IGM Financial Annual Report 2023

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FY2023 Annual Report · IGM Financial

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Bettering
the lives of
Canadians

2023 Annual Report
IGM Financial | TSX: IGM

Contents

3 Our purpose
4 2023 highlights
Letter to
6
shareholders

Wealth
management
highlights

Asset
management
highlights

14 Our people
16

Our commitment
to sustainability

17 Management’s
discussion and
analysis

92 Consolidated
financial
statements

IGM Financial brings together the best
of wealth and asset management.

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 our
clients meet their financial goals. The company’s wealth and
asset management businesses are complemented by strategic
partnerships that create value for shareholders by diversifying
earnings and expanding capabilities.

Reasons to invest

• Operating companies remain strong and positioned for
growth, gaining momentum with their respective wealth
and asset management strategies

• Diversification through our strategic partners provides

additional growth and knowledge sharing opportunities

• Experienced leadership team focused on driving innovation
and creating an agile culture that leads to exceptional client
outcomes and employee engagement

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

• Commitment to creating long-term value for our

shareholders and doing what’s right for a sustainable future

Readers are referred to the caution regarding Forward-Looking Statements and Non-IFRS Financial Measures and Additional IFRS 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, 2023.

From our IGM family to yours

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:

Better experiences

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.

Better solutions

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

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.

Better ownership

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

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

entrepreneurial

We celebrate initiative and encourage
everyone to own their actions.

responsible

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

inclusive

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

2023 IGM Financial Annual Report2023 highlights

Clients

Culture

1 million+

30,000+

clients

10%

overall average
client returns

59%

third-party advisors and
institutional investors

1 million+

retail and
institutional clients

51%

of IG mutual fund
assets rated 4 or 5 stars
by Morningstar

of MI mutual fund
assets rated 4 or 5 stars
by Morningstar

Community

$9 million

contributed to community
and charitable organizations
across Canada

IGM recognized as one
of Canada’s 2024 Top
100 Employers

IGM recognized as one
of Canada’s 2023 Best
Diversity Employers

3,600+

full-time employees
across the IGM family
of companies

3,100+

IG Wealth Management
advisors across Canada
helping Canadians meet
their financial goals

Sustainability

$1.6 million raised through
IGM Gives Campaign, with
an increase in participation
of 8% over 2022

IGM recognized as one
of Corporate Knights
2024 Global 100 Most
Sustainable Corporations

IGM ranked one of
Corporate Knights’
2023 Best 50 Corporate
Citizens in Canada

$900,000+

donated to over 300 local,
grassroots organizations
across Canada through
IG region offices

$250,000

donated, together with
Canada Life and Power
Corporation, to support
forest fire relief efforts
across Canada

Mackenzie and IG are
members supporting our
highest emitting investees
transition to net zero

IGM has actively
participated in the annual
climate survey since 2013

From our IGM family to yoursShareholders

Net earnings

$1,148.9 million
$4.82 per share

available to common shareholders

Adjusted net earnings1

$820.7 million
$3.44 per share

available to common shareholders

Assets under management
& advisement2

$240.2 billion

Dividends declared

$535.7 million
$2.25 per share

per common share

IGM Financial earnings per share

$4.82

$4.08

$4.05

$3.63

$3.44

$3.12

$3.21

$3.19

$3.20

2019

2020

2021

2022

2023

EPS Adjusted EPS1

Total assets under management and advisement

At December 31, 2023

% change year-over-year

IG Wealth Management

Mackenzie Investments

IGM Financial consolidated2,3

IGM Financial including strategic investments2,3,4

$121.2B

$195.7B

$240.2B

$389.4B

9.4%

4.9%

7.1%

35.1%

1 A non-IFRS financial measure. See Non-IFRS Financial Measures and Other Financial Measures on page 19 in this document.

2 Sale of Investment Planning Counsel closed on November 30, 2023. Figures presented exclude IPC from all periods.

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

4 See definitions of other financial measures included in the Non-IFRS Financial Measures and Other Financial Measures section on page 19 of this report.

2023 IGM Financial Annual ReportLetter to
shareholders

In 2023, people adapted to new routines and reconnected in a richer
way with family, friends and colleagues while keeping an eye on
their finances amid persistent inflation, rising interest rates and
increased global instability. Against this backdrop, IGM Financial
entered a new and exciting chapter as a business while staying true
to our ongoing commitment of bettering the lives of Canadians by
better planning and managing their money.

During the year we provided our clients with the
guidance and support they required to navigate
these challenges demonstrating how sound strategy
and execution deliver the best results. By remaining
committed to their financial plans, our clients were
rewarded with strong overall average client returns
of almost 10% over the year. Our deep pool of talent
allowed us to maintain momentum in our core
businesses, control our expenses and work more
efficiently. We also made important, far-reaching
investments that set our company up for meaningful
earnings growth in the years ahead.

We continued to keep a close eye on expenses. This
enabled us to reduce our annual expense guidance to
no more than 2%. We ended 2023 with assets under
management and advisement (AUM&A) of $240 billion,
up 7.1% from December 31, 2022 (excluding IPC). Annual
net earnings were $1,148.9 million or $4.82 per share
and annual adjusted net earnings (a non-IFRS financial
measure) were $820.7 million or $3.44 per share.

Our focus on expenses did not curtail our investment
in our businesses. We continued to work with leading
global technology partners such as Salesforce,
Microsoft, Google and Broadridge to optimize
our performance and deepen our relationships
with advisors and investors. These initiatives are
updating our back office, modernizing our corporate
contact centre and enhancing both the client and
employee experience.

Having substantially completed the modernization
of our major systems and technology investments to
strengthen our performance and competitive industry
position, we were able to simplify our operations and
reduce structural costs. This included eliminating
duplicate roles and systems, enabling partnerships
across the business and enhancing efficiencies. These
strategic initiatives allowed us to reinvest in our future
and realign and support our core businesses while
accelerating growth and reducing costs.

Our deep bench of talent and leadership have
executed exceptionally well amid market
fluctuations and macroeconomic challenges.

From our IGM family to yours

resilience through periods of market instability while
helping them navigate all aspects of their financial lives.

At IG Wealth Management, Damon Murchison and his
team executed a number of key initiatives in 2023 to
drive long-term growth and business success while
enriching and elevating the advisor and client experience.
This included investing in technology platforms and
partnerships to further digitalize the business and
strengthen the breadth of our advice through innovation
and championing best practices across our diverse and
growing advisor network to meet the needs of mass
affluent and high-net-worth Canadians.

These strategies resulted in client AUA increasing to
$121.2 billion from $110.8 billion in 2022. Net outflows
were $165 million. IG maintained momentum in
attracting and serving clients from the high-net-worth
and mass affluent market segments, with inflows of
IG-managed investments to new affluent clients with
investments of more than $500,000 growing by 58.3%
since 2020.

Our modernization of IG’s investment management
and financial planning platforms continued in 2023.

In January, we increased our equity interest in
China Asset Management Co. (ChinaAMC) to 27.8%,
deepening our participation in the Chinese asset
management industry with one of the nation’s
leading asset managers. This growing relationship
creates growth opportunities for us and strengthens,
diversifies and differentiates our global business.

And in April, we announced a 20.5% investment in
Rockefeller Capital Management, an exciting strategic
milestone that expands IGM’s wealth management
footprint into the U.S. through an iconic brand in the
high- and ultra-high-net-worth space. The partnership
exemplifies our commitment to diversification and
growth while deepening the connected strength of
our family of businesses and strategic investments.

Concurrent with the Rockefeller transaction, we
announced the sale of one of our wealth management
businesses, Investment Planning Counsel (IPC), to our
sister company, Canada Life Assurance Company,
allowing us to strengthen our focus and investment in
our core businesses. We would like to thank IPC CEO
Blaine Shewchuk, Executive Chair Chris Reynolds and
the entire team for their contributions to IGM over the
last twenty years.

Today, our realigned business positions IGM for future
growth across all demographic segments and varied
geographies. Our lineup of businesses are leaders
in their respective industries: a wealth management
powerhouse in IG Wealth Management, Rockefeller
and Wealthsimple, and a dynamic asset management
portfolio of businesses in Mackenzie Investments,
ChinaAMC and Northleaf Capital Partners.

Wealth management

During more challenging economic times we
demonstrate our greatest value to Canadians, providing
them with the tools and guidance they need to build

James O’Sullivan

President and
Chief Executive Officer

IGM Financial

2023 IGM Financial Annual Reportnesto Mortgage Cloud solution, introduced in 2023
with implementation continuing through 2024, helps
IG advisors provide clients with an easier, faster and
best-in-class digital mortgage experience. Similarly,
our financial planning platform, from industry leading
software provider Conquest Planning, has become
a critical piece of our modern financial planning
business and continues to deliver a highly responsive,
sophisticated and nimble level of planning at a
time when advisors are adapting to changing client
scenarios, priorities and expectations.

During the year, IG introduced IG Private Company
Advisory, a dedicated team that supports owners
of small and mid-sized Canadian businesses with
advice tailored to suit their companies in key areas
such as growth strategy, raising capital, mergers and
acquisitions and divestitures.

We continued to enhance our multi-channel client
engagement model throughout 2023, allowing us to
deliver a best-in-class financial planning experience
across the full spectrum of client needs while remaining
dedicated to the ongoing growth of the mass affluent
and high-net-worth client segments. This includes a
Dedicated Channel, which provides full-service access

to expert financial advisors and IG Wealth Connect,
a digital-first offering backed by human advice from
planning experts. Together, IG Wealth Connect and
the Dedicated Channel comprise our Corporate
Channel with combined assets growing to $6.1 billion
at December 31, 2023.

The landmark partnership with Rockefeller during the
year advances our strategy of expanding our presence
in the high-net-worth and ultra-high-net-worth client
segments and presents IG with a strong opportunity for
knowledge-sharing and business partnerships between
our connected businesses in the future.

IGM is also the largest shareholder in Wealthsimple,
with an interest of approximately 25%. One of Canada’s
fastest-growing and innovative financial services
companies, Wealthsimple was named Globe and Mail’s
most trusted financial institution among Canadians
under 45. The company enjoys a dominant position
with Millennials and is a complement to our core wealth
management business.

Our efforts to provide advisors and clients with
superior advice, personalized financial planning tools
and industry-leading services and solutions earned us
renewed accolades in 2023 and reflect the high-impact
investments we have made to our business. IG finished
first among all full-service firms in 10 key categories
of Investment Executive’s annual Dealer Report Card,
including advisor education, training and support
for high-net-worth clients. This was a remarkable
achievement in line with our 2022 four-year high in this
benchmark industry report and was a testament to our

We are confident in our ability
to deliver growth and increased
value to our shareholders
while working to better the
lives of Canadians.

R. Jeffrey Orr

Chair of the Board

IGM Financial

From our IGM family to yourscommitment to supporting our advisors in 2023 amid
challenging markets, high interest rates and heightened
client needs.

Asset management

In alignment with our efforts to strengthen our core
businesses for sustainable future growth, IGM’s asset
management business continued to leverage the most
promising markets in the world through its portfolio of
strong partners and highly relevant investments.

Led by Luke Gould, Mackenzie Investments deepened
its bedrock of client trust with a clear purpose. To
help crystallize this, it launched Be Invested, a new
brand platform that underscores the importance of
remaining invested across all market cycles. It is a
natural extension of Mackenzie’s mission to create
a more invested world together. Performing well in
2023 despite broader market challenges, total AUM
was $195.7 billion, compared to $186.6 billion at
the end of 2022. Investment fund net redemptions
were $2.1 billion and total net redemptions (including
institutional) were $1.9 billion in 2023.

During the year, Mackenzie continued to advance
its ongoing digital transformation through various
initiatives. In November, we announced an
agreement with CIBC Mellon to provide enhanced
asset management capabilities through OnCore, a
modern, innovative, and global middle office solution
administered by BNY Mellon.

As a company known for its desire to build a more
sustainable world, Mackenzie also made a number
of key product launches in 2023. This includes the
Mackenzie Corporate Knights Global 100 Index
Fund and Mackenzie Corporate Knights Global 100
Index ETF and the Mackenzie Greenchip USD Global
Environmental All Cap Fund, the largest thematic
environmental fund in Canada.

More generally, Mackenzie also launched the Mackenzie
All-Equity ETF Portfolio and Mackenzie USD Global
Dividend Fund, along with two new funds in partnership
with Primerica Financial Services: Mackenzie FuturePath
Shariah Global Equity Fund and Mackenzie FuturePath
US Core Fund. The firm’s ongoing commitment to
product innovation and excellence saw its dedicated
Exchange Traded Funds (ETF) team win recognition as

Best US Equity ETF and Best Canadian Equity ETF Issuer
at the 2023 ETF Express Canada Awards.

During the year, our asset management business
strengthened our partnership network through
strategic investments that align with our goals of
creating a more invested world and building global
offerings. To help further this, we expanded our
participation in the rapidly growing Chinese asset
management industry by acquiring Power Corporation
of Canada’s interest in ChinaAMC, increasing our equity
interest to 27.8%.

With alternative investments accounting for an
increasing portion of the global asset management
revenue pool, our growing participation in private
assets and alternatives in partnership with Northleaf
aligns with our mission to drive growth and deliver
long-term shareholder value for IGM. Northleaf’s AUM
grew to $26.6 billion in 2023, a 10.4% increase over
2022, representing a cumulative annual growth rate of
22.3% since our partnership was formed in late 2020.

This approach yielded clear benefits for Mackenzie’s
people, advisors and investors. For the first time,
Mackenzie made Glassdoor’s Best Places to Work List,
an award based solely on the input of employees.
Mackenzie also achieved continued strong results in the
industry’s annual client scorecard, the 2023 Environics
Advisor Perception Study (APS), maintaining its strong
APS leadership position among the top three in overall
score. These results are all the more impressive
given that Mackenzie had to navigate a third-party
cyber-security incident during the year and are a
testament to the team’s ongoing focus on transparency
and always putting the advisor and investor first.

Driving positive change

During 2023, IGM continued to prioritize initiatives that
service and strengthen our businesses, our people
and the communities around us through a focus on
diversity, equity and inclusion (DEI), environmental
sustainability and engagement with local communities.

We continued our transition to a hybrid work
environment that will help our people thrive. Finding
ways to work together virtually in recent years helped
accelerate innovation and flexibility throughout our
business, and we will continue to balance the flexible

2023 IGM Financial Annual Report2024 and beyond

Our deep bench of talent and leadership
have executed exceptionally well amid market
fluctuations and macroeconomic challenges. We
have reengineered our core businesses, IG Wealth
Management and Mackenzie Investments, and
combined with our four best-in-class partners,
Rockefeller, Wealthsimple, ChinaAMC and Northleaf,
we are well positioned for future growth.

We would like to thank our teams for their hard work
in 2023 as they helped to ensure the financial well-
being of Canadians. The transformative changes of
the last four years have strengthened our ability to
compete with global asset managers and allowed
our wealth management business to extend its
relationships with high-net worth and ultra-high-
net-worth clients. Combined with our deep and
experienced pool of talent and focus on execution,
these changes have reshaped our company and set
us on an exciting path to sustained growth.

As a values-driven company, IGM will continue to
support the growth and career development of our
employees and advisors, give back to communities
where we live and work and use our influence and
capacity as a large financial services company to drive
positive social impact and fight climate change. After
a time of momentous change and evolution, we are
confident in our ability to deliver growth and increased
value in the years ahead to our shareholders while
working to better the lives of Canadians.

On behalf of the Board of Directors,

James O’Sullivan

R. Jeffrey Orr

President and
Chief Executive Officer

IGM Financial

Chair of the Board

IGM Financial

benefits and efficiency of working virtually while also
having a presence in the office.

We work hard to be a place where employees across
the country feel respected, elevated and valued
and give them ample opportunities to develop their
careers as we build a culture grounded in DEI. We
will continue to build on the progress we have made,
embedding an inclusive lens across our business.

Climate change is one of the defining challenges of
our time. We understand we have a role to play in
implementing sustainable business practices and
investing in a climate-resilient economy. We are
committed to the recommendations of the Task Force
on Climate-related Financial Disclosures and have
participated in the annual Carbon Disclosure Project
(CDP) survey since 2013 to disclose our approach
to climate change management and associated
metrics and targets. Throughout 2023 our Green
Business Resource Group made a positive impact in
our communities organizing initiatives that resulted
in planting 650 trees and a shoreline and parks
cleanup across major Canadian cities.

As a Canadian company, we know we have
a responsibility to be actively involved in the
communities in which we live and work. IGM’s annual
Giving Campaign, in support of United Way and the
Mackenzie Together Charitable Foundation, raised
more than $1.6 million and featured record employee
participation. Further, through our IG Empower Your
Tomorrow community platform, we continued to
make an impact in helping build financial confidence
among four underserved groups, including Indigenous
communities, newcomers, seniors and youth. And
during our annual Mackenzie Together Volunteer
Week the Mackenzie community came together to
donate their time to a variety of charities.

Together, these achievements brought us renewed
recognition as one of Canada’s Top 100 Employers
(2024), one of Canada’s Best Diversity Employers
(2023) and one of Manitoba’s Top Employers (2023)
by Mediacorp Canada in its annual ranking of
companies that provide an outstanding workplace
for their employees. We also once again ranked
among the world’s 100 most sustainable corporations
on Corporate Knights 2024 Global 100.

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

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.

2023 IGM Financial Annual ReportWealth management

IGM Financial is committed to improving the financial
well‑being of our clients.

IG Wealth Management 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 they do.

Damon Murchison
President and
Chief Executive Officer

IG Wealth Management

$121.2 billion
Total assets under advisement

$12.7 billion
Gross client inflows

Ranked #1 in several key categories of Investment Executive’s
2023 Dealer Report card, representing the second-highest score

among full-service and mutual fund dealers

$6.2 million
raised nationally by

more than 21,000

walkers participating

in the IG Wealth

Management Walk

for Alzheimer‘s

5 LSEG Lipper Fund Awards won for

outstanding performance

10 FundGrade A+† Awards won for Performance

Corporate Channel

focused on growth

Dedicated Channel grew to
$3.2 billion

IG Wealth Connect grew to
$2.9 billion

Rockefeller Capital Management was established
in 2018. A leading independent financial advisory
services firm, Rockefeller offers strategic advice
to ultra- and high-net-worth individuals and
families, institutions, and corporations across
the United States.

Wealthsimple is one of Canada’s fastest-growing
financial services companies. Wealthsimple
provides IGM with innovative capabilities while
also providing access to markets with significant
potential for growth.

20.5% interest

24.7% interest

From our IGM family to yours

Asset management

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

Mackenzie Investments continued to help advisors and investors build strong portfolios
and reinforced the importance of being invested through all market cycles.

Luke Gould
President and
Chief Executive Officer

Mackenzie Investments

$195.7 billion*
Total assets under management

$7.3 billion
Mutual fund gross sales

New brand platform

encouraging people to

be invested in the things

that matter in their lives,

while investing their

money so their goals

are realized

Ranked among the top 25 best places to work in

Canada based solely on the input of employees

Clarenville, Newfoundland’s White Hills Resort

wins third annual Mackenzie Top Peak

CROWNIN G CANADA’S MOST INVE STE D SKI COMMUN IT Y

11 FundGrade A+† Awards for outstanding

investment performance

Top 3 overall
score in the 2023

Environics Advisor

Perception Study

#2 in brand equity

#2 advisor sales
penetration

* Includes $76.8 billion in advisory fee mandates to wealth management.

Founded in 1998 as one of the first fund management
companies in China, China Asset Management Co., Ltd.
has maintained a market leading position in China’s
asset management industry. Our ownership interest
in ChinaAMC offers our clients access to Chinese
capital markets.

Northleaf is a global private markets investment
firm focused on mid-market companies and assets.
With an established long-term track record as a
principal investor in private equity, private credit
and infrastructure globally, Northleaf enhances the
investment solutions we offer our clients.

27.8% interest

56% interest

2023 IGM Financial Annual Report 13

Our people

At IGM we work continually to be a standout employer that
fosters a strong, inclusive and progressive culture for our people
— a place where individuals can grow their careers and do their
best for clients, communities and one another.

We’re proud of the work we have done to support our people and to build a high-performance culture that drives
strong business results. And these efforts were recognized externally as well. We’re very proud to once again be
named one of Canada’s Top 100 Employers in 2024, and in 2023 one of Canada’s Best Diversity Employers and one
of Manitoba’s Top Employers by Mediacorp Canada in its annual ranking of companies that provide an outstanding
workplace for their employees.

To drive our collective success, we continued to evolve our work model to allow employees to thrive while building
relationships with one another and connecting with clients in a meaningful way. Our employees responded
positively, with our annual engagement survey results ranking support for work/life balance at an impressive 89%.

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

Survey results

Our people told us how proud they are to work
for IGM, with the highest employee engagement
scores in our annual survey going to our People
Leaders and our DEI and Sustainability initiatives,
which continue to rank above external benchmarks.
Here are some highlights from our annual employee
engagement survey:

89%

say IGM creates an environment where people
with diverse backgrounds can succeed

88%

believe everyone on their team is able to
succeed to their fullest potential at IGM,
no matter who they are

84%

feel IGM is committed to sustainability in our
business, and in products and services to clients

89%

believe their people leader supports their
efforts to balance their work and personal life

78% overall employee engagement score – higher

than Canadian and global benchmarks

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 yoursDiversity, equity, inclusion

In 2023, we entered the third year
of our drive to advance DEI across
the financial services industry. The
impact of our people leaders’ plans
to advance DEI within their teams are
reflected in our exceptional survey
results above and are a testament to
the progress and commitment to DEI
across the organization. Our executive
council, DEI Centre of Excellence and
seven Business Resource Groups
(BRGs) also helped us execute our
three-pillar strategy.

2023 highlights:

• Continued growth and participation in our seven employee-led
BRGs with programming and activities to support members and
foster learning and engagement. Through our 2SLGBTQIA+, Black,
diverseABILITIES, Green, Indigenous, Pan-Asian and Women BRGs,
our people find community through programming and initiatives
that align with our overall DEI strategy and business priorities.

• 1,300 employees completed 4 Seasons of Reconciliation training

and took time to reflect and honor Canada’s National Day for Truth
and Reconciliation.

• Launched a new Mentorship Program specifically with our Black BRG,

aimed at developing and advancing our Black talent.

Inclusive workplace
Nurture a culture of allyship
and inclusive leadership

Diverse talent
Attract, develop, retain
and accelerate

Clients & brand
Leverage DEI in
the marketplace

Mackenzie employees celebrate
the start of 2023 ski season.

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

2023 IGM Financial Annual ReportOur commitment
to sustainability

At IGM, we believe we have an
important role to play in building a
better tomorrow for Canadians.

Our sustainability strategy centres us on what matters most to
our business and stakeholders. We work to accelerate positive
change in areas where we can make the greatest impact as
wealth and asset managers.

Focus areas

Committed to responsible
business practices

• Governance

• Ethics and compliance

• Risk management

• Information security

and privacy

• Talent and culture

• Community support

• Climate and environment

Visit igmfinancial.com/en/corporate‑sustainability
to learn more about our sustainability efforts.

Building financial well‑being
$500,000 over five years
to organizations supporting women’s
financial well-being through Mackenzie
Together Grant

2,700+ Indigenous
community members
attended a financial literacy workshop or
received one-on-one financial help services
through IG’s partnership with Prosper Canada

Advancing sustainable investing
$6.0B
assets under management in sustainable
solutions, up 25% from $4.8 billion in 2022

172
companies/governments engaged on a variety
of ESG issues in Mackenzie-managed funds

Accelerating DEI in finance
84%
of employees self-identified through
our Count me in! initiative

500+
employees belong to one of seven BRGs,
a 300% increase in membership over 2022

Our commitments

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

Corporate 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

102

137

139

2023 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, 2023 and 2022 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, 2023 is as of February 15, 2024.

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, 2023, Power Corporation of Canada (Power) and Great-West Lifeco Inc. (Lifeco), a subsidiary of Power, held

directly or indirectly 62.1% 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 Inc.’s (IGM Financial, IGM or the Company) 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.sedarplus.ca.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisNon-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

Refer 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’s core businesses
IG Wealth Management and Mackenzie Investments. 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 core businesses. AUM&A excludes Investment Planning
Counsel’s (IPC’s) AUM, AUA, sales, redemptions and net flows which
have been disclosed as Discontinued operations.

• 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
core business.

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

Management segment. AUM are an additional 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.

• Assets Under Management and Advisement Including Strategic
Investments (AUM&A Including SI) represents AUM&A including
the Company’s proportionate share of the AUM&A of strategic
investments based on the Company’s direct and indirect ownership
of the strategic investments. The strategic investments included are
those whose activities are primarily in asset and wealth management,
and include ChinaAMC, Northleaf, Rockefeller and Wealthsimple.
Rockefeller client assets include assets under management and
advisement as well as assets held for investment purposes and only
receiving administrative services.

• Working Capital which consists of current assets less current liabilities
excluding assets and liabilities not reflective of ongoing operations.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportIGM Financial Inc.

Summary of Consolidated Operating Results

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

excluding other items outlined below, for the fourth quarter of

management company supporting advisors and the clients

2023 were $198.9 million or $0.84 per share compared to net

they serve in Canada, and institutional investors throughout

earnings available to common shareholders of $224.7 million

North America, Europe and Asia. The Company operates

or $0.94 per share for the comparative period in 2022.

through a number of operating subsidiaries and also holds a

number of strategic investments that provide benefits to these

subsidiaries while furthering the Company’s growth prospects.

The Company’s wealth management segment consists of

IG Wealth Management (IG), and strategic investments in

Rockefeller Capital Management (Rockefeller) and Wealthsimple
Financial Corp. (Wealthsimple). The asset management segment

consists of Mackenzie Investments (Mackenzie) and strategic

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

and Northleaf Capital Group Ltd. (Northleaf). The Company

also holds an investment in Great-West Lifeco Inc. (Lifeco). The

Other items for the year ended December 31, 2023 consisted of:

• A gain on the sale of IPC of $220.7 million recorded in the

fourth quarter.

• Restructuring and other charges of $76.2 million after-tax

($103.3 million pre-tax), recorded in the second quarter,

related to further streamlining and simplifying the Company’s

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

Company sold its subsidiary, Investment Planning Counsel (IPC),

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

in the fourth quarter of 2023.

IGM Financial’s Assets Under Management and Advisement

Including Strategic Investments (AUM&A Including SI)

were $389.4 billion as at December 31, 2023 compared to

$288.3 billion at December 31, 2022, as detailed in Table 6.

IGM Financial’s Assets Under Management and Advisement

(AUM&A) were $240.2 billion as at December 31, 2023,

compared with $224.2 billion at December 31, 2022. Average

total AUM&A for the year ended December 31, 2023 were

$232.8 billion compared to $229.4 billion in 2022. Average

total AUM&A for the fourth quarter of 2023 were $232.1 billion

compared to $222.6 billion in the fourth quarter of 2022.

Net earnings available to common shareholders for the year

ended December 31, 2023 were $1,148.9 million or $4.82 per

971

4.05

867

821

3.63

3.44

764

763

3.19

3.20

2019

2020

2021

2022

2023

Adjusted Net Earnings Available to Common Shareholders

share compared to net earnings available to common

Adjusted Earnings per Share

shareholders of $867.2 million or $3.63 per share in 2022,

representing an increase of 32.8% in earnings per share. Net

earnings available to common shareholders for the three months

ended December 31, 2023 were $419.6 million or $1.76 per share

compared to net earnings available to common shareholders of

$224.7 million or $0.94 per share for the comparative period in

2022, an increase of 87.2% in earnings per share.

Adjusted net earnings available to common shareholders and adjusted

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

2019 – the Company’s proportionate share in Lifeco’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.

Adjusted net earnings available to common shareholders,

2021 – additional consideration receivable related to the sale

excluding other items outlined below, for the year ended
December 31, 2023 were $820.7 million or $3.44 per share

of Personal Capital in 2020.

2023 – the gain on sale of IPC, gain on sale of Lifeco, Lifeco IFRS 17

compared to net earnings available to common shareholders of

adjustment and restructuring and other.

$867.2 million or $3.63 per share for the comparative period in

2022. Adjusted net earnings available to common shareholders,

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

Other Financial Measures section of this document.

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysisoperating model to better align with business priorities.

• a strategic ownership position with two board seats and

The initiatives include:

rights enhancing IGM’s opportunity to increase its equity

- Organizational structure changes including aligning

interest in Rockefeller in the future; and

the Company’s organizational structure to advance

• the opportunity for knowledge sharing and collaboration

the growing needs of the business and deliver against

between Rockefeller and IGM’s wealth management

key strategic initiatives. It also includes optimizing the

business, IG Wealth Management.

Company’s resources and talent structure to advance the

growing needs of the business, enable partnerships across

the business and operate more efficiently and effectively.

- Digital transformation to retire duplicate systems and to

automate and modernize our technology infrastructure to

enhance efficiencies and the Company’s ability to service

client needs.

- Real estate consolidation of IG Wealth Management’s

footprint to reflect the adoption of hybrid work and

new technologies.

• A gain on the sale of a portion of the Company’s investment

Concurrently with the Rockefeller transaction, IGM entered into

an agreement to sell 100% of IPC to The Canada Life Assurance

Company (Canada Life) for $575 million. Payment for the

Rockefeller transaction of $835 million (USD $622 million) was

completed on June 2, 2023.

The financial results of Rockefeller are recorded in the

Company’s Wealth Management segment.

Investment Planning Counsel Inc. –
Discontinued Operations

in Lifeco of $168.6 million after-tax ($172.9 million pre-tax),

On November 30, 2023, the Company completed the sale of

consisting of $174.8 million recorded in the first quarter

and a decrease of $6.2 million that was recorded on a

prospective basis in the second quarter.

• Lifeco IFRS 17 adjustment of $15.1 million, recorded in the

second quarter, representing a change of estimate which has

been recorded on a prospective basis.

Shareholders’ equity was $6.7 billion at December 31, 2023,

compared to $6.1 billion at December 31, 2022. Adjusted

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

Other Financial Measures) for the year ended December 31,

2023 was 13.0% compared with 14.3% for the comparative

period in 2022. Adjusted ROE excluding the impact of fair

100% of the common shares of IPC for proceeds of $575 million

plus adjustments and recorded a gain of $220.7 million.

In accordance with IFRS 5 – Non-Current Assets Held for Sale and
Discontinued Operations, the operating results and cash flows of
IPC have been classified as discontinued operations within the

Wealth Management segment.

Net earnings from discontinued operations for all periods

under review are reported as a separate line item in

consolidated and segment results.

China Asset Management Co., Ltd.

value through other comprehensive income investments (a

On January 12, 2023, the Company closed the transaction

non-IFRS ratio – see Non-IFRS Financial Measures and Other

to acquire Power’s 13.9% interest in ChinaAMC for cash

Financial Measures) for the year ended December 31, 2023 was

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

13.7% compared with 15.6% in 2022. The quarterly dividend

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

per common share was 56.25 cents in 2023, unchanged from

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

the end of 2022.

2023 Developments

Rockefeller Capital Management

On April 3, 2023, IGM Financial purchased a 20.5% equity

interest in Rockefeller, a leading U.S. independent financial

Lifeco to Power for cash consideration of $553 million which

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

2.4%. The Company recorded a gain on sale of the Lifeco shares

of $174.8 million, net of tax. The remaining $597 million of

consideration was funded 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.

services advisory firm, for cash consideration of $835 million

Benefits of the ChinaAMC acquisition include:

(USD $622 million).

Highlights of the Rockefeller transaction include:

• the expansion of IGM’s wealth management footprint,

through Rockefeller, into the U.S., with a brand and business

model focused on the high-net-worth and ultra-high-net-

worth segments;

• 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.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual Report• Simplifying the IGM Financial and Power organization

• European equity markets, as measured by the MSCI Europe

structure by consolidating the ChinaAMC ownership position

net total return index, increased by 6.4% in the fourth

at Mackenzie.

quarter of 2023 and by 15.8% for the year.

The financial results of ChinaAMC are recorded in the Company’s

Asset Management segment.

Market Overview

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

Pacific net total return index, increased by 8.0% in the fourth

quarter of 2023 and by 11.4% for the year.

• The FTSE TMX Canada Universe Bond total return index

increased by 8.3% in the fourth quarter of 2023 and by 6.7%

Financial market returns were positive for the fourth quarter

for the year.

and year ended December 31, 2023:

• The S&P TSX Composite total return index increased by 8.1%

in the fourth quarter of 2023 and by 11.8% for the year.

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

index, increased by 11.7% in the fourth quarter of 2023 and

by 26.3% for the year.

• Our clients experienced an average investment return of

6.7% in the fourth quarter of 2023 and 9.9% for the year

(excluding IPC).

IGM Financial’s AUM&A increased by 7.1% from $224.2 billion at

December 31, 2022 to $240.2 billion at December 31, 2023. See

Table 6 for the breakdown of IGM Financial’s AUM&A.

Table 1: Reconciliation of Non-IFRS Financial Measures

Three months ended

Twelve months ended

($ millions except EPS)

Adjusted net earnings available to common shareholders(1)

Gain on sale of IPC

Restructuring and other, net of tax

Gain on sale of Lifeco, net of tax

Lifeco IFRS 17 adjustment

Net earnings available to common shareholders

Adjusted earnings per share(1)

Gain on sale of IPC

Restructuring and other, net of tax

Gain on sale of Lifeco, net of tax

Lifeco IFRS 17 adjustment

Earnings per share(2)

2023
Dec. 31

198.9

220.7

–

419.6

0.84

0.92

–

2023
Sep. 30

2022
Dec. 31

209.8

224.7

–

2023
Dec. 31

820.7

220.7

(76.2)

168.6

15.1

224.7

$ 1,148.9

209.8

0.88

–

0.94

–

3.44

0.93

(0.32)

0.71

0.06

4.82

2022
Dec. 31

867.2

–

867.2

3.63

–

3.63

1.76

0.88

0.94

Average outstanding shares – Diluted (thousands)

238,156

238,550

237,958

238,418

238,996

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 – continuing and discontinued operations(1)

Income taxes

Adjusted net earnings(1)

Gain on sale of IPC

Restructuring and other, net of tax

Gain on sale of Lifeco, net of tax

Lifeco IFRS 17 adjustment

Net earnings

345.8

362.3

366.1

$ 1,404.2

$ 1,425.6

(26.7)

319.1

26.7

(25.2)

(26.5)

294.1

38.6

255.5

54.9

200.6

220.7

–

(30.2)

332.1

30.2

(24.2)

(27.1)

311.0

41.3

269.7

59.8

209.9

–

(22.2)

343.9

22.2

(20.9)

(26.2)

319.0

28.7

290.3

63.3

227.0

–

(116.7)

(130.8)

1,287.5

1,294.8

116.7

(94.2)

(106.5)

1,203.5

141.0

1,062.5

238.2

824.3

220.7

(76.2)

168.6

15.1

123.5

(77.6)

(104.0)

1,236.7

113.8

1,122.9

250.4

872.5

–

421.3

209.9

227.0

$ 1,152.5

872.5

(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 and in Q2 to Q4 2023, also included interest on the credit facility.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisReportable Segments

In the fourth quarter of 2023, the Company realigned its

reportable segments to better characterize and simplify the

Company’s business lines into wealth management and asset

management segments.

The revised segments reflect a realignment of Rockefeller

and Wealthsimple to the wealth management segment and

ChinaAMC and Northleaf to the asset management segment.

These changes have no impact on the reported earnings of

the Company. Prior period comparative information has been

restated to reflect the realigned segments.

accounted for using the equity method. The proportionate

share of earnings on these investments are included in the

segment’s revenue.

• Corporate and Other – primarily represents the investments in
Lifeco and Portage Ventures LPs, the Company’s unallocated

capital, as well as consolidation elimination entries.

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

core businesses IG Wealth Management and Mackenzie

Investments. In the Wealth Management segment, AUM is

a component part of AUA. All instances where the asset

management segment is providing investment management

The Company’s reportable segments are Wealth Management,

services or distributing its products through the Wealth

Asset Management and Corporate & Other and reflect the

Management segment are eliminated in our reporting such

Company’s internal financial reporting and performance
measurement (Tables 2, 3 and 4):

• Wealth Management – reflects the activities of its core
business and strategic investments that are principally

focused on providing financial planning and related

services to retail client households. This segment includes

the activities of IG Wealth Management which is a retail

distribution organization that serves Canadian households

through its securities dealer, mutual fund dealer 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. This segment also includes the Company’s strategic

that there is no double-counting of the same client savings

held at IGM Financial’s core businesses. AUM&A excludes IPC’s

AUM, AUA, sales, redemptions and net flows which have been

disclosed as discontinued operations.

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 an additional 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

investments in Rockefeller and Wealthsimple. Rockefeller is

discretionary portfolio management responsibilities.

classified as an investment in associate and accounted for

using the equity method, with the proportionate share of

earnings included in revenue. Wealthsimple is classified as an

investment which is accounted for as fair value through other

comprehensive income and therefore has no impact on the

segment earnings. This segment also included IPC, which was

sold on November 30, 2023. IPC’s results were classified as

discontinued operations.

• Asset Management – reflects the activities of its core

business and strategic investments primarily focused on

providing investment management services. This segment

includes the operations of Mackenzie Investments which

provides investment management services to a suite of

investment funds that are distributed through third party

dealers and financial advisors, and through institutional
advisory mandates to financial institutions, pensions and

Assets Under Management and Advisement Including
Strategic Investments (AUM&A Including SI) represents
AUM&A including the Company’s proportionate share of the

AUM&A of strategic investments based on the Company’s

direct and indirect ownership of the strategic investments.

The strategic investments included are those whose activities

are primarily in asset and wealth management, and include

ChinaAMC, Northleaf, Rockefeller and Wealthsimple. Rockefeller

client assets include AUM&A as well as assets held for

investment purposes and only receiving administrative services.

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

other institutional investors. This segment also includes the

categories are as follows:

Company’s strategic investment in ChinaAMC and Northleaf

• Wealth management revenue – revenues earned by the

which are classified as investments in associates and

Wealth Management segment for providing financial planning,

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportTable 2: Consolidated Operating Results by Segment – Q4 2023 vs. Q4 2022

Three months ended
($ 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

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

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings – continuing operations(1)

Net earnings – discontinued operations

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 IPC

Net earnings available to common shareholders

Wealth Management

Asset Management

Corporate & Other

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

Total

2022
Dec. 31

$ 551.7

$ 530.8

–

(1.7)

–

$ 550.0

$ 530.8

–

3.7

(0.8)

–

2.1

(0.4)

259.5

(76.0)

183.5

4.0

32.3

554.6

532.5

219.8

232.4

115.9

43.0

391.3

163.3

26.0

137.3

36.6

100.7

3.5

104.2

–

217.2

108.9

41.5

367.6

164.9

22.6

142.3

38.2

104.1

3.5

107.6

0.2

20.8

92.7

1.2

114.7

105.1

6.5

98.6

20.1

78.5

–

78.5

1.7

260.5

(76.9)

183.6

5.6

24.9

214.1

21.3

91.3

1.0

113.6

100.5

5.9

94.6

20.2

74.4

–

74.4

2.1

(25.2)

(0.7)

(25.9)

2.9

19.1

(5.6)

–

0.2

(27.5)

(27.3)

21.7

–

21.7

(0.7)

22.4

(4.5)

17.9

–

(27.0)

(0.1)

(27.1)

7.2

40.9

21.0

–

(0.2)

(27.0)

(27.2)

48.2

–

48.2

3.4

44.8

0.2

45.0

–

234.3

(76.7)

157.6

10.6

50.6

768.8

253.2

208.8

16.7

478.7

290.1

32.5

257.6

56.0

201.6

(1.0)

200.6

1.7

233.5

(77.0)

156.5

14.9

65.4

767.6

238.5

200.0

15.5

454.0

313.6

28.5

285.1

61.8

223.3

3.7

227.0

2.3

$ 104.2

107.4

76.8

72.3

17.9

45.0

198.9

224.7

220.7

–

$ 419.6

$ 224.7

(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.

investment advisory and related financial services. Revenues

Management segment and wholesale distribution activities

include financial advisory fees, investment management and

performed by the Asset Management segment. Expenses

related administration fees, distribution revenue associated

include compensation, recognition and other support

with insurance and banking products and services, and

provided to our advisors, field management, product &

revenue relating to mortgage lending activities.

planning specialists; expenses associated with facilities,

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

advisory and administrative services.

• Dealer compensation – asset-based and sales-based

compensation paid to dealers by the Asset Management

segment.

• Proportionate share of associates’ earnings – the Company’s
proportionate share of earnings from equity investments

including Lifeco, ChinaAMC, Northleaf and Rockefeller.

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

financial planning services to clients of the Wealth

technology and training relating to our advisors and

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

functions. These expenses primarily reflect compensation,

technology and other service provider expenses.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 3: Consolidated Operating Results by Segment – Twelve Months Ended

Twelve months ended
($ 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

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

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings – continuing operations(1)

Net earnings – discontinued operations

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 IPC

Restructuring and other

Gain on sale of Lifeco

Lifeco IFRS 17 adjustment

Wealth Management

Asset Management

Corporate & Other

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

Total

2022
Dec. 31

$ 2,206.2

$ 2,159.9

–

(6.5)

–

$ 2,199.7

$ 2,159.9

–

13.3

(3.3)

–

2.4

(0.4)

2,216.2

2,161.9

922.7

438.5

172.4

882.7

424.0

169.1

1,533.6

1,475.8

682.6

98.2

584.4

156.1

428.3

15.0

443.3

0.2

686.1

89.7

596.4

159.7

436.7

11.3

448.0

0.2

1,051.2

(311.4)

1,077.7

(327.6)

739.8

750.1

12.0

121.4

873.2

83.5

362.7

4.6

450.8

422.4

25.0

397.4

83.8

313.6

–

313.6

3.4

5.7

82.9

838.7

79.4

360.5

4.9

444.8

393.9

23.5

370.4

81.6

288.8

–

288.8

5.1

(102.2)

(2.7)

(104.9)

12.3

66.9

(32.2)

–

1.2

(111.3)

(110.1)

77.9

–

77.9

(2.0)

79.9

(12.5)

67.4

–

(110.5)

–

(110.5)

14.2

128.2

949.0

(314.1)

634.9

37.6

185.0

967.2

(327.6)

639.6

22.3

210.7

31.9

3,057.2

3,032.5

–

2.1

(110.5)

1,006.2

802.4

65.7

962.1

786.6

63.5

(108.4)

1,874.3

1,812.2

140.3

1,182.9

1,220.3

–

123.2

140.3

4.7

135.6

0.1

135.7

–

1,059.7

237.9

821.8

2.5

824.3

3.6

113.2

1,107.1

246.0

861.1

11.4

872.5

5.3

$ 443.1

$ 447.8

$ 310.2

$ 283.7

67.4

135.7

820.7

867.2

220.7

(76.2)

168.6

15.1

–

$ 1,148.9

$ 867.2

Net earnings available to common shareholders

(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.

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

related to the credit facility, which was temporary financing

put in place in the second quarter of 2023 and was repaid in

party investment management organizations. These

the fourth quarter prior to the close of the IPC sale, is included

fees typically are variable with the level of assets under

in discontinued operations and totalled $6.0 million and

management. These fees include investment advisory

$17.9 million, respectively, for the three and twelve months

services performed for the Wealth Management segment

ended December 31, 2023.

by the Asset Management segment.

Income taxes are reported in each segment. IGM Financial

Interest expense represents interest expense on long-term

consolidated changes in the effective tax rates are detailed in

debt and leases. The change in interest expense for the

Table 5.

three and twelve month periods resulted from the impact of

the issuance of $300 million 5.426% debentures on May 26,

2023. 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. Interest expense

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

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportTable 4: Consolidated Operating Results by Segment – Q4 2023 vs. Q3 2023

Three months ended
($ 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

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

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings – continuing operations(1)

Net earnings – discontinued operations

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 IPC

Net earnings available to common shareholders

Wealth Management

Asset Management

Corporate & Other

2023
Dec. 31

2023
Sep. 30

2023
Dec. 31

2023
Sep. 30

2023
Dec. 31

2023
Sep. 30

2023
Dec. 31

Total

2023
Sep. 30

$ 551.7

$ 564.8

–

(1.7)

$ 550.0

$ 563.1

–

3.7

(0.8)

–

2.2

0.7

259.5

(76.0)

183.5

4.0

32.3

554.6

567.7

219.8

232.4

115.9

43.0

391.3

163.3

26.0

137.3

36.6

100.7

3.5

104.2

–

234.3

108.8

43.8

386.9

180.8

25.9

154.9

41.2

113.7

4.5

118.2

–

20.8

92.7

1.2

114.7

105.1

6.5

98.6

20.1

78.5

–

78.5

1.7

265.7

(77.9)

187.8

2.5

25.1

215.4

19.0

87.2

1.2

107.4

108.0

6.6

101.4

22.4

79.0

–

79.0

0.1

(25.2)

(0.7)

(25.9)

2.9

19.1

(5.6)

–

0.2

(27.5)

(27.3)

21.7

–

21.7

(0.7)

22.4

(4.5)

17.9

–

(25.8)

(0.7)

(26.5)

3.2

12.7

234.3

(76.7)

157.6

10.6

50.6

239.9

(78.6)

161.3

7.9

38.5

(12.3)

768.8

770.8

–

0.4

(28.2)

(27.8)

15.5

0.1

15.4

(3.3)

18.7

(6.0)

12.7

–

253.2

208.8

16.7

478.7

290.1

32.5

257.6

56.0

201.6

(1.0)

200.6

1.7

253.3

196.4

16.8

466.5

304.3

32.6

271.7

60.3

211.4

(1.5)

209.9

0.1

$ 104.2

118.2

76.8

78.9

17.9

12.7

198.9

209.8

220.7

–

$ 419.6

$ 209.8

(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(1)

Income taxes at Canadian federal and provincial
statutory rates

Effect of:

Proportionate share of associates’ earnings

Other

Effective income tax rate – before other items

Gain on sale of Lifeco

Lifeco IFRS 17 adjustment

Effective income tax rate – net earnings from
continuing operations

Three months ended

Twelve months ended

2023
Dec. 31

2023
Sep. 30

2022
Dec. 31

2023
Dec. 31

2022
Dec. 31

26.65 %

26.59 %

26.64 %

26.68 %

26.63 %

(4.37)

(0.58)

21.70

–

(2.84)

(1.52)

22.23

–

(5.61)

0.63

21.66

–

(3.40)

(0.46)

22.82

(3.68)

(0.35)

(4.56)

0.15

22.22

–

21.70 %

22.23 %

21.66 %

18.79 %

22.22 %

(1) The effective income tax rates for the comparative figures have been restated to exclude discontinued operations related to IPC from earnings.

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysisyear. The effect of changes in management’s best estimates

• A gain on the sale of a portion of the Company’s investment

reported in adjusted net earnings is reflected in Other, which

in Lifeco of $168.6 million after-tax ($172.9 million pre-tax),

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

consisting of $174.8 million recorded in the first quarter

income tax rates on foreign operations.

and a decrease of $6.2 million that was recorded on a

In December 2021, the Organization for Economic Co-operation

and Development (OECD) published the Pillar Two model

rules outlining a structure for a new 15% global minimum tax

regime. A number of countries where the Company operates,

including Ireland and the UK, have enacted legislation, and

will be effective for the Company’s financial year beginning

January 1, 2024. Pillar Two draft legislation in Canada has not

been substantively enacted but when enacted, is expected to

be effective for the Company as of January 1, 2024.

The assessment of the potential exposure to Pillar Two income

taxes is based on the most recent tax filings, country-by-country

reporting and financial statements for the Company and its

subsidiaries as part of a larger related group of companies.

Based on the assessment, the Pillar Two effective tax rates of the

material jurisdictions in which the Company and its subsidiaries

prospective basis in the second quarter.

• Lifeco IFRS 17 adjustment of $15.1 million, recorded in the

second quarter, representing a change of estimate which

has been recorded on a prospective basis.

Total AUM&A

IGM Financial’s AUM&A Including SI were $389.4 billion

as at December 31, 2023 compared to $288.3 billion at

December 31, 2022, as detailed in Table 6.

AUM&A were $240.2 billion at December 31, 2023 compared

to $224.2 billion at December 31, 2022, an increase of 7.1%, as

detailed in Table 6. AUM were $226.6 billion at December 31,

2023 compared to $213.6 billion at December 31, 2022, an

increase of 6.1%.

operate are above 15%. However, there may be immaterial

AUM&A net outflows for the twelve months ended December 31,

jurisdictions where the Pillar Two income taxes apply, but the

2023 were $2.0 billion compared to net inflows of $859 million

Company and its subsidiaries do not expect a material exposure

in 2022, as detailed in Table 6. Investment fund net redemptions

to Pillar Two income taxes in those jurisdictions.

for the twelve month period were $4.3 billion in 2023 compared

Other items, as reflected in Tables 2, 3 and 4, include the

after-tax impact of any item that management considers to be

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

period comparison of results from operations less meaningful

and are not allocated to segments.

to net redemptions of $1.0 billion in 2022. Net outflows in

the fourth quarter of 2023 were $1.2 billion compared to

net outflows of $520 million in the fourth quarter of 2022,

as detailed in Table 6. Fourth quarter investment fund net

redemptions were $1.9 billion compared to net redemptions of

$1.6 billion in 2022. Net flows and net sales are based on AUM&A

Other items for the year ended December 31, 2023, included:

excluding sub-advisory assets to Canada Life and to the Wealth

• A gain on the sale of IPC of $220.7 million recorded in the

Management segment.

fourth quarter.

• Restructuring and other charges of $76.2 million after-tax

($103.3 million pre-tax), recorded in the second quarter,

related to further streamlining and simplifying the Company’s

operating model to better align with business priorities. The

initiatives include:

The Company also benefits from the underlying assets under

management of the Company’s investments in associates,

including ChinaAMC, Northleaf, Rockefeller and its investment

in Wealthsimple which is classified as fair value through

other comprehensive income. The Company has included its

proportionate share of the AUM&A of these investments in its

- Organizational structure changes including aligning

AUM&A Including SI based on its direct and indirect interest in

the Company’s organizational structure to advance

these companies.

the growing needs of the business and deliver against

key strategic initiatives. It also includes optimizing the

Company’s resources and talent structure to advance the

growing needs of the business, enable partnerships across

the business and operate more efficiently and effectively.

- Digital transformation to retire duplicate systems and to

At December 31, 2023, ChinaAMC’s AUM was RMB¥ 1,823.6 billion

($341.0 billion) compared to RMB¥ 1,721.6 billion ($337.6 billion)

at December 31, 2022, an increase of 5.9% (CAD$ 1.0%). IGM

Financial held a 13.9% interest in ChinaAMC on December 31,

2022, which was increased to 27.8% on January 12, 2023.

automate and modernize our technology infrastructure to

At December 31, 2023, Northleaf’s AUM was $26.6 billion

enhance efficiencies and the Company’s ability to service

compared to $24.1 billion at December 31, 2022, an increase of

client needs.

10.4%. IGM Financial holds a 56% economic interest in Northleaf.

- Real estate consolidation of IG Wealth Management’s

footprint to reflect the adoption of hybrid work and

new technologies.

At December 31, 2023, Rockefeller’s client assets were USD

$122.1 billion ($161.6 billion). IGM Financial holds a 20.5%

interest in Rockefeller.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportTable 6: AUM&A

($ millions)

Three months ended

Gross flows

Mutual fund gross sales(4)
Dealer gross inflows(3)

Discontinued operations inflows

Net flows

Mutual fund net sales(4)

ETF net creations

Investment fund net sales

Institutional SMA net sales

IGM product net sales

Other dealer net flows

Total net flows(3)

Discontinued operations net flows

Total net flows including discontinued operations(3)

Twelve months ended

Gross flows

Mutual fund gross sales(4)
Dealer gross inflows(3)

Discontinued operations inflows

Net flows

Mutual fund net sales(4)
ETF net creations(5)

Investment fund net sales
Institutional SMA net sales(6)

IGM product net sales

Other dealer net flows

Total net flows(3)

Discontinued operations net flows

Total net flows including discontinued operations(3)

Wealth Management(1)

Asset Management(2)

Intercompany

Eliminations(3)

Consolidated

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

2022
Dec. 31

$ 2,628 $

2,125 $ 1,736 $

1,559 $

– $

– $ 4,364 $ 3,684

3,089

1,196

3,031

1,157

–

(987)

161

(826)

(186)

(1,012)

–

(1,052)

–

(1,052)

–

(1,052)

824

(228)

387

160

(718)

–

(718)

–

(718)

1,147

429

476

(1,012)

(967)

–

(1,012)

(967)

–

(966)

134

(832)

(135)

(967)

–

3,089

1,196

3,031

1,157

(2,039)

(1,684)

161

134

(1,878)

(1,550)

(186)

(135)

(2,064)

(1,685)

825

1,165

(1,239)

404

(835)

(520)

(440)

$ 10,917 $ 10,587 $ 7,270 $

7,496 $

– $

– $ 18,187 $ 18,083

12,650

4,671

12,872

4,424

–

(2,254)

–

(2,254)

–

(2,254)

2,089

(165)

728

567

–

2,647

2,690

255

2,951

(2,314)

(1,736)

245

705

(2,069)

192

(1,031)

(834)

(1,877)

(1,865)

–

(1,877)

(1,865)

–

(1,877)

(1,865)

–

12,650

4,671

12,872

4,424

(4,568)

(1,693)

245

(4,323)

192

(4,131)

2,090

(2,041)

826

705

(988)

(834)

(1,822)

2,681

859

298

(1,215)

1,157

(1) Effective January 2023, Mackenzie Investment fund products sold through IG Wealth Management are reported within IG Wealth Management’s AUM and Mackenzie

Sub-advisory and AUM to Wealth Management.

(2) Asset Management flows activity excludes sub-advisory to Canada Life and the Wealth Management segment.
(3) Consolidated results eliminate double counting where business is reflected within multiple segments.
(4) IG Wealth Management AUM and net sales include separately managed accounts.
(5) ETFs – During the twelve month period of 2022, Wealthsimple made allocation changes which resulted in $675 million in purchases in Mackenzie ETFs.
(6) Sub-advisory, institutional and other accounts

- During the second quarter of 2023, Mackenzie onboarded an institutional mandate of $490 million.
- During the first quarter of 2022, an institutional investor redeemed $291 million within products Mackenzie sub-advises.

At December 31, 2023, Wealthsimple’s AUA was $31.0 billion

compared to $18.3 billion at December 31, 2022, an increase of

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

69.4%. IGM Financial holds a 24.7% interest in Wealthsimple.

revenues result primarily from changes in average AUM&A.

Changes in AUM for the Wealth Management and Asset

AUM&A Including SI were $309.8 billion in 2021, decreased to

Management segments are discussed further in each of their

$288.3 million in 2022 and increased to $389.4 million in 2023.

respective Review of the Business sections in the MD&A.

The increase in 2023 were driven primarily by the increase in

proportionate share of ownership of ChinaAMC, the investment

in Rockefeller and an increase in the core business AUM&A.

Selected Annual Information

Financial information for the three most recently completed

years is included in Table 7.

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysis
Table 6: AUM&A (continued)

($ millions)

AUM&A

IG Wealth Management

AUM(2)

Other AUA

AUA

Mackenzie Investments

Mutual funds
ETFs(3)

Investment funds

Institutional SMA
Sub-advisory to Canada Life(4)

Total Institutional SMA

Third Party AUM
Sub-advisory and AUM to Wealth Management(4)

Total AUM

Consolidated excluding discontinued operations(5)

AUM

AUM&A

Strategic investments(6)

ChinaAMC

Northleaf

Rockefeller

Wealthsimple

Intra-segment eliminations

Wealth Management

Asset Management

Intercompany

Eliminations(1)

Consolidated

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

2022
Dec. 31

2023
Dec. 31

2022
Dec. 31

$ 107,635 $

99,275

13,588

11,541

121,223

110,816

56,408 $ 54,434

5,507

5,219

61,915

59,653

7,367

49,665

57,032

6,422

47,023

53,445

118,947

76,758

113,098

73,514

195,705

186,612

$ 107,635 $

99,275 $ 195,705 $ 186,612 $ (76,758) $ (72,336) $ 226,582 $ 213,551

121,223

110,816

195,705

186,612

(76,758)

(73,186)

240,170

224,242

33,061

7,657

(6)

–

4,447

–

94,792

14,912

46,932

13,521

(260)

(156)

Consolidated AUM&A Including SI(5)

161,935

115,263

305,149

246,909

(77,659)

(73,905)

389,425

288,267

40,712

4,447

109,444

60,297

(901)

(719)

149,255

64,025

(1) Consolidated results eliminate double counting where business is reflected within multiple segments.
(2) Wealth Management AUM includes separately managed accounts.
(3) ETF assets inclusive of IGM Financial’s managed products were $12.9 billion at December 31, 2023 (2022 – $12.4 billion).
(4) Effective November 30, 2023, Mackenzie’s sub-advisory to discontinued operations, which had previously been reported in sub-advisory and AUM to Wealth

Management, are now reported in sub-advisory to Canada Life.

(5) 2022 excludes discontinued operations of IPC: Wealth Management AUM of $4.6 billion and AUA of $29.5 billion; AUA elimination entries of ($4.4) billion; and IGM

consolidated AUM&A of $25.2 billion.

(6) Proportionate share of strategic investments’ AUM comprised of 27.8% (2022 – 13.9%) of ChinaAMC’s AUM, 56% (2022 – 56%) of Northleaf’s AUM, 20.5% (2022 – nil)

of Rockefeller’s client assets, and 24.7% (2022 – 24.3%) of Wealthsimple’s AUA.

AUM&A were $248.8 billion in 2021, decreased to $224.2 billion

in 2022 and increased to $240.2 billion in 2023. Changes

Dividends per Common Share – Annual dividends per common
share were $2.25 in 2023, unchanged from 2022 and 2021.

were driven largely by changes in financial markets during the

periods. Average total AUM&A for the year ended December 31,

2023 were $232.8 billion compared to $229.4 billion in 2022.

The impact on earnings and revenues of changes in average

total AUM&A and other pertinent items are discussed in the

Summary of Quarterly results

The Summary of Quarterly Results in Table 8 includes the

eight most recent quarters and the reconciliation of non-IFRS

Review of Segment Operating Results sections of the MD&A for

financial measures to net earnings in accordance with IFRS.

both IG Wealth Management and Mackenzie.

Changes in average AUM&A over the eight most recent quarters,

Net earnings in future periods will largely be determined by the

as shown in Table 8, largely reflect the impact of changes in

level of AUM&A which will continue to be influenced by global

domestic and foreign markets and net sales of the Company.

market conditions.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual Report
Table 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

Restructuring and other

Gain on sale of Lifeco

Lifeco IFRS 17 adjustment

Gain on sale of Personal Capital

Earnings before income taxes

Income taxes

Net earnings from continuing operations

Net earnings from discontinued operations

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 IPC

Restructuring and other, net of tax

Gain on sale of Lifeco, net of tax

Lifeco IFRS 17 adjustment

Gain on sale of Personal Capital, 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 AUM&A(2) ($ billions)

Investment fund AUM

Total AUM

Total AUM&A

Ending AUM&A(2) ($ billions)

Investment fund AUM

Total AUM

Total AUM&A

Ending AUM&A Including SI(2) ($ billions)

Total corporate assets ($ millions)

Total long-term debt ($ millions)

Outstanding common shares (thousands)

Average outstanding shares – Diluted (thousands)

2023

2022

2021

2,199.7

2,159.9

2,231.2

634.9

37.6

185.0

3,057.2

1,997.5

1,059.7

(103.3)

172.9

15.1

–

1,144.4

215.1

929.3

223.2

1,152.5

(3.6)

1,148.9

820.7

220.7

(76.2)

168.6

15.1

–

639.6

22.3

210.7

3,032.5

1,925.4

1,107.1

–

1,107.1

246.0

861.1

11.4

872.5

(5.3)

867.2

–

1,148.9

867.2

3.45

3.44

4.83

4.82

2.25

164.8

220.7

232.8

169.5

226.6

240.2

389.4

18,663

2,400

238,132

238,418

3.64

3.63

3.64

3.63

2.25

164.0

220.8

229.4

158.9

213.6

224.2

288.3

18,738

2,100

237,668

238,996

657.5

10.9

196.4

3,096.0

1,866.7

1,229.3

–

10.6

1,239.9

279.2

960.7

20.2

980.9

(2.0)

978.9

971.2

–

7.7

978.9

4.07

4.05

4.10

4.08

2.25

168.0

227.0

233.2

178.9

240.7

248.8

309.8

17,661

2,100

239,679

240,019

(1) A non-IFRS financial measure – see Non-IFRS Financial Measures and Other Financial Measures section of this document.
(2) As detailed in AUM&A definitions, AUM, AUA and AUM&A exclude IPC discontinued operations.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 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

Restructuring and other

Gain on sale of Lifeco

Lifeco IFRS 17 adjustment

Earnings before income taxes

Income taxes

Net earnings from continuing operations

Net earnings from discontinued operations

Net earnings

Non-controlling interest

2023
Q4

2023
Q3

2023
Q2

2023
Q1

2022
Q4

2022
Q3

2022
Q2

2022
Q1

$ 550.0 $ 563.1 $ 552.5 $ 534.1 $ 530.8 $ 532.6 $ 535.3 $

561.2

234.3

(76.7)

157.6

10.6

50.6

239.9

(78.6)

161.3

7.9

38.5

238.7

(79.5)

159.2

8.1

42.9

236.1

(79.3)

156.8

11.0

53.0

233.5

(77.0)

156.5

14.9

65.4

235.7

(77.4)

158.3

10.3

46.9

241.9

(82.1)

159.8

(0.4)

50.0

256.1

(91.1)

165.0

(2.5)

48.4

768.8

770.8

762.7

754.9

767.6

748.1

744.7

772.1

253.2

208.8

16.7

32.5

511.2

257.6

–

257.6

56.0

201.6

219.7

421.3

1.7

253.3

196.4

16.8

32.6

499.1

271.7

–

271.7

60.3

211.4

(1.5)

209.9

0.1

254.0

195.4

16.4

30.0

495.8

266.9

(103.3)

(6.2)

15.1

172.5

35.5

137.0

1.8

138.8

0.6

245.7

201.8

15.8

28.1

491.4

263.5

–

179.1

–

442.6

63.3

379.3

3.2

382.5

1.2

238.5

200.0

15.5

28.5

482.5

285.1

–

285.1

61.8

223.3

3.7

227.0

2.3

235.1

189.9

15.2

28.5

468.7

279.4

–

279.4

63.4

216.0

1.0

217.0

0.9

243.5

193.6

15.4

28.3

480.8

263.9

–

263.9

58.5

205.4

3.0

208.4

1.3

245.0

203.1

17.4

27.9

493.4

278.7

–

278.7

62.3

216.4

3.7

220.1

0.8

Net earnings available to common shareholders

$ 419.6 $ 209.8 $ 138.2 $ 381.3 $ 224.7 $

216.1 $

207.1 $

219.3

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

Other items:

Gain on sale of IPC

Restructuring and other, net of tax ($27.1 million)

Gain on sale of Lifeco, net of tax (Q1 – $4.3 million)

Lifeco IFRS 17 adjustment

$ 198.9 $ 209.8 $ 205.5 $ 206.5 $ 224.7 $

216.1 $

207.1 $

219.3

220.7

–

(76.2)

(6.2)

15.1

–

174.8

–

Net earnings available to common shareholders

$ 419.6 $ 209.8 $ 138.2 $ 381.3 $ 224.7 $

216.1 $

207.1 $

219.3

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

– Basic

– Diluted

Earnings per share

– Basic

– Diluted

0.84 $

0.88 $

0.86 $

0.87 $

0.95 $

0.91 $

0.87 $

0.84

0.88

0.86

0.87

0.94

0.91

0.87

1.76

0.88

0.58

1.60

0.95

0.94

0.91

0.87

0.91

Average outstanding shares – Diluted (thousands)

238,156

238,550

238,631

238,424

237,958

237,808

239,242

241,251

Average AUM&A(3) ($ billions)

Investment fund AUM

Total AUM

AUM&A

Ending AUM&A(3) ($ billions)

Investment fund AUM

Total AUM

AUM&A

$ 164.0 $

165.7 $ 165.4 $ 164.2 $ 158.6 $

159.5 $ 164.3 $ 173.7

219.2

232.1

221.5

233.7

221.8

233.6

220.2

231.6

213.1

222.6

213.8

222.4

221.4

229.4

234.2

242.1

$ 169.5 $ 160.9 $ 166.3 $ 165.6 $ 158.9 $ 153.0 $ 155.5 $ 173.3

226.6

240.2

215.2

227.4

222.6

234.7

222.3

234.1

213.6

224.2

205.3

214.1

209.6

217.7

233.1

241.2

Ending AUM&A Including SI(3) ($ billions)

$ 389.4 $ 372.9 $ 375.2 $ 349.1 $ 288.3 $ 277.3 $ 279.9 $ 300.3

(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.
(3) As detailed in AUM&A definitions, AUM, AUA and AUM&A exclude IPC discontinued operations.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual Report Wealth Management

The Wealth Management segment includes IG Wealth

administration and other related fees and depend largely

Management and strategic investments in Rockefeller and

on the level and composition of assets under management.

Wealthsimple. Prior to the segment realignment in the fourth

quarter of 2023, Rockefeller and Wealthsimple were included

in the Strategic Investments and Other segment. Prior period

comparative information has been restated to reflect the

realigned segment.

The Wealth Management segment also included IPC, which was

classified as discontinued operations and was sold in the fourth

quarter of 2023.

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 AUA.

• Other financial planning revenues are fees related

to providing clients other financial products including

mortgages, insurance and banking products.

• Proportionate share of associates’ earnings is the

Company’s proportionate share of earnings from the

segment’s equity investments.

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

• Product and program fees are related to the management

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

of investment products and include management,

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

management company in Canada that focuses on providing

comprehensive personal financial planning to Canadians

through its advisors by offering a broad range of financial

products and services.

2023 Developments

Rockefeller Capital Management

On April 3, 2023, IGM Financial acquired a 20.5% equity

interest in Rockefeller for cash consideration of $835 million

Rockefeller, founded in 2018, is a leading U.S. independent

(USD $622 million).

financial services advisory firm focused on the high-net-worth

and ultra-high-net-worth segments. Rockefeller’s goal is to

be a premier advisory firm that redefines and elevates the

financial services experience to empower individuals, families,

institutions and corporations to realize their aspirations and

achieve their most important goals.

Wealthsimple, founded in 2014, is one of Canada’s fastest

growing financial services companies and provides simple digital

tools for growing and managing your money. Wealthsimple’s

mission is to help everyone achieve financial freedom.

Investment Planning Counsel

On November 30, 2023, IGM Financial completed the sale of 100%

of the common shares of IPC.

In accordance with IFRS 5 – Non-Current Assets Held for Sale and
Discontinued Operations, the operating results and cash flows of
IPC have been classified as discontinued operations within the

Wealth Management segment. As a result, the operating results

of IPC included within the Wealth Management segment Table 11
– Operating Results – Wealth Management have been classified as
discontinued operations and are shown as a separate line item

for all periods under review.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisIG Wealth Management Developments

nesto

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

a strategic agreement in the fourth quarter of 2022 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

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

another 22% 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.

Management’s ongoing strategy to transform its business and

follows the firm’s modernization of its investment management

Strategy

and financial planning platforms.

IG Private Company Advisory

Our goal is to help Canadians achieve financial well-being

through better planning as Canada’s top financial planning firm.

In the third quarter of 2023, IG Wealth Management introduced

We strive to meet our strategic mandate by:

IG Private Company Advisory to provide comprehensive

1) Focusing on key mass affluent and high net worth segments

advice to Canadian small to medium-sized business owners to

by aligning our capabilities to industry wealth drivers.

support their succession plans. IG Private Company Advisory’s

dedicated team works with IG Wealth Management clients and

provides advice in areas related to their business, including

growth strategy, mergers, acquisitions and divestitures, and

raising capital.

2) Utilizing a segmented advice model to align our best-

in-class advice with Canadians’ financial planning needs

and complexities.

3) Leveraging leading innovation to enhance client experience

and improve operational efficiencies.

IG Target Education Portfolios

IG Wealth Management has a client-centric strategy with

The Company introduced the IG Target Education Portfolios

a focus on high net worth (HNW) and mass affluent client

that will invest in an asset mix that automatically evolves based

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

on when a child is expected to begin their post-secondary

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

studies, shifting from a focus on maximizing growth in early

years to keep up with rising costs of education to focus on

income and capital preservations as the target education date

approaches. The IG Target Education Portfolios are designed

to work in Registered Education Savings Plan accounts, which

IG Wealth Management is committed to increasing the financial

confidence of all Canadians by leveraging our people, expertise

and resources because we believe it will help create stronger

communities and a better future for all.

provide the benefits of the Canadian Savings Grant, tax-free

We believe that Canadians deserve a high standard of advice

growth and tax efficient education funding not available

that takes into consideration all dimensions of their financial lives

through traditional savings account.

with financial plans tailored to meet and adapt to their needs.

IG Wealth Management

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 clients and their families and we are deeply committed to

improving financial literacy in the communities where we work

and live.

Our exclusive network is comprised of 3,139 advisors. IG Wealth

Management clients are more than one million individuals,

families and business owners.

We focus 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.

Financial Advice

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

through of a well-constructed financial plan.

Advisors

Canadians hold $6.2 trillion in discretionary financial assets
with financial institutions at December 31, 2022, based on

the most recent report from Investor Economics, and we

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

view these savings as IG Wealth Management’s addressable

complicated financial needs.

market. 75% of these savings are held by households with

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportIG Wealth Management provides advice through two

• 251 new advisors (333 at December 31, 2022), which are

primary channels:

those advisors with less than four years of experience.

• IG Wealth Management entrepreneurial advisors are focused

• 1,188 associates and regional vice-presidents (1,161 at

on households with more complex needs which are in the

December 31, 2022). Associates are licensed team members

high net worth and mass affluent segments of the market by

of advisor practices who provide financial planning services

focusing on households with greater than $250,000 of assets.

and advice to the clientele served by the team.

• IG Wealth Management’s corporate channel is focused on

• IG Wealth Management had a total advisor network of 3,139

households with less complex requirements and consists of

(3,235 at December 31, 2022).

employee advisors in two streams:

- Employee dedicated advisors focused on mass affluent

households with assets from $100,000 to $250,000 of assets.

- Employee pooled advisors focused on mass market

households with assets less than $100,000.

Our entrepreneurial advisor network creates a competitive
advantage and drives client engagement with a focus on

comprehensive financial planning and product solutions. Our

IG Wealth Management 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 $0.7 million per

advisor, unchanged from the comparative period of 2022.

advantage is further enabled by hiring top quality advisors,

• The advisor practice gross inflows were $1.6 million per practice

increasing proficiency, improving technology, implementing a

compared to $1.5 million in the comparative period of 2022.

client segmentation approach and enhancing a strong brand.

AUA consists of the following:

Key initiatives that impact advisor productivity are:

• Tightened recruiting standards that increased the likelihood

• Clients with household assets greater than $1 million

of success while also enhancing our culture and brand.

(defined as “high net worth”) which totalled $45.8 billion at

December 31, 2023, an increase of 21.6% from one year ago,

• Corporate advice channel that provides consistent service

levels to clients with less complex needs and creates capacity

and represented 38% of total AUA.

for advisors.

• Clients with household assets between $100 thousand

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

$66.3 billion at December 31, 2023, an increase of 4.2%

from one year ago, and represented 55% of total AUA.

• Clients with household assets less than $100 thousand

(defined as “mass market”) which totalled $9.1 billion at

December 31, 2023, a decrease of 4.4% from one year ago,

and represented 7% of total AUA.

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.

• Product and pricing enhancements with a focus on the high

net worth and mass affluent segments.

• Continued technology enhancements such as the Advisor

Desktop powered by Salesforce.

• IG Living PlanTM and other client experience enhancements.

• Digital application to deliver tailored client investment

proposals (powered by CapIntel).

We also support advisors and clients through our network of

product and planning specialists, who assist in the areas of

advanced financial planning, insurance, and securities. Effective

the first quarter of 2023 as part of the strategic mortgage

partnership, we have engaged nesto to provide mortgage

planning assistance to clients. These specialists help to ensure

that we are providing comprehensive financial planning across

all elements of a client’s financial life. Clients are served by

The following provides a breakdown of the IG Wealth

our mutual fund licensed and securities licensed advisors

Management advisor network into its significant components

and specialists.

at December 31, 2023:

• 1,700 advisor practices (1,741 at December 31, 2022), 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.

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.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisFor the distinct needs of the high net worth market, IG Private

Goodman & Company, PanAgora Asset Management, PIMCO

Wealth Management focuses on industry wealth drivers including

Canada Corp., Northleaf Capital Partners (Canada), BristolGate

tax planning and optimization, retirement readiness, wealth

Capital Partners, Aristotle Capital Boston, Putnam Investments

transfer and estate planning, small and medium enterprise

Canada, Franklin Templeton Investment Management, Wellington

monetization, high net worth financial literacy and philanthropy

Management Canada, Rockefeller & Co., JPMorgan Asset

and legacy planning.

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

Management advisor through an enhanced digital experience

Management (Canada), BlackRock Asset Management Canada,

ClearBridge Investments, 1832 Asset Management (Dynamic),

American Century Investment Management, and ChinaAMC.

to develop and track a financial plan which is unique to each

We provide clients with an extensive suite of well-constructed

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, focusing on managed solutions, 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 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

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.

IG Wealth Management was once again recognized for industry

leading performance during 2023 by winning ten Fundata
FundGrade A+† awards for its investment solutions. This award is
presented annually and honours funds that achieve consistently

high FundGrade scores throughout the calendar year.

We provide portfolio construction with investment solutions that

include public markets, private markets, and alternative strategies.

less expense and complexity than setting up and administering

Our investment solutions include:

their own private foundation.

The IG Advisory Account (IGAA) 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 increases fee transparency and can hold most securities

and investment products available in the marketplace to

individual investors.

Financial Solutions

IG Wealth Management strives to achieve expected

investment returns for the lowest possible risk focusing on

managed solutions that create value for clients through active

management. To do this, we select and engage high-quality

sub-advisors so our clients have access to a diverse range of

investment products and solutions. Each asset manager is

selected through a proven and rigorous process. We oversee

all sub-advisors to ensure that their activities are consistent

with their investment philosophies and with the investment

objectives and strategies of the products they advise.

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 (Canada), Sagard Credit Partners, Portage, Beutel

• Managed solutions that rebalance investments to ensure

that a chosen mix of investments and risk and return is

maintained. These solutions include IG Core Portfolios,

IG Managed Growth Portfolios, IG Managed Payout

Portfolios, Investors Portfolios, IG Climate Action Portfolios,

IG U.S. Taxpayer Portfolios, IG Target Education Portfolios,

and IG Managed Risk Portfolios.

• iProfile™ Portfolios – iProfile Portfolios are a suite of
six 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 Discretionary Portfolios – iProfile Private

Discretionary 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 Discretionary Portfolios have

been designed to deliver strong risk-adjusted returns by

diversifying across asset classes, management styles and

geographic regions. The portfolios include discretionary

model portfolios and iProfile Private Pools to support the

models: four iProfile Active Allocation Private Pools, iProfile

Alternatives Private Pool with mandates including global

macro and global equity hedge strategies, iProfile ETF Private

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportPool providing exposure through exchange traded funds

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

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

Emerging Markets Private Pool, Fixed Income Private Pool,

Canadian Equity Private Pool, U.S. Equity Private Pool and

International Equity Private Pool.

• A deep and broad selection of mutual funds, diversified by

manager, asset category, investment style, geography, market

capitalization and sector.

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, 2023, total segregated

fund assets were $1.2 billion, compared to $1.3 billion at

• Segregated funds that provide for long-term investment

growth potential combined with risk management, benefit

December 31, 2022.

guarantee features and estate planning efficiencies.

Insurance

• Separately managed accounts (discretionary dealer-managed

IG Wealth Management distributes life insurance in Canada

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 four Northleaf

through its arrangements with leading insurance companies,

and offers a broad range of term, universal life, whole life,

disability, critical illness, long-term care, personal health care

coverage and group insurance.

Capital Partners’ private credit investments that focus on loans

At December 31, 2023, total in-force policies were approximately

to middle market companies in North America and Europe,

374 thousand with an insured value of $105 billion, compared to

as well as to investments managed by BlackRock, PIMCO and

approximately 377 thousand with an insured value of $103 billion

Sagard. Private Investment Mandates are also included in both

at December 31, 2022. Distribution of insurance products is

the iProfile Canadian Equity Private Pool and the iProfile U.S.

enhanced through IG Wealth Management’s Insurance Planning

Equity Private Pool. Both of these mandates intend to provide

Specialists, located throughout Canada, who assist advisors with

investors with enhanced diversification and long-term capital

advanced estate planning solutions for high net worth clients.

appreciation through exposure to investments in privately held

companies. The iProfile Canadian Equity Private Pool has made

Securities Operations

commitments to Northleaf Growth Fund, Northleaf Venture

Investors Group Securities Inc. is an investment dealer

Catalyst III Fund, a custom Northleaf IG Canadian Private Equity

registered in all Canadian provinces and territories providing

Fund, as well as a fund managed by Sagard. The iProfile U.S.

clients with securities services to complement their financial

Equity Private Pool has made commitments to the Northleaf

and investment planning. IG Wealth Management advisors can

Capital Opportunities Fund, Northleaf Private Equity Investors

refer clients to one of our Wealth Specialists available through

VIII Fund, Northleaf Secondary Partners III Fund, as well as to

Investors Group Securities Inc.

investments managed by BlackRock and Portage. In the fourth

quarter of 2023, the iProfile International Equity Private Pool

Mortgage Banking Operations

made commitments to the Northleaf IG European Private

Mortgages are offered to clients by IG Wealth Management.

Equity Fund.

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, 2023, 92.2% of IG Wealth Management

mutual fund assets had a rating of three stars or better from
Morningstar† fund ranking service and 58.7% had a rating of
four or five stars. This compared to the Morningstar† universe
of 86.8% for three stars or better and 50.2% for four and five
star funds at December 31, 2023. Morningstar Ratings† are an
objective, quantitative measure of a fund’s three, five and ten

year risk-adjusted performance relative to comparable funds.

Licensed mortgage brokers are located throughout each

province in Canada, and work with our clients and their

advisors to develop mortgage and lending strategies that meet

the individual needs and goals of each client as part of their

comprehensive financial plan.

Mortgage fundings offered through IG Wealth Management

for the three and twelve months ended December 31, 2023

were $188 million and $783 million compared to $121 million

and $694 million in 2022, an increase of 55.3% and 12.9%,

respectively. At December 31, 2023, mortgages serviced

totalled $6.8 billion, compared to $6.9 billion at December 31,

2022, a decrease of 1.4%.

Private Company Advisory

Private Company Advisory is a comprehensive service to

business owners in the small to midsize segment that provides

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 9: Change in AUA – Wealth Management

Three months ended
($ millions)

Change in AUA – IG Wealth Management

IG gross client inflows

IG gross client outflows

Net flows

Investment returns

Net change in assets

Beginning assets

Ending AUA

Strategic investments ending AUA

Rockefeller

Wealthsimple

Intra-segment eliminations

2023
Dec. 31

2023
Sep. 30

2022
Dec. 31

2023
Sep. 30

Change

2022
Dec. 31

3,089

3,317

(228)

7,247

7,019

3,103

3,120

(17)

(2,593)

(2,610)

3,031

2,602

429

5,358

5,787

114,204

116,814

105,029

$ 121,223

$ 114,204

$ 110,816

33,061

30,991

7,657

(6)

6,051

(4)

–

4,447

–

40,712

37,038

4,447

(0.5)%

1.9 %

6.3

N/M

(2.2)

6.1 %

27.5

N/M

35.3

21.3

8.7

9.4 %

6.7 %

N/M %

26.5

(50.0)

9.9 %

7.1 %

72.2

N/M

N/M %

40.5 %

Consolidated ending AUA including strategic investments(1)

$ 161,935

$ 151,242

$ 115,263

Daily average AUA

IG Wealth Management

Twelve months ended
($ millions)

Change in AUA – IG Wealth Management

IG gross client inflows

IG gross client outflows

Net flows

Investment returns

Net change in assets

Beginning assets

Ending AUA(1)

Daily average AUA

IG Wealth Management

$ 117,090

$ 116,921

$ 109,638

0.1 %

6.8 %

2023
Dec. 31

2022
Dec. 31

Change

12,650

12,872

(1.7)%

12,815

(165)

10,572

10,407

10,182

2,690

(11,431)

(8,741)

110,816

119,557

25.9

N/M

(7.3)

$ 121,223

$ 110,816

9.4 %

$ 116,188

$ 111,271

4.4 %

(1) Q3 2023 and Q4 2022 exclude discontinued operations of IPC of $30.3 billion and $29.5 billion, respectively.

advice on debt and equity financing, business valuation

inflows, client outflows and investment returns. AUA represents

and succession.

Wealth Management AUM and AUA

AUM and AUA are key performance indicators for the Wealth

Management segment and are detailed in Tables 9 and 10.

Wealth Management AUA including strategic investments were

$161.9 billion at December 31, 2023, compared to $115.3 billion

at December 31, 2022. Strategic investments AUA is based

on the Company’s direct and indirect ownership interest in

these companies.

IG Wealth Management’s AUA were $121.2 billion at

December 31, 2023, an increase of 9.4% from December 31,

2022. The level of AUA are influenced by three factors: client

savings and investment products, including AUM 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 entrepreneurial advisors’

compensation is also based on AUA and net assets contributed

by our clients.

At December 31, 2023, Rockefeller’s client assets were USD

$122.1 billion ($161.6 billion). IGM Financial acquired a 20.5%

interest in Rockefeller during the second quarter of 2023.

At December 31, 2023, Wealthsimple’s AUA was $31.0 billion

compared to $18.3 billion at December 31, 2022, an increase of

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportTable 10: Change in AUM – IG Wealth Management

Three months ended
($ millions)

Sales

Redemptions

Net sales (redemptions)

Investment returns

Net change in assets

Beginning assets

Ending assets

Daily average AUM

Twelve months ended
($ millions)

Sales

Redemptions

Net sales (redemptions)

Investment returns

Net change in assets

Beginning assets

Ending assets

Daily average AUM

2023
Dec. 31

2,628

3,680

(1,052)

6,742

5,690

2023
Sep. 30

2,687

3,107

(420)

(2,396)

(2,816)

2022
Dec. 31

2,125

2,843

(718)

4,533

3,815

101,945

104,761

95,460

$ 107,635

$ 101,945

99,275

$ 104,198

$ 104,726

$ 99,208

2023
Sep. 30

(2.2)%

18.4

(150.5)

N/M

(2.7)

5.6 %

(0.5)%

Change

2022
Dec. 31

23.7 %

29.4

(46.5)

48.7

49.1

6.8

8.4 %

5.0 %

2023
Dec. 31

2022
Dec. 31

Change

10,917

10,587

3.1 %

13,171

(2,254)

10,614

8,360

99,275

10,544

(11,309)

(11,266)

110,541

$ 107,635

99,275

$ 104,121

$ 101,859

24.9

N/M

(10.2)

8.4 %

2.2 %

69.4%. IGM Financial holds a 24.7% interest in Wealthsimple at

Changes in mutual fund AUM for the periods under review are

December 31, 2023, compared to 24.3% at December 31, 2022.

reflected in Table 10.

IG Wealth Management AUM and AUA

For the quarter ended December 31, 2023, gross client inflows

of IG Wealth Management AUA were $3.1 billion, an increase

of 1.9% from $3.0 billion in the comparable period in 2022.

For the quarter ended December 31, 2023, gross inflows from

newly acquired clients with more than $1.0 million of assets

accounted for 25.4% of all newly acquired client inflows. Net

client outflows were $228 million compared to net client inflows

of $429 million in the comparable period in 2022. During the

fourth quarter, investment returns resulted in an increase of

$7.2 billion in AUA compared to an increase of $5.4 billion in the

fourth quarter of 2022.

Gross client inflows of IG Wealth Management AUA were

$12.7 billion for the twelve months ended December 31,

2023, and represented a decrease of 1.7% from $12.9 billion

in the comparable period in 2022. For the twelve months

ended December 31, 2023, gross inflows from newly acquired

clients with more than $1.0 million of assets accounted for

25.5% of all newly acquired client inflows. Net client outflows

were $165 million in the twelve month period, a decrease

of $2.9 billion from net client inflows of $2.7 billion in the

comparable period in 2022. During 2023, investment returns

resulted in an increase of $10.6 billion in AUA compared to a

decrease of $11.4 billion in 2022.

At December 31, 2023, $87.0 billion, or 82% of IG Wealth

Management’s mutual fund AUM, were in products with

unbundled fee structures, up 13.4% from $76.7 billion at

December 31, 2022 which represented 77% of AUM.

Change in AUM&A – 2023 vs. 2022

IG Wealth Management’s AUA were $121.2 billion at

December 31, 2023, an increase of 9.4% from $110.8 billion

at December 31, 2022. IG Wealth Management’s mutual fund

AUM were $107.6 billion at December 31, 2023, representing

an increase of 8.4% from $99.3 billion at December 31, 2022.

Average daily mutual fund assets were $104.2 billion in the

fourth quarter of 2023, up 5.0% from $99.2 billion in the

fourth quarter of 2022. Average daily mutual fund assets were

$104.1 billion for the twelve months ended December 31, 2023,

an increase of 2.2% from $101.9 billion in 2022.

For the quarter ended December 31, 2023, sales of IG Wealth

Management mutual funds through its advisor network were

$2.6 billion, an increase of 23.7% from the comparable period in

2022. Mutual fund redemptions totalled $3.7 billion, an increase

of 29.4% from 2022. IG Wealth Management mutual fund net

redemptions for the fourth quarter of 2023 were $1.1 billion

compared with net redemptions of $718 million in 2022. During

the fourth quarter, investment returns resulted in an increase

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysisof $6.7 billion in mutual fund assets compared to an increase of

Change in AUM&A – Q4 2023 vs. Q3 2023

$4.5 billion in the fourth quarter of 2022.

IG Wealth Management’s annualized quarterly redemption

rate for long-term funds was 13.4% in the fourth quarter

of 2023, compared to 11.0% in the fourth quarter of 2022.

IG Wealth Management’s twelve month trailing redemption

rate for long-term funds was 12.2% at December 31, 2023,

compared to 10.0% at December 31, 2022, and remains well

below the corresponding average redemption rate for all other

members of the Investment Funds Institute of Canada (IFIC) of

approximately 15.8% at December 31, 2023.

For the twelve months ended December 31, 2023, sales of IG

Wealth Management mutual funds through its advisor network

were $10.9 billion, an increase of 3.1% from 2022. Mutual fund
redemptions totalled $13.2 billion, an increase of 24.9% from

2022. Net redemptions of IG Wealth Management mutual funds

were $2.3 billion compared with net sales of $43 million in

2022. During 2023, investment returns resulted in an increase

of $10.6 billion in mutual fund assets compared to a decrease

of $11.3 billion in 2022.

IG Wealth Management’s AUA were $121.2 billion at

December 31, 2023, an increase of 6.1% from $114.2 billion at

September 30, 2023. IG Wealth Management’s mutual fund

AUM were $107.6 billion at December 31, 2023, an increase of

5.6% from $101.9 billion at September 30, 2023. Average daily

mutual fund assets were $104.2 billion in the fourth quarter of

2023 compared to $104.7 billion in the third quarter of 2023, a

decrease of 0.5%.

For the quarter ended December 31, 2023, sales of IG Wealth

Management mutual funds through its advisor network were

$2.6 billion, a decrease of 2.2% from the third quarter of

2023. Mutual fund redemptions totalled $3.7 billion for the

fourth quarter, increased 18.4% from the previous quarter,

and the annualized quarterly redemption rate was 13.4% in
the fourth quarter compared to 11.4% in the third quarter of

2023. IG Wealth Management mutual fund net redemptions

were $1.1 billion for the current quarter compared to net

redemptions of $420 million in the previous quarter.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportReview of Segment Operating Results

The Wealth Management segment’s adjusted net earnings are

presented in Table 11 and include the operations of IG Wealth

Management, earnings related to strategic investments and IPC.

As a result of the sale of IPC announced on April 3, 2023,

the operating results of IPC included within the Wealth

IG Wealth Management

IG Wealth Management’s adjusted net earnings are presented

within Table 12. Adjusted net earnings for the fourth quarter of

2023 were $101.7 million, a decrease of 2.8% from the fourth

quarter in 2022 and a decrease of 10.2% from the prior quarter.

Management segment have been classified as discontinued

Adjusted net earnings for the year ended December 31, 2023

operations and are shown as a separate line item in Table 11

were $432.4 million, a decrease of 1.1% from 2022.

for all periods under review.

Adjusted earnings before interest and taxes for the fourth

quarter of 2023 were $164.3 million, a decrease of 0.7% from

the fourth quarter in 2022 and a decrease of 9.0% from the

Table 11: 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

Proportionate share of associates’ earnings

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 – continuing operations(1)

Net earnings – discontinued operations(2)

Adjusted net earnings(1)

Non-controlling interest

2023
Dec. 31

2023
Sep. 30

2022
Dec. 31

2023
Sep. 30

Change

2022
Dec. 31

$ 301.3

$ 300.9

$ 283.1

0.1 %

6.4 %

224.0

525.3

–

26.4

551.7

3.7

(0.8)

225.5

526.4

0.1

38.3

564.8

2.2

0.7

214.7

497.8

0.6

32.4

530.8

2.1

(0.4)

554.6

567.7

532.5

145.6

24.3

18.7

43.8

62.5

232.4

115.9

43.0

391.3

163.3

26.0

137.3

36.6

100.7

3.5

104.2

–

148.0

23.6

17.2

45.5

62.7

234.3

108.8

43.8

386.9

180.8

25.9

154.9

41.2

113.7

4.5

118.2

–

140.3

20.4

16.8

39.7

56.5

217.2

108.9

41.5

367.6

164.9

22.6

142.3

38.2

104.1

3.5

107.6

0.2

(0.7)

(0.2)

(100.0)

(31.1)

(2.3)

68.2

N/M

(2.3)

(1.6)

3.0

8.7

(3.7)

(0.3)

(0.8)

6.5

(1.8)

1.1

(9.7)

0.4

(11.4)

(11.2)

(11.4)

(22.2)

(11.8)

4.3

5.5

(100.0)

(18.5)

3.9

76.2

(100.0)

4.2

3.8

19.1

11.3

10.3

10.6

7.0

6.4

3.6

6.4

(1.0)

15.0

(3.5)

(4.2)

(3.3)

–

(3.2)

–

(100.0)

Adjusted net earnings available to common shareholders(1)

$ 104.2

118.2

107.4

(11.8)%

(3.0)%

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

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 11: 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

Proportionate share of associates’ earnings

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 – continuing operations(1)

Net earnings – discontinued operations(2)

Adjusted net earnings(1)

Non-controlling interest

2023
Dec. 31

2022
Dec. 31

Change

$ 1,188.5

$ 1,140.4

890.5

875.1

2,079.0

2,015.5

1.0

126.2

3.9

140.5

2,206.2

2,159.9

13.3

(3.3)

2.4

(0.4)

2,216.2

2,161.9

584.4

91.8

66.7

179.8

246.5

922.7

438.5

172.4

558.9

76.1

65.5

182.2

247.7

882.7

424.0

169.1

1,533.6

1,475.8

682.6

98.2

584.4

156.1

428.3

15.0

443.3

0.2

686.1

89.7

596.4

159.7

436.7

11.3

448.0

0.2

4.2 %

1.8

3.2

(74.4)

(10.2)

2.1

N/M

2.5

4.6

20.6

1.8

(1.3)

(0.5)

4.5

3.4

2.0

3.9

(0.5)

9.5

(2.0)

(2.3)

(1.9)

32.7

(1.0)

–

Adjusted net earnings available to common shareholders(1)

$ 443.1

$ 447.8

(1.0)%

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

prior quarter. Adjusted earnings before interest and taxes

were $1,188.5 million, an increase of $48.1 million or 4.2% from

for the year ended December 31, 2023 were $686.9 million,

$1,140.4 million in 2022.

unchanged from 2022.

2023 vs. 2022

Fee Income

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 AUA.
Advisory fees were $301.3 million in the fourth quarter of 2023,

an increase of $18.2 million or 6.4% from $283.1 million in 2022.

For the twelve months ended December 31, 2023, advisory fees

The increase in advisory fees in the three months ending

December 31, 2023 was primarily due to the increase in

average AUA of 6.8%, as shown in Table 9, partially offset by

a decrease in the advisory fee rate. The increase in advisory

fees in the twelve months ending December 31, 2023 was

primarily due to the increase in average AUA of 4.4%. The

average advisory fee rate for the fourth quarter was 102.1 basis

points of average AUA compared to 102.4 basis points in 2022.

The average advisory fee rate for the twelve months ended

December 31, 2023, was 102.3 basis points of average AUA,

compared to 102.5 basis points in 2022.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportTable 12: 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)

2023
Dec. 31

2023
Sep. 30

2022
Dec. 31

2023
Sep. 30

Change

2022
Dec. 31

301.3

224.0

525.3

–

26.4

551.7

3.7

555.4

145.6

24.3

18.7

43.8

62.5

232.4

115.7

43.0

391.1

164.3

26.0

138.3

36.6

300.9

225.5

526.4

0.1

38.3

564.8

2.2

567.0

148.0

23.6

17.2

45.5

62.7

234.3

108.4

43.8

386.5

180.5

25.9

154.6

41.3

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

0.1 %

6.4 %

(0.7)

(0.2)

(100.0)

(31.1)

(2.3)

68.2

(2.0)

(1.6)

3.0

8.7

(3.7)

(0.3)

(0.8)

6.7

(1.8)

1.2

(9.0)

0.4

(10.5)

(11.4)

4.3

5.5

(100.0)

(18.5)

3.9

76.2

4.2

3.8

19.1

11.3

10.3

10.6

7.0

6.3

3.6

6.4

(0.7)

15.0

(3.2)

(4.2)

101.7

113.3

104.6

(10.2)%

(2.8)%

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

Product and program fees depend largely on the level and

Other financial planning revenues of $26.4 million for the fourth

composition of mutual fund AUM. Product and program

quarter of 2023 decreased by $6.0 million from $32.4 million

fees totalled $224.0 million in the current quarter, up 4.3%

in 2022. For the twelve month period, other financial planning

from $214.7 million a year ago primarily due to the increase

revenues of $126.2 million decreased by $14.3 million from

in average AUM of 5.0%, as shown in Table 10. Product and

$140.5 million in 2022.The change for both the three and

program fees were $890.5 million for the twelve month period

twelve month periods was primarily due to lower earnings

ended December 31, 2023 compared to $875.1 million in 2022,

from the mortgage banking operations and lower revenues

an increase of 1.8% primarily due to an increase in average

from the distribution of banking products partially offset by

AUM of 2.2%. The average product and program fee rate for

higher revenues from the distribution of insurance products.

the three and twelve month periods ending December 31, 2023

The lower earnings in both periods from the mortgage banking

were 85.5 and 85.7 basis points of AUM, respectively, compared

operations are due to fair value adjustments and net margins

to 85.9 for both comparable periods in 2022.

caused by the current interest rate environment.

Other financial planning revenues are primarily earned from:

A summary of mortgage banking operations for the three and

• Mortgage banking operations

twelve month periods under review is presented in Table 13.

• Distribution of insurance products through I.G. Insurance

Services Inc.

• Securities trading services provided through Investors Group

Securities Inc.

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

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 12: 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)

2023
Dec.31

2022
Dec. 31

Change

$ 1,188.5

$ 1,140.4

890.5

875.1

2,079.0

2,015.5

1.0

126.2

2,206.2

13.3

2,219.5

584.4

91.8

66.7

179.8

246.5

922.7

437.5

172.4

3.9

140.5

2,159.9

2.4

2,162.3

558.9

76.1

65.5

182.2

247.7

882.7

423.6

169.1

1,532.6

1,475.4

686.9

98.2

588.7

156.3

432.4

686.9

89.7

597.2

159.8

437.4

4.2 %

1.8

3.2

(74.4)

(10.2)

2.1

N/M

2.6

4.6

20.6

1.8

(1.3)

(0.5)

4.5

3.3

2.0

3.9

–

9.5

(1.4)

(2.2)

(1.1)%

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

twelve months ended December 31, 2023, and investment

$25.5 million for the three and twelve month periods ended

income earned on our cash and cash equivalents and securities

December 31, 2023 to $145.6 million and $584.4 million,

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

respectively, compared to 2022. The increase for both the

includes a charge from the Corporate and Other segment for

three and twelve month periods was primarily due to increases

the use of unallocated capital.

in AUA, deferred selling commission units maturing and other

Expenses

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 AUA.

Asset-based compensation increased by $5.3 million and

compensation changes.

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).

All sales-based compensation payments are capitalized and

amortized as they reflect incremental costs to obtain a client

contract. Sales-based compensation was $24.3 million for

the fourth quarter of 2023, an increase of $3.9 million from

$20.4 million in 2022. For the twelve month period, sales-

based compensation expense was $91.8 million, an increase

of $15.7 million from $76.1 million in 2022.

Other advisory and business development expenses were

$62.5 million in the fourth quarter of 2023, compared to

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportTable 13: 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 (losses) 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
Gains (losses) on sales(1)

Fair value adjustments

Other

Average mortgages serviced

Securitizations

Other

Mortgage sales to:(2)

Securitizations
Other(1)

2023
Dec. 31

2023
Sep. 30

2022
Dec. 31

2023
Sep. 30

Change

2022
Dec. 31

41.7

39.6

2.1

(0.8)

(9.2)

4.6

(3.3)

4,694

2,084

6,778

379

417

40.2

35.8

4.4

(1.8)

3.2

4.1

9.9

4,613

2,162

6,775

542

624

34.1

29.5

4.6

–

(5.7)

4.0

2.9

4,567

2,357

6,924

359

–

359

3.7 %

22.3 %

10.6

(52.3)

55.6

N/M

12.2

34.2

(54.3)

N/M

(61.4)

15.0

N/M %

1.8 %

(3.6)

– %

(30.1)%

(53.7)

(33.2)%

2.8 %

(11.6)

(2.1)%

5.6 %

N/M

16.2 %

2023
Dec. 31

2022
Dec. 31

Change

155.2

142.8

12.4

(3.6)

(8.0)

14.6

15.4

4,630

2,144

6,774

1,327

228

1,555

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

22.0 %

38.9

(49.2)

(2.9)

(158.1)

78.0

(40.8)%

(1.7)%

(10.8)

(4.8)%

3.6 %

(35.8)

(5.0)%

(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.

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysis$56.5 million in 2022, an increase of $6.0 million. The increase

in the third quarter of 2023. The decrease was primarily due to

was due to higher compensation paid on the distribution of

the decrease in average AUM of 0.5%, as shown in Table 10. The

insurance products and timing of certain projects and other

average product and program fee rate was 85.5 basis points in

expenses. Other advisory and business development expenses

the current quarter, compared to 85.7 in the third quarter.

were $246.5 million in the twelve months ended December 31,

2023, a decrease of $1.2 million from $247.7 million in 2022.

Other financial planning revenues of $26.4 million in the fourth

quarter of 2023 decreased by $11.9 million from $38.3 million

Operations and support includes costs that support our wealth

in the third quarter due to lower earnings from the mortgage

management and other general and administrative functions

banking operations partially offset by higher revenues on

such as product management, technology and operations, as

the distribution of insurance products. The lower earnings

well as other functional business units and corporate expenses.

from the mortgage banking operations are due to fair value

Operations and support expenses were $115.7 million for the

adjustments and net margins caused by the current interest

fourth quarter of 2023 compared to $108.8 million in 2022,

rate environment.

an increase of $6.9 million. The increase in the fourth quarter

was due to the timing of projects and other expenses. For the

Expenses

twelve month period, operations and support expenses were

$437.5 million in 2023 compared to $423.6 million in 2022, an

Advisory and business development expenses in the current
quarter were $232.4 million, a decrease of $1.9 million from

increase of $13.9 million or 3.3%.

$234.3 million in the previous quarter.

Sub-advisory expenses were $43.0 million for the fourth

Operations and support expenses were $115.7 million for

quarter of 2023 compared to $41.5 million in 2022, an increase

the fourth quarter of 2023 compared to $108.4 million in the

of $1.5 million or 3.6%. For the twelve month period, sub-

previous quarter primarily due to the timing of projects and

advisory expenses were $172.4 million in 2023 compared to

seasonality of expenses.

$169.1 million in 2022, an increase of $3.3 million or 2.0%. The

change in both periods was primarily due to changes in AUM.

Interest Expense

Interest expense, which includes allocated interest expense

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

$26.0 million in the fourth quarter of 2023, compared to

$22.6 million in 2022. For the twelve month period, interest

expense totalled $98.2 million compared to $89.7 million in

Wealth Management
Strategic Investments

Wealth Management strategic investment’s adjusted net

earnings are presented within Table 14. Adjusted net earnings

for the fourth quarter of 2023 were ($1.0) million, compared

to ($0.5) million in 2022 and $0.4 million in the prior quarter.

Annual adjusted net earnings were ($4.1) million, compared to

2022. Long-term debt interest expense is calculated based on

($0.7) million in 2022.

an allocation of IGM Financial’s long-term debt to IG Wealth

Management. The allocation of debt increased to $1.95 billion

during the second quarter of 2023, as a result of the issuance

of long-term debt by IGM Financial. Previously, the allocation

was $1.7 billion.

Q4 2023 vs. Q3 2023

Fee Income

Advisory fee income increased by $0.4 million or 0.1% to

$301.3 million in the fourth quarter of 2023 compared with

the third quarter of 2023. The increase in advisory fees in the

fourth quarter was primarily due to the increase in average

AUA of 0.1% for the quarter, as shown in Table 9. The average

Investment Planning Counsel –
Discontinued Operations

2023 vs. 2022

Adjusted net earnings for IPC in 2023 reflect earnings up to

the date of sale of November 30. Adjusted net earnings for the

fourth quarter were comparable to that of the fourth quarter of

2022 and for the year were $3.7 million higher compared to the

full year of 2022.

Q4 2023 vs. Q3 2023

advisory fee rate for the fourth quarter was 102.1 basis points

Adjusted net earnings in the fourth quarter of 2023 related

of average AUM, unchanged from the third quarter.

to IPC were $1.0 million lower in the fourth quarter of 2023

Product and program fees were $224.0 million in the fourth

quarter of 2023, a decrease of $1.5 million from $225.5 million

compared to the prior quarter.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportTable 14: Operating Results – Wealth Management Strategic Investments

Three months ended
($ millions)

Revenues

Proportionate share of associates’ earnings

Rockefeller

Other

Expenses

Operations and support

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

Twelve months ended
($ millions)

Revenues

Proportionate share of associates’ earnings

Rockefeller

Other

Expenses

Operations and support

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

2023
Dec. 31

2023
Sep. 30

2022
Dec. 31

2023
Sep. 30

Change

2022
Dec. 31

–

1.2

(0.8)

0.2

(1.0)

–

(0.5)

0.7

0.4

0.3

(0.1)

(1.0)

0.4

–

(0.4)

0.1

(0.5)

–

(0.5)

(100.0)%

– %

(60.0)

N/M

(50.0)

N/M

100.0

(100.0)

100.0

(100.0)

–

N/M %

(100.0)%

2023
Dec. 31

2022
Dec. 31

Change

(0.7)

(2.6)

(3.3)

1.0

(4.3)

(0.2)

(4.1)

–

(0.4)

0.4

(0.8)

(0.1)

(0.7)

N/M %

N/M

150.0

N/M

(100.0)

N/M %

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

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisAsset Management

The Asset Management segment includes Mackenzie

Management is considered a client of the Asset Management

Investments and strategic investments in ChinaAMC and

segment and transfer pricing is based on values for similar

Northleaf. Prior to the segment realignment in the fourth

sized asset management mandates.

quarter of 2023, ChinaAMC and Northleaf were included in

the Strategic Investments and Other segment. Prior period

comparative information has been restated to reflect the

• Proportionate share of associates’ earnings is the

Company’s proportionate share of earnings from the equity

investments in ChinaAMC and Northleaf.

realigned segment.

Asset Management revenue reflects:

• Net asset management fees – third party includes fees
received from our investment funds and fees from third

parties for investment management services. Compensation
paid to dealers offsets the fees earned.

• Asset management fees – Wealth Management includes

fees received from the Wealth Management segment. Wealth

Assets managed by Mackenzie for IG Wealth Management are

included in the Asset Management segment’s AUM.

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

Mackenzie Investments is a diversified asset management

innovation and offering multi-asset investment solutions

solutions provider founded in 1967. We provide investment

and services for investors with various risk-return profiles.

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.

Northleaf is a global private equity, private credit and

infrastructure fund manager headquartered in Toronto.

Northleaf seeks to deliver high absolute risk-adjusted returns

from access to value creation outside public markets.

Mackenzie earns asset management fees primarily from:

• Management fees earned from its investment funds, sub-

2023 Developments

advised accounts and institutional clients.

China Asset Management Co., Ltd.

• Fees earned from its mutual funds for administrative services.

On January 12, 2023, the Company acquired an additional 13.9%

• Redemption fees on deferred sales charge and low load units.

interest in ChinaAMC for cash consideration of $1.15 billion

The largest component of Mackenzie’s revenues is management

fees. The amount of management fees depends on the level and

composition of AUM. Management fee rates vary depending on

the investment objective and the account type of the underlying

AUM. Equity based mandates have higher management fee rates

from Power which increased the Company’s equity interest in

ChinaAMC from 13.9% to 27.8%.

Mackenzie Investments

than fixed income mandates and retail mutual fund accounts

Strategy

have higher management fee rates than exchange traded funds,

sub-advised accounts and institutional accounts.

Founded in 1998 as one of the first fund management
companies in China, ChinaAMC has developed and maintained a

position among the market leaders in China’s asset management

industry. ChinaAMC drives for growth through product

Mackenzie undertook a review of its strategic framework in the

first quarter and the overall strategy and focus remains largely

intact. Additions to our framework include an explicit emphasis
on being committed to the success of our clients and on having

the best minds in the investment industry, both of which are

defining features of our approach.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportMackenzie’s mission is to create a more invested world, together.

In addition to our retail distribution team, Mackenzie also

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

asset management solutions provider and business partner.

Mackenzie’s strategic mandates are: win Canadian retail; build

meaningful strategic partnerships; and develop presence

in underpenetrated channels with a targeted approach. We

achieve our strategic mandates with the following focus areas:

• Continuously improving distribution with a segmented

approach;

• Delivering competitive risk adjusted investment performance;

• Advancing brand leadership;

• Creating innovative and relevant products and solutions;

• Encouraging a sustainable future;

• Ensuring operational excellence and efficiency;

• Fostering a high performing, diverse and winning culture.

Our focus areas drive future business growth. We aim to

achieve this by being committed to the success of our clients,

attracting and fostering the best minds in the investment

industry, maintaining a boutique investment approach, having

an innovative and future oriented product focus, and being

responsible in everything we do.

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, Montreal, 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

Chinese capital markets. We also supplement our investment

capabilities with strategic partners (third party sub-advisors)

in selected areas. The development of a broad range of

investment capabilities and products is a key strength in

supporting the evolving financial needs of investors.

has specialty teams focused on strategic alliances and the

institutional marketplace.

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

offered by banks, insurance companies and other investment

companies. Strategic alliances with related parties include

providing advisory services to IG Wealth Management and

Lifeco subsidiaries (including IPC). Mackenzie partners with

Wealthsimple to distribute ETFs through their product shelf.

Mackenzie also serves as one of two exclusive investment

solutions providers to PFSL Investment Canada Ltd. (Primerica)

and launched a suite of 27 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.

In the institutional channel, Mackenzie provides investment

management services to pension plans, foundations and other

institutions. We attract new institutional business through our

relationships with pension and management consultants.

Gross sales and redemption activity in strategic alliance and

institutional accounts can be more pronounced than in the

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

distribution relationships of these accounts. These accounts

are also subject to ongoing reviews and rebalance activities

which may result in a significant change in the level of AUM.

Mackenzie continues to be positioned to build and enhance

our distribution relationships given our team of experienced

investment professionals, strength of our distribution network,

broad product shelf, competitively priced products and our

focus on client experience and investment excellence.

Brand

During the first quarter of 2023, Mackenzie launched its new

Our business focuses on three key distribution channels: retail,

brand platform “Be Invested” which encourages people to be

strategic alliances and institutional.

Mackenzie primarily distributes its retail investment products

through third-party financial advisors. Our sales teams work

with many of the more than 30,000 independent financial

advisors and their firms across Canada. Our innovative,

comprehensive lineup of investment solutions covers all asset

invested in the things that matter in their lives, while investing

their money so their goals are realized. This new platform is

an extension of Mackenzie’s mission “to create an invested

world together”.

Investment Management

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

Mackenzie has $195.7 billion in AUM at December 31, 2023,

products and investment solutions designed to help advisors

including $76.8 billion of sub-advisory mandates to the Wealth

meet the evolving needs of their clients. We regularly introduce

Management segment. It has teams located in Toronto,

new funds and we may merge or streamline our fund offerings

Montreal, Winnipeg, Vancouver, Boston, Dublin and Hong Kong.

to provide enhanced investment solutions.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisWe continue to deliver our investment offerings through a

Mutual Funds

boutique structure, with separate in-house investment teams

which each have a distinct focus and investment approach.

Our investment team currently consists of 16 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.

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 2023, Mackenzie

launched four mutual funds, including two Mackenzie FuturePath

mutual funds through its partnership with PFSL:

• Mackenzie Corporate Knights Global 100 Index Fund

• Mackenzie USD Global Dividend Fund

• Mackenzie FuturePath Shariah Global Equity Fund

• Mackenzie FuturePath USD US Core

Mackenzie’s 56% economic interest in Northleaf enhances its

During the fourth quarter of 2023, Mackenzie launched two

investment capabilities by offering global private equity, private

mutual funds:

credit and infrastructure investment solutions to our clients.

• Mackenzie Greenchip USD Global Environmental All Cap

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. With the launch of

the suite of 27 Futurepath Funds for Primerica, the following

third party sub-advisors were added: 1832 Asset Management,

Addenda, Brandywine, Blackrock, and T. Rowe Price.

Fund provides investors with an opportunity to gain U.S.
dollar exposure to the environmental economy.

• Mackenzie All-Equity ETF Portfolio provides investors with

a competitively priced, all-in-one core equity solution. The

Fund seeks long-term capital appreciation by investing in a

diversified set of Mackenzie and third-party exchange traded

funds with exposure to Canadian and foreign equities.

Alternative Funds

Long-term investment performance is a key measure of

Mackenzie currently has ten alternative funds including four

Mackenzie’s ongoing success. At December 31, 2023, 31.5%

products in collaboration with Northleaf Capital Partners

of Mackenzie mutual fund assets were rated in the top two

(Northleaf) as part of its ongoing commitment to expand retail

performance quartiles for the one year time frame, 43.0%

investor access to private market investment solutions. AUM of

for the three year time frame and 54.0% for the five year

the four products with Northleaf exceeds $150 million.

time frame. Mackenzie also monitors its fund performance

relative to the ratings it receives on its mutual funds from
the Morningstar† fund ranking service. At December 31,
2023, 83.2% of Mackenzie mutual fund assets measured
by Morningstar† had a rating of three stars or better and
50.7% had a rating of four or five stars. This compared to the
Morningstar† universe of 86.8% for three stars or better and
50.2% for four and five star funds at December 31, 2023.

Exchange Traded Funds

The addition of Exchange Traded Funds (ETF) has complemented

Mackenzie’s broad and innovative fund line-up and reflects its

investor-focused vision to provide advisors and investors with

new solutions to drive investor outcomes and achieve their

personal goals. These ETFs offer investors another investment

option when building long-term diversified portfolios.

Mackenzie was once again recognized for industry leading

During 2023, Mackenzie launched five new ETFs. These ETFs

performance during 2023 by winning ten Fundata FundGrade
A+† awards for its mutual funds and exchange traded funds. This
award is presented annually and honours funds that achieve

consistently high FundGrade scores throughout the calendar year.

Products

Mackenzie continues to evolve its product shelf by providing

enhanced investment solutions for financial advisors to offer

their clients. During 2023, Mackenzie launched six mutual

funds, including two FuturePath Funds through its partnership

with Primerica Financial Services Canada (PFSL), and five ETFs,

including a suite of three fixed income ETFs.

further broadened our diverse offerings of ETFs:

• Mackenzie Corporate Knights Global 100 Index ETF

• Mackenzie Canadian Ultra Short Bond Index ETF

• Mackenzie Canadian Government Long Bond Index ETF

• Mackenzie US Government Long Bond Index ETF

• Mackenzie All-Equity Allocation ETF

Mackenzie’s current line-up consists of 50 ETFs: 26 active and

strategic beta ETFs and 24 traditional index ETFs. ETF AUM

ended the quarter at $12.9 billion, inclusive of $7.4 billion

in investments from IGM managed products. This ranks

Mackenzie in sixth place in the Canadian ETF industry for AUM.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportFirst Home Saving Account

Mackenzie introduced a First Home Savings Account

(FHSA) during the fourth quarter of 2023. Available through

financial advisors, the Mackenzie FHSA enhances the ability

of Canadians to save for the purchase of their first home

through a tax-sheltered savings and investment account.

Mackenzie Investments AUM

Change in AUM – 2023 vs. 2022

Mackenzie’s total AUM at December 31, 2023 were

$195.7 billion, an increase of 4.9% from $186.6 billion at

December 31, 2022. Third party AUM were $118.9 billion, an

increase of 5.2% from $113.1 billion at December 31, 2022.

2024 Launch

Investment fund AUM were $61.9 billion at December 31, 2023,

Mackenzie filed a preliminary prospectus for the launch of the

compared to $59.7 billion at December 31, 2022, an increase of

following products during the first quarter of 2024:

3.8%. Mackenzie’s mutual fund AUM of $56.4 billion increased

• Mackenzie World Low Volatility Fund and Mackenzie World

Low Volatility ETF seeks to provide long-term capital growth

by investing primarily in equity securities of large and mid-

capitalization companies in developed global markets, while

seeking to provide lower volatility.

• Mackenzie Shariah Global Equity Fund seeks to provide

long-term capital growth by investing primarily in Shariah-

compliant equity securities of companies located anywhere

in the world.

Assets Under Management

AUM is a key performance indicator for the Asset Management

segment.

The changes in total AUM are summarized in Table 15 and the

changes in investment fund AUM are summarized in Table 16.

Assets managed for the Wealth Management segment are

included in total AUM.

Asset Management AUA including strategic investments

were $305.1 billion at December 31, 2023, compared to

$246.9 billion at December 31, 2022. Strategic investments

AUA is based on the Company’s direct and indirect ownership

interest in these companies.

At December 31, 2023, Mackenzie’s total AUM were

$195.7 billion, an increase of 4.9% from $186.6 billion last

year. Mackenzie’s total third party AUM were $118.9 billion,

an increase of 5.2% from $113.1 billion last year. The change in

Mackenzie’s AUM is determined by investment returns and net

contributions from our clients.

At December 31, 2023, ChinaAMC’s AUM was RMB¥ 1,823.6 billion

($341.0 billion) compared to RMB¥ 1,721.6 billion ($337.6 billion)

at December 31, 2022, an increase of 5.9% (CAD$ 1.0%).

Mackenzie held a 13.9% interest in ChinaAMC on December 31,

2022, which was increased to 27.8% on January 12, 2023.

At December 31, 2023, Northleaf’s AUM was $26.6 billion
compared to $24.1 billion at December 31, 2022, an increase of

10.4%. Mackenzie holds a 56% economic interest in Northleaf.

by 3.6% from $54.4 billion at December 31, 2022. Mackenzie’s

ETF assets excluding ETFs held within IGM Financial’s

managed products were $5.5 billion at December 31, 2023, an

increase of 5.5% from $5.2 billion at December 31, 2022. ETF

assets inclusive of IGM Financial’s managed products were
$12.9 billion at December 31, 2023 compared to $12.4 billion

at December 31, 2022.

In the three months ended December 31, 2023, Mackenzie’s

mutual fund gross sales were $1.7 billion, an increase of 11.4%

compared to $1.6 billion in 2022. Mutual fund redemptions in

the current quarter were $2.7 billion, an increase of 7.8% from

last year. Mutual fund net redemptions for the three months

ended December 31, 2023 were $1.0 billion, consistent with the

prior year. In the three months ended December 31, 2023, ETF

net creations were $161 million compared to $134 million last

year. Investment fund net redemptions in the current quarter

were $826 million compared to net redemptions of $832 million

last year. During the current quarter, investment returns

resulted in investment fund assets increasing by $3.7 billion

compared to an increase of $2.9 billion last year.

Total net redemptions excluding sub-advisory to Canada Life

and to the Wealth Management segment for the three months

ended December 31, 2023 were $1.0 billion, consistent with

the prior year. During the current quarter, investment returns

resulted in assets increasing by $4.2 billion compared to an

increase of $3.4 billion last year.

In the twelve months ended December 31, 2023, Mackenzie’s

mutual fund gross sales were $7.3 billion, a decrease of

3.0% from $7.5 billion in 2022. Mutual fund redemptions

in the current period were $9.6 billion, an increase of 3.8%

from last year. Mutual fund net redemptions for the year

ended December 31, 2023 were $2.3 billion, compared to

net redemptions of $1.7 billion in 2022. In the year ended

December 31, 2023, ETF net creations were $245 million

compared to $705 million last year. Investment fund net

redemptions in the current period were $2.1 billion compared

to net redemptions of $1.0 billion last year. During the current

period, investment returns resulted in investment fund assets

increasing by $4.3 billion compared to a decrease of $7.7 billion

last year.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 15: Change in Total AUM – Asset Management

Three months ended
($ millions)

Mackenzie AUM excluding sub-advisory to
Canada Life and the Wealth Management segment

Net sales (redemptions)

Mutual funds

ETF net creations

Investment funds(1)(2)
Sub-advisory, institutional and other accounts(3)

Total net sales (redemptions)

Investment returns

Net change in assets

Beginning assets

Ending assets

Mackenzie consolidated AUM

Mutual funds

ETFs

Investment funds(1)(2)
Sub-advisory, institutional and other accounts(3)

Sub-advisory to Canada Life(4)

Third party AUM
Sub-advisory and AUM to Wealth Management(2)(4)

Consolidated AUM

Strategic investments ending AUM

ChinaAMC

Northleaf

Intra-segment eliminations

2023
Dec. 31

2023
Sep. 30

2022
Dec. 31

2023
Sep. 30

Change

2022
Dec. 31

(987)

(712)

161

(826)

(186)

(1,012)

4,192

3,180

66,102

(699)

(692)

(1,948)

(2,640)

68,742

(966)

134

(832)

(135)

(967)

3,385

2,418

63,657

(38.6)%

(2.2)%

N/M

(18.2)

N/M

(46.2)

N/M

(3.8)

20.1

0.7

(37.8)

(4.7)

23.8

31.5

3.8

69,282

66,102

$ 66,075

4.8 %

4.9 %

56,408

53,950

$ 54,434

4.6 %

3.6 %

5,507

61,915

7,367

69,282

49,665

118,947

76,758

5,050

59,000

7,102

66,102

45,906

112,008

74,325

5,219

59,653

6,422

66,075

47,023

113,098

73,514

9.0

4.9

3.7

4.8

8.2

6.2

3.3

5.5

3.8

14.7

4.9

5.6

5.2

4.4

$ 195,705

$ 186,333

$ 186,612

5.0 %

4.9 %

94,792

$ 94,470

$ 46,932

0.3 %

102.0 %

14,912

(260)

15,092

(302)

13,521

(156)

$ 109,444

$ 109,260

$ 60,297

$ 114,128

$ 115,517

$ 112,651

189,302

191,889

186,260

(1.2)

13.9

0.2 %

3.2 %

(1.2)%

(1.3)

10.3

(66.7)

81.5 %

23.6 %

1.3 %

1.6

Consolidated ending AUM including strategic investments

$ 305,149

$ 295,593

$ 246,909

Mackenzie average total AUM(5)

Third party AUM

Consolidated

Twelve months ended
($ millions)

Mackenzie AUM excluding sub-advisory to Canada Life and the Wealth Management segment

Net sales (redemptions)

Mutual funds
ETF net creations(6)

Investment funds(1)(2)
Sub-advisory, institutional and other accounts(3)

Total net sales (redemptions)

Investment returns

Net change in assets

Beginning assets

Ending assets

Mackenzie average total AUM(5)

Third Party

Consolidated

2023
Dec. 31

2022
Dec. 31

Change

(2,314)

(1,736)

245

(2,069)

192

(1,877)

5,084

3,207

66,075

705

(1,031)

(834)

(1,865)

(8,370)

(10,235)

76,310

(33.3)%

(65.2)

(100.7)

N/M

(0.6)

N/M

(13.4)

69,282

$ 66,075

4.9 %

$ 115,436

$ 117,801

191,637

194,040

(2.0)%

(1.2)

(1) Investment fund AUM and net sales exclude investments into Mackenzie mutual funds and ETFs by IGM Financial’s investment funds.
(2) Effective January 2023, Mackenzie investment fund products sold through IG Wealth Management are reclassified from Investment funds to Sub-advisory and AUM

to Wealth Management.

(3) Sub-advisory, institutional and other accounts

(4) Effective November 30, 2023, Mackenzie’s sub-advisory to discontinued operations, which had previously been reported in sub-advisory and AUM to Wealth

Management, are now reported in sub-advisory to Canada Life.

(5) Based on daily average investment fund assets and month-end average sub-advisory, institutional and other assets.
(6) ETFs – During the first quarter of 2022, Wealthsimple made allocation changes which resulted in $675 million in purchases in Mackenzie ETFs.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportTable 16: Change in Investment Fund AUM – Mackenzie Investments(1)

Three months ended
($ millions)

Sales

Redemptions

Mutual fund net sales (redemptions)

ETF net creations

Investment fund net sales (redemptions)(2)(3)

Investment returns

Net change in assets

Beginning assets

Ending assets

Consists of:

Mutual funds

ETFs

Investment funds(3)

Daily average investment fund assets

Twelve months ended
($ millions)

Sales

Redemptions

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

Investment fund net sales (redemptions)(2)(3)

Investment returns

Net change in assets

Beginning assets

Ending assets

Daily average investment fund assets

2023
Dec. 31

1,736

2,723

(987)

161

(826)

3,741

2,915

59,000

2023
Sep. 30

1,503

2,215

(712)

(699)

(1,840)

(2,539)

61,539

2022
Dec. 31

1,559

2,525

(966)

134

(832)

2,934

2,102

57,551

2023
Sep. 30

Change

2022
Dec. 31

15.5 %

11.4 %

22.9

(38.6)

N/M

(18.2)

N/M

(4.1)

7.8

(2.2)

20.1

0.7

27.5

38.7

2.5

61,915

$ 59,000

59,653

4.9 %

3.8 %

56,408

53,950

$ 54,434

5,507

5,050

61,915

$ 59,000

59,848

$ 60,949

5,219

59,653

59,421

2023
Dec. 31

7,270

9,584

(2,314)

245

(2,069)

4,331

2,262

59,653

61,915

60,714

4.6 %

9.0

4.9 %

(1.8)%

2022
Dec. 31

7,496

9,232

(1,736)

705

(1,031)

(7,678)

(8,709)

68,362

59,653

62,114

3.6 %

5.5

3.8 %

0.7 %

Change

(3.0)%

3.8

(33.3)

(65.2)

(100.7)

N/M

(12.7)

3.8 %

(2.3)%

(1) Investment fund AUM and net sales excludes investments into Mackenzie mutual funds and ETFs by IGM Financial’s investment funds.
(2) Total investment fund net sales and AUM exclude Mackenzie mutual fund investments in ETFs.
(3) Effective January 2023, Mackenzie investment fund products sold through IG Wealth Management are reclassified from Investment funds to Sub-advisory and AUM

to Wealth Management.

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

During the first quarter of 2022, Wealthsimple made allocation
changes which resulted in $675 million purchases into

members of IFIC was approximately 15.5% at December 31,
2023. Mackenzie’s twelve-month trailing redemption rate is

Mackenzie ETFs. Excluding this transaction, ETF net creations

comprised of the weighted average redemption rate for front-

were $30 million and investment fund net redemptions were

end load assets, deferred sales charge and low load assets with

$1.7 billion in the twelve months ended December 31, 2022.

redemption fees, and deferred sales charge assets without

Redemptions of long-term mutual funds in the three and

twelve months ended December 31, 2023, were $2.7 billion and

$9.5 billion, respectively, compared to $2.5 billion and $9.1 billion

last year. Mackenzie’s annualized quarterly redemption rate

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.

for long-term mutual funds was 19.7% in the fourth quarter

Total net redemptions excluding sub-advisory to Canada Life

of 2023, compared to 18.2% in the fourth quarter of 2022.

and to the Wealth Management segment for the twelve months

Mackenzie’s twelve-month trailing redemption rate for long-

ended December 31, 2023 were $1.9 billion consistent with

term mutual funds was 17.1% at December 31, 2023, compared

2022. During the twelve month period, investment returns

to 16.0% last year. The corresponding average twelve-month

resulted in assets increasing by $5.1 billion compared to a

trailing redemption rate for long-term mutual funds for all other

decrease of $8.4 billion last year.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisDuring the twelve months of 2023, Mackenzie onboarded an

For the quarter ended December 31, 2023, Mackenzie mutual

institutional mandate of $490 million. During the twelve months

fund gross sales were $1.7 billion, an increase of 15.5% from

ended December 31, 2022, an institutional investor redeemed

the third quarter of 2023. Mutual fund redemptions were

$291 million within products that Mackenzie sub-advises

$2.7 billion, an increase of 22.9% from the third quarter

and Wealthsimple made allocation changes which resulted in

of 2023. Net redemptions of Mackenzie mutual funds for

$675 million in purchases in Mackenzie ETFs. Excluding these

the current quarter were $1.0 billion compared with net

transactions, total net redemptions excluding sub-advisory to

redemptions of $712 million in the previous quarter.

Canada Life and to the Wealth Management segment for the

twelve months ended December 31, 2023 were $2.4 billion

compared to $2.3 billion in 2022.

Redemptions of long-term mutual fund assets in the current

quarter were $2.7 billion, compared to $2.2 billion in the third

quarter. Mackenzie’s annualized quarterly redemption rate

As at December 31, 2023, Mackenzie’s sub-advisory to

for long-term mutual funds for the current quarter was 19.7%

Canada Life were $49.7 billion compared to $47.0 billion at

compared to 15.7% in the third quarter.

December 31, 2022.

For the quarter ended December 31, 2023, Mackenzie ETF net

As at December 31, 2023, Mackenzie’s sub-advisory and AUM

creations were $161 million compared to $13 million in the

to the Wealth Management segment were $76.8 billion or 71.3%

third quarter.

of Wealth Management AUM excluding strategic investments

compared to $73.5 billion or 70.8% of Wealth Management

AUM excluding strategic investments at December 31, 2022.

Investment fund net redemptions in the current quarter were

$826 million compared to net redemptions of $699 million in

the third quarter.

Change in AUM – Q4 2023 vs. Q3 2023

As at December 31, 2023, Mackenzie’s sub-advisory to

Mackenzie’s total AUM at December 31, 2023 were

Canada Life were $49.7 billion compared to $45.9 billion at

$195.7 billion, an increase of 5.0% from $186.3 billion at

September 30, 2023.

September 30, 2023. Third party AUM were $118.9 billion, an

increase of 6.2% from $112.0 billion at September 30, 2023.

As at December 31, 2023, Mackenzie’s sub-advisory and AUM

to the Wealth Management segment were $76.8 billion or 71.3%

Investment fund AUM were $61.9 billion at December 31,

of Wealth Management AUM excluding strategic investments

2023, an increase of 4.9% from $59.0 billion at September 30,

compared to $74.3 billion or 69.6% of total Wealth Management

2023. Mackenzie’s mutual fund AUM were $56.4 billion at

AUM excluding strategic investments at September 30, 2023.

December 31, 2023, an increase of 4.6% from $54.0 billion

at September 30, 2023. Mackenzie’s ETF assets were

$5.5 billion at December 31, 2023 compared to $5.1 billion at

September 30, 2023. ETF assets inclusive of IGM Financial’s

managed products were $12.9 billion at December 31, 2023

compared to $12.5 billion at September 30, 2023.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportReview of Segment Operating Results

The Asset Management segment’s adjusted net earnings are

year ended December 31, 2023 were $303.4 million, a decrease

presented in Table 17 and include the operations of Mackenzie

of 3.1% from 2022.

Investments and earnings related to strategic investments.

Mackenzie Investments

2023 vs. 2022

Revenues

Mackenzie Investments’ adjusted net earnings are presented

in Table 18. Adjusted net earnings for the fourth quarter of

2023 were $49.4 million, a decrease of 3.7% from the fourth

Asset management fees are classified as either Asset

management fees – third party or Asset management fees –

Wealth Management.

quarter in 2022 and a decrease of 12.6% from the prior quarter.

• Net asset management fees – third party is comprised of

Adjusted net earnings for the year ended December 31, 2023

the following:

were $204.4 million, a decrease of 4.1% from 2022.

Adjusted earnings before interest and taxes for the fourth
quarter of 2023 were $73.8 million, a decrease of 2.9% from the

fourth quarter in 2022 and a decrease of 11.3% from the prior

quarter. Adjusted earnings before interest and taxes for the

- 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

Table 17: 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

Proportionate share of associates’ earnings

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

Non-controlling interest

2023
Dec. 31

2023
Sep. 30

2022
Dec. 31

2023
Sep. 30

Change

2022
Dec. 31

230.9

236.2

232.5

(2.2)%

(0.7)%

0.6

231.5

(76.0)

–

(76.0)

155.5

28.0

183.5

4.0

32.3

219.8

20.8

92.7

1.2

114.7

105.1

6.5

98.6

20.1

78.5

1.7

76.8

0.7

236.9

(77.9)

–

(77.9)

159.0

28.8

187.8

2.5

25.1

215.4

19.0

87.2

1.2

107.4

108.0

6.6

101.4

22.4

79.0

0.1

78.9

0.7

233.2

(76.9)

–

(76.9)

156.3

27.3

183.6

5.6

24.9

214.1

21.3

91.3

1.0

113.6

100.5

5.9

94.6

20.2

74.4

2.1

72.3

(14.3)

(2.3)

(2.4)

–

(2.4)

(2.2)

(2.8)

(2.3)

60.0

28.7

2.0

9.5

6.3

–

6.8

(2.7)

(1.5)

(2.8)

(10.3)

(0.6)

N/M

(14.3)

(0.7)

(1.2)

–

(1.2)

(0.5)

2.6

(0.1)

(28.6)

29.7

2.7

(2.3)

1.5

20.0

1.0

4.6

10.2

4.2

(0.5)

5.5

(19.0)

(2.7)%

6.2 %

Adjusted net earnings available to common shareholders(1)

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

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 17: 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

Proportionate share of associates’ earnings

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

Non-controlling interest

2023
Dec. 31

2022
Dec. 31

Change

934.6

962.9

3.0

937.6

(311.4)

–

(311.4)

626.2

113.6

739.8

12.0

121.4

873.2

83.5

362.7

4.6

450.8

422.4

25.0

397.4

83.8

313.6

3.4

3.1

966.0

(320.3)

(7.3)

(327.6)

638.4

111.7

750.1

5.7

82.9

838.7

79.4

360.5

4.9

444.8

393.9

23.5

370.4

81.6

288.8

5.1

(2.9)%

(3.2)

(2.9)

(2.8)

(100.0)

(4.9)

(1.9)

1.7

(1.4)

110.5

46.4

4.1

5.2

0.6

(6.1)

1.3

7.2

6.4

7.3

2.7

8.6

(33.3)

9.3 %

Adjusted net earnings available to common shareholders(1)

310.2

283.7

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

our investment funds. The amount of management

and decrease to zero after two or three years, depending

fees depends on the level and composition of AUM.

on the purchase option.

Management fee rates vary depending on the investment

objective and the account type of the underlying AUM.

For example, equity-based mandates have higher

management fee rates than exchange traded funds,

fixed income mandates and retail mutual fund accounts

have higher management fee rates than sub-advised

and institutional accounts. The majority of Mackenzie’s

mutual fund assets are retail and sold through third party

financial advisors.

- 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 AUM. 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

- Redemption fees – consists of fees earned from the

deferred sales charge purchase option and on a low load

redemptions of mutual fund assets sold on a deferred

purchase option. Mackenzie stopped selling deferred sales

sales charge purchase option and on a low load purchase

charge purchase options and low load purchase options as

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

of June 1, 2022, in accordance with regulatory changes.

• Asset management fees – Wealth Management

consists of sub-advisory fees earned from the Wealth

Management segment.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportTable 18: Operating Results – Mackenzie Investments

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)

2023
Dec. 31

2023
Sep. 30

2022
Dec. 31

2023
Sep. 30

Change

2022
Dec. 31

230.9

236.2

232.5

(2.2)%

(0.7)%

0.6

231.5

(76.0)

–

(76.0)

155.5

28.0

183.5

4.0

187.5

20.8

91.7

1.2

113.7

73.8

6.5

67.3

17.9

49.4

0.7

236.9

(77.9)

–

(77.9)

159.0

28.8

187.8

2.5

190.3

19.0

86.9

1.2

107.1

83.2

6.6

76.6

20.1

56.5

0.7

233.2

(76.9)

–

(76.9)

156.3

27.3

183.6

5.6

189.2

21.3

90.9

1.0

113.2

76.0

5.9

70.1

18.8

51.3

(14.3)

(2.3)

(2.4)

–

(2.4)

(2.2)

(2.8)

(2.3)

60.0

(1.5)

9.5

5.5

–

6.2

(11.3)

(1.5)

(12.1)

(10.9)

(14.3)

(0.7)

(1.2)

–

(1.2)

(0.5)

2.6

(0.1)

(28.6)

(0.9)

(2.3)

0.9

20.0

0.4

(2.9)

10.2

(4.0)

(4.8)

(12.6)%

(3.7)%

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

Net asset management fees – third party were $155.5 million

Asset management fees – Wealth Management were

for the three months ended December 31, 2023, a decrease of

$28.0 million for the three months ended December 31, 2023,

$0.8 million or 0.5% from $156.3 million last year. The decrease in

an increase of $0.7 million or 2.6% from $27.3 million last year.

net asset management fees – third party was due to a decrease

The increase in management fees was due to a 2.1% increase

in the net asset management fee rate partially offset by a 1.3%

in average AUM and an increase in the management fee rate.

increase in average AUM, as shown in Table 15. Mackenzie’s net
asset management fee rate was 54.2 basis points for the three

Mackenzie’s management fee rate was 14.8 basis points for the
three months ended December 31, 2023 compared to 14.7 basis

months ended December 31, 2023, compared to 55.1 basis

points in the comparative period in 2022.

points in the comparative period in 2022. The decrease in rate

was mostly driven by a change in the composition of AUM.

Asset management fees – Wealth Management were

$113.6 million for the twelve months ended December 31, 2023,

Net asset management fees – third party were $626.2 million

an increase of $1.9 million or 1.7% from $111.7 million last year.

for the twelve months ended December 31, 2023, a decrease of

The increase in management fees was due to an increase in the

$12.2 million or 1.9% from $638.4 million last year. The decrease

management fee rate. Mackenzie’s management fee rate was

in net asset management fees – third party was primarily due

14.9 basis points for the twelve months ended December 31,

to a 2.0% decrease in average AUM, as shown in Table 15, offset

2023, compared to 14.7 basis points in the comparative period in

by an increase in the net management fee rate. Mackenzie’s

2022. Average AUM were comparable in both periods.

net asset management fee rate was 54.4 basis points for the
twelve months ended December 31, 2023, compared to 54.2

basis points in the comparative period in 2022. The increase in

rate was mostly driven by lower selling commissions, partially

offset by a change in the composition of AUM.

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.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 18: Operating Results – Mackenzie Investments (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)

2023
Dec. 31

2022
Dec. 31

Change

934.6

962.9

3.0

937.6

(311.4)

–

(311.4)

626.2

113.6

739.8

12.0

751.8

83.5

360.3

4.6

448.4

303.4

25.0

278.4

74.0

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

(2.9)%

(3.2)

(2.9)

(2.8)

(100.0)

(4.9)

(1.9)

1.7

(1.4)

110.5

(0.5)

5.2

0.5

(6.1)

1.3

(3.1)

6.4

(3.9)

(3.1)

204.4

213.2

(4.1)%

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

Net investment income and other was $4.0 million for the three

and support expenses were $91.7 million for the three months

months ended December 31, 2023 compared to $5.6 million

ended December 31, 2023, an increase of $0.8 million or 0.9%

last year, and was $12.0 million for the twelve months ended

from $90.9 million in 2022. Expenses for the twelve months

December 31, 2023 compared to $5.7 million last year.

ended December 31, 2023 were $360.3 million, an increase of

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

$20.8 million for the three months ended December 31, 2023,

a decrease of $0.5 million or 2.3% from $21.3 million in 2022.

Expenses for the twelve months ended December 31, 2023

were $83.5 million, an increase of $4.1 million or 5.2% from

$79.4 million last year.

$1.9 million or 0.5% from $358.4 million last year.

Sub-advisory expenses were $1.2 million for the three months
ended December 31, 2023, compared to $1.0 million in 2022.

Expenses for the twelve months ended December 31, 2023

were $4.6 million, compared to $4.9 million last year.

Interest Expense

Interest expense, which includes allocated interest expense

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

$6.5 million in the fourth quarter of 2023, compared to

$5.9 million in the comparative period in 2022. Interest expense

Operations and support includes costs associated with

for the twelve month period was $25.0 million compared

business operations, including technology and business

to $23.5 million in 2022. Long-term debt interest expense

processes, in-house investment management and product

is calculated based on an allocation of IGM Financial’s long-

shelf management, corporate management and support

term debt to Mackenzie. The allocation of debt increased to

functions. These expenses primarily reflect compensation,

$450 million during the second quarter of 2023, as a result of

technology and other service provider expenses. Operations

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual Reportthe issuance of long-term debt by IGM Financial. Previously, the

Operations and support expenses were $91.7 million for

allocation was $400 million.

the current quarter, an increase of $4.8 million or 5.5% from

Q4 2023 vs. Q3 2023

Revenues

$86.9 million compared to the third quarter.

Sub-advisory expenses were $1.2 million for the current

quarter, consistent with the third quarter.

Net asset management fees – third party were $155.5 million

for the current quarter, a decrease of $3.5 million or 2.2% from

Asset Management Strategic Investments

$159.0 million in the third quarter of 2023. Factors contributing

to the net decrease were:

• Net asset management fee rate was 54.2 basis points for

the current quarter compared to 54.8 basis points in the

third quarter.

Asset Management strategic investment’s adjusted net

earnings are presented within Table 19. Adjusted net earnings

for the fourth quarter of 2023 were $27.4 million, compared

to $21.0 million in 2022 and $22.4 million in the prior quarter.

Annual adjusted net earnings were $105.8 million, compared

• Average AUM were $114.1 billion in the current quarter,

to $70.5 million in 2022.

a decrease of 1.2% from the prior quarter.

The proportionate share of associates’ earnings consists of

Asset management fees – Wealth Management were

equity earnings from ChinaAMC and Northleaf.

$28.0 million in the current quarter, a decrease of $0.8 million

or 2.8% from $28.8 million in the third quarter of 2023. Factors

contributing to the net decrease were:

• Asset management fee rate was 14.8 basis points for

the current quarter compared to 15.0 basis points in the

second quarter.

• Average AUM were $75.2 billion in the current quarter,

a decrease of 1.6% from the prior quarter.

Net investment income and other was $4.0 million for the

current quarter, compared to $2.5 million in the third quarter.

Expenses

Advisory and business development expenses were $20.8 million

for the current quarter compared to $19.0 million in the

third quarter.

The Company’s share of ChinaAMC earnings were $23.7 million

in the fourth quarter of 2023 compared to $14.2 million in the

comparable period in 2022 and were $104.1 million in the twelve

month period of 2023, compared to $57.2 million in 2022. The

increase in 2023 reflects the Company purchase of an additional

13.9% equity interest in ChinaAMC on January 12, 2023.

The Company’s share of Northleaf’s earnings were $8.6 million

in the fourth quarter of 2023 compared to $10.7 million in the

comparable period in 2022 and were $17.3 million in the twelve

month period of 2023, compared to $25.7 million in 2022. This

is offset by non-controlling interest as reflected in the table.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 19: Operating Results – Asset Management Strategic Investments

Three months ended
($ millions)

Revenues

Proportionate share of associates’ earnings

ChinaAMC

Northleaf

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

Proportionate share of associates’ earnings

ChinaAMC

Northleaf

Expenses

Operations and support

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings(1)

Non-controlling interest

2023
Dec. 31

2023
Sep. 30

2022
Dec. 31

2023
Sep. 30

Change

2022
Dec. 31

23.7

8.6

32.3

1.0

31.3

2.2

29.1

1.7

27.4

24.6

0.5

25.1

0.3

24.8

2.3

22.5

0.1

22.4

14.2

10.7

24.9

0.4

24.5

1.4

23.1

2.1

21.0

(3.7)%

66.9 %

N/M

28.7

(19.6)

29.7

233.3

150.0

26.2

(4.3)

29.3

N/M

27.8

57.1

26.0

(19.0)

22.3 %

30.5 %

2023
Dec. 31

2022
Dec. 31

Change

104.1

17.3

121.4

2.4

119.0

9.8

109.2

3.4

Adjusted net earnings available to common shareholders(1)

105.8

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

57.2

25.7

82.9

2.1

80.8

5.2

75.6

5.1

70.5

82.0 %

(32.7)

46.4

14.3

47.3

88.5

44.4

(33.3)

50.1 %

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportCorporate and Othe r

Review of Segment Operating Results

The Corporate and Other segment includes the Company’s

investments in Lifeco and Portage, and unallocated capital.

2023 vs. 2022

The proportionate share of associates’ earnings decreased by

Earnings from the Corporate and Other segment include the

$21.8 million in the fourth quarter of 2023 compared to the

Company’s proportionate share of earnings of its associate,

fourth quarter of 2022, and decreased by $61.3 million in the

Lifeco, net investment income on unallocated capital and

twelve month period. These earnings reflect the proportionate

consolidation elimination entries.

At December 31, 2023, the Company held a 2.4% equity interest

in Lifeco. IGM Financial and Lifeco are controlled by Power.

Portage consists of early-stage investment funds dedicated

share of equity earnings from Lifeco as discussed in the

Consolidated Financial Position section of this MD&A. The

decrease in Lifeco earnings reflect the previously discussed

changes in IGM Financial’s percentage ownership effective on
January 12, 2023. In 2022 and in the fourth quarter of 2023, the

to backing innovating financial services companies and are

Company recorded its proportionate share of Lifeco earnings

controlled by Power.

In addition to Lifeco and other investments held by the

Company, the Corporate and Other segment includes

unallocated capital which totalled $282.3 million at

based on actual earnings. In the first three quarters of 2023,

the Company recorded its proportionate share of Lifeco

earnings using consensus analysts’ earnings estimates, as

Lifeco had reported quarterly earnings after the Company.

December 31, 2023 compared to $770.9 million at

Net investment income and other was $2.9 million in the fourth

December 31, 2022, as detailed in Table 20.

quarter of 2023, a decrease of $4.3 million from $7.2 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.

Corporate and Other segment adjusted net earnings are

presented in Table 21.

in 2022. For the twelve month period, net investment income

and other was $12.3 million, a decrease of $1.9 million from

$14.2 million in 2022.

Q4 2023 vs. Q3 2023

The proportionate share of associates’ earnings was

$19.1 million in the fourth quarter of 2023, an increase of

$6.4 million from the third quarter of 2023. During the fourth

quarter, the Company recorded an increase of $0.8 million to

adjust Lifeco’s third quarter earnings to the actual earnings

disclosed by Lifeco. During the third quarter, the Company

recorded an adjustment of ($8.0) million related to Lifeco’s

second quarter earnings.

Table 20: Total Assets – Corporate and Other

($ millions)

Investments in associate

Lifeco

FVTOCI investments

Portage and other investments

Unallocated capital and other

Total assets

Lifeco fair value

December 31, 2023

December 31, 2022

589.3

939.5

114.7

282.3

986.3

970.9

111.6

770.9

1,822.0

1,168.3

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 21: Operating Results – Corporate and Other

Three months ended
($ millions)

Revenues

Wealth Management

Asset management

Dealer compensation expense

Net asset management

Net investment income and other

Proportionate share of associates’ earnings

Lifeco

Expenses

Operations and support

Sub-advisory

Adjusted earnings before interest and taxes

Interest expense

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings – continuing operations

Net earnings – discontinued operations

Adjusted net earnings(1)

Twelve months ended
($ millions)

Revenues

Wealth Management

Asset management

Dealer compensation expense

Net asset management

Net investment income and other

Proportionate share of associates’ earnings

Lifeco

Expenses

Operations and support

Sub-advisory

Adjusted earnings before income taxes(1)

Income taxes

Adjusted net earnings – continuing operations

Net earnings – discontinued operations

Adjusted net earnings(1)

2023
Dec. 31

2023
Sep. 30

2022
Dec. 31

2023
Sep. 30

Change

2022
Dec. 31

(1.7)

–

– %

N/M %

(25.2)

(0.7)

(25.9)

2.9

19.1

(5.6)

0.2

(27.5)

(27.3)

21.7

–

21.7

(0.7)

22.4

(4.5)

(25.8)

(0.7)

(26.5)

3.2

12.7

(12.3)

0.4

(28.2)

(27.8)

15.5

0.1

15.4

(3.3)

18.7

(6.0)

17.9

12.7

(27.0)

(0.1)

(27.1)

7.2

40.9

21.0

(0.2)

(27.0)

(27.2)

48.2

–

48.2

3.4

44.8

0.2

45.0

2.3

–

2.3

(9.4)

50.4

54.5

(50.0)

2.5

1.8

40.0

(100.0)

40.9

78.8

19.8

25.0

6.7

N/M

4.4

(59.7)

(53.3)

N/M

(1.9)

(0.4)

(55.0)

–

(55.0)

N/M

(50.0)

N/M

40.9 %

(60.2)%

2023
Dec. 31

2022
Dec. 31

Change

(6.5)

–

N/M %

(102.2)

(2.7)

(104.9)

12.3

66.9

(32.2)

1.2

(111.3)

(110.1)

77.9

(2.0)

79.9

(12.5)

(110.5)

–

(110.5)

14.2

128.2

31.9

2.1

(110.5)

(108.4)

140.3

4.7

135.6

0.1

7.5

N/M

5.1

(13.4)

(47.8)

N/M

(42.9)

(0.7)

(1.6)

(44.5)

N/M

(41.1)

N/M

67.4

135.7

(50.3)%

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

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportIGM Financial Inc.

Consolidated Financial Position

IGM Financial’s total assets were $18.7 billion at December 31,

The total fair value of Corporate investments of $721 million

2023, unchanged from December 31, 2022.

Other Investments

The composition of the Company’s securities holdings is

detailed in Table 22.

Fair Value Through Other
Comprehensive Income (FVTOCI)

Gains and losses on FVTOCI investments are recorded in Other

comprehensive income.

Corporate Investments

Corporate investments is primarily comprised of the Company’s

investments in Wealthsimple, and Portag3 Ventures LP, Portag3

Ventures II LP and Portage Ventures III LP (Portage) and are

recorded at FVTOCI.

The Company is the largest shareholder in Wealthsimple with

a combined direct and indirect interest of 24.7% and a fair

value of $607 million at December 31, 2023, compared to

24.3% and a fair value of $492 million in December 31, 2022.

This change is largely due to a fair value increase of 20% and

an incremental investment during the period. The increase in

fair value is consistent with the increase in public market peer

valuations, as well as Wealthsimple’s business performance

and revised revenue expectations. 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.

at December 31, 2023 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.

Certain proprietary investment funds are consolidated where

the Company has made the assessment that it controls the

investment fund. The underlying securities of these funds are

classified as FVTPL.

Loans

The composition of the Company’s loans is detailed in Table 23.

Loans consisted of residential mortgages and represented

27.4% of total assets at December 31, 2023, compared to 26.8%

at December 31, 2022.

Loans measured at amortized cost are primarily comprised of

residential mortgages sold to securitization programs sponsored

by third parties that in turn issue securities to investors. An

offsetting liability, Obligations to securitization entities, has

been recorded and totalled $4.7 billion at December 31, 2023,

compared to $4.6 billion at December 31, 2022.

The Company holds loans pending sale or securitization. Loans

measured at fair value through profit or loss are residential

Table 22: Other Investments

($ millions)

Fair value through other comprehensive income

Corporate investments

Fair value through profit or loss

Equity securities

Proprietary investment funds

December 31, 2023

December 31, 2022

Cost

Fair Value

Cost

Fair Value

264.9

721.4

242.7

602.6

12.8

126.5

139.3

13.1

129.1

142.2

12.7

156.7

169.4

12.9

159.0

171.9

404.2

863.6

412.1

774.5

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 23: Loans

($ millions)

Amortized cost

Allowance for expected credit losses

December 31, 2023 December 31, 2022

5,109.4

(0.7)

5,108.7

5,022.3

(0.8)

5,021.5

mortgages held temporarily by the Company pending

In the fourth quarter of 2023, the Company securitized loans

sale. Loans held for securitization are carried at amortized

through its mortgage banking operations with cash proceeds

cost. Total loans being held pending sale or securitization

of $327.7 million compared to $351.4 million in 2022. Additional

are $375.5 million at December 31, 2023, compared to

information related to the Company’s securitization activities,

$371.9 million at December 31, 2022.

including the Company’s hedges of related reinvestment and

Residential mortgages originated by IG Wealth Management

are funded primarily through sales to third parties on a fully
serviced basis, including Canada Mortgage and Housing

interest rate risk, can be found in the Financial Risk section of this

MD&A and in Note 8 to the Consolidated Financial Statements.

Corporation (CMHC) or Canadian bank sponsored securitization

Investment in Associates

programs. At December 31, 2023, IG Wealth Management

serviced $8.7 billion of residential mortgages, including

$1.9 billion originated by subsidiaries of Lifeco.

Securitization Arrangements

Through the Company’s mortgage banking operations,

residential mortgages 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-sponsored asset-backed

commercial paper (ABCP) programs. The Company retains

servicing responsibilities and certain 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

Great-West Lifeco Inc.

At December 31, 2023, the Company held a 2.4% equity interest

in Lifeco. IGM Financial and Lifeco are controlled by Power.

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

ended December 31, 2023 compared with 2022 are shown in

Table 24.

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%. IGM Financial’s

accounting gain on the sale of the Lifeco shares is $172.9 million

before-tax ($168.6 million after tax), consisting of $179.1 million

recorded in the first quarter and a decrease of $6.2 million that

was recorded in the second quarter.

In the second quarter of 2023, the Company recorded a Lifeco

IFRS 17 adjustment of $15.1 million representing a change of

estimate which has been recorded on a prospective basis.

programs as follows: i) the mortgages and related obligations

China Asset Management Co., Ltd.

are carried at amortized cost, with interest income and interest

expense, utilizing the effective interest rate method, recorded

over the term of the mortgages, ii) the component of swaps

entered into under the CMB Program whereby the Company

pays coupons on Canada Mortgage Bonds and receives

investment returns on the reinvestment of repaid mortgage

principal, are recorded at fair value, and iii) cash reserves held

under the ABCP program are carried at amortized cost.

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

27.8% equity interest in ChinaAMC, as it exercises significant

influence. Changes in the carrying value for the three and

twelve months ended December 31, 2023 are shown in

Table 24. The change in Other comprehensive income of
positive $8.1 million in the three months ended December 31,

2023, was due to a 0.5% appreciation of the Chinese yuan

relative to the Canadian dollar.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportTable 24: Investment in Associates

($ millions)

Lifeco

ChinaAMC Rockefeller

Northleaf

Other

Total

Lifeco

ChinaAMC

Northleaf

Other

Total

December 31, 2023

December 31, 2022

Three months ended

Carrying value,
October 1(1)

Investment

Dividends

$ 578.8

$1,852.9

$ 864.2

$ 293.2

38.8

$3,627.9

$ 903.2

$ 764.8

$ 273.8

–

$ 1,941.8

–

(11.5)

0.6

–

Proportionate share of:

Earnings(2)(3)

19.1

23.7

1.5

–

2.1

(11.5)

–

(18.3)

–

40.5

–

40.5

(18.3)

8.6

(0.8)

50.6

40.9

14.2

10.7

(0.4)

65.4

Other
comprehensive
income (loss) and
other adjustments

Carrying value,
December 31

Twelve months ended

Carrying value,
January 1(1)

Investment

Disposition

Dividends

Proportionate share of:

Earnings(2)(3)

IFRS 17 adjustment

Other
comprehensive
income (loss) and
other adjustments

Carrying value,
December 31

2.9

8.1

(20.9)

–

(9.9)

13.7

8.2

–

21.9

$ 589.3

$1,885.3

$ 844.8

$ 301.8

38.0

$3,659.2

$ 939.5

$ 787.2

$ 284.5

$ 40.1

$ 2,051.3

$ 939.5

$ 787.2

–

$ 284.5

40.1

$2,051.3

$ 885.1

$ 768.7

$ 258.8

–

$ 1,912.6

–

1,162.4

857.7

(397.7)

(46.0)

66.9

15.1

–

(69.2)

104.1

–

(0.7)

–

11.5

(99.2)

(12.2)

–

0.5

2,020.6

–

(397.7)

(115.2)

–

(73.2)

(31.3)

–

40.5

–

40.5

–

(104.5)

17.3

(2.6)

–

185.0

15.1

128.2

–

57.2

–

(99.9)

(0.6)

(7.4)

25.7

(0.4)

210.7

–

(8.0)

$ 589.3

$1,885.3

$ 844.8

$ 301.8

38.0

$3,659.2

$ 939.5

$ 787.2

$ 284.5

$ 40.1

$ 2,051.3

(1) Opening balances have been restated for the estimated impact of Lifeco’s adoption of IFRS 17 and IFRS 9.
(2) The proportionate share of earnings from the Company’s investment in associates is recorded in the Wealth Management, Asset Management and Corporate and

Other segment.

(3) The Company’s proportionate share of Northleaf’s earnings, net of Non-controlling interest, was $6.9 million and $13.9 million, respectively, for the three and twelve

month periods of 2023 compared to $8.6 million and $20.6 million, respectively, in 2022.

ChinaAMC’s total assets under management, excluding

influence arising from board representation, participation in the

subsidiary assets under management, were RMB¥ 1,823.6 billion

policy making process and shared strategic initiatives.

($341.0 billion) at December 31, 2023, representing an increase

of 5.9% (CAD$ 1.0%) from RMB¥ 1,721.6 billion ($337.6 billion)

at December 31, 2022. Mutual fund net flows, which exclude

Rockefeller’s client assets were USD $122.1 billion ($161.6 billion)

at December 31, 2023.

subsidiary and institutional assets under management, were

On April 3, 2023, the Company acquired a 20.5% equity

RMB¥ 41.5 billion and RMB¥ 220.2 billion for the three and

interest in Rockefeller for cash consideration of $835 million

twelve month periods ended December 31, 2023, respectively

(USD $622 million).

(net flows obtained from Wind Information Co., Ltd.).

On January 12, 2023, the Company acquired an additional

13.9% interest in ChinaAMC for cash consideration of

Northleaf Capital Group Ltd.

The Company, through an acquisition vehicle held by the

$1.15 billion from Power which increased the Company’s equity

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

interest in ChinaAMC from 13.9% to 27.8%.

Rockefeller Capital Management

and a 70% economic interest in Northleaf. The acquisition

vehicle is owned 80% by Mackenzie and 20% by Lifeco.

Mackenzie and Lifeco have an obligation and right to purchase

The financial results of Rockefeller are accounted for using the

the remaining equity and voting interest in Northleaf

equity method of accounting as the Company exercises significant

commencing in approximately five years from the acquisition

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysisdate and extending into future periods. The equity method

Northleaf’s assets under management, including invested

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

capital and uninvested commitments, were $26.6 billion as at

interest as it exercises significant influence. Significant

December 31, 2023, representing an increase of $2.5 billion or

influence arises from board representation, participating in

10.4% from $24.1 billion at December 31, 2022. The increase

the policy making process and shared strategic initiatives.

during the twelve month period was driven by $3.6 billion in

The Company controls the acquisition vehicle therefore it

recognizes the full 70% economic interest in Northleaf and

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

net interest in Northleaf of 14%.

new commitments, offset in part by a decrease of $0.6 billion

related to return of capital and a decrease of $0.5 billion related

to foreign exchange on USD denominated assets.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportConsolidated Liquidity and Capital Resources

Liquidity

Cash and cash equivalents totalled $544.6 million at

December 31, 2023 compared with $1,072.9 million at

$1,404.2 million for the year ended December 31, 2023,

compared to $1,425.6 million for 2022. EBITDA before sales

December 31, 2022. Cash and cash equivalents related

commissions excludes the impact of both commissions paid

to the Company’s deposit operations were $0.6 million at

and commission amortization (refer to Table 1).

December 31, 2023, compared to $0.8 million at December 31,

2022, as shown in Table 25.

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

Client funds on deposit represents cash balances held by

For the financial year ($ millions)

clients within their investment accounts and with the offset

included in deposit liabilities. The decrease in Client funds on

deposit and Deposit liabilities in 2023 was partially due to the

sale of IPC in 2023. IPC Client funds on deposit and Deposit

liabilities were $318 million at December 31, 2022.

Working capital, which consists of current assets less current

liabilities, totalled $358.2 million at December 31, 2023

1,547

1,426

1,404

EBITDA before
sales commissions

1,294

1,226

compared with $846.8 million at December 31, 2022 (Table 26).

1,129

1,087

1,377

1,295

1,288

EBITDA after
sales commissions

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

2019

2020

2021

2022

2023

operations.

• Pay interest related to long-term debt.

EBITDA before and after sales commissions excluded the following:

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

• Maintain liquidity requirements for regulated entities.

one-time charges.

• Pay quarterly dividends on its outstanding common shares.

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

• Finance common share repurchases and retirement of

long-term debt.

• Capital investment in the business and business acquisitions.

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

IGM Financial continues to generate significant cash flows from

sale of Personal Capital in 2020.

its operations. Earnings before interest, taxes, depreciation

2023 – the gain on sale of IPC, gain on sale of Lifeco, Lifeco IFRS 17

and amortization before sales commissions (EBITDA before

adjustment and restructuring and other.

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

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

Financial Measures and Other Financial Measures), totalled

Other Financial Measures section of this document.

Table 25: 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

2023

2022

0.6

0.8

3,365.7

4,347.4

0.7

9.3

0.6

9.4

$ 3,376.3

$ 4,358.2

$ 3,344.2

$ 4,334.0

23.3

8.8

15.2

9.0

$ 3,376.3

$ 4,358.2

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisTable 26: 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

2023

2022

544.6

$ 1,072.9

3,365.7

431.6

1,020.8

5,362.7

712.9

3,343.1

948.5

5,004.5

4,347.4

462.6

992.2

6,875.1

726.4

4,332.8

969.1

6,028.3

358.2

846.8

Earnings before interest, taxes, depreciation and amortization

Adjustments to determine net cash from operating activities

after sales commissions (EBITDA after sales commissions),

during the year ended 2023 compared to 2022 consist of

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

non-cash operating activities offset by cash operating activities:

Other Financial Measures), totalled $1,287.5 million for the year

ended December 31, 2023, compared to $1,294.8 million for

2022. EBITDA after sales commissions excludes the impact of

commission amortization (refer to Table 1).

• 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

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

other assets.

for information related to other sources of liquidity and to

• The deduction of investment in associates’ equity earnings

the Company’s exposure to and management of liquidity and

offset by dividends received.

funding risk.

Cash Flows

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

benefits offset by cash contributions.

• Changes in operating assets and liabilities and other.

Table 27 – Cash Flows is a summary of the Consolidated

• The adjustments for other items in 2023 which included the

Statements of Cash Flows which forms part of the Consolidated

gain on the partial sale of the Company’s investment in Lifeco

Financial Statements for the year ended December 31, 2023.

and the gain on the sale of IPC.

Cash and cash equivalents decreased by $528.3 million in 2023

• The add-back of a one-time adjustment in 2023 in respect

compared to a decrease of $219.5 million in 2022.

of a restructuring provision and other.

• The deduction of restructuring provision cash payments.

Table 27: 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

2023
Dec. 31

2022
Dec. 31

Change

$ 1,367.0

$ 1,122.9

21.7 %

(222.7)

(307.0)

837.3

(203.8)

(1,161.8)

(528.3)

1,072.9

(330.9)

(54.3)

737.7

(1,091.9)

134.7

(219.5)

1,292.4

32.7

N/M

13.5

81.3

N/M

(140.7)

(17.0)

544.6

$ 1,072.9

(49.2)%

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportFinancing activities during the year ended December 31, 2023

• The investment in Rockefeller of $857.7 million in 2023, which

compared to 2022 related to:

was comprised of cash consideration of $835 million and

• An increase in obligations to securitization entities

transaction costs.

of $1,256.0 million and repayments of obligations to

• Sale of Lifeco shares with proceeds of $552.7 million in 2023.

securitization entities of $1,217.0 million in 2023 compared

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.

• Net proceeds on the credit facility of $550.0 million in 2023

which was repaid prior to the close of the IPC sale.

• Sale of IPC in 2023 with proceeds of $555.0 million, net of

cash and cash equivalents of discontinued operations.

Accumulated Other
Comprehensive Income

• The issuance of debentures of $300.0 million in 2023.

Accumulated other comprehensive income totalled

• The payment of regular common share dividends which

totalled $535.4 million in 2023 compared to $537.2 million

$316.3 million at December 31, 2023, compared to

$362.8 million at December 31, 2022, as detailed in Table 28.

in 2022.

2022 also included the purchase of 2,890,000 common shares

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

$115.7 million.

Investing activities during the year ended December 31, 2023

compared to 2022 primarily related to:

• The purchases of other investments totalling $86.7 million

and sales of other investments with proceeds of

$80.8 million in 2023 compared to $150.5 million and

$120.1 million, respectively, in 2022.

The Other comprehensive loss for employee benefits in 2023

was primarily due to a decrease in discount rates.

The gain related to Other investments in 2023 is primarily

due a change in fair value of Wealthsimple of approximately

20%. The change is consistent with the increase in public

market peer valuations, as well as Wealthsimple’s business

performance and revised revenue expectations.

The Other comprehensive loss for Investment in associates

in 2023 was primarily related to the second quarter foreign

exchange translation related to the Company’s investment

• An increase in loans of $1,203.2 million with repayments

in ChinaAMC.

of loans and other of $1,113.5 million in 2023 compared to

$1,274.4 million and $1,584.4 million, respectively, in 2022,

primarily related to residential mortgages in the Company’s

mortgage banking operations.

The disposal of investment in associate of $16.0 million in 2023

represents the amount of accumulated other comprehensive

income transferred out as a result of the sale of Lifeco shares.

• Net cash used in additions to intangible assets and

acquisitions and other was $125.0 million in 2023 compared

Capital Resources

to $107.1 million in 2022.

The Company’s capital management objective is to maximize

• The investment in ChinaAMC of $1,162. 4 million in 2023.

shareholder returns while ensuring that the Company is

capitalized in a manner which appropriately supports regulatory

capital requirements, working capital needs and business

Table 28: Accumulated Other Comprehensive Income (Loss)

($ millions)

2023

Balance, January 1

Other comprehensive income (loss)

Disposal of investment in associate

Transfer out of fair value through other comprehensive income

Balance, December 31

2022

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

4.4

(18.4)

–

(14.0)

(95.6)

100.0

–

4.4

309.6

85.1

–

(0.7)

394.0

919.1

(585.5)

(24.0)

309.6

48.8

(96.5)

(16.0)

–

(63.7)

59.6

(10.8)

–

Total

362.8

(29.8)

(16.0)

(0.7)

316.3

883.1

(496.3)

(24.0)

48.8

362.8

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysisexpansion. The Company’s capital management practices are

Other activities in 2023 included the declaration of common

focused on preserving the quality of its financial position by

share dividends of $535.7 million or $2.25 per share. Changes

maintaining a solid capital base and a strong balance sheet.

in common share capital are reflected in the Consolidated

Capital of the Company consists of long-term debt and common

Statements of Changes in Shareholders’ Equity.

shareholders’ equity which totalled $9.1 billion at December 31,

2023, compared to $8.2 billion at December 31, 2022. 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

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

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

DBRS 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.

levels of capital based on either working capital, liquidity

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

or shareholders’ equity. The Company’s subsidiaries have

the securities of the Company and do not address market price

complied with all regulatory capital requirements.

or other factors that might determine suitability of a specific

The total outstanding long-term debt was $2.4 billion at

December 31, 2023, compared to $2.1 billion at December 31,

2022. Long-term debt is comprised of debentures which are

senior unsecured debt obligations of the Company subject to

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.

standard covenants, including negative pledges, but which do

The A rating assigned to IGM Financial’s senior unsecured

not include any specified financial or operational covenants.

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

The increase in long-term debt resulted from the issuance on

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

May 26, 2023, of $300.0 million 5.426% debentures maturing

the Company’s capacity to meet its financial commitment

May 26, 2053. The offering was made pursuant to a prospectus

supplement to IGM Financial’s short form base shelf

prospectus dated December 7, 2022. The net proceeds were

used by IGM Financial to fund a portion of the purchase price

in connection with the acquisition of the 20.5% equity interest

in Rockefeller and for general corporate purposes.

The Company commenced a Normal Course Issuer Bid

(NCIB) on December 21, 2023 to purchase for cancellation

up to 3 million of its common shares. The program will be

used to mitigate the dilutive effect of stock options issued

under the Company’s stock option plan and for other capital

management purposes. The Company’s previous NCIB expired

on February 28, 2023, and the Company has not repurchased

any shares in the last 12 months.

In connection with its NCIB, 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 the normal course issuer bid during

certain pre-determined trading blackout periods, subject to

pre-established parameters. 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.

Capital

As at December 31 ($ millions)

9,120

2,400

8,230

2,100

8,601

7,143

2,100

6,599

2,100

4,499

4,994

6,450

6,063

6,660

2019

2020

2021

2022

2023

Non-controlling Interest

Long-term Debt

Common Shareholders’ Equity

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual Reporton the obligation is strong, but the obligation is somewhat

• Loans classified as held for trading are valued using market

more susceptible to the adverse effects of changes in

interest rates for loans with similar credit risk and maturity,

circumstances and economic conditions than obligations

specifically lending rates offered to retail borrowers by

in higher rated categories.

financial institutions.

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

unsecured debentures by Morningstar DBRS is the fifth

highest of the 22 ratings used for long-term debt. Under the

Morningstar DBRS long-term rating scale, debt securities

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

• 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

the payment of financial obligations is substantial, but of lesser

cash flow analysis.

credit quality than AA. Entities in the A (High) category may be

• Obligations to securitization entities are valued by

vulnerable to future events, but qualifying negative factors are

discounting the expected future cash flows at prevailing

considered manageable.

Financial Instruments

Table 29 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, credit

facility, and certain other financial liabilities.

Fair value is determined using the following methods

and assumptions:

• Other investments and other financial assets and financial

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 25 of the Consolidated Financial Statements which

provides additional discussion on the determination of fair

value of financial instruments.

liabilities are valued using quoted prices from active markets,

Although there were changes to both the carrying values and

when available. When a quoted market price is not readily

fair values of financial instruments, these changes did not have

available, valuation techniques are used that require

a material impact on the financial condition of the Company for

assumptions related to discount rates and the timing and

the twelve months ended December 31, 2023.

amount of future cash flows. Wherever possible, observable

market inputs are used in the valuation techniques.

Table 29: Financial Instruments

($ millions)

Financial assets recorded at fair value

Other investments

– Fair value through other comprehensive income

– 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

December 31, 2023

December 31, 2022

Carrying Value

Fair Value

Carrying Value

Fair Value

721.4

142.2

42.7

721.4

142.2

42.7

602.6

171.9

63.7

602.6

171.9

63.7

5,108.7

5,070.8

5,021.5

4,905.5

49.6

51.6

3,344.2

4,687.8

2,400.0

3,344.2

4,695.7

2,453.4

4,334.0

4,610.4

2,100.0

4,334.0

4,544.6

2,013.9

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisRisk Management

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

• The Governance and Nominating Committee oversees

our business activities. Our ability to manage these risks is key

corporate governance practices.

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 Risk,

Compliance and Internal Audit functions.

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 appetite,

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

• 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 and Mackenzie Investments, the Chief Financial

Officer, the General Counsel, the Chief Operating Officer, the

Chief Human Resources Officer, and the Chief Risk Officer,

who reports to the Chief Executive Officer of IGM Financial.

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 Executive Risk Management Committee.

responsibilities in relation to financial disclosure, internal

Second Line of Defence

controls and the control environment as well as our

The Risk function, overseen by the Chief Risk Officer, provides

compliance activities, including administration of the Code
of Conduct.

oversight, analysis and reporting to the Executive Risk
Management Committee on the level of risks relative to the

• The Human Resource Committee oversees human resources

and talent practices and policies including compensation.

established risk appetite for all activities of the Company. Other

responsibilities include: i) developing and maintaining the risk

management program and framework, ii) managing the risk

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual Reportmanagement process, and iii) providing guidance and training

Risks are assessed by evaluating the impact and likelihood of

to business unit and support function leaders.

the potential risk event after consideration of controls and any

The Company has a number of committees of senior business

leaders which provide oversight of specific business risks,

including the Financial Risk Management and Operational

risk transfer activities. The results of these assessments are

considered relative to risk appetite and may result in action

plans to adjust the risk profile.

Risk Management committees. These committees perform

Risk assessments are monitored and reviewed on an ongoing

critical reviews of risk assessments, risk management practices

basis by business units and by oversight areas including the

and risk response plans developed by business units and

Risk function. The Risk function promotes and coordinates

support functions.

Other oversight accountabilities reside with the Company’s

Legal and Compliance functions which are responsible for

ensuring compliance with policies, laws and regulations.

communication and consultation to support effective risk

management and escalation. The Risk function regularly

reports on the results of risk assessments and on the

assessment process to the Executive Risk Management

Committee and to the Risk Committee.

Third Line of Defence

The Internal Audit function is the third line of defence and

provides independent assurance to senior management and

the Board of Directors on the effectiveness of the Company’s

risk management policies, processes and practices.

Risk Appetite

Risk Management Culture

Risk management is everyone’s responsibility within the

organization. The Risk function engages all business units

in risk workshops and surveys to foster awareness and to

incorporate our risk framework into business activities.

We have an established business planning process which

The Executive Risk Management Committee establishes the

reinforces our risk management culture. Our compensation

Company’s appetite for different types of risk through the Risk

programs are typically objectives-based, do not encourage or

Appetite Framework. Under the Risk Appetite Framework, one of

reward excessive or inappropriate risk taking, and often are

four appetite levels is established for each risk type and business

aligned specifically with risk management objectives.

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 inform them in establishing

policies, limits, controls and risk transfer activities.

The Risk Appetite Framework facilitates the alignment

Our risk management program emphasizes integrity, ethical

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

of business strategy with risk appetite, supports capital

Significant risks that may adversely affect our ability to achieve

deployment assessments, and supports the identification,

strategic and business objectives are identified through our

mitigation, and management of risks.

ongoing risk management process.

Risk Management Process

The Company’s risk management process is designed to foster:

• Ongoing assessment of risks and tolerance in a changing

operating environment.

Risks are identified based on our established methodology,

considering factors both internal and external to the

organization. These risks are broadly grouped into three

categories: financial, operational, and strategic and business.

• Appropriate identification and understanding of existing and

1) Financial Risk

emerging risks and risk response.

• Timely monitoring and escalation of risks based upon

changing circumstances.

Significant risks that may adversely affect the Company’s ability

to achieve its strategic and business objectives are identified

through the Company’s ongoing risk management process.

We use a consistent methodology across our organizations

and business units for identification and assessment of risks.

This is the risk of financial loss related to AUM&A and

advisement, liquidity and funding risk, credit risk, or market risk.

Risks Related to AUM&A

At December 31, 2023, IGM Financial’s AUM&A were $240.2 billion

compared to $224.2 billion at December 31, 2022.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisThe Company’s primary sources of revenues are advisory fees

Foreign currency denominated securities are exposed to

and asset management fees which are applied as an annual

foreign exchange risk. A depreciation in foreign currency versus

percentage of the level of AUM&A. AUM&A levels are impacted

the Canadian dollar will cause the Canadian value of securities

by both net sales and changes in the market.

to fall while an appreciation in foreign currency versus the

Global markets by their nature are subject to uncertainty

and a variety of risks. Movement in equity market prices,

foreign exchange rates, real asset values, interest rates/credit

spreads, or other asset values could cause the Company’s

Canadian dollar will cause the Canadian value of securities to

rise, thus impacting AUM&A, revenue and earnings.

Liquidity and Funding Risk

AUM&A, revenue and earnings to decline. A general economic

This is the risk of an inability to generate or obtain sufficient

downturn, market volatility, client rebalancing, poor investment

cash in a timely and cost-effective manner to meet contractual

performance, or a lack of investor confidence could also lead to

or anticipated commitments as they come due or arise.

lower sales, higher redemption levels and lower AUM&A.

Our liquidity profile is structured to ensure we have sufficient

The Company believes that exposure to investment returns on

liquidity to satisfy current and prospective requirements

its client portfolios is beneficial over the long term to financial

in both normal and stressed conditions. Our liquidity

results and consistent with stakeholder expectations, and

management practices include:

therefore does not typically engage in risk transfer activities

such as hedging in relation to these exposures.

• Maintaining liquid assets and lines of credit to satisfy near

term liquidity needs.

The Company’s exposure to market risk aligns with the

• Ensuring effective controls over liquidity management

experience of its clients. AUM are broadly diversified by asset

processes.

class, geographic region, industry sector, investment team

and style. The Company regularly reviews the sensitivity of

its AUM, revenues, earnings and cash flow to changes in

financial markets.

• Performing regular cash forecasts and stress testing.

• Regular assessment of capital market conditions and the

Company’s ability to access bank and capital market funding.

• Ongoing efforts to diversify and expand long-term mortgage

Domestic and foreign equity securities are exposed to equity

funding sources.

price risk which may negatively impact AUM&A, revenues and

• Oversight of liquidity and funding risks by the Financial Risk

earnings. Equity price risk can be classified into two categories:

Management Committee, a committee of finance and other

general equity risk and issuer-specific risk. The Company’s

business leaders.

internal and external fund managers reduce exposure to

issuer-specific risks through diversification.

Fixed-income securities are exposed to interest rate risk. An

A key funding requirement is the funding of advisor network

compensation paid for the distribution of financial products

and services. This compensation continues to be paid from

increase in interest rates causes market prices of fixed-income

operating cash flows.

securities to fall while a decrease in interest rates causes market

prices to rise, thus impacting AUM&A, revenue and earnings.

The Company also maintains sufficient liquidity to fund and

temporarily hold mortgages pending sale or securitization

Table 30: IGM Financial AUM – Asset and Currency Mix

As at December 31, 2023

Cash

Short-term fixed income and mortgages

Other fixed income

Domestic equity

Foreign equity

Real Property

CAD

USD

Other

Investment
Funds

Total

0.8 %

2.1 %

4.1

22.6

20.5

49.7

2.3

4.0

22.5

25.4

44.2

1.8

100.0 %

50.3 %

56.9 %

33.5

16.2

29.7

13.4

100.0 %

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual Reportto long-term funding sources and to manage any derivative

As at December 31, 2023 and December 31, 2022, the

collateral requirements. Through its mortgage banking

Company was not utilizing its committed lines of credit or its

operations, residential mortgages are sold to third parties

uncommitted lines of credit.

including certain mutual funds, institutional investors through

private placements, Canadian bank-sponsored securitization

trusts, and by issuance and sale of National Housing Act

Mortgage-Backed Securities (NHA MBS) including sales to

Canada Housing Trust under the CMB Program. The Company

Schedule I Canadian chartered banks have provided the

Company with a non-revolving term loan facility related to the

proceeds on the sale of IPC. The term loan facility was repaid

prior to the sale of IPC.

maintains committed capacity within certain Canadian bank-

The actuarial valuation for funding purposes related to the

sponsored securitization trusts. Capacity for sales under

Company’s registered defined benefit pension plan, based on

the CMB Program consists of participation in new CMB

a measurement date of December 31, 2022, was completed

issues and reinvestment of principal repayments held in the

during April 2023. The valuation determines the plan surplus

Principal Reinvestment Accounts. The Company’s continued

or deficit on both a solvency and going concern basis. The

ability to fund residential mortgages through Canadian bank-

solvency basis determines the relationship between the plan

sponsored securitization trusts and NHA MBS is dependent on

securitization market conditions and government regulations

assets and its liabilities assuming that the plan is wound up
and settled on the valuation date. A going concern valuation

that are subject to change. A condition of the NHA MBS and CMB

compares the relationship between the plan assets and the

Program is that securitized loans be insured by an insurer that

present value of the expected future benefit cash flows,

is approved by CMHC. The availability of mortgage insurance is

assuming the plan will be maintained indefinitely. Based on the

dependent upon market conditions and is subject to change.

actuarial valuation, the registered pension plan had a solvency

The Company accesses the unsecured long-term debt markets

for corporate purposes, and ensures a well-diversified maturity

structure to manage associated funding risks.

surplus of $70.5 million compared to a surplus of $14.4 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.

The Company’s contractual obligations are reflected in Table 31.

The registered pension plan had a going concern surplus

The maturity schedule for long-term debt of $2.4 billion

is reflected in the accompanying chart (Long-Term Debt

Maturity Schedule).

of $127.4 million compared to $95.0 million in the previous

valuation. The next actuarial valuation will be based on a

measurement date of December 31, 2025. During the year, the

Company has made cash contributions of $3.7 million (2022

In addition to IGM Financial’s current balance of cash and

– $11.5 million). As a result of the valuation filed in April 2023,

cash equivalents, liquidity is available through the Company’s

IGM Financial received a contribution holiday and is not allowed

lines of credit. The Company’s lines of credit with various

to make contributions to the pension plan until the next

Schedule I Canadian chartered banks totalled $800 million at

actuarial valuation which is expected to be as at December 31,

December 31, 2023, compared to $825 million at December 31,

2025. Pension contribution decisions are subject to change, as

2022. The lines of credit at December 31, 2023 consisted of

contributions are affected by many factors including market

committed lines of $650 million and uncommitted lines of

performance, regulatory requirements, changes in assumptions

$150 million, compared to $650 million and $175 million at

and management’s ability to change funding policy.

December 31, 2022. Any advances made by a bank under the

uncommitted lines of credit are at the bank’s sole discretion.

Management believes cash flows from operations, available

cash balances and other sources of liquidity are sufficient to

Table 31: Contractual Obligations

As at December 31, 2023
($ millions)

Derivative financial instruments
Deposits and certificates(1)

Obligations to securitization entities
Leases(2)

Long-term debt

Total contractual obligations

Demand

–

3,342.8

–

Less than
1 Year

11.4

0.3

937.1

29.2

–

1–5 Years

38.2

0.5

3,737.5

84.2

525.0

After
5 Years

–

0.6

13.2

96.9

1,875.0

Total

49.6

3,344.2

4,687.8

210.3

2,400.0

3,342.8

978.0

4,385.4

1,985.7

$ 10,691.9

(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.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisLong-Term Debt Maturity Schedule

($ millions)

525

Jan 400

Dec 125

175

150

200

450

300

250

200

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 2051 2052

2053

Year

meet the Company’s liquidity needs. The Company continues to

– $293.2 million) and other corporate commercial paper of nil

have the ability to meet its operational cash flow requirements,

(2022 – $45.0 million).

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 are significantly influenced by the

impact that market risk has on the Company’s fee income

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

regularly reviews the credit ratings of its counterparties.

The maximum exposure to credit risk on these financial

instruments is their carrying value.

and commission and certain other expenses. The Company’s

The Company’s exposure to and management of credit risk

liquidity position and its management of liquidity and funding

related to cash and cash equivalents and fixed income securities

risk have not changed materially since December 31, 2022.

have not changed materially since December 31, 2022.

Credit Risk

IG Wealth Management’s client funds on deposit of

$3,365.7 million (2022 – $4,029.7 million) are held with Schedule

This is the risk of financial loss to the Company if a counterparty

I chartered banks and approximately 93% of the deposits

to a transaction fails to meet its obligations.

were insured by the Canada Deposit Insurance Corporation at

The Company is exposed to credit risk through its cash and

December 31, 2023.

cash equivalents, client funds on deposit, mortgage portfolio,

Mortgage Portfolio

and use of over-the-counter derivatives. 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, 2023, cash and cash equivalents of

$544.6 million (2022 – $1,072.9 million) consisted of cash

At December 31, 2023, residential mortgages, recorded on the

Company’s balance sheet, of $5.1 billion (2022 – $5.0 billion)

consisted of $4.7 billion sold to securitization programs (2022

– $4.6 billion), $375.5 million held pending sale or securitization

(2022 – $371.9 million) and $11.5 million related to the

Company’s intermediary operations (2022 – $12.7 million).

balances of $216.5 million (2022 – $346.3 million) on deposit

The Company manages credit risk related to residential

with Canadian chartered banks and cash equivalents of

mortgages through:

$328.1 million (2022 – $726.6 million). Cash equivalents are

• Adhering to its lending policy and underwriting standards;

comprised of Government of Canada treasury bills totalling

$0.5 million (2022 – $81.6 million), provincial government

treasury bills and promissory notes of $36.4 million (2022 –

$306.8 million), bankers’ acceptances of $291.2 million (2022

• Its loan servicing capabilities;

• Use of client-insured mortgage default insurance and mortgage

portfolio default insurance held by the Company; and

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual Report• Its practice of originating its mortgages exclusively through

The Company’s exposure to and management of credit risk

a network of Mortgage Advisors and IG Wealth Management

related to mortgage portfolios have not changed materially

advisors as part of a client’s IG Living Plan.

since December 31, 2022.

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 $2.4 billion (2022

– $2.5 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.

• Credit risk for mortgages securitized by transfer to bank-

sponsored securitization trusts totalling $2.3 billion (2022

– $2.1 billion) is limited to amounts held in cash reserve

accounts and future net interest income, the fair values of

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

a gain position, the Company is exposed to credit risk

if its counterparties fail to fulfil their obligations under

these arrangements.

which were $58 million (2022 – $55.2 million) and $37 million

The Company’s derivative activities are managed in accordance

(2022 – $21.3 million), respectively, at December 31, 2023.

with its Derivative Policy which includes counterparty limits and

Cash reserve accounts are reflected on the balance sheet,

other parameters to manage counterparty risk. The aggregate

whereas rights to future net interest income are not

reflected on the balance sheet and will be recorded over

the life of the mortgages.

At December 31, 2023, residential mortgages recorded

on balance sheet were 50.7% insured (2022 – 53.3%). At

December 31, 2023, impaired mortgages on these portfolios

were $3.1 million, compared to $2.2 million at December 31,

2022. Uninsured non-performing mortgages over 90 days

on these portfolios were $2.8 million at December 31, 2023,

compared to $1.7 million at December 31, 2022.

credit risk exposure related to derivatives that are in a gain

position of $51.2 million (2022 – $71.2 million) does not give

effect to any netting agreements or collateral arrangements.

The exposure to credit risk, considering netting agreements

and collateral arrangements and including rights to future net

interest income, was $3.7 million at December 31, 2023 (2022

– $10.5 million). Counterparties are all Canadian Schedule I

chartered banks and, as a result, management has determined

that the Company’s overall credit risk related to derivatives was

not significant at December 31, 2023. Management of credit

risk related to derivatives has not changed materially since

The Company also retains certain elements of credit risk

December 31, 2022.

on mortgage loans sold to the IG Mackenzie Mortgage and

Short-Term Income Fund through an agreement to repurchase

mortgages in certain circumstances benefiting the funds. These

loans are not recorded on the Company’s balance sheet as

the Company has transferred substantially all of the risks and

rewards of ownership associated with these loans.

Additional information related to the Company’s securitization

activities and utilization of derivative contracts can be found in

Notes 2, 7, 8 and 24 to the Consolidated Financial Statements.

Market Risk

The Company regularly reviews the credit quality of the

mortgages and the adequacy of the allowance for expected

credit losses.

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.

The Company’s allowance for expected credit losses was

Interest Rate Risk

$0.7 million at December 31, 2023, decreased from $0.8 million at

December 31, 2022, and is considered adequate by management

IGM Financial is exposed to interest rate risk on its mortgage

portfolio and on certain of the derivative financial instruments

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, and v) stress

testing of losses under adverse real estate market conditions.

used in our mortgage banking operations.

The Company manages interest rate risk associated with its

mortgage banking operations by entering into interest rate

swaps with Canadian Schedule I chartered banks as follows:

• The Company has in certain instances funded floating rate

mortgages with fixed rate Canada Mortgage Bonds as part

of the securitization transactions under the CMB Program.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisAs part of the CMB Program, the Company is party to a

The Company sponsors a number of deferred compensation

swap whereby it is entitled to receive investment returns

arrangements where payments to participants are deferred

on reinvested mortgage principal and is obligated to pay

and linked to the performance of the common shares of IGM

Canada Mortgage Bond coupons. This swap had a fair value

Financial Inc. The Company hedges its exposure to this risk

of $7.7 million (December 31, 2022 – $20.5 million) and an

through the use of forward agreements and total return swaps.

outstanding notional amount of $0.2 billion at December 31,

2023 (December 31, 2022 – $0.2 billion). The Company enters

Foreign Exchange Risk

into interest rate swaps with Canadian Schedule I chartered

IGM Financial is exposed to foreign exchange risk on its

banks to hedge the risk that the interest rates earned on

investment in ChinaAMC and Rockefeller. Changes to the

floating rate mortgages and reinvestment returns decline.

carrying value due to changes in foreign exchange rates

The fair value of these swaps totalled negative $12.5 million

are recognized in Other comprehensive income. As at

(December 31, 2022 – negative $19.6 million), on an

December 31, 2023, a 5% appreciation (depreciation) in

outstanding notional amount of $1.4 billion at December 31,

Canadian currency relative to foreign currencies would

2023 (December 31, 2022 – $1.3 billion). The net fair value of

decrease (increase) the aggregate carrying value of foreign

these swaps of negative $4.8 million at December 31, 2023

investments by approximately $128.1 million ($141.6 million).

(December 31, 2022 – positive $0.9 million) is recorded on

the balance sheet and has an outstanding notional amount

of $1.6 billion (December 31, 2022 – $1.5 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 Obligations to securitization entities. The fair value

of these swaps was negative $1.1 million (December 31, 2022

– positive $4.7 million) on an outstanding notional amount of

$181.5 million at December 31, 2023 (December 31, 2022 –

$191.6 million).

As at December 31, 2023, the impact to annual net earnings

of a 100 basis point increase in interest rates would have been

an increase of approximately $0.5 million (December 31, 2022

– decrease of $1.7 million). The Company’s exposure to and

management of interest rate risk have not changed materially

since December 31, 2022.

Equity Price Risk

IGM Financial is exposed to equity price risk on our equity

investments which are classified as either fair value through

other comprehensive income or fair value through profit or loss,

and on our investments in associates, which are accounted for

using the equity method. The fair value of the other investments

was $0.9 billion at December 31, 2023 (December 31, 2022 –

$0.8 billion), as shown in Table 22, and the carrying value of the

investment in associates was $3.7 billion at December 31, 2023

(December 31, 2022 – $2.1 billion).

The Company’s proportionate share of ChinaAMC’s and

Rockefeller’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, 2023, 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 by approximately $4.9 million ($5.4 million).

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.

We are exposed to a broad range of operational risks, including

information security and system failures, errors relating to

transaction processing, financial models and valuations, failure

of key third parties, fraud and misappropriation of assets, and

inadequate application of internal control processes.

Operational risks relating to people and processes are mitigated

through policies and process controls. Oversight of risks and

ongoing evaluation of the effectiveness of controls is provided by

the Company’s Risk, Compliance, and Internal Audit functions.

The Company’s insurance governance process includes

oversight by the Insurance Steering Committee and senior

executives. As part of this process, the nature and extent

of the Company’s insurance is regularly reviewed to ensure

coverage remains appropriate and complies with relevant laws,

regulations, and contractual agreements.

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

governance processes have been developed to help manage

operational risk.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportTechnology and Cyber Risk

Legal and Regulatory Risk

This is the risk related to unplanned downtime on critical

This is the risk of not complying with laws, contractual

business processes, loss of customer/business data and/or

agreements or regulatory requirements. These risks relate

the misalignment between the technology capabilities of the

to regulation governing product distribution, investment

organization and its business strategy.

management, accounting, reporting and communications.

Technology underpins our business operations and the client,

The Company is subject to complex and changing legal, taxation

employee and advisor experience. As a result, we are exposed

and regulatory requirements, including the requirements of

to cyber security risks such as identity theft, compromise of

agencies of the federal, provincial and territorial governments

technology systems and malicious software attacks. Globally,

in Canada which regulate the Company and its activities.

the volume of these activities has increased and could

The Company and its subsidiaries are also subject to the

compromise confidential information of the Company and

requirements of new single self-regulatory organization, the

its clients or other stakeholders and result in other negative

Canadian Investment Regulatory Organization (CIRO). These

consequences including lost revenue, litigation, regulatory

and other regulatory bodies regularly adopt new laws, rules,

scrutiny or reputational damage. Our enterprise-wide cyber

regulations and policies that apply to the Company and its

security programs, benchmarking of capabilities to sound

subsidiaries. These requirements include those that apply to

industry practices, and threat and vulnerability assessment and

IGM Financial as a publicly traded company and those that apply

response capabilities provide resiliency in addressing this risk.

to the Company’s subsidiaries based on the nature of their

Third Party Risk

This is the risk that exists due to the use of external parties to

assist or wholly perform activities necessary to the operations

and strategy of the business.

activities. They include regulations related to the management and

provision of financial products and services, including securities,

insurance and mortgages, and other activities carried on by

the Company in the markets in which it operates. Regulatory

standards affecting the Company and the financial services

industry are significant and continually evolve. The Company

We regularly engage third parties to provide expertise and

and its subsidiaries are subject to reviews as part of the normal

efficiencies that support our operational activities. Our

exposure to third party risk could include reputational,

regulatory and other operational risks. Policies, standard

operating procedures and dedicated resources, including a

supplier code of conduct and material outsourcing policy, have

been developed and implemented to specifically address third

party risk. We perform due diligence and monitoring activities

before entering into contractual relationships with third parties

and on an ongoing basis. As our reliance on third parties

continues to grow, we continue to enhance resources and

processes to support third party risk management.

Model Risk

This is the risk of financial loss or reputational harm resulting

from conclusions and decisions based on incorrect or

misused models.

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.

ongoing process of oversight by the 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 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, testing, monitoring and

reporting. The Audit Committee of the Board receives regular

reporting on compliance initiatives and issues.

The Company 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.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisPrivacy 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

aggregate, to have a material adverse effect on the Company’s

consolidated financial position.

People Risk

ethical standards. Our clients entrust us with their personal

This risk refers to the potential inability to: attract or retain

information, and we have a regulatory and ethical responsibility

employees or Wealth Management advisors; have a diverse,

to protect it. We collect only the personal information that is

equitable and inclusive workforce; provide development

necessary to provide our products and services to clients, and

opportunities to achieve current and future business

where we have consent to do so.

If we need to share clients’ personal information with third

parties, we remain responsible for that information and protect it

objectives; support employee wellbeing and engagement;

and sustain ongoing personnel or business succession and/or

transition plans.

through contractual and other measures that commit the service

We manage this risk through competitive compensation and

providers to maintain levels of protection comparable to ours.

benefit offerings, training and development programs, and

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

periodic employee and advisor surveys.

We have a Diversity, Equity and Inclusion Strategy with the

purpose of driving an inclusive, equitable and consistent

experience for employees, Wealth Management advisors,

and clients that supports our business objectives now and

into the future. To achieve the desired outcomes, we focus on

three pillars of action: raising awareness; improving inclusive

leadership behaviours; and building external partnerships and

business units to address privacy matters.

community engagement.

Employees and advisors are required to complete mandatory

privacy training at onboarding, and annually thereafter. The

We also have a Wellness Strategy to support our employees’

wellbeing with a goal to ensure our employees are physically

training includes our privacy obligations, privacy best practices,

thriving, emotionally balanced, socially connected and

and how to prevent, handle and report privacy breaches,

financially secure.

complaints and access to information requests.

Contingencies

Business Continuity Management

This is the risk that the organization cannot effectively

The Company is subject to legal actions arising in the normal

recover and maintain critical business processes in the event

course of its business. In December 2018, a proposed

class action was filed in the Ontario Superior Court against

Mackenzie Financial Corporation (Mackenzie) which alleges

that the company should not have paid mutual fund trailing

commissions to order execution only dealers. This action was

certified in January 2024. In August 2022, a second proposed

class action concerning the same subject matter was filed

against Mackenzie.

In late March 2023, the Company was notified by one of

our third-party vendors, InvestorCOM Inc., that they were

compromised due to a cybersecurity incident related to a

technology supplier to InvestorCOM, GoAnywhere. The Company

has notified impacted clients and offered credit monitoring at no

of a disruption (internal, third-party, physical or natural

circumstances) or respond to a crisis or emergency event.

A business continuity management program ensures the

Company’s critical processes function in the event of a

business disruption.

The Company’s crisis response plan outlines policies and

procedures to address situations that could significantly impact

the organization’s reputation, brands or business operations.

A crisis assessment team comprised of senior leadership is

responsible for setting strategy, overseeing response and

ensuring appropriate subject matter experts are engaged in

scenario-dependent crisis response teams.

cost for two years to all clients. Four proposed class actions have

On a regular basis, the Company tests business continuity

been filed against Mackenzie concerning this incident.

and disaster recovery plans as well as conducting crisis

Although it is difficult to predict the outcome of any such legal

actions, based on current knowledge, management does not

expect the outcome of any of these matters, individually or in

simulation exercises.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual Report3) Strategic and Business Risk

This is the risk of potential adverse impacts resulting from

factors in the external environment or related to the strategy

or specific business activities of the Company.

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.

Global economic conditions, changes in equity markets, inflation

and demographics can affect investor confidence, 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 AUM, as described more fully under

the Risks Related to AUM&A section of this MD&A.

To manage this risk, the Company, across its operating

subsidiaries, communicates with clients and underscores

the importance of financial planning across economic cycles.

The Company and the industry continue to take steps to

educate Canadian investors on the merits of financial planning,

diversification and long-term investing. In periods of volatility,

Wealth Management advisors and independent financial

advisors play a key role in assisting investors in maintaining

perspective and focus on their long-term objectives.

Redemption rates for long-term funds are summarized in

Table 32 and are discussed in the Wealth Management and

governance is essential to the well-being of the Company

and our shareholders.

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 two operating

companies – Investors Group Inc., and Mackenzie Financial

Corporation – each of 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

business strategy. In carrying out this responsibility, the Board

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

discussion of strategic matters including receiving updates on

the progress and implementation of the strategic plan.

Competitive Risk

Product / Service Offering

the Asset Management Segment Operating Results sections

This risk refers to the potential for unfavourable impacts on

of this MD&A.

Strategy Setting

This is the risk of failing to set or meet appropriate strategic

objectives resulting in an impact on business performance.

IGM Financial believes in the importance of good corporate

governance and the central role played by directors in

the governance process. We believe that sound corporate

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

service types. Client development and retention can be

influenced by a number of factors, including investment

performance, products and services offered by competitors,

relative service levels, relative pricing, product attributes,

Table 32: Twelve Month Trailing Redemption Rate for Long-term Funds

IGM Financial Inc.

IG Wealth Management

Mackenzie

2023
Dec. 31

2022
Dec. 31

12.2 %

17.1 %

10.0 %

16.0 %

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysisreputation and actions taken by competitors. This competition

distribution relationship in these relationships and the relative

could have an adverse impact upon the Company’s financial

size of these accounts, gross sale and redemption activity

position and operating results. Please refer to The Competitive

can be more pronounced in these accounts than in a retail

Landscape section of this MD&A for further discussion.

relationship. Mackenzie’s ability to market its investment

We provide Wealth Management advisors, independent

financial advisors, as well as retail and institutional clients

with a high level of service and support and a broad range

of investment products, with a focus on building enduring

relationships. The Company’s subsidiaries also continually

review their respective product and service offering and

pricing to ensure competitiveness in the marketplace.

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

We strive to deliver strong investment performance on our

leading investment management companies. These factors

products relative to benchmarks and peers. Poor investment

are discussed further in the Asset Management Review of the

performance relative to benchmarks or peers could reduce

Business section of this MD&A.

the level of AUM 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 AUM 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 derives all of its investment fund

sales, insurance sales, and mortgage and banking 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 loss of client accounts which could

have an adverse effect on IG Wealth Management’s results

of operations and business prospects, as well as our culture

and ability to attract key advisors. IG Wealth Management is

focused on strengthening its distribution network of advisors

and on responding to the complex financial needs of its clients

by delivering a diverse range of products and services in the

context of personalized financial advice.

Mackenzie derives the majority of its mutual fund sales through

third party financial advisors. Financial advisors generally
offer their clients investment products in addition to, and in

competition with Mackenzie. Mackenzie also derives sales

of its investment products and services from its strategic

alliance and institutional clients. Due to the nature of the

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

treatment, disclosure requirements, transaction processes or

other differences that may be as a result of differing regulation

or application of regulation. Regulatory developments may

also impact product structures, pricing, and dealer and advisor

compensation. In July, 2023, the China Securities Regulatory

Commission (CSRC) initiated a work plan for the fee reform

of the mutual fund industry, which the CSRC has indicated is

designed to continue to promote the high-quality development

of the Chinese investment fund industry. Concurrently,

ChinaAMC announced fee reductions on certain mutual funds.

These reductions reduce the revenues of ChinaAMC and

impact the earnings that IGM Financial recognizes related to

its investment in ChinaAMC. These changes are not expected

to be material to IGM Financial. We believe these changes will

help encourage broader participation of retail and institutional

investors in the development of a fast growing industry.

While the Company and its subsidiaries actively monitor such

initiatives, and where feasible comment upon or discuss them

with regulators, the ability of the Company and its subsidiaries

to mitigate the imposition of differential regulatory treatment of

financial products or services is limited.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportThe Company continuously monitors regulatory developments,

climate-related risks and opportunities and is designed to

guidance and communications.

Acquisition Risk

This risk refers to the potential that desired objectives are

not attained from the Company’s acquisitions and strategic

be used with IFRS S1. The effective date in Canada is currently

unknown; however, the standards could apply to the Company

as early as December 31, 2024 subject to adoption by the

Canadian Securities Administrators. The Company will continue

to monitor any updates and future developments.

investments. The Company undertakes thorough due diligence

Environmental risks include issues such as climate change,

prior to completing an acquisition, but there is no assurance

biodiversity and land use, pollution, waste, and the

that the Company will achieve the expected strategic objectives

unsustainable use of energy, water and other resources. Social

or cost and revenue synergies subsequent to an acquisition.

Subsequent changes in the economic environment and other

risks include issues such as human rights; labour standards;

diversity, equity and inclusion; Indigenous reconciliation; and

unanticipated factors may affect the Company’s ability to achieve

community impacts.

expected earnings growth or expense reductions. The success

of an acquisition and of the Company’s strategic investments is

dependent on retaining AUM, clients, and key employees of an

acquired company.

Natural or Human Caused Disasters

This is the risk that events such as earthquakes, floods, fire,

tornadoes, pandemics, or terrorism 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 AUM&A.

The Company has an insurance review process where it

assesses and determines the nature and extent of insurance

that is appropriate to provide adequate protection against

unexpected losses, and where it is required by law, regulators

or contractual agreements.

Environmental and Social Risk
(Including Climate Change)

The Company’s Executive Risk Management Committee is

responsible for oversight of the risk management process,

including E&S and climate change risks. The Executive

Sustainability Committee is responsible for ensuring central

management governance for sustainability across IGM,

including policy and strategy, goals and targets, measuring

progress, and reviewing public reports and disclosures.

Our commitment to responsible management is demonstrated

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 environmental, social and governance

(ESG) issues into their investment decision making and active

ownership processes. In addition, our operating companies

have implemented Sustainable Investment Policies outlining

the practices at each company.

This is the potential for financial loss or other unfavourable

impacts resulting from the Company’s inability to manage

IGM Financial reports annually on sustainability management

and performance in its Sustainability Report available on

or respond to changing environmental or social (E&S) issues

our website.

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.

On June 26, 2023, the International Sustainability Standards

Board (ISSB) issued its first two sustainability standards: IFRS S1
– General Requirements for Disclosure of Sustainability-related
Financial Information (IFRS S1) and IFRS S2 – Climate-related
Disclosures (IFRS S2). IFRS S1 sets out the general requirements
for disclosing material information about sustainability-related

risks and opportunities to meet investor information needs,

and IFRS S2 sets out specific disclosure requirements for

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.

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-

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysisrelated financial disclosures that provide decision-useful

3. Demonstrating alignment through our corporate actions – We

information to investors, analysts, rating agencies and other

will hold ourselves to a similar standard that we expect from

stakeholders. Various global regulators and standard setting

the companies we invest in and empower our employees to

bodies, including the International Sustainability Standards

stand behind our commitments.

Board, are publishing guidelines and standards aligned with

the TCFD recommendations.

TCFD Disclosure

The TCFD recommends that organizations disclose information

about climate-related risks and opportunities in four areas:

governance, strategy, risk management, and metrics and targets.

Governance

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 joined the Partnership for Carbon

Accounting Financials (PCAF) to support our journey to measure

and disclose the greenhouse gas emissions associated with our

mortgage loans and investments.

Our Board is responsible for providing oversight on risk and

Climate-related risks and opportunities are identified and

strategy, which includes sustainability and climate-related

assessed within IGM Financial through our business planning

matters. The Board meets with management at least annually

processes which define our strategic priorities, initiatives and

to discuss plans and emerging ESG issues, including climate.

Through its Risk Committee, the Board is responsible for

ensuring that material ESG and climate-related risks are

appropriately identified, managed and monitored. Its

responsibilities include ensuring that appropriate procedures

are in place to identify and manage risks and establish risk

tolerances; ensuring that appropriate policies, procedures and

controls are implemented to manage risks; and reviewing the

risk management process on a regular basis to confirm that it

is functioning effectively.

budgets. Our climate-related risks and opportunities can be

grouped into the physical impacts of climate change and the

impacts related to the transition to a low-carbon economy.

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

Senior management at each of our operating companies

within and across our investment portfolios aids in managing

have primary ownership and accountability for the ongoing

exposure to any one company, sector or geographic region that

climate risk and opportunity management associated with

might be exposed to climate-related risks. We are also exposed

their respective activities. Our Executive Risk Management

to the impact of extreme weather events on our corporate

and Executive Sustainability Committees perform oversight

properties which could lead to business disruption, and on

functions, and our Chief Risk Officer oversees implementation

the valuations of investment properties and client mortgages,

of the Corporate Sustainability and Risk Management programs,

which if not addressed proactively, could affect financial

reporting into the President and Chief Executive Officer.

performance and the ability to use the assets long-term.

Other management committees and working groups also

Our operating companies are committed to sustainable investing

oversee climate-related governance across the Company.

programs and policies that include a focus on climate risk.

Strategy

Through IGM Financial’s wealth and asset management

businesses, the company plays a role in the global transition

to a low-carbon economy, with a focus on three key areas:

1. Investing in a greener, climate resilient economy – Our

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 sub-advisors,

our teams request information about how ESG, including

investment processes and products give us the opportunity

climate risks and opportunities, is resourced, what processes

to manage climate risks and create innovative solutions to

and tools are used, metrics and targets, and how strategy and

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.

governance are influenced. As we continue to 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.

IG Wealth Management and Mackenzie, and their investment

sub-advisors, are signatories to the PRI. Under the PRI, investors

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual Reportformally commit to incorporate ESG issues, including climate

methods such as: (i) risk workshops with business units across

change, into their investment decision making and active

the organization, (ii) risk surveys completed by senior leaders

ownership processes. In addition, IG Wealth Management and

and business unit management, (iii) discussions with key

Mackenzie have implemented sustainable investing policies

stakeholders and business partners, and (iv) by conducting

outlining the practices at their respective companies.

research on emerging risks and internal and external events

Opportunities

impacting our business. We use a consistent methodology

across our organizations and business units for identification

We are focused on meeting growing demand for sustainable

and assessment of risks, considering factors both internal and

investing and the opportunity to invest in the transition to

external to the organization. Risks are broadly grouped into

a net-zero economy. We are also increasing our focus on

three categories: financial, operational, and strategic/business

educating and communicating with clients and advisors on

risks. Climate risk is captured under strategic risks, but we are

sustainable investing and climate change.

also increasingly focused on defining the relationship of climate

At Mackenzie Investments, sustainable investing is an area of

risk to other risks.

strategic emphasis, and we have established a dedicated team

Once identified, possible risks are assessed by taking into

within Mackenzie’s Sustainability Centre of Excellence who bring
focus to ESG and climate within asset management. Mackenzie

consideration both the likelihood and severity of the impact

of the risk event using a standard set of assessment criteria

has expanded its suite of funds investing to directly support

including consideration of financial, reputational, operational,

the transition to a low-carbon economy through its acquisition

and regulatory/compliance impact. Based on the assessment,

of Greenchip, an investment boutique which is exclusively

the Risk function will consider our risk appetite and work with

focused on thematic investing to combat climate change;

the business to put in place measures to mitigate, transfer, or

the launch of the Betterworld team in 2021, that invests in

accept the risk or capitalize on opportunities.

companies making a positive impact on the people and the

planet, and funds prioritizing sustainability and ESG-labelled

debt, including green bonds.

Risk assessments are monitored and reviewed on an ongoing

basis by business units and by oversight areas including the

Risk function. The Risk function promotes and coordinates

IG Wealth Management has integrated environmental and

communication and consultation to support effective risk

climate issues into its sub-advisory selection and oversight

management and escalation. It regularly reports on the results

processes, and product development strategy. In 2021,

of risk assessments and on the assessment process to the

IG Wealth Management launched its Climate Action Portfolios,

Executive Risk Management Committee and to the Board

a suite of four diversified managed solutions which aim to

Risk Committee.

provide clients with the opportunity to support and benefit

from the global transition to net zero emissions.

Scenarios

We have implemented tools for our investment funds to

enhance our quantitative assessment of climate risks by

analyzing emissions and other climate-related information at

the investee company, asset class 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

Paris Agreement. We are exploring scenario analysis tools with

external data providers to support us in our efforts to run

climate-related scenario analysis across our business.

Risk Management

The identification and assessment of risks, including climate

change, is coordinated through the Risk function who provide

oversight, analysis and reporting on the level of risks relative to

the established risk appetite of the Company. The Risk function

identifies possible risks that could impact our business through

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. We have focused on

developing resources and tools to assess climate-related

risks and opportunities for our Mackenzie managed equity

portfolios. Through these tools we can assess historical

greenhouse gas emissions data and portfolio temperature

alignment to identify the highest emitters and inform

engagement activities with companies facing transition risks. At

IG Wealth Management, 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 undertaken through direct conversations between portfolio

managers and companies/issuers; through Mackenzie

firm-wide engagements; and through collaborations with

peers on initiatives where the collective investor voice has

more influence. At IG Wealth Management, investment

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysismanagement sub-advisors including Mackenzie are responsible

Metrics and Targets

for engagement activities and IG Wealth Management monitors

their practices as part of regular due diligence and oversight.

Mackenzie Investments is a founding participant in Climate

Engagement Canada and participates in CERES’ Investor Network

on Climate Risk. Both Mackenzie and IG Wealth Management

joined Climate Action 100+ and became founding signatories to

the Canadian Investor Statement on Climate Change.

We set, monitor and report on climate change-related metrics

and targets annually in our CDP response and our Sustainability

Report which are available on our website. Mackenzie

Investments also joined the Net Zero Asset Managers initiative.

At Mackenzie, each boutique investment team is responsible

for integrating ESG into its investment process, including

determining appropriate GHG emissions and other metrics to

assess climate-related risks and opportunities in investment

strategies. The teams have access to ESG data tools and

metrics to support their assessment.

We currently report Scope 1, 2 and 3 GHG emissions, where

possible, including a portion of our Scope 3 investment

emissions and weighted average carbon intensity. We are

continuing to expand and enhance our measurement and

reporting of emissions related to our investment portfolios

as tools and information improves.

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportThe Financial Services Environment

Canadians held $6.2 trillion in discretionary financial assets with

full service and discount brokerage subsidiaries. Bank branches

financial institutions at December 31, 2022 based on the most

continue to place increased emphasis on both financial planning

recent report from Investor Economics. The nature of holdings

and mutual funds. In addition, each of the “big six” banks has

was diverse, ranging from demand deposits held for short-term

one or more mutual fund management subsidiaries. Collectively,

cash management purposes to longer-term investments held for

mutual fund assets of the “big six” bank-owned mutual fund

retirement purposes. Approximately 64% ($4.0 trillion) of these

managers and affiliated firms represented 46% of total industry

financial assets are held within the context of a relationship with

long-term mutual fund assets at December 31, 2023.

a financial advisor, and this is the primary channel serving the

longer-term savings needs of Canadians. Of the $2.2 trillion held

outside of a financial advisory relationship, approximately 60%

consisted of bank deposits.

The Canadian mutual fund industry continues to be very

concentrated, with the 10 largest firms and their subsidiaries

representing 71% of industry long-term mutual fund assets

and 70% of total mutual fund AUM at December 31, 2023.

Financial advisors represent the primary distribution channel

We anticipate continuing consolidation in this segment

for IGM Financial’s products and services, and the core

of the industry as smaller participants are acquired by

emphasis of our business model is to support these financial

larger organizations.

advisors as they work with clients to plan for and achieve their

financial goals. Multiple sources of emerging research show

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

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.

long-term financial plans and goals.

• Continued importance of the role of the financial advisor.

Approximately 38% of Canadian discretionary financial assets

or $2.4 trillion resided in investment funds at December 31,

• Public policy related to retirement savings.

• Changes in the regulatory environment.

2022, making it the largest financial asset class held by

• A highly competitive landscape.

Canadians. Other asset types include deposit products and

direct securities such as stocks and bonds. Approximately

73% of investment funds are comprised of mutual fund

products, with other product categories including segregated

• Advancing and changing technology.

The Competitive Landscape

funds, hedge funds, pooled funds, closed end funds and

IG Wealth Management competes directly with other retail

exchange traded funds. With $170 billion in investment fund

financial service providers in the advice segment, including

AUM at December 31, 2023, IGM Financial is among the

other financial planning firms, as well as full service brokerages,

country’s largest investment fund managers. We believe that

banks and insurance companies. Mackenzie Investments

investment funds are likely to remain the preferred savings

competes directly with other investment managers for AUM,

vehicle of Canadians. They offer the benefits of diversification,

and our products compete with stocks, bonds and other

professional management, flexibility and convenience, and are

asset classes for a share of Canadians’ investment assets.

available in a broad range of mandates and structures to meet

most investor requirements and preferences.

Competition from other financial service providers, alternative

product types or delivery channels, and changes in regulations

Traditional distinctions between bank branches, full-service

or public preferences could impact the characteristics of

brokerages, financial planning firms and insurance agent sales

our product and service offerings, including pricing, product

forces have become obscured as many of these financial

structures, dealer and advisor compensation and disclosure.

service providers strive to offer comprehensive financial

We monitor developments on an ongoing basis, and engage in

advice implemented through access to a broad product

policy discussions and develop product and service responses

shelf. Accordingly, the Canadian financial services industry

as appropriate.

is characterized by a number of large, diversified, vertically-
integrated participants, similar to IGM Financial, that offer both

financial planning and investment management services.

IGM Financial continues to focus on our commitment to

provide quality investment advice and financial products,

service innovations, effective and responsible management

Canadian banks distribute financial products and services

of the Company and long-term value for our clients and

through their traditional bank branches, as well as through their

shareholders. This includes efforts to modernize our

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysisdigital 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.

• Broad product capabilities, leading brands and quality

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.

Broad and Diversified Distribution

In addition to owning one of Canada’s largest financial

planning organizations, IG Wealth Management, 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.

Enduring Client Relationships

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 | 2023 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

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 AUM 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,

2023 financial information 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

amortized cost. The fair value of publicly traded financial

prior years may be adjusted in the current year to reflect

instruments is determined using published market prices.

management’s best estimates of the overall adequacy

The fair value of financial instruments where published

of its provisions. Any related tax benefits or changes in

market prices are not available, including Corporate

investments and derivatives related to the Company’s

management’s best estimates are reflected in the provision

for income taxes. The recognition of deferred tax assets

securitized loans, are determined using various valuation

depends on management’s assumption that future earnings

models which maximize the use of observable market inputs

will be sufficient to realize the future benefit. The amount

where available. Valuation methodologies and assumptions

of the deferred tax asset or liability recorded is based on

used in valuation models are reviewed on an ongoing basis.

management’s best estimate of the timing of the realization

Changes in these assumptions or valuation methodologies

of the assets or liabilities. If our interpretation of tax

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 13 of the Consolidated Financial

Statements. The Company tests the fair value of goodwill

and indefinite life intangible assets for impairment at least

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 17 to the Consolidated Financial Statements.

once a year and more frequently if an event or circumstance

indicates the asset may be impaired. An impairment loss

• Capitalized sales commissions – Commissions paid directly by
the client based upon the level of new assets contributed

is recognized if the amount of the asset’s carrying amount

to client accounts at IG Wealth Management are deferred

exceeds its recoverable amount. The recoverable amount is

and amortized over a maximum period of seven years.

the higher of an asset’s fair value less costs of disposal and

The Company regularly reviews the carrying value of

its value in use. For the purposes of assessing impairment,

capitalized sales commissions with respect to any events

assets are grouped at the lowest levels for which there

or circumstances that indicate impairment. Among the

are separately identifiable cash inflows (cash generating

tests performed by the Company to assess recoverability

units). Finite life intangible assets are tested for impairment

is the comparison of the future economic benefits derived

2023 IGM Financial Inc. Annual Report | Management's Discussion and Analysisfrom the capitalized sales commission asset in relation to

asset of $61.6 million at December 31, 2023 compared to an

its carrying value. At December 31, 2023, there were no

accrued benefit asset of $86.8 million at December 31, 2022.

indications of impairment to capitalized sales commissions.

Actuarial gains or losses recorded in Other comprehensive

• 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 (RPP) for all eligible

employees, unfunded supplementary executive retirement

income, including the defined benefit pension plan, the

SERPs and post-employment benefit plans, were losses of

$25.1 million ($18.4 million after tax) for the twelve months

ended December 31, 2023.

A decrease of 0.25% in the discount rate utilized in 2023

would result in a change of $20.4 million in the accrued

pension obligation, $18.5 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 16 of the Consolidated

Financial Statements.

Changes in Accounting Policies

plans for certain executive officers (SERPs) and an unfunded

IFRS 17 – Insurance Contracts (IFRS 17)

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

Company’s defined benefit pension plan assets and for the

accrued benefit obligations on all defined benefit plans is

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 decreased since December 31, 2022.

The discount rate on the Company’s RPP at December 31,

2023 was 4.65% compared to 5.25% at December 31, 2022.

The pension plan assets increased to $536.0 million at

December 31, 2023 from $510.7 million at December 31,

2022 due to market appreciation. The total defined benefit

pension plan obligation increased to $474.4 million at

December 31, 2023 from $423.9 million at December 31,

2022, primarily due to the decrease in the discount rate.

The defined benefit pension plan had an accrued benefit

The IASB issued IFRS 17 which sets out the requirements for

the recognition, measurement, presentation and disclosures

of insurance contracts a company issues, reinsurance

contracts it holds, and investment contracts with discretionary

participation features issued. IFRS 17 is effective for periods

beginning on or after January 1, 2023. Entities adopting
IFRS 17 had the option to defer adoption of IFRS 9 – Financial
Instruments (IFRS 9). Adoption of these standards affected the
accounting for the carrying value of the Company’s investment

in Lifeco and the amount that the Company records for its

proportionate share of associate’s earnings. In the fourth

quarter of 2022, Lifeco disclosed that the adoption of IFRS 17

and IFRS 9 was expected to decrease its total equity by

$3.4 billion as at January 1, 2022. Accordingly, the Company

reduced the carrying value of its investment in Lifeco and

retained earnings, at January 1, 2022, by $136 million to reflect

its proportionate share of Lifeco’s estimated decrease to total

equity. In the second quarter of 2023, the Company revised its

estimate, on a prospective basis, using the final Lifeco disclosed

impact of IFRS 17 and IFRS 9 by decreasing the gain on sale of

Lifeco shares by $6.2 million and increasing the proportionate

share of associate’s earnings by $15.1 million.

Additional information of the impact on Lifeco is available in its

public disclosures.

IAS 12 – Income Taxes

The Company adopted the amendments to IFRS for IAS 12 –
Income Taxes effective May 2023 and has applied the exception
to recognizing and disclosing information about deferred

tax assets and liabilities related to Pillar Two model rules

published by the Organization for Economic Co-operation and

Development (OECD).

Management's Discussion and Analysis | 2023 IGM Financial Inc. Annual ReportFuture 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.

Disclosure 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
President and Chief Executive Officer and the Chief Financial

Officer, has evaluated the effectiveness of the Company’s
disclosure controls and procedures. Based on their evaluations

Officer by others, particularly during the period in which the

as of December 31, 2023, 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, 2023, 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 2023,

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.

2023 IGM Financial Inc. Annual Report | Management's Discussion and AnalysisOther Information

Transactions with Related Parties

IGM Financial enters into transactions with Canada Life, which

On November 30, 2023, the Company completed the sale

of 100% of IPC to Canada Life.

is a subsidiary of its affiliate, Lifeco, which is a subsidiary

The acquisition and sale transactions were recorded at

of Power. These transactions are in the normal course of

fair value.

operations and have been recorded at fair value:

• During 2023 and 2022, 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

For further information on transactions involving related

parties, see Notes 3, 10 and 28 to the Company’s Consolidated

Financial Statements.

Outstanding Share Data

distribution agreement with Canada Life and received

Outstanding common shares of IGM Financial as at

$51.7 million in distribution fees (2022 – $48.7 million).
The Company received $59.8 million (2022 – $61.4 million)

December 31, 2023 totalled 238,131,738. Outstanding stock
options as at December 31, 2023 totalled 10,902,118 of

and paid $19.5 million (2022 – $19.5 million) to Canada Life

which 6,924,596 were exercisable. As at February 9, 2024,

and related subsidiary companies for the provision of sub-

outstanding common shares totalled 238,136,813 and

advisory services for certain investment funds. No fees were

outstanding stock options totalled 10,823,003 of which

paid to Canada Life related to the distribution of certain

6,845,481 were exercisable.

mutual funds of the Company in 2023 (2022 – $0.6 million).

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.

SEDAR

Additional information relating to IGM Financial, including

the Company’s most recent financial statements and Annual

Information Form, is available at www.sedarplus.ca.

Management's Discussion and Analysis | 2023 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 material accounting policies

Note 3. Discontinued operations

Note 4. Revenues from contracts with customers

Note 5. Expenses

Note 6. Other investments

Note 7. Loans

Note 8. Securitizations

Note 9. Other assets

Note 10. Investment in associates

Note 11. Capital assets

Note 12. Capitalized sales commissions

Note 13. Goodwill and intangible assets

Note 14. Deposits and certificates

Note 15. Other liabilities

Note 16. Employee benefits

Note 17. Income taxes

Note 18. Long-term debt

Note 19. Share capital

Note 20. Capital management

Note 21. Share-based payments

Note 22. Accumulated other comprehensive income (loss)

Note 23. Risk management

Note 24. Derivative financial instruments

Note 25. Fair value of financial instruments

Note 26. Earnings per common share

Note 27. Contingent liabilities and guarantees

Note 28. Related party transactions

Note 29. Segmented information

100

101

102

107

108

109

110

111

112

114

115

116

117

120

122

123

125

126

129

130

133

134

2023 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 | 2023 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, 2023 and 2022, 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 material

accounting policy information (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, 2023 and 2022, 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, 2023. 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, 6 and 25 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.

2023 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 | 2023 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 15, 2024

2023 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 4)

Asset management

Dealer compensation expense

Net asset management (Note 4)

Net investment income and other

Gain on sale of Lifeco shares (Notes 2, 10)

Proportionate share of associates’ earnings (Note 10)

Expenses (Note 5)

Advisory and business development

Operations and support

Sub-advisory

Interest (Note 18)

Earnings before income taxes

Income taxes (Note 17)

Net earnings from continuing operations

Net earnings from discontinued operations (Note 3)

Net earnings

Non-controlling interest (Notes 3, 10)

Net earnings available to common shareholders

Earnings per share (in dollars) (Note 26)

Net earnings available to common shareholders from continuing operations

– Basic

– Diluted

Net earnings available to common shareholders

– Basic

– Diluted

(See accompanying notes to consolidated financial statements)

2023

2022

$ 2,199,681

$ 2,159,870

949,041

(314,107)

634,934

37,646

172,977

200,137

967,212

(327,521)

639,691

22,238

–

210,762

3,245,375

3,032,561

1,006,252

905,704

65,731

123,231

962,064

786,643

63,574

113,174

2,100,918

1,925,455

1,144,457

215,077

929,380

223,131

1,152,511

(3,619)

1,107,106

245,948

861,158

11,420

872,578

(5,334)

$ 1,148,892

867,244

3.89

3.88

4.83

4.82

3.59

3.58

3.64

3.63

Consolidated Financial Statements | 2023 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

2023

2022

$ 1,152,511

872,578

Other comprehensive income (loss) (Note 6), net of tax of $(12,315) and $92,009

85,054

(585,515)

Employee benefits

Net actuarial gains (losses), net of tax of $6,767 and $(36,950)

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 $6,751 and $2,541

Total comprehensive income

(See accompanying notes to consolidated financial statements)

(18,378)

100,049

1,472

12,689

(97,913)

(29,765)

(23,508)

(496,285)

$ 1,122,746

376,293

2023 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 6)

Client funds on deposit

Accounts and other receivables

Income taxes recoverable

Loans (Note 7)

Derivative financial instruments (Note 24)

Other assets (Note 9)

Investment in associates (Note 10)

Capital assets (Note 11)

Capitalized sales commissions (Note 12)

Deferred income taxes (Note 17)

Intangible assets (Note 13)

Goodwill (Note 13)

Liabilities

Accounts payable and accrued liabilities

Income taxes payable

Derivative financial instruments (Note 24)

Deposits and certificates (Note 14)

Other liabilities (Note 15)

Obligations to securitization entities (Note 8)

Lease obligations

Deferred income taxes (Note 17)

Long-term debt (Note 18)

Shareholders’ Equity

Share capital (Note 19)

Common shares

Contributed surplus

Retained earnings

Accumulated other comprehensive income (loss) (Note 22)

Non-controlling interest (Note 10)

These financial statements were approved and authorized for issuance by the Board of Directors on February 15, 2024.

James O’Sullivan
Director

John McCallum
Director

(See accompanying notes to consolidated financial statements)

2023

2022

Restated
(Note 2)

544,633

1,072,892

863,598

3,365,722

335,552

38,292

774,536

4,347,354

368,806

15,544

5,108,696

5,021,483

42,729

112,474

63,665

156,240

3,659,174

2,051,303

306,961

394,736

3,232

1,250,712

2,636,771

326,288

372,173

1,419

1,363,642

2,802,173

$ 18,663,282

$ 18,737,518

444,690

504,373

9,535

49,580

3,344,190

394,926

4,687,827

169,940

442,186

7,922

51,581

4,333,997

355,577

4,610,438

192,793

451,005

2,400,000

2,100,000

11,942,874

12,607,686

1,690,626

1,672,799

57,926

54,134

4,595,620

3,973,456

316,290

59,946

362,766

66,677

6,720,408

6,129,832

$ 18,663,282

$ 18,737,518

Consolidated Financial Statements | 2023 IGM Financial Inc. Annual ReportConsolidated Statements of Changes in Shareholders’ Equity

(in thousands of Canadian dollars)

Share capital
– Common
shares
(Note 19)

Contributed
surplus

Retained
earnings

Accumulated
other
comprehensive
income (loss)
(Note 22)

Non-
controlling
interest

Total
shareholders’
equity

2023

Balance, beginning of year

As previously reported

$ 1,672,799 $

54,134 $ 4,106,714 $

362,766 $

66,677 $ 6,263,090

Change in accounting policy (Note 2)

–

(133,258)

–

(133,258)

1,672,799

54,134

3,973,456

362,766

66,677

6,129,832

As restated

Net earnings

Other comprehensive income (loss), net of tax

Total comprehensive income

Common shares

Stock options

Current period expense

Exercised

Common share dividends

Non-controlling interest

Disposal of investment in associate (Note 10)

Transfer out of fair value through other
comprehensive income (Note 6)

Other

Balance, end of year

2022

Balance, beginning of year

As previously reported

–

4,744

(952)

–

1,152,511

–

1,152,511

–

(29,765)

–

(535,703)

(3,619)

(2,017)

703

10,289

–

(16,008)

(703)

–

(6,731)

–

1,152,511

(29,765)

1,122,746

17,827

4,744

(952)

(535,703)

(10,350)

(18,025)

–

10,289

$ 1,690,626 $

57,926 $

4,595,620 $

316,290 $

59,946 $

6,720,408

$ 1,658,680 $

51,069 $ 3,856,996 $

883,083 $

51,343 $

6,501,171

Issued under stock option plan

17,827

Change in accounting policy (Note 2)

–

(133,258)

–

(133,258)

As restated

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 6)

Common share cancellation excess and other

1,658,680

51,069

3,723,738

883,083

51,343

6,367,913

–

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 $ 3,973,456 $

362,766 $

66,677 $

6,129,832

(See accompanying notes to consolidated financial statements)

100

2023 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 from continuing and discontinued operations

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

Restructuring provisions and other

Gain on sale of Lifeco shares (Note 10)

Gain on sale of Investment Planning Counsel (Note 3)

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

Net proceeds on credit facility

Repayment of credit facility

Issue of debentures

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

Investment in ChinaAMC (Note 10)

Investment in Rockefeller (Note 10)

Proceeds from sale of Lifeco shares (Note 10)

Proceeds from sale of Investment Planning Counsel, net of cash and cash equivalents of discontinued operations (Note 3)

Decrease in cash and cash equivalents

Cash and cash equivalents from continuing and discontinued operations, 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)

2023

2022

$ 1,366,999

$ 1,122,943

(222,681)

(330,869)

94,160

(116,646)

106,487

(84,912)

3,864

103,266

(172,977)

(220,703)

37,143

894,000

(56,720)

837,280

77,587

(123,513)

103,994

(106,262)

5,855

–

(3,680)

746,055

(8,385)

737,670

(96)

(160)

1,256,041

1,171,025

(1,217,004)

(1,626,896)

(24,142)

550,000

(550,000)

300,000

16,875

–

(535,443)

(25,592)

–

42,553

(115,667)

(537,197)

(203,769)

(1,091,934)

(86,741)

80,835

(150,508)

120,070

(1,203,239)

(1,274,427)

1,113,531

1,584,354

(28,763)

(125,012)

(1,162,369)

(857,690)

552,655

555,023

(37,672)

(107,107)

–

(1,161,770)

134,710

(528,259)

(219,554)

1,072,892

1,292,446

544,633

$ 1,072,892

216,501

346,257

328,132

726,635

544,633

$ 1,072,892

305,617

275,743

253,558

201,741

101

Consolidated Financial Statements | 2023 IGM Financial Inc. Annual ReportNotes to Consolidated Financial Statements
December 31, 2023 and 2022 (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 (Power).

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 material 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 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 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 6, 8, 10, 12, 13, 15, 16, 17 and 25.

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), Rockefeller Capital

Management (Rockefeller), 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.

Changes in accounting policies

IFRS 17 – Insurance Contracts (IFRS 17)

The IASB issued IFRS 17 which sets out the requirements for the recognition, measurement, presentation and disclosures of

insurance contracts a company issues, reinsurance contracts it holds, and investment contracts with discretionary participation

features issued. IFRS 17 is effective for periods beginning on or after January 1, 2023. Entities adopting IFRS 17 had the option to
defer adoption of IFRS 9 – Financial Instruments (IFRS 9). Adoption of these standards affected the accounting for the carrying value of
the Company’s investment in Lifeco and the amount that the Company records for its proportionate share of associate’s earnings. In

2022, Lifeco disclosed that the adoption of IFRS 17 and IFRS 9 was expected to decrease its total equity by $3.4 billion as at January 1,

102

2023 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial Statements2022. Accordingly, the Company reduced the carrying value of its investment in Lifeco and retained earnings, at January 1, 2022,

by $136 million to reflect its proportionate share of Lifeco’s estimated decrease to total equity. In 2023, the Company revised its

estimate, on a prospective basis, using the final Lifeco disclosed impact of IFRS 17 and IFRS 9, by decreasing the gain on sale of Lifeco

shares by $6.2 million and increasing the proportionate share of associate’s earnings by $15.1 million.

Additional information of the impact on Lifeco is available in its public disclosures.

Retained earnings at January 1, 2022 and 2023 also include an increase of $2.4 million, net of tax, due to other items.

IAS 12 – Income Taxes

The Company adopted the amendments to IFRS for IAS 12 – Income Taxes effective May 2023 and has applied the exception to
recognizing and disclosing information about deferred tax assets and liabilities related to Pillar Two model rules published by the

Organization for Economic Co-operation and Development (OECD).

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.

Financial 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.

103

Notes to the Consolidated Financial Statements | 2023 IGM Financial Inc. Annual ReportOther 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 Statements
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.

Derecognition

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.

104

2023 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsRight-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.

Goodwill 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.

105

Notes to the Consolidated Financial Statements | 2023 IGM Financial Inc. Annual ReportIf 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.

Share-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

106

2023 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial Statementsflow 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 24). 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.

The 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.

Note 3. Discontinued operations

On November 30, 2023, the Company completed the sale of 100% of Investment Planning Counsel Inc. (IPC) to The Canada Life

Assurance Company (Canada Life) for proceeds of $575 million plus adjustments. Canada Life is a subsidiary of the Company’s

affiliate, Lifeco, which is a subsidiary of Power.

In accordance with IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations, the operating results and cash flows of IPC
have been classified as discontinued operations within the Wealth Management segment.

During 2023, Schedule I Canadian chartered banks provided the Company with a non-revolving credit facility related to the sale

of IPC. The Company drew on the facility during 2023 and repaid the balance prior to the close of the IPC sale. Interest rates on

the credit facility fluctuated with Canadian bankers’ acceptances and the interest expense was recorded as part of discontinued

operations in the Statements of Earnings.

As at November 30, 2023, IPC’s total assets were $692.6 million, including $30.6 million of cash and cash equivalents, and total

liabilities were $345.7 million.

107

Notes to the Consolidated Financial Statements | 2023 IGM Financial Inc. Annual ReportResults from discontinued operations are included up to November 30, 2023.

Net earnings from discontinued operations

Revenues

Wealth management

Net asset management

Net investment income and other

Expenses(1)

Earnings before income taxes

Income taxes

Net earnings

Gain on sale

Net earnings from discontinued operations

Non-controlling interest

2023

2022

284,678

305,436

15,186

3,265

303,129

300,288

2,841

413

2,428

220,703

223,131

(150)

17,422

1,830

324,688

308,851

15,837

4,417

11,420

–

11,420

(200)

Net earnings available to common shareholders from discontinued operations

222,981

11,220

(1) Includes interest expense allocation of $17.9 million in 2023.

Cash flows from discontinued operations

Included within the Company’s cash flows are the following amounts attributable to discontinued operations:

Net cash (used in) provided by:

Operating activities

Financing activities

Investing activities

Net (decrease) increase in cash and cash equivalents

Note 4. 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

2023

2022

53,083

(32,599)

(29,113)

22,151

14,687

(30,806)

(8,629)

6,032

2023

2022

$ 1,188,503

$ 1,140,306

883,958

875,082

2,072,461

2,015,388

1,031

126,189

3,939

140,543

2,199,681

2,159,870

949,041

(314,107)

634,934

967,212

(327,521)

639,691

$ 2,834,615

$ 2,799,561

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.

108

2023 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsNote 5. Expenses

Commissions

Salaries and employee benefits

Restructuring and other

Occupancy

Amortization of capital, intangible and other assets

Other

Sub-advisory

Interest

2023

2022

737,602

721,636

584,373

103,266

22,899

90,544

373,272

567,833

–

23,856

87,397

347,985

1,911,956

1,748,707

65,731

123,231

63,574

113,174

$ 2,100,918

$ 1,925,455

In 2023, the Company incurred restructuring and other charges of $103.3 million ($76.2 million after-tax) resulting from streamlining

and simplifying the business to more effectively align with business priorities. The charge includes the Company’s changes to the

organizational structure to advance the growing needs of the business, digital transformation by retiring duplicate systems and

modernizing information technology and an effort to consolidate its real estate footprint to better reflect client and advisor needs.

Note 6. Other investments

Fair value through other comprehensive income (FVTOCI)

Corporate investments

Fair value through profit or loss (FVTPL)

Equity securities

Proprietary investment funds

2023

2022

Cost

Fair value

Cost

Fair value

264,915

721,379

242,704

602,612

12,778

126,550

139,328

13,140

129,079

142,219

12,689

156,663

169,352

12,933

158,991

171,924

404,243

863,598

412,056

774,536

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.

The total fair value of Corporate investments of $721.4 million (2022 – $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. The investment

is classified at fair value through other comprehensive income. IGM Financial Inc. holds directly and indirectly a 24.7% interest in

Wealthsimple (2022 – 24.3%) valued at $607 million at December 31, 2023 (2022 – $492 million). This change is largely due to a

fair value increase of 20% and an incremental investment during the year. The increase in fair value is consistent with the increase

in public market peer valuations, as well as Wealthsimple’s business performance and revised revenue expectations. 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.

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.

109

Notes to the Consolidated Financial Statements | 2023 IGM Financial Inc. Annual ReportFair 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, 2023, there were $169.6 billion in investment fund

assets under management (2022 – $158.9 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, 2023, the underlying investments related to these consolidated investment funds primarily consisted of cash and

short-term investments of $9.0 million (2022 – $14.6 million), equity securities of $43.6 million (2022 – $97.5 million) and fixed income

securities of $19.3 million (2022 – $22.3 million). The underlying securities of these funds are classified as FVTPL and recognized at

fair value.

Note 7. Loans

Amortized cost

Residential mortgages

Less: Allowance for expected credit losses

The change in the allowance for expected credit losses is as follows:

Balance, beginning of year

Write-offs, net of recoveries

Change in expected credit losses

Balance, end of year

1 year
or less

Contractual maturity

1 – 5
years

Over
5 years

2023
Total

2022
Total

998,607

$ 4,109,077

1,749

$ 5,109,433

$ 5,022,298

737

815

$ 5,108,696

$ 5,021,483

815

204

(282)

737

648

(689)

856

815

Total credit impaired loans as at December 31, 2023 were $3,131 (2022 – $2,159).

Total interest income on loans was $170.3 million (2022 – $138.8 million). Total interest expense on obligations to securitization

entities, related to securitized loans, was $142.8 million (2022 – $102.8 million). Losses realized on the sale of residential mortgages

totalled $3.6 million (2022 – losses of $3.5 million). Fair value adjustments related to mortgage banking operations totalled negative

$8.0 million (2022 – negative $3.1 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.

Note 8. 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

110

2023 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial Statementsto changes in variable rate investment returns, are recorded as derivatives with a negative fair value of $4.8 million at December 31,

2023 (2022 – positive $0.9 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.

2023

Carrying value

NHA MBS and CMB Program

Bank sponsored ABCP

Total

Fair value

2022

Carrying value

NHA MBS and CMB Program

Bank sponsored ABCP

Total

Fair value

Securitized
mortgages

Obligations to
securitization
entities

$ 2,408,639

$ 2,389,389

2,313,806

2,298,438

$ 4,722,445

$ 4,687,827

$ 4,690,885

$ 4,695,738

$ 2,494,400

$ 2,459,828

2,143,241

2,150,610

$ 4,637,641

$ 4,610,438

$ 4,532,493

$ 4,544,609

Net

19,250

15,368

34,618

(4,853)

34,572

(7,369)

27,203

(12,116)

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 9. Other assets

Accrued benefit asset (Note 16)

Deferred and prepaid expenses

Other

2023

61,592

48,834

2,048

2022

86,779

56,412

13,049

112,474

156,240

Total other assets of $34.9 million as at December 31, 2023 (2022 – $33.1 million) are expected to be realized within one year.

111

Notes to the Consolidated Financial Statements | 2023 IGM Financial Inc. Annual ReportNote 10. Investment in associates

2023

Balance, beginning of year

As previously reported

Change in accounting policy (Note 2)

As restated

Additions

Disposition

Dividends

Proportionate share of:

Earnings

IFRS 17 adjustment

Other comprehensive income (loss) and other adjustments

Balance, end of year

2022

Balance, beginning of year

As previously reported

Change in accounting policy (Note 2)

As restated

Additions

Dividends

Proportionate share of:

Earnings

Other comprehensive income (loss) and other adjustments

Lifeco

ChinaAMC

Rockefeller

Northleaf

Other

Total

$ 1,075,225

$ 787,171

(135,658)

–

939,567

787,171

–

$ 284,499

40,066

$ 2,186,961

–

(135,658)

284,499

40,066

2,051,303

–

1,162,369

857,690

(397,705)

(46,045)

–

(69,180)

66,908

15,098

11,465

104,094

–

(99,231)

(12,171)

–

(724)

–

542

2,020,601

–

(397,705)

(115,225)

17,346 (1)

(2,585)

–

185,039

15,098

(99,937)

$ 589,288

$ 1,885,223

$ 844,795

$ 301,845

38,023

$ 3,659,174

$ 1,020,700

$ 768,724

(135,658)

–

885,042

768,724

–

(73,181)

(31,319)

128,227

(521)

57,231

(7,465)

–

$ 258,831

–

258,831

–

$ 2,048,255

(135,658)

1,912,597

–

40,430

–

(104,500)

25,668 (1)

(364)

210,762

–

(7,986)

$ 284,499

40,066

$ 2,051,303

Balance, end of year

$ 939,567

787,171

(1) The Company’s proportionate share of Northleaf’s earnings, net of Non-controlling interest, was $13,877 in 2023 (2022 – $20,534).

The Company uses the equity method to account for its investments in associates, which include Lifeco, ChinaAMC, Rockefeller, and

Northleaf, as it exercises significant influence.

On January 12, 2023, the Company closed the transaction to acquire Power’s 13.9% interest in ChinaAMC for cash consideration

of $1.16 billion including transaction costs, increasing the Company’s equity interest in ChinaAMC from 13.9% to 27.8%. To partially

fund the transaction, IGM Financial 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 remaining $597 million of consideration was funded 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. The Company continues to equity account for its 27.8% interest in ChinaAMC and 2.4% interest in Lifeco.

In 2023, the Company recognized a gain on the sale of the Lifeco shares of $172.9 million before-tax ($168.6 million after-tax).

The Company recorded a Lifeco IFRS 17 adjustment of $15.1 million in 2023, representing a change of estimate which has been

recorded on a prospective basis.

On April 3, 2023, the Company acquired a 20.5% interest in Rockefeller for a total cost of $858 million, which was comprised of cash

consideration of $835 million (USD $622 million) and transaction costs.

Great-West Lifeco Inc. (Lifeco)

Lifeco is a publicly listed company that is incorporated and domiciled in Canada and is controlled by Power. 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, 2023, the Company held 22,136,471 (2022 – 37,337,133) shares of Lifeco, which represented an equity interest

of 2.4% (2022 – 4.0%). Significant influence arises from several factors, including but not limited to the following: common control

of Lifeco by Power, directors common to the boards of the Company and Lifeco, certain shared strategic alliances and significant

112

2023 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial Statementsintercompany 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 $970.9 million at December 31, 2023 (2022 – $1,168.3 million).

Lifeco directly owned 9,200,000 shares of the Company at December 31, 2023 (2022 – 9,200,000).

Lifeco’s financial information as at December 31, 2023 can be obtained in its publicly available information.

China 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, 2023, the Company held a 27.8% ownership interest in ChinaAMC (2022 – 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

Canadian
Dollars

3,514

1,055

1,398

384

387

2023

Chinese
Yuan

18,794

5,642

7,327

2,013

2,028

Canadian
Dollars

3,461

1,032

1,446

418

434

2022

Chinese
Yuan

17,650

5,261

7,475

2,163

2,248

Rockefeller Capital Management (Rockefeller)

Rockefeller is a U.S. independent financial services advisory firm focused on the high-net-worth and ultra-high-net-worth segments.

As at December 31, 2023, the Company held a 20.5% ownership interest in Rockefeller. Significant influence arises from board

representation, participating in the policy making process and significant intercompany transactions.

The following table sets forth certain summary financial information from Rockefeller:

(millions)

As at December 31

Total assets

Total liabilities

For the nine months ended December 31(1)

Revenue

Net earnings available to common shareholders

Total comprehensive income

(1) Excludes the first quarter of 2023 earnings as acquisition was on April 3, 2023.

US
Dollars

2023

Canadian
Dollars

1,353.3

843.3

1,791.4

1,116.2

578.0

5.6

779.6

7.7

7.6

113

Notes to the Consolidated Financial Statements | 2023 IGM Financial Inc. Annual ReportNorthleaf Capital Group Ltd. (Northleaf)

Northleaf is a global private equity, private credit and infrastructure fund manager headquartered in Toronto.

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% Lifeco.

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

Note 11. Capital assets

2023

Cost

Less: accumulated amortization

Changes in capital assets:

Balance, beginning of year

Additions

Disposals

Amortization

Sale of IPC

Balance, end of year

2022

Cost

Less: accumulated amortization

Changes in capital assets:

Balance, beginning of year

Additions

Disposals

Amortization

Balance, end of year

114

2023

2022

152.9

84.3

160.3

113.2

151.6

28.8

137.0

40.7

Furniture and
equipment

Building and
components

Right-of-use
assets

Total

350,551

(248,156)

102,395

100,816

24,161

(977)

(15,407)

(6,198)

72,939

(21,606)

51,333

49,677

3,347

–

(1,691)

–

277,648

(124,415)

153,233

175,795

14,678

–

(27,446)

(9,794)

701,138

(394,177)

306,961

326,288

42,186

(977)

(44,544)

(15,992)

102,395

51,333

153,233

306,961

353,374

(252,558)

100,816

81,423

37,325

(1,163)

(16,769)

69,592

(19,915)

49,677

51,105

243

–

280,946

(105,151)

175,795

183,436

20,416

–

(1,671)

(28,057)

703,912

(377,624)

326,288

315,964

57,984

(1,163)

(46,497)

100,816

49,677

175,795

326,288

2023 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsNote 12. Capitalized sales commissions

Cost

Less: accumulated amortization

Changes in capitalized sales commissions

Balance, beginning of year

Changes due to:

Sales of investment funds

Amortization

Sale of IPC

Balance, end of year

2023

2022

701,308

(306,572)

394,736

372,173

117,385

(94,160)

(662)

22,563

585,363

(213,190)

372,173

325,424

124,336

(77,587)

–

46,749

394,736

372,173

Note 13. Goodwill and intangible assets

2023

Cost

Less: accumulated amortization

Changes in goodwill and intangible assets:

Balance, beginning of year

Additions

Disposals

Amortization

Sale of IPC

Finite life

Distribution
and other
management
contracts

189,410

(84,976)

104,434

176,067

91,374

(617)

(15,836)

(146,554)

Software

372,039

(228,442)

143,597

161,839

38,076

(6)

(42,478)

(13,834)

Investment
fund
management
contracts

Indefinite life

Trade names

Total
intangible
assets

Goodwill

717,504

–

717,504

740,559

–

(23,055)

285,177

$ 1,564,130

$ 2,636,771

–

(313,418)

–

285,177

$ 1,250,712

$ 2,636,771

285,177

$ 1,363,642

$ 2,802,173

–

129,450

(623)

(58,314)

(183,443)

–

(165,402)

Balance, end of year

143,597

104,434

717,504

285,177

$ 1,250,712

$ 2,636,771

2022

Cost

Less: accumulated amortization

Changes in goodwill and intangible assets:

Balance, beginning of year

Additions

Disposals

Amortization

365,318

(203,479)

161,839

160,336

40,264

(2)

(38,759)

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

–

Balance, end of year

161,839

176,067

740,559

285,177

$ 1,363,642

$ 2,802,173

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

2023

Indefinite life
intangible
assets

Goodwill

2022

Indefinite life
intangible
assets

Goodwill

$ 1,346,245

–

$ 1,491,687

23,055

1,290,526

1,002,681

1,310,486

1,002,681

$ 2,636,771

$ 1,002,681

$ 2,802,173

$ 1,025,736

115

Notes to the Consolidated Financial Statements | 2023 IGM Financial Inc. Annual ReportThe 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 application of capitalization multiples to

financial and operating metrics based upon precedent acquisition transactions and trading comparables and discounted cash

flow analysis. 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. 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.

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.

Note 14. 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 $3,344.2 million (2022 – $4,334.0 million) related to deposits and certificates.

Deposits

Certificates

Note 15. Other liabilities

Dividends payable

Interest payable

Accrued benefit liabilities (Note 16)

Provisions

Other

Term to maturity

Demand

1 year or less

1–5 years

Over 5 years

2023
Total

2022
Total

$ 3,342,782

–

$ 3,342,782

–

328

–

455

–

$ 3,342,782

$ 4,332,493

625

1,408

1,504

625

$ 3,344,190

$ 4,333,997

2023

2022

133,949

133,688

40,250

85,188

65,933

69,606

36,659

81,367

18,356

85,507

394,926

355,577

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 2023 consisted of additional estimates of

$107.1 million (2022 – $3.2 million), provision reversals of $1.2 million (2022 – $1.5 million) and payments of $58.3 million (2022 –

$10.0 million).

Total other liabilities of $271.7 million as at December 31, 2023 (2022 – $235.6 million) are expected to be settled within one year.

116

2023 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsNote 16. 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.

The actuarial valuation for funding purposes related to the Company’s registered defined benefit pension plan, based on a

measurement date of December 31, 2022, 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 $70.5 million compared to a solvency surplus of $14.4 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. The registered pension plan had a going concern surplus of $127.4 million compared

to $95.0 million in the previous valuation. The next actuarial valuation will be based on a measurement date of December 31,

2025. During the year, the Company has made contributions of $2.8 million (2022 – $11.4 million). As a result of the valuation filed

in April 2023, IGM Financial received a contribution holiday and is not allowed to make contributions to the pension plan until the

next actuarial valuation which is expected to be as at December 31, 2025. 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.

117

Notes to the Consolidated Financial Statements | 2023 IGM Financial Inc. Annual ReportPlan 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

Plan amendment

Employee contributions

Interest expense

Additions

Remeasurements:

Actuarial losses (gains)

Demographic assumption

Experience adjustments

Financial assumptions

Balance, end of year

Defined
benefit
pension plan

510,730

1,677

2,801

(29,771)

26,388

–

24,206

536,031

423,951

(29,771)

12,143

–

1,677

21,780

–

(4,592)

5,184

44,067

474,439

2023

Other post-
employment
benefits

SERPs

Defined
benefit
pension plan

SERPs

2022

Other post-
employment
benefits

–

56,084

(4,029)

1,228

–

2,825

–

144

3,175

59,462

–

25,283

(2,404)

206

–

1,268

–

158

1,215

25,726

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

–

(2,506)

(174,233)

423,951

–

71,557

(5,808)

1,971

–

2,069

–

(1,048)

(12,657)

56,084

–

32,551

(3,722)

344

–

931

–

708

(5,529)

25,283

Accrued benefit asset (liability)

61,592

(59,462)

(25,726)

86,779

(56,084)

(25,283)

Significant 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

4.65%

3.75%

N/A

SERPs

4.60%-4.65%

3.75%

N/A

2023

Other post-
employment
benefits

4.65%

N/A

5.30%

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%

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 17.3 years

(2022 – 15.7 years).

Benefit expense:

Current service cost

Plan amendment

Net interest cost

118

Defined
benefit
pension plan

2023

Other post-
employment
benefits

SERPs

Defined
benefit
pension plan

SERPs

12,143

1,228

206

21,027

1,971

–

(4,608)

2,825

–

1,268

–

481

–

2,069

2022

Other post-
employment
benefits

344

–

931

7,535

4,088

1,474

21,508

4,040

1,275

2023 IGM Financial Inc. Annual Report | Notes to the Consolidated Financial StatementsSensitivity analysis:

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