# Investors Group (TSX:IGM)



## gardner (Feb 13, 2014)

I was joking about IGM over over on the Investment forum in this thread
http://canadianmoneyforum.com/showthread.php/26913-What-is-best-way-to-make-some-return-on-my

But after watching it for a couple of days, it is absolutely on a tear. I suppose there is an element of rebound after the October correction, and they have upped their dividend. I wish I'd bought it instead of just joking about it last week. With the dividend at 0.56, they would be a good dividend yielder up past $50.

Anyone here follow IGM?


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## AltaRed (Jun 8, 2009)

Some people are believers because 'the early demise of the highly lucrative managed mutual fund industry is greatly exaggerated'. That may be true as much of the investing public is still led by the rings in their noses. But the headwinds are there. Wise investors are moving to passive low cost index mutual funds, ETFs, or the bank versions of mutual funds, never mind the ongoing pressure and requirements to disclose their fees. Will the current model hold up for decades to come, or will there be an unequivocal shift once financial advisors and the mutual fund industry are forced to show their hands? 

I do not invest in the one trick ponies of IGM, AGF, CI Financial, etc. albeit I do have investments in PWF and IAG as examples of organizations with a wealth management component (SLF and MFC, and even the big banks could be considered examples).


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## bmoney (Jun 22, 2013)

I don't like this industry and its not just ETFs that make me uncomfortable, its the potential changes to trailing commissions that could put a death nail into this group. IG caters to the low end with high fees, and the government is looking to take away their lunch money. You are better off staying with the banks or life cos


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## gardner (Feb 13, 2014)

The DSCs and the effective 5-year lock-in is what gives these guys their moat. Even with 150M *net* new deposits, they took in over 6b of gross deposits last year, most of which will be locked in for ~5 years. They probably have 25b locked-in right now -- 1/3 of assets under management.

Is there word that the crown is going to regulate or eliminate DSCs?


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## bmoney (Jun 22, 2013)

gardner said:


> The DSCs and the effective 5-year lock-in is what gives these guys their moat. Even with 150M *net* new deposits, they took in over 6b of gross deposits last year, most of which will be locked in for ~5 years. They probably have 25b locked-in right now -- 1/3 of assets under management.
> 
> Is there word that the crown is going to regulate or eliminate DSCs?


Possibly, we don't know for sure.

Regulators are aiming to increase the transparency of fees and base a comp model similar to what is used in England. Advisors would be compensated based on a percentage of assets under management. Currently, the way the fund industry works advisors are paid an upfront commission based on the percentage of assets raised - typically 5% of new assets in the first year. Each year thereafter, the advisor is paid a trailing commission by the fund company - ordinarily this would be .50%-1%. The DSC is not part of the advisor compensation, it's a deterrent and meant to protect the fund company by assisting in the recovery of acquisition costs ie: recover part of the commissions paid out to the advisor because of early redemption. All the client ever sees on a statement is the MER, the advisor doesn't directly charge any fees. Many advisors do not disclose their compensation; worse they will often tell clients they are basically receiving their services at no charge.


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## My Own Advisor (Sep 24, 2012)

When is PWF going to raise its dividend? (owns about 67% of IGM)


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## Oldroe (Sep 18, 2009)

We all have our things. I've bought and sold AGF, CI for nice profits. An own PWF likely for life.

DIY investors like to think that nobody makes money with these funds which is not true. They just make less.


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## gardner (Feb 13, 2014)

I was reading a bit on the Mutual Fund Dealers Assn web site. Evidently in December they amended their rules to add a bunch of disclosures, essentially spelling out the dollar amounts of all the fees and commissions. It's not obvious if the MER of the underlying fund would be disclosed, but the portion that kicks back to the dealer as trailing commission sure will be. The new rules are set to take effect by July 15, 2016 -- a year and a half down the road. I'm not sure the dealers will be eager to implement early, so unless the crown gets after them, that's the schedule for the new disclosure rules I suppose.

http://www.mfda.ca/regulation/bulletins14/Bulletin0623-P.pdf
http://www.mfda.ca/regulation/rules/RulesDec14.pdf


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## Eclectic12 (Oct 20, 2010)

bmoney said:


> I don't like this industry and its not just ETFs that make me uncomfortable, its the potential changes to trailing commissions that could put a death nail into this group. IG caters to the low end with high fees, and the government is looking to take away their lunch money. You are better off staying with the banks or life cos


Maybe ... but another thread is arguing that without understanding, most people never learn to invest and prefer being hands off ... which works to IG's benefit.


Cheers


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## Guban (Jul 5, 2011)

They also have a well established network of motivated "advisors" / sales people that help investors contribute lots of money, and keep them invested for the long haul.


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## gardner (Feb 13, 2014)

There was a sizable bump -- ~4% -- yesterday. I don't see any real news, just a reiteration of middling analyst recommendations. Is that just expiry of options or something?


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