 80% by Mackenzie and 20% by Lifeco. Northleaf is a global private

equity, private credit and infrastructure fund manager headquartered in Toronto.

Mackenzie and Lifeco have an obligation and right to purchase the remaining economic and voting interest in Northleaf commencing

in approximately five years from the acquisition date and extending into future periods. The equity method is used to account

for the acquisition vehicle’s 70% economic interest as it exercises significant influence. Significant influence arises from board

representation, participation in the policy making process and shared strategic initiatives.

The Company controls the acquisition vehicle and therefore recognizes the full 70% economic interest in Northleaf and recognizes

Non-controlling interest (NCI) related to Lifeco’s net interest in Northleaf of 14%.

The following table sets forth certain summary financial information from Northleaf:

(millions)

As at December 31

Total assets

Total liabilities

For the year ended December 31

Revenue

Net earnings available to common shareholders

Total comprehensive income

2022

2021

160.3

113.2

119.6

106.0

137.0

40.7

99.8

17.9

106

2022 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsNote 10. Capital assets

2022

Cost

Less: accumulated amortization

Changes in capital assets:

Balance, beginning of year

Additions

Disposals

Amortization

Balance, end of year

2021

Cost

Less: accumulated amortization

Changes in capital assets:

Balance, beginning of year

Additions

Disposals

Amortization

Balance, end of year

Note 11. Capitalized sales commissions

Cost

Less: accumulated amortization

Changes in capitalized sales commissions

Balance, beginning of year

Changes due to:

Sales of investment funds

Amortization

Balance, end of year

Furniture and
equipment

Building and
components

Right-of-use
assets

Total

353,374

(252,558)

100,816

69,592

(19,915)

49,677

81,423 $

51,105

37,325

(1,163)

(16,769)

243

–

280,946

(105,151)

175,795

183,436

20,416

–

703,912

(377,624)

326,288

315,964

57,984

(1,163)

(46,497)

(1,671)

(28,057)

100,816

49,677

175,795

326,288

336,025

(254,602)

81,423

99,036

9,296

(9,166)

(17,743)

69,349

(18,244)

51,105

51,411

1,339

–

260,530

(77,094)

183,436

179,243

32,658

–

(1,645)

(28,465)

665,904

(349,940)

315,964

329,690

43,293

(9,166)

(47,853)

81,423

51,105

183,436

315,964

2022

2021

585,363

(213,190)

372,173

325,424

124,336

(77,587)

46,749

461,149

(135,725)

325,424

231,085

151,022

(56,683)

94,339

372,173

325,424

107

Notes to the Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportNote 12. Goodwill and intangible assets

2022

Cost

Less: accumulated amortization

Changes in goodwill and intangible assets:

Balance, beginning of year

Additions

Disposals

Amortization

Finite life

Distribution
and other
management
contracts

Investment
fund
management
contracts

Indefinite life

Trade names

Total
intangible
assets

Goodwill

289,286

(113,219)

176,067

170,632

20,082

(223)

(14,424)

740,559

–

740,559

–

285,177

$ 1,680,340

$ 2,802,173

–

(316,698)

–

285,177

$ 1,363,642

$ 2,802,173

285,177

$ 1,356,704

$ 2,802,066

–

60,346

(225)

(53,183)

107

–

Software

365,318

(203,479)

161,839

160,336

40,264

(2)

(38,759)

Balance, end of year

161,839

176,067

740,559

285,177

$ 1,363,642

$ 2,802,173

2021

Cost

Less: accumulated amortization

Changes in goodwill and intangible assets:

Balance, beginning of year

Additions

Disposals

Amortization

325,123

(164,787)

160,336

155,923

38,865

(19)

(34,433)

270,327

(99,695)

170,632

139,931

44,072

(867)

(12,504)

740,559

–

740,559

–

285,177

$ 1,621,186

$ 2,802,066

–

(264,482)

–

285,177

$ 1,356,704

$ 2,802,066

285,177

$ 1,321,590

$ 2,803,075

–

82,937

(886)

(46,937)

(1,009)

–

Balance, end of year

160,336

170,632

740,559

285,177

$ 1,356,704

$ 2,802,066

The goodwill and indefinite life intangible assets consisting of investment fund management contracts and trade names are allocated

to each cash generating unit (CGU) as summarized in the following table:

Wealth Management

Asset Management

Total

2022

Indefinite life
intangible
assets

Goodwill

2021

Indefinite life
intangible
assets

Goodwill

$ 1,491,687

23,055

$ 1,491,687

23,055

1,310,486

1,002,681

1,310,379

1,002,681

$ 2,802,173

$ 1,025,736

$ 2,802,066

$ 1,025,736

The Company tests whether goodwill and indefinite life intangible assets are impaired by assessing the carrying amounts with the

recoverable amounts. The recoverable amount of the Company’s CGUs is based on the best available evidence of fair value less costs

of disposal.

In assessing the recoverable amounts, valuation approaches are used that may include discounted cash flow analysis and application

of capitalization multiples to financial and operating metrics based upon precedent acquisition transactions and trading comparables.

Assumptions and estimates employed in discounted cash flows include future changes in assets under management resulting from

net sales and investment returns, pricing and profit margin changes and discount rates, which represent level 3 fair value inputs.

Valuation multiples may include price-to-earnings or other conventionally used measures for investment managers or other financial

service providers (multiples of value to assets under management, revenues, or other measures of profitability). This assessment

may give regard to a variety of relevant considerations, including expected growth, risk and capital market conditions, among other

factors. The valuation multiples used in assessing fair value represent Level 2 fair value inputs.

The fair value less costs of disposal of the Company’s CGUs was compared with the carrying amount and it was determined there was

no impairment. Changes in assumptions and estimates used in determining the recoverable amounts of CGUs can result in significant

adjustments to the valuation of the CGUs.

108

2022 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsNote 13. Deposits and certificates

Deposits and certificates are classified as other financial liabilities measured at amortized cost.

Included in the assets of the Consolidated Balance Sheets are cash and cash equivalents, client funds on deposit and loans

amounting to $4,334.0 million (2021 – $2,220.3 million) related to deposits and certificates.

Deposits

Certificates

Note 14. Other liabilities

Dividends payable

Interest payable

Accrued benefit liabilities (Note 15)

Provisions

Other

Term to maturity

Demand

1 year or less

1–5 years

Over 5 years

2022
Total

2021
Total

$ 4,332,493

–

$ 4,332,493

–

350

–

487

–

$ 4,332,493

$ 2,218,611

667

1,504

1,663

667

$ 4,333,997

$ 2,220,274

2022

2021

133,688

134,816

36,659

81,367

18,356

85,507

26,775

125,732

26,674

68,469

355,577

382,466

The Company establishes restructuring provisions related to business acquisitions, divestitures and other items, as well as other

provisions in the normal course of its operations. Changes in provisions during 2022 consisted of additional estimates of $3.2 million

(2021 – $7.3 million), provision reversals of $1.5 million (2021 – $4.0 million) and payments of $10.0 million (2021 – $54.1 million).

Total other liabilities of $235.6 million as at December 31, 2022 (2021 – $244.9 million) are expected to be settled within one year.

Note 15. Employee benefits

Defined benefit plans

The Company maintains a number of employee pension and post-employment benefit plans. These plans include a funded

registered defined benefit pension plan for all eligible employees, unfunded supplementary executive retirement plans (SERPs)

for certain executive officers, and an unfunded post-employment health care, dental and life insurance plan for eligible retirees.

Effective July 1, 2012, the defined benefit pension plan was closed to new members. For all eligible employees hired after July 1, 2012,

the Company has a registered defined contribution pension plan.

The defined benefit pension plan is a separate trust that is legally separated from the Company. The defined benefit pension plan is

registered under the Pension Benefits Act of Manitoba (Act) and the Income Tax Act (ITA). As required by the Act, the defined benefit

pension plan is governed by a pension committee which includes current and retired employees. The Pension Committee has certain

responsibilities as described in the Act but may delegate certain activities to the Company. The ITA governs the employer’s ability to

make contributions and also has parameters that the plan must meet with respect to investments in foreign property.

The defined benefit pension plan provides lifetime pension benefits to all eligible employees based on length of service and final

average earnings subject to limits established by the ITA. Death benefits are available on the death of an active member or a
retired member.

Employees who are not senior officers are required to make annual contributions based on a percentage of salaries which are

subject to a maximum amount.

109

Notes to the Consolidated Financial Statements | 2022 IGM Financial Inc. Annual ReportThe actuarial valuation for funding purposes related to the Company’s registered defined benefit pension plan, based on a

measurement date of December 31, 2021, was completed. The valuation determines the plan surplus or deficit on both a solvency

and going concern basis. The solvency basis determines the relationship between the plan assets and its liabilities assuming that

the plan is wound up and settled on the valuation date. A going concern valuation compares the relationship between the plan

assets and the present value of the expected future benefit cash flows, assuming the plan will be maintained indefinitely. Based

on the actuarial valuation, the registered pension plan had a solvency surplus of $14.4 million compared to a solvency deficit of

$61.3 million in the previous actuarial valuation, which was based on a measurement date of December 31, 2021. The improvement

in the funded status resulted largely from interest rate increases, as well as the return on plan assets. The registered pension plan

had a going concern surplus of $95.0 million compared to $79.2 million in the previous valuation. The next actuarial valuation will be

based on a measurement date of December 31, 2022. During the year, the Company has made contributions of $11.4 million (2021 –

$13.6 million). The Company expects annual contributions of approximately $2.0 million in 2023. Pension contribution decisions are

subject to change, as contributions are affected by many factors including market performance, regulatory requirements, changes

in assumptions and management’s ability to change funding policy.

The SERPs are non-registered, non-contributory defined benefit plans which provide supplementary benefits to certain

retired executives.

The other post-employment benefit plan is a non-contributory plan and provides eligible employees a reimbursement of medical

costs or a fixed amount per year to cover medical costs during retirement.

The SERPs and other post-employment benefit plans are managed by the Company with oversight from the Board of Directors.

The defined benefit plans expose the Company to actuarial risks such as mortality risk which represents life expectancy and impacts

the calculation of the obligations; interest rate risk which impacts the discount rate used to calculate the obligations and the actual

return on plan assets; salary risk as estimated salary increases are used in the calculation of the obligations; and investment risk as

the nature of the investments impact the actual return on the plan assets. The risks are managed by regular monitoring of the plans,

applicable regulations and other factors that could impact the Company’s expenses and cash flows.

Plan assets, benefit obligations and funded status:

Fair value of plan assets

Balance, beginning of year

Employee contributions

Employer contributions

Benefits paid

Interest income

Additions

Remeasurements:

Return on plan assets

Balance, end of year

Accrued benefit obligation

Balance, beginning of year

Benefits paid

Current service cost

Employee contributions

Interest expense

Additions

Remeasurements:

Actuarial losses (gains)

Experience adjustments

Financial assumptions

Balance, end of year

2022

Other post-
employment
benefits

SERPs

Defined
benefit
pension plan

SERPs

2021

Other post-
employment
benefits

Defined
benefit
pension plan

566,727

1,810

11,438

(30,590)

18,613

998

(58,266)

510,730

588,351

(30,590)

21,027

1,810

19,094

998

–

71,557

(5,808)

1,971

–

2,069

–

(2,506)

(174,233)

423,951

(1,048)

(12,657)

56,084

–

32,551

(3,722)

344

–

931

–

708

(5,529)

25,283

516,945

1,964

13,598

(27,748)

13,774

–

48,194

566,727

650,064

(27,748)

25,707

1,964

17,177

–

(3,348)

(75,465)

588,351

–

74,825

(3,853)

2,107

–

1,668

–

1,861

(5,051)

71,557

–

42,135

(2,671)

679

–

960

–

(6,402)

(2,150)

32,551

Accrued benefit asset (liability)

86,779

(56,084)

(25,283)

(21,624)

(71,557)

(32,551)

110

2022 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsSignificant actuarial assumptions used to calculate the defined benefit obligation:

Discount rate

Rate of compensation increase
Health care cost trend rate(1)

Defined
benefit
pension plan

5.25%

3.75%

N/A

SERPs

5.25%-5.30%

3.75%

N/A

2022

Other post-
employment
benefits

5.25%

N/A

5.40%

Defined benefit
pension plan

3.30%

3.75%

N/A

SERPs

2.65%-3.10%

3.75%

N/A

2021

Other post-
employment
benefits

3.00%

N/A

5.50%

Mortality rates at age 65 for current pensioners

23.1 years

(1) Trending to 4.00% in 2040 and remaining at that rate thereafter.

The weighted average duration of the pension plan’s defined benefit obligation at the end of the reporting period is 15.7 years

(2021 – 20.7 years).

Benefit expense:

Current service cost

Net interest cost

Sensitivity analysis:

Defined
benefit
pension plan

21,027

481

21,508

2022

Other post-
employment
benefits

Defined
benefit
pension plan

344

931

1,275

25,707

3,403

29,110

SERPs

1,971

2,069

4,040

2021

Other post-
employment
benefits

679

960

1,639

SERPs

2,107

1,668

3,775

The calculation of the accrued benefit liability and the related benefit expense are sensitive to the significant actuarial assumptions.

The following table presents the sensitivity analysis:

Defined benefit pension plan

Discount rate (+ / - 0.25%)

Increase

Decrease

Rate of compensation (+ / - 0.25%)

Increase

Decrease

Mortality

Increase 1 year

SERPs

Discount rate (+ / - 0.25%)

Increase

Decrease

Rate of compensation (+ / - 0.25%)

Increase

Decrease

Mortality

Increase 1 year