Welcome to the IGM Financial fourth quarter 2020 earnings results call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Keith Potter, Senior Vice President, Finance. Please go ahead.
Good morning, and welcome to IGM Financial's 2020 fourth quarter earnings call. Joining me on the call today are James O'Sullivan, President and CEO of IGM Financial, Damon Murchison, President and CEO of IG Wealth Management. We also have Barry McInerney, President and CEO of Mackenzie Investments, and Luke Gould, Executive Vice President and CFO of IGM Financial. Before we get started, I'd like to draw your attention to the cautions concerning forward-looking statements on slide three of the presentation. Slide four summarizes non-IFRS financial measures used in this material. On slide five, we provide a list of documents that are available to the public on our website related to the fourth quarter results for IGM Financial. With that, I'll now turn it over to James.
Well, thank you, Keith, and good morning, everyone. Before we jump into the quarter, I'll start with the highlights for the full year 2020. As we reflect on the year, it was certainly unlike any we've seen. Yet despite the challenges our business and people faced during the pandemic, we continued to build momentum. We achieved record-high AUM&A of CAD 240 billion, which was up 26% from last year. We achieved record-high new flows of CAD 7.1 billion, up from net redemptions of CAD 1.7 billion, and we delivered strong adjusted EPS of CAD 3.20, which is up slightly from 2019. As I spoke to on the Q3 call, we also made significant progress on business transformation initiatives, with the objectives to enhance back office efficiency and elevate the client and advisor experiences.
To build on this, I'd say we are about halfway through our modernization journey and have much to do in 2021 and beyond to digitize our back office and hit full stride on our outsourcing and productivity-focused initiatives. Finally, we were very active adding scale and new capabilities to drive future growth through acquisitions, and in the case of Personal Capital, monetized an investment that we believed was the best way to create value for our shareholders. We were able to achieve these results by quickly transitioning to a work-from-home environment in March and focusing on the health and wellbeing of our people and clients during 2020. On behalf of the leadership team at IGM, I'd like to thank our employees, consultants, and advisors for their commitment and resilience throughout 2020. Turning to slide eight on Q4 2020 highlights for IGM.
Overall, I would say business momentum accelerated in Q4. We achieved record AUM&A in the quarter of CAD 240 billion, up 6.7%, excluding acquisitions. We also achieved record-high total net flows of CAD 2.2 billion, with strong results from IG Wealth Management and record-high net sales at Mackenzie. IGM's Q4 earnings per share were CAD 0.96, and adjusted earnings per share were CAD 0.86, up slightly from last year. EPS included a non-IFRS adjustment, primarily consisting of a gain on the sale of the Quadrus Group of Funds. I'm proud, I'm very proud, in fact, that IGM was recognized by Corporate Knights as one of the top 100 most sustainable corporations globally and as the top-rated investment services company.
The Global 100 assesses several performance factors, and IGM's strong showing was based on above-average results for clean revenue, female representation at the board and executive level, racial diversity, carbon and energy productivity, and certain important HR practices. Finally, to close out a busy year, we closed the acquisitions of GLC, Greenchip, and Northleaf during the quarter. Turning to slide nine on investment returns. Q4 2020 saw strong equity market increases across all major indices with low volatility, while fixed income returns were flat. Overall, IGM's average client investment return of 5.5% was strong during the fourth quarter. We've seen equity markets increase further so far in 2021, with client investment returns averaging approximately 2.4% year- to- date, February 9th. Turning to slide 10.
Q4 long-term mutual fund net sales were CAD 16.4 billion for the total industry and CAD 7.2 billion for the advice channel. This is the best fund industry Q4 net sales in history. We're encouraged by the momentum of the industry and at IGM as we complete the RSP season and look forward into 2021. Slide 11 on results for the fourth quarter. Average AUM&A of CAD 202.2 billion increased 7.9% year-over-year. With the closing of GLC on December 31, we add scale to our platform and ended the year with AUM&A of CAD 240 billion. IGM's Q4 2020 adjusted net earnings per share of CAD 0.86 were up slightly from last year.
As I commented, net earnings per share of CAD 0.96 primarily reflects a gain on the sale of the Quadrus Group of Funds. Slide 12 highlights quarter-over-quarter and year-over-year EBIT contributions from our segments. The year-over-year increase in adjusted EBIT was driven by the asset management segment and ChinaAMC, which were up 14.5% and 63.9% respectively. Slide 13 details the strong improvement in net flows across all segments during both the fourth quarter and full year 2020. Q4 2020 consolidated net inflows were an impressive CAD 2.2 billion and CAD 7.1 billion for the full year. I've spoken before about the momentum that is building across our businesses. This slide very well demonstrates it. We are well positioned to complete the modernization of our businesses and business processes.
With a strong focus on net flows, net sales, and expense management, we look forward to delivering a strong year for our shareholders. I'll now turn the call over to Damon to review IG's results.
Thank you, James. Turning to IG Wealth Management's Q4 2020 highlights on slide 15. We are pleased to report record high AUM and AUA. AUA ended the year at CAD 103 billion, up 5.9% during the quarter, driven by strong client returns and net flows. Record high growth inflows for the period were driven by a combination of new client acquisition and contributions from existing clients into IG investment accounts. From a consultant productivity perspective, gross sales per consultant practice increased 19% relative to the same quarter last year. And as we've talked about in past calls, we are attracting more experienced advisors with existing client relationships in AUA that is being transferred to IG Wealth Management. IG's fourth quarter net sales were positive CAD 485 million, the best Q4 in over two decades.
I want to turn to slide 16. It demonstrates the building momentum in net flows across various time periods and on a 12-month trailing basis. The chart on the right illustrates how COVID has masked some of the momentum we have in this business. We entered 2020 with a strong upward momentum in both gross and net flows until COVID sent everyone home. We had a transition period, allow us to develop tools, skills, and the expertise to provide advice remotely, and our momentum returned in August through to the end of the year and has continued into 2021.
In January, we had net inflows of CAD 182 million, and over CAD 1 billion on a twelve, on a trailing 12-month basis, fueling our net sales of CAD 105 million in this, in this past month. Turning to slide 17, this shows our typical overview of operating results for the quarter. Here, you can see positive net flows momentum is driven by higher gross inflows and lower gross outflows rate. Our IG net flow rate was 1.1% on a 12-month trailing basis, showing our progress. But let's be clear here, it's still early days, and we're building momentum, and we have not hit our stride yet. Turning to slide 18. I'll take you through a deep dive into our AUA growth and net flows and explain how AUA transitions into AUM.
To orient you to this slide briefly, we have a table on the left which shows a change in our AUA during 2022. On the right, we break down our Q4 2020 net flows into two key components to describe what we're seeing. The first component of net flows are buys, sells, and switches within IG client accounts. The second component are in-kind transfers from other dealers. And just as a reminder, we earn an advice fee on AUA, which represents 65% of our revenue. So looking at the first point on the page, we're highlighting the net buys of CAD 140 million into Mackenzie Investment Funds. IG consultants and clients have access to an approved list of select Mackenzie products to cover categories where IG currently does not offer solutions.
IGM earns full margin on these assets, but these low flows do not show up as mutual fund net sales at IG. As you can see, 95% of the total investment solutions sold at IG Wealth Management are IGM solutions. The second and third point deal with third-party funds and securities. Let's go to point number one, and we'll highlight the CAD 373 million in third-party funds and securities transferred in kind to our firm. This is directly connected to our success in building new client relationships and consolidating existing client investments at IG Wealth. With our focus on mass affluent and high- net- worth, we expect to continue to see momentum here. Point three, as we continue to transfer in securities in kind, we expect to see a significant portion migrate to our IG managed solutions.
As you can see, in the quarter, CAD 125 million migrated to our solutions. The fourth item on our AUA growth, as expected, we are seeing an increase in cash balances as we migrate our clients to our nominee dealer platform. While we had a migration with a high interest savings account in the first half of 2020, and cash transitioned to client accounts in December from year-end distributions, we do expect this level of transfer in cash balances to increase over time, given our attractive rates. This provides a tremendous opportunity to put this cash to use as our consultants work with their, with their clients. Turning to slide 19, I want to focus on the productivity growth of our network, something that is key to our strategy.
We are a more focused business, striving to work with more mass affluent and high-net-worth Canadians. Our belief is that as we match our financial planning skill and expertise with the complex financial planning needs of these segments, our consultants' productivity will grow as we bring more clients on board with more meaningful assets. We continue to see significant increases in productivity across the board. Productivity of our one- to four-year consultants was up 8% versus Q4 2019, and our experienced consultants up 19% year-over-year. We're just getting started here and have lots of upside as we continue to execute our strategy to go upmarket, recruit experienced financial planners, and complete our transformation focused on and the advisor and client experience. Turning to the last slide, slide 20.
Our customer value proposition is rooted in marrying the benefits of a dynamic living plan with a strong long-term advisor relationship and well-constructed managed solutions. Being able to deliver on dynamic living plans is core to who we are. I'd like to highlight the rollout of our next generation of the IG Living Plan. We rolled it out in December to elevate our client experience and consider it to be leading edge. The tool allows us to show our clients their entire financial picture in ways that are easy for them to digest. It enables us to work with what-if scenarios with our clients in a simplified, accessible way, and it empowers us to use artificial intelligence to determine planning strategies which are deeply customized to each individual.
It's this combination of leading-edge financial planning tool with the deep expertise of a credentialed advisor that we believe gives us our competitive edge as we strive to work with more mass affluent and high-net-worth Canadians who have complex financial planning needs. Now I'll turn it over to Barry.
Thank you very much, Damon, and good morning, everyone. I'll take us to page 22, where I'll begin my comments on Mackenzie's Q4 results. Total AUM reached a record high of CAD 186.8 billion, up 10% for the year, with a total annual net sales of CAD 6.25 billion. The percentage increase excludes the incremental CAD 30.3 billion relating to the acquisition of Greenchip and GLC and the impact of the disposition of the Quadrus Group of Funds. Net sales were a record high CAD 1.7 billion during the fourth quarter. The momentum we're seeing is truly broad-based across Mackenzie, foreign equities, Canadian equities, balanced, and fixed income categories, all generating positive net sales. Both our retail and institutional channels delivered positive net sales, and this quarter marked our 17th consecutive quarter of positive retail investment fund sales.
We enhanced the capabilities of our investment management organization with the completion of a number of initiatives during the fourth quarter. We executed our succession plan for past Chief Investment Officer, Tony Elavia, who retired on December 31st, by appointing Steve Locke, CIO of Fixed Income and Multi-Asset, and welcoming Lesley Marks to Mackenzie to take on the role of CIO Equities. I have full confidence that Lesley and Steve will lead our investment management team to build on Tony's legacy of success. As James touched on earlier, Mackenzie acquired Greenchip Financial this past quarter, a highly regarded Canadian firm focused exclusively on the environmental economy since 2007. The Greenchip team is now set up as a Mackenzie investment boutique focused on environmental thematic investing and continues to manage the top-performing Mackenzie Global Environmental Equity Fund.
Lastly, with the close of the GLC transaction, we added a new Canadian equity investment boutique and welcomed a number of new investment professionals to the Mackenzie family. Slide 23 demonstrates the exceptional Q4 and full year 2020 investment fund net sales at Mackenzie, and how we've seen this momentum extend into the RSP season. January investment fund net sales, excluding institutional fund allocation changes, were a record high CAD 779 million, reflecting a continuation of our success in the retail channel. Slide 24 highlights Mackenzie's Q4 2020 operating results. Total mutual fund gross sales of CAD 4.5 billion were up 74% year-over-year, with strong increases in both retail and institutional channels.
Retail investment fund net sales were CAD 1.3 billion, including CAD 1 billion from mutual funds and CAD 300 million from primarily active and strategic- beta ETFs. Mackenzie's long-term investment fund net sales rate was 5.5% as at January 31st, 2021. This represents significant organic growth in Mackenzie. Finally, we had 60% of AUM rated four or five stars by Morningstar, which continues to be close to decade-high levels. Slide 25 displays the investment performance and retail net sales across our investment boutiques. I won't review this in detail, but you'll see you get a sense, rather, for the breadth of our momentum from the information on the slide, and you'll note the new Greenchip boutique experienced strong retail net inflows during the quarter. Slide 26 relates to two of our growth catalysts, sustainable investing and private markets.
As announced in December, we acquired Greenchip Financial to form a new sustainable investing boutique focused on environmental thematic investing. The team's expertise in energy transition and climate change will help us meet a growing retail and institutional demand that has accelerated in 2020 and into 2021. The Mackenzie Global Environmental Equity Fund has net sales of over CAD 200 million in the fourth quarter and an additional CAD 194 million in the month of January alone. We are excited about this offering and our plans to expand upon this with a new global balanced fund and global sustainable bond fund that we expect to launch shortly.
This isn't just a large opportunity for growth at Mackenzie, but also an important step to address climate change and to support the IGM group of companies' commitment to the recommendations of the Task Force on Climate-related Financial Disclosures. We talked about Northleaf on our last call, and as a brief update, I'm very excited to announce that Mackenzie now has seeded a private credit offering memorandum fund in January. The liquidity sleeve is in place, and the first capital call is expected on April 1st. We also launched the Mackenzie Private Equity Replication Fund, which will be used as the liquid component of the private equity OM we plan to launch later this year, and we also have plans to bring infrastructure products to life in the near term.
Standalone, Northleaf experienced solid net commitments in Q4 and has made great progress working with IG Wealth and Great-West Life to bring additional private market strategies to the respective businesses. Another driver of growth is China and ChinaAMC on page 27. While we are extremely proud of the momentum we are seeing in Mackenzie, ChinaAMC was in a league of their own in 2020. ChinaAMC organically grew their AUM by 42% during the year, and ChinaAMC's fourth quarter 2020 earnings grew an impressive 49% year-over-year. And as James mentioned, their earnings contribution to IGM in Canadian dollars increased 64% over the same time period. We remain very optimistic about the long-term growth profile of ChinaAMC and the Chinese asset management industry as a whole. Now I'll turn the call over to Luke.
Thanks, Barry. Good morning, everybody. So a few quick comments on slide 29. First, on the left, we closed the period with CAD 240 billion. This was a very strong quarter and a quarter we're proud of, and excluding the CAD 30 billion in acquired assets, our AUM&A grew by 6.8%. Year-to-date, 2021 has obviously been good to us, and we're up over another 3% due to financial market increases and continued strong net flows. On the right, I'd remind that in the quarter, we had record high net sales of CAD 2.2 billion, which was an annualized net sales rate of 4.4%.
On the left, I'd remind you that as a result of the huge V that we all lived through during 2020, our average balance of AUM&A during the year was relatively unchanged from the balance in 2019. With things where they are right now, we're rolling in meaningful growth into 2021. Going to page 30, you can see our quarterly EBIT on the left and our EBIT margins as a percent of AUM&A on the right. On the left chart, I'd highlight here that we have an additional CAD 17 million in our fourth quarter expenses that are driven by strong sales performance during the quarter. The first item we've highlighted is wholesale and commissions at Mackenzie, which were up by CAD 10 million.
This CAD 10 million is a true up for a full year of activity and is driven by retail gross sales and net sales at Mackenzie. As you'll see in a couple of slides, retail sales were up over 50% in the quarter and net sales quadrupled. I'd also remind that these commissions are not capitalized, but are expensed as incurred, in spite of the fact that we're going to earn revenues over the holding period of the units, which tends to average seven years. Similarly, a component of corporate bonus is driven by market share net sales activity, and as a result of the strong sales activity in the fourth quarter, this element of compensation increased by CAD 6.5 million.
On the right-hand side, you can see that our net revenue rate was stable at 103 basis points, and excluding the expense items I described just a second ago, our EBIT margin was similarly very stable in the period. Going to page 31, you can see the consolidated income statement for IGM Financial. First, we've highlighted in the first two points, the geography of the wholesale and commissions and the corporate bonus adjustment in our business development line and our operation and support expense lines, respectively. In the business development line, I'd also remind you that this lines up seasonally in the fourth quarter as we ramp up advertising in advance of the RSP season.
In point three, in the bottom right, we're also highlighting that the tax loss consolidation arrangements that we've enjoyed with our parent company for a number of years have discontinued in the fourth quarter of 2020. This was running at about CAD 2.8 million per quarter. Turning to page 32, I'm going to apologize in advance that this is a very busy slide, but it's something I wanted to make sure we spent a moment on walking through how our Mackenzie business development expenses should be expected to behave in relation to the retail sales activity we're putting on, given the significant momentum we're seeing in the business. First, I'd like to highlight in the top half of the page, the retail sales results, and then I'm going to pivot to the bottom, where we talk about the expense and how it interplays.
So on the left, you can see our last 12-month trailing gross and net sales for retail mutual funds at Mackenzie. You can see in the light blue line, we've been trending at about CAD 1 billion per year in net sales for the last four years. And you can see starting in August, something's happening, and we start to see very meaningful improvements. In fact, we net sold CAD 1 billion in the fourth quarter, which is where we've been trending for the four previous annual periods. We're pushing with all we got right now, and you'll see we're running at over CAD 2 billion, and the line continues to steepen as we travel through 2021. We've added four dots there to give you four possibilities to help you understand how expenses will behave in 2021.
In the chart in the middle and the right, you can see our quarterly and annual retail sales results on mutual funds. This gives you the context to see how Q4 was a breakout quarter and why we did have this unexpected true up for our full year retail sales commissions. On the very right, we show those four sales possibilities for 2021, and you can see in the charts we are up 53% year-over-year on Q4 at gross sales, and then you'll see from our January results that that's continued into 2021. On the bottom, we've highlighted the business development expense line. This line is comprised of about 20%-25% commission of their sales base, about 25% advertising, which is discretionary, and the remainder is other people and promotional expenses.
As mentioned, all of this is expenses incurred and generates retail sales that contribute a margin of about 1% of assets per year over an average seven-year holding period. If you follow the business development expense line across, you'll see that extra CAD 10 million true up in Q4 2020, as the expense was CAD 28.3 million, up from CAD 16 million in the prior quarter. I'd also highlight, if you keep following across to the right, you'll see that this line item was CAD 80 million for the full year, unchanged from 2019. I'd note when considering commissions, we reset the bar every single calendar year, and for 2021, the bar has been set much higher than 2020. At the right, you can see how this expense is going to vary based on sales activity.
If gross sales improve by 20%, you can expect this expense to go up by five. If gross sales improve by 50%, this expense will go up by 20, and we'll keep engaging with you on a quarterly basis to help you understand how this expense is traveling in relation to the sales we put on. Our last point before leaving this slide, I should highlight, we're obviously pushing for continued 50% year-over-year growth. As you heard from Barry, we have all the conditions for success, and we're leaning in. We have the number one sales organization in the country. We have a broad range of compelling and relevant products. We have very strong investment performance, and we have a very favorable market environment.
Turning to page 33, and bridging on those last comments, we're giving some guidance to help you understand how expenses will travel in 2021. As mentioned, in business development expenses, there is variability based upon sales and other volumes, and there's also meaningful discretion that management has to manage expenses. At IG, we expect this to be under 3% this year, and we're going to manage this. At Mackenzie, we're giving guidance for 5% growth, and as highlighted in the prior slide, there's a lot of variability with sales and meaningful discretion in this line, and we'll keep you posted as we travel through the year. You'll see in point one at the bottom, that there's a theme on our expenses next year, that there's significant business and momentum at Mackenzie, and we're leaning in.
In the operations and support line for Mackenzie, you'll see that we're planning for 5% growth before the expenses from acquisition, and this growth is being driven by investment in a number of product opportunities that we're bringing to life. We'd encourage you to do the math on Mackenzie's earnings trajectory. There's a lot of operating leverage in this business, and we're expecting significant earnings growth based upon where we're traveling and where we're sitting right now. In operations and support expenses, you can see we're expecting IG Wealth expenses to grow by less than 0.5%. We believe we have the resources we need to compete and win, and as you saw in Damon's section, there's strong momentum in the business traveling into 2021. Moving to page 34, you can see our fee rates for IG Wealth. I have a few remarks.
First, you can see that our advisory fee rate was 105 basis points during the quarter. I'd remind that this weighted average fee rate varies based upon the composition of our clientele. As we bring on more high net worth and mass affluent clients, it puts downward pressure on this rate. Similarly, as our clients migrate into higher wealth tiers as a result of investment returns generated for them, it puts downward pressure on this rate. Over the coming two quarters, we'd expect this rate to decline by about 0.7-0.9 basis points per quarter, and we will keep you apprised of the, of developments on, high net worth client acquisition as the quarters travel through 2021. Second, at the bottom, you can see our sales-based compensation rate.
While commissions at IG are capitalized and amortized, we want to remind you that we have one final year of these commission rates dropping as part of our migration away from deferred selling commission products a number of years ago. In 2021 and beyond, you can expect this rate to be closer to 105-110 basis points of gross inflows, down from the 120 basis points it's been trending at. Moving to page 35, you can see the income statement for IG Wealth. The only comment I'd make on this slide is to highlight that sequentially, both our other financial planning revenues and our other product commissions are up as a result of the seasonality and the sale of insurance products.
I'd also highlight an increase in business development expenses from Q3 as we did ramp up advertising heading into the RSP season. On page 36, we have another busy slide, and I do apologize, but we've added this slide to help you understand how our AUM at Mackenzie has changed with the acquisitions of GLC and Greenchip, as well as the divestiture of the Quadrus Group of Funds, and you'll see there's a lot of moving pieces. I'm not going to walk through the waterfall chart in the table, but we'll make the point that as part of the divestiture of the Quadrus Group of Funds, and as part of Canada Life establishing their own mutual fund complex, we've had a CAD 13.4 billion transfer out of our investment fund reporting, and we've added CAD 43.5 billion into our sub-advisory reporting of institutional SMA.
We put a footnote right at the bottom that pro forma for these transactions, Mackenzie now sub-advises CAD 47.2 billion to Canada Life, and this represents 42% of their Canadian individual, individual and group channel assets under management. On an ongoing basis, we're going to call up this important relationship for us, and we're going to share the, the share of their AUM that we represent and the associated revenues that we're generating, and you'll find these disclosures coming in Q1. I'll also advise that you can find the detail of how Canada Life's individual and group businesses are traveling in their entirety within the Great-West Lifeco supplemental information package that's available on a quarterly basis, and this will allow you to see how Mackenzie is addressing, their AUM.
Moving to page 37, you can see Mackenzie's operating metrics, and we've given some guidance on this slide, how to model the impact of the GLC and Greenchip acquisitions. On the left, you can see our pro forma AUM at December 31 was CAD 186.8 billion, and on the right, you can see their net management fee rate is stable at 71 basis points. Just to the right of this, we've given a couple of dots where we've provided the pro forma net management fee rate of 54.5 basis points, including the CAD 30 billion in net assets acquired as part of the GLC acquisition.
You'll see in the comment bar at the top, the annualized net revenue we've added at December 31, 2020, was CAD 33 million, and the incremental expenses coming on in 2021 are CAD 20 million. On page 38, you can see the Mackenzie income statement. First point here, as discussed, there's an additional CAD 10 million in wholesale and commissions within the d- business development line, and this is conspicuous. At the bottom, I'd highlight in that third column from the right, you can see Mackenzie's earnings were up 14.5% year-over-year. Excluding that incremental wholesale and commission item, we're up 30%, and I would remind you, there's a lot of operating leverage in this business as the business continues to grow. Page 39, I'm going to conclude my comments on our strategic investments. A few quick remarks here.
First, you can see on the right, the carrying value or the trading value in the case of Great-West, is now CAD 2.9 billion. We haven't made any revaluation for Wealthsimple, but you'll see in the appendix that it continues to put on considerable growth. I'd highlight in the fourth row from the right, we closed the acquisition of Northleaf during the quarter, as Barry mentioned. It contributed CAD 800,000 in the weeks since close in the fourth quarter, and we give guidance for expecting contribution of approximately CAD 10 million after minority interest in 2021. As you saw from Barry, ChinaAMC's growth continues to be considerable, and our share of its earnings are up 63% year over year.
One last comment I'd leave as I conclude, is that we are continuing to evolve our disclosures, and we have one more enhancement that we're going to be launching during the first quarter based upon feedback I've received from several of you and several of our shareholders. Specifically, we're going to be bringing our statement disclosures down to the net, net income line from the EBIT line, where it is currently. We think this is going to be very helpful for those wishing, wishing to assess valuation on a P/E basis and employ sum- of- the- parts approach. And we are going to provide this disclosure retrospectively for two years within the quarter. That concludes my comments. I'll turn it over to questions.
Thank you. We'll 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. To join the question queue, please press star, then one now. Our first question comes from Nik Priebe of CIBC Capital Markets. Please go ahead.
Okay, thanks. Wanted to start with a question on dividend policy. Your dividend has been relatively stable over time, but in the context of pretty consistent market strength and some of the momentum that you're seeing on the net flow side, how do you think about dividend policy? Is there a target payout ratio, either on earnings or free cash flow, that you would be kind of comfortable with there?
Yeah, Tim. Nik, it's James. I'll start, and Luke will have a comment. You know, my observation would be that the dividend is strong, and the payout ratio is at a very reasonable level currently. So that dividend, I think, is... I would describe it as well supported by earnings, well supported by capital. Our focus now is on earnings growth, and as we grow earnings, obviously, the capacity to increase that dividend will, will, will emerge, and that's very much a topic that we will take before our board as we execute on our 2021 financial plan.
Okay, that's helpful. And then appreciated the color on ChinaAMC, just surrounding the strength in net flows, the AUM growth trajectory there. I wonder if you could share your thoughts on, you know, how you plan to realize value on that investment over time. I think you are receiving a dividend, and you do participate in the earnings growth of that business, but, you know, just from a longer term perspective, it'd be helpful to understand how you're thinking about that one.
Well, you know, what I'd say, Nik, is, it is a very attractive investment. We're very proud to have it. It has been a source of very impressive earnings growth inside our strategic investments portfolio. Look, I kind of view I would view ChinaAMC as I view many of the investments inside that division or that segment. For each of those investments, over some reasonable period of time, we have what I would describe as strategic optionality. And I like that, because these businesses generate free cash flow. We can commit that free cash flow to investments in the business, to dividends, or to M&A. And so as I look across that strategic investments portfolio, I see optionality over some reasonable period of time, and that's kind of how we're viewing it.
We're—we love it, we're open-minded, and time, time will tell. In the interim, it's generating a very impressive and growing stream of earnings for our shareholders.
And if I could add on, it's Barry. If I could add on China. You know, the partnership between Mackenzie and ChinaAMC has just been so strong in the last four years now, and we continue to look for areas of collaboration and cooperation. So as you're probably well aware, in Canada, we've launched a Chinese equity mutual fund a couple of years ago, which is five- star now and bringing in about CAD 2 million a day. It's starting to get about CAD 250 million in size. We plan to launch a Chinese fixed income fund in the very near future because the search for yield, as we all know, continues for not just Canadian investors, but all investors.
Looking for other opportunities to bring their capabilities to the second- largest stock and bond market in the world to Canada. At the same time, they continue to look for opportunities for us in the institutional role in China, and we've been making some good progress there. We're exchanging ideas on, on, AI, on data management, on technology. So it's, it's a really strong partnership. So as James points out, you know, as standalone, it's a compelling investment for IGM, but also what, what adds to its attractiveness is also the, the strong business cooperation between, between the two companies. Thank you.
... Okay. No, that's, that's good color. That's it for me. Thank you.
Our next question comes from Geoffrey Kwan of RBC Capital Markets. Please go ahead.
Hi, good morning. My first question is on IG Wealth. Just with the focus, having moved to high net worth investors, and I know it's hard to generalize, but just wanted to understand how their behavior kind of differs, you know, whether or not it's gross sales redemptions relative to the typical client that IG Wealth would have had from, you know, before there was the move to, to focus on high net worth. So, for example, like, is there any more or less seasonality around their AUA flows? You know, is RSP season less important for these high net worth investors just because they may have, say, higher paying jobs and, you know, with pensions and therefore the RSP contribution limits are lower? Do they invest in different types of funds, use insurance more, that sort of thing?
Hey, Jeff, it's Damon. So I would say that, on the whole, I'm generalizing, but the mass affluent in the high net worth space would be less influenced by RSP season. You're generally dealing with larger non-registered accounts. So they would tend to invest, you know, whenever they had money to invest. Now, that being said, you're dealing with a lot of individuals, executives that get year-end bonuses, and so you're dealing with that, and it's obviously at year-end or early in Q1. In terms of the full gamma portfolio, generally, as you get to mass affluent and high net worth, you're dealing with more insurance, with higher face values.
You're dealing with more tax type situations, 'cause you're dealing with individuals that are self-employed, or own small and medium-sized businesses. So I would say to you that the profile looks different than mass affluent, but the big takeaway is more non-registered, less registered assets, higher account balances, and more complex financial needs.
Okay, thank you. And just my other question was, Barry, I know you talked about it earlier in the call, just essentially the sales performance has been really strong. You know, I know the overall performance of the funds versus peers has been good. You're also, I think, exposed to a lot of the fund categories that are selling well. But kind of looking into that 2021, you know, what-where do you see the greatest opportunities to drive even better numbers? Is it distribution? Is it, you know, selling more into, you know, kind of the key accounts that you're doing right now? Yeah, any insights would be helpful.
Yeah, sure, Jeff, great question. So, we do expect, as Luke mentioned, for 2021, if, you know, markets hold and conditions hold, which is not in our control, we should nicely exceed 2020 levels. It's just gone very, very well. The industry flows are strong, risk on, zero interest rates, savings rates are up, and then we're gaining market share in an environment where the industry flows are strong. So that's just a perfect environment for an asset management firm. And as I've mentioned on prior calls, it's broad-based, and we look at it kind of two-prong.
We're really at Mackenzie, really, accelerating our market share in the really deep pools, global equities, global fixed income, global and domestic balance has gone very, very well. And I might add, by the way, that, one of the advantages we feel at Mackenzie is the fact that, we do have some very strong growth equity offerings, but, we actually are more core in value in our offerings. Value, of course, has been disadvantaged for quite some time. So when the market starts to broaden out and normalize, I think we're well ... We're gonna be well positioned to take advantage of, you know, those types of markets, even though the markets, as we speak today, we're taking advantage of.
Then, of course, as I mentioned before, the growth catalyst, the sustainable investing, the China, the ETFs, these are, and the alternatives, all these areas are seeing significant growth across Canadian investors and advisors. We're well positioned, and so we're seeing growth across the board. In the RSP season, it started peculiarly so strongly from day one. As you know, it normally ramps up a little bit into January and gets going in February, but it's been going consistently, day in, day out, with significant growth in net sales for us, broad-based every day even through February. And again, as we remind ourselves, if the markets hold and confidence holds with investors, March was a very difficult month last year. Significant industry outflows, which we experienced, too.
So again, if we can avoid that occurrence, then you should see a very strong Q1 across the board. Thank you.
Great. Thank you.
Our next question comes from Gary Ho of Desjardins Capital Markets. Please go ahead.
Thanks. Good morning. Maybe just follow on the same theme, the last question. So what do you attribute the industry strength that we've seen over the last few months, particularly in the advice channel? Anything that you guys can point to?
Well, I'll start, and I'm sure my colleagues will jump in. As I mentioned, with the prior question, again, if you just see what the environment is right now, we've got, you know, historic monetary and fiscal support, right? So that is giving gaining confidence in the stock market. And the stock market looks forward-looking, and looking at earnings a year out, and of course, if we can get through this year, mend the economy a little bit more, and obviously the vaccine distribution and efficacy holds-
... then that's a positive thing. Second of all, the monetary policy liquidity obviously has forced interest rates to be very, very low, and so it's a relative game. And again, investors are coming into the marketplace. There was a lot of cash on the sidelines. There still is, and they're going into this risk-on environment to get into the stock market. So again, you probably have noticed the industry flows have been at record highs, and Mackenzie were again gaining market share, and so that's a great combination. We're not to say that the markets won't be volatile this year. They will be. They were last year, they will be this year. Nothing is perfect, but this is shaping up to be a very robust year actually across the board.
And so, we're just really focused to make sure that when these events occur and as the conditions occur, they're not always in place. When they're in place, risk on, it's for us to harvest it, and we're just completely 100% focused on doing that. That's why we're leaning in a little more this year with Mackenzie in terms of some investments to take advantage of this, this phenomenon that we're experiencing.
Okay, great. And then my next question, for Luke, it's a two-part question. Just going back to slide 37 for a bit. You know, at the top, you mentioned, I think CAD 33 million revenue, CAD 20 million expenses, so CAD 13 million EBIT, let's call it. I thought GLC, when you guys announced it, that was closer to CAD 20 million by itself. Are you netting out, maybe Quadrus in there, or what's changed? And then second, just, you know, related to expenses as well. In 2020, benefited from kind of lower travel and entertainment costs. That's across all your peers. So what are you building in your fiscal 2021 guidance? Are you expecting some of that to ramp back up later this year, or, what's in that +3% number?
Thanks, Gary. So first one, on GLC, you, you've got it absolutely right. So CAD 20 million was the guidance on GLC itself. We did have the divestiture of Quadrus, and that's the CAD 7 million difference. And the lost revenue on the divestiture of Quadrus, that's something that tapers off over time, meaning it's more in the initial years, and it tapers off to nothing over seven years. So that's the impact there. On the T&E, the travel and entertainment expenses, we're expecting very little ramp up during 2021. We're gonna navigate the year as it comes. Right now, I know the whole organization has adopted remote in a very effective way.
As we've set our 2021 plan, you know, the first eight months of the year, we have very minimal ramp up in travel and entertainment, and in the back quarter, we have some, but I'd call it slight.
Got it. Okay, thanks. And then next question maybe for Damon. Just saw the consultant count just a bit in the quarter after an increase in Q3, but obviously, you know, we've seen the productivity trending higher. Can you give us, you know, your outlook for this year? What's the recruitment environment like today?
Yeah, I would say that with our slight drop in consulting in Q4, it was primarily driven by seasonal retirements. You generally have your advisors, your consultants retiring in late in Q4, some in early in Q1. Our pipeline of high quality financial planning candidates is double what it was last year at this time. So we feel that- we feel really good about where we are. We continue to see signs that our value proposition is resonating in the marketplace for talent. That being said, and you mentioned it, our primary focus is on increasing the productivity of our existing consultants.
You know, average consultant practices is roughly double the size of the average MFDA advisor practice right now, but we're still only 40% of the average size of the average IIROC advisor practice. So we have significant opportunity to grow our existing practices as we continue to kind of enhance our client experience and focus going on upmarket to mass affluent and high net worth. So, you know, in terms of guidance, we selectively look to add financial planners to our network. We're not in a hurry. It's more about getting the quality and doing it right and making sure that they're a fit. But our clear focus and KPI is on productivity.
Okay, perfect. If I can just sneak one more in, Barry, can you talk about the new fund launches at Northleaf? You know, what's your expectation for fund size? And also kind of remind me, you know, if there's any on-balance sheet seed capital that's required to get these funds off the ground.
Sure. That's a great question, because as you know, this is the final leg of the democratization of alternatives to get the private investments in the hands of individual investors. So it's really exciting. A lot of education. I do wanna mention, Jeff, as you can probably imagine, a lot of education that we're rolling out, working with the dealers to get approvals. But we will have a full suite this year of OM funds for Mackenzie, Northleaf private credit, infrastructure, and private equity. So they'll be in market. They're being structured so that they can support liquidity if need be, and each of them will have a liquidity sleeve.
For instance, the private credit that's up and running, the liquidity side uses our, actually our high yield ETF and our floating rate ETF, and then it uses the private credit as an example of Northleaf. So they'll all be in place, education, but there's strong interest early days because just take private credit, for instance, the search for yield. You have to... Fixed income is a terrific asset class, right? It just has to work harder over the next 20 years than it did the last 40 years. To do that, you need to look for additional yield opportunities, corporate yield, obviously emerging markets, China, fixed income, as I mentioned, is very high, and private credit now. So it's a, it's a very-
... nice sleeve in a fixed income portfolio, overall portfolio, to allow you to meet your retirement needs going forward. So and in infrastructure and private credit have their own attributes. And I will, if I put a quick little plug in, which is an interesting one, so the private credit OM, when we launch it, will have obviously the direct private equity capabilities in that fund. But the liquidity sleeve will be the mutual fund we just launched last month, which is the private equity replication fund, which is a really unique way of replicating private equity returns using the public markets. So, more coming on that one, but we're really excited by it.
After, obviously, initial period of education and dealers getting comfortable with the risk profile, we expect some strong flows.
I take it minimal capital requirements on, on-
Yeah.
From your balance sheet?
It is actually, yeah. Yeah, that's correct.
Okay, perfect. That's it for me. Thank you.
Thank you.
Our next question comes from Tom MacKinnon of BMO Capital. Please go ahead.
Yeah, thanks very much. Morning. Just a couple quick number questions for Luke, and then a follow-up. The additional CAD 20 million in expenses associated with GLC and Greenchip, if I'm looking at slide 38, where should we put those expenses? Are they sort of sub-advisory, business development, operations support? Just just to help with the modeling.
Good, good, good, good question, Tom. All of them are in, in operations and support.
Okay. And then-
Yeah, you can think of all those expenses substantively, it's people, it's the investment teams.
Okay. And then the 0.7-0.9 guidance in terms of, I think I missed that. That was in... When you were discussing slide 34, was that on advisory fees, the 0.7-0.9 basis points per quarter reduction in advisory fees? Was that what you're referring to?
Yeah, right, right on, Tom. On page 34, it was the advisory, the weighted average advisory fee rate. And you can see it was like 105 basis points in Q4, and you can see the trend from Q2 to Q4. And so I was just giving guidance that, that where, where markets are at going into Q1, and with the continued trend of bringing in high net worth and mass affluent, we expect 0.7-0.9 basis points decline during Q1 and Q2. And, and we'll be circling back, you know, in May on, on how that travel is going.
But there's no impact on product and program fees. Is that correct?
Yeah, that's right. So advisory fees varies based upon the composition of the clientele. Product and program fees varies based upon the nature of the underlying product, and I hold the product and program fees relatively stable.
All right. But there's no benefit for high-net-worth people in terms of product and program fees?
No, everyone pays the same thing on product and programs. We differentiate our pricing on advisory fees.
Okay. And then, a question with respect to the, you know, the movement up to into mass affluent and high net worth at IG with the consultants in terms of... And then, certainly more complicated financial planning with more insurance involved and more tax planning involved. How are you coping in... This seems to be a lot of training and mentoring, and how are you coping in a COVID environment with respect to that?
And is there a point in time where, you know, the ability of these advisors to, especially the new ones that are brought on, to really get a grasp of, the complexity of dealing with a high net worth client, and, sort of as they just sort of, you know, sit at home or sit in their basement and do this? Is that, to what extent do you have to kind of get back to work and get training and mentoring people into that?
Hey, Tom. So in terms of your question, we call it gamma, just being able to provide advice across the spectrum, whether it's investments, insurance, tax planning, cash management, you name it. So it starts with the fact that we're deeply committed to having accredited advisors. You know, we're pretty much leaders in terms of the number of advisors that we have that have their financial planning designation. So, you know, when you have that, you're already off to a strong start, and you have a foundation. That being said, you know, we've invested a lot in IG University, which we believe is industry leading knowledge sharing, practice management sharing, and training component of our business.
You know, it goes, it goes into kind of all the things that you need to do to be a true financial planning shop. And through IG University, which predominantly started as a face-to-face program, we've migrated over the years to digital. So we were ready for the pandemic without obviously forecasting the pandemic that was gonna take place, where we've been able to train all of our new consultants and our existing consultants on a multitude of things, because obviously we're going through a transformation and we're changing how they're interacting with their clients on a daily basis, all through IG University. So we believe it puts us in an enviable position. Now, that being said, if you're new to the industry this year in a pandemic, it's tough. It's gonna be tough.
And, you know, we know that, but the fact that the new consultants have so many other consultants and leaders that they can rely on, that they can rely on all of our training, we do believe it puts them in the best possible position to succeed... but I'll remind you, our recruitment efforts have steered over the last few years to really focusing on recruiting experienced advisors. And-
And as you recruit more experienced advisors, doesn't just the average age of the consultants go up? Like, are you eventually just having older and older advisors, and then kind of missing out on emerging affluent people that way, or?
Well, if you were just recruiting, you know, anyone, it could, but we're selective as to who we're recruiting. First off, we're looking for someone that fits our model, which means they have to have a financial planning mindset, and not just managing the investment side of the business. And number two, we want someone that wants to grow with us, and that we want to grow with them. Generally, an advisor would come to IG Wealth Management because they see this as the go-forward platform that they want to be a part of, to be able to compete effectively against the competition, the competition out there. So, you know, when you look at it, theoretically, it could, but for us, that's not the case.
In order to make sure that we continue to have a nice farm team, we've really expanded the number of associates within our network. That's continued to be a segment within our population that has grown, it's going to continue to grow, because ultimately we believe that the consultant practice teams, as they grow in size, their capabilities will grow. As their capabilities grow, our ability to provide better gamma to our clients will grow.
Okay, thanks.
And Tom, one thing, Tom, it's Luke. One thing I'd add to what to Damon's comments. I think you asked a really important question, and I do want to highlight an advantage of IG. It's our specialist support. So we've got a team of advanced financial planning specialists. We've got a team of security specialists, insurance specialists, estate planning specialists. And so when you take this environment of specialist support that each of our consultant practices has, and the value that specialists bring to high net worth to mass affluent Canadians, what the pandemic has done and this ability to work remotely, it's really amplified the way our specialists and advanced financial planning team can engage in client relationships.
You and I, we would have seen these people in airports, you know, traveling to meet high net worth clients. That's done. We've been able to pivot to a way that we can really leverage these people in ways that we couldn't before. We have the best minds in the country when it comes to advanced financial planning. It is a real asset to the organization, and it's been a real good amplifier of this talent, having the pandemic and having this pivot to remote.
Great. Thanks for the color.
Our next question comes from Graham Ryding of TD Securities. Please go ahead.
Hi, good morning. Damon, I'm gonna start with you. Just thinking about IG market share, who do you, you know, how do you benchmark yourself? You know, on slide 17, you showed your net flows rate relative to the advice channel, but I'm just wondering, is that the most relevant benchmark for you, or are the banks a channel that, you know, you're trying to increasingly compete with, you know, both at the branch level and the full service broker channel?
Yeah, Our benchmark is truly all the wealth management dealers out there. The key here is that that information is not readily available. It's pretty interesting in this country, the information on asset management is out there. It's out there, you know, from daily to monthly, and you can get it, you can access it, you can benchmark yourself, you can track your progress for various business. But on the wealth management side, it's not like that. A lot of these numbers are quote, "held closely to the vest," and, you know, we're working with our competitors and with industry organizations to try to open up the reporting so that we can truly have a benchmark that makes sense.
Ultimately, at the end of the day, we believe that we should be benchmarked against all of the wealth management organizations across the country, whether it be the banks or the independents, and then we are going to hold ourselves accountable to gaining share against those organizations.
Okay, understood. Then when I look at your recruitment, you talk about recruiting experienced advisors. You know, is there any context perhaps of, you know, of your 1,837, I think, is what you have with greater than four years experience, you know, how many of those you've recruited from external firms, or perhaps in 2020, how many advisors were you able to recruit relative to past years? Is there any sort of color on that front?
Well, I would say, I would say to you that we've just really started recruiting experienced advisors over the last 12 months.
Okay.
So it'd be a little too early to start benchmarking that, but I will say this: our level of recruitment has dropped substantially over the last four or five years, where we were recruiting significantly as the primary driver of our business and KPI to a point where it's important, but it's not a core KPI. It's something that, of course, we believe in, and we're gonna continue to do, but we're gonna do it at a measured pace because we want the right people. So it's about getting the right people the right way.
But our core focus is on productivity, because if we can drive productivity with the 1,800+ teams that we have out there that are located across the country in everyone's communities where the clients are, we will, we will drive this business and get to a net flows rate where, everyone can see that this business is, is quite healthy.
Okay, great. Then one last, if I could, Luke, just on slide 34, you mentioned sales-based comp, I think, is coming down in 2021. What about asset-based comp? Is that gonna be steady at 46 basis points, or is there another uptick again this year?
... Yeah, good, good question, Tom. So you can see on page 34, asset-based comp has been relatively stable. Right now, you know, we're almost at the end of the migration where the legacy deferred selling commission balance has fully matured. I've got on my calendar, it's October 1, 2023, it'll all be matured. So we will have some upward pressure on asset-based comp as the units continue to mature and they're entitled to a higher trail. But you've seen that that's been slight in the past quarters. That we really haven't seen a lot on a quarter-by-quarter basis, and so I wouldn't model or expect any meaningful increase in that line.
And I would highlight as well the unmatured DSC. It's a relatively small part of our asset base right now.
Yeah. Okay, great. Thanks.
Once again, if you have a question, please press star, then one. Our next question comes from Scott Chan of Canaccord Genuity. Please go ahead.
Good morning. Luke, maybe going back to slide 37 and looking at the CAD 33 million annualized revenue number based on the net CAD 30 billion from GLC and Greenchip. That would imply, I guess, just over 10 basis points in management fees. Is that so is that correct on kind of that Canada Life platform?
Yeah, I think-
About 10 basis points?
Yeah, I'd say two things. So one, as Gary had asked the question, too, that so that includes the divestiture of Quadrus as well.
Mm-hmm.
But I think you're doing the math. The net is we're acquiring 33 billion, and there's CAD 33 million of revenue coming on. But we will start doing in the coming, the coming quarters, is we'll give the transparency on, on GLC. Here's the CAD 47 billion and rising, here's the, here's the revenue. But just over 10 basis points, that's the right number. I would highlight that this is a, a, an almost CAD 50 billion relationship, and that's important to fees. I'd highlight that the transfer pricing framework is the same one we're using for, for IG facing Mackenzie. And I would highlight as well, there's a lot of fixed income in the, in the business that we bought.
Okay, so the transfer fee pricing for Mackenzie, for IG is pretty similar as well, though, double digits, I believe, right? That's-
Yeah, that's right.
Yeah, okay.
You can think of the IG rate being a little bit higher because it's more weight to equities.
Okay. Okay, that makes sense. And one of your competitors yesterday, you know, had more noticeable performance fees this year than ever. And when I look at your platform, specifically on Mackenzie, with your alts, your liquid alts and perhaps Northleaf, you know, within the strategic investments or kind of future funds, is there, like in the future, is there ways that that that that IGM could potentially earn performance fees that we can kind of see in the financials? Or any kind of thoughts on that and on how to think about that?
Well, it's a good question. It's Barry, it's a great question. You know, we're always looking for... When we price products, you know, we're open to any type of pricing mechanism, but we're very thoughtful, again, to your point, to see what's competitive, also to see what's the future trend and particularly transparency, right? So, you know, sometimes you see trends from institutional work on the retail world, and probably the performance fees are a little more relevant in the institutional world. But I wouldn't say that that trend is accelerating.
In fact, I think that probably transparency, as we are in ensuring you have alignment between the investor and the asset manager, you know, that's probably not something that we would—you could see a lot of us doing going forward. We're always open to it. We'll always look to see if it's appropriate to align the interests of the investor and the asset manager going forward with new products. But right now, we don't have that in structure in our products. And then even our, you know, some of our new liquid alts and others, we decided not to do that. We thought for transparency purposes, it was best just to price it with the normal mechanism without the performance fee element to it.
And I'd add to that, the one place, and you mentioned alts in private. The one place we do have performance fees, and you can expect to see them, is in Northleaf. And so that in many cases will be us distributing or including their products within the IG Mackenzie and other our solution. But that is an area where we do have performance fees, and it will show up through our share of ownership of Northleaf over time.
that share of Northleaf, we saw the first contribution this quarter. I think it was about 2.8 million. Is that kind of a good quarterly run rate? And is there, like, potentials for special dividends or anything in certain quarters that we should be aware of?
Yeah, so I'd say right now, the guidance that we're planning for, and you should expect about CAD 10 million to be our proportionate share of that Northleaf earnings during the year. To the extent that there are performance fees, it would be in the fourth quarter, the calendar fourth quarter of the year. So Q4 2021 would be the next time that we'll be reporting on that.
This Q4 2020, you guys weren't in the position to earn performance fees because the number was so low and the acquisition closed. Is that fair?
No, our share of performance fees was trivial. We had a few weeks of having the acquisition, and during 2020, there weren't meaningful performance fees that flew through the products that we participated in.
So if I quarterize the Q4 on Northleaf, I guess it would be over CAD 1 million, but you're saying it should be about CAD 2.5 million contribution per quarter, excluding performance fees?
Yeah, and what, and I'd say it's going to be CAD 10 million next year. We, we don't have a lot, a lot planned for performance fees, and, and they could surprise. And, and if there was a surprise, it would be in the fourth quarter of 2021. But what right now, our guidance is that our 56% ownership of Northleaf will, will give us an earnings contribution of CAD 10 million over the full year.
Okay, perfect. Thank you very much.
Yeah, you're welcome.
This concludes the question and answer session. I would like to turn the conference back over to Mr. Potter for any closing remarks.
Yeah, thank you everyone for joining the call today and for the engaging questions. We wish you all a great weekend, and with that, Ariel, I'll close the call.
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day!