IGM Financial is one of Canada’s premier financial services companies, and one of the country’s largest managers and distributors of mutual funds and other managed asset products. It trades on the Toronto Stock Exchange (TSX: IGM) and has a market capitalisation of approximately €8bn, according to figures released at the end of October 2011. As such, it is the fourth largest publicly traded asset manager in the world. Its majority shareholder is Power Financial Corporation.
IGM Financial builds its business through a strategic focus on multiple distribution opportunities, delivering high-quality advice and innovative investment and service solutions for investors. Strong relationships are at the core of the company’s philosophy.
At a time when Canadians are weathering market uncertainty, these relationships, combined with the company’s commitment to providing quality investment advice and financial products, have placed it in a position of leadership and strength in the financial services industry. The company had more than €85bn in total assets under management at the end of October 2011.
In 1926, Investors Syndicate, a forerunner to Investors Group, opened its first office in Canada and began pioneering the concept of financial planning in Canada. From the very start, the Investors name became synonymous with leading-edge financial products and one-to-one personal advice and service. During the early years, the company introduced one of the country’s first mutual funds, Investors Mutual of Canada. Investors Group also introduced new financial planning strategies like the benefits of dollar-cost averaging.
“Pay yourself first” became synonymous with the Investors Group approach, as clients made it a priority to invest as part of their monthly financial obligations. In 1971, the company launched the “Personal Financial Review,” which expanded beyond investments to include all the elements of a client’s financial well-being.
The Investors Group vision is to be the best financial services company serving the long-term needs of Canadians. The company’s product and service offerings now include a full range of planning options, including investment management, securities and insurance, which are offered through a network of approximately 4,600 consultants to nearly one million Canadians.
Mackenzie Financial got its start in 1967 as a private investment advisory firm. In 1968, the company agreed to open up a mutual fund – the Industrial Growth Fund – to market to the public. In the 1970s, Mackenzie’s investment management practice grew organically and through acquisitions. The company believed strongly in the advice model and continued to work with financial advisors to expand the mutual fund line to meet the increasing needs of investors, a trend that continues to this day.
Mackenzie grew its market share in the 1980s – in an increasingly competitive market – through a continued focus on investment quality and product innovation. The company was the first to market a number of innovative strategies and structures.
The strength of Mackenzie’s retail distribution network was solidified in the 1990s and to this day is built on its long-standing relationships with financial advisors and representatives, as well as its partnerships with retail brokers, insurance agents, banks, and financial institutions. Its products are offered through a network of more than 30,000 third-party financial advisors to more than one million investors.
Investing in communities
Investors Group is committed to supporting the communities in which its employees, advisors and clients live and work. The company’s spirit of volunteerism is strong and is recognised throughout the country. It is known for its support and encouragement – through a variety of programmes – of the community efforts of its employees and advisors. Investor Group commits at least one percent of its average annual pre-tax income to charitable and other non-profit organisations. In 2010, contributions totalled more than $6.3m, with over 2,500 donations going to more than 1,400 organisations.
Mackenzie’s community investment focuses primarily on small social service organisations across Canada, particularly those with a focus on families and children at risk, as well as financial literacy. The Mackenzie Financial Charitable Foundation, which provides grants to 30 charities, provides a vehicle for employees to become active donors and volunteers.
Through its Committed Volunteer Programme, Mackenzie actively encourages its employees to participate in the community as volunteers. Mackenzie provides time off for employees to volunteer and also directs grants to charities where employees regularly donate their time.
The company believes in the importance of good corporate governance. It is the company’s view that a financially strong, long-term-oriented controlling shareholder can have a significant positive impact on a company’s long-term returns. The benefits of such an arrangement include the ability to support management in the pursuit of long-term strategies, and the provision of directors who are experienced and knowledgeable about the company’s business.
In the case of IGM, these attributes are provided through a governance model developed over many years, which includes a group of directors who are also officers of the controlling shareholder.
Effective structures and procedures exist to ensure the board’s independence from management and to ensure that the conflicts of interest between the company and its related parties, including Power Financial, are dealt with appropriately. Conflicts of interest are resolved through the Related Party and Conduct Review Committee, comprised of directors who are independent of the controlling shareholder. The committee approves only those transactions that it deems appropriate. Most committees of the board are composed entirely of directors who are independent of management.
Reflecting its commitment to good governance, IGM has adopted an extensive written code of conduct that governs its directors, officers and employees. This code of conduct covers all applicable policies and is reviewed annually with all individuals to whom it applies. The board believes that the company’s governance system is effective and is appropriate to its circumstances. IGM’s governance practices consider the long-term returns to the company’s shareholders and its responsibilities to its clients – important indicators of the effectiveness of a governance system.