IGM Financial Q3 2026 Earnings Call Transcript

IGM Financial (TSX:IGM) reported third-quarter financial results on Friday. The transcript from the company’s third-quarter earnings call has been provided below.

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View the webcast at https://www.gowebcasting.com/events/igm-financial/2026/11/06/igm-financial-inc-3rd-quarter-2026-results/play

Summary

IGM Financial reported a 15% increase in assets under management and advisement and a 19% increase in adjusted earnings per share year-over-year.

The company witnessed strong net flows of $2.7 billion at IG Wealth and Mackenzie, with significant growth in attracting high-net-worth clients.

Strategic investments, including those in Wealthsimple and Rockefeller, showed robust client asset growth, enhancing strategic connectivity across businesses.

The company returned $343 million to shareholders, maintaining financial flexibility with $830 million in unallocated capital and a conservative leverage profile.

IGM is investing in AI and simplification initiatives to drive productivity and enhance client and advisor experiences, aiming for broader deployment in 2027.

Mackenzie Investments reported a 12.5% increase in AUM, driven by strong institutional and retail sales, with improved Morningstar ratings.

Wealthsimple’s assets under administration grew by 68% year-over-year, supported by expanded offerings and client base.

Management remains optimistic about continued growth potential, noting a significant opportunity to expand market penetration among affluent clients.

Full Transcript

Danielle (Operator)

Thank you for standing by. This is the conference operator. Welcome to the IGM Financial third quarter 2026 analyst call and webcast. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation there will be an opportunity to ask questions. To join the question queue you may press star then 1 on your telephone keypad; you will hear a tone acknowledging your request. Should you need assistance during the conference call, you may reach out to an operator by pressing star then zero.

I would now like to turn the conference over to Kyle Martens, Senior Vice-President, Corporate Development and Investor Relations. Please go ahead.

Kyle Martens (Senior Vice-President, Corporate Development & Investor Relations)

Thank you, Danielle. Good morning, everyone, and thank you for joining us. On the call today we have Damon Murchison, President and CEO of IGM Financial and IG Wealth Management; Luke Gould, President and CEO of Mackenzie Investments; and Keith Potter, Executive Vice President and CFO, IGM Financial. Before we get started, I would like to draw your attention to our cautions concerning forward-looking statements on slide 2 of the presentation. Presentation slides 3 and 4 summarize non-IFRS financial measures and other financial measures used in the presentation, and in slide 50 in the appendix we provide a list of documents available on our website related to IGM Financial’s 2026 third quarter results.

With that, I’ll turn it over to Damon on slide 7.

Damon Murchison (President and Chief Executive Officer, IGM Financial and IG Wealth Management)

Thanks, Kyle, and good morning, everyone. We delivered another strong quarter with continued momentum across our businesses driving a 15% increase in assets under management and advisement and a 19% increase in adjusted earnings per share compared to last year. Our leadership teams continue to execute and we’re making progress against our three strategic priorities. First, we continue to grow our core wealth and asset management businesses. IG Wealth and Mackenzie generated a combined $2.7 billion in net flows during the quarter.

At IG, client assets reached $178 billion, up 14% year over year. We’re still seeing continued success in attracting mass affluent and high-net-worth Canadians, supported by our ability to build long-term trusted relationships and our comprehensive financial planning expertise. At Mackenzie, we have strengthened our competitive position, allowing us to accelerate momentum across this business. The changes we made to sharpen and strengthen our investment capabilities are translating into tangible results. Institutional continues to outperform, while we’re seeing real momentum in retail with year-to-date mutual fund gross sales up 58% and improving retail net sales up $1.4 billion, driven by stronger investment performance and expanding advisor relationships.

Mackenzie has a stronger, more competitive business today. …with significant opportunities ahead. Luke will discuss this a little bit later on in the call. Across IGM Financial, we are building on both businesses’ strength by sharing expertise, simplifying processes, improving data and technology, and investing in AI. Our goal is to create better client and advisor experiences and drive greater advisor and sales team productivity, leading to profitable growth. I will detail our progress here shortly.

Second, we continue to amplify growth through our strategic investments. Northleaf’s net flows were $798 million, which are now included in IGM Financial’s consolidated net flows beginning in the third quarter. And Wealthsimple and Rockefeller delivered particularly strong client asset growth of 68% and 27% year over year, respectively, with Wealthsimple’s recent financing representing another important demonstration of value creation. But the opportunity for us here extends beyond financial contributions.

These partnerships continue to create opportunities for strategic connectivity and that will benefit all businesses, and we are continuing to activate these relationships year to date. Mackenzie leveraged its presence and established relationships in China to onboard additional assets from one of Asia’s largest sovereign wealth funds. IG onboarded assets in partnership with Rockefeller, and Northleaf is providing private market capabilities to IG, Mackenzie, and Rockefeller.

Third, we continue to allocate capital with discipline. We returned $343 million to shareholders during the quarter, including $144 million in dividends and $199 million in share repurchases. And in October we invested an additional $96 million in Wealthsimple. At the end of the third quarter, we had approximately $830 million in unallocated capital. This, combined with our conservative leverage profile, gives us flexibility to continue to invest in our businesses and return capital to shareholders.

Our businesses have momentum, and we have a laser-like focus on execution, profitable growth, and long-term value creation. Turn to Slide 8. I’d like to update you on the progress we’re making with simplification and AI. Simplification and personalization guide our work, making it easier for our employees, advisors, and clients. AI is an enabler, allowing us to elevate the stakeholder experience, drive productivity, and sharpen our competitiveness. Our June simplification actions create a capacity to reinvest without layering on costs. Keith will give you an update on our savings a little later.

We’ve integrated technology and the business teams more closely and added AI leadership to improve alignment, delivery, and accountability. We’re beginning to invest in the foundational capabilities needed to use AI responsibly at scale, which include common data services, a platform for AI solutions, and appropriate monitoring and controls. These investments will support broader deployment in 2027 and help us share effective solutions across IGM Financial, meaning we’re not trying to build isolated tools in every business.

We want to establish common capabilities so that our teams can use them to solve real problems across the enterprise where possible, with clear accountability for results. At IG, for example, we have expanded AI access and training across our advisor network and piloted supporting advisors before, during, and after client meetings by preparing personalized meeting packages, documenting discussions, and simplifying follow-up. We’re also piloting chat-enabled requests to simplify routine transactions through our corporate channel. The opportunity to give advisors time back means more time with clients and greater capacity to deliver better advice.

At Mackenzie, we’re seeing tangible progress across investment, research, distribution, and client services. We are integrating data and research to support AI-assisted analysis and expanding AI use cases across our investment boutiques. We’ve also piloted AgentIQ for content creation and AI-powered competitive intelligence to strengthen our prospecting efforts. Together, these initiatives are helping our investment teams make better-informed decisions, strengthen our distribution capabilities, and simplify how we operate.

We’re in the early stages of this journey, and we’ve been deliberate about putting the right foundations in place. As we look forward to 2027, our focus will increasingly shift towards deploying solutions and demonstrating tangible business value through better client and advisor experience, improved advisor and sales team productivity, and stronger operating performance. We’ll provide regular quarterly updates on this progress going forward. Turn to slide 9. The operating environment remained resilient, although markets were more mixed than in the first half of the year. Canadian and U.S. equity markets rose, while Chinese equities and fixed income weakened. Client investment returns were 0.2% for Q3 and 9.4% year to date. Despite economic uncertainty, the industry flows remained positive. We can’t control the markets, but what we control is the advice, sales, service, and investment experience we deliver.

Slide 10 illustrates the breadth of our earnings. Adjusted net earnings available to common shareholders increased 17% to $351 million. Wealth management earnings rose 30%, supported by IG and Rockefeller. Asset management was slightly lower as Mackenzie and Northleaf growth was offset by China Asset Management. Corporate and other was also a contributor in the quarter. Our core businesses are delivering, and Keith will cover the financial drivers in his comments.

Now I’ll turn to IG Wealth’s continued momentum. Turn to Slide 12. I’d like to start by recognizing a very special milestone for IG Wealth as we celebrated our 100th anniversary this year. For a century, we’ve helped Canadians achieve their financial goals through comprehensive financial planning and trusted advice. It’s a legacy that we’re incredibly proud of. And what’s particularly encouraging is that we’re celebrating from a position of strength. IG ended September with record quarter-end client assets of $178 billion, up 14% year over year, and generated $666 million in net flows.

We also delivered record third-quarter new client gross inflows of $1.4 billion, with 80% coming from mass affluent and high net worth Canadians, which is exactly where we’ve been positioning this business. Gross inflows per advisor practice increased 23% year over year and 69% since our 2023 Investor Day. We’ve also strengthened our offering with a tiered interest cash solution and partnerships including Goldman Sachs and National Bank. This anniversary was an opportunity to recognize what our advisors and employees have built together. But it’s also about the next chapter. Going forward, we will continue investing in our advisors, technology, and client experience to help more Canadians navigate their complex financial needs. Rockefeller and Wealthsimple continue to execute their strategies and delivered impressive growth in Q3, which I will also detail.

Turn to slide 13. Gross inflows increased approximately 18% to $4.5 billion, while our gross outflow rate improved modestly. That supported $666 million in quarterly net inflows and a trailing 12-month net flows rate of 1.6%. This consistency reflects sustained new client acquisition and strong existing client relationships. At quarter end, 76% of IG’s investment solutions were rated 4 or 5 stars by Morningstar and 98% were rated 3 stars or higher.

We believe the combination of competitive investment solutions and comprehensive financial planning advice will continue to fuel our growth, and we continue to see an opportunity to improve how we support our advisors so they can spend more time building relationships and less time navigating administrative work. Slide 14 shows how our client mix has evolved. New client gross inflows reached approximately $1.4 billion in the quarter. Over the past five years, inflows from high net worth households have increased by more than 150%, and those for mass affluent households grew by more than 40%. This reflects years of investment in technology, financial planning tools, and our advisors’ capabilities, allowing us to serve more mass affluent and high net worth clients in a more meaningful way.

Tax planning, wealth transfer, business succession, retirement—all create growing demand for personalized financial planning advice that we provide at scale. Our value proposition goes well beyond managing investments. As our clients’ financial needs become more complex, having a trusted advisor who understands their family’s full financial picture becomes increasingly important. That’s why we’ve been so deliberate about building our business around comprehensive financial planning—long-term relationships that span multiple generations.

We believe there’s a significant runway to attract more affluent clients and deepen those multigenerational relationships. Turn to slide 15. This covers two important parts of comprehensive financial planning: insurance and mortgages. With insurance, we delivered another strong quarter with new annualized premiums increasing 33% year over year to $27 million. Mortgage fundings declined 13% year over year in a more challenging environment. Both mortgages and insurance remain important ways to support our clients as they make significant financial decisions.

Going forward, our opportunity is to bring these two capabilities together more seamlessly, helping our advisors deepen client relationships and serve more of their credit and protection needs through comprehensive financial planning. Slide 16 highlights our strong advisor satisfaction. In the Investment Executive Dealer Report Card, IG ranked first among direct peers with an overall score of 8.9, up from 8.8 last year. We also ranked first in 14 of 25 categories including financial planning support, high-net-worth solutions, and advisor development. Our advisors’ net promoter score remained exceptionally strong at 92. Why does this matter? It matters because great advisors are central to our competitive advantage.

It’s proven that when they have the right support, technology, and capabilities, they can spend more time with clients, building stronger practices and delivering better outcomes, which drives value through greater share of wallet, new client acquisition, and stronger advisor recruitment. We believe this matters more today than ever before as the industry faces advisor succession and Canadian financial needs become more complex. These results reinforce the strength of our platform and advisor proposition, and we’re going to keep on investing.

Turn to slide 17. In Rockefeller, client assets reached approximately $237 billion, up 27% year over year. Rockefeller generated $5.3 billion in record third-quarter organic asset growth and $4.8 billion from inorganic growth via new advisor teams. Private Advisor count reached 482, up 15%, or 62 advisors, year over year. The family office offering continues to attract leading advisors and ultra-high-net-worth clients. We see meaningful runway for further expansion in the U.S., alongside opportunities to share expertise and strengthen collaboration with IG Wealth.

It’s another example of how strategic investments can bring both attractive growth and capabilities that are relevant to the broader organization. Finally, turning to Wealthsimple on slide 18. This business continues to demonstrate exceptional growth. Assets under administration reached $169.2 billion, up 68% year over year, with approximately $11 billion in net flows during the quarter. Wealthsimple now serves more than 3.8 million clients, up 27%, including one in four Canadians aged 18 to 40 and more than 30,000 business clients. It’s broadening its banking, business, and trading offerings supported by a simple, personalized client experience.

With the recently announced financing, IGM Financial invested an additional $96 million, bringing the pro forma value of our investment to approximately $3 billion. We remain Wealthsimple’s largest single shareholder. The combination of client growth, broader product offerings, and deeper relationships creates significant opportunity for Wealthsimple over time, and for IGM Financial, the value of this relationship extends beyond our financial investment.

Wealthsimple’s approach of simplification, personalization, and client experience provides important insights as we continue to strengthen our own business. With that, I’ll turn the call over to Luke Gould to go over Mackenzie’s results.

Luke Gould (President and Chief Executive Officer, Mackenzie Investments)

Great. Thanks, Damon. Good morning, everyone. Turn to page 20. You’ll see highlights for Mackenzie and the Asset Management segment of the quarter. We’re pleased with the continuing momentum in the quarter across many dimensions. Our AUM is up 12.5% in the last year to a record high of $269.5 billion, and we had net sales of $2 billion in the quarter and $5.6 billion year to date. Investment fund net sales of $664 million in Q3 were up noticeably from 2025, with all of this increase relating to retail net sales improvement of approximately $300 million from last year, and we continue to experience significant sales momentum from global institutional clients, and I’ll provide a bit more color on this in a few slides. At the bottom left of the page, we’ve reiterated our three strategic priorities at Mackenzie: raise the bar on investment excellence, build better products, and deliver a great service experience, and all of our initiatives to enhance the business are focused around these three priorities.

We’ve highlighted a few milestones on each of these priorities in the quarter. On investment excellence, we continue to see improvements in overall Morningstar ratings in the quarter, and this is the highest share of our AUM in five-star funds in almost five years. And we also completed the implementation of our Middle Office and Data Foundation with BNY Mellon. This was a multi-year program that provides our investment professionals with a world-class operating environment to do their best work.

On the product front, we added to our Mackenzie Modis Systematic suite of ETFs leveraging capabilities within our multi-asset team. And we also launched our novel Global Equity and Gold Overlay ETF MG for those seeking protection from currency debasement or otherwise wishing for gold exposure as part of a single-ticket solution. And within delivering a great service experience, we have a number of rollout milestones coming in Q4 on our digital platforms to advisors and clients in partnership with OneVest and Salesforce.

This new online platform addresses feedback we’ve received from clients over time on how to enhance their experiences with Mackenzie. And on the bottom right, we’ve highlighted that we have received the results of the 2026 Advisor Perception Study from Environics, and we are very pleased with these results. We’ve increased our overall score and had increases on most of the 40 measures in the survey. Our overall score rank is second out of 25 assessed competitors.

We’re also pleased to have increased our advisor sales penetration, the percent of advisors in Canada actively purchasing Mackenzie, and we maintained a rank of number two on this measure across advisor types. You’ll see in a few slides we’ve introduced supplemental disclosures this quarter on new client acquisition, and these measures are consistent with what we’ve seen from the Advisor Perception Study and the number of advisors working with us. We also saw our net promoter score improve to number three relative to our rank in 2025 of number eight, and I’d just close by saying it’s so good to get this feedback from Canadian financial advisors and to Environics.

We do appreciate your study and get a lot out of it. Turning to page 21, you can see the trend and history of Mackenzie’s net sales. On the middle left, you can see solid flows and continued improvement on our investment fund net sales year to date. And on the right, you can see that this improvement has been driven by ongoing improvements in retail. At the bottom left, you can see the strong year-to-date net sales overall at the same level as 2025, which was a record-high year for us on this measure, and this was driven by continuing inflows from institutional investors.

We are expecting continued improvement in sales across channels over the coming quarters as we continue to have winning conditions in a number of places within our offerings. Turning to page 22, I’d highlight in the bottom left that the industry environment remains healthy, and the mutual fund net sales rate for the industry peers is around 2%, and we’re slightly above this. In the top right, we’ve highlighted the continued growth in retail with $292 million in improvement, as well as meaningful institutional net sales in the period. If you look at the institutional SMA line, you’ll see that $1.362 billion reflects onboarding from some of the awards in Q2 that we telegraphed last quarter.

We had a number of these new awards fund in the third quarter, and also we had many, many new awards during Q3, and right now the awarded pipeline—meaning we have been awarded the mandates but they haven’t funded yet—totals about $5 billion, and that’s going to be coming in in the coming months. And beyond this, we do have a very strong high-probability pipeline as we enter 2027. I would comment the institutional onboarding continued reflecting a good mix of some of the largest public pensions globally, sub-advisory to financial institutions, many foreign clients, a few Canadian clients, and I’d also highlight that while a lot of the institutional growth has come from our global quant equity team, we also saw very good growth from our Canadian equity team during the quarter.

And in the bottom right, overall investment performance continues to be solid, and the share of assets residing in five-star funds, as mentioned, remains at the highest level in almost five years, and we have very compelling performance across a broad range of relevant strategies. Moving to page 23, we provided some new disclosure relating to our Canadian retail business serving financial advisors. At the top, we presented the quarterly sales trend for the last seven quarters and year to date, and I remind and look at the quarterly numbers, there’s seasonality in our business. At the top right, you can see the improvement in retail gross mutual fund sales, 58% year to date, and you can see net sales improvement of $1.35 billion.

At the bottom, we want to provide some context on new client acquisition, highlighting the sale activity we’re seeing from new advisors who started doing business with us. At the bottom left, you can see a contributor to the gross sales increase has been meaningful improvement in sales from new advisor relationships, which are up 129%. I’d also note that these numbers exclude ETF purchases; year-over-year increases would be much larger when this activity is included, as we’ve seen success in our active equity ETFs in particular.

In the middle, you can see that we are at an all-time high in new advisors choosing to work with Mackenzie, with very strong momentum here as we enter 2027, and in the bottom right, we’re pleased to see this reflected in the advisor sales penetration numbers from the Advisor Perception Study. Turning to page 24, you can see the performance in net sales for our retail investment funds by boutique. I’d highlight a few things on this slide. First, in the third column from the left, we continue to see noteworthy retail flows and momentum into our global quant equity boutique as mentioned last quarter. I would note that we do not see these flows as being near their potential yet. We have 15 retail mandates here in large categories, and the track records are exceptional, and we’re working hard on continuing to get the word out on this holistic quant approach.

And as you scan across the top section of the slide, looking at the other boutiques, you’ll see that we have very compelling performance in a number of relevant product categories at this moment that we’re going to lean into. This includes our Multi-Asset Strategies team, our Value team, our Resources and Energy Evolution Greenchip team, among others. Turn to page 25, a few quick comments on the Chinese investment fund industry. You’ll see that industry assets declined 1% in the quarter, and you can see at the very bottom there were relatively healthy long-term net sales of 1.1 trillion yuan, and this was offset by the equity market declines during the quarter. Around half of industry net sales were into fixed income products, with the remainder into index equity products. And on the right, China AMC maintained its rank of number two in the industry with a 5.4% market share, up slightly from 5.2% in June.

Turning to page 26, China AMC ended the quarter with total AUM of 2.9 trillion, down 2% in the quarter. I would note if you look at the bottom right, you’ll see China AMC had a solid 145 billion yuan in long-term fund net inflows during the quarter, and the composition of these flows was generally aligned with the industry, with a mix of fixed income and equity index products. Turning to slide 27, it was another good quarter for fundraising for Northleaf, with around $800 million raised primarily across private equity and private credit offerings. This brings fundraising over the last 12 months to $3.6 billion, and they’ve continued to average around a billion dollars in fundraising consistently since we commenced our partnership with them just over five years ago. We continue to be very pleased with the results at Northleaf and with the management team’s execution against its strategic vision and priorities.

As you know, we started consolidating the results of Northleaf into ours effective July 1st, and I’ll now turn the call over to Keith Potter, and Keith will cover the financial results as well as the accounting impacts related to our consolidation of Northleaf.

Keith Potter (Chief Financial Officer)

Thank you, Luke, and good morning, everyone. Turning to slide 29, IGM delivered another record quarter of strong broad-based results with adjusted EPS of $1.51, up 19% year over year. Reported EPS was $2.10. The main adjustments that are new this quarter include the non-cash gain of 144 million that stems from the change in Northleaf equity accounting to consolidation accounting, where we remeasured our existing investment prior to consolidation, and the amortization of acquisition-related intangible assets driven by the purchase price allocation Associated with Northleaf. Turning to capital allocation, we returned $343 million to shareholders in the quarter, including $199 million in share repurchases. We also ended the quarter with unallocated capital of $830 million and reduced our gross debt to EBITDA ratio to 1.3, which leaves us with substantial financial flexibility as we continue to invest in our businesses and return capital to shareholders. In other highlights, as you have seen in recent press releases, we participated in a Wealthsimple financing round and increased the fair value by 13%.

IGM now has an equity interest valued at $3 billion. As discussed last quarter, we are consolidating results for Northleaf. As you review our disclosures, you will see this impacts the consolidated financial statements as well as our AUM, AUA and net flows reporting. If you have any questions as you review the disclosures, please reach out to Kyle and the IR team and they can help you out. Turning to slide 30, you can see our AUMA and flow trends. AUMA for IG and Mackenzie combined increased 0.7% relative to Q2 and, as I commented, you can see in the table we started to include Northleaf in our consolidated AUMA metrics starting in Q3. Consistent with the consolidation of financial results, Slide 31 consolidates IG, Mackenzie and Northleaf. Average AUMA for IG and Mackenzie combined increased 17.1% year over year to support adjusted EPS growth of almost 20% excluding Northleaf.

Q3 operations and support and business development expenses were flat year over year and up 3.6% year to date. Our results benefited from simplification initiatives we announced in June which are progressing as expected. We expect to generate approximately $15 million in savings in 2026 which will be reinvested to strengthen our capabilities across IGM. We’ve begun that reinvestment with an initial focus on foundational AI capabilities and other priorities.

As Damon discussed, we are on track to meet both our 2026 savings and reinvestment milestones. Looking ahead to the fourth quarter, we are maintaining our full year operations and support business development expense growth guidance of 4% excluding Northleaf, and I’ll speak more to this. We will also look forward to providing our 2027 expense guidance on the February call. Slide 32 presents key profitability drivers for IG Wealth Management. On the left you can see average AUMA was up 3.9% from last quarter and on the right our advisory fee rate decreased 0.7 basis points, which was slightly higher than guidance provided last quarter, and the decrease was driven by more cash being invested into long-term solutions and, as a reminder, cash spreads are higher than the standard advisory fee rate. Looking ahead to Q4, we expect the advisory fee rate to decline slightly as cash is put to work in long-term solutions.

This trend is expected to reverse in Q1 of 2027 from investment fund year-end cash distributions, similar to what we saw in Q1 of this year. Asset-based compensation rate was up slightly in the quarter and we expect a modest increase in Q4. On Slide 33, IG’s overall earnings of $197.9 million is another record quarter and up 27.4% year over year on revenue growth of 15%. The business continues to demonstrate strong and positive operating leverage. On point two, other financial planning revenue continues its positive growth trend year over year supported by strength in the mortgage and insurance businesses. Other product commissions are up in line with growth of insurance sales and, finally, expenses for the quarter are down year over year mainly due to simplification savings and timing of expenses.

As Damon mentioned, we are reinvesting savings in AI capabilities in Q4 and expect conference expense to be higher, including the IG 100 anniversary celebration, and expect full-year expense growth of around 4%. Moving to Mackenzie on Slide 34, average AUM was up 3.8% versus Q2. On the right, the third-party rate excluding Canada Life decreased 0.6 basis points, which was less than guided to last quarter and mainly due to timing of institutional fundraisings. As we look to the next quarter, our best estimate for the third-party fee rate excluding Canada Life is to decrease approximately 1 basis point and overall third-party rate to decline approximately 4.5 basis points.

This reflects institutional business onboarding of approximately $1 billion in Q3, $1.3 billion in October and an estimated $2 billion for the remainder of the year. Turning to China AMC on Slide 35, Luke already commented on AUM. Q3 earnings were $33.5 million, down year over year and sequentially. Both comparative periods benefited from strong equity markets while the CSI 300 index declined nearly 12% this quarter. This drove unfavorable fair value movements on China AMC’s investment holdings and disciplined expense management helped offset much of the impact.

Slide 37 has earnings contribution from companies in each segment. Rockefeller earnings have improved significantly, driven by continued growth of the core business and transaction-related revenue from their alts platform. While these fees are part of Rockefeller’s ongoing business, their timing and magnitude can vary from quarter to quarter. Transaction-related revenue contributed approximately $6.5 million to earnings. Northleaf contributed $4.9 million to adjusted earnings net of non-controlling interest, in line with expectations.

On Slide 38, we continue to make progress against our capital allocation priorities. We returned $343 million in capital to shareholders in Q3, including $199 million in share repurchases and $144 million in dividends. At the same time we maintained $830 million in unallocated capital. Our gross leverage ratio ended the quarter lower at 1.22 times compared to 1.25 times in Q2. Our cash dividend payout ratio was 52% reflecting the continued growth in earnings.

Overall, we remain focused on investing in our core wealth and asset management businesses, investing in strategic investments we own today, returning capital to shareholders and maintaining financial strength and financial flexibility to support our long-term priorities. Turning to Slide 39, IGM’s indicative value is at approximately $91 per share. We derive the indicative value of our core operating companies using average forward P/E multiples from a diversified group of wealth managers for IG and asset managers for Mackenzie as of market close on October 30, so worth providing some context on how these multiples have evolved. Global wealth peer multiples have declined from approximately 15 times forward earnings earlier in 2025 to 10 to 11 times today, approaching decade-low levels, while asset manager multiples have remained relatively stable at approximately 10 to 12 times.

In contrast, Canadian banks and insurers are trading at approximately 15 and 14 times respectively, reversing the historical valuation relationship with global wealth and asset managers. Our indicative valuation reflects a consistent approach using the global wealth and asset manager peer multiples. That will end our prepared remarks and I’ll turn it back to the operator to open it for questions.

OPERATOR

Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question comes from Etienne Ricard from BMO Capital Markets.

Please go ahead.

Etienne Ricard (Analyst)

Thank you and good morning. At IG Wealth, it’s interesting to see flows from high net worth clients, which appears to be accelerating. What do you see as the key drivers of this trend? And would you expect a continued mix shift towards higher-wealth households to support higher margins?

Damon Murchison (President and Chief Executive Officer, IGM Financial and IG Wealth Management)

Yeah, it’s Damon here. So the reason why you see that growth is quite simple. It’s the services that we are providing, quite frankly, which is we solve complex financial challenges for Canadians through our financial planning. Expertise is needed in this country. More and more Canadians that we’re in front of are looking for advice that extends beyond just investment advice. They’re looking for tax planning, they’re looking for intergenerational conversations and estate planning.

They’re looking for how can you help me with my business and how do I structure my business? Or how can you help me value my business and sell my business? How can you help me explain my wealth to my kids because they’re going to inherit wealth the likes of which they have never seen. And then how can I give to the causes that matter to me while I’m living so I can leave a legacy? These are all just examples of the type of advice that we provide at IG Wealth.

And then we provide it at scale because we have advisors that are in every community across the country. In terms of forward looking, we see it just discontinuing. We have a very, very long runway. When I take a look at our penetration of clients or Canadians that have investable assets between a million dollars and $5 million, so the start of high net worth, we’re sub 2% penetration. And when I look at Canadians that are $5 million plus, we’re sub 1% penetration. So given that we’re providing a service that few others can provide and we’re doing it across the country at scale, we have a huge opportunity here to continue this.

Etienne Ricard (Analyst)

And just to circle back on margins, how would you expect a continued mix shift to help maybe raise the margin profile?

Keith Potter (Chief Financial Officer)

Yeah, it’s Keith here. It really impacts the advisory fee rate. If you look at the advisory fee rate and the trend over the past couple of years, I would expect it to continue to come down as we put on more high net worth clients that typically pay a lower fee rate than other clients. But I would also expect it to be a decent move down at a decelerated pace relative to what we’ve seen in the past.

Etienne Ricard (Analyst)

Okay. And just to come back on Wealthsimple, you maintained your ownership stable in the last equity raise. Where do you see IGM’s ownership in the company move over the next few years, to the extent more capital is raised? And just an update on how meaningful Wealthsimple is for Mackenzie from a distribution channel perspective, that would be appreciated.

Damon Murchison (President and Chief Executive Officer, IGM Financial and IG Wealth Management)

Yeah, so thanks, Etienne. I’ll start off that and Luke can talk about Mackenzie. But we’ve gone on record saying that Wealthsimple is strategic for us. It’s strategic for us for a number of reasons. Obviously they are phenomenal at what they do and not just attracting new clients, but really embracing their existing clients and being able to broaden out relationships and deepen relationships over time across a number of different verticals. And Michael and team are very adept at that and we believe they’re going to continue to do so.

They’re also very valuable for the organization because we learn from them on a day-to-day basis. You know, we’re on a journey of personalization and simplification. And there’s probably no other organization in the financial services side of this business in this country that does that better than Wealthsimple. So, you know, they make us better each and every day. So, you know, we are very proud to be their largest shareholder and we want to continue to be their largest shareholder.

Luke Gould (President and Chief Executive Officer, Mackenzie Investments)

Hey Etienne, it’s Luke. Welcome. In terms of the Mackenzie relationship, we’re very pleased to support Wealthsimple and their product offering. We support them through ETFs. The ETFs are substantially all passive. We do have some private label ones that we worked on with them. So think of it as about, you know, just north of $5 billion in ETF business. And think of it being a very, very small part of our revenue.

Etienne Ricard (Analyst)

Thank you very much.

OPERATOR

The next question comes from Scott Fletcher from CIBC. Please go ahead.

Scott Fletcher (Analyst)

Hi, good morning. Just wanted to ask on the Mackenzie advisor relationship, some good data there on the acceleration of new sales. Just could you unpack some of the strength there and what you’re seeing resonate with the new advisors and how they’re able to sort of increase their gross sales rates?

Danielle (Operator)

Yeah, absolutely. So we’ve… It’s interesting, Environics has been doing this study for over 30 years and it’s been such a gift for us. We really in earnest started using the feedback from this study to guide where we needed to make changes and make investments over a decade ago. And this is one of our key measures of how advisors feel about us. When you look at the study itself, it does have 40 measures. And so you can think of it as covering everything that matters to an advisor from a product provider.

So that includes the strength of product offering, the breadth of the offering, the strength of sales support, brand, sales and service, every single dimension. This year we are so pleased to see improvements across the board. We’ve generally been overall in the last eight years a consistent top three. We really do have as our KPI for the company to be number one. Nobody wants to be number two. It’s a big rally cry for us. We want to be the very best, the most relevant, respected and admired. And we do believe this study would inform who actually is holding that position. So we’re very pleased to see the success and again, we’re generally top three in most measures and we are aspiring to be number one on every measure.

And we’ve got all of our initiatives lined up to do that and all the investments we keep making the business to help us be the very best in this country. On the new advisor supporters side, there’s a lot driving that. We’ve got the feedback across the board on where things are getting better and why advisors should be proud to work with us as a trusted partner in their business. And right now there’s a lot of relevance across a number of product offerings. A lot of the new advisors coming on have come for quant. That’s been the lead offering that we’ve had right now. And so that’s been nice to see, having these new, relevant and compelling offerings to really provoke discussions with new folks who are adding us to their practice.

Scott Fletcher (Analyst)

Okay, thanks. And sort of a follow-up on the quant boutique, really the engine of flows on the retail side of things. I was curious on the mandates that you transferred over into that boutique, are you seeing flows in those funds improve after you move them over?

Luke Gould (President and Chief Executive Officer, Mackenzie Investments)

Yeah, for the ones we talked about last quarter, that was our U.S. SMID mandates. And yeah, we have seen improvements. And again, on this holistic quant approach, we now have over 30 mandates. Of those 30, about 15 have been launched in retail in Canada. And yeah, the level of alpha has been impressive. The approach is proven and what’s been most compelling for us is the consistency of alpha across different style-led environments or factor-led environments.

So yeah, the reassignment of mandates has gone very well in U.S. SMID and more broadly. Again, the focus is just getting the word out. You know, this combination of AI and HI, you know, artificial intelligence and human intelligence, it’s really paying dividends in the space at this point in time.

Scott Fletcher (Analyst)

Great, thanks, Luke. I’ll pass the line.

OPERATOR

The next question comes from Bart Ziarski from RBC Capital Markets. Please go ahead.

Bart Ziarski (Analyst)

Great. Thanks for taking the question, and good morning everyone. So just wanted to ask on Wealthsimple, there was a product release day yesterday. Could you maybe walk us through kind of just the flavor of those product launches and how you expect the product mix to evolve for Wealthsimple going forward? Thanks.

Damon Murchison (President and Chief Executive Officer, IGM Financial and IG Wealth Management)

Bart. It’s Damon. So I will say that in terms of the announcements, they focused on three key areas of their business. First off, just making sure that they’re focused on AI and offering new tools to their clients that leverage AI, so it makes it easier for them to manage their money and do analysis and do all the wonderful things that they need to do to be able to understand their financial situation a little bit better, including a little bit of a concierge or private banker, as they would say.

The second theme was just around investing and trading. They want to step change and have the most sophisticated investing platform in the country, but also the simplest investing platform to use in the country. So they’ve gone on record in saying that, which is certainly ambitious, and they’re more than capable of delivering that. And then they want to enhance their app experience for their clients. So those are the three areas, as well as continue to launch products in the banking space, in the investing space.

So they’ve got an ambitious plan to be able to do so and we fully support Michael and his team.

Bart Ziarski (Analyst)

Got it. Thanks, Damon. That’s helpful. And then maybe for Luke, you commented that you’ve seen the highest share of AUM in the last five years with five-star performance, obviously a strong result and there’s changes there earlier this year. Can you maybe walk us through just where you’re seeing the momentum and what’s sort of driving that strong performance? Thanks.

Luke Gould (President and Chief Executive Officer, Mackenzie Investments)

Yeah, absolutely. Page 24 had a good summary by boutique and you can think of Morningstar Ratings generally being a weighted average of the percentile rankings of the ten-year, the five-year and the three-year returns. So when you look at the roster, we’ve now got 13 of our 20 largest funds have a rating of four star or five star. And so it’s been nice to see that trend evolve. And when you think of the offerings that have that relative strength, just eyeballing page 24, you can gather where they are.

Our Multi-Asset Strategies team with their managed solutions have exceptional performance, the best they’ve ever had. Our Global Quant team, Global Equity Income has also seen a real recovery in performance recently. And Resources and Greenchip, lots of five-star products there as well. So you can see we’ve got a big range. I would also comment on the quality teams, Ivy and Bluewater, where the quality style and the defensive style in the last few years has not been a style that’s been in favor.

And it’s been interesting to watch the last six weeks how markets have changed and to see a lot of these styles start getting legs under their feet again. So the shelf’s evolving quite nicely as we enter 2027.

Bart Ziarski (Analyst)

Got it. That’s helpful. Thanks for taking my questions.

OPERATOR

Thank you. The next question comes from Graham Riding from TD Securities. Please go ahead.

Graham Riding (Analyst at TD Securities)

All right, maybe just a follow-up question there, Luke. When you talk about the quality team sort of lighting up a little bit in the last six weeks, are you talking about performance noticeably outperforming or are you talking about interest from, you know, advisors and clients?

Luke Gould (President and Chief Executive Officer, Mackenzie Investments)

That was performance starting to turn. Yeah. So for those two, it’s been a different environment and an environment much more suited to their style, I would say. On the flow side, we do see this as being a tailwind that, as you can see on page 24, those franchises have been in net redemptions over the past number of years and we are seeing those net redemptions starting to kind of peak and come back the other way. So we do have a few tailwinds there as we enter 2027.

Graham Riding (Analyst at TD Securities)

Okay, great. Maybe Damon, similar sort of theme, but just anything at the margin that you’re seeing in terms of client behavior or feedback from your advisor network, just given the recent market volatility with interest rates the last sort of, I guess, six weeks and obviously market volatility more recently. Are you seeing anything with client behavior or feedback and, or are you expecting any sort of impact here if this volatility persists?

Damon Murchison (President and Chief Executive Officer, IGM Financial and IG Wealth Management)

Yeah, I think what we’re seeing from what we’re hearing from our advisors, and we’re hearing from our clients, is traditionally what we’ve always heard in periods of significant volatility at IG Wealth, where our advisors really look to their clients to start to dollar-cost average into the markets during periods like this versus commit all at once. And this is something that we always traditionally do. So you’re paid to wait right now, particularly if you want to go a little bit longer.

So that’s something that is just consistent with our business. And if the volatility persists till the end of the year, then you will certainly see more of that. Yeah, you know what, in volatile markets, we tend to do quite well for a few reasons. Number one, our clients tend to be invested for the long term. When we talk to them about being invested in the long term and we hold their hands, they’re less apt to try to make rash decisions, and it just becomes, okay, when do we commit the monies that we have on the sidelines? And that’s where dollar-cost averaging comes in.

Number two, it allows us to talk about other levers in their lives that matter, particularly protection, credit, wealth transfer, all the other things that people start to think about when they see the markets go a little bit wonky — they start to look at other parts of their life. So it allows us to really get into that financial planning conversation. And when we do that, you fortify your existing relationships, but then you’re in a position to get referrals that drive new client acquisition.

So for us, periods of volatility, we tend to do quite well. Yeah, so let me take a step back first and just talk about, year to date, the organization’s in a very strong financial position: unallocated capital of 830 million, low leverage profile, which has allowed us to continue to invest in the business and return capital to shareholders in a disciplined fashion. We’re very proud that year to date, we’ve returned a record amount of capital to shareholders. Our priorities remain consistent. So first, we want to invest in our core businesses, IG Wealth and Mackenzie.

Two, we do want to grow our dividend commensurate with our ability to grow our earnings. And three, we do want to continue to return capital to shareholders in context of continuing to invest in our core businesses. The momentum that we have now at IG and Mackenzie, along with our unallocated capital position and low leverage, gives us a lot of flexibility going into 2027 as it relates to continuing to invest in these businesses and return capital to shareholders.

And we look forward to going to our board with our capital plan at the end of this year.

Keith Potter (Chief Financial Officer)

Yeah, that’s Keith here. I’d just add as well. If you look at October, we’re on pace for the same share buybacks we had in Q4. As Damon mentioned, we will be going to the board in October with our capital plan. I’ll just remind as well that late last year we did have the proceeds from the Rockefeller transaction, which was part of the proceeds that we’re using to buy back shares this year. And as Damon mentioned, after we invest in the core, we’ll review dividend with the board.

That gives us a lot of flexibility for share buybacks, and we’ll weigh that against other capital allocation opportunities in the new year.

OPERATOR

The next question comes from Adi Gupta from Desjardins Capital Markets. Please go ahead.

Adi Gupta (Analyst)

Hey, good morning. Thanks for taking my question. Just a quick one here on Northleaf and the strategic connectivity with your other businesses. We’ve seen decent growth in the amount of assets that it manages for Mackenzie, and I’m assuming it manages assets for IG Wealth and Rockefeller as well. Is there any room here for you to put the pedal to the metal and maybe do more, and maybe thoughts around timeframe? Thanks.

Damon Murchison (President and Chief Executive Officer, IGM Financial and IG Wealth Management)

Yeah, so it’s Damon. I’ll start it off in terms of IG Wealth. Northleaf has been a fantastic partner of ours, and we’re always looking for ways to leverage their expertise in infrastructure, in private credit, and private equity through our managed assets program. Our managed assets program allows us to invest in Northleaf in ways where we do not have to provide liquidity at their product level, but at the program level, so we get the pure play. Over time, I think the opportunity is significant for Northleaf and for IG.

And then Rockefeller, they certainly are on Rockefeller’s shelf, and they will look over time to increase that.

Luke Gould (President and Chief Executive Officer, Mackenzie Investments)

Yeah, look, I’ll just say, we’ve added five Mackenzie–Northleaf products for Canadian households, and we’re very proud of those and our continued work on getting those products in continuous portfolios. I’d say another area of growth that we see at Mackenzie is more inclusion of Northleaf within our managed solutions, much like Damon was speaking. So that’s something you can expect to see more of here. And I’ll also expand on Damon’s comments on Rockefeller. Within the Power group ecosystem, we do see a lot more opportunity for Northleaf inclusion. That includes Empower in the United States of America, which is the second-largest retirement service platform in the States. That’s something the Northleaf and Empower teams are actively working on. And so we do see a lot more opportunity within the group for Northleaf to shine.

Adi Gupta (Analyst)

Awesome. That’s great color. And just one quick question. On Rockefeller, we saw a pretty decent uptick in adjusted earnings. I think you talked about transactional revenue being a portion of that. Maybe just how to think about the earnings trajectory for Rockefeller as we head into 2027. Any color there would be appreciated. Thanks.

Keith Potter (Chief Financial Officer)

Yeah, you know, it’s Keith here. We sit on the board of Rockefeller, so they’re going to put a plan in front of us in the new year, and we can give you more perspective then. But what I would say is if you look at their core base business on a quarterly basis, look at earnings growing at about a million to a million and a half per quarter. That would exclude a key part of their business, which is transaction revenue, and they generate that in two areas of their business: one is their M&A advisory and the other one is their ALTS platform.

In this quarter, obviously, they have generated meaningful growth from that part of the platform. We expect that to be part of their earnings going forward. It will be lumpy over time, but I would go with a base 1 to 1.5 million per quarter, with upside to that as they have other transactional revenues associated with M&A and their ALTS platform.

Adi Gupta (Analyst)

Great, thank you.

OPERATOR

The next question comes from Romel Sabat from Jefferies. Please go ahead.

Romel Sabat (Analyst)

Hi, good morning. Thank you for taking my question. So we’ve seen significant margin improvements, notably in IG Wealth. I understand that this is driven from the cost savings that you mentioned that are going to be reinvested into AI and technology. So I understand, from an absolute basis, operating expenses shouldn’t change much. But when we think about the margins, should those productivity gains and cost efficiencies drive meaningful margin expansion in 2027, or is that something further down the line?

Keith Potter (Chief Financial Officer)

Yeah, it’s Keith here. So the savings that we’re generating, we’re going to reinvest in AI capabilities, whether that be people, processes, technology. Our expense growth guidance for this year is 4%. We’ll provide you with guidance for next year, but that will help us build stronger businesses and generate the growth in revenue and the top line of the business. So I wouldn’t necessarily say that that specifically is going to drive margin expansion, but it’s contributing to each stronger business so that we can achieve our objectives and priorities.

Romel Sabat (Analyst)

Okay, I get it. That makes sense. Thank you. That’s the only question I have. Thank you.

OPERATOR

This concludes our question and answer session. I would like to turn the conference back over to Damon Murchison for closing remarks.

Damon Murchison (President and Chief Executive Officer, IGM Financial and IG Wealth Management)

Thank you, operator. Let me close the call on a few points. First, our core business at IGM continues to demonstrate strong momentum. Second, our strategic investments provide additional opportunities for growth and value creation. Third, we’re taking meaningful steps to simplify IGM and invest in our capabilities that will strengthen our competitiveness. And lastly, we have the financial strength to compound value while returning capital to shareholders.

Our strategy is working and our focus remains on execution, profitable growth, and long-term shareholder value. I want to thank our employees and advisors for their continued dedication and our clients for the trust they place in us. Thank you for joining us on today’s call and your continued interest in IGM. With that, I’ll turn it back over to the operator to close today’s call.

OPERATOR

This brings to a close today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

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