IGM Fi­nan­cial to record $118M charge for ops in Q4

Stockwatch Daily - - FRONT PAGE - Mr. Jeff Car­ney re­ports

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

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