IGM Financial to record $118M charge for ops in Q4
IGM FINANCIAL Inc. has implemented a number of initiatives to assist in its operational effectiveness. During the fourth quarter, the company will record a one-time charge associated with these efforts of approximately $118-million after tax, or $160-million pretax, which equates to 49 cents per share after tax.
“As a leading financial services organization, we continue to make the necessary decisions to stay at the forefront of our industry across all of our companies,” said Jeff Carney, president and chief executive officer, IGM Financial. “These efforts will drive operational effectiveness and savings that we will reinvest into technology enhancements and the digitization of our business.”
Among the initiatives is a decision to discontinue development of a new investment fund accounting system. After a thorough review, the company instead will upgrade its current solution, resulting in meaningful continuing savings, among other benefits. As a result of this, and other associated technology decisions, the company will record a non-cash charge of approximately $74-million after tax, reflecting capitalized system development expenditures.
“With rapid advancements in technology, we are shifting our technological environment from customized, internally developed solutions to more modern, externally sourced, best-of-breed industry solutions,” said Mike Dibden, chief operating officer, IGM Financial. “Our change in direction reflects recent developments that have allowed us to pursue new and more cost-effective solutions suitable for today and over the longer term.”
A number of other initiatives were announced to support the company’s efforts: • Expanding the IGM shared
services model, beyond the previously announced joining of Investors Group and Mackenzie’s investment management functions to further include areas from marketing, human resources, customer service and other operational teams;
• Optimizing Investors Group’s product and financial specialists to reinvest in the training and development of the company’s adviser network;
• Offering a one-time voluntary retirement program;
• Simplifying the company’s reporting structure to speed decisions and increase the empowerment of the company’s people. Restructuring and other charges of approximately $44-million after tax are anticipated in support of these activities, reflecting severance and other costs.
Postimplementation of these initiatives, the company anticipates 2018 non-commission expense increases of 5 per cent relative to 2017. As the company reinvests in digitization over the coming years, it anticipates future efficiencies, and benefits for clients, advisers, employees and shareholders will be identified.
About IGM Financial Inc. IGM Financial is one of Canada’s premier personal financial services companies and one of the country’s largest managers and distributors of mutual funds and other managed asset products, with over $154-billion in total assets under management at Oct. 31, 2017. Its activities are carried out principally through Investors Group, Mackenzie Investments and Investment Planning Counsel.
We seek Safe Harbor.
Marc A Bibeau, Jeffrey R Carney, Marcel R Coutu, Andre R Desmarais, Paul Guy Jr Desmarais, Gary A Doer, Susan Doniz, Claude Genereux, Sharon Hodgson, Sharon Elizabeth Macleod, Susan Jane McArthur, John S McCallum, Robert Jeffrey Orr, Jacques Parisien, Henri-Paul Rousseau, Gregory Dennis Tretiak
(IGM) Shares: 240,597,865