IGM Financial Inc. 2021 Third Quarter Report

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021

Financial Highlights	1
Report to Shareholders	2
Management's Discussion and Analysis	4
Interim Condensed Consolidated Financial Statements	66
Notes to the Interim CondensedConsolidated Financial Statements	71
Shareholder Information	84

Readers are referred to the caution regarding Forward-Looking Statements and Non-IFRS Financial Measures and Additional IFRS Measures on page 5 of this Quarterly Report.

FINANCIAL HIGHLIGHTS

			FOR THE THREE MONTHSENDED SEPTEMBER 30		AS AT AND FOR THE NINE MONTHS	ENDED SEPTEMBER 30
(unaudited)	2021	2020	CHANGE	2021	2020	CHANGE
Net earnings available to common shareholders ($ millions)Net Earnings$Adjusted Net Earnings(1)	270.8270.8	$190.9214.2	41.9 %26.4	$710.4710.4	$535.3558.6	32.7 %27.2
Diluted earnings per shareNet EarningsAdjusted Net Earnings(1)	1.131.13	0.800.90	41.325.6	2.972.97	2.252.34	32.026.9
Return on equityNet EarningsAdjusted Net Earnings(1)				16.3 %16.3 %	15.3 %15.9 %
Dividends per share	0.5625	0.5625	–	1.6875	1.6875	–
Total assets under management and advisement(2) ($ millions)Total assets under management(2)				$265,214236,152	$196,420172,613	35.0 %36.8
Wealth ManagementAssets under advisement(2)				145,462	125,015	16.4
IG Wealth ManagementAssets under management(3)Other assets under advisement				106,5517,407	92,8744,664
Assets under advisement				113,958	97,538	16.8
Investment Planning CounselAssets under management(3)Other assets under advisement				5,50326,012	5,13922,345
Assets under advisement				31,515	27,484	14.7
Asset Management (Mackenzie Investments)Mutual funds(4)ETFs(5)				62,6805,068	63,5993,330
Investment fundsInstitutional SMA(4)				67,74856,350	66,9297,671
Total excluding subadvisory to Wealth ManagementSub-advisory to Wealth Management(4)				124,09879,242	74,60071,388
Total assets under management				203,340	145,988	39.3

			WEALTH MANAGEMENT			ASSETMANAGEMENT(6)
Net Flows ($ millions)	MANAGEMENT	IG WEALTH		INVESTMENTPLANNINGCOUNSEL	MACKENZIEINVESTMENTS		INTERSEGMENTELIMINATIONS		TOTAL(2)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021Mutual fund net sales(3)ETF net creations	$	576–	$	10–	$	829320	$	––	$1,415320
Investment fund net salesInstitutional SMA net sales		576–		10–		1,149(367)		––	1,735(367)
Managed asset net salesOther dealer net flows		576438		10248		782–		–(116)	1,368570
Total net flows		1,014		258		782		(116)	1,938
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021Mutual fund net sales(3)ETF net creations	$	1,356–	$	(159)–	$	3,3931,287	$	––	$4,5901,287
Investment fund net salesInstitutional SMA net sales		1,356–		(159)–		4,680(539)		––	5,877(539)
Managed asset net salesOther dealer net flows		1,3561,343		(159)524		4,141–		–(550)	5,3381,317
Total net flows		2,699		365		4,141		(550)	6,655

(1) Non-IFRS Financial Measures:

Adjusted net earnings for the three and nine months ended September 30, 2020 excluded:

• A gain on the sale of the investment in Personal Capital of $31.4 million after-tax ($37.2 million pre-tax).

• Restructuring and other charges of $54.7 million after-tax ($74.5 million pre-tax) resulting from our ongoing multi-year transformation initiatives and efforts to enhance our operational effectiveness and also from the acquisition of GLC Asset Managment Group Ltd. and other changes to our investment management teams.

(2) Consolidated results eliminate double counting where business is reflected within multiple segments.

(3) Includes separately managed accounts.

(4) The change in mutual fund assets under management includes a net decrease of $13.2 billion due to the divestiture of Quadrus Group of Funds and Greenchip acquisition in the fourth quarter of 2020. The increase in institutional assets under managment includes $43.5 billion due to the GLC Asset Management Group Ltd. acqusition in the fourth quarter of 2020.

(5) Total ETFs in the Asset Management section including ETFs held within IGM investment funds were $11.9 billion at September 30, 2021 compared to $7.5 billion at September 30, 2020.

(6) Asset Management flows activity excludes sub-advisory to Wealth Management.

Report to Shareholders

HIGHLIGHTS

Record high net earnings of $270.8 million or $1.13 per share – up 42% from the third quarter of 2020 and up 14% from the second quarter of 2021. Net earnings were up 26% from adjusted net earnings, excluding other items,(1) of $214.2 million in 2020.
Record high net inflows of $1.9 billion, compared to net inflows of $408 million in the third quarter of 2020.
Record high third quarter investment fund net sales of $1.7 billion, compared to $610 million in the third quarter of 2020.
Record high quarter-end assets under management and advisement of $265.2 billion, up 1.2% in the quarter and 35.0% from September 30, 2020 (including $30.3 billion in net business acquisitions in 2020).

FINANCIAL RESULTS

Net earnings available to common shareholders for the three months ended September 30, 2021 were $270.8 million or $1.13 per share compared to $190.9 million or $0.80 per share for the comparative period in 2020. Adjusted net earnings available to common shareholders, excluding other items,(1) for the three months ended September 30, 2020 were $214.2 million or $0.90 per share.

Net earnings available to common shareholders for the nine months ended September 30, 2021 were $710.4 million or $2.97 per share compared to $535.3 million or $2.25 per share in 2020. Adjusted net earnings available to common shareholders, excluding other items,(1) for the nine months ended September 30, 2020 were $558.6 million or $2.34 per share.

WEALTH MANAGEMENT

Reflects the activities of operating companies that are principally focused on providing financial planning and related services to Canadian households and includes the activities of IG Wealth Management and Investment Planning Counsel.

Net earnings in the third quarter of 2021 was $146.8 million and represented 54.2% of IGM's net earnings. This was an increase of 21.3% compared to the third quarter of 2020.

Record high assets under advisement at September 30, 2021 of $145.5 billion, an increase of 1.5% from $143.3 billion at June 30, 2021 and an increase of 16.4% from $125.0 billion at September 30, 2020.

IG WEALTH MANAGEMENT

Record quarter-end high assets under advisement at September 30, 2021 of $114.0 billion, an increase of 1.6% from $112.2 billion at June 30, 2021 and an increase of 16.8% from $97.5 billion at September 30, 2020.

Highest third quarter net client inflows of $1.0 billion, an increase from net client outflows of $9 million in the third quarter of 2020. Net client inflows for the nine month period were $2.7 billion, an increase of $2.4 billion from net client inflows of $310 million in 2020.

Record high third quarter gross client inflows of $3.1 billion, up 47.3% from gross inflows of $2.1 billion in 2020.

INVESTMENT PLANNING COUNSEL

Assets under advisement – Assets under advisement at September 30, 2021 were $31.5 billion, an increase of 1.1% from $31.2 billion at June 30, 2021 and an increase of 14.7% from $27.5 billion at September 30, 2020.

Gross client inflows for the third quarter of 2021 were $1.1 billion, up 27.5% from $892 million in 2020.

Net client inflows for the third quarter of 2021 were $258 million, up from net client outflows of $146 million in 2020.

ASSET MANAGEMENT (MACKENZIE INVESTMENTS)

Reflects the activities of operating companies primarily focused on providing investment management services, and represents the operations of Mackenzie Investments.

Net earnings in the third quarter of 2021 was $71.0 million and represented 26.2% of IGM's net earnings. This was an increase of 47.0% compared to the third quarter of 2020.

(1) Please refer to the reconciliation of non-IFRS financial measures to measures prescribed by IFRS in Management's Discussion and Analysis (MD&A) on page 6 of this quarterly report.

Total assets under management were at an all-time quarter-end high of $203.3 billion, an increase of 0.8% from $201.7 billion at June 30, 2021 and an increase of 39.3% from $146.0 billion at September 30, 2020. The increase from last year included $30.3 billion or 20.8% from the net business acquisitions in the fourth quarter of 2020 of GLC Asset Management Group Ltd. (GLC) and Greenchip Financial Corp. (Greenchip). Assets under management excluding sub-advisory to the Wealth Management segment were $124.1 billion at September 30, 2021, an increase of 1.0% from June 30, 2021 and 66.4% from September 30, 2020. The net business acquisitions represented 40.6% of the increase from the prior year.

Record high third quarter investment fund net sales in the quarter of $1.1 billion, compared to $946 million(2) in 2020. Net sales for the nine month period were $4.7 billion(3) compared to net sales of $2.4 billion(2) a year ago.

Record high third quarter retail mutual fund gross sales were $2.1 billion, an increase of 23.9% from $1.7 billion in the third quarter of 2020.

ETF business – ETF assets under management totalled $11.9 billion at September 30, 2021, up from $7.5 billion at September 30, 2020. Excluding investment in ETFs by IGM mutual funds, ETF assets under management were $5.1 billion at September 30, 2021, compared to $3.3 billion at September 30, 2020.

STRATEGIC INVESTMENTS AND OTHER

Represents the key strategic investments made by the Company, including China Asset Management Co., Ltd., Great-West Lifeco Inc., Northleaf Capital Group Ltd., Wealthsimple Financial Corporation, and Portag3 Ventures LPs, as well as unallocated capital.

Great-West Lifeco Inc. (Lifeco) – The Company's proportionate share of Lifeco's third quarter earnings was $35.3 million, an increase of 7.0% from $33.0 million in the third quarter of 2020.

China Asset Management Co., Ltd. (China AMC) – The Company's proportionate share of China AMC's third quarter earnings was $17.0 million, an increase of 61.9% from $10.5 million in the third quarter of 2020 and was the highest quarterly result since IGM's investment in China AMC.

DIVIDENDS

The Board of Directors has declared a dividend of 56.25 cents per share on the Company's common shares which is payable on January 31, 2022 to shareholders of record on December 31, 2021.

On behalf of the Board of Directors,

James O'Sullivan President and Chief Executive Officer IGM Financial Inc.

November 4, 2021

(2) During the three months ended September 30, 2020, institutional clients, which include Mackenzie mutual funds within their investment offerings, made fund allocation changes which resulted in gross sales and net sales of $290 million.

During the nine months ended September 30, 2020, institutional clients, which include Mackenzie mutual funds within their investment offerings, made fund allocation changes which resulted in gross sales of $772 million and net sales of $580 million.

(3) During the nine months ended September 30, 2021, institutional clients, which include Mackenzie mutual funds within their investment offerings, made fund allocation changes which resulted in gross sales of $367 million and net redemptions of $411 million.

MANAGEMENT'S DISCUSSION AND ANALYSIS

IGM Financial Inc.
Summary of Consolidated Operating Results	6
Wealth Management
Review of the Business	16
Review of Segment Operating Results	24
Asset Management
Review of the Business	29
Review of Segment Operating Results	37
Strategic Investments and Other
Review of Segment Operating Results	40
IGM Financial Inc.
Consolidated Financial Position	42
Consolidated Liquidity and Capital Resources	45
Risk Management	49
The Financial Services Environment	62
Critical Accounting Estimates and Policies	64
Internal Control Over Financial Reporting	65
Other Information	65

Management's Discussion and Analysis

The Management's Discussion and Analysis (MD&A) presents management's view of the results of operations and financial condition of IGM Financial Inc. (IGM Financial or the Company) as at and for the three and nine months ended September 30, 2021 and should be read in conjunction with the unaudited Interim Condensed Consolidated Financial Statements (Interim Financial Statements) as well as the 2020 IGM Financial Inc. Annual Report and the 2021 IGM Financial Inc. First and Second Quarter Reports to Shareholders filed on www.sedar.com. Commentary in the MD&A as at and for the three and nine months ended September 30, 2021 is as of November 4, 2021.

Basis of Presentation and Summary of Accounting Policies

The Interim Financial Statements of IGM Financial, which are the basis of the information presented in the Company's MD&A, have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (IFRS) and are presented in Canadian dollars (Note 2 of the Interim Financial Statements).

Forward-looking Statements

Certain statements in this report, other than statements of historical fact, are forwardlooking statements based on certain assumptions and reflect IGM Financial's current expectations. Forward-looking statements are provided to assist the reader in understanding the Company's financial position and results of operations as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of the Company, as well as the outlook for North American and international economies, for the current fiscal year and subsequent periods. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "plans", "believes", "estimates", "seeks", "intends", "targets", "projects", "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could".

This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forwardlooking statements, including the perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. While the Company considers these assumptions to be reasonable based on information currently available to management, they may prove to be incorrect.

By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of material factors, many of which are beyond the Company's and its subsidiaries' control, affect the operations, performance and results of the Company,

Non-IFRS Financial Measures and Additional IFRS Measures

Net earnings available to common shareholders, which is an additional measure in accordance with IFRS, may be subdivided into two components consisting of:

Adjusted net earnings available to common shareholders; and
Other items, which include the after-tax impact of any item that management considers to be of a non-recurring nature or that could make the period-over-period comparison of results from operations less meaningful.

"Adjusted net earnings available to common shareholders", "adjusted diluted earnings per share" (EPS) and "adjusted return on average common equity" (ROE) are non-IFRS financial measures which are used to provide management and investors with additional measures to assess earnings performance. These non-IFRS financial measures do not have standard meanings prescribed by IFRS and may not be directly comparable to similar measures used by other companies.

"Earnings before interest and taxes" (EBIT), "adjusted earnings before interest and taxes" (Adjusted EBIT), "earnings before interest, taxes, depreciation and amortization before sales commissions" (EBITDA before sales commissions), and "earnings before interest, taxes, depreciation and amortization after sales commissions" (EBITDA after sales commissions) are also non-IFRS financial measures. EBIT, Adjusted EBIT, EBITDA before and its subsidiaries, and their businesses, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: the impact or unanticipated impact of general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, management of market liquidity and funding risks, changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates), the effect of applying future accounting changes, operational and reputational risks, business competition, technological change, changes in government regulations and legislation, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, outbreaks of disease or pandemics (such as COVID-19), the Company's ability to complete strategic transactions, integrate acquisitions and implement other growth strategies, and the Company's and its subsidiaries' success in anticipating and managing the foregoing factors.

The reader is cautioned that the foregoing list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. The reader is also cautioned to consider these and other factors, uncertainties and potential events carefully and not place undue reliance on forward-looking statements.

Other than as specifically required by applicable Canadian law, the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.

Additional information about the risks and uncertainties of the Company's business and material factors or assumptions on which information contained in forward-looking statements is based is provided in its disclosure materials, including this Management's Discussion and Analysis and its most recent Annual Information Form, filed with the securities regulatory authorities in Canada, available at www.sedar.com.

sales commissions and EBITDA after sales commissions are alternative measures of performance utilized by management, investors and investment analysts to evaluate and analyze the Company's results. EBITDA before sales commissions excludes all sales commissions. EBITDA after sales commissions includes all sales commissions and highlights aggregate cash flows. Other items of a non-recurring nature, or that could make the period-over-period comparison of results from operations less meaningful, are further excluded to arrive at EBITDA before sales commissions and EBITDA after sales commissions. These non-IFRS financial measures do not have standard meanings prescribed by IFRS and may not be directly comparable to similar measures used by other companies.

"Earnings before income taxes" and "net earnings available to common shareholders" are additional IFRS measures which are used to provide management and investors with additional measures to assess earnings performance. These measures are considered additional IFRS measures as they are in addition to the minimum line items required by IFRS and are relevant to an understanding of the entity's financial performance.

Refer to the appropriate reconciliations of non-IFRS financial measures to reported results in accordance with IFRS in Tables 1 to 4.

IGM Financial Inc.

Summary of Consolidated Operating Results

IGM Financial Inc. (TSX:IGM) is a leading wealth and asset management company supporting financial advisors and the clients they serve in Canada, and institutional investors throughout North America, Europe and Asia. The Company operates through a number of operating subsidiaries and also holds a number of strategic investments that provide benefits to these subsidiaries while furthering the Company's growth prospects. The Company's principle operating subsidiaries are wealth manager IG Wealth Management (IG) and asset manager Mackenzie Investments (Mackenzie). The Company also operates through wealth manager Investment Planning Counsel (IPC) and has strategic investments in Great-West Lifeco Inc. (Lifeco), China Asset Management Co., Ltd. (China AMC), Northleaf Capital Group Ltd. (Northleaf), and Wealthsimple Financial Corp. (Wealthsimple) as described more fully later in this MD&A.

In the third quarter of 2020, the Company realigned its financial reporting and related disclosures to reflect its current reportable segments of Wealth Management, Asset Management and Strategic Investments and Other. In the first quarter of 2021, the Company further expanded its reportable segment disclosures to report to Net Earnings. These segments are described later in this MD&A.

IGM Financial's assets under management and advisement were $265.2 billion as at September 30, 2021, the highest quarter-end level in the history of the Company, compared with $196.4 billion at September 30, 2020 and $240.0 billion at December 31, 2020, as detailed in Tables 6 and 7. Average total assets under management and advisement for the third quarter of 2021 were $267.4 billion compared to $194.9 billion in the third quarter of 2020. Average total assets under management and advisement for the nine months ended September 30, 2021 were $255.6 billion compared to $187.6 billion for the nine months ended September 30, 2020.

Total assets under management were $236.2 billion at September 30, 2021, also the highest quarter-end level, compared with $172.6 billion at September 30, 2020 and $214.0 billion at December 31, 2020. Average total assets under management for the third quarter of 2021 were $238.3 billion compared to $171.4 billion in the third quarter of 2020. Average total assets under management for the nine months ended September 30, 2021 were $227.9 billion compared to $164.7 billion for the comparative period in 2020.

Net earnings available to common shareholders for the three months ended September 30, 2021 were at an all-time record high of $270.8 million or $1.13 per share compared with net earnings available to common shareholders of $190.9 million or $0.80 per share for the comparative period in 2020, representing an increase of 41.3% in earnings per share. Net earnings available to common shareholders for the nine months ended September 30, 2021 were $710.4 million or $2.97 per share compared to net earnings available to common shareholders of $535.3 million or $2.25 per share for the comparative period in 2020, representing an increase of 32.0% in earnings per share.

Net earnings per share in the third quarter of 2021 represented an increase of 25.6% over adjusted net earnings per share in the third quarter of 2020 and an increase of 26.9% for the nine month period. In 2020, adjusted net earnings available to common shareholders, excluding other items outlined below, were $214.2 million or $0.90 per share for the third quarter and were $558.6 million or $2.34 per share for the nine month period.

Other items for the three and nine months ended September 30, 2020 consisted of:

A gain on the sale of the investment in Personal Capital Corporation of $31.4 million after-tax ($37.2 million pre-tax).
Restructuring and other charges of $54.7 million after-tax ($74.5 million pre-tax) resulting from our ongoing multiyear transformation initiatives and efforts to enhance our operational effectiveness and also from the acquisition of GLC Asset Management Group Ltd. (GLC) and other changes to our investment management teams. This included activities to improve efficiency and capabilities by leveraging the scale and expertise of scaled providers through outsourcing partnerships, as well as process automation initiatives relating to key internal processes. During the quarter, the Company also incurred severance and other charges relating to the acquisition of GLC as well as other personnel changes.

Shareholders' equity was $6.3 billion as at September 30, 2021 compared to $5.0 billion at December 31, 2020. Return on average common equity based on adjusted net earnings for the nine months ended September 30, 2021 was 16.3% compared with 15.9% for the comparative period in 2020. Excluding the impact of fair value through other comprehensive income investments net of tax, return on average common equity at September 30, 2021 is 18.9%. The quarterly dividend per common share declared in the third quarter of 2021 was 56.25 cents, unchanged from the second quarter of 2021.

COVID‑19

Governments worldwide have enacted emergency measures to combat the spread of a novel strain of coronavirus (COVID-19). These measures, which include the implementation of travel bans, closing of non-essential businesses, self-imposed quarantine periods and social distancing, have caused significant volatility in global equity markets and material disruption to global

businesses. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions.

The distribution of vaccines has resulted in the easing of restrictions in many economies and has contributed to strong gains in certain economic sectors during 2021. However, there is uncertainty regarding the effectiveness of vaccines against new variants of the virus, and this contributes towards uncertainty of the timing of a full economic recovery. As a result, it is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operating subsidiaries in future periods.

COVID-19 has the current and ongoing potential to expose the Company to a number of risks inherent in our business activities. These include: liquidity risk; credit risk; business risk and risks related to assets under management and advisement; operational risk; governance, oversight and strategic risk; regulatory developments; and people risk. These risks are discussed in further detail in the Risk Management section of this MD&A.

MARKET OVERVIEW

Returns in financial markets have remained strong in 2021 with a continued upward trend since the first quarter of 2020:

The S&P TSX Composite index increased by 7.3% in the first quarter and 7.8% in the second quarter and decreased by 0.5% in the third quarter of 2021.
U.S. equity markets, as measured by the S&P 500 index, increased by 5.8% in the first quarter, 8.2% in the second quarter and 0.2% in the third quarter of 2021.
The FTSE TMX Canada Universe Bond Index decreased by 5.7% in the first quarter of 2021, increased by 1.0% in the second quarter and decreased by 1.1% in the third quarter.

TABLE 1: RECONCILIATION OF NON-IFRS FINANCIAL MEASURES

			THREE MONTHS ENDED	NINE MONTHS ENDED
($ millions)	2021SEP. 30	2021JUN. 30		2020SEP. 30		2021SEP. 30		2020SEP. 30
Adjusted net earnings available tocommon shareholders – Non-IFRS measureGain on sale of Personal Capital, net of taxRestructuring and other, net of tax	$270.8––	$237.4––	$	214.231.4(54.7)	$	710.4––	$	558.631.4(54.7)
Net earnings available to common shareholders – IFRS	$270.8	$237.4	$	190.9	$	710.4	$	535.3
Adjusted net earnings per share(1) available tocommon shareholders – Non-IFRS measureGain on sale of Personal Capital, net of taxRestructuring and other, net of tax	$1.13––	$0.99––	$	0.900.13(0.23)	$	2.97––	$	2.340.13(0.22)
Net earnings per share(1) available tocommon shareholders – IFRS	$1.13	$0.99	$	0.80	$	2.97	$	2.25
EBITDA before sales commissions – Non-IFRS measureSales-based commissions paid	$422.3(37.8)	$379.7(42.7)	$	336.3(30.0)		$ 1,135.2(127.6)	$	900.0(98.2)
EBITDA after sales commissions – Non-IFRS measureSales-based commissions paid subject to amortizationAmortization of capitalized sales commissionsAmortization of capital, intangible and other assets	384.533.8(14.8)(24.9)	337.037.7(13.6)(25.5)		306.325.1(9.5)(21.5)		1,007.6111.7(40.5)(74.4)		801.881.5(25.8)(62.0)
Adjusted earnings before interest andincome taxes – Non-IFRS measureInterest expense(2)	378.628.7	335.628.5		300.427.9		1,004.485.3		795.582.7
Adjusted earnings before income taxes– Non-IFRS measureIncome taxes	349.978.4	307.169.3		272.558.3		919.1207.4		712.8154.2
Adjusted net earnings – Non-IFRS measureGain on sale of Personal Capital, net of taxRestructuring and other, net of tax	271.5––	237.8––		214.231.4(54.7)		711.7––		558.631.4(54.7)
Net earnings – IFRS	$271.5	$237.8	$	190.9	$	711.7	$	535.3

(1) Diluted earnings per share.

(2) Interest expense includes interest on long-term debt and interest on leases.

• Our clients experienced an average investment return in the first quarter of 2.7%, 4.5% in the second quarter and 0.5% in the third quarter of 2021.

IGM Financial's assets under management and advisement increased by 10.5% from $240.0 billion at December 31, 2020 to $265.2 billion at September 30, 2021, and increased by 35.0% from $196.4 billion at September 30, 2020. The increase included $30.3 billion in net business acquisitions in the fourth quarter of GLC Asset Management Group Ltd. (GLC) and Greenchip Financial Corp. (Greenchip).

REPORTING CHANGES

Effective January 1, 2021, the Company expanded its reportable segment disclosures to report to Net earnings, whereas previously it reported to Earnings before interest and taxes. These changes further build on the disclosure enhancements announced by the Company in the third quarter of 2020, which were introduced to improve transparency into key drivers of each business line and help stakeholders understand and assess components of value. The Company's reportable segments are Wealth Management, Asset Management and Strategic Investments & Other.

Prior period comparative information has been restated to reflect these changes.

These changes have no impact on the reported earnings of the Company.

These changes are intended to:

Better reflect the business performance of underlying segments
Reflect the capacity for financial leverage within the segments
Encourage sum-of-parts approach to value assessment

To calculate segment Net earnings, debt and interest is allocated to each segment based on management's assessment of: i) capacity to service the debt, and ii) where the debt is being serviced. Income tax expense is calculated based on revenue and expenses included in each segment.

REPORTABLE SEGMENTS

The segments as described below reflect the Company's internal financial reporting and performance measurement (Tables 2 and 3):

• Wealth Management – reflects the activities of operating companies that are principally focused on providing financial planning and related services to Canadian households. This segment includes the activities of IG Wealth Management and Investment Planning Counsel. These firms are retail distribution organizations who serve Canadian households through their securities dealers, mutual fund dealers and

other subsidiaries licensed to distribute financial products and services. A majority of the revenues of this segment are derived from providing financial advice and distributing financial products and services to Canadian households. This segment also includes the investment management activities of these organizations, including mutual fund management and discretionary portfolio management services.

Asset Management reflects the activities of operating companies primarily focused on providing investment management services, and represents the operations of Mackenzie Investments. Investment management services are provided to a suite of investment funds that are distributed through third party dealers and financial advisors, and through institutional advisory mandates to financial institutions, pensions and other institutional investors.
Strategic Investments and Other primarily represents the key strategic investments made by the Company, including China Asset Management Co., Ltd., Great-West Lifeco Inc., Northleaf Capital Group Ltd., Wealthsimple Financial Corp., and Portag3 Ventures LPs, as well as unallocated capital. Investments are classified in this segment (as opposed to the Wealth Management or Asset Management segment) when warranted due to different market segments, growth profiles or other unique characteristics.

Assets under Management and Advisement (AUM&A)

represents the consolidated AUM and AUA of IGM Financial. In the Wealth Management segment, AUM is a component part of AUA. All instances where the asset management segment is providing investment management services or distributing its products through the Wealth Management segment are eliminated in our reporting such that there is no double-counting of the same client savings held at IGM operating companies.

Assets under Advisement (AUA) are the key driver of the Wealth Management segment. AUA are savings and investment products held within client accounts of our Wealth Management segment operating companies.

Assets under Management (AUM) are the key driver of the Asset Management segment. AUM are a secondary driver of revenues and expenses within the Wealth Management segment in relation to its investment management activities. AUM are client assets where we provide investment management services, and include investment funds where we are the fund manager, investment advisory mandates to institutions, and other client accounts where we have discretionary portfolio management responsibilities.

FINANCIAL PRESENTATION

The financial presentation includes revenues and expenses to align with the key drivers of business activity and to reflect our emphasis on business growth and operational efficiency. The categories are as follows:

Wealth management revenue revenues earned by the Wealth Management segment for providing financial planning, investment advisory and related financial services. Revenues include financial advisory fees, investment management and related administration fees, distribution revenue associated with insurance and banking products and services, and net investment income and other revenue relating to mortgage lending activities.
Asset management revenue revenues earned by the Asset Management segment related to investment management advisory and administrative services.
Dealer compensation asset-based and sales-based compensation paid to dealers by the Asset Management segment.
Advisory and business development expenses expenses incurred on activities directly associated with providing financial planning services to clients of the Wealth Management segment. Expenses include compensation,

	WEALTH MANAGEMENT		ASSET MANAGEMENT					STRATEGICINVESTMENTS & OTHER		INTERSEGMENTELIMINATIONS
THREE MONTHS ENDED($ millions)	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30
RevenuesWealth management	$ 660.0	$ 575.7	$–	$–	$–	$–	$(5.0)	$(4.1)	$ 655.0	$ 571.6
Asset managementDealer compensation	–	–	293.1	233.1	–	–	(29.7)	(25.7)	263.4	207.4
expense	–	–	(90.9)	(75.5)	–	–	5.0	4.2	(85.9)	(71.3)
Net asset management	–	–	202.2	157.6	–	–	(24.7)	(21.5)	177.5	136.1
Net investment incomeand otherProportionate share of	(0.2)	0.7	2.2	1.1	0.6	0.6	(0.1)	(0.2)	2.5	2.2
associates' earnings	–	–	–	–	55.9	43.5	–	–	55.9	43.5
	659.8	576.4	204.4	158.7	56.5	44.1	(29.8)	(25.8)	890.9	753.4
ExpensesAdvisory and business
development	274.8	236.5	19.2	16.0	–	–	–	0.1	294.0	252.6
Operations and support	113.2	111.2	83.3	69.7	1.2	1.2	(0.1)	(0.2)	197.6	181.9
Sub-advisory	48.7	41.7	1.7	2.5	–	–	(29.7)	(25.7)	20.7	18.5
	436.7	389.4	104.2	88.2	1.2	1.2	(29.8)	(25.8)	512.3	453.0
Adjusted earnings beforeinterest and taxesInterest expense(1)	223.122.8	187.022.7	100.25.9	70.55.2	55.3–	42.9–	––	––	378.628.7	300.427.9
Adjusted earnings beforeincome taxesIncome taxes	200.353.5	164.343.3	94.323.3	65.317.0	55.31.6	42.9(2.0)	––	––	349.978.4	272.558.3
Adjusted net earningsNon-controlling interest	146.8–	121.0–	71.0–	48.3–	53.70.7	44.9–	––	––	271.50.7	214.2–
Adjusted net earningsavailable to commonshareholders(2)	$ 146.8	$ 121.0	$71.0	$48.3	$53.0	$44.9	$–	$–	270.8	214.2
Other items, net of taxGain on sale of Personal CapitalRestructuring and other									––	31.4(54.7)
Net earnings available to common shareholders									$ 270.8	$ 190.9

TABLE 2: CONSOLIDATED OPERATING RESULTS BY SEGMENT – Q3 2021 VS. Q3 2020

(1) Interest expense includes interest on long-term debt and interest on leases.

(2) Refer to Non-IFRS Financial Measures and Additional IFRS Measures in this MD&A for an explanation of the Company's use of non-IFRS financial measures.

TABLE 3: CONSOLIDATED OPERATING RESULTS BY SEGMENT – NINE MONTHS ENDED

		WEALTH MANAGEMENT		ASSET MANAGEMENT		STRATEGICINVESTMENTS & OTHER		INTERSEGMENTELIMINATIONS		TOTAL
NINE MONTHS ENDED($ millions)	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30
Revenues
Wealth management	$ 1,900.4	$ 1,677.5	$–	$–	$–	$–	$(14.3)	$(12.1)	$ 1,886.1	$ 1,665.4
Asset managementDealer compensation	–	–	829.3	671.4	–	–	(84.6)	(74.8)	744.7	596.6
expense	–	–	(263.6)	(220.9)	–	–	14.3	12.1	(249.3)	(208.8)
Net asset management	–	–	565.7	450.5	–	–	(70.3)	(62.7)	495.4	387.8
Net investment incomeand otherProportionate share of	2.2	1.3	4.5	1.9	1.6	4.9	(0.2)	(0.3)	8.1	7.8
associates' earnings	–	–	–	–	145.7	106.9	–	–	145.7	106.9
	1,902.6	1,678.8	570.2	452.4	147.3	111.8	(84.8)	(75.1)	2,535.3	2,167.9
ExpensesAdvisory and business
development	804.5	705.2	64.6	51.9	–	–	–	–	869.1	757.1
Operations and support	350.2	340.4	247.3	219.1	3.6	3.2	(0.2)	(0.3)	600.9	562.4
Sub-advisory	140.2	120.5	5.3	7.2	–	–	(84.6)	(74.8)	60.9	52.9
	1,294.9	1,166.1	317.2	278.2	3.6	3.2	(84.8)	(75.1)	1,530.9	1,372.4
Adjusted earnings beforeinterest and taxesInterest expense(1)	607.767.6	512.767.2	253.017.7	174.215.5	143.7–	108.6–	––	––	1,004.485.3	795.582.7
Adjusted earnings before
income taxes	540.1	445.5	235.3	158.7	143.7	108.6	–	–	919.1	712.8
Income taxes	144.2	118.4	59.8	41.5	3.4	(5.7)	–	–	207.4	154.2
Adjusted net earningsNon-controlling interest	395.9–	327.1–	175.5–	117.2–	140.31.3	114.3–	––	––	711.71.3	558.6–
Adjusted net earningsavailable to commonshareholders(2)	$395.9	$327.1	$175.5	$117.2	$139.0	$114.3	$–	$–	710.4	558.6
Other items, net of tax
Gain on sale of Personal CapitalRestructuring and other									––	31.4(54.7)
Net earnings available to common shareholders									$710.4	$535.3

(1) Interest expense includes interest on long-term debt and interest on leases.

(2) Refer to Non-IFRS Financial Measures and Additional IFRS Measures in this MD&A for an explanation of the Company's use of non-IFRS financial measures.

recognition and other support provided to our financial advisors, field management, product & planning specialists; expenses associated with facilities, technology and training relating to our financial advisors and specialists; other business development activities including direct marketing and advertising; and wholesale distribution activities performed by the Asset Management segment. A significant component of these expenses vary directly with levels of assets under management or advisement, business development measures including sales and client acquisition, and the number of advisor and client relationships.

Operations and support expenses expenses associated with business operations, including technology and business processes; in-house investment management and product shelf management; corporate management and support functions. These expenses primarily reflect compensation and technology and other service provider expenses.
Sub-advisory expenses reflects fees relating to investment management services provided by third party or related party investment management organizations. These fees typically are variable with the level of assets under management.

TABLE 4: CONSOLIDATED OPERATING RESULTS BY SEGMENT – Q3 2021 VS. Q2 2021

			WEALTH MANAGEMENT		ASSET MANAGEMENT		STRATEGICINVESTMENTS & OTHER						INTERSEGMENTELIMINATIONS	TOTAL
THREE MONTHS ENDED($ millions)	SEP. 30	2021	2021JUN. 30		2021SEP. 30	2021JUN. 30		2021SEP. 30		2021JUN. 30		2021SEP. 30		2021JUN. 30	2021SEP. 30		2021JUN. 30
RevenuesWealth management	$ 660.0		$ 632.4		$–	$–	$	–	$	–	$	(5.0)	$	(4.8)	$ 655.0		$ 627.6
Asset managementDealer compensation		–		–	293.1	276.3		–		–		(29.7)		(28.0)	263.4		248.3
expense		–		–	(90.9)	(87.4)		–		–		5.0		4.7	(85.9)		(82.7)
Net asset management		–		–	202.2	188.9		–		–		(24.7)		(23.3)	177.5		165.6
Net investment incomeand otherProportionate share of		(0.2)		0.6	2.2	1.1		0.6		0.8		(0.1)		–	2.5		2.5
associates' earnings		–		–	–	–		55.9		48.2		–		–	55.9		48.2
		659.8	633.0		204.4	190.0		56.5		49.0		(29.8)		(28.1)	890.9		843.9
ExpensesAdvisory and business
development		274.8	266.0		19.2	25.1		–		–		–		–	294.0		291.1
Operations and support		113.2	115.0		83.3	80.5		1.2		1.3		(0.1)		–	197.6		196.8
Sub-advisory		48.7		46.5	1.7	1.9		–		–		(29.7)		(28.0)	20.7		20.4
		436.7	427.5		104.2	107.5		1.2		1.3		(29.8)		(28.0)	512.3		508.3
Adjusted earnings before
interest and taxesInterest expense(1)		223.122.8	205.5	22.5	100.25.9	82.56.0		55.3–		47.7–		––		(0.1)–	378.628.7		335.628.5
Adjusted earnings before
income taxes		200.3	183.0		94.3	76.5		55.3		47.7		–		(0.1)	349.9		307.1
Income taxes		53.5		48.7	23.3	20.0		1.6		0.7		–		(0.1)	78.4		69.3
Adjusted net earnings		146.8	134.3		71.0	56.5		53.7		47.0		–		–	271.5		237.8
Non-controlling interest		–		–	–	–		0.7		0.4		–		–	0.7		0.4
Adjusted net earningsavailable to commonshareholders(2)	$	146.8	$134.3		$71.0	$56.5	$	53.0	$	46.6	$	–	$	–	270.8		237.4
Other items, net of tax															–		–
Net earnings available to common shareholders															$270.8	$	237.4

(1) Interest expense includes interest on long-term debt and interest on leases.

(2) Refer to Non-IFRS Financial Measures and Additional IFRS Measures in this MD&A for an explanation of the Company's use of non-IFRS financial measures.

These fees include investment advisory services performed for the Wealth Management segment by the Asset Management segment.

Interest expense represents interest expense on long-term debt and leases. Interest expense is allocated to each segment based on management's assessment of: i) capacity to service the debt, and ii) where the debt is being serviced.

Income taxes are reported in each segment. IGM Financial consolidated changes in the effective tax rates are detailed in Table 5.

Tax planning may result in the Company recording lower levels of income taxes. Management monitors the status of its income tax filings and regularly assesses the overall adequacy of its provision for income taxes and, as a result, income taxes recorded in prior years may be adjusted in the current year. The effect of changes in management's best estimates reported in adjusted net earnings is reflected in Other, which also includes, but is not limited to, the effect of lower effective income tax rates on foreign operations.

Other items, as reflected in Tables 2, 3 and 4, include the aftertax impact of any item that management considers to be of a non-recurring nature or that could make the period-over-period comparison of results from operations less meaningful and are not allocated to segments. The three and nine months ended September 30, 2020 included the following Other items:

TABLE 5: EFFECTIVE INCOME TAX RATE

			THREE MONTHS ENDED	NINE MONTHS ENDED
	2021SEP. 30	2021JUN. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30
Income taxes at Canadian federal and
provincial statutory rates	26.65 %	26.61 %	26.82 %	26.63 %	26.72 %
Effect of:
Proportionate share of associates' earnings	(3.78)	(3.69)	(4.50)	(3.74)	(3.89)
Tax loss consolidation(1)	–	–	(1.20)	–	(1.23)
Other	(0.47)	(0.34)	(0.12)	(0.32)	(0.09)
Effective income tax rate – adjusted net earnings	22.40	22.58	21.00	22.57	21.51
Disposition of assets net of acquisition costs	–	–	(2.14)	–	(0.74)
Effective income tax rate – net earnings	22.40 %	22.58 %	18.86 %	22.57 %	20.77 %

(1) See Note 26 – Related Party Transactions of the Consolidated Financial Statements included in the 2020 IGM Financial Inc. Annual Report (Annual Financial Statements). The benefits from the tax loss consolidation arrangements ended at December 31, 2020.

Gain on sale of Personal Capital $37.2 million ($31.4 million after-tax) resulting from the sale of the Company's investment in Personal Capital in the third quarter.
Restructuring and other $74.5 million ($54.7 million aftertax) resulting from our ongoing multi-year transformation initiatives and efforts to enhance our operational effectiveness and also from the acquisition of GLC and other changes to our investment management teams. This included activities to improve efficiency and capabilities by leveraging the scale and expertise of scaled providers through outsourcing partnerships, as well as process automation initiatives relating to key internal processes. During the quarter, the Company also incurred severance and other charges relating to the acquisition of GLC as well as other personnel changes.

SUMMARY OF CHANGES IN TOTAL ASSETS UNDER MANAGEMENT AND ADVISEMENT

Assets under management and advisement were $265.2 billion at September 30, 2021 compared to $196.4 billion at September 30, 2020, an increase of 35.0%. Total assets under management were $236.2 billion at September 30,

2021 compared to $172.6 billion at September 30, 2020, an increase of 36.8%. Changes in assets under management and advisement are detailed in Table 6. The increase in assets under management and advisement included $30.3 billion in net business acquisitions from the fourth quarter of 2020 of GLC Asset Management Group Ltd. (GLC) and Greenchip Financial Corp. (Greenchip).

Changes in assets under management for the Wealth Management and Asset Management segments are discussed further in each of their respective Review of the Business sections in the MD&A.

SUMMARY OF QUARTERLY RESULTS

The Summary of Quarterly Results in Table 7 includes the eight most recent quarters and the reconciliation of non-IFRS financial measures to net earnings in accordance with IFRS.

Changes in average daily investment fund assets under management over the eight most recent quarters, as shown in Table 7, largely reflect the impact of changes in domestic and foreign markets and net sales of the Company.

TABLE 6: ASSETS UNDER MANAGEMENT AND ADVISEMENT

			WEALTH MANAGEMENT		ASSET MANAGEMENT(1)
		IG WEALTHMANAGEMENT	PLANNING COUNSEL	INVESTMENT		MACKENZIEINVESTMENTS		INTERCOMPANYELIMINATIONS(2)		CONSOLIDATED
($ millions)	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30
THREE MONTHS ENDEDGross flows
Mutual fund gross sales(3)(4)$	2,741	$1,949	$188	$97	$2,587	$2,903	$–	$–	$5,516	$4,949
Dealer gross inflows	3,141	2,132	1,137	892	–	–	–	–	4,278	3,024
Net flowsMutual fund net sales(3)(4)ETF net creations(5)	576–	(259)–	10–	(77)–	829320	84997	––	––	1,415320	51397
Investment fund net salesInstitutional SMA net sales(6)Mackenzie net sales through	576–	(259)–	10–	(77)–	1,149(367)	946(319)	––	––	1,735(367)–	610(319)–
Wealth Management	65	39	54	25	–	–	(119)	(64)	–	–
IGM product net salesOther dealer net flows	641373	(220)211	64194	(52)(94)	782–	627–	(119)3	(64)–	1,368570	291117
Total net flows	1,014	(9)	258	(146)	782	627	(116)	(64)	1,938	408
NINE MONTHS ENDEDGross flows
Mutual fund gross sales(3)(4)$Dealer gross inflows	8,8869,997	$6,4157,039	$6003,857	$4003,273	$ 10,095–	$9,064–	$––	$––	$ 19,58113,854	$15,87910,312
Net flowsMutual fund net sales(3)(4)ETF Net creations(5)	1,356–	(442)–	(159)–	(218)–	3,3931,287	1,580860	––	––	4,5901,287	920860
Investment fund net salesInstitutional SMA net sales(6)Mackenzie net sales through	1,356–	(442)–	(159)–	(218)–	4,680(539)	2,4402,137	––	––	5,877(539)	1,7802,137
Wealth Management	395	81	160	54	–	–	(555)	(135)	–	–
IGM product net salesOther dealer net flows	1,751948	(361)671	1364	(164)288	4,141–	4,577–	(555)5	(135)2	5,3381,317	3,917961
Total net flows	2,699	310	365	124	4,141	4,577	(550)	(133)	6,655	4,878

(1) Asset Management flows activity excludes sub-advisory to Wealth Management.

(2) Consolidated results eliminate double counting where business is reflected within multiple segments.

(3) IG Wealth Management and Investment Planning Counsel AUM and net sales include separately managed accounts.

(4) During the third quarter and the nine month period, institutional clients, which include Mackenzie mutual funds within their investment offerings, made fund allocation changes which resulted in:

Year to date 2021 – sales of $367 million and net redemptions of $411 million.

Q3 2020 – sales and net sales of $290 million.

Year to date 2020 – sales of $772 million and net sales of $580 million.

(5) ETFs – During the second and third quarters of 2020, Wealthsimple made allocation changes which resulted in $370 million in purchases in Mackenzie ETFs and $325 million of redemptions from Mackenzie's ETFs, respectively.

(6) Sub-advisory, institutional and other accounts:

Q2 2021 – Mackenzie was awarded $680 million of sub-advisory wins.

Q2 2020 – Mackenzie was awarded $2.6 billion of sub-advisory wins.

				WEALTH MANAGEMENT		ASSET MANAGEMENT
		IG WEALTHMANAGEMENT		INVESTMENTPLANNING COUNSEL		MACKENZIEINVESTMENTS		INTERCOMPANYELIMINATIONS(1)	CONSOLIDATED
($ millions)	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30	2021SEP. 30	2020SEP. 30
Assets under Managementand AdvisementWealth ManagementAUMMackenzie assets	$ 106,551	$92,874	$5,503	$5,139			$–	$–	$ 112,054	$98,013
sold throughWealth ManagementOther AUA	8876,520	2694,395	3,45922,553	2,92619,419			–(11)	–(7)	4,34629,062	3,19523,807
AUAAsset ManagementMutual funds	113,958	97,538	31,515	27,484	$ 62,680	$63,599	(11)	(7)	145,46262,680	125,01563,599
ETFsInvestment fundsInstitutional SMA					5,06867,74856,350	3,33066,9297,671			5,06867,74856,350	3,33066,9297,671
Total ex sub-advisory to Wealth ManagementSub-advisory to Wealth Management					124,09879,242	74,60071,388			124,09879,242	74,60071,388
Total AUM					203,340	145,988			203,340	145,988
ETFsDistributed to third partiesHeld within IGM managed products					5,0686,838	3,3304,136	(6,838)	(4,136)	5,068–	3,330–
Total ETFs					11,906	7,466	(6,838)	(4,136)	5,068	3,330
ConsolidatedAUMMackenzie assets	106,551	92,874	5,503	5,139	203,340	145,988	(79,242)	(71,388)	236,152	172,613
sold throughWealth ManagementOther AUA	8876,520	2694,395	3,45922,553	2,92619,419	––	––	(4,346)(11)	(3,195)(7)	–29,062	–23,807
AUM&A	113,958	97,538	31,515	27,484	203,340	145,988	(83,599)	(74,590)	265,214	196,420

TABLE 6: ASSETS UNDER MANAGEMENT AND ADVISEMENT (CONTINUED)

(1) Consolidated results eliminate double counting where business is reflected within multiple segments.

TABLE 7: SUMMARY OF QUARTERLY RESULTS

	2021Q3	2021Q2	2021Q1	2020Q4	2020Q3	2020Q2	2020Q1	2019Q4
Consolidated statements of earnings ($ millions)
RevenuesWealth management	$ 655.0	$ 627.6	$ 603.5	$ 594.2	$ 571.6	$ 531.1	$ 562.7	$ 587.1
Asset management	263.4	248.3	233.0	216.3	207.4	190.7	198.5	203.4
Dealer compensation expense	(85.9)	(82.7)	(80.7)	(74.3)	(71.3)	(66.1)	(71.4)	(69.8)
Net asset management	177.5	165.6	152.3	142.0	136.1	124.6	127.1	133.6
Net investment income and other	2.5	2.5	3.1	3.2	2.2	7.6	(2.0)	6.7
Proportionate share of associates' earnings	55.9890.9	48.2843.9	41.6800.5	40.1779.5	43.5753.4	43.3706.6	20.1707.9	32.6760.0
Expenses
Advisory and business development	294.0	291.1	284.0	283.1	252.6	245.4	259.1	270.9
Operations and support	197.6	196.8	206.5	189.0	181.9	185.4	195.1	182.6
Sub-advisoryInterest(1)	20.728.7	20.428.5	19.828.1	18.327.9	18.527.9	16.927.5	17.527.3	18.127.8
	541.0	536.8	538.4	518.3	480.9	475.2	499.0	499.4
Earnings before undernoted	349.9	307.1	262.1	261.2	272.5	231.4	208.9	260.6
Gain on sale of Personal Capital	–	–	–	–	37.2	–	–	–
Gain on sale of Quadrus Group of Fundsnet of acquisition costs	–	–	–	25.2	–	–	–	–
Proportionate share of associate's adjustments	–	–	–	3.4	–	–	–	–
Restructuring and otherProportionate share of associate's one-time charges	––	––	––	––	(74.5)–	––	––	–(9.2)
Earnings before income taxes	349.9	307.1	262.1	289.8	235.2	231.4	208.9	251.4
Income taxes	78.4	69.3	59.7	60.5	44.3	47.9	48.0	59.8
Net earnings	271.5	237.8	202.4	229.3	190.9	183.5	160.9	191.6
Non-controlling interestNet earnings available to common shareholders	0.7$ 270.8	0.4$ 237.4	0.2$ 202.2	0.2$ 229.1	–$ 190.9	–$ 183.5	–$ 160.9	–$ 191.6

Reconciliation of Non-IFRSfinancial measures(2) ($ millions)
Adjusted net earnings available to common
shareholders – non-IFRS measure	$ 270.8	$ 237.4	$ 202.2	$ 204.3	$ 214.2	$ 183.5	$ 160.9	$ 200.8
Other items:Gain on sale of Personal Capital, net of tax	–	–	–	–	31.4	–	–	–
Gain on sale of Quadrus Group of Funds
net of acquisition costs, net of tax	–	–	–	21.4	–	–	–	–
Proportionate share of associate's adjustmentsRestructuring and other, net of tax	––	––	––	3.4–	–(54.7)	––	––	––
Proportionate share of associate's one-time charges	–	–	–	–	–	–	–	(9.2)
Net earnings available to common shareholders – IFRS	$ 270.8	$ 237.4	$ 202.2	$ 229.1	$ 190.9	$ 183.5	$ 160.9	$ 191.6
Earnings per Share ($)
Adjusted net earnings available
to common shareholders(2)
– Basic– Diluted	1.131.13	0.990.99	0.850.85	0.860.86	0.900.90	0.770.77	0.680.68	0.840.84
Net earnings available to common shareholders
– Basic– Diluted	1.131.13	0.990.99	0.850.85	0.960.96	0.800.80	0.770.77	0.680.68	0.800.80
Average assets under management
and advisement ($ billions)
Investment fund assets under management	$ 181.6	$ 173.1	$ 165.5	$ 169.8	$ 163.7	$ 152.6	$ 158.5	$ 159.5
Total assets under managementAssets under management and advisement	238.3267.4	227.8255.4	217.6243.9	177.6202.2	171.4194.9	159.2181.5	163.3186.0	164.5187.4
Ending assets under management
and advisement ($ billions)
Investment fund assets under managementTotal assets under management	$ 179.8236.2	$ 177.3233.6	$ 168.4221.6	$ 162.3214.0	$ 164.9172.6	$ 157.8165.4	$ 143.2147.5	$ 161.8166.8
Assets under management and advisement	265.2	262.0	248.5	240.0	196.4	188.3	168.4	190.0

(1) Interest expense includes interest on long-term debt and interest on leases.

(2) Refer to Non-IFRS Financial Measures and Additional IFRS Measures in this MD&A in addition to the Summary of Consolidated Operating Results section included in the MD&A of the 2020 IGM Financial Inc. Annual Report for an explanation of Other items used to calculate the Company's Non-IFRS financial measures.

Wealth Management

The Wealth Management segment consists of both IG Wealth Management (IG) and Investment Planning Counsel, Inc. (IPC).

Wealth Management revenue consists of:

Advisory fees are related to providing financial advice to clients including fees related to the distribution of products.
Product and program fees are related to the management of investment products and include management, administration and other related fees.
Other financial planning revenues are fees related to providing clients other financial products including mortgages, insurance and banking products.

Sub-advisory fees are paid between segments and to third parties for investment management services provided to our investment products. Wealth Management is considered a client of the Asset Management segment and transfer pricing is based on values for similar sized asset management mandates.

Effective January 1, 2021, each segment now reflects their results to adjusted net earnings. Debt and interest expense is allocated to segment based on management's assessment of: i) capacity to service the debt, and ii) where the debt is being serviced. Income taxes are also reported in each segment.

Review of the Business

IG Wealth Management, founded in 1926, provides comprehensive personal financial planning and wealth management services to Canadians through our exclusive network of 3,298 Consultants. IG Wealth Management clients are more than one million individuals, families and business owners.

Investment Planning Counsel, founded in 1996, is an independent distributor of financial products, services and advice in Canada, with 685 financial advisors.

The Wealth Management segment provides a comprehensive planning approach, through IG Wealth Management Consultants and IPC Advisors, by offering a broad range of financial products and services.

The review of the business in the Wealth Management section primarily relates to IG Wealth Management as it represents 96% of adjusted net earnings of the total segment.

2021 DEVELOPMENTS

Early in the fourth quarter, IG Wealth Management announced that it will be launching IG Climate Action Portfolios, a suite of four diversified managed solutions:

IG Climate Action Portfolio Global Fixed Income Balanced
IG Climate Action Portfolio Global Neutral Balanced
IG Climate Action Portfolio Global Equity Balanced
IG Climate Action Portfolio Global Equity

These portfolios were developed with leading global asset managers and will provide clients with a new way to support the world's transition to net zero emissions. The portfolios will invest in both equity and fixed income securities that are believed to reduce the risks or are expected to benefit from the opportunities associated with climate change and the transition to a net zero emission global economy.

IG Wealth Management has announced a partnership with CapIntel where IG advisors will gain access to a powerful realtime digital application that will improve their ability to quickly and more transparently deliver advice and proposals that address unique client needs.

IG WEALTH MANAGEMENT STRATEGY

IG Wealth Management's promise is to inspire financial confidence.

Our strategic mandate is to be Canada's financial partner of choice.

Canadians hold $5.6 trillion in discretionary financial assets with financial institutions at December 31, 2020 based on the most recent report from Investor Economics, and we view these savings as IG Wealth Management's addressable market. 76% of these savings are held by households with over $1 million, which are referred to as high net worth, and another 20% reside with households with between $100,000 and $1 million, which are referred to as mass affluent. These segments tend to have more complicated financial needs, and IG Wealth Management's focus on providing comprehensive financial planning solutions positions it well to compete and grow in these segments.

Our value proposition is to deliver better Gamma, better Beta and better Alpha.

We seek to deliver our value proposition through:

Superior Advice Acquiring a deep knowledge of Canadian investors and using those insights to shape everything we do.
Segmented Client Experiences Creating segmented experiences personalized throughout our clients' lifetimes.
Entrepreneurial Advisors Inspiring our entrepreneurial advisors to constantly deliver an engaging experience and a holistic plan that seeks to deliver superior outcomes.
Powerful Financial Solutions Providing our clients with a comprehensive suite of well-constructed, high-performing and competitively priced solutions.
Business processes that are simple, easy and digitized Re-designing client and advisor interactions to simplify processes, reduce errors, and digitize the experience with an appropriate cost structure.
A high-performing and diverse culture.

DELIVERING GAMMA

the value of all efforts that sit outside of investment portfolio construction. this includes the value that a financial advisor adds to a client relationship, and comes from the creation and follow through of a well-constructed financial plan.

Entrepreneurial Advisors, Superior Advice

Our financial advisors provide value to clients by developing insight into their specific needs, creating and implementing well-constructed financial plans and offering superior advice. IG Wealth Management has a national distribution network of more than 3,000 highly qualified financial advisors (called Consultants) in communities throughout Canada. Our advisory services are most suited to individuals with complicated financial needs.

All IG Wealth Management Consultant practices hold a credentialed financial planning designation or are enrolled in a program. These designations are nationally recognized financial planning qualifications that require an individual to demonstrate financial planning competence through education, standardized examinations, continuing education requirements, and accountability to ethical standards.

The following provides a breakdown of the IG Wealth Management Consultant network into its significant components at September 30, 2021:

1,768 Consultant practices (1,853 at September 30, 2020), which reflect Consultants with more than four years of experience. These practices may include Associates as described below. The level and productivity of Consultant practices is a key measurement of our business as they serve clientele representing approximately 95% of AUM.
413 New Consultants (477 at September 30, 2020), which are those Consultants with less than four years of experience.
1,117 Associates and Regional Directors (1,033 at September 30, 2020). Associates are licensed team members of Consultant practices who provide financial planning services and advice to the clientele served by the team.

• IG Wealth Management had a total Consultant network of 3,298 (3,363 at September 30, 2020).

IG Wealth Management's recruiting standards increase the likelihood of success while also enhancing our culture and brand.

Our training curriculum is reviewed and refreshed each year to offer new Consultants important building blocks to develop client relationships. As Consultants progress, they develop their skills as financial planners and business managers through a selection of focused educational programs.

We also support Consultants and clients through our network of product and planning specialists, who assist in the areas of advanced financial planning, mortgages and banking, insurance, and securities. These specialists help to ensure that we are providing comprehensive financial planning across all elements of a client's financial life. Clients are served by our Mutual Fund Dealers Association of Canada (MFDA) and Investment Industry Regulatory Organization of Canada (IIROC) licensed Consultants or specialists.

Segmented Client Experiences

IG Wealth Management distinguishes itself from our competition by offering comprehensive planning to our clients within the context of long-term relationships. A primary focus is on advising and attracting high net worth and mass affluent clients.

For the distinct needs of the high net worth market, we offer IG Private Wealth Management which includes investment management, retirement, tax and estate planning services.

IG Living Plan™ is our holistic, client-centric approach to financial planning that reflects the evolving needs, goals and aspirations of Canadian families and individuals. The IG Living Plan Portal, which is based on Conquest Planning, provides a single, integrated view of a client's entire financial picture and uses predictive tools to determine planning strategies customized to the individual.

The IG Living Plan leverages the expertise of IG Wealth Management's Consultants who serve approximately one million clients located in communities throughout Canada.

IG Wealth Management has a full range of products that allow us to provide a tailored IG Living Plan that evolves over time. These products include:

Powerful financial solutions that include investment vehicles that match risk and investment performance to each client's needs and requirements.
Insurance products that include a variety of different policy types from the leading insurers in Canada.
Mortgage and banking solutions that are offered as part of a comprehensive financial plan.
Charitable Giving Program, a donor-advised giving program which enables Canadians to make donations and build an

enduring charitable giving legacy with considerably less expense and complexity than setting up and administering their own private foundation.

IG Wealth Management's National Service Centre is focused on supporting more than 200,000 clients with less complex requirements while allowing our Consultant practices to focus on those clients with more complex needs.

IG Wealth Management Consultants are focused on the high net worth and mass affluent segments of the market, which we define as households with over $1 million and between $100 thousand and $1 million, respectively.

Assets under advisement for clients with household assets greater than $1 million (defined as "high net worth") totalled $39.6 billion at September 30, 2021, an increase of 45.4% from one year ago, and represented 35% of total assets under advisement.

Assets under advisement for clients with household assets between $100 thousand and $1 million (defined as "mass affluent") totalled $64.8 billion at September 30, 2021, an increase of 8.5% from one year ago, and represented 57% of total assets under advisement.

Assets under advisement for clients with household assets less than $100 thousand (defined as "mass market") totalled $9.6 billion at September 30, 2021, a decrease of 9.2% from one year ago, and represented 8% of total assets under advisement.

Business Processes

IG Wealth Management continually seeks to enhance our systems and business processes so our Consultants can serve clients more effectively. We look to enhance client and advisor interactions on an ongoing basis to simplify processes, reduce errors, and digitize the experience with an appropriate cost structure.

The IG Wealth Management Advisor Portal is a customer relationship management platform based on Salesforce launched in 2020. It enables our Consultants to manage client relationships, improve their efficiency through digitized workflows, and access data-driven reporting to help better run their practices.

IG Wealth Management's dealer platform provides increased automation and supports both MFDA and IIROC licensed advisors as well as new products on our investment dealer platform designed to support the high net worth segment of our client base.

A High-Performing and Diverse Culture

It is essential that we offer competitive compensation and benefits to attract and retain outstanding people. Our training and development approach, along with our use of feedback from periodic employee and advisor surveys, positions our employees and advisors to better serve our clients.

DELIVERING BETA AND ALPHA

beta – the value created by well-constructed investment portfolios – achieving expected investment returns for the lowest possible risk.

alpha – the value of active management – achieving returns superior to passive benchmarks with a similar composition and risk profile.

IG Wealth Management strives to achieve expected investment returns for the lowest possible risk through well-constructed investment portfolios (Beta), and to create value for clients through active management (Alpha). To do this, we select and engage high-quality sub-advisors so our clients have access to a diverse range of investment products and solutions. Each asset manager is selected through a proven and rigorous process. We oversee all sub-advisors to ensure that their activities are consistent with their investment philosophies and with the investment objectives and strategies of the products they advise.

IG Wealth Management's relationships include Mackenzie Investments and other world class investment firms such as BlackRock, T. Rowe Price, PIMCO, China AMC, Putnam and JP Morgan Asset Management.

Powerful Financial Solutions

We provide clients with an extensive suite of well-constructed and competitively priced financial solutions. We regularly enhance the scope and diversity of our investment offering with new funds and product changes that enable clients to achieve their goals.

Our solutions include:

A deep and broad selection of mutual funds, diversified by manager, asset category, investment style, geography, market capitalization and sector.
Managed portfolios that rebalance investments to ensure that a chosen mix of risk and return is maintained. These solutions include IG Core Portfolios, IG Managed Payout Portfolios, Investors Portfolios, and IG Managed Risk Portfolios.
IG Advisory Account (IGAA) and unbundled fee structures The IGAA is a fee-based account that improves client experience by offering the ability to simplify and consolidate selected investments into a single account while providing all of our clients with a transparent advisory fee. IGAA accounts increase fee transparency and can hold most securities and investment products available in the marketplace to individual investors.
iProfile™ Portfolios – iProfile Portfolios are a suite of four managed solutions that provide comprehensive diversification and are designed to suit personal preferences for risk tolerance and investment goals. These portfolios provide exposure similar to the investments of the iProfile Private

Pools. These portfolios are offered in both the IGAA and iProfile account structures.

• iProfile™ Private Portfolios – iProfile Private Portfolios are model portfolios comprised of iProfile Private Pools, available for households with investments held at IG Wealth Management in excess of $250,000. iProfile Private Portfolios have been designed to deliver strong risk-adjusted returns by diversifying across asset classes, management styles and geographic regions. Recent enhancements include the launch of new discretionary model portfolios and six new iProfile Private Pools to support the new models: three iProfile Active Allocation Private Pools, iProfile Alternatives Private Pool with mandates including long-short, global macro and global equity hedge strategies, iProfile ETF Private Pool providing exposure through exchange traded funds (ETF) and iProfile Low Volatility Private Pool with Canadian, U.S., International and Emerging Market geographic coverage.

In addition, we have incorporated investments in private assets with the introduction of a Private Credit Mandate in the iProfile Fixed Income Private Pool. The pool has committed to three Northleaf Capital Partners' private credit investments that focus on loans to middle market companies in North America and Europe, as well as to Sagard and PIMCO.

Segregated funds that provide for long-term investment growth potential combined with risk management, benefit guarantee features and estate planning efficiencies.
Separately managed accounts (discretionary dealermanaged accounts).

In support of the global goal to reach net zero by 2050, IG Wealth Management is a founding Signatory to Responsible Investment Association's Canadian Investor Statement on Climate Change.

A growing portion of IG Wealth Management's client assets are in unbundled fee structures. We continue to migrate our clients to unbundled fee products, a significant change for IG Wealth Management and the Canadian mutual fund industry overall. Unbundled fee products separate the advisory fee that is charged directly to a client's account from the fees charged to the underlying investment funds. This separation provides clients with greater transparency into the fees they pay, and allows IG Wealth Management to differentiate pricing by client segment to ensure that it is competitive.

We have discontinued offering bundled purchase options for substantially all investment products.

IG Wealth Management monitors its investment performance by comparing to certain benchmarks. Morningstar† fund ranking service is one of the rankings monitored when determining fund performance.

At September 30, 2021, 80.2% of IG Wealth Management mutual fund assets had a rating of three stars or better from Morningstar† fund ranking service and 46.8% had a rating of four or five stars. This compared to the Morningstar† universe of 85.8% for three stars or better and 53.0% for four and five star funds at September 30, 2021. Morningstar Ratings† are an objective, quantitative measure of a fund's three, five and ten year risk-adjusted performance relative to comparable funds.

WEALTH MANAGEMENT ASSETS UNDER MANAGEMENT AND ADVISEMENT

Assets under management and advisement are key performance indicators for the Wealth Management segment.

Wealth Management's assets under advisement were at a record high level of $145.5 billion at September 30, 2021, an increase of 16.4% from September 30, 2020. The level of assets under advisement are influenced by three factors: client inflows, client outflows and investment returns.

Wealth Management's assets under management were also at a record high level of $112.1 billion, an increase of 14.3% from September 30, 2020. The level of assets under management are influenced by sales, redemptions and investment returns.

Changes in Wealth Management assets under advisement and assets under management for the periods under review are reflected in Tables 8 and 9.

IG WEALTH MANAGEMENT ASSETS UNDER MANAGEMENT AND ADVISEMENT

Assets under advisement (AUA) are a key performance indicator for IG Wealth Management. AUA represents savings and investment products, including Assets Under Management where we provide investment management services, that are held within our clients' accounts. Advisory fees are charged based on an annual percentage of substantially all AUA, through the IG Advisory Account fee, and represent the majority of the fees earned from our clients. Our Consultants' compensation is also based on AUA and net assets contributed by our clients.

IG Wealth Management's assets under advisement and mutual fund assets under management were at quarter-end high record levels at September 30, 2021. Assets under advisement were $114.0 billion at September 30, 2021, an increase of 16.8% from September 30, 2020, and mutual fund assets under management were $106.6 billion, an increase of 14.7%.

Changes in IG Wealth Management assets under advisement and management for the periods under review are reflected in Tables 10 and 11.

For the quarter ended September 30, 2021, gross client inflows of IG Wealth Management assets under advisement were $3.1 billion, an increase of 47.3% from $2.1 billion in

TABLE 8: CHANGE IN ASSETS UNDER ADVISEMENT – WEALTH MANAGEMENT

					% CHANGE
THREE MONTHS ENDED($ millions)	2021SEP. 30	2021JUN. 30	2020SEP. 30	2021JUN. 30	2020SEP. 30
Gross client inflowsGross client outflows	$4,2783,003	$4,3413,554	$3,0243,179	(1.5) %(15.5)	41.5 %(5.5)
Net flowsInvestment returns	1,275842	7875,682	(155)4,703	62.0(85.2)	N/M(82.1)
Net change in assetsBeginning assets	2,117143,345	6,469136,876	4,548120,467	(67.3)4.7	(53.5)19.0
Ending assets under advisementIG Wealth ManagementInvestment Planning Counsel	$ 145,462113,95831,515	$ 143,345112,18531,171	$ 125,01597,53827,484	1.5 %1.61.1	16.4 %16.814.7
Average assets under advisementIG Wealth ManagementInvestment Planning Counsel	$ 146,531114,82031,721	$ 140,158109,66730,501	$ 124,32797,04527,288	4.5 %4.74.0	17.9 %18.316.2
NINE MONTHS ENDED($ millions)			2021SEP. 30	2020SEP. 30	% CHANGE
Gross client inflowsGross client outflows			$13,85410,785	$10,3129,876	34.3 %9.2
Net flowsInvestment returns			3,0699,810	436(241)	N/MN/M
Net change in assetsBeginning assets			12,879132,583	195124,820	N/M6.2
Ending assets under advisementIG Wealth ManagementInvestment Planning Counsel			$ 145,462113,95831,515	$ 125,01597,53827,484	16.4 %16.814.7
Average assets under advisementIG Wealth ManagementInvestment Planning Counsel			$ 140,563110,02730,546	$ 121,09994,38426,721	16.1 %16.614.3

the comparable period in 2020. Net client inflows were at an all-time third quarter level high of $1.0 billion, compared to net client outflows of $9 million in the comparable period in 2020. During the third quarter, investment returns resulted in an increase of $759 million in assets under advisement compared to an increase of $3.7 billion in the third quarter of 2020.

For the nine months ended September 30, 2021, gross client inflows of IG Wealth Management assets under advisement were $10.0 billion, the highest year to date result in the history of the company, and represented an increase of 42.0% from $7.0 billion in the comparable period in 2020. Net client inflows were at an all-time high level of $2.7 billion in the nine month period, an improvement of $2.4 billion from net client inflows of $310 million in the comparable period in 2020. During 2021, investment returns resulted in an increase of $8.0 billion in assets under advisement compared to an increase of $128 million in 2020.

Changes in mutual fund assets under management for the periods under review are reflected in Table 11.

In addition to net sales of $576 million in the third quarter of 2021 to IG fund products, there were net sales to Mackenzie fund products of $65 million for a total of $641 million in net sales to IGM products. For the nine month period, net sales to IG fund products were $1.4 billion and net sales to Mackenzie fund products were $0.4 billion for a total of $1.8 billion in net sales to IGM products.

At September 30, 2021, $71.0 billion, or 67% of IG Wealth Management's mutual fund assets under management, were in products with unbundled fee structures, up 62.7% from $43.6 billion at September 30, 2020 which represented 47% of assets under management.

CHANGE IN ASSETS UNDER MANAGEMENT AND ADVISEMENT – 2021 VS. 2020

IG Wealth Management's assets under advisement were $114.0 billion at September 30, 2021, an increase of 16.8% from $97.5 billion at September 30, 2020. IG Wealth Management's mutual fund assets under management were $106.6 billion at

TABLE 9: CHANGE IN ASSETS UNDER MANAGEMENT – WEALTH MANAGEMENT

					% CHANGE
THREE MONTHS ENDED($ millions)	2021SEP. 30	2021JUN. 30	2020SEP. 30	2021JUN. 30	2020SEP. 30
SalesRedemptions	$2,9292,343	$2,9762,757	$2,0462,382	(1.6) %(15.0)	43.2 %(1.6)
Net sales (redemptions)Investment returns	586765	2194,431	(336)3,775	167.6(82.7)	N/M(79.7)
Net change in assetsBeginning assets	1,351110,703	4,650106,053	3,43994,574	(70.9)4.4	(60.7)17.1
Ending assets under managementIG Wealth ManagementInvestment Planning Counsel	$ 112,054106,5515,503	$ 110,703105,2185,485	$98,01392,8745,139	1.2 %1.30.3	14.3 %14.77.1
Daily average mutual fund assetsIG Wealth ManagementInvestment Planning Counsel	$ 113,145107,5575,588	$ 108,470103,0685,402	$97,68792,5435,144	4.3 %4.43.4	15.8 %16.28.6
NINE MONTHS ENDED($ millions)			2021SEP. 30	2020SEP. 30	% CHANGE
SalesRedemptions			$9,4868,289	$6,8157,475	39.2 %10.9
Net sales (redemptions)Investment returns			1,1977,824	(660)121	N/MN/M
Net change in assetsBeginning assets			9,021103,033	(539)98,552	N/M4.5
Ending assets under managementIG Wealth ManagementInvestment Planning Counsel			$ 112,054106,5515,503	$98,01392,8745,139	14.3 %14.77.1
Daily average mutual fund assetsIG Wealth ManagementInvestment Planning Counsel			$ 108,870103,4255,445	$95,25790,1555,102	14.3 %14.76.7

September 30, 2021, representing an increase of 14.7% from $92.9 billion at September 30, 2020. Average daily mutual fund assets were $107.6 billion in the third quarter of 2021, up 16.2% from $92.5 billion in the third quarter of 2020. Average daily mutual fund assets were $103.4 billion for the nine months ended September 30, 2021, up 14.7% from $90.2 billion in 2020.

For the quarter ended September 30, 2021, sales of IG Wealth Management mutual funds through its Consultant network were $2.7 billion, an increase of 40.6% from the comparable period in 2020. Mutual fund redemptions totalled $2.2 billion, a decrease of 1.9% from 2020. IG Wealth Management mutual fund net sales for the third quarter of 2021 were $576 million compared with net redemptions of $259 million in 2020. During the third quarter, investment returns resulted in an increase of $757 million in mutual fund assets compared to an increase of $3.6 billion in the third quarter of 2020.

IG Wealth Management's annualized quarterly redemption rate for long-term funds was 7.7% in the third quarter of 2021, compared to 9.0% in the third quarter of 2020. IG Wealth

Management's twelve month trailing redemption rate for long-term funds was 9.6% at September 30, 2021, compared to 9.8% at September 30, 2020, and remains well below the corresponding average redemption rate for all other members of the Investment Funds Institute of Canada (IFIC) of approximately 13.6% at September 30, 2021. IG Wealth Management's redemption rate has been very stable compared to the overall mutual fund industry, reflecting our focus on financial planning.

For the nine months ended September 30, 2021, sales of IG Wealth Management mutual funds through its Consultant network were $8.9 billion, an increase of 38.5% from 2020. Mutual fund redemptions totalled $7.5 billion, an increase of 9.8% from 2020. Net sales of IG Wealth Management mutual funds were $1.4 billion compared with net redemptions of $442 million in 2020. During 2021, investment returns resulted in an increase of $7.5 billion in mutual fund assets compared to an increase of $155 million in 2020.

TABLE 10: CHANGE IN ASSETS UNDER ADVISEMENT – IG WEALTH MANAGEMENT

				% CHANGE
THREE MONTHS ENDED($ millions)	2021SEP. 30	2021JUN. 30	2020SEP. 30	2021JUN. 30	2020SEP. 30
Gross client inflowsGross client outflows	$3,1412,127	$3,2202,550	$2,1322,141	(2.5) %(16.6)	47.3 %(0.7)
Net flowsInvestment returns	1,014759	6704,520	(9)3,711	51.3(83.2)	N/M(79.5)
Net change in assetsBeginning assets	1,773112,185	5,190106,995	3,70293,836	(65.8)4.9	(52.1)19.6
Ending assets	$ 113,958	$ 112,185	$97,538	1.6 %	16.8 %
Average assets under advisement	$ 114,820	$ 109,667	$97,045	4.7 %	18.3 %

Average assets under advisement	$ 110,027	$94,384	16.6 %
Ending assets	$ 113,958	$97,538	16.8 %
Net change in assetsBeginning assets	10,685103,273	43897,100	N/M6.4
Net flowsInvestment returns	2,6997,986	310128	N/MN/M
Gross client inflowsGross client outflows	$9,9977,298	$7,0396,729	42.0 %8.5
NINE MONTHS ENDED($ millions)	2021SEP. 30	2020SEP. 30	% CHANGE

TABLE 11: CHANGE IN ASSETS UNDER MANAGEMENT – IG WEALTH MANAGEMENT

					% CHANGE
THREE MONTHS ENDED($ millions)	2021SEP. 30	2021JUN. 30	2020SEP. 30	2021JUN. 30	2020SEP. 30
Sales	$2,741	$2,794	$1,949	(1.9) %	40.6 %
Redemptions	2,165	2,515	2,208	(13.9)	(1.9)
Net sales (redemptions)	576	279	(259)	106.5	N/M
Investment returns	757	4,194	3,600	(82.0)	(79.0)
Net change in assets	1,333	4,473	3,341	(70.2)	(60.1)
Beginning assets	105,218	100,745	89,533	4.4	17.5
Ending assets	$ 106,551	$ 105,218	$92,874	1.3 %	14.7 %
Daily average assets under management	$ 107,557	$ 103,068	$92,543	4.4 %	16.2 %
Managed asset net sales
Investment fund net sales	$576	$279	$(259)	106.5 %	N/M %
Mackenzie net sales through Wealth Management	65	118	39	(44.9)	66.7
	$641	$397	$(220)	61.5 %	N/M %
NINE MONTHS ENDED($ millions)			2021SEP. 30	2020SEP. 30	% CHANGE
Sales			$8,886	$6,415	38.5 %
Redemptions			7,530	6,857	9.8
Net sales (redemptions)			1,356	(442)	N/M
Investment returns			7,482	155	N/M
Net change in assets			8,838	(287)	N/M
Beginning assets			97,713	93,161	4.9
Ending assets			$ 106,551	$92,874	14.7 %
Daily average assets under management			$ 103,425	$90,155	14.7 %
Managed asset net sales
Investment fund net sales			$1,356	$(442)	N/M %
Mackenzie net sales through Wealth Management			395	81	N/M
			$1,751	$(361)	N/M %

CHANGE IN ASSETS UNDER MANAGEMENT AND ADVISEMENT – Q3 2021 VS. Q2 2021

IG Wealth Management's assets under advisement were $114.0 billion at September 30, 2021, an increase of 1.6% from $112.2 billion at June 30, 2021. IG Wealth Management's mutual fund assets under management were $106.6 billion at September 30, 2021, an increase of 1.3% from $105.2 billion at June 30, 2021. Average daily mutual fund assets were $107.6 billion in the third quarter of 2021 compared to $103.1 billion in the second quarter of 2021, an increase of 4.4%.

For the quarter ended September 30, 2021, sales of IG Wealth Management mutual funds through its Consultant network were $2.7 billion, a decrease of 1.9% from the second quarter of 2021. Mutual fund redemptions, which totalled $2.2 billion for the third quarter, decreased 13.9% from the previous quarter and the annualized quarterly redemption rate was 7.7% in the third quarter compared to 9.4% in the second quarter of 2021. IG Wealth Management mutual fund net sales were $576 million for the current quarter compared to net sales of $279 million in the previous quarter.

IG WEALTH MANAGEMENT OTHER PRODUCTS AND SERVICES

SEGREGATED FUNDS

IG Wealth Management offers segregated funds which include the IG Series of Guaranteed Investment Funds (GIFs). Select GIF policies allow for a Lifetime Income Benefit (LIB) option to provide guaranteed retirement income for life. The investment components of these segregated funds are managed by IG Wealth Management. At September 30, 2021, total segregated fund assets were $1.5 billion, unchanged from September 30, 2020.

INSURANCE

IG Wealth Management continues to be a leader in the distribution of life insurance in Canada. Through its arrangements with leading insurance companies, IG Wealth Management offers a broad range of term, universal life, whole life, disability, critical illness, long-term care, personal health care coverage and group insurance.

The average number of policies sold by each insurance-licensed Consultant was 2.1 for the quarter ended September 30, 2021, unchanged from 2020. For the nine months ended September 30, 2021, the average number of policies sold by each insurance-licensed Consultant was 7.2 compared to 6.4 in 2020. Distribution of insurance products is enhanced through IG Wealth Management's Insurance Planning Specialists, located throughout Canada, who assist Consultants with advanced estate planning solutions for high net worth clients.

SECURITIES OPERATIONS

Investors Group Securities Inc. is an investment dealer registered in all Canadian provinces and territories providing clients with securities services to complement their financial and investment planning. IG Wealth Management Consultants can refer clients to one of our Wealth Planning Specialists available through Investors Group Securities Inc.

MORTGAGE AND BANKING OPERATIONS

IG Wealth Management Mortgage Planning Specialists are located throughout each province in Canada, and work with our clients and their Consultants to develop mortgage and other lending strategies that meet the individual needs and goals of each client as part of their comprehensive financial plan.

Mortgages are offered to clients by IG Wealth Management, a national mortgage lender, and through IG Wealth Management's Solutions Banking† , provided by National Bank of Canada under a long-term distribution agreement. An All-in-One product, a comprehensive cash management solution that integrates the features of a mortgage, term loan, revolving line of credit and deposit account, is also offered through Solutions Banking† .

Mortgage fundings offered through IG Wealth Management and through Solutions Banking† for the three and nine months ended September 30, 2021 were $258 million and $862 million compared to $318 million and $823 million in 2020, a decrease of 19.0% and an increase of 4.8%, respectively. At September 30, 2021, mortgages offered through both sources totalled $8.6 billion, compared to $9.8 billion at September 30, 2020, a decrease of 12.1%.

Available credit associated with Solutions Banking† All-in-One accounts originated for the three and nine month periods ended September 30, 2021 were $309 million and $1.1 billion, respectively, compared to $285 million and $745 million in 2020. At September 30, 2021, the balance outstanding of Solutions Banking† All-in-One products was $3.8 billion, compared to $3.2 billion one year ago, and represented approximately 52% of total available credit associated with these accounts.

Other products and services offered through IG Wealth Management's Solutions Banking† include investment loans, lines of credit, personal loans, creditor insurance, deposit accounts, and credit cards. Through Solutions Banking† , clients have access to a network of banking machines, as well as a private labelled client website and client service centre. The Solutions Banking† offering supports IG Wealth Management's approach to delivering total financial solutions for our clients through a broad financial planning platform. Total outstanding lending products of IG Wealth Management clients in the Solutions Banking† offering, including Solutions Banking† mortgages totalled $5.6 billion at September 30, 2021, compared to $4.9 billion at September 30, 2020.

Review of Segment Operating Results

The Wealth Management segment's adjusted net earnings are presented in Table 12 and include the operations of IG Wealth Management and Investment Planning Counsel.

IG WEALTH MANAGEMENT

IG Wealth Management adjusted net earnings are presented in Table 13. Adjusted net earnings for the third quarter of 2021 were $140.9 million, an increase of 20.1% from the third quarter in 2020 and an increase of 8.1% from the prior quarter. Adjusted net earnings for the nine months ended September 30, 2021 were $381.8 million, an increase of 20.7% from 2020.

Adjusted earnings before interest and taxes for the third quarter of 2021 were $214.8 million, an increase of 18.2% from the third quarter in 2020 and an increase of 7.4% from the prior quarter. Adjusted earnings before interest and taxes for the nine months ended September 30, 2021 were $587.8 million, an increase of 18.2% from 2020.

2021 VS. 2020

FEE INCOME

Advisory fees include fees for providing financial advice to clients including fees related to the distribution of products, and depend largely on the level and composition of assets under advisement. Advisory fees were $296.9 million in the third quarter of 2021, an increase of $37.8 million or 14.6% from $259.1 million in 2020. For the nine months ended September 30, 2021, advisory fees were $853.2 million, an increase of $99.6 million or 13.2% from $753.6 million in 2020.

The increase in advisory fees in the three and nine month periods ending September 30, 2021 was primarily due to the increase in average assets under advisement of 18.3% and 16.6%, respectively, as shown in Table 10. In both periods, the increase in average assets was offset in part by a decrease in the advisory fee rate. The average advisory fee rate for the third quarter was 102.6 basis points of average assets under advisement compared to 106.2 basis points in 2020, and for the nine month period, the rate was 103.7 basis points compared to 106.6 basis points in 2020. The decrease in rates reflect changes in product and client mix as we have more high net worth clients who are eligible for lower rates.

Product and program fees depend largely on the level and composition of mutual fund assets under management. Product and program fees totalled $233.5 million in the current quarter, up 16.2% from $201.0 million a year ago. Product and program fees were $665.4 million for the nine month period ended September 30, 2021 compared to $584.8 million in 2020, an increase of 13.8%.

The increase in product and program fees in both the three and nine month periods of 2021 was primarily due to the increase in average assets under management of 16.2% and 14.7%, respectively, as shown in Table 11. The average product and program fee rate for the third quarter was 86.1 basis points of average assets under management compared to 86.2 basis points in 2020, and the rate for the nine month period was 86.0 basis points of average assets under management compared to 86.5 basis points in 2020, reflecting changes in product mix and price in both periods.

Other financial planning revenues are primarily earned from:

Mortgage banking operations
Distribution of insurance products through I.G. Insurance Services Inc.
Securities trading services provided through Investors Group Securities Inc.
Banking services provided through Solutions Banking†

Other financial planning revenues of $39.8 million for the third quarter of 2021 increased by $2.6 million from $37.2 million in 2020. For the nine month period, other financial planning revenues of $121.7 million increased by $17.5 million from $104.2 million in 2020. The increase in both the quarter and nine month periods was primarily due to higher earnings from the mortgage banking operations and higher distribution fee income from insurance products.

A summary of mortgage banking operations for the three and nine month periods under review is presented in Table 14.

NET INVESTMENT INCOME AND OTHER

Net investment income and other is primarily related to investment income earned on our cash and cash equivalents and securities and other income not related to our core business. It also includes a charge from the Strategic Investments and Other segment for the use of unallocated capital.

EXPENSES

IG Wealth Management incurs advisory and business development expenses that include compensation paid to our Consultants. The majority of these costs vary directly with asset or sales levels. Also included are other distribution and business development activities which do not vary directly with asset or sales levels, such as direct marketing and advertising, financial planning specialist support and other costs incurred to support our adviser networks. These expenses tend to be discretionary or vary based upon the number of consultants or clients.

Asset-based compensation fluctuates with the value of assets under advisement. Asset-based compensation increased by

TABLE 12: OPERATING RESULTS – WEALTH MANAGEMENT

					% CHANGE
THREE MONTHS ENDED($ millions)	2021SEP. 30	2021JUN. 30	2020SEP. 30	2021JUN. 30	2020SEP. 30
Revenues
Wealth Management
Advisory fees	$364.5	$349.1	$315.3	4.4 %	15.6 %
Product and program fees	248.4	235.1	214.9	5.7	15.6
	612.9	584.2	530.2	4.9	15.6
Redemption feesOther financial planning revenues	1.845.3	2.745.5	3.741.8	(33.3)(0.4)	(51.4)8.4

Total Wealth ManagementNet investment income and other	660.0(0.2)	632.40.6	575.70.7	4.4N/M	14.6N/M

	659.8	633.0	576.4	4.2	14.5
Expenses
Advisory and business developmentAsset-based compensation	191.6	180.6	158.9	6.1	20.6
Sales-based compensation	14.7	13.4	9.5	9.7	54.7
Other
Other product commissions	16.5	17.5	15.7	(5.7)	5.1
Business development	52.0	54.5	52.4	(4.6)	(0.8)
	68.5	72.0	68.1	(4.9)	0.6
Total advisory and business development	274.8	266.0	236.5	3.3	16.2
Operations and support	113.2	115.0	111.2	(1.6)	1.8
Sub-advisory	48.7	46.5	41.7	4.7	16.8
	436.7	427.5	389.4	2.2	12.1
Adjusted earnings before interest and taxes	223.1	205.5	187.0	8.6	19.3
Interest expense	22.8	22.5	22.7	1.3	0.4
Adjusted earnings before taxes	200.3	183.0	164.3	9.5	21.9
Income taxes	53.5	48.7	43.3	9.9	23.6
Adjusted net earnings	$146.8	$134.3	$121.0	9.3 %	21.3 %
NINE MONTHS ENDED($ millions)			2021SEP. 30	2020SEP. 30	% CHANGE
Revenues
Wealth Management
Advisory fees			$ 1,046.6	$920.2	13.7 %
Product and program fees			708.3	626.5	13.1
			1,754.9	1,546.7	13.5
Redemption fees			8.3	12.8	(35.2)
Other financial planning revenues			137.2	118.0	16.3
Total Wealth Management			1,900.4	1,677.5	13.3
Net investment income and other			2.2	1.3	69.2
			1,902.6	1,678.8	13.3
Expenses
Advisory and business development
Asset-based compensation			544.9	461.7	18.0
Sales-based compensation			40.2	25.8	55.8
Other
Other product commissionsBusiness development			54.2165.2	49.6168.1	9.3(1.7)

			219.4	217.7	0.8
Total advisory and business development			804.5	705.2	14.1
Operations and support			350.2	340.4	2.9
Sub-advisory			140.2	120.5	16.3
			1,294.9	1,166.1	11.0
Adjusted earnings before interest and taxes			607.7	512.7	18.5
Interest expense			67.6	67.2	0.6
Adjusted earnings before taxes			540.1	445.5	21.2
Income taxes			144.2	118.4	21.8
Adjusted net earnings			$395.9	$327.1	21.0 %

TABLE 13: OPERATING RESULTS – IG WEALTH MANAGEMENT

					% CHANGE
THREE MONTHS ENDED($ millions)	2021SEP. 30	2021JUN. 30	2020SEP. 30	2021JUN. 30	2020SEP. 30
Revenues
Wealth Management
Advisory fees	$296.9	$285.0	$259.1	4.2 %	14.6 %
Product and program fees	233.5	221.0	201.0	5.7	16.2
	530.4	506.0	460.1	4.8	15.3
Redemption feesOther financial planning revenues	1.839.8	2.740.4	3.737.2	(33.3)(1.5)	(51.4)7.0

Total Wealth ManagementNet investment income and other	572.0(0.5)	549.10.4	501.00.6	4.2N/M	14.2N/M
	571.5	549.5	501.6	4.0	13.9

ExpensesAdvisory and business development
Asset-based compensation	138.4	131.2	113.1	5.5	22.4
Sales-based compensation	14.7	13.4	9.5	9.7	54.7
Other
Other product commissions	13.3	14.4	12.9	(7.6)	3.1
Business development	43.8	46.1	46.0	(5.0)	(4.8)
	57.1	60.5	58.9	(5.6)	(3.1)
Total advisory and business development	210.2	205.1	181.5	2.5	15.8
Operations and support	101.8	101.6	100.0	0.2	1.8
Sub-advisory	44.7	42.8	38.4	4.4	16.4
	356.7	349.5	319.9	2.1	11.5
Adjusted earnings before interest and taxes	214.8	200.0	181.7	7.4	18.2
Interest expense	22.6	22.4	22.6	0.9	–
Adjusted earnings before taxes	192.2	177.6	159.1	8.2	20.8
Income taxes	51.3	47.2	41.8	8.7	22.7
Adjusted net earnings	$140.9	$130.4	$117.3	8.1 %	20.1 %
NINE MONTHS ENDED($ millions)			2021SEP. 30	2020SEP. 30	% CHANGE
Revenues
Wealth Management
Advisory fees			$853.2	$753.6	13.2 %
Product and program fees			665.4	584.8	13.8
			1,518.6	1,338.4	13.5
Redemption feesOther financial planning revenues			8.2121.7	12.7104.2	(35.4)16.8

Total Wealth Management			1,648.5	1,455.3	13.3
Net investment income and other			1.3	0.5	160.0
			1,649.8	1,455.8	13.3
Expenses
Advisory and business development
Asset-based compensationSales-based compensation			394.040.2	328.725.8	19.955.8
Other
Other product commissions			44.8	41.3	8.5
Business development			140.8	146.8	(4.1)
			185.6	188.1	(1.3)
Total advisory and business development			619.8	542.6	14.2
Operations and support			313.3	305.3	2.6
Sub-advisory			128.9	110.5	16.7
			1,062.0	958.4	10.8
Adjusted earnings before interest and taxes			587.8	497.4	18.2
Interest expense			67.1	66.8	0.4
Adjusted earnings before taxes			520.7	430.6	20.9
Income taxes			138.9	114.2	21.6
Adjusted net earnings			$381.8	$316.4	20.7 %

TABLE 14: MORTGAGE BANKING OPERATIONS – IG WEALTH MANAGEMENT

					% CHANGE
THREE MONTHS ENDED	2021	2021	2020	2021	2020
($ millions)	SEP. 30	JUN. 30	SEP. 30	JUN. 30	SEP. 30
Total mortgage banking income
Net interest income on securitized loans
Interest income	$35.6	$37.7	$44.7	(5.6) %	(20.4) %
Interest expense	27.3	27.4	35.5	(0.4)	(23.1)
Net interest income	8.3	10.3	9.2	(19.4)	(9.8)
Gains on sales(1)	1.8	(0.7)	3.2	N/M	(43.8)
Fair value adjustments	1.3	1.0	–	30.0	N/M
Other	0.2	1.3	1.8	(84.6)	(88.9)
	$11.6	$11.9	$14.2	(2.5) %	(18.3) %
Average mortgages serviced
Securitizations	$5,338	$5,479	$6,444	(2.6) %	(17.2) %
Other	2,454	2,566	2,736	(4.4)	(10.3)
	$7,792	$8,045	$9,180	(3.1) %	(15.1) %
Mortgage sales to:(2)
Securitizations	$333	$508	$606	(34.4) %	(45.0) %
Other(1)	222	240	167	(7.5)	32.9
	$555	$748	$773	(25.8) %	(28.2) %

NINE MONTHS ENDED			2021	2020
($ millions)			SEP. 30	SEP. 30	% CHANGE
Total mortgage banking income
Net interest income on securitized loans
Interest income			$113.9	$137.0	(16.9) %
Interest expense			85.9	115.0	(25.3)
Net interest income			28.0	22.0	27.3
Gains on sales(1)			3.4	6.1	(44.3)
Fair value adjustments			1.4	(4.1)	N/M
Other			2.8	6.7	(58.2)
			$35.6	$30.7	16.0 %
Average mortgages serviced
Securitizations			$5,538	$6,578	(15.8) %
Other			2,534	2,774	(8.7)
			$8,072	$9,352	(13.7) %
Mortgage sales to:(2)
Securitizations			$1,208	$1,171	3.2 %
Other(1)			696	513	35.7
			$1,904	$1,684	13.1 %

(1) Represents sales to institutional investors through private placements, to IG Mackenzie Mortgage and Short Term Income Fund, and to IG Mackenzie Canadian Corporate Bond Fund as well as gains realized on those sales.

(2) Represents principal amounts sold.

$25.3 million and $65.3 million for the three and nine month periods ended September 30, 2021 to $138.4 million and $394.0 million, respectively, compared to 2020. The increase was primarily due to increased average assets under advisement and Consultant performance.

IG Wealth Management sales-based compensation is based upon the level of new assets contributed to client accounts at IG Wealth Management (subject to eligibility requirements).

All sales-based compensation payments are capitalized and amortized as they reflect incremental costs to obtain a client contract.

Sales-based compensation was $14.7 million for the third quarter of 2021, an increase of $5.2 million from $9.5 million in 2020. For the nine month period, sales-based compensation expense was $40.2 million, an increase of $14.4 million from $25.8 million in 2020. The increase in expense is due

to additional sales-based commission being capitalized and amortized throughout 2020 and 2021.

Other advisory and business development expenses were $57.1 million in the third quarter of 2021, compared to $58.9 million in 2020. Other advisory and business development expenses were $185.6 million in the nine months ended September 30, 2021, compared to $188.1 million in 2020.

Operations and support includes costs that support our wealth management and other general and administrative functions such as product management, technology and operations, as well as other functional business units and corporate expenses. Operations and support expenses were $101.8 million for the third quarter of 2021 compared to $100.0 million in 2020, an increase of $1.8 million or 1.8%. For the nine month period, operations and support expenses were $313.3 million in 2021 compared to $305.3 million in 2020, an increase of $8.0 million or 2.6%.

Sub-advisory expenses were $44.7 million for the third quarter of 2021 compared to $38.4 million in 2020, an increase of $6.3 million or 16.4%. For the nine month period, subadvisory expenses were $128.9 million in 2021 compared to $110.5 million in 2020, an increase of $18.4 million or 16.7%. The increase in both periods is primarily due to higher assets under management.

INTEREST EXPENSE

Interest expense, which includes allocated interest expense on long-term debt and interest expense on leases, totalled $22.6 million in the third quarter of 2021, unchanged from 2020. For the nine month period, interest expense totalled $67.1 million compared to $66.8 million in 2020. Long-term debt interest expense is calculated based on a long-term debt allocation of $1.7 billion to IG Wealth Management.

Q3 2021 VS. Q2 2021

FEE INCOME

Advisory fee income increased by $11.9 million or 4.2% to $296.9 million in the third quarter of 2021 compared with the second quarter of 2021. The increase in advisory fees in the third quarter was primarily due to the increase in average assets under advisement of 4.7% for the quarter, as shown in Table 10.

The average advisory fee rate for the third quarter was 102.6 basis points of average assets under management, a decrease from 104.2 basis points in the second quarter primarily due to changes in client mix.

Product and program fees were $233.5 million in the third quarter of 2021, an increase of $12.5 million from $221.0 million in the second quarter of 2021. The increase in product and program fees was due to higher assets under management. The average product and program fee rate was 86.1 basis points in the current quarter, compared to 86.0 basis points in the second quarter.

Other financial planning revenues of $39.8 million in the third quarter of 2021 decreased by $0.6 million from $40.4 million in the second quarter.

NET INVESTMENT INCOME AND OTHER

Net investment income and other was ($0.5) million in the third quarter of 2021 compared to $0.4 million in the previous quarter, a decrease of $0.9 million.

EXPENSES

Advisory and business development expenses in the current quarter were $210.2 million compared with $205.1 million in the previous quarter primarily due to higher assets under advisement and Consultant performance.

Operations and support expenses were $101.8 million for the third quarter of 2021 compared to $101.6 million in the previous quarter, an increase of $0.2 million or 0.2%.

INVESTMENT PLANNING COUNSEL

2021 VS. 2020

Adjusted net earnings related to Investment Planning Counsel were $2.2 million and $3.4 million higher in the three and nine month periods ended September 30, 2021, than the comparable periods in 2020.

Q3 2021 VS. Q2 2021

Adjusted net earnings related to Investment Planning Counsel were $2.0 million higher in the third quarter of 2021 compared to the prior quarter.

Asset Management

The Asset Management segment includes Mackenzie Investments (Mackenzie).

Asset Management revenue reflects:

Net asset management fees third party includes fees received from our mutual funds and fees from third parties for investment management services. Compensation paid to dealers offsets the fees earned.
Asset management fees Wealth Management includes fees received from the Wealth Management segment. Wealth Management is considered a client of the Asset Management

segment and transfer pricing is based on values for similar sized asset management mandates.

Assets managed for IG Wealth Management are included in the Asset Management segment's assets under management.

Effective January 1, 2021, each segment now reflects their results to adjusted net earnings. Debt and interest expense is allocated to a segment based on management's assessment of: i) capacity to service the debt, and ii) where the debt is being serviced. Income taxes are also reported in each segment.

Review of the Business

Mackenzie Investments is a diversified asset management solutions provider founded in 1967. We provide investment management and related services with a wide range of investment mandates through a boutique structure and using multiple distribution channels. We are committed to delivering strong investment performance for our clients by drawing on more than 50 years of investment management experience.

Mackenzie earns asset management fees primarily from:

Management fees earned from its investment funds, subadvised accounts and institutional clients.
Fees earned from its mutual funds for administrative services.
Redemption fees on deferred sales charge and low load units.

The largest component of Mackenzie's revenues is management fees. The amount of management fees depends on the level and composition of assets under management. Management fee rates vary depending on the investment objective and the account type of the underlying assets under management. Equity based mandates have higher management fee rates than fixed income mandates and retail mutual fund accounts have higher management fee rates than sub-advised and institutional accounts.

DEVELOPMENTS

ACQUISITIONS

GLC Asset Management Group Ltd. (GLC)

On December 31, 2020, Mackenzie acquired GLC, a Canadian investment management firm with $37 billion in assets under management, from Great-West Lifeco Inc. (Lifeco).

Separately, Lifeco's subsidiary, The Canada Life Assurance Company (Canada Life) acquired the fund management

contracts relating to private label Quadrus Group of Funds (QGOF). Mackenzie was previously the manager and trustee of the QGOF. Subsequent to the sale, Mackenzie continues to provide investment and administration services to the QGOF.

Benefits of the deal to Mackenzie include the following:

The net addition of $30.1 billion in assets under management solidifying Mackenzie as one of Canada's largest asset managers.
Expands Mackenzie's distribution reach to the fast-growing group retirement business channel and establishes Mackenzie as one of the top three providers in Canada of investment solutions to defined contribution plans and other group retirement offerings.
Enhances Mackenzie's investment capabilities with the addition of a new Canadian Equity boutique.

The acquisition also includes a distribution agreement with Canada Life, positioning Mackenzie as the core investment advisor to its individual and group product offerings and enhancing Canada Life's capabilities and competitiveness.

Greenchip Financial Corp. (Greenchip)

On December 22, 2020, Mackenzie acquired Greenchip, a leading Canadian firm focused exclusively on the environmental economy since 2007. The acquisition adds $618 million in assets under management, of which $435 million was sub-advisory mandates to the Mackenzie Global Environmental Equity Fund. Mackenzie has been a leader in bringing sustainable investing to Canadians, with an evolving suite of funds focused on environmental leadership, gender diversity and sustainability. The acquisition of Greenchip is a natural evolution reflecting the success of Greenchip's sub-advisory relationship to the Mackenzie Global Environmental Equity Fund.

ASSET MANAGEMENT STRATEGY

Mackenzie's mission is to create a more invested world, together.

Mackenzie's objective is to become Canada's preferred global asset management solutions provider and business partner.

Mackenzie's focus is based on five key strategies:

Win in retail in a segmented way
Build a global institutional business with a targeted approach
Deliver innovative investment solutions and performance
Business processes that are simple, easy and digitized
Continue to foster a high performance and diverse culture

These strategies impact our strategic priorities and drive future business growth. We aim to achieve this by attracting and fostering the best minds in the investment industry, responding to changing needs of financial advisors and investors with distinctive and innovative solutions, and continuing to deliver institutional quality in everything we do.

Mackenzie seeks to maximize returns on business investment by focusing our resources in areas that directly impact the success of our strategic focus: investment management, distribution and client experience.

Our investment management capabilities are delivered through a boutique structure, with separate in-house teams having distinct focuses and diverse styles. Our research and portfolio management teams are located in Toronto, Montreal, Winnipeg, Vancouver, Boston, Dublin and Hong Kong. In addition to our own investment teams, we supplement our investment capabilities with strategic partners (third party sub-advisors) in selected areas. The development of a broad range of investment capabilities and products is a key strength in supporting the evolving financial needs of investors.

Our business focuses on three key distribution channels: retail, strategic alliances and institutional.

Mackenzie primarily distributes its retail investment products through third-party financial advisors. Our sales teams work with many of the more than 30,000 independent financial advisors and their firms across Canada. Our innovative, comprehensive lineup of investment solutions covers all asset classes and parts of the globe. We offer a range of relevant products and investment solutions designed to help advisors meet the evolving needs of their clients. We regularly introduce new funds and we may merge or streamline our fund offerings to provide enhanced investment solutions.

In addition to our retail distribution team, Mackenzie also has specialty teams focused on strategic alliances and the institutional marketplace.

Within the strategic alliance channel, Mackenzie offers certain series of our mutual funds and provides sub-advisory services to third-party and related party investment programs offered by banks, insurance companies and other investment companies. Strategic alliances with related parties include providing advisory services to IG Wealth Management, Investment Planning Counsel and Great-West Lifeco Inc. (Lifeco) subsidiaries. Beginning in 2020, Mackenzie partnered with Wealthsimple and launched three ETFs. Within the strategic alliance channel, Mackenzie's primary distribution relationship is with the head office of the respective bank, insurance company or investment company.

In the institutional channel, Mackenzie provides investment management services to pension plans, foundations and other institutions. We attract new institutional business through our relationships with pension and management consultants.

Gross sales and redemption activity in strategic alliance and institutional accounts can be more pronounced than in the retail channel, given the relative size and the nature of the distribution relationships of these accounts. These accounts are also subject to ongoing reviews and rebalance activities which may result in a significant change in the level of assets under management.

Mackenzie continues to be positioned to continue to build and enhance our distribution relationships given our team of experienced investment professionals, strength of our distribution network, broad product shelf, competitively priced products and our focus on client experience and investment excellence.

ASSETS UNDER MANAGEMENT

The changes in total assets under management are summarized in Table 15 and the changes in investment fund assets under management are summarized in Table 16.

Assets managed for the Wealth Management segment are included in total assets under management. Prior to the third quarter of 2020, assets managed by Mackenzie for IG Wealth Management were excluded from the Mackenzie reportable segment. Comparative periods have been retroactively restated.

At September 30, 2021, Mackenzie's total assets under management were $203.3 billion, an all-time quarter-end high, and an increase of 39.3% from $146.0 billion last year. The increase in assets under management included the impact of $30.3 billion related to the net business acquisitions of GLC and Greenchip during the fourth quarter of 2020. Mackenzie's total assets under management (excluding sub-advisory to Wealth Management) were $124.1 billion, also an all-time quarter-end high, and an increase of 66.4% from $74.6 billion last year. The change in Mackenzie's assets under management is determined by investment returns generated for our clients and net contributions from our clients.

TABLE 15: CHANGE IN TOTAL ASSETS UNDER MANAGEMENT – ASSET MANAGEMENT(1)

					% CHANGE
THREE MONTHS ENDED($ millions)	2021SEP. 30	2021JUN. 30	2020SEP. 30	2021JUN. 30	2020SEP. 30
Assets under management excludingsub-advisory to Wealth ManagementNet sales (redemptions)
Mutual funds(1)ETF net creations(2)	$829320	$1,103562	$84997	(24.8) %(43.1)	(2.4) %N/M
Investment funds(3)Sub-advisory, institutional and other accounts(4)	1,149(367)	1,665242	946(319)	(31.0)N/M	21.5(15.0)
Total net sales (redemptions)Investment returns	782403	1,9075,482	6273,152	(59.0)(92.6)	24.7(87.2)
Net change in assetsBeginning assets	1,185122,913	7,389115,524	3,77970,821	(84.0)6.4	(68.6)73.6
Ending assets	$ 124,098	$ 122,913	$74,600	1.0 %	66.4 %
Consolidated Assets under management(5)Mutual fundsETFs	$62,6805,068	$61,7174,889	$63,5993,330	1.6 %3.7	(1.4) %52.2
Investment funds(3)Sub-advisory, institutional and other accounts	67,74856,350	66,60656,307	66,9297,671	1.70.1	1.2N/M
Sub-advisory to Wealth Management	124,09879,242	122,91378,788	74,60071,388	1.00.6	66.411.0
Consolidated assets under management	$ 203,340	$ 201,701	$ 145,988	0.8 %	39.3 %
Average total assets(6)Excluding sub-advisory to Wealth ManagementConsolidated	$ 125,181204,850	$ 119,321196,582	$73,698144,517	4.9 %4.2	69.9 %41.7
NINE MONTHS ENDED($ millions)			2021SEP. 30	2020SEP. 30	% CHANGE
Assets under management excludingsub-advisory to Wealth ManagementNet sales (redemptions)
Mutual funds(1)ETF net creations(2)			$3,3931,287	$1,580860	114.7 %49.7
Investment funds(3)Sub-advisory, institutional and other accounts(4)			4,680(539)	2,4402,137	91.8N/M
Total net sales (redemptions)Investment returns			4,1419,019	4,5771,766	(9.5)N/M
Net change in assetsBeginning assets			13,160110,938	6,34368,257	107.562.5
Ending assets			$ 124,098	$74,600	66.4 %
Average total assets(6)Excluding sub-advisory to Wealth ManagementConsolidated			$ 119,051196,108	$69,480139,465	71.3 %40.6

(1) Mutual funds – Institutional clients, which include Mackenzie mutual funds within their investment offerings, made fund allocation changes:

– First quarter of 2021 – resulted in sales of $367 million, redemptions of $778 million and net redemptions of $411 million.

– Third quarter of 2020 – resulted in sales and net sales of $290 million.

– Second quarter of 2020 – resulted in sales and net sales of $109 million.

– First quarter of 2020 – resulted in sales of $373 million, redemptions of $192 million and net sales of $181 million.

(2) ETFs – During the second and third quarters of 2020, Wealthsimple made allocation changes which resulted in $370 million in purchases in Mackenzie ETFs and $325 million of redemptions from Mackenzie's ETFs, respectively.

(3) Investment fund assets under management and net sales exclude investments into Mackenzie mutual funds and ETFs by IGM investment funds.

(4) Sub-advisory, institutional and other accounts:
- Second quarter of 2021 Mackenzie was awarded $680 million of sub-advisory wins.
- Second quarter of 2020 Mackenzie was awarded $2.6 billion of sub-advisory wins.

(5) In the fourth quarter of 2020 Mackenzie Investments:

– Sold $13.4 billion of fund management contracts relating to private label Quadrus Group of Funds (QGOF) to Great-West Lifeco. Inc.

Acquired $183 million in mutual fund assets under management related to acquisition of Greenchip Financial Corp.
Acquired $43.5 billion in institutional accounts as part of transaction with Great-West Lifeco Inc.
(6) Based on daily average investment fund assets and month-end average sub-advisory, institutional and other assets.

TABLE 16: CHANGE IN INVESTMENT FUND ASSETS UNDER MANAGEMENT – ASSET MANAGEMENT(1)

					% CHANGE
THREE MONTHS ENDED($ millions)	2021SEP. 30	2021JUN. 30	2020SEP. 30	2021JUN. 30	2020SEP. 30
Sales	$2,587	$2,996	$2,903	(13.7) %	(10.9) %
Redemptions	1,758	1,893	2,054	(7.1)	(14.4)
Mutual fund net sales (redemptions)(2)	829	1,103	849	(24.8)	(2.4)
ETF net creations(3)	320	562	97	(43.1)	N/M
Investment fund net sales (redemptions)(4)	1,149	1,665	946	(31.0)	21.5
Investment returns	(7)	2,630	2,719	N/M	N/M
Net change in assets	1,142	4,295	3,665	(73.4)	(68.8)
Beginning assets	66,606	62,311	63,264	6.9	5.3
Ending assets	$ 67,748	$ 66,606	$ 66,929	1.7 %	1.2 %
Consists of:(5)
Mutual funds	$ 62,680	$ 61,717	$ 63,599	1.6 %	(1.4) %
ETFs	5,068	4,889	3,330	3.7	52.2
Investment funds	$ 67,748	$ 66,606	$ 66,929	1.7 %	1.2 %
Daily average investment fund assets	$ 68,426	$ 64,623	$ 66,026	5.9 %	3.6 %
NINE MONTHS ENDED($ millions)			2021SEP. 30	2020SEP. 30	% CHANGE
Sales			$ 10,095	$9,064	11.4 %
Redemptions			6,702	7,484	(10.4)
Mutual fund net sales (redemptions)(2)			3,393	1,580	114.7
ETF net creations(3)			1,287	860	49.7
Investment fund net sales (redemptions)(4)			4,680	2,440	91.8
Investment returns			3,818	1,278	198.7
Net change in assets			8,498	3,718	128.6
Beginning assets			59,250	63,211	(6.3)
Ending assets			$ 67,748	$ 66,929	1.2 %
Daily average investment fund assets			$ 64,594	$ 63,030	2.5 %

(1) Investment fund assets under management and net sales excludes investments into Mackenzie mutual funds and ETFs by IGM investment funds.

(2) Mutual funds – Institutional clients, which include Mackenzie mutual funds within their investment offerings, made fund allocation changes:

– First quarter of 2021 – resulted in sales of $367 million, redemptions of $778 million and net redemptions of $411 million.

– Third quarter of 2020 – resulted in sales and net sales of $290 million.

– Second quarter of 2020 – resulted in sales and net sales of $109 million.

– First quarter of 2020 – resulted in sales of $373 million, redemptions of $192 million and net sales of $181 million.

(3) ETFs – During the second and third quarters of 2020, Wealthsimple made allocation changes which resulted in $370 million in purchases in Mackenzie ETFs and $325 million of redemptions from Mackenzie's ETFs, respectively.

(4) Total investment fund net sales and assets under management exclude Mackenzie mutual fund investments in ETFs.

(5) Sold $13.4 billion of fund management contracts relating to private label Quadrus Group of Funds (QGOF) to Great-West Lifeco. Inc. Acquired $183 million in mutual fund assets under management related to acquisition of Greenchip Financial Corp.

CHANGE IN ASSETS UNDER MANAGEMENT – 2021 VS. 2020

Mackenzie's total assets under management at September 30, 2021 were $203.3 billion, an increase of 39.3% from $146.0 billion at September 30, 2020. The increase in assets under management included $30.3 billion in net business acquisitions noted previously. Mackenzie's total assets under management, excluding the net acquisitions of $30.3 billion related to the net business acquisitions noted previously, increased 18.5% from September 30, 2020. Assets under management excluding sub-advisory to the Wealth

Management segment were $124.1 billion, an increase of 66.4% from $74.6 billion at September 30, 2020.

Investment fund assets under management were $67.7 billion at September 30, 2021, compared to $66.9 billion at September 30, 2020, an increase of 1.2%. The net increase was inclusive of the decrease of $13.2 billion of net assets under management related to the sale of mutual fund contracts in the divestiture of QGOF and the Greenchip acquisition, noted previously. Mackenzie's mutual fund assets under management of $62.7 billion decreased by 1.4% from $63.6 billion at September 30, 2020. Mackenzie's ETF assets excluding ETFs held within IGM managed products were $5.1 billion at September 30, 2021, an increase of 52.2% from $3.3 billion at September 30, 2020. ETF assets inclusive of IGM managed products were $11.9 billion at September 30, 2021 compared to $7.5 billion at September 30, 2020.

In the three months ended September 30, 2021, Mackenzie's mutual fund gross sales were $2.6 billion a decrease of 10.9% from $2.9 billion in 2020. Mutual fund redemptions in the current quarter were $1.8 billion, a decrease of 14.4% from last year. Mutual fund net sales for the three months ended September 30, 2021 were $829 million, as compared to net sales of $849 million last year. In the three months ended September 30, 2021, ETF net creations were $320 million compared to $97 million last year. Investment fund net sales in the current quarter were $1.1 billion compared to net sales of $946 million last year. During the current quarter, investment returns resulted in investment fund assets decreasing by $7 million compared to increase of $2.7 billion last year.

During the third quarter of 2020, certain third party programs, which include Mackenzie mutual funds, made fund allocation changes resulting in gross and net sales of $290 million. Excluding these transactions in 2020, mutual fund gross sales decreased by 1.0% in the three months ended September 30, 2021 compared to last year, mutual fund redemptions decreased by 14.4% and mutual fund net sales of $829 million in 2021 compared to mutual fund net sales of $559 million last year.

ETF net creations were $320 million in the third quarter of 2021, compared to $422 million in the third quarter of 2020 after excluding the Wealthsimple redemption of $325 million of Mackenzie ETFs.

Total net sales excluding sub-advisory to the Wealth Management segment for the three months ended September 30, 2021 were $782 million compared to net sales of $627 million last year. Excluding the mutual fund and ETF transactions discussed above, net sales were $782 million for the three months ended September 30, 2021 compared to net sales of $662 million last year. During the current quarter, investment returns resulted in assets increasing by $403 million compared to an increase of $3.2 billion last year.

In the nine months ended September 30, 2021, Mackenzie's mutual fund gross sales were $10.1 billion, an increase of 11.4% from $9.1 billion in 2020. Mutual fund redemptions in the current period were $6.7 billion, a decrease of 10.4% from last year. Mutual fund net sales for the nine months ended September 30, 2021 were $3.4 billion, as compared to net sales of $1.6 billion last year. In the nine months ended September 30, 2021, ETF net creations were $1.3 billion compared to $860 million last year. Investment fund net sales in the current period were $4.7 billion

compared to net sales of $2.4 billion last year. During the current period, investment returns resulted in investment fund assets increasing by $3.8 billion compared to an increase of $1.3 billion last year.

During the nine months ended September 30, 2021, certain third party programs, which include Mackenzie mutual funds made fund allocation changes resulting in gross sales of $367 million, redemptions of $778 million and net redemptions of $411 million. During the nine months ended September 30, 2020, certain third party programs, which include Mackenzie mutual funds made fund allocation changes resulting in gross sales of $772 million, redemptions of $192 million and net sales of $580 million. Excluding these transactions in 2021 and 2020, mutual fund gross sales increased 17.3% and mutual fund redemptions decreased 18.7% in the nine months ended September 30, 2021 compared to last year and mutual fund net sales were $3.8 billion in the current year compared to $1.0 billion last year.

Redemptions of long-term mutual funds in the three and nine months ended September 30, 2021, were $1.7 billion and $6.6 billion, respectively, compared to $1.9 billion and $7.2 billion last year. Redemptions of long-term mutual funds excluding mutual fund allocation changes made by third party programs were $5.8 billion in the nine months ended September 30, 2021 compared to $7.0 billion in the comparative period last year. Mackenzie's annualized quarterly redemption rate for longterm mutual funds was 11.0% in the third quarter of 2021, compared to 12.6% in the third quarter of 2020. Mackenzie's twelve-month trailing redemption rate for long-term mutual funds was 15.6% at September 30, 2021, compared to 16.2% last year. Mackenzie's twelve month trailing redemption rate for long-term funds, excluding rebalance transactions, was 13.3% at September 30, 2021, compared to 15.5% at September 30, 2020. The corresponding average twelve-month trailing redemption rate for long-term mutual funds for all other members of IFIC was approximately 13.3% at September 30, 2021. Mackenzie's twelve-month trailing redemption rate is comprised of the weighted average redemption rate for frontend load assets, deferred sales charge and low load assets with redemption fees, and deferred sales charge assets without redemption fees (matured assets). Generally, redemption rates for front-end load assets and matured assets are higher than the redemption rates for deferred sales charge and low load assets with redemption fees.

During the nine months ended September 30, 2020, Wealthsimple purchased $370 million and redeemed $325 million of Mackenzie ETFs. Excluding these transactions in 2020, ETF net creations were $1.3 billion in the current year compared to $815 million last year.

Total net sales excluding sub-advisory to the Wealth Management segment for the nine months ended September 30, 2021 were

$4.1 billion, compared to net sales of $4.6 billion last year. During the second quarter of 2021, Mackenzie was awarded $680 million of sub-advisory mandates through our strategic partnership with China Asset Management Co, Ltd. During the second quarter of 2020, Mackenzie was awarded $2.6 billion of sub-advisory mandates from various clients. Excluding these transactions and the 2021 and 2020 transactions previously discussed, net sales were $3.9 billion for the nine months ended September 30, 2021 compared to net sales of $1.3 billion last year. During the nine months ended September 30, 2021, investment returns resulted in assets increasing by $9.0 billion compared to an increase of $1.8 billion last year.

As at September 30, 2021, Mackenzie's sub-advisory to the Wealth Management segment were $79.2 billion or 70.7% of total Wealth Management assets under management compared to $71.4 billion or 72.8% of total Wealth Management assets under management at September 30, 2020.

CHANGE IN ASSETS UNDER MANAGEMENT – Q3 2021 VS. Q2 2021

Mackenzie's total assets under management at September 30, 2021 were $203.3 billion, an increase of 0.8% from $201.7 billion at June 30, 2021. Assets under management excluding subadvisory to the Wealth Management segment were $124.1 billion, an increase of 1.0% from $122.9 billion at June 30, 2021.

Investment fund assets under management were $67.7 billion at September 30, 2021, an increase of 1.7% from $66.6 billion at June 30, 2021. Mackenzie's mutual fund assets under management were $62.7 billion at September 30, 2021, an increase of 1.6% from $61.7 billion at June 30, 2021. Mackenzie's ETF assets were $5.1 billion at September 30, 2021 compared to $4.9 billion at June 30, 2021. ETF assets inclusive of IGM managed products were $11.9 billion at September 30, 2021 compared to $10.6 billion at June 30, 2021.

For the quarter ended September 30, 2021, Mackenzie mutual fund gross sales were $2.6 billion, a decrease of 13.7% from the second quarter of 2021. Mutual fund redemptions were $1.8 billion, a decrease of 7.1% from the second quarter of 2021. Net sales of Mackenzie mutual funds for the current quarter were $829 million compared with net sales of $1.1 billion in the previous quarter.

Redemptions of long-term mutual fund assets in the current quarter were $1.7 billion, compared to $1.9 billion in the second quarter. Mackenzie's annualized quarterly redemption rate for long-term mutual funds for the current quarter was 11.0% compared to 12.5% in the second quarter.

For the quarter ended September 30, 2021, Mackenzie ETF net creations were $320 million compared to $562 million in the second quarter.

Investment fund net sales in the current quarter were $1.1 billion compared to net sales of $1.7 billion in the second quarter.

As at September 30, 2021, Mackenzie's sub-advisory to the Wealth Management segment were $79.2 billion or 70.7% of total Wealth Management assets under management compared to $78.8 billion or 71.2% of total Wealth Management assets under management at June 30, 2021.

INVESTMENT MANAGEMENT

Mackenzie has $203.3 billion in assets under management at September 30, 2021, including $79.2 billion of sub-advisory mandates to the Wealth Management segment. It has teams located in Toronto, Montreal, Winnipeg, Vancouver, Boston, Dublin and Hong Kong.

We continue to deliver our investment offerings through a boutique structure, with separate in-house investment teams which each have a distinct focus and investment approach. This boutique approach promotes diversification of styles and ideas and provides Mackenzie with a breadth of capabilities. Oversight is conducted through a common process intended to promote superior risk-adjusted returns over time. This oversight process focuses on i) identifying and encouraging each team's performance edge, ii) promoting best practices in portfolio construction, and iii) emphasizing risk management.

Our investment team currently consists of seventeen boutiques including the following recent additions described below:

Addition of a new Canadian Equity boutique with the acquisition of GLC at December 31, 2020.
Addition of a new boutique, Greenchip, that focuses on thematic investing to combat climate change, through the acquisition of Greenchip Financial Corp. at December 22, 2020.
Launch of a new sustainability-focused boutique "Betterworld" during the second quarter of 2021. This boutique will invest exclusively in companies exemplifying leadership in environmental, social and governance (ESG) behaviours and practices.

Mackenzie's 56% ownership interest in Northleaf enhances its investment capabilities by offering global private equity, private credit and infrastructure investment solutions to our clients.

In addition to our own investment teams, Mackenzie supplements investment capabilities through the use of third party sub-advisors and strategic beta index providers in selected areas. These include Putnam Investments Inc., TOBAM, China AMC, Impax Asset Management LLC and Rockefeller Capital Management.

During 2021, Mackenzie undertook a number of initiatives on climate change in support of the global goal to reach net zero by 2050. This builds upon Mackenzie's sustainability strategy, and these items included the following:

Signatory to the global Net Zero Asset Managers Initiative
Founding participant to Climate Engagement Canada
Founding Signatory to Responsible Investment Association's Canadian Investor Statement on Climate Change

Long-term investment performance is a key measure of Mackenzie's ongoing success. At September 30, 2021, 32.5% of Mackenzie mutual fund assets were rated in the top two performance quartiles for the one year time frame, 51.9% for the three year time frame and 59.9% for the five year time frame. Mackenzie also monitors its fund performance relative to the ratings it receives on its mutual funds from the Morningstar† fund ranking service. At September 30, 2021, 84.8% of Mackenzie mutual fund assets measured by Morningstar† had a rating of three stars or better and 51.1% had a rating of four or five stars. This compared to the Morningstar† universe of 85.8% for three stars or better and 53.0% for four and five star funds at September 30, 2021. These ratings exclude the Quadrus Group of Funds† .

PRODUCTS

Mackenzie continues to evolve its product shelf by providing enhanced investment solutions for financial advisors to offer their clients. During the third quarter, Mackenzie launched a number of new products and merged its suite of capital class funds to streamline and strengthen its product shelf.

MUTUAL FUNDS

Mackenzie manages its product shelf through new fund launches and fund mergers to streamline fund offerings for financial advisors and investors.

During the third quarter, Mackenzie launched three new Funds:

Mackenzie Tax-Managed Global Equity Fund seeks to provide investors with long-term tax effective rates of return by investing primarily in equity securities issued by companies of any size, anywhere in the world. The Fund utilizes a variety of tax management strategies including giving preference to companies with lower relative yield weighed against riskadjusted return potential, favouring longer-term investment opportunities over short-term ones and utilizing tax loss harvesting. The Fund is managed by the Mackenzie Global Equity and Income Team.
Mackenzie Betterworld Canadian Equity Fund and Mackenzie Betterworld Global Equity Fund seek to provide investors with long-term capital appreciation by investing in equity securities of companies located anywhere in the world (for the Global Equity Fund) and in Canada (for the Canadian Equity Fund), where such companies are considered to have progressive corporate practices and best-in-class environmental, social and governance practices. The portfolios are comprised mainly of large-cap equities that are well diversified across

sectors and industries. These Funds are managed by the Mackenzie Betterworld Team.

Early in the fourth quarter, Mackenzie launched four new funds:

Furthering its commitment to offer Canadian investors expanded access to the strong growth taking place in China, the Mackenzie ChinaAMC All China Bond Fund and Mackenzie ChinaAMC Multi-Asset Funds were launched. These Funds will be sub-advised by China Asset Management Co. Ltd.
- Mackenzie ChinaAMC All China Bond Fund seeks to generate above average income for investors with the potential for long-term capital growth by investing in China's fixed income markets, primarily in a diversified portfolio of Chinese fixed-income securities of any size, issued by companies and governments, including central government and policy bank issues, corporates, short-term bank deposits, local government funding vehicles, real estate company issues, state owned enterprises and financials.
- Mackenzie ChinaAMC Multi Asset Fund is an all-in-one solution for those seeking exposure to China. By investing in both fixed income and equity markets, the Fund offers the potential for favourable long term asset growth with high yield potential and the diversification benefits of low correlation to other markets. The Fund provides exposure to the Chinese equity market (60 to 90 per cent composition) and to the Chinese fixed income market (10 to 40 percent composition).
To address the needs of investors seeking retirement, Mackenzie is adding to the suite of Monthly Income Portfolios with the launch of the Mackenzie Monthly Income Growth Portfolio. This Fund is Mackenzie's first monthly income fund in the global equity balanced category. It seeks to provide investors with a diversified portfolio designed to provide a steady stream of income with long-term capital appreciation and reduced volatility. The Fund offers a fixed four per cent distribution and will be managed by Mackenzie's Multi-Asset Strategies Team.
Mackenzie Global Green Bond Fund seeks to generate income with the potential for long-term capital appreciation by investing primarily in fixed income securities of global issuers of sustainable and responsible debt. The Fund focusses on labelled green bonds and other debt instruments that are used to finance a greener future. The Fund is managed by the Mackenzie Fixed Income Team.

On July 30, 2021, Mackenzie wound-up the Mackenzie Financial Capital Corporation on a tax-deferred basis by merging each of the 34 corporate class funds into their corresponding trust fund equivalent. Changes to tax legislation and evolving market trends have eliminated many of the benefits that were available to corporate class funds. The continuing trust funds have a substantially similar investment objective.

EXCHANGE TRADED FUNDS

The addition of Exchange Traded Funds (ETF) has complemented Mackenzie's broad and innovative fund line-up and reflects its investor-focused vision to provide advisors and investors with new solutions to drive investor outcomes and achieve their personal goals. These ETFs offer investors another investment option to utilize in building long-term diversified portfolios.

Mackenzie's current line-up consists of 43 ETFs: 24 active and strategic beta ETFs and 19 traditional index ETFs. ETF assets under management ended the quarter at $11.9 billion, inclusive of $6.8 billion in investments from IGM managed products.

During the third quarter, Mackenzie launched one new ETF:

• Mackenzie Global Sustainable Bond ETF seeks to provide a steady flow of income with potential for moderate capital growth by investing primarily in fixed-income securities with a focus on sustainable and responsible global issuers. They are selected using a proprietary method which involves analyzing

more than 2,900 environmental, social and governance (ESG) performance data points. The ETF is managed by the Mackenzie Fixed Income Team.

ALTERNATIVE FUNDS

Early in the fourth quarter, Mackenzie Northleaf Private Infrastructure Fund was launched as part of Mackenzie's ongoing commitment to expand retail investor access to private market investment solutions. The Fund seeks to achieve long-term capital appreciation and income generation primarily through investments in conservatively positioned infrastructure projects (such as wind farms, fibre networks and toll roads) across OECD countries. The Fund is managed by Mackenzie's Multi-Asset Strategies Team in partnership with Northleaf Capital Partners (Northleaf). This launch marks the second collaboration between Mackenzie and Northleaf following the launch of Mackenzie Northleaf Private Credit Fund in the first quarter of 2021.

Review of Segment Operating Results

The Asset Management segment includes revenue earned on advisory mandates to the Wealth Management segment and investments into Mackenzie mutual funds and ETFs by the Wealth Management segment.

The Asset Management segment adjusted net earnings are presented in Table 17. Adjusted net earnings for the third quarter of 2021 were $71.0 million, an increase of 47.0% from the third quarter in 2020 and an increase of 25.7% from the prior quarter.

Adjusted earnings before interest and taxes for the third quarter of 2021 were $100.2 million, an increase of 42.1% from the third quarter in 2020 and 21.5% from the prior quarter.

2021 VS. 2020

REVENUES

Asset management fees are classified as either Asset management fees – third party or Asset management fees – Wealth Management.

Net asset management fees third party is comprised of the following:
- Asset management fees third party consists of management and administration fees earned from our investment funds and management fees from our third party sub-advisory, institutional and other accounts. The largest component is management fees from our investment funds. The amount of management fees depends on the level and composition of assets under management. Management fee rates vary depending on the investment objective and the account type of the underlying assets under management. For example, equity-based mandates have higher management fee rates than fixed income mandates and retail mutual fund accounts have higher management fee rates than sub-advised and institutional accounts. The majority of Mackenzie's mutual fund assets are retail and sold through third party financial advisors.
- Redemption fees consists of fees earned from the redemptions of mutual fund assets sold on a deferred sales charge purchase option and on a low load purchase option. Redemption fees charged for deferred sales charge assets range from 5.5% in the first year and decrease to zero after seven years. Redemption fees for low load assets range from 2.0% to 3.0% in the first year and decrease to zero after two or three years, depending on the purchase option.
- Dealer compensation expenses consists of asset-based and sales-based compensation. Asset-based compensation represents trailing commissions paid to dealers on certain classes of retail mutual funds and are calculated as a

percentage of mutual fund assets under management. These fees vary depending on the fund type and the purchase option upon which the fund was sold: front-end, deferred sales charge or low load. Sales based compensation are paid to dealers on the sale of mutual funds under the deferred sales charge purchase option and on a low load purchase option.

• Asset management fees – Wealth Management consists of subadvisory fees earned from the Wealth Management segment.

Net asset management fees – third party were $172.5 million for the three months ended September 30, 2021, an increase of $40.7 million or 30.9% from $131.8 million last year. The increase in net asset management fees – third party was primarily due to a 69.9% increase in average assets under management, as shown in Table 15, partially offset by a decline in the effective net asset management fee rate. Mackenzie's net asset management fee rate was 54.7 basis points for the three months ended September 30, 2021 compared to 71.0 basis points in the comparative period in 2020. The decline in the net management fee rate was primarily due to the increase in sub-advisory assets from the GLC acquisition, which have lower effective rates. Other factors include a change in the composition of assets under management, including the impact of having a greater share in non-retail priced products.

Net asset management fees – third party were $481.1 million for the nine months ended September 30, 2021, an increase of $105.4 million or 28.1% from $375.7 million last year. The increase in net asset management fees – third party was primarily due to a 71.3% increase in average assets under management partially offset by a decline in the effective net asset management fee rate. Mackenzie's net asset management fee rate was 54.0 basis points for the nine months ended September 30, 2021 compared to 72.1 basis points in the comparative period in 2020. The decline in the net management fee rate was primarily due to the increase in sub-advisory assets from the GLC acquisition, which have lower effective rates. Other factors include a change in the composition of assets under management, including the impact of having a greater share in non-retail priced products. Contributing to the increase in nonretail assets was the onboarding of $2.6 billion of sub-advisory and institutional wins during the second quarter of 2020.

Management fees – Wealth Management were $29.7 million for the three months ended September 30, 2021, an increase of $3.9 million or 15.1% from $25.8 million last year. The increase in management fees was due to an increase in the effective management fee rate and a 12.5% increase in average assets under management. Mackenzie's management fee rate was 14.8 basis points for the three months ended September 30,

TABLE 17: OPERATING RESULTS – ASSET MANAGEMENT

THREE MONTHS ENDED20212021202020212020($ millions)SEP. 30JUN. 30SEP. 30JUN. 30SEP. 30RevenuesAsset managementAsset management fees – third party$262.5$247.2$206.46.2 %27.2 %Redemption fees0.91.10.9(18.2)–263.4248.3207.36.127.1Dealer compensation expensesAsset-based compensation(86.9)(82.5)(70.6)5.323.1Sales-based compensation(4.0)(4.9)(4.9)(18.4)(18.4)(90.9)(87.4)(75.5)4.020.4Net asset management fees – third party172.5160.9131.87.230.9Asset management fees – Wealth Management29.728.025.86.115.1Net asset management202.2188.9157.67.028.3Net investment income and other2.21.11.1100.0100.0204.4190.0158.77.628.8ExpensesAdvisory and business development19.225.116.0(23.5)20.0Operations and support83.380.569.73.519.5Sub-advisory1.71.92.5(10.5)(32.0)104.2107.588.2(3.1)18.1Adjusted earnings before interest and taxes100.282.570.521.542.1Interest expense5.96.05.2(1.7)13.5Adjusted earnings before taxes94.376.565.323.344.4Income taxes23.320.017.016.537.1Adjusted net earnings$71.0$56.5$48.325.7 %47.0 %NINE MONTHS ENDED20212020($ millions)SEP. 30SEP. 30% CHANGERevenuesAsset managementAsset management fees – third party$741.6$593.325.0 %Redemption fees3.13.3(6.1)744.7596.624.8Dealer compensation expensesAsset-based compensation(247.7)(204.2)21.3Sales-based compensation(15.9)(16.7)(4.8)(263.6)(220.9)19.3Net asset management fees – third party481.1375.728.1Asset management fees – Wealth Management84.674.813.1Net asset management565.7450.525.6Net investment income and other4.51.9136.8570.2452.426.0ExpensesAdvisory and business development64.651.924.5Operations and support247.3219.112.9Sub-advisory5.37.2(26.4)317.2278.214.0Adjusted earnings before interest and taxes253.0174.245.2Interest expense17.715.514.2Adjusted earnings before taxes235.3158.748.3Income taxes59.841.544.1Adjusted net earnings$175.5$117.249.7 %			% CHANGE

2021 compared to 14.4 basis points in the comparative period in 2020. The increase in the management fee rate was due to a change in the composition of assets under management.

Management fees – Wealth Management were $84.6 million for the nine months ended September 30, 2021, an increase of $9.8 million or 13.1% from $74.8 million last year. The increase in management fees was due to an increase in the effective management fee rate and a 10.1% increase in average assets under management. Mackenzie's management fee rate was 14.7 basis points for the nine months ended September 30, 2021 compared to 14.3 basis points in the comparative period in 2020. The increase in the management fee rate was due to a change in the composition of assets under management.

Net investment income and other primarily includes investment returns related to Mackenzie's investments in proprietary funds. These investments are generally made in the process of launching a fund and are sold as third party investors subscribe. Net investment income and other was $2.2 million for the three months ended September 30, 2021 compared to $1.1 million last year and was $4.5 million for the nine months ended September 30, 2021, compared to $1.9 million last year.

EXPENSES

Mackenzie incurs advisory and business development expenses that primarily includes wholesale distribution activities and these costs vary directly with assets or sales levels. Advisory and business development expenses were $19.2 million for the three months ended September 30, 2021, an increase of $3.2 million or 20.0% from $16.0 million in 2020. Expenses for the nine months ended September 30, 2021 were $64.6 million, an increase of $12.7 million or 24.5% from $51.9 million last year. The increase in the three and nine month periods ended September 30, 2021 compared to the prior year is due to higher wholesaler commissions attributed to record high level of sales partially offset by lower travel and entertainment expenses.

Operations and support includes costs associated with business operations, including technology and business processes, in-house investment management and product shelf management, corporate management and support functions. These expenses primarily reflect compensation, technology and other service provider expenses. Operations and support expenses were $83.3 million for the three months ended September 30, 2021, an increase of $13.6 million or 19.5% from $69.7 million in 2020. Expenses for the nine months ended September 30, 2021 were $247.3 million, an increase of $28.2 million or 12.9% from $219.1 million last year. The increase in the three and nine month periods ended September 30, 2021 compared to the prior year is due to strategic initiatives including the acquisitions during the fourth quarter of 2020.

Sub-advisory expenses were $1.7 million for the three months ended September 30, 2021, compared to $2.5 million in 2020. Expenses for the nine months ended September 30, 2021 were $5.3 million, compared to $7.2 million last year.

INTEREST EXPENSE

Interest expense, which includes allocated interest expense on long-term debt and interest expense on leases, totalled $5.9 million in the third quarter of 2021 compared to $5.2 million in the third quarter of 2020. Interest expense for the nine month period was $17.7 million compared to $15.5 million in 2020. Long-term debt interest expense is calculated based on a longterm debt allocation of $0.4 billion to Mackenzie.

Q3 2021 VS. Q2 2021

REVENUES

Net asset management fees – third party were $172.5 million for the current quarter, an increase of $11.6 million or 7.2% from $160.9 million in the second quarter. The increase in net asset management fees – third party was primarily due to a 4.9% increase in average assets under management, as shown in Table 15, and an increase in the effective net asset management fee rate. Mackenzie's net asset management fee rate was 54.7 basis points for the current quarter compared to 54.1 basis points in the second quarter. The increase in the net asset management fee rate was attributed to the strength of retail which has higher rates.

Management fees – Wealth Management were $29.7 million in the current quarter, up from $28.0 million in the second quarter of 2021, primarily due to the increase in assets under management of 3.1% from the second quarter. The management fee rate was 14.8 basis points in the current quarter compared to 14.5 basis points in the second quarter.

Net investment income and other was $2.2 million for the current quarter, an increase of $1.1 million from the second quarter.

EXPENSES

Advisory and business development expenses were $19.2 million for the current quarter, a decrease of $5.9 million or 23.5% from $25.1 million in the second quarter. The decline in the current quarter is attributed to lower wholesaler commissions consistent with the decline in net investment fund net sales in the current quarter.

Operations and support expenses were $83.3 million for the current quarter, an increase of $2.8 million or 3.5% from $80.5 million compared to the second quarter.

Sub-advisory expenses were $1.7 million for the current quarter, compared to $1.9 million in the second quarter.

Strategic Investments and Other

Review of Segment Operating Results

The Strategic Investments and Other segment includes investments in Great-West Lifeco Inc. (Lifeco), China Asset Management Co., Ltd. (China AMC), Northleaf Capital Group Ltd. (Northleaf), Wealthsimple Financial Corp., Portag3 Ventures LPs., and unallocated capital.

Earnings from the Strategic Investments and Other segment include the Company's proportionate share of earnings of its associates, Lifeco, China AMC and Northleaf as well as net investment income on unallocated capital.

In the third quarter of 2020, the Company sold its 24.8% equity interest in Personal Capital Corporation (Personal Capital) as discussed in the Consolidated Financial Position section of this MD&A.

Assets held by the Strategic Investments and Other segment are included in Table 18.

Unallocated capital represents capital not allocated to any of the operating companies and which would be available for investment, debt repayment, distribution to shareholders or other corporate purposes. This capital is invested in highly liquid, high quality financial instruments in accordance with the Company's Investment Policy.

Strategic Investments and Other segment adjusted net earnings are presented in Table 19.

2021 VS. 2020

The proportionate share of associates' earnings increased by $12.4 million in the third quarter of 2021 compared to the third quarter of 2020 and increased by $38.8 million in nine months ended September 30, 2021 compared to 2020. These earnings reflect equity earnings from Lifeco, China AMC, Northleaf and, until the third quarter of 2020, Personal Capital, as discussed in the Consolidated Financial Position section of this MD&A. The increase in the third quarter of 2021 resulted primarily from increases in the proportionate share of China AMC's earnings of $6.5 million and Lifeco's earnings of $2.3 million. The increase in the nine month period of 2021 resulted primarily from increases in the proportionate share of China AMC's earnings of $14.9 million and Lifeco's earnings of $12.9 million and an increase due to Personal Capital, reflecting the sale of the Company's investment in the second quarter of 2020. The increase in both the three and nine month periods was also due to the proportionate share of Northleaf's earnings, which was $2.9 million and $5.1 million, respectively, net of non-controlling interest.

Net investment income and other was $0.6 million in the third quarter of 2021, unchanged from 2020, and was $1.6 million in the nine months ended September 30, 2021, a decrease from $4.9 million in 2020.

Q3 2021 VS. Q2 2021

The proportionate share of associates' earnings was $55.9 million in the third quarter of 2021, an increase of $7.7 million from the second quarter of 2021. Net investment income and other was $0.6 million in the third quarter of 2021, compared to $0.8 million in the second quarter.

TABLE 18: TOTAL ASSETS – STRATEGIC INVESTMENTS AND OTHER

($ millions)	2021SEPTEMBER 30	2020DECEMBER 31
Investments in associates
Lifeco	$ 1,001.5	$962.4
China AMC	742.6	720.3
Northleaf	255.3	248.5
	1,999.4	1,931.2
FVTOCI investments
Wealthsimple (direct investment only)	1,133.5	511.6
Portag3 and other investments	121.7	81.7
	1,255.2	593.3
Unallocated capital and other	673.7	240.6
Total assets	$ 3,928.3	$ 2,765.1
Lifeco fair value	$ 1,439.0	$ 1,133.2

TABLE 19: OPERATING RESULTS – STRATEGIC INVESTMENTS AND OTHER

					% CHANGE
THREE MONTHS ENDED	2021	2021	2020	2021	2020
($ millions)	SEP. 30	JUN. 30	SEP. 30	JUN. 30	SEP. 30
Revenues
Net investment income and other	$0.6	$0.8	$0.6	(25.0) %	– %
Proportionate share of associates' earnings
Investment in Lifeco	35.3	31.3	33.0	12.8	7.0
Investment in China AMC	17.0	15.1	10.5	12.6	61.9
Investment in Northleaf	3.6	1.8	–	100.0	N/M
	55.9	48.2	43.5	16.0	28.5
	56.5	49.0	44.1	15.3	28.1
Expenses
Operations and support	1.2	1.3	1.2	(7.7)	–
Adjusted earnings before taxes	55.3	47.7	42.9	15.9	28.9
Income taxes	1.6	0.7	(2.0)	128.6	N/M
Adjusted net earnings	53.7	47.0	44.9	14.3	19.6
Non-controlling interest	0.7	0.4	–	75.0	N/M
Adjusted net earnings available to common shareholders	$53.0	$46.6	$44.9	13.7 %	18.0 %
NINE MONTHS ENDED($ millions)			2021SEP. 30	2020SEP. 30	% CHANGE

RevenuesNet investment income and other			$1.6	$4.9	(67.3) %
Proportionate share of associates' earnings
Investment in Lifeco			94.7	81.8	15.8
Investment in China AMC			44.6	29.7	50.2
Investment in Northleaf			6.4	–	N/M
Investment in Personal Capital			–	(4.6)	100.0
			145.7	106.9	36.3
			147.3	111.8	31.8
Expenses
Operations and support			3.6	3.2	12.5
Adjusted earnings before taxes			143.7	108.6	32.3
Income taxes			3.4	(5.7)	N/M
Adjusted net earnings			140.3	114.3	22.7
Non-controlling interest			1.3	–	N/M
Adjusted net earnings available to common shareholders			$139.0	$114.3	21.6 %

IGM Financial Inc.

Consolidated Financial Position

IGM Financial's total assets were $17.0 billion at September 30, 2021, compared to $16.1 billion at December 31, 2020.

OTHER INVESTMENTS

The composition of the Company's securities holdings is detailed in Table 20.

FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVTOCI)

Gains and losses on FVTOCI investments are recorded in Other comprehensive income.

Corporate Investments

Corporate investments is primarily comprised of the Company's investments in Wealthsimple Financial Corp. (Wealthsimple), and Portag3 Ventures LP, Portag3 Ventures II LP and Portage Ventures III LP (Portag3).

Wealthsimple is an online investment manager that provides financial investment guidance. The investment is classified at Fair Value Through Other Comprehensive Income.

On May 3, 2021, Wealthsimple announced a $750 million equity fundraising, valuing IGM's investment in Wealthsimple at $1,448 million. As part of the transaction, IGM Financial Inc. disposed of a portion of its investment for proceeds of $294 million ($258 million after-tax).

In the second quarter of 2021, a realized gain of $239 million ($207 million after-tax) was transferred from Accumulated other comprehensive income to Other retained earnings.

The Company continues to be the largest shareholder in Wealthsimple with an interest of 23% and fair value of $1,153 million.

Portag3 consists of early-stage investment funds dedicated to backing innovating financial services companies and are

controlled by Power Financial Corporation, a subsidiary of Power Corporation of Canada. In the nine months ended September 30, 2021, the Company invested $6.6 million related to Portag3 for a total investment of $59.7 million.

The total fair value of Corporate investments of $1.3 billion at September 30, 2021 is presented net of certain costs incurred within the limited partnership structures holding the underlying investments.

FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)

Securities classified as FVTPL include equity securities and proprietary investment funds. Gains and losses are recorded in Net investment income and other in the Consolidated Statements of Earnings.

Certain proprietary investment funds are consolidated where the Company has made the assessment that it controls the investment fund. The underlying securities of these funds are classified as FVTPL.

LOANS

The composition of the Company's loans is detailed in Table 21.

Loans consisted of residential mortgages and represented 32.7% of total assets at September 30, 2021, compared to 39.4% at December 31, 2020.

Loans measured at amortized cost are primarily comprised of residential mortgages sold to securitization programs sponsored by third parties that in turn issue securities to investors. An offsetting liability, Obligations to securitization entities, has been recorded and totalled $5.3 billion at September 30, 2021, compared to $6.2 billion at December 31, 2020.

The Company holds loans pending sale or securitization. Loans measured at fair value through profit or loss are residential mortgages held temporarily by the Company pending sale.

TABLE 20: OTHER INVESTMENTS

		DECEMBER 31, 2020
($ millions)		COST	FAIR VALUE		COST		FAIR VALUE
Fair value through other comprehensive incomeCorporate investments	$	223.9	$1,255.2	$	251.4	$	593.3
Fair value through profit or lossEquity securities		1.5	1.7		1.5		1.5
Proprietary investment funds		76.9	81.9		35.3		37.5
		78.4	83.6		36.8		39.0
	$	302.3	$1,338.8	$	288.2	$	632.3

TABLE 21: LOANS

($ millions)	2021SEPTEMBER 30	2020DECEMBER 31
Amortized costLess: Allowance for expected credit losses	$5,550.40.7	$6,329.40.8
	5,549.7	6,328.6
Fair value through profit or loss	4.0$5,553.7	3.3$6,331.9

Loans held for securitization are carried at amortized cost. Total loans being held pending sale or securitization are $317.0 million at September 30, 2021, compared to $334.5 million at December 31, 2020.

Residential mortgages originated by IG Wealth Management are funded primarily through sales to third parties on a fully serviced basis, including Canada Mortgage and Housing Corporation (CMHC) or Canadian bank sponsored securitization programs. At September 30, 2021, IG Wealth Management serviced $10.0 billion of residential mortgages, including $2.4 billion originated by subsidiaries of Lifeco.

SECURITIZATION ARRANGEMENTS

Through the Company's mortgage banking operations, residential mortgages originated by IG Wealth Management mortgage planning specialists are sold to securitization trusts sponsored by third parties that in turn issue securities to investors. The Company securitizes residential mortgages through the CMHC sponsored National Housing Act Mortgage-Backed Securities (NHA MBS) and the Canada Mortgage Bond Program (CMB Program) and through Canadian banksponsored asset-backed commercial paper (ABCP) programs. The Company retains servicing responsibilities and certain elements of credit risk and prepayment risk associated with the transferred assets. The Company's credit risk on its securitized mortgages is partially mitigated through the use of insurance. Derecognition of financial assets in accordance with IFRS is based on the transfer of risks and rewards of ownership. As the Company has retained prepayment risk and certain elements of credit risk associated with the Company's securitization transactions through the CMB and ABCP programs, they are accounted for as secured borrowings. The Company records the transactions under these programs as follows: i) the mortgages and related obligations are carried at amortized cost, with interest income and interest expense, utilizing the effective interest rate method, recorded over the term of the mortgages, ii) the component of swaps entered into under the CMB Program whereby the Company pays coupons on Canada Mortgage Bonds and receives investment returns on the reinvestment of repaid mortgage principal, are recorded at fair

value, and iii) cash reserves held under the ABCP program are carried at amortized cost.

In the third quarter of 2021, the Company securitized loans through its mortgage banking operations with cash proceeds of $319.0 million compared to $593.4 million in 2020. Additional information related to the Company's securitization activities, including the Company's hedges of related reinvestment and interest rate risk, can be found in the Financial Risk section of this MD&A and in Note 6 to the Interim Financial Statements.

INVESTMENT IN ASSOCIATES

Great-West Lifeco Inc. (Lifeco)

At September 30, 2021, the Company held a 4% equity interest in Lifeco. IGM Financial and Lifeco are controlled by Power Corporation of Canada.

The equity method is used to account for IGM Financial's investment in Lifeco, as it exercises significant influence. Changes in the carrying value for the three and nine months ended September 30, 2021 compared with 2020 are shown in Table 22.

China Asset Management Co., Ltd. (China AMC)

Founded in 1998 as one of the first fund management companies in China, China AMC has developed and maintained a position among the market leaders in China's asset management industry.

China AMC's total assets under management, excluding subsidiary assets under management, were RMB¥ 1,606.6 billion ($308.5 billion) at June 30, 2021, representing an increase of 10.0% (CAD$ increase of 8.2%) from RMB¥ 1,461.1 billion ($285.1 billion) at December 31, 2020.

The equity method is used to account for the Company's 13.9% equity interest in China AMC, as it exercises significant influence. Changes in the carrying value for the three and nine months ended September 30, 2021 are shown in Table 22. The change in other comprehensive income of $16.1 million in the three month period ended September 30, 2021 was due to a 2.3% appreciation of the Chinese yuan relative to the Canadian dollar.

TABLE 22: INVESTMENT IN ASSOCIATES

	SEPTEMBER 30, 2021						SEPTEMBER 30, 2020
($ millions)		LIFECO		CHINA AMC		NORTHLEAF	TOTAL		LIFECO		CHINA AMC		PERSONALCAPITAL(3)	TOTAL
THREE MONTHS ENDED
Carrying value, July 1	$	985.8	$	709.5	$	251.7	$ 1,947.0	$	958.1	$	689.2	$	–	$ 1,647.3
Dividends		(16.4)		–		–	(16.4)		(16.4)		–		–	(16.4)
Proportionate share of:
Earnings (losses)(1)		35.3		17.0		3.6(2)	55.9		33.0		10.5		–	43.5
Other comprehensive income (loss)
and other adjustments		(3.2)		16.1		–	12.9		(31.9)		13.3		–	(18.6)
Carrying value, September 30		$ 1,001.5	$	742.6	$	255.3	$ 1,999.4	$	942.8	$	713.0	$	–	$ 1,655.8
NINE MONTHS ENDED
Carrying value, January 1	$	962.4	$	720.3	$	248.5	$ 1,931.2	$	896.7	$	662.7	$	194.5	$ 1,753.9
Investment		–		–		0.4	0.4		–		–		–	–
Dividends		(49.1)		(26.8)		–	(75.9)		(49.1)		(13.7)		–	(62.8)
Proportionate share of:
Earnings (losses)(1)		94.7		44.6		6.4(2)	145.7		81.8		29.7		(4.6)	106.9
Other comprehensive income (loss)
and other adjustments		(6.5)		4.5		–	(2.0)		13.4		34.3		8.8	56.5
Disposition		–		–			–		–		–		(198.7)	(198.7)
Carrying value, September 30		$ 1,001.5	$	742.6	$	255.3	$ 1,999.4	$	942.8	$	713.0	$	–	$ 1,655.8

(1) The proportionate share of earnings from the Company's investment in associates is recorded in the Strategic Investments and Other segment.

(2) The Company's proportionate share of Northleaf's earnings, net of Non-controlling interest, was $2.9 million and $5.1 million, respectively, for the three and nine month periods. (3) In 2020, the Company sold its equity interest in Personal Capital to a subsidiary of Lifeco, Empower Retirement.

Northleaf Capital Group Ltd. (Northleaf)

On October 28, 2020, the Company's subsidiary, Mackenzie, together with Lifeco, acquired a non-controlling interest in Northleaf, a global private equity, private credit and infrastructure fund manager headquartered in Toronto.

The transaction was executed through an acquisition vehicle 80% owned by Mackenzie and 20% owned by Lifeco for cash consideration of $241 million and up to an additional $245 million in consideration at the end of five years subject to the business achieving exceptional growth in certain performance measures over the period. Any additional consideration will be recognized as expense over the five year period based on the fair value of the expected payment, which is revalued at each reporting period date.

The acquisition vehicle acquired a 49.9% voting interest and a 70% economic interest in Northleaf. Mackenzie and Lifeco have an obligation and right to purchase the remaining equity and voting interest in Northleaf commencing in approximately five years and extending into future periods. The equity method is used to account for the acquisition vehicle's 70% economic

interest as it exercises significant influence. Significant influence arises from board representation, participating in the policy making process and shared strategic initiatives.

The Company controls the acquisition vehicle therefore it recognizes the full 70% economic interest in Northleaf and recognizes Non-controlling interest (NCI) related to Lifeco's net interest in Northleaf of 14%. Net of NCI, IGM's investment at December 31, 2020 was $199.6 million, comprised of $192.6 million in cash consideration, $6.2 million in capitalized transaction costs and proportionate share of 2020 earnings of $0.8 million.

Northleaf's assets under management, including invested capital and uninvested commitments, were $18.6 billion as at September 30, 2021 (December 31, 2020 – $14.6 billion). The increase of $4.0 billion in assets under management during the nine month period was driven by $4.3 billion in new commitments and an increase of $0.1 billion related to foreign exchange on USD denominated assets, offset by a decrease of $0.4 billion in return of capital and other.

Consolidated Liquidity and Capital Resources

LIQUIDITY

Cash and cash equivalents totalled $1,123.1 million at September 30, 2021 compared with $771.6 million at December 31, 2020 and $992.4 million at September 30, 2020. Cash and cash equivalents related to the Company's deposit operations were $2.4 million at September 30, 2021, compared to $5.2 million at December 31, 2020 and $2.8 million at September 30, 2020, as shown in Table 23.

Client funds on deposit represents cash balances held by clients within their investment accounts and with the offset included in deposit liabilities.

Working capital, which consists of current assets less current liabilities, totalled $825.1 million at September 30, 2021, compared with $330.8 million at December 31, 2020 and $696.1 million at September 30, 2020 (Table 24).

Working capital, which includes unallocated capital, is utilized to:

Finance ongoing operations, including the funding of sales commissions.
Temporarily finance mortgages in its mortgage banking operations.
Pay interest related to long-term debt.
Maintain liquidity requirements for regulated entities.
Pay quarterly dividends on its outstanding common shares.
Finance common share repurchases and retirement of long-term debt.
Capital investment in the business and business acquisitions.

IGM Financial continues to generate significant cash flows from its operations. Earnings before interest, taxes, depreciation and amortization before sales commissions (EBITDA before sales commissions) totalled $422.3 million for the third quarter of 2021 compared to $336.3 million for the third quarter of 2020

and $379.7 million for the second quarter of 2021. For the nine months ended September 30, 2021, EBITDA before sales commissions totalled $1,135.2 million compared to $900.0 million for the comparative period of 2020. EBITDA before sales commissions excludes the impact of both commissions paid and commission amortization (refer to Table 1).

Earnings before interest, taxes, depreciation and amortization after sales commissions (EBITDA after sales commissions) totalled $384.5 million in the third quarter of 2021 compared to $306.3 million in the third quarter of 2020 and $337.0 million in the second quarter of 2021. For the nine months ended September 30, 2021, EBITDA after sales commissions totalled $1,007.6 million compared to $801.8 million for the comparative period of 2020. EBITDA after sales commissions excludes the impact of commission amortization (refer to Table 1).

Refer to the Financial Instruments Risk section of this MD&A for information related to other sources of liquidity and to the Company's exposure to and management of liquidity and funding risk.

CASH FLOWS

Table 25 – Cash Flows is a summary of the Consolidated Statements of Cash Flows which forms part of the Interim Financial Statements for the three and nine month periods ended September 30, 2021. Cash and cash equivalents increased by $156.3 million in the third quarter of 2021 compared to an increase of $355.5 million in 2020. For the nine months ended September 30, 2021, cash and cash equivalents increased by $351.5 million, compared to an increase of $272.4 million in 2020.

Adjustments to determine net cash from operating activities during the three and nine month periods of 2021 compared to 2020 consist of non-cash operating activities offset by cash operating activities:

($ millions)	2021SEP. 30	2020DEC. 31	2020SEP. 30
Assets
Cash and cash equivalents	$2.4	$5.2	$2.8
Client funds on deposit	1,642.3	1,063.4	821.6
Accounts and other receivables	1.6	48.4	26.1
Loans	8.6	10.5	14.0
Total assets	$1,654.9	$1,127.5	$864.5
Liabilities and shareholders' equity

Deposit liabilities $ 1,641.0 $ 1,104.9 $ 845.7 Other liabilities 3.4 12.2 8.5 Shareholders' equity 10.5 10.4 10.3 Total liabilities and shareholders' equity $ 1,654.9 $ 1,127.5 $ 864.5

TABLE 23: DEPOSIT OPERATIONS – FINANCIAL POSITION

Management's Discussion and Analysis | IGM Financial Inc. Third Quarter Report 2021 | 45

TABLE 24: WORKING CAPITAL

($ millions)	2021SEP. 30	2020DEC. 31	2020SEP. 30
Current assets
Cash and cash equivalents	$1,123.1	$771.6	$992.4
Client funds on deposit	1,642.3	1,063.4	821.6
Accounts receivable and other assets	429.6	391.3	408.2
Current portion of securitized mortgages and other	1,173.0	1,518.6	1,723.3
	4,368.0	3,744.9	3,945.5
Current liabilities
Accounts and other payables	807.4	756.5	723.2
Deposits and certificates	1,639.6	1,101.4	841.8
Current portion of obligations to securitization entities and other	1,095.9	1,556.2	1,684.4
	3,542.9	3,414.1	3,249.4
Working capital	$825.1	$330.8	$696.1

The add-back of amortization of capitalized sales commissions offset by the deduction of capitalized sales commissions paid.
The add-back of amortization of capital, intangible and other assets.
The deduction of investment in associates' equity earnings offset by dividends received.
The add-back of pension and other post-employment benefits offset by cash contributions.
Changes in operating assets and liabilities and other.
The deduction of restructuring provision cash payments.
The adjustment for other items in 2020, which included the add-back of restructuring provision and other and the deduction of the gain on the sale of the Company's investment in Personal Capital.

Financing activities during the third quarter of 2021 compared to 2020 related to:

An increase in obligations to securitization entities of $313.3 million and repayments of obligations to securitization entities of $573.6 million in 2021 compared to an increase in obligations to securitization entities of $595.4 million and repayments of obligations to securitization entities of $664.7 million in 2020.
The payment of regular common share dividends which totalled $134.4 million in 2021, compared to $134.0 million in 2020.

Financing activities during the nine months ended September 30, 2021 compared to 2020 related to:

• An increase in obligations to securitization entities of $1,158.2 million and repayments of obligations to securitization entities of $1,979.6 million in 2021 compared to an increase in obligations to securitization entities of $1,147.9 million and repayments of obligations to securitization entities of $1,569.7 million in 2020.

		THREE MONTHS ENDED SEPTEMBER 30		NINE MONTHS ENDED SEPTEMBER 30
($ millions)	2021	2020	% CHANGE	2021	2020	% CHANGE
Operating activities
Earnings before income taxes	$349.9	$235.3	48.7 %	$919.1	$675.6	36.0 %
Income taxes paid	(21.9)	(70.3)	68.8	(126.5)	(131.9)	4.1
Adjustments to determine net cashfrom operating activities	(3.0)	9.9	N/M	(178.2)	(46.1)	(286.6)
	325.0	174.9	85.8	614.4	497.6	23.5
Financing activities	(388.6)	(210.7)	(84.4)	(1,212.1)	(847.2)	(43.1)
Investing activities	219.9	391.3	(43.8)	949.2	622.0	52.6
Change in cash and cash equivalentsCash and cash equivalents,	156.3	355.5	(56.0)	351.5	272.4	29.0
beginning of period	966.8	636.9	51.8	771.6	720.0	7.2
Cash and cash equivalents, end of period	$ 1,123.1	$992.4	13.2 %	$ 1,123.1	$992.4	13.2 %

TABLE 25: CASH FLOWS

• The payment of regular common share dividends which totalled $402.5 million in 2021, compared to $402.1 million in 2020.

Investing activities during the third quarter of 2021 compared to 2020 primarily related to:

The purchases of other investments totalling $28.9 million and sales of other investments with proceeds of $8.5 million in 2021 compared to $0.7 million and $6.9 million, respectively, in 2020.
An increase in loans of $431.4 million with repayments of loans and other of $682.5 million in 2021 compared to $516.7 million and $696.4 million, respectively, in 2020 primarily related to residential mortgages in the Company's mortgage banking operations.
Net cash used in additions to intangible assets was $11.3 million in 2021 compared to $13.3 million in 2020.

Investing activities during the nine months ended September 30, 2021 compared to 2020 related to:

The purchases of other investments totalling $85.5 million and sales of other investments with proceeds of $310.8 million in 2021 compared to $26.5 million and $21.9 million, respectively, in 2020. The proceeds in 2021 reflect cash proceeds on the disposition of a portion of IGM Financial's investment in Wealthsimple.
An increase in loans of $1,402.3 million with repayments of loans and other of $2,181.8 million in 2021 compared to $1,333.9 million and $1,799.5 million, respectively, in 2020 primarily related to residential mortgages in the Company's mortgage banking operations.
Net cash used in additions to intangible assets was $47.5 million in 2021 compared to $42.5 million in 2020.

The three and nine month periods of 2020 also included the sale of the Company's investment in Personal Capital with proceeds of $231.0 million.

CAPITAL RESOURCES

The Company's capital management objective is to maximize shareholder returns while ensuring that the Company is capitalized in a manner which appropriately supports regulatory capital requirements, working capital needs and business expansion. The Company's capital management practices are focused on preserving the quality of its financial position by maintaining a solid capital base and a strong balance sheet. Capital of the Company consists of long-term debt and common shareholders' equity which totalled $8.3 billion at September 30, 2021, compared to $7.1 billion at December 31, 2020. The Company regularly assesses its capital management practices in response to changing economic conditions.

The Company's capital is primarily utilized in its ongoing business operations to support working capital requirements, long-term investments made by the Company, business expansion and other strategic objectives. Subsidiaries subject to regulatory capital requirements include investment dealers, mutual fund dealers, exempt market dealers, portfolio managers, investment fund managers and a trust company. These subsidiaries are required to maintain minimum levels of capital based on either working capital, liquidity or shareholders' equity. The Company's subsidiaries have complied with all regulatory capital requirements.

The total outstanding long-term debt was $2.1 billion at September 30, 2021, unchanged from December 31, 2020. Long-term debt is comprised of debentures which are senior unsecured debt obligations of the Company subject to standard covenants, including negative pledges, but which do not include any specified financial or operational covenants.

Other activities in 2021 included the declaration of common share dividends of $403.0 million or $1.6875 per share. Changes in common share capital are reflected in the Interim Consolidated Statements of Changes in Shareholders' Equity.

Standard & Poor's (S&P) current rating on the Company's senior unsecured debentures is "A" with a stable outlook. Dominion Bond Rating Service's (DBRS) current rating on the Company's senior unsecured debentures is "A (High)" with a stable rating trend.

Credit ratings are intended to provide investors with an independent measure of the credit quality of the securities of a company and are indicators of the likelihood of payment and the capacity of a company to meet its obligations in accordance with the terms of each obligation. Descriptions of the rating categories for each of the agencies set forth below have been obtained from the respective rating agencies' websites.

These ratings are not a recommendation to buy, sell or hold the securities of the Company and do not address market price or other factors that might determine suitability of a specific security for a particular investor. The ratings also may not reflect the potential impact of all risks on the value of securities and are subject to revision or withdrawal at any time by the rating organization.

The A rating assigned to IGM Financial's senior unsecured debentures by S&P is the sixth highest of the 22 ratings used for long-term debt. This rating indicates S&P's view that the Company's capacity to meet its financial commitment on the obligation is strong, but the obligation is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rated categories.

The A (High) rating assigned to IGM Financial's senior unsecured debentures by DBRS is the fifth highest of the 26 ratings used for long-term debt. Under the DBRS long-term rating scale,

debt securities rated A (High) are of good credit quality and the capacity for the payment of financial obligations is substantial. While this is a favourable rating, entities in the A (High) category may be vulnerable to future events, but qualifying negative factors are considered manageable.

FINANCIAL INSTRUMENTS

Table 26 presents the carrying amounts and fair values of financial assets and financial liabilities. The table excludes fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. These items include cash and cash equivalents, accounts and other receivables, certain other financial assets, accounts payable and accrued liabilities and certain other financial liabilities.

Fair value is determined using the following methods and assumptions:

Other investments and other financial assets and liabilities are valued using quoted prices from active markets, when available. When a quoted market price is not readily available, valuation techniques are used that require assumptions related to discount rates and the timing and amount of future cash flows. Wherever possible, observable market inputs are used in the valuation techniques.
Loans classified as held for trading are valued using market interest rates for loans with similar credit risk and maturity,

specifically lending rates offered to retail borrowers by financial institutions.

Loans classified as amortized cost are valued by discounting the expected future cash flows at prevailing market yields.
Obligations to securitization entities are valued by discounting the expected future cash flows at prevailing market yields for securities issued by these securitization entities having similar terms and characteristics.
Deposits and certificates are valued by discounting the contractual cash flows using market interest rates currently offered for deposits with similar terms and credit risks.
Long-term debt is valued using quoted prices for each debenture available in the market.
Derivative financial instruments are valued based on quoted market prices, where available, prevailing market rates for instruments with similar characteristics and maturities, or discounted cash flow analysis.

See Note 13 of the Interim Financial Statements which provides additional discussion on the determination of fair value of financial instruments.

Although there were changes to both the carrying values and fair values of financial instruments, these changes did not have a material impact on the financial condition of the Company for the nine months ended September 30, 2021.

	TABLE 26: FINANCIAL INSTRUMENTS

	SEPTEMBER 30, 2021	DECEMBER 31, 2020
($ millions)	CARRYING VALUE	FAIR VALUE	CARRYING VALUE	FAIR VALUE
Financial assets recorded at fair value
Other investments
– Fair value through other comprehensive income	$1,255.2	$1,255.2	$593.3	$593.3
– Fair value through profit or loss	83.6	83.6	39.0	39.0
Loans
– Fair value through profit or loss	4.0	4.0	3.3	3.3
Derivative financial instruments	44.9	44.9	37.3	37.3
Financial assets recorded at amortized cost
Loans
– Amortized cost	5,549.7	5,630.6	6,328.6	6,532.8
Financial liabilities recorded at fair value
Derivative financial instruments	19.0	19.0	34.5	34.5
Financial liabilities recorded at amortized cost
Deposits and certificates	1,641.0	1,641.3	1,104.9	1,105.4
Obligations to securitization entities	5,268.2	5,390.3	6,173.9	6,345.2
Long-term debt	2,100.0	2,499.1	2,100.0	2,653.8

Risk Management

IGM Financial is exposed to a variety of risks that are inherent in our business activities. Our ability to manage these risks is key to our ongoing success. The Company emphasizes a strong risk management culture and the implementation of an effective risk management approach. Our approach coordinates risk management across the organization and its business units and seeks to ensure prudent and measured risk-taking in order to achieve an appropriate balance between risk and return. Fundamental to our enterprise risk management program is protecting and enhancing our reputation.

RISK MANAGEMENT FRAMEWORK

The Company's risk management approach is undertaken through our comprehensive Enterprise Risk Management (ERM) Framework which is composed of five core elements: risk governance, risk appetite, risk principles, a defined risk management process, and risk management culture. The ERM Framework is established under our ERM Policy, which is approved by the Executive Risk Management Committee.

RISK GOVERNANCE

Our risk governance structure emphasizes ownership of risk management in each business unit and oversight by an executive Risk Management Committee accountable to the Risk Committee of the Board (Risk Committee) and ultimately to the Board of Directors. Additional oversight is provided by the ERM Department, compliance groups, and Internal Audit Department.

The Risk Committee provides primary oversight and carries out its risk management mandate. The Risk Committee is responsible for assisting the Board in reviewing and overseeing the risk governance structure and risk management program of the Company by: i) ensuring that appropriate procedures are in place to identify and manage risks and establish risk tolerances, ii) ensuring that appropriate policies, procedures and controls are implemented to manage risks, and iii) reviewing the risk management process on a regular basis to ensure that it is functioning effectively.

Other specific risks are managed with the support of the following Board committees:

The Audit Committee has specific risk oversight responsibilities in relation to financial disclosure, internal controls and the control environment as well as our compliance activities, including administration of the Code of Conduct.
The Human Resource Committee oversees compensation policies and practices.
The Governance and Nominating Committee oversees corporate governance practices.

• The Related Party and Conduct Review Committee oversees conflicts of interest.

Management oversight for risk management resides with the executive Risk Management Committee which is comprised of the Chief Executive Officers of IGM Financial, IG Wealth Management and Mackenzie Investments, the Chief Financial Officer, the General Counsel, the Chief Operating Officer, the Chief Strategy and Corporate Development Officer and the Chief Human Resources Officer. The committee is responsible for oversight of IGM Financial's risk management process by: i) establishing and maintaining the risk framework and policy; ii) defining the risk appetite; iii) ensuring our risk profile and processes are aligned with corporate strategy and risk appetite; and iv) establishing "tone at the top" and reinforcing a strong culture of risk management.

The Chief Executive Officers of the operating companies have overall responsibility for overseeing risk management of their respective companies.

The Company has assigned responsibility for risk management using the Three Lines of Defence model, with the First Line reflecting the business units having primary responsibility for risk management, supported by Second Line risk management functions and a Third Line (the Internal Audit function) providing assurance and validation of the design and effectiveness of the ERM Framework.

In response to the impact of COVID-19, the Company is focusing our teams on addressing and managing COVID-19 issues and has established new committees and processes where required.

First Line of Defence

The leaders of the various business units and support functions have primary ownership and accountability for the ongoing risk management associated with their respective activities. Responsibilities of business unit and support function leaders include: i) establishing and maintaining procedures for the identification, assessment, documentation and escalation of risks, ii) implementing control activities to mitigate risks, iii) identifying opportunities for risk reduction or transfer, and iv) aligning business and operational strategies with the risk culture and risk appetite of the organization as established by the Risk Management Committee.

Second Line of Defence

The Enterprise Risk Management (ERM) Department provides oversight, analysis and reporting to the Risk Management Committee on the level of risks relative to the established risk appetite for all activities of the Company. Other responsibilities include: i) developing and maintaining the enterprise risk

management program and framework, ii) managing the enterprise risk management process, and iii) providing guidance and training to business unit and support function leaders.

The Company has a number of committees of senior business leaders which provide oversight of specific business risks, including the Financial Risk Management and Operational Risk Management committees. These committees perform critical reviews of risk assessments, risk management practices and risk response plans developed by business units and support functions.

Other oversight accountabilities reside with the Company's corporate and compliance groups which are responsible for ensuring compliance with policies, laws and regulations.

Third Line of Defence

The Internal Audit Department is the third line of defence and provides independent assurance to senior management and the Board of Directors on the effectiveness of risk management policies, processes and practices.

RISK APPETITE AND RISK PRINCIPLES

The Risk Management Committee establishes the Company's appetite for different types of risk through the Risk Appetite Framework. Under the Risk Appetite Framework, one of four appetite levels is established for each risk type and business activity of the Company. These appetite levels range from those where the Company has no appetite for risk and seeks to minimize any losses, to those where the Company readily accepts exposure while seeking to ensure that risks are well understood and managed. These appetite levels guide our business units as they engage in business activities, and inform them in establishing policies, limits, controls and risk transfer activities.

A Risk Appetite Statement and Risk Principles provide further guidance to business leaders and employees as they conduct risk management activities. The Risk Appetite Statement's emphasis is to maintain the Company's reputation and brand, ensure financial flexibility, and focus on mitigating operational risk.

RISK MANAGEMENT PROCESS

The Company's risk management process is designed to foster:

Ongoing assessment of risks and tolerance in a changing operating environment.
Appropriate identification and understanding of existing and emerging risks and risk response.
Timely monitoring and escalation of risks based upon changing circumstances.

Significant risks that may adversely affect the Company's ability to achieve its strategic and business objectives are identified through the Company's ongoing risk management process.

We use a consistent methodology across our organizations and business units for identification and assessment of risks. Risks are assessed by evaluating the impact and likelihood of the potential risk event after consideration of controls and any risk transfer activities. The results of these assessments are considered relative to risk appetite and tolerances and may result in action plans to adjust the risk profile.

Risk assessments are monitored and reviewed on an ongoing basis by business units and by oversight areas including the ERM Department. The ERM Department promotes and coordinates communication and consultation to support effective risk management and escalation. The ERM Department regularly reports on the results of risk assessments and on the assessment process to the Risk Management Committee and to the Board Risk Committee.

RISK MANAGEMENT CULTURE

Risk management is intended to be everyone's responsibility within the organization. The ERM Department engages all business units in workshops to foster awareness and incorporation of our risk framework into our business activities.

We have an established business planning process which reinforces our risk management culture. Our compensation programs are typically objectives-based, and do not encourage or reward excessive or inappropriate risk taking, and often are aligned specifically with risk management objectives.

Our risk management program emphasizes integrity, ethical practices, responsible management and measured risk-taking with a long-term view. Our standards of integrity and ethics are reflected within our Code of Conduct which applies to directors, officers and employees.

KEY RISKS OF THE BUSINESS

Significant risks that may adversely affect our ability to achieve strategic and business objectives are identified through our ongoing risk management process.

We use a consistent methodology across our organizations and business units to identify and assess risks, considering factors both internal and external to the organization. These risks are broadly grouped into five categories: financial, operational, strategic, business, and environmental and social.

1) FINANCIAL RISK

LIQUIDITY AND FUNDING RISK

This is the risk of an inability to generate or obtain sufficient cash in a timely and cost-effective manner to meet contractual or anticipated commitments as they come due or arise.

Our liquidity management practices include:

Maintaining liquid assets and lines of credit to satisfy near term liquidity needs.
Ensuring effective controls over liquidity management processes.
Performing regular cash forecasts and stress testing.
Regular assessment of capital market conditions and the Company's ability to access bank and capital market funding.
Ongoing efforts to diversify and expand long-term mortgage funding sources.
Oversight of liquidity management by the Financial Risk Management Committee, a committee of finance and other business leaders.

A key funding requirement is the funding of Consultant network compensation paid for the distribution of financial products and services. This compensation continues to be paid from operating cash flows.

The Company also maintains sufficient liquidity to fund and temporarily hold mortgages pending sale or securitization to long-term funding sources and to manage any derivative collateral requirements. Through its mortgage banking operations, residential mortgages are sold to third parties including certain mutual funds, institutional investors through private placements, Canadian bank-sponsored securitization trusts, and by issuance and sale of National Housing Act Mortgage-Backed Securities (NHA MBS) securities including sales to Canada Housing Trust under the CMB Program. The Company maintains committed capacity within certain Canadian bank-sponsored securitization trusts. Capacity for sales under the CMB Program consists of participation in new CMB issues and reinvestment of principal repayments held in the Principal Reinvestment Accounts. The Company's continued ability to fund residential mortgages through Canadian bank-sponsored securitization trusts and NHA MBS is dependent on securitization market conditions and government regulations that are subject to change. A condition

of the NHA MBS and CMB Program is that securitized loans be insured by an insurer that is approved by CMHC. The availability of mortgage insurance is dependent upon market conditions and is subject to change.

As part of ongoing liquidity management during 2021 and 2020, the Company:

Continued to assess additional funding sources for the Company's mortgage banking operations.
Received proceeds of $310.8 million from the sales of a portion of the Company's investment in Wealthsimple and other investments in 2021.
Received proceeds from the sales of the Company's investment in Personal Capital and the Quadrus Group of Funds of $262.8 million in 2020.
Acquisition of GLC for $185 million and Northleaf for $241 million in 2020.

The Company's contractual obligations are reflected in Table 27.

In addition to IGM Financial's current balance of cash and cash equivalents, liquidity is available through the Company's lines of credit. The Company's lines of credit with various Schedule I Canadian chartered banks totalled $825 million at September 30, 2021, unchanged from December 31, 2020. The lines of credit at September 30, 2021 consisted of committed lines of $650 million and uncommitted lines of $175 million, unchanged from December 31, 2020. The Company has accessed its uncommitted lines of credit in the past; however, any advances made by a bank under the uncommitted lines of credit are at the bank's sole discretion. As at September 30, 2021 and December 31, 2020, the Company was not utilizing its committed lines of credit or its uncommitted lines of credit.

The actuarial valuation for funding purposes related to the Company's registered defined benefit pension plan, based on a measurement date of December 31, 2020, was completed in

AS AT SEPTEMBER 30, 2021($ millions)	DEMAND	LESS THAN1 YEAR	1-5YEARS	AFTER5 YEARS	TOTAL
Derivative financial instruments	$–	$8.4	$10.5	$0.1	$19.0
Deposits and certificates	1,639.2	0.4	0.6	0.8	1,641.0
Obligations to securitization entities	–	1,087.5	4,170.5	10.2	5,268.2
Leases(1)	–	29.7	92.0	116.8	238.5
Long-term debt	–	–	–	2,100.0	2,100.0
Pension funding(2)	–	3.3	–	–	3.3
Total contractual obligations	$1,639.2	$1,129.3	$4,273.6	$2,227.9	$9,270.0

TABLE 27: CONTRACTUAL OBLIGATIONS

(1) Includes remaining lease payments related to office space and equipment used in the normal course of business.

(2) The next required actuarial valuation will be completed based on a measurement date of December 31, 2021. Pension funding requirements beyond 2021 are subject to significant variability and will be determined based on future actuarial valuations. Pension contribution decisions are subject to change, as contributions are affected by many factors including market performance, regulatory requirements, changes in assumptions and management's ability to change funding policy.

June 2021. The valuation determines the plan surplus or deficit on both a solvency and going concern basis. The solvency basis determines the relationship between the plan assets and its liabilities assuming that the plan is wound up and settled on the valuation date. A going concern valuation compares the relationship between the plan assets and the present value of the expected future benefit cash flows, assuming the plan will be maintained indefinitely. Based on the actuarial valuation, the registered pension plan had a solvency deficit of $61.3 million compared to $47.2 million in the previous actuarial valuation, which was based on a measurement date of December 31, 2017. The increase in the solvency deficit resulted primarily as a result of lower interest rates and is required to be funded over five years. The registered pension plan had a going concern surplus of $79.2 million compared to $46.1 million in the previous valuation. The next required actuarial valuation will be based on a measurement date of December 31, 2021. During the year, the Company has made contributions of $11.1 million (2020 – $19.2 million). The Manitoba Government announced that they will temporarily waive certain contributions businesses are required to make to their defined benefit pension plans including solvency funding payments for the 13 months from December 2020 to December 2021. IGM has elected this special payment moratorium and as a result, the Company expects to only make current service cost annual contributions of approximately $14.4 million in 2021, with $3.3 million remaining for the rest of 2021. Pension contribution decisions are subject to change, as contributions are affected by many factors including market performance, regulatory requirements, changes in assumptions and management's ability to change funding policy.

Management believes cash flows from operations, available cash balances and other sources of liquidity described above are sufficient to meet the Company's liquidity needs. The Company continues to have the ability to meet its operational cash flow requirements, its contractual obligations, and its declared dividends. The current practice of the Company is to declare and pay dividends to common shareholders on a quarterly basis at the discretion of the Board of Directors. The declaration of dividends by the Board of Directors is dependent on a variety of factors, including earnings which are significantly influenced by the impact that debt and equity market performance has on the Company's fee income and commission and certain other expenses. The Company's liquidity position and its management of liquidity and funding risk have not changed materially since December 31, 2020.

CREDIT RISK

This is the risk of financial loss to the Company if a counterparty to a transaction fails to meet its obligations.

The Company's cash and cash equivalents, other investment holdings, mortgage portfolios, and derivatives are subject to

credit risk. The Company monitors its credit risk management practices on an ongoing basis to evaluate their effectiveness.

Cash and Cash Equivalents and Client Funds on Deposit

At September 30, 2021, cash and cash equivalents of $1,123.1 million (December 31, 2020 – $771.6 million) consisted of cash balances of $320.6 million (December 31, 2020 – $76.6 million) on deposit with Canadian chartered banks and cash equivalents of $802.5 million (December 31, 2020 – $695.0 million). Cash equivalents are comprised of Government of Canada treasury bills totalling $147.1 million (December 31, 2020 – $96.0 million), provincial government treasury bills and promissory notes of $421.8 million (December 31, 2020 – $148.8 million), and bankers' acceptances and other corporate commercial paper of $233.6 million (December 31, 2020 – $450.2 million).

Client funds on deposit of $1,642.3 million (December 31, 2020 – $1,063.4 million) represent cash balances held in client accounts which are deposited at Canadian financial institutions.

The Company manages credit risk related to cash and cash equivalents by adhering to its Investment Policy that outlines credit risk parameters and concentration limits. The Company regularly reviews the credit ratings of its counterparties. The maximum exposure to credit risk on these financial instruments is their carrying value.

The Company's exposure to and management of credit risk related to cash and cash equivalents and fixed income securities have not changed materially since December 31, 2020.

Mortgage Portfolio

As at September 30, 2021, residential mortgages, recorded on the Company's balance sheet, of $5.6 billion (December 31, 2020 – $6.3 billion) consisted of $5.2 billion sold to securitization programs (December 31, 2020 – $6.0 billion), $317.0 million held pending sale or securitization (December 31, 2020 – $334.5 million) and $11.4 million related to the Company's intermediary operations (December 31, 2020 – $14.1 million).

The Company manages credit risk related to residential mortgages through:

Adhering to its lending policy and underwriting standards;
Its loan servicing capabilities;
Use of client-insured mortgage default insurance and mortgage portfolio default insurance held by the Company; and
Its practice of originating its mortgages exclusively through its own network of Mortgage Planning Specialists and IG Wealth Management Consultants as part of a client's IG Living Plan.

In certain instances, credit risk is also limited by the terms and nature of securitization transactions as described below:

Under the NHA MBS program totalling $2.7 billion (December 31, 2020 – $3.2 billion), the Company is obligated to make timely payment of principal and coupons irrespective of whether such payments were received from the mortgage borrower. However, as required by the NHA MBS program, 100% of the loans are insured by an approved insurer.
Credit risk for mortgages securitized by transfer to banksponsored securitization trusts totalling $2.5 billion (December 31, 2020 – $2.8 billion) is limited to amounts held in cash reserve accounts and future net interest income, the fair values of which were $62.3 million (December 31, 2020 – $73.0 million) and $41.1 million (December 31, 2020 – $45.6 million), respectively, at September 30, 2021. Cash reserve accounts are reflected on the balance sheet, whereas rights to future net interest income are not reflected on the balance sheet and will be recorded over the life of the mortgages.

At September 30, 2021, residential mortgages recorded on balance sheet were 53.2% insured (December 31, 2020 – 55.3%). As at September 30, 2021, impaired mortgages on these portfolios were $4.5 million, compared to $4.8 million at December 31, 2020. Uninsured non-performing mortgages over 90 days on these portfolios were $2.4 million at September 30, 2021, compared to $2.3 million at December 31, 2020.

The Company also retains certain elements of credit risk on mortgage loans sold to the IG Mackenzie Mortgage and Short Term Income Fund and to the IG Mackenzie Canadian Corporate Bond Fund through an agreement to repurchase mortgages in certain circumstances benefiting the funds. These loans are not recorded on the Company's balance sheet as the Company has transferred substantially all of the risks and rewards of ownership associated with these loans.

The Company regularly reviews the credit quality of the mortgages and the adequacy of the allowance for expected credit losses.

The Company's allowance for expected credit losses was $0.7 million at September 30, 2021, compared to $0.8 million at December 31, 2020, and is considered adequate by management to absorb all credit-related losses in the mortgage portfolios based on: i) historical credit performance experience, ii) recent trends including the economic impact of COVID-19 and Canada's COVID-19 Economic Response Plan to support Canadians and businesses, iii) current portfolio credit metrics and other relevant characteristics, iv) our strong financial planning relationship with our clients, and v) stress testing of losses under adverse real estate market conditions.

The Company's exposure to and management of credit risk related to mortgage portfolios have not changed materially since December 31, 2020.

Derivatives

The Company is exposed to credit risk through derivative contracts it utilizes to hedge interest rate risk, to facilitate securitization transactions and to hedge market risk related to certain stock-based compensation arrangements. These derivatives are discussed more fully under the Market Risk section of this MD&A.

To the extent that the fair value of the derivatives is in a gain position, the Company is exposed to credit risk that its counterparties fail to fulfil their obligations under these arrangements.

The Company's derivative activities are managed in accordance with its Investment Policy which includes counterparty limits and other parameters to manage counterparty risk. The aggregate credit risk exposure related to derivatives that are in a gain position of $42.8 million (December 31, 2020 – $35.8 million) does not give effect to any netting agreements or collateral arrangements. The exposure to credit risk, considering netting agreements and collateral arrangements and including rights to future net interest income, was $0.4 million at September 30, 2021 (December 31, 2020 – $3.8 million). Counterparties are all Canadian Schedule I chartered banks and, as a result, management has determined that the Company's overall credit risk related to derivatives was not significant at September 30, 2021. Management of credit risk related to derivatives has not changed materially since December 31, 2020.

Additional information related to the Company's securitization activities and utilization of derivative contracts can be found in Note 6 to the Interim Financial Statements and in Notes 2, 6 and 22 to the Annual Financial Statements.

MARKET RISK

This is the risk of loss arising from changes in the values of the Company's financial instruments due to changes in foreign exchange rates, interest rates or equity prices.

Interest Rate Risk

IGM Financial is exposed to interest rate risk on its mortgage portfolio and on certain of the derivative financial instruments used in our mortgage banking operations.

The Company manages interest rate risk associated with its mortgage banking operations by entering into interest rate swaps with Canadian Schedule I chartered banks as follows:

• The Company has in certain instances funded floating rate mortgages with fixed rate Canada Mortgage Bonds as part of the securitization transactions under the CMB Program. As previously discussed, as part of the CMB Program, the Company is party to a swap whereby it is entitled to receive investment returns on reinvested mortgage principal and

is obligated to pay Canada Mortgage Bond coupons. This swap had a negative fair value of $4.7 million (December 31, 2020 – negative $21.1 million) and an outstanding notional amount of $0.4 billion at September 30, 2021 (December 31, 2020 – $0.7 billion). The Company enters into interest rate swaps with Canadian Schedule I chartered banks to hedge the risk that the interest rates earned on floating rate mortgages and reinvestment returns decline. The fair value of these swaps totalled $9.3 million (December 31, 2020 – $19.9 million), on an outstanding notional amount of $1.5 billion at September 30, 2021 (December 31, 2020 – $1.3 billion). The net fair value of these swaps of $4.6 million at September 30, 2021 (December 31, 2020 – negative $1.2 million) is recorded on the balance sheet and has an outstanding notional amount of $1.9 billion (December 31, 2020 – $2.0 billion).

• The Company is exposed to the impact that changes in interest rates may have on the value of mortgages committed to or held pending sale or securitization to long-term funding sources. The Company enters into interest rate swaps to hedge the interest rate risk related to funding costs for mortgages held by the Company pending sale or securitization. Hedge accounting is applied to the cost of funds on certain securitization activities. The effective portion of fair value changes of the associated interest rate swaps are initially recognized in Other comprehensive income and subsequently recognized in Wealth Management revenue over the term of the related Obligations to securitization entities. The fair value of these swaps was $0.7 million (December 31, 2020 – negative $0.3 million) on an outstanding notional amount of $109.5 million at September 30, 2021 (December 31, 2020 – $191.3 million).

As at September 30, 2021, the impact to annual net earnings of a 100 basis point increase in interest rates would have been a decrease of approximately $1.8 million (December 31, 2020 – decrease of $1.3 million). The Company's exposure to and management of interest rate risk have not changed materially since December 31, 2020.

Equity Price Risk

IGM Financial is exposed to equity price risk on our equity investments which are classified as either fair value through other comprehensive income or fair value through profit or loss or investments in associates. The fair value of the equity investments was $1,338.8 million at September 30, 2021 (December 31, 2020 – $632.3 million), as shown in Table 20.

The Company sponsors a number of deferred compensation arrangements for employees where payments to participants are deferred and linked to the performance of the common shares of IGM Financial Inc. The Company hedges its exposure to this risk through the use of forward agreements and total return swaps.

Foreign Exchange Risk

IGM Financial is exposed to foreign exchange risk on its investment in China AMC. Changes to the carrying value due to changes in foreign exchange rates is recognized in Other comprehensive income. As at September 30, 2021, a 5% appreciation (depreciation) in Canadian currency relative to foreign currencies would decrease (increase) the aggregate carrying value of foreign investments by approximately $35.1 million ($38.8 million).

The Company's proportionate share of China AMC's earnings, recorded in Proportionate share of associates' earnings in the Consolidated Statements of Earnings, is also affected by changes in foreign exchange rates. For the quarter ended September 30, 2021, the impact to net earnings of a 5% appreciation (depreciation) in Canadian currency relative to foreign currencies would decrease (increase) the Company's proportionate share of associates' earnings (losses) by approximately $0.8 million ($0.9 million).

RISKS RELATED TO ASSETS UNDER MANAGEMENT AND ADVISEMENT

At September 30, 2021, IGM Financial's total assets under management and advisement were $265.2 billion compared to $240.0 billion at December 31, 2020.

The Company's primary sources of revenues are advisory fees and asset management fees which are applied as an annual percentage of the level of assets under management and advisement. As a result, the level of the Company's revenues and earnings are indirectly exposed to a number of financial risks that affect the value of assets under management and advisement on an ongoing basis. These include market risks, such as changes in equity prices, interest rates and foreign exchange rates, as well as credit risk on debt securities, loans and credit exposures from other counterparties within our client portfolios.

Changing financial market conditions may also lead to a change in the composition of the Company's assets under management between equity and fixed income instruments, which could result in lower revenues depending upon the management fee rates associated with different asset classes and mandates.

The Company believes that over the long term, exposure to investment returns on its client portfolios is beneficial to the Company's results and consistent with stakeholder expectations, and generally it does not engage in risk transfer activities such as hedging in relation to these exposures.

The Company's exposure to the value of assets under management and advisement aligns it with the experience of its clients. Assets under management are broadly diversified by asset class, geographic region, industry sector, investment team and style. The Company regularly reviews the sensitivity of its

assets under management, revenues, earnings and cash flow to changes in financial markets.

2) OPERATIONAL RISK

This is the risk of financial loss, reputational damage or regulatory actions resulting from inadequate or failed internal processes or systems, human interaction or external events. This excludes business risk, which is a separate category in our ERM framework.

We are exposed to a broad range of operational risks, including information technology security and system failures, errors relating to transaction processing, financial models and valuations, fraud and misappropriation of assets, and inadequate application of internal control processes.

Operational risks relating to people and processes are mitigated through policies and process controls. Oversight of risks and ongoing evaluation of the effectiveness of controls is provided by the Company's Compliance Department, ERM Department and Internal Audit Department.

The Company has an insurance review process where it assesses and determines the nature and extent of insurance that is appropriate to provide adequate protection against unexpected losses, and where it is required by law, regulators or contractual agreements.

Operational risk affects all business activities, including the processes in place to manage other risks. As a result, operational risk can be difficult to measure, given that it forms part of other risks of the Company and may not always be separately identified.

The Company's risk management framework emphasizes operational risk management and internal control. The Company has a very low appetite for risk in this area.

The business unit leaders are responsible for management of the day to day operational risks of their respective business units. Specific programs, policies, training, standards and governance processes have been developed to help manage operational risk.

The Company has a crisis response plan which outlines crisis response coordination policies and procedures in the event of a crisis that could significantly impact the organization's reputation, brands or business operations. The Company executes simulation exercises on a regular basis. The Company has a crisis assessment team comprised of senior leadership who are responsible for crisis confirmation and management. In addition, this team is responsible for setting strategy, overseeing response and ensuring appropriate subject matter experts are engaged in the scenario-dependent crisis response team.

The Company also has a business continuity management program to enable critical operations and processes to function in the event of a business disruption.

For the health and safety of the Company's employees and clients and to help efforts to limit the speed and spread of the COVID-19 infection, the Company moved substantially all of its employees and Consultants to work from home and temporarily closed its offices in March 2020. The Company is continuously assessing its plan and protocols, and taking direction from external governing bodies such as the Medical Officers of Health, to determine when employees and advisors will return to the office.

The Company's business continuity plan has been effective at ensuring the Company is able to continue operations and provide client service with minimal disruptions.

TECHNOLOGY AND CYBER RISK

We use systems and technology to support business operations and the client and financial advisor experience. As a result, we

TABLE 28: IGM FINANCIAL ASSETS UNDER MANAGEMENT – ASSET AND CURRENCY MIX

AS AT SEPTEMBER 30, 2021	INVESTMENT FUNDS	TOTAL
Cash	1.4 %	1.1 %
Short-term fixed income and mortgages	3.7	3.5
Other fixed income	24.0	23.7
Domestic equity	21.0	25.1
Foreign equity	47.4	44.7
Real Property	2.5	1.9
	100.0 %	100.0 %
CAD	52.2 %	53.5 %
USD	30.9	31.6
Other	16.9	14.9
	100.0 %	100.0 %

are exposed to risks relating to technology and cyber security such as data breaches, identity theft and hacking, including the risk of denial of service or malicious software attacks. The volume of these activities in our society has increased since the onset of COVID-19. Such attacks could compromise confidential information of the Company and that of clients or other stakeholders, and could result in negative consequences including lost revenue, litigation, regulatory scrutiny or reputational damage. To remain resilient to such threats, we have established enterprise-wide cyber security programs, benchmarked capabilities to sound industry practices, and implemented threat and vulnerability assessment and response capabilities. Extended duration of work from home programs introduces increased need to mitigate risk of potential data loss.

OUTSOURCING

We regularly engage third parties to provide expertise and efficiencies that support our operational activities. Our exposure to third party service provider risk could include reputational, regulatory and other operational risks. Policies, standard operating procedures and dedicated resources, including a supplier code of conduct and outsourcing policy, have been developed and implemented to specifically address third party service provider risk. We perform due diligence and monitoring activities before entering into contractual relationships with third-party service providers and on an ongoing basis. As our reliance on external service providers continues to grow, we continue to enhance resources and processes to support third party risk management.

MODEL RISK

We use a variety of models to assist in: the valuation of financial instruments, operational scenario testing, management of cash flows, capital management, and assessment of potential acquisitions. These models incorporate internal assumptions, observable market inputs and available market prices. Effective controls exist over the development, implementation and application of these models. However, changes in the internal assumptions or other factors affecting the models could have an adverse effect on the Company's consolidated financial position and reputation.

LEGAL AND REGULATORY COMPLIANCE

This is the risk of not complying with laws, contractual agreements or regulatory requirements. These risks relate to regulation governing product distribution, investment management, accounting, reporting and communications.

IGM Financial is subject to complex and changing legal, taxation and regulatory requirements, including the requirements of agencies of the federal, provincial and territorial governments in Canada which regulate the Company and its activities.

The Company and its subsidiaries are also subject to the requirements of self-regulatory organizations to which they belong. These and other regulatory bodies regularly adopt new laws, rules, regulations and policies that apply to the Company and its subsidiaries. These requirements include those that apply to IGM Financial as a publicly traded company and those that apply to the Company's subsidiaries based on the nature of their activities. They include regulations related to the management and provision of financial products and services, including securities, insurance and mortgages, and other activities carried on by the Company in the markets in which it operates. Regulatory standards affecting the Company and the financial services industry are significant and continually evolve. The Company and its subsidiaries are subject to reviews as part of the normal ongoing process of oversight by the various regulators.

Failure to comply with laws, rules or regulations could lead to regulatory sanctions and civil liability, and may have an adverse reputational or financial effect on the Company. The Company manages legal and regulatory compliance risk through its efforts to promote a strong culture of compliance. The monitoring of regulatory developments and their impact on the Company is overseen by the Regulatory Initiatives Committee chaired by the Executive Vice-President, General Counsel. The Company also continues to develop and maintain compliance policies, processes and oversight, including specific communications on compliance and legal matters, training, testing, monitoring and reporting. The Audit Committee of the Board receives regular reporting on compliance initiatives and issues.

IGM Financial promotes a strong culture of ethics and integrity through its Code of Conduct approved by the Board of Directors, which outlines standards of conduct that apply to all IGM Financial directors, officers and employees. The Code of Conduct references many policies relating to the conduct of directors, officers and employees. Other corporate policies cover anti-money laundering and privacy. Training is provided on these policies on an annual basis. Individuals subject to the Code of Conduct attest annually that they understand the requirements and have complied with its provisions.

Business units are responsible for management of legal and regulatory compliance risk, and implementing appropriate policies, procedures and controls. The Company's Compliance Departments are responsible for providing oversight of all regulated compliance activities. The Internal Audit Department also provides oversight concerning regulatory compliance matters.

PRIVACY

Our clients entrust us with their personal information, and we have a legal and ethical responsibility to protect it. In accordance with Canadian privacy laws, we collect only personal information that is necessary to provide our products and services to clients, or where we have consent to do so. We do not disclose personal information about clients unless required by law, when necessary to provide products or services to them, or as otherwise authorized by them.

If we need to share clients' personal information with third-party service providers, we remain responsible for that information and protect it through contracts that commit the service providers to maintain levels of protection comparable to ours.

Our operating companies have comprehensive procedures to respond to any privacy breaches, mitigate risks and prevent re-occurrence. If a breach is determined to pose a real risk of significant harm to a client, we will notify the individual, and the federal and/or provincial Privacy Commissioner where applicable, in a timely manner.

Privacy is covered in our annual, mandatory compliance training for employees. Topics include our privacy obligations, privacy tips and best practices, and how to handle privacy breaches, complaints and access to information requests. Each operating company also has its own Privacy Officer, who provides guidance to staff and manages our response to privacy concerns.

Each operating company has its own privacy-related procedures relevant to its business and we have an overarching Privacy Policy applicable across IGM Financial. We also conducted training for advisors and IG field staff on handling client privacy and security during the pandemic, and issued guidelines to all employees on how to protect client personal information and confidential business documents while working from home.

CONTINGENCIES

The Company is subject to legal actions arising in the normal course of its business. In December 2018, a proposed class action was filed in the Ontario Superior Court against Mackenzie which alleges that the company should not have paid mutual fund trailing commissions to order execution only dealers. Although it is difficult to predict the outcome of any such legal actions, based on current knowledge and consultation with legal counsel, management does not expect the outcome of any of these matters, individually or in aggregate, to have a material adverse effect on the Company's consolidated financial position.

3) STRATEGIC RISK

This is the risk of potential adverse impacts resulting from inadequate or inappropriate governance, oversight, management of incentives and conflicts, regulatory developments and strategy.

IGM Financial believes in the importance of good corporate governance and the central role played by directors in the governance process. We believe that sound corporate governance is essential to the well-being of the Company and our shareholders. Oversight of IGM Financial is performed by the Board of Directors directly and through its five committees. The Company's President and Chief Executive Officer has overall responsibility for management of the Company. The Company's activities are carried out principally by three operating companies – Investors Group Inc., Mackenzie Financial Corporation and Investment Planning Counsel Inc. – each of which are managed by a President and Chief Executive Officer.

We have a business planning process that supports development of an annual business plan, approved by the Board of Directors, which incorporates objectives and targets for the Company. Components of management compensation are associated with the achievement of earnings targets and other objectives associated with the plan. Strategic plans and direction are part of this planning process and are integrated into the Company's risk management program.

REGULATORY DEVELOPMENT RISK

This is the potential for changes to regulatory, legal, or tax requirements that may have an adverse impact on the Company's business activities or financial results.

We are exposed to the risk of changes in laws, taxation and regulation that could have an adverse impact on the Company. Particular regulatory initiatives may have the effect of making the products of the Company's subsidiaries appear to be less competitive than the products of other financial service providers, to third party distribution channels and to clients. Regulatory differences that may impact the competitiveness of the Company's products include regulatory costs, tax treatment, disclosure requirements, transaction processes or other differences that may be as a result of differing regulation or application of regulation. Regulatory developments may also impact product structures, pricing, and dealer and advisor compensation. While the Company and its subsidiaries actively monitor such initiatives, and where feasible comment upon or discuss them with regulators, the ability of the Company and its subsidiaries to mitigate the imposition of differential regulatory treatment of financial products or services is limited.

The Company continuously monitors regulatory developments, guidance and communications. Each of the Company's subsidiaries is currently engaged in the implementation of the Canadian Securities Administrators (CSA) Client Focused Reforms, which come into effect January 1, 2022.

ACQUISITION RISK

The Company is exposed to risks related to its acquisitions and strategic investments. The Company undertakes thorough due diligence prior to completing an acquisition, but there is no assurance that the Company will achieve the expected strategic objectives or cost and revenue synergies subsequent to an

acquisition. Subsequent changes in the economic environment and other unanticipated factors may affect the Company's ability to achieve expected earnings growth or expense reductions. The success of an acquisition is dependent on retaining assets under management, clients, and key employees of an acquired company.

4) BUSINESS RISK

GENERAL BUSINESS CONDITIONS

This risk refers to the potential for unfavourable impacts on IGM Financial resulting from competitive or other external factors relating to the marketplace.

Global economic conditions, changes in equity markets, demographics and other factors including geopolitical risk and government instability, can affect investor confidence, income levels and savings decisions. This could result in reduced sales of IGM Financial's products and services and/or result in investors redeeming their investments. These factors may also affect the level and volatility of financial markets and the value of the Company's assets under management, as described more fully under the Risks Related to Assets Under Management section of this MD&A.

To manage this risk, the Company, across its operating subsidiaries, communicates with clients and underscores the importance of financial planning across economic cycles. The Company and the industry continue to take steps to educate Canadian investors on the merits of financial planning, diversification and long-term investing. In periods of volatility, Consultants and independent financial advisors play a key role in assisting investors in maintaining perspective and focus on their long-term objectives.

Redemption rates for long-term funds are summarized in Table 29 and are discussed in the Wealth Management and the Asset Management Segment Operating Results sections of this MD&A.

CATASTROPHIC EVENTS OR LOSS

Catastrophic events or loss refers to the risk that events such as earthquakes, floods, fire, tornadoes, pandemics, or terrorism could adversely affect the Company's financial performance.

Catastrophic events can cause economic uncertainty, affect investor confidence, income levels and financial planning decisions. This could affect the level and volatility of financial markets and the level of the Company's assets under management and advisement.

The global COVID-19 pandemic has caused economic disruption, adversely impacted economic conditions, has caused significant volatility in the level of financial markets, and has increased unemployment in Canada and globally.

In response, the Company implemented its business continuity plans and transitioned substantially all of its employees and Consultants to working from home.

It is difficult to predict how significant the COVID-19 pandemic and government measures taken in response will be to world economies, our clients and our business. This event could have a material impact on the financial positions and results of the Company, subject to duration and severity.

PRODUCT / SERVICE OFFERING

This risk refers to the potential for unfavourable impacts on IGM Financial resulting from inadequate product or service performance, quality or breadth.

IGM Financial and its subsidiaries operate in a highly competitive environment, competing with other financial service providers, investment managers and product and service types. Client development and retention can be influenced by a number of factors, including investment performance, products and services offered by competitors, relative service levels, relative pricing, product attributes, reputation and actions taken by competitors. This competition could have an adverse impact upon the Company's financial position and operating results. Please refer to The Competitive Landscape section of this MD&A for further discussion.

We provide Consultants, independent financial advisors, as well as retail and institutional clients with a high level of service and support and a broad range of investment products, with a focus on building enduring relationships. The Company's subsidiaries also continually review their respective product and service offering and pricing to ensure competitiveness in the marketplace.

We strive to deliver strong investment performance on our products relative to benchmarks and peers. Poor investment

TABLE 29: TWELVE MONTH TRAILING REDEMPTION RATE FOR LONG-TERM FUNDS

	2021SEP. 30	2020SEP. 30
IGM Financial Inc.
IG Wealth Management	9.6 %	9.8 %
Mackenzie	15.6 %	16.2 %
Counsel	23.0 %	19.0 %

performance relative to benchmarks or peers could reduce the level of assets under management and sales and asset retention, as well as adversely impact our brands and reputation. Meaningful and/or sustained underperformance could affect the Company's results. Our objective is to cultivate investment processes and disciplines that give us a competitive advantage, and we do this by diversifying our assets under management and product shelf by investment team, brand, asset class, mandate, style and geographic region.

BUSINESS / CLIENT RELATIONSHIPS

This risk refers to the potential for unfavourable impacts on IGM Financial resulting from changes to key business or client relationships. These relationships primarily include IG Wealth Management clients and Consultants, Mackenzie retail distribution, strategic and significant business partners, clients of Mackenzie funds, and sub-advisors and other product suppliers.

IG Wealth Management Consultant network – IG Wealth Management derives all of its mutual fund sales through its Consultant network. IG Wealth Management Consultants have regular direct contact with clients which can lead to a strong and personal client relationship based on the client's confidence in that individual Consultant. The market for financial advisors is extremely competitive. The loss of a significant number of key Consultants could lead to the loss of client accounts which could have an adverse effect on IG Wealth Management's results of operations and business prospects. IG Wealth Management is focused on strengthening its distribution network of Consultants and on responding to the complex financial needs of its clients by delivering a diverse range of products and services in the context of personalized financial advice, as discussed in the Wealth Management Review of the Business section of this MD&A.

Asset Management – Mackenzie derives the majority of its mutual fund sales through third party financial advisors. Financial advisors generally offer their clients investment products in addition to, and in competition with Mackenzie. Mackenzie also derives sales of its investment products and services from its strategic alliance and institutional clients. Due to the nature of the distribution relationship in these relationships and the relative size of these accounts, gross sale and redemption activity can be more pronounced in these accounts than in a retail relationship. Mackenzie's ability to market its investment products is highly dependent on continued access to these distribution networks. Lack of access could have a material adverse effect on Mackenzie's operating results and business prospects. Mackenzie is well positioned to manage this risk and to continue to build and enhance its distribution relationships. Mackenzie's diverse portfolio of financial products and its longterm investment performance record, marketing, educational and service support has made Mackenzie one of Canada's

leading investment management companies. These factors are discussed further in the Asset Management Review of the Business section of this MD&A.

PEOPLE RISK

This risk refers to the potential inability to attract or retain employees or Consultants, develop them to an appropriate level of proficiency, or manage engagement and personnel succession or transition.

Management, investment and distribution personnel play an important role in developing, implementing, managing and distributing products and services offered by IGM Financial. The loss of these individuals or an inability to attract, retain and motivate sufficient numbers of qualified personnel could negatively affect IGM Financial's business and financial performance.

We have a Diversity and Inclusion Strategy with the purpose of driving an inclusive, equitable and consistent experience for employees and clients that supports our business objectives now and into the future. To achieve the desired outcomes, we focus on three pillars of action: raising awareness; improving inclusive leadership behaviours; and building external partnerships and community engagement.

COVID-19 has caused significant disruption in peoples' lives both professionally and personally. The Company's actions have included:

Implementing a work at home strategy to maintain social distance for our employees and Consultants.
Providing the tools and processes to enable our employees and Consultants to continue to operate effectively from home.
Providing Employee Assistance Programs and other programs to support the mental and physical well-being of our employees, Consultants, and their families.
Developing a return to office strategy to safely allow employees and advisors to return to the office when appropriate.

5) ENVIRONMENTAL AND SOCIAL RISK

This is the potential for financial loss or other unfavourable impacts resulting from environmental or social issues connected to our business operations or investment activities.

Environmental risks include issues such as climate change, biodiversity, pollution, waste, and the unsustainable use of energy, water and other resources. Social risks include issues such as human rights, labour standards, diversity and inclusion, and community impacts.

IGM Financial has a long-standing commitment to responsible management, as articulated in our Corporate Sustainability Statement approved by the Board of Directors. The Board's risk management oversight includes ensuring that material

environmental and social risks are appropriately identified, managed and monitored.

The Company's executive Risk Management Committee is responsible for oversight of the risk management process. Other management committees provide oversight of specific risks including the Corporate Sustainability (CS) Committee and the Diversity and Inclusion Executive Council. The CS Committee is composed of senior executives who are responsible for ensuring implementation of policy and strategy, establishing goals and initiatives, measuring progress, and approving annual reporting for environmental, social and governance (ESG) matters.

Our commitment to responsible management is demonstrated through various mechanisms. These include our Code of Conduct for employees, contractors, and directors; our Supplier Code of Conduct for the firms that do business with us; our Respectful Workplace Policy; our Diversity Policy; our Environmental Policy; and other related policies.

IG Wealth Management and Mackenzie Investments are signatories to the Principles for Responsible Investment (PRI). IG Wealth Management sub-advisors were also required to be signatories to the PRI by the end of 2019. Under the PRI, investors formally commit to incorporate ESG issues into their investment decision making and active ownership processes. In addition, IG Wealth Management, Mackenzie Investments and Investment Planning Counsel have implemented Responsible Investment Policies outlining the practices at each company.

IGM Financial reports annually on ESG management and performance in its Corporate Sustainability Report available on our website. The Company has been recognized for demonstrating strong ESG performance through positions earned on the FTSE4Good Index Series, Jantzi Social Index, Corporate Knights' 2021 Global 100 and Best 50 Corporate Citizens, and has been recognized by CDP at the leadership level for the past four years for its climate disclosures.

We believe that financial services companies have an important role to play in addressing climate change.

IGM Financial is a long-standing participant in the CDP (formerly Carbon Disclosure Project), which promotes corporate disclosures on greenhouse gas emissions and climate change management including setting and monitoring emission reduction targets.

Global practices are continually evolving relating to the identification, analysis, and management of climate risks and opportunities. The Financial Stability Board's Task Force on Climate-related Financial Disclosures (TCFD) was established in response to investor demand for enhanced information on climate-related risks and opportunities. IGM Financial and its operating companies support the TCFD recommendations which include a framework for consistent, voluntary climate-related

financial disclosures that provide decision-useful information to investors, analysts, rating agencies and other stakeholders.

TCFD DISCLOSURE

The TCFD recommends that organizations disclose information about climate-related risks and opportunities in four areas: governance, strategy, risk management, and metrics and targets. Full implementation of TCFD will be a multi-year journey.

Governance: IGM Financial's Board is responsible for providing oversight on risk and strategy, which includes climate-related matters. Through its Risk Committee, the Board is responsible for ensuring that material climate-related issues are appropriately identified, managed and monitored. Our Chief Financial Officer (CFO) oversees implementation of the Corporate Sustainability and Enterprise Risk Management programs. We have established an enterprise wide TCFD Working Group of senior leaders to lead the planning and implementation of the TCFD recommendations. This working group is focused on enhancing our knowledge and tools to quantify climate risks in tandem with our industry, further integrating climate into our business strategy, operations and product offering, evolving our engagement approach with investee companies, and addressing increased disclosure expectations.

Strategy: Climate-related opportunities are identified and assessed within IGM Financial through our business planning processes which define our strategic priorities, initiatives and budgets. In addition to our commitments described above to be responsible investors through engagement and integration of material climate issues into our investment processes, we also offer investment products with specific environmental or social mandates.

At Mackenzie Investments, sustainable investing is one of our key areas of strategic emphasis, and we have established a dedicated function which reports to the CEO. Beyond integrating environmental considerations into investment processes across our boutiques, we have an investment boutique, Greenchip, which focuses on thematic investing to combat climate change. Mackenzie also introduced a new sustainability-focused boutique "Betterworld". This boutique will invest exclusively in companies exemplifying leadership in environmental, social and governance (ESG) behaviours and practices.

During 2021, Mackenzie undertook a number of initiatives on climate change in support of the global goal to reach net zero by 2050. These initiatives included the following:

Signatory to the global Net Zero Asset Managers Initiative
Founding participant to Climate Engagement Canada
Founding Signatory to Responsible Investment Association's Canadian Investor Statement on Climate Change
Launch of two fixed income funds (Mackenzie Global Green Bond Fund and Mackenzie Global Sustainable Bond ETF)

• Launch of Mackenzie Betterworld Canadian Equity Fund and Mackenzie Betterworld Global Equity Fund in addition to our Greenchip offerings

At IG Wealth Management, we have integrated environmental and climate issues into our sub-advisory selection and oversight processes, and have requirements for all sub-advisors to our product offering to be UN PRI signatories. We have a Sustainable and Responsible Investing Committee whose responsibilities include incorporation of climate change awareness and management into our product and service offerings, and we have established education and communication programs for our financial planners.

During 2021, IG Wealth Management also became a Founding Signatory to Responsible Investment Association's Canadian Investor Statement on Climate Change.

In addition, IG Wealth Management announced that it will be launching IG Climate Action Portfolios, a suite of four diversified managed solutions. These portfolios were developed with leading global asset managers and will provide clients with a new way to support the world's transition to net zero emissions. The portfolios will invest in both equity and fixed income securities that are believed to reduce the risks or are expected to benefit from the opportunities associated with climate change and the transition to a net zero emission global economy.

Risk Management: Assessment and management of climaterelated risks is integrated into our ERM framework. At Mackenzie Investments, our boutique investment teams are each responsible for determining when and how climate change is material and how to incorporate transition and physical risks into their investment process. The teams have access to ESG data tools and a service provider for comprehensive global investor engagement who places a priority on climate change engagement. To help aid in the assessment of material climate risks and opportunities, Mackenzie Investments is in the process of implementing the Sustainability Accounting Standards Board framework and a tool to enhance climate data and analytics. We are following the development of climate scenario tools for our industry in order to incorporate scenario planning to enhance our understanding of how our clients and the Company will be impacted by various climate change scenarios.

Metrics and Targets: We set, monitor and report on climate change-related metrics and targets annually in our CDP response and our CS Report which are available at igmfinancial.com/en/ corporate-sustainability. We are reviewing tools to expand our reporting of emissions metrics in our investment portfolios. We have set emission reduction and renewable energy targets in our operations and are on track to meet these goals. As we continue to develop our climate strategy, we will review our targets to continue measuring our progress.

The Financial Services Environment

Canadians held $5.6 trillion in discretionary financial assets with financial institutions at December 31, 2020 based on the most recent report from Investor Economics. The nature of holdings was diverse, ranging from demand deposits held for short-term cash management purposes to longer-term investments held for retirement purposes. Approximately 64% ($3.6 trillion) of these financial assets are held within the context of a relationship with a financial advisor, and this is the primary channel serving the longer-term savings needs of Canadians. Of the $2.0 trillion held outside of a financial advisory relationship, approximately 59% consisted of bank deposits.

Financial advisors represent the primary distribution channel for IGM Financial's products and services, and the core emphasis of our business model is to support these financial advisors as they work with clients to plan for and achieve their financial goals. Multiple sources of emerging research show significantly better financial outcomes for Canadians who use financial advisors compared to those who do not. We actively promote the value of financial advice and the importance of a relationship with an advisor to develop and remain focused on long-term financial plans and goals.

Approximately 40% of Canadian discretionary financial assets or $2.2 trillion resided in investment funds at December 31, 2020, making it the largest financial asset class held by Canadians. Other asset types include deposit products and direct securities such as stocks and bonds. Approximately 76% of investment funds are comprised of mutual fund products, with other product categories including segregated funds, hedge funds, pooled funds, closed end funds and exchange traded funds. With $180 billion in investment fund assets under management at September 30, 2021, IGM Financial is among the country's largest investment fund managers. We believe that investment funds are likely to remain the preferred savings vehicle of Canadians. They offer the benefits of diversification, professional management, flexibility and convenience, and are available in a broad range of mandates and structures to meet most investor requirements and preferences.

Traditional distinctions between bank branches, full-service brokerages, financial planning firms and insurance agent sales forces have become obscured as many of these financial service providers strive to offer comprehensive financial advice implemented through access to a broad product shelf. Accordingly, the Canadian financial services industry is characterized by a number of large, diversified, verticallyintegrated participants, similar to IGM Financial, that offer both financial planning and investment management services.

Canadian banks distribute financial products and services through their traditional bank branches, as well as through their full service and discount brokerage subsidiaries. Bank branches continue to place increased emphasis on both financial planning and mutual funds. In addition, each of the "big six" banks has one or more mutual fund management subsidiaries. Collectively, mutual fund assets of the "big six" bank-owned mutual fund managers and affiliated firms represented 46% of total industry long-term mutual fund assets at September 30, 2021.

The Canadian mutual fund industry continues to be very concentrated, with the 10 largest firms and their subsidiaries representing 72% of industry long-term mutual fund assets and 72% of total mutual fund assets under management at September 30, 2021. We anticipate continuing consolidation in this segment of the industry as smaller participants are acquired by larger organizations.

We believe that the financial services industry will continue to be influenced by the following trends:

Shifting demographics as the number of Canadians in their prime savings and retirement years continues to increase.
Changes in investor attitudes based on economic conditions.
Continued importance of the role of the financial advisor.
Public policy related to retirement savings.
Changes in the regulatory environment.
A highly competitive landscape.
Advancing and changing technology.

THE COMPETITIVE LANDSCAPE

Our subsidiaries IG Wealth Management and Investment Planning Counsel compete directly with other retail financial service providers in the advice segment, including other financial planning firms, as well as full service brokerages, banks and insurance companies. Our asset management subsidiary, Mackenzie Investments, competes directly with other investment managers for assets under management, and our products compete with stocks, bonds and other asset classes for a share of Canadians' investment assets.

Competition from other financial service providers, alternative product types or delivery channels, and changes in regulations or public preferences could impact the characteristics of our product and service offerings, including pricing, product structures, dealer and advisor compensation and disclosure. We monitor developments on an ongoing basis, and engage in policy discussions and develop product and service responses as appropriate.

IGM Financial continues to focus on our commitment to provide quality investment advice and financial products, service innovations, effective and responsible management of the

Company and long-term value for our clients and shareholders. We are midway through a five-year transformation to modernize our digital platforms and technology infrastructure to enhance operations, achieve efficiencies and improve the service experience for our clients. We believe that IGM Financial is wellpositioned to meet competitive challenges and capitalize on future growth opportunities.

Our competitive strength includes:

Broad and diversified distribution through more than 35,000 financial advisors, with an emphasis on comprehensive financial planning.
Broad product capabilities, leading brands and quality subadvisory relationships.
Enduring client relationships and the long-standing heritages and cultures of its subsidiaries.
Benefits of being part of the Power Corporation group of companies.

BROAD AND DIVERSIFIED DISTRIBUTION

In addition to owning two of Canada's largest financial planning organizations, IG Wealth Management and Investment Planning Counsel, IGM Financial has, through Mackenzie, access to

distribution through over 30,000 independent financial advisors. Mackenzie also, in its growing strategic alliance business, partners with global manufacturing and distribution entities to provide investment management services.

BROAD PRODUCT CAPABILITIES

Our subsidiaries continue to develop and launch innovative products and strategic investment planning tools to assist advisors in building optimized portfolios for clients.

ENDURING CLIENT RELATIONSHIPS

IGM Financial enjoys significant advantages as a result of the enduring relationships that advisors have developed with clients. In addition, our subsidiaries have strong heritages and cultures which are challenging for competitors to replicate.

PART OF THE POWER CORPORATION GROUP OF COMPANIES

As part of the Power Corporation group of companies, IGM Financial benefits through expense savings from shared service arrangements, as well as through access to distribution, products and capital.

Critical Accounting Estimates and Policies

SUMMARY OF CRITICAL ACCOUNTING ESTIMATES

There were no changes to the Company's assumptions related to critical accounting estimates from those reported at December 31, 2020 except as follows:

• *Employee benefits –*The Company maintains a number of employee benefit plans. These plans include a funded registered defined benefit pension plan (RPP) for all eligible employees, unfunded supplementary executive retirement plans for certain executive officers (SERPs) and an unfunded post-employment health care and life insurance plan for eligible retirees.

Discount rates have increased significantly since December 31, 2020. The discount rate on the Company's RPP at September 30, 2021 was 3.55% compared to 2.70% at December 31, 2020. The pension plan assets increased to $546.5 million at September 30, 2021 from $517.0 million at December 31, 2020. The total defined benefit pension plan obligation was $559.9 million at September 30, 2021 compared to $650.1 million at December 31, 2020. The defined benefit pension plan had an accrued benefit liability

of $13.4 million at September 30, 2021 compared to $133.1 million at December 31, 2020. Total gains recorded in Other comprehensive income, including the defined benefit pension plan, the SERPs and post-employment benefit plans, were $27.3 million ($19.9 million after tax) and $143.0 million ($104.4 million after tax) for the three and nine months ended September 30, 2021.

CHANGES IN ACCOUNTING POLICIES

IGM Financial has not adopted any changes in accounting policies in 2021.

FUTURE ACCOUNTING CHANGES

The Company continuously monitors the potential changes proposed by the International Accounting Standards Board (IASB) and analyzes the effect that changes in the standards may have on the Company's operations.

The IASB is currently undertaking a number of projects which will result in changes to existing IFRS standards that may affect the Company. Updates will be provided as the projects develop.

Internal Control Over Financial Reporting

During the third quarter of 2021, there have been no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Other Information

TRANSACTIONS WITH RELATED PARTIES

There were no changes to the types of related party transactions from those reported at December 31, 2020. For further information on transactions involving related parties, see Notes 8, 26 and 29 to the Company's Annual Financial Statements.

OUTSTANDING SHARE DATA

Outstanding common shares of IGM Financial as at September 30, 2021 totalled 239,149,672. Outstanding stock options as at September 30, 2021 totalled 12,249,010 of which 6,711,635 were exercisable. As at October 31, 2021, outstanding common shares totalled 239,189,966 and outstanding stock options totalled 12,204,261 of which 6,671,341 were exercisable.

SEDAR

Additional information relating to IGM Financial, including the Company's most recent financial statements and Annual Information Form, is available at www.sedar.com.

Interim Condensed Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF EARNINGS

(unaudited)	THREE MONTHS ENDEDSEPTEMBER 30				NINE MONTHS ENDEDSEPTEMBER 30
(in thousands of Canadian dollars, except per share amounts)	2021		2020		2021		2020
Revenues (Note 3)
Wealth management	$655,052	$	571,640	$	1,886,141	$	1,665,439
Asset management	263,436		207,412		744,738		596,611
Dealer compensation expense	(85,913)		(71,366)		(249,323)		(208,843)
Net asset management	177,523		136,046		495,415		387,768
Net investment income and other (Note 7)	2,500		39,501		8,109		45,104
Proportionate share of associates' earnings (Note 7)	55,903		43,434		145,645		106,858
	890,978		790,621		2,535,310		2,205,169
Expenses
Advisory and business development	293,981		252,529		869,131		757,062
Operations and support	197,641		256,361		600,865		636,885
Sub-advisory	20,757		18,518		60,958		52,919
Interest	28,636		27,911		85,252		82,688
	541,015		555,319		1,616,206		1,529,554
Earnings before income taxes	349,963		235,302		919,104		675,615
Income taxes	78,382		44,389		207,407		140,284
Net earnings	271,581		190,913		711,697		535,331
Non-controlling interest (Note 7)	(733)		–		(1,280)		–
Net earnings available to common shareholders	$270,848	$	190,913	$	710,417	$	535,331

Earnings per share (in dollars) (Note 14)– Basic	$1.13	$	0.80	$	2.98	$	2.25
– Diluted	$1.13	$	0.80	$	2.97	$	2.25

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)			THREE MONTHS ENDEDSEPTEMBER 30	NINE MONTHS ENDEDSEPTEMBER 30
(in thousands of Canadian dollars)		2021	2020		2021		2020
Net earnings	$	271,581	$190,913	$	711,697	$	535,331
Other comprehensive income (loss), net of taxItems that will not be reclassified to Net earningsFair value through other comprehensive income investments (Note 4)Other comprehensive income (loss), net of tax of $39, $(39,457),
$(125,320), and $(39,495)Employee benefitsNet actuarial gains (losses), net of tax of $(7,379), $721,		(233)	252,811		802,992		253,038
$(38,616) and $5,230Investment in associates – employee benefits and other		19,948	(1,950)		104,412		(14,137)
Other comprehensive income (loss), net of tax of nil		910	(16,945)		22,940		(2,748)
Items that may be reclassified subsequently to Net earningsInvestment in associates and otherOther comprehensive income (loss), net of tax of $(2,160), $(1,126),
$(3,302) and $(1,500)		10,225	(6,980)		(17,981)		48,514
		30,850	226,936		912,363		284,667
Total comprehensive income	$	302,431	$417,849	$	1,624,060	$	819,998

CONSOLIDATED BALANCE SHEETS

(unaudited)(in thousands of Canadian dollars)		DECEMBER 312020
Assets
Cash and cash equivalents	$1,123,052	$771,585
Other investments (Note 4)	1,338,841	632,300
Client funds on deposit	1,642,271	1,063,442
Accounts and other receivables	418,104	444,458
Income taxes recoverable	24,124	30,366
Loans (Note 5)	5,553,704	6,331,855
Derivative financial instruments	44,910	37,334
Other assets	68,463	49,782
Investment in associates (Note 7)	1,999,438	1,931,168
Capital assets	320,445	329,690
Capitalized sales commissions	302,259	231,085
Deferred income taxes	27,277	84,624
Intangible assets	1,330,404	1,321,590
Goodwill	2,802,066	2,803,075
	$16,995,358	$16,062,354
LiabilitiesAccounts payable and accrued liabilities	$530,886	$486,575
Income taxes payable	64,815	7,146
Derivative financial instruments	19,042	34,514
Deposits and certificates	1,640,991	1,104,889
Other liabilities	361,130	536,141
Obligations to securitization entities (Note 6)	5,268,206	6,173,886
Lease obligations	197,976	188,334
Deferred income taxes	512,323	388,079
Long-term debt	2,100,000	2,100,000
	10,695,369	11,019,564
Shareholders' Equity
Share capital
Common shares	1,633,504	1,598,381
Contributed surplus	52,287	51,663
Retained earnings	3,721,436	3,207,469
Accumulated other comprehensive income (loss)	842,077	136,364
Non-controlling interest	50,685	48,913
	6,299,989	5,042,790
	$16,995,358	$16,062,354

These interim condensed consolidated financial statements were approved and authorized for issuance by the Board of Directors on November 4, 2021.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

						NINE MONTHS ENDED SEPTEMBER 30
	SHARE CAPITAL –			ACCUMULATEDOTHERCOMPREHENSIVE	NON-	TOTAL
(unaudited)	COMMON SHARES	CONTRIBUTED	RETAINED	INCOME (LOSS)	CONTROLLING	SHAREHOLDERS'
(in thousands of Canadian dollars)	(Note 8)	SURPLUS	EARNINGS	(Note 11)	INTEREST	EQUITY

2021
Balance, beginning of period	$1,598,381	$51,663	$3,207,469	$136,364	$48,913	$5,042,790
Net earnings	–	–	711,697	–	–	711,697
Other comprehensive income (loss),
net of tax	–	–	–	912,363	–	912,363
Total comprehensive income	–	–	711,697	912,363	–	1,624,060
Common shares
Issued under stock option plan	35,123	–	–	–	–	35,123
Stock options
Current period expense	–	2,833	–	–	–	2,833
Exercised	–	(2,209)	–	–	–	(2,209)
Common share dividends	–	–	(402,979)	–	–	(402,979)
Non-controlling interestTransfer out of fair value through	–	–	(1,280)	–	1,772	492
other comprehensive income (Note 4)	–	–	206,650	(206,650)	–	–
Other	–	–	(121)	–	–	(121)
Balance, end of period	$1,633,504	$52,287	$3,721,436	$842,077	$50,685	$6,299,989

2020
Balance, beginning of period	$1,597,860	$48,677	$2,980,260	$(127,702)	$–	$4,499,095
Net earnings	–	–	535,331	–	–	535,331
Other comprehensive income (loss),
net of tax	–	–	–	284,667	–	284,667
Total comprehensive income	–	–	535,331	284,667	–	819,998
Common shares
Issued under stock option plan	521	–	–	–	–	521
Stock options
Current period expense	–	2,196	–	–	–	2,196
Exercised	–	(24)	–	–	–	(24)
Common share dividends	–	–	(402,145)	–	–	(402,145)
Other	–	–	(2,413)	–	–	(2,413)
Balance, end of period	$1,598,381	$50,849	$3,111,033	$156,965	$–	$4,917,228

CONSOLIDATED STATEMENTS OF CASH FLOWS

	NINE MONTHS ENDED			SEPTEMBER 30
(unaudited)(in thousands of Canadian dollars)		2021		2020
Operating activities
Earnings before income taxes	$	919,104	$	675,615
Income taxes paid		(126,472)		(131,859)
Adjustments to determine net cash from operating activities
Capitalized sales commission amortization		40,530		25,788
Capitalized sales commissions paid		(111,704)		(81,484)
Amortization of capital, intangible and other assets		74,432		62,000
Proportionate share of associates' earnings, net of dividends received		(69,707)		(44,110)
Pension and other post-employment benefits		12,459		(1,795)
Restructuring provisions and other		–		74,460
Gain on sale of Personal Capital Corporation		–		(37,232)
Changes in operating assets and liabilities and other		(77,871)		(38,711)
Cash from operating activities before restructuring provision payments		660,771		502,672
Restructuring provision cash payments		(46,339)		(5,067)
		614,432		497,605
Financing activities
Net decrease in deposits and certificates		(3,693)		(4,833)
Increase in obligations to securitization entities		1,158,187		1,147,867
Repayments of obligations to securitization entities and other		(1,979,586)		(1,569,728)
Repayments of lease obligations		(17,464)		(18,869)
Issue of common shares		32,914		498
Common share dividends paid		(402,506)		(402,137)
		(1,212,148)		(847,202)
Investing activities
Purchase of other investments		(85,548)		(26,511)
Proceeds from the sale of other investments		310,768		21,921
Increase in loans		(1,402,262)		(1,333,880)
Repayment of loans and other		2,181,770		1,799,511
Net additions to capital assets		(8,012)		(27,512)
Net cash used in additions to intangible assets		(47,533)		(42,549)
Proceeds from sale of Personal Capital Corporation		–		231,005
		949,183		621,985
Increase in cash and cash equivalents		351,467		272,388
Cash and cash equivalents, beginning of period		771,585		720,005
Cash and cash equivalents, end of period	$	1,123,052	$	992,393

CashCash equivalents	$	320,555802,497	$	57,153935,240

	$	1,123,052	$	992,393
Supplemental disclosure of cash flow information related to operating activities
Interest and dividends received	$	192,359	$	205,543
Interest paid	$	167,864	$	195,774

Notes to the Interim Condensed Consolidated Financial Statements

September 30, 2021 (unaudited) (In thousands of Canadian dollars, except shares and per share amounts)

NOTE 1 CORPORATE INFORMATION

IGM Financial Inc. (the Company) is a publicly listed company (TSX: IGM), incorporated and domiciled in Canada. The registered address of the Company is 447 Portage Avenue, Winnipeg, Manitoba, Canada. The Company is controlled by Power Corporation of Canada.

IGM Financial Inc. is a wealth and asset management company which serves the financial needs of Canadians through its principal subsidiaries, each operating distinctly within the advice segment of the financial services market. The Company's wholly-owned principal subsidiaries are Investors Group Inc. and Mackenzie Financial Corporation (Mackenzie).

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited Interim Condensed Consolidated Financial Statements of the Company (Interim Financial Statements) have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, using the accounting policies as set out in this note and in Note 2 to the Consolidated Financial Statements for the year ended December 31, 2020. The Interim Financial Statements should be read in conjunction with the Consolidated Financial Statements in the 2020 IGM Financial Inc. Annual Report.

FUTURE ACCOUNTING CHANGES

The Company continuously monitors the potential changes proposed by the IASB and analyzes the effect that changes in the standards may have on the Company's operations.

THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 2021 2020 2021 2020 Advisory fees $ 359,688 $ 311,194 $ 1,032,371 $ 908,153 Product and program fees 248,309 214,861 708,253 626,430 607,997 526,055 1,740,624 1,534,583 Redemption fees 1,836 3,757 8,288 12,845 Other financial planning revenues 45,219 41,828 137,229 118,011 Wealth management 655,052 571,640 1,886,141 1,665,439 Asset management 263,436 207,412 744,738 596,611 Dealer compensation expense (85,913) (71,366) (249,323) (208,843) Net asset management 177,523 136,046 495,415 387,768 Net revenues from contracts with customers $ 832,575 $ 707,686 $ 2,381,556 $ 2,053,207

NOTE 3 REVENUES FROM CONTRACTS WITH CUSTOMERS

Wealth management revenue is earned by providing financial planning, investment advisory and related financial services. Advisory fees, related to financial planning, are associated with assets under management and advisement. Product and program fees, related to investment management and administration services, are associated with assets under management. Other financial planning revenues include insurance, banking products and services, and mortgage lending activities.

Asset management revenue, related to investment management advisory and administrative services, depends on the level and composition of assets under management.

NOTE 4 OTHER INVESTMENTS

	SEPTEMBER 30, 2021			DECEMBER 31, 2020
		COST	FAIRVALUE		COST		FAIRVALUE
Fair value through other comprehensive income (FVTOCI)Corporate investments	$	223,950	$1,255,219	$	251,417	$	593,273
Fair value through profit or loss (FVTPL)Equity securitiesProprietary investment funds		1,47676,905	1,70181,921		1,49935,254		1,51337,514
		78,381	83,622		36,753		39,027
	$	302,331	$1,338,841	$	288,170	$	632,300

Wealthsimple Financial Corp. (Wealthsimple) is an online investment manager that provides financial investment guidance. The investment is classified at Fair Value Through Other Comprehensive Income.

On May 3, 2021, Wealthsimple announced a $750 million equity fundraising, valuing IGM Financial Inc.'s investment in Wealthsimple at $1,448 million. As part of the transaction, IGM Financial Inc. disposed of a portion of its investment for proceeds of $294 million ($258 million after-tax).

In the second quarter of 2021, a realized gain of $239 million ($207 million after-tax) was transferred from Accumulated other comprehensive income to Other retained earnings.

The Company continues to be the largest shareholder in Wealthsimple with an interest of 23% and fair value of $1,153 million.

NOTE 5 LOANS

		CONTRACTUAL MATURITY
	1 YEAROR LESS	1 – 5YEARS		OVER5 YEARS		SEPTEMBER 302021TOTAL		DECEMBER 312020TOTAL
Amortized costResidential mortgages	$1,150,336	$4,394,846	$	5,245	$	5,550,427	$	6,329,342
Less: Allowance for expected credit losses						723		778
Fair value through profit or loss						5,549,7044,000		6,328,5643,291
					$	5,553,704	$	6,331,855

The change in the allowance for expected credit losses is as follows:

Balance, beginning of periodWrite-offs, net of recoveriesExpected credit losses	$778$(293)238	675(562)665
Balance, end of period	$723$	778

Total credit impaired loans as at September 30, 2021 were $4,509 (December 31, 2020 – $4,807).

Total interest income on loans was $119.8 million (2020 – $144.8 million). Total interest expense on obligations to securitization entities, related to securitized loans, was $85.9 million (2020 – $115.0 million). Gains realized on the sale of residential mortgages totalled $3.4 million (2020 – $6.1 million). Fair value adjustments related to mortgage banking operations totalled $1.4 million (2020 – negative $4.1 million). These amounts were included in Wealth management revenue. Wealth management revenue also includes other mortgage banking related items including portfolio insurance, issue costs, and other items.

NOTE 6 SECURITIZATIONS

The Company securitizes residential mortgages through the Canada Mortgage and Housing Corporation (CMHC) sponsored National Housing Act Mortgage-Backed Securities (NHA MBS) Program and Canada Mortgage Bond (CMB) Program and through Canadian bank-sponsored asset-backed commercial paper (ABCP) programs. These transactions do not meet the requirements for derecognition as the Company retains prepayment risk and certain elements of credit risk. Accordingly, the Company has retained these mortgages on its balance sheets and has recorded offsetting liabilities for the net proceeds received as Obligations to securitization entities which are recorded at amortized cost.

The Company earns interest on the mortgages and pays interest on the obligations to securitization entities. As part of the CMB transactions, the Company enters into a swap transaction whereby the Company pays coupons on CMBs and receives investment returns on the NHA MBS and the reinvestment of repaid mortgage principal. A component of this swap, related to the obligation to pay CMB coupons and receive investment returns on repaid mortgage principal, and the hedging swap used to manage exposure to changes in variable rate investment returns, are recorded as derivatives with a fair value of $4.6 million at September 30, 2021 (December 31, 2020 – negative $1.2 million).

All mortgages securitized under the NHA MBS and CMB Program are insured by CMHC or another approved insurer under the program. As part of the ABCP transactions, the Company has provided cash reserves for credit enhancement which are recorded at cost. Credit risk is limited to these cash reserves and future net interest income as the ABCP Trusts have no recourse to the Company's other assets for failure to make payments when due. Credit risk is further limited to the extent these mortgages are insured.

SEPTEMBER 30, 2021	SECURITIZEDMORTGAGES			OBLIGATIONS TOSECURITIZATIONENTITIES	NET
Carrying valueNHA MBS and CMB ProgramBank sponsored ABCP	$	2,744,5562,481,289	$	2,755,3052,512,901	$(10,749)(31,612)
Total	$	5,225,845	$	5,268,206	$(42,361)
Fair value	$	5,298,280	$	5,390,306	$(92,026)
DECEMBER 31, 2020
Carrying valueNHA MBS and CMB ProgramBank sponsored ABCP	$	3,216,1582,767,743	$	3,307,4282,866,458	$(91,270)(98,715)
Total	$	5,983,901	$	6,173,886	$(189,985)
Fair value	$	6,186,410	$	6,345,189	$(158,779)

The carrying value of Obligations to securitization entities, which is recorded net of issue costs, includes principal payments received on securitized mortgages that are not due to be settled until after the reporting period. Issue costs are amortized over the life of the obligation on an effective interest rate basis.

NOTE 7 INVESTMENT IN ASSOCIATES

	LIFECO	CHINA AMC	NORTHLEAF	PERSONALCAPITAL	TOTAL
SEPTEMBER 30, 2021
Balance, beginning of period	$962,388	$720,282	$248,498	$–	$1,931,168
Additions	–	–	449	–	449
Dividends	(49,061)	(26,877)	–	–	(75,938)
Proportionate share of:
Earnings (losses)	94,635	44,609	6,401(1)	–	145,645
Other comprehensive income (loss) and other adjustments	(6,479)	4,593	–	–	(1,886)
Balance, end of period	$1,001,483	$742,607	$255,348	$–	$1,999,438
SEPTEMBER 30, 2020
Balance, beginning of period	$896,651	$662,694	$–	$194,537	$1,753,882
Dividends	(49,062)	(13,686)	–	–	(62,748)
Proportionate share of:
Earnings (losses)	81,850	29,648	–	(4,640)	106,858
Other comprehensive income (loss) and other adjustments	13,413	34,313	–	8,817	56,543
Disposition	–	–	–	(198,714)	(198,714)
Balance, end of period	$942,852	$712,969	$–	$–	$1,655,821

(1) The Company's proportionate share of Northleaf's earnings net of Non-controlling interest was $5,121.

The Company uses the equity method to account for its investments in Great-West Lifeco Inc. (Lifeco), China Asset Management Co., Ltd. (China AMC) and Northleaf Capital Group Ltd. (Northleaf) as it exercises significant influence.

During the third quarter of 2020, the Company sold its equity interest in Personal Capital Corporation (Personal Capital) to a subsidiary of Lifeco, Empower Retirement, for proceeds of $232.8 million (USD $176.2 million) and up to an additional USD $24.6 million in consideration subject to Personal Capital achieving certain target growth objectives. As a result of the sale, the Company derecognized its investment in Personal Capital and recorded an accounting gain of $37.2 million ($31.4 million net of tax) in Net investment income and other.

NOTE 8 SHARE CAPITAL

AUTHORIZED

Unlimited number of: First preferred shares, issuable in series Second preferred shares, issuable in series Class 1 non-voting shares Common shares, no par value

ISSUED AND OUTSTANDING

		SEPTEMBER 30, 2021	SEPTEMBER 30, 2020
	SHARES	STATEDVALUE	SHARES	STATEDVALUE
Common shares:Balance, beginning of periodIssued under Stock Option Plan	238,308,284841,388	$1,598,38135,123	238,294,09014,194	$1,597,860521
Balance, end of period	239,149,672	$1,633,504	238,308,284	$1,598,381

NOTE 9 CAPITAL MANAGEMENT

The capital management policies, procedures and activities of the Company are discussed in the Capital Resources section of the Company's Management's Discussion and Analysis contained in the Third Quarter 2021 Report to Shareholders and in Note 18 to the Consolidated Financial Statements in the 2020 IGM Financial Inc. Annual Report and have not changed significantly since December 31, 2020.

NOTE 10 SHARE-BASED PAYMENTS

STOCK OPTION PLAN

	SEPTEMBER 302021	DECEMBER 312020
Common share options
– Outstanding	12,249,010	11,930,224
– Exercisable	6,711,635	6,326,067

In the third quarter of 2021, there were 32,695 options granted to employees (2020 – 567,200). In the nine months ended September 30, 2021, the Company granted 1,648,345 options to employees (2020 – 2,104,365). The weighted-average fair value of options granted during the nine months ended September 30, 2021, has been estimated at $2.73 per option (2020 – $1.43) using the Black-Scholes option pricing model. The weighted-average closing share price at the grant dates was $35.19.

Other assumptions used in these valuation models include:

	NINE MONTHS ENDEDSEPTEMBER 30
	20212020
Exercise price	$35.29$36.82
Risk-free interest rate	1.29%1.11%
Expected option life	7 years7 years
Expected volatility	23.00%18.62%
Expected dividend yield	6.41%6.45%

Expected volatility has been estimated based on the historic volatility of the Company's share price over seven years which is reflective of the expected option life. Options vest over a period of up to 7.5 years from the grant date and are exercisable no later than 10 years after the grant date.

NOTE 11 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

SEPTEMBER 30, 2021	EMPLOYEEBENEFITS	OTHERINVESTMENTS	INVESTMENTIN ASSOCIATESAND OTHER	TOTAL
Balance, beginning of periodOther comprehensive income (loss)Transfer out of FVTOCI	$(196,949)104,412–	$293,448802,992(206,650)	$39,8654,959–	$136,364912,363(206,650)
Balance, end of period	$(92,537)	$889,790	$44,824	$842,077
SEPTEMBER 30, 2020
Balance, beginning of periodOther comprehensive income (loss)	$(165,947)(14,137)	$46,363253,038	$(8,118)45,766	$(127,702)284,667
Balance, end of period	$(180,084)	$299,401	$37,648	$156,965

Amounts are recorded net of tax.

NOTE 12 RISK MANAGEMENT

The risk management policies and procedures of the Company are discussed in the Financial Instruments Risk section of the Company's Management's Discussion and Analysis contained in the Third Quarter 2021 Report to Shareholders and in Note 21 to the Consolidated Financial Statements in the 2020 IGM Financial Inc. Annual Report and have not changed significantly since December 31, 2020.

NOTE 13 FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair values are management's estimates and are calculated using market conditions at a specific point in time and may not reflect future fair values. The calculations are subjective in nature, involve uncertainties and are matters of significant judgment.

All financial instruments measured at fair value and those for which fair value is disclosed are classified into one of three levels that distinguish fair value measurements by the significance of the inputs used for valuation.

Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in the most advantageous market, utilizing a hierarchy of three different valuation techniques, based on the lowest level input that is significant to the fair value measurement in its entirety.

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 Observable inputs other than Level 1 quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable or corroborated by observable market data; and
Level 3 Unobservable inputs that are supported by little or no market activity. Valuation techniques are primarily model-based.

Markets are considered inactive when transactions are not occurring with sufficient regularity. Inactive markets may be characterized by a significant decline in the volume and level of observed trading activity or through large or erratic bid/offer spreads. In those instances where traded markets are not considered sufficiently active, fair value is measured using valuation models which may utilize predominantly observable market inputs (Level 2) or may utilize predominantly non-observable market inputs (Level 3). Management considers all reasonably available information including indicative broker quotations, any available pricing for similar instruments, recent arm's length market transactions, any relevant observable market inputs, and internal model-based estimates. Management exercises judgment in determining the most appropriate inputs and the weighting ascribed to each input as well as in the selection of valuation methodologies.

Fair value is determined using the following methods and assumptions:

Other investments and other financial assets and financial liabilities are valued using quoted prices from active markets, when available. When a quoted market price is not readily available, valuation techniques are used that require assumptions related to discount rates and the timing and amount of future cash flows. Wherever possible, observable market inputs are used in the valuation techniques.

Loans classified as Level 2 are valued using market interest rates for loans with similar credit risk and maturity.

Loans classified as Level 3 are valued by discounting the expected future cash flows at prevailing market yields.

Obligations to securitization entities are valued by discounting the expected future cash flows at prevailing market yields for securities issued by these securitization entities having similar terms and characteristics.

Deposits and certificates are valued by discounting the contractual cash flows using market interest rates currently offered for deposits with similar terms and credit risks.

Long-term debt is valued using quoted prices for each debenture available in the market.

Derivative financial instruments are valued based on quoted market prices, where available, prevailing market rates for instruments with similar characteristics and maturities, or discounted cash flow analysis.

Level 1 financial instruments include exchange-traded equity investments and open-end investment fund units and other financial liabilities in instances where there are quoted prices available from active markets.

NOTE 13 FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Level 2 assets and liabilities include fixed income securities, loans, derivative financial instruments, deposits and certificates and longterm debt. The fair value of fixed income securities is determined using quoted market prices or independent dealer price quotes. The fair value of derivative financial instruments and deposits and certificates are determined using valuation models, discounted cash flow methodologies, or similar techniques using primarily observable market inputs. The fair value of long-term debt is determined using indicative broker quotes.

Level 3 assets and liabilities include investments with little or no trading activity valued using broker-dealer quotes, loans, other financial assets, obligations to securitization entities and derivative financial instruments. Derivative financial instruments consist of principal reinvestment account swaps which represent the component of a swap entered into under the CMB Program whereby the Company pays coupons on Canada Mortgage Bonds and receives investment returns on the reinvestment of repaid mortgage principal. Fair value is determined by discounting the projected cashflows of the swaps. The notional amount, which is an input used to determine the fair value of the swap, is determined using an average unobservable prepayment rate of 15% which is based on historical prepayment patterns. An increase (decrease) in the assumed mortgage prepayment rate increases (decreases) the notional amount of the swap.

The following table presents the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. The table distinguishes between those financial instruments recorded at fair value and those recorded at amortized cost. The table also excludes fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. These items include cash and cash equivalents, accounts and other receivables, certain other financial assets, accounts payable and accrued liabilities and certain other financial liabilities.

					FAIR VALUE
	CARRYING VALUE	LEVEL 1	LEVEL 2	LEVEL 3	TOTAL
SEPTEMBER 30, 2021
Financial assets recorded at fair value
Other investments
– FVTOCI	$1,255,219	$–	$–	$1,255,219	$1,255,219
– FVTPL	83,622	73,467	9,887	268	83,622
Loans
– FVTPL	4,000	–	4,000	–	4,000
Derivative financial instruments	44,910	–	38,816	6,094	44,910
Financial assets recorded at amortized cost
Loans
– Amortized cost	5,549,704	–	332,308	5,298,280	5,630,588
Financial liabilities recorded at fair value
Derivative financial instruments	19,042	–	8,220	10,822	19,042
Financial liabilities recorded at amortized cost
Deposits and certificates	1,640,991	–	1,641,273	–	1,641,273
Obligations to securitization entities	5,268,206	–	–	5,390,306	5,390,306
Long-term debt	2,100,000	–	2,499,081	–	2,499,081
DECEMBER 31, 2020
Financial assets recorded at fair value
Other investments
– FVTOCI	$593,273	$–	$–	$593,273	$593,273
– FVTPL	39,027	38,748	–	279	39,027
Loans
– FVTPL	3,291	–	3,291	–	3,291
Derivative financial instruments	37,334	–	35,389	1,945	37,334
Financial assets recorded at amortized cost
Loans
– Amortized cost	6,328,564	–	346,428	6,186,410	6,532,838
Financial liabilities recorded at fair value
Derivative financial instruments	34,514	–	11,466	23,048	34,514
Financial liabilities recorded at amortized cost
Deposits and certificates	1,104,889	–	1,105,384	–	1,105,384
Obligations to securitization entities	6,173,886	–	–	6,345,189	6,345,189
Long-term debt	2,100,000	–	2,653,814	–	2,653,814

There were no significant transfers between Level 1 and Level 2 in 2021 and 2020.

NOTE 13 FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

	BALANCEJANUARY 1	GAINS(LOSSES)INCLUDED IN COMPREHENSIVENET EARNINGS(1)	GAINS (LOSSES)INCLUDED INOTHERINCOME	PURCHASESANDISSUANCES	SETTLEMENTS	TRANSFERSIN (OUT)	BALANCESEPTEMBER 30
SEPTEMBER 30, 2021
Other investments– FVTOCI– FVTPL	$593,273279	$–20	$928,312–	$9,062–	$–31	$(275,428)(2)–	$ 1,255,219268
Derivative financialinstruments, net	(21,103)	8,817	–	1,877	(5,681)	–	(4,728)
SEPTEMBER 30, 2020
Other investments– FVTOCI– FVTPL	$301,196563	$–(228)	$292,532–	$4,371–	$––	$––	$598,099335
Derivative financialinstruments, net	(906)	(26,649)	–	1,466	(3,382)	–	(22,707)

The following table provides a summary of changes in Level 3 assets and liabilities measured at fair value on a recurring basis.

(1) Included in Wealth management revenue or Net investment income and other in the Consolidated Statements of Earnings.

(2) Related to the disposition of a portion of IGM Financial Inc.'s investment in Wealthsimple (Note 4).

NOTE 14 EARNINGS PER COMMON SHARE

				THREE MONTHS ENDEDSEPTEMBER 30			NINE MONTHS ENDEDSEPTEMBER 30
		2021		2020		2021		2020
EarningsNet earningsNon-controlling interest	$	271,581(733)	$	190,913–	$	711,697(1,280)	$	535,331–
Net earnings available to common shareholders	$	270,848	$	190,913	$	710,417	$	535,331
Number of common shares (in thousands)Weighted average number of common shares outstandingAdd: Potential exercise of outstanding stock options(1)		238,9701,605		238,308–		238,642914		238,306–
Average number of common shares outstanding – diluted basis		240,575		238,308		239,556		238,306
Earnings per common share (in dollars)– Basic– Diluted	$$	1.131.13	$$	0.800.80	$$	2.982.97	$$	2.252.25

(1) Excludes 158 thousand shares for the three months ended September 30, 2021 (2020 – 3,023 thousand) related to outstanding stock options that were anti-dilutive. Excludes 420 thousand shares for the nine months ended September 30, 2021 (2020 – 3,056 thousand) related to outstanding stock options that were anti-dilutive.

NOTE 15 COVID-19

The Company has implemented its business continuity plan as a result of these events, which has included moving substantially all employees and consultants to work from home and further supporting the Company's information technology infrastructure.

NOTE 16 SEGMENTED INFORMATION

The Company's reportable segments are:

Wealth Management
Asset Management
Strategic Investments and Other

These segments reflect the Company's internal financial reporting and performance measurement.

Wealth Management reflects the activities of operating companies that are principally focused on providing financial planning and related services to Canadian households. This segment includes the activities of IG Wealth Management and Investment Planning Counsel. These firms are retail distribution organizations who serve Canadian households through their securities dealers, mutual fund dealers and other subsidiaries licensed to distribute financial products and services. A majority of the revenues of this segment are derived from providing financial advice and distributing financial products and services to Canadian households. This segment also includes the investment management activities of these organizations, including mutual fund management and discretionary portfolio management services.
Asset Management reflects the activities of operating companies primarily focused on providing investment management services, and represents the operations of Mackenzie Investments. Investment management services are provided to a suite of investment funds that are distributed through third party dealers and financial advisors, and also through institutional advisory mandates to financial institutions, pensions and other institutional investors.
Strategic Investments and Other primarily represents the key strategic investments made by the Company, including China Asset Management Co., Ltd., Great-West Lifeco Inc., Northleaf Capital Group Ltd., Wealthsimple Financial Corp., and Portag3 Ventures LPs. Unallocated capital is also included within this segment.

Effective January 1, 2021, the Company expanded its reportable segment disclosures to report to Net earnings, whereas previously it was reported to Earnings before interest and taxes. The Company restated comparative figures in its segment results to conform to the current period's presentation. These changes further build on the disclosure enhancements announced by the Company in the third quarter of 2020, which were introduced to improve transparency into key drivers of each business line and help stakeholders understand and assess components of value.

2021
THREE MONTHS ENDED SEPTEMBER 30	WEALTHMANAGEMENT	ASSETMANAGEMENT		STRATEGICINVESTMENTSAND OTHER		INTERSEGMENT	TOTAL
Revenues
Wealth management	$659,982	$	–	$	–	$(4,930)	$655,052
Asset management	–		293,109		–	(29,673)	263,436
Dealer compensation	–		(90,834)		–	4,921	(85,913)
Net asset management	–		202,275		–	(24,752)	177,523
Net investment income and other	(226)		2,143		646	(63)	2,500
Proportionate share of associates' earnings	–		–		55,903	–	55,903
	659,756		204,418		56,549	(29,745)	890,978
Expenses
Advisory and business development	274,796		19,194		–	(9)	293,981
Operations and support	113,271		83,235		1,197	(62)	197,641
Sub-advisory	48,730		1,701		–	(29,674)	20,757
	436,797		104,130		1,197	(29,745)	512,379
	222,959		100,288		55,352	–	378,599
Interest expense(1)	22,695		5,941		–	–	28,636
Earnings before income taxes	200,264		94,347		55,352	–	349,963
Income taxes	53,486		23,359		1,537	–	78,382
	146,778		70,988		53,815	–	271,581
Non-controlling interest	–		–		(733)	–	(733)
Net earnings available to common shareholders	$146,778	$	70,988	$	53,082	$–	$270,848

(1) Interest expense includes interest on long-term debt and interest on leases.

2020
THREE MONTHS ENDEDSEPTEMBER 30	WEALTHMANAGEMENT	ASSETMANAGEMENT	STRATEGICINVESTMENTSAND OTHER	INTERSEGMENT	TOTALSEGMENT	ADJUSTMENTS(2)	TOTAL
Revenues
Wealth management	$575,798	$–	$–	$(4,158)	$571,640	$–	$571,640
Asset managementDealer compensation	––	233,142(75,508)	––	(25,730)4,142	207,412(71,366)	––	207,412(71,366)
Net asset management	–	157,634	–	(21,588)	136,046	–	136,046
Net investment incomeand otherProportionate share of	615	1,087	612	(45)	2,269	37,232	39,501
associates' earnings	–	–	43,434	–	43,434	–	43,434
	576,413	158,721	44,046	(25,791)	753,389	37,232	790,621
ExpensesAdvisory and business
development	236,461	16,070	–	(2)	252,529	–	252,529
Operations and support	111,224	69,600	1,137	(60)	181,901	74,460	256,361
Sub-advisory	41,705	2,542	–	(25,729)	18,518	–	18,518
	389,390	88,212	1,137	(25,791)	452,948	74,460	527,408
	187,023	70,509	42,909	–	300,441	(37,228)	263,213
Interest expense(1)	22,696	5,215	–	–	27,911	–	27,911
Earnings before income taxes	164,327	65,294	42,909	–	272,530	(37,228)	235,302
Income taxes	43,299	16,946	(1,882)	–	58,363	(13,974)	44,389
	$121,028	$48,348	$44,791	$–	214,167	(23,254)	190,913
Gain on sale of Personal CapitalRestructuring and other charges					31,387(54,641)	(31,387)54,641	––
Net earnings available tocommon shareholders					$190,913	$–	$190,913

(1) Interest expense includes interest on long-term debt and interest on leases.

(2) Gain on sale of Personal Capital and Restructuring and other changes, as well as the tax related to these items, are not related to a specific segment and therefore excluded from segment results. These items have been added back to their respective revenue or expense line item to reconcile Total Segment results to the Company's Consolidated Statements of Earnings.

2021
NINE MONTHS ENDED SEPTEMBER 30	WEALTHMANAGEMENT	ASSETMANAGEMENT		STRATEGICINVESTMENTSAND OTHER	INTERSEGMENT		TOTAL
Revenues
Wealth management	$1,900,417	$–	$	–	$	(14,276)	$1,886,141
Asset management	–	829,290		–		(84,552)	744,738
Dealer compensation	–	(263,583)		–		14,260	(249,323)
Net asset management	–	565,707		–		(70,292)	495,415
Net investment income and other	2,194	4,507		1,595		(187)	8,109
Proportionate share of associates' earnings	–	–		145,645		–	145,645
	1,902,611	570,214		147,240		(84,755)	2,535,310
Expenses
Advisory and business development	804,547	64,600		–		(16)	869,131
Operations and support	350,226	247,268		3,559		(188)	600,865
Sub-advisory	140,205	5,304		–		(84,551)	60,958
	1,294,978	317,172		3,559		(84,755)	1,530,954
	607,633	253,042		143,681		–	1,004,356
Interest expense(1)	67,540	17,712		–		–	85,252
Earnings before income taxes	540,093	235,330		143,681		–	919,104
Income taxes	144,197	59,834		3,376		–	207,407
	395,896	175,496		140,305		–	711,697
Non-controlling interest	–	–		(1,280)		–	(1,280)
Net earnings available to common shareholders	$395,896	$175,496	$	139,025	$	–	$710,417
Identifiable assets	$8,775,093	$1,489,856	$	3,928,343	$	–	$ 14,193,292
Goodwill	1,491,687	1,310,379		–		–	2,802,066
Total assets	$ 10,266,780	$2,800,235	$	3,928,343	$	–	$ 16,995,358

(1) Interest expense includes interest on long-term debt and interest on leases.

2020
NINE MONTHS ENDEDSEPTEMBER 30	WEALTHMANAGEMENT	ASSETMANAGEMENT	STRATEGICINVESTMENTSAND OTHER	INTERSEGMENT	TOTALSEGMENT	ADJUSTMENTS(2)	TOTAL
Revenues
Wealth management	$ 1,677,528	$–	$–	$(12,089)	$ 1,665,439	$–	$ 1,665,439
Asset managementDealer compensation	––	671,439(220,908)	––	(74,828)12,065	596,611(208,843)	––	596,611(208,843)
Net asset management	–	450,531	–	(62,763)	387,768	–	387,768
Net investment incomeand otherProportionate share of	1,255	1,842	4,912	(137)	7,872	37,232	45,104
associates' earnings	–	–	106,858	–	106,858	–	106,858
	1,678,783	452,373	111,770	(74,989)	2,167,937	37,232	2,205,169
ExpensesAdvisory and business
development	705,163	51,909	–	(10)	757,062	–	757,062
Operations and support	340,412	219,024	3,140	(151)	562,425	74,460	636,885
Sub-advisory	120,502	7,245	–	(74,828)	52,919	–	52,919
	1,166,077	278,178	3,140	(74,989)	1,372,406	74,460	1,446,866
Interest expense(1)	512,70667,225	174,19515,463	108,630–	––	795,53182,688	(37,228)–	758,30382,688
Earnings before income taxesIncome taxes	445,481118,396	158,73241,491	108,630(5,629)	––	712,843154,258	(37,228)(13,974)	675,615140,284
	$327,085	$117,241	$114,259	$–	558,585	(23,254)	535,331
Gain on sale of Personal CapitalRestructuring and other charges					31,387(54,641)	(31,387)54,641	––
Net earnings available tocommon shareholders					$535,331	$–	$535,331
Identifiable assetsGoodwill	$ 9,020,7301,491,687	$ 1,345,2871,168,580	$ 2,836,847–	$––	$ 13,202,8642,660,267	––	$ 13,202,8642,660,267
Total assets	$ 10,512,417	$ 2,513,867	$ 2,836,847	$–	$ 15,863,131	–	$ 15,863,131

(1) Interest expense includes interest on long-term debt and interest on leases.

Shareholder Information

HEAD OFFICE

447 Portage Avenue Winnipeg, Manitoba R3B 3H5 Telephone: 204 943 0361 Fax: 204 947 1659

AUDITOR Deloitte llp

TRANSFER AGENT AND REGISTRAR

Computershare Investor Services Inc.

Telephone: 800 564 6253 [email protected]

800, 324 - 8th Avenue SW Calgary, Alberta T2P 2Z2

1500 Robert-Bourassa Boulevard, 7th Floor Montreal, Quebec H3A 3S8

100 University Avenue, 8th Floor Toronto, Ontario M5J 2Y1

510 Burrard Street, 2nd Floor Vancouver, British Columbia V6C 3B9

STOCK EXCHANGE LISTING

Toronto Stock Exchange IGM Financial Inc. shares are listed on the Toronto Stock Exchange under Common Shares: IGM

SHAREHOLDER INFORMATION

For additional financial information about the Company, please contact: Investor Relations [email protected]

WEBSITES

Visit our websites at igmfinancial.com ig.ca mackenzieinvestments.com ipcc.ca

For copies of the annual or quarterly reports, please contact the Corporate Secretary's office at 204 956 8259 or visit our website at igmfinancial.com

™ Trademarks, including IG Wealth Management, are owned by IGM Financial Inc. and licensed to its subsidiary corporations, except as noted below. Investment Planning Counsel's trademark is owned by Investment Planning Counsel Inc. and used with permission. Mackenzie Investments' trademark is owned by Mackenzie Financial Corporation and used with permission.

† Banking products and services are distributed through Solutions Banking™. Solutions Banking products and services are provided by National Bank of Canada. Solutions Banking is a trademark of Power Financial Corporation. National Bank of Canada is a licensed user of these trademarks. Morningstar and the Morningstar Ratings are trademarks of Morningstar Inc. Quadrus Group of Funds is a trademark of Quadrus Investment Services Ltd. CFP® and Certified Financial Planner® are certification trademarks owned outside the U.S. by Financial Planning Standards Board Ltd. (FPSB). Financial Planning Standards Council

is the marks licensing authority for the CFP marks in Canada, through agreement with FPSB.

A MEMBER OF THE POWER CORPORATION GROUP OF COMPANIES

AI assistant

IGM Financial Inc. — Interim / Quarterly Report 2021

43100_rns_2021-11-05_97598897-b0aa-444f-a753-ee4064cfe900.pdf

IGM Financial Inc. 2021 Third Quarter Report

Contents

FINANCIAL HIGHLIGHTS

Report to Shareholders

HIGHLIGHTS

FINANCIAL RESULTS

WEALTH MANAGEMENT

IG WEALTH MANAGEMENT

INVESTMENT PLANNING COUNSEL

ASSET MANAGEMENT (MACKENZIE INVESTMENTS)

STRATEGIC INVESTMENTS AND OTHER

DIVIDENDS

MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's Discussion and Analysis

Basis of Presentation and Summary of Accounting Policies

Forward-looking Statements

Non-IFRS Financial Measures and Additional IFRS Measures

IGM Financial Inc.

Summary of Consolidated Operating Results

COVID‑19

MARKET OVERVIEW

TABLE 1: RECONCILIATION OF NON-IFRS FINANCIAL MEASURES

REPORTING CHANGES

REPORTABLE SEGMENTS

Assets under Management and Advisement (AUM&A)

FINANCIAL PRESENTATION

TABLE 2: CONSOLIDATED OPERATING RESULTS BY SEGMENT – Q3 2021 VS. Q3 2020

TABLE 3: CONSOLIDATED OPERATING RESULTS BY SEGMENT – NINE MONTHS ENDED

TABLE 4: CONSOLIDATED OPERATING RESULTS BY SEGMENT – Q3 2021 VS. Q2 2021

TABLE 5: EFFECTIVE INCOME TAX RATE

SUMMARY OF CHANGES IN TOTAL ASSETS UNDER MANAGEMENT AND ADVISEMENT

SUMMARY OF QUARTERLY RESULTS

TABLE 6: ASSETS UNDER MANAGEMENT AND ADVISEMENT

TABLE 6: ASSETS UNDER MANAGEMENT AND ADVISEMENT (CONTINUED)

TABLE 7: SUMMARY OF QUARTERLY RESULTS

Wealth Management

Review of the Business

2021 DEVELOPMENTS

IG WEALTH MANAGEMENT STRATEGY

DELIVERING GAMMA

Entrepreneurial Advisors, Superior Advice

Segmented Client Experiences

Business Processes

A High-Performing and Diverse Culture

DELIVERING BETA AND ALPHA

Powerful Financial Solutions

WEALTH MANAGEMENT ASSETS UNDER MANAGEMENT AND ADVISEMENT

IG WEALTH MANAGEMENT ASSETS UNDER MANAGEMENT AND ADVISEMENT

TABLE 8: CHANGE IN ASSETS UNDER ADVISEMENT – WEALTH MANAGEMENT

CHANGE IN ASSETS UNDER MANAGEMENT AND ADVISEMENT – 2021 VS. 2020

TABLE 9: CHANGE IN ASSETS UNDER MANAGEMENT – WEALTH MANAGEMENT

TABLE 10: CHANGE IN ASSETS UNDER ADVISEMENT – IG WEALTH MANAGEMENT

TABLE 11: CHANGE IN ASSETS UNDER MANAGEMENT – IG WEALTH MANAGEMENT

CHANGE IN ASSETS UNDER MANAGEMENT AND ADVISEMENT – Q3 2021 VS. Q2 2021

IG WEALTH MANAGEMENT OTHER PRODUCTS AND SERVICES

SEGREGATED FUNDS

INSURANCE

SECURITIES OPERATIONS

MORTGAGE AND BANKING OPERATIONS

Review of Segment Operating Results

IG WEALTH MANAGEMENT

2021 VS. 2020

FEE INCOME

NET INVESTMENT INCOME AND OTHER

EXPENSES

TABLE 12: OPERATING RESULTS – WEALTH MANAGEMENT

TABLE 13: OPERATING RESULTS – IG WEALTH MANAGEMENT

TABLE 14: MORTGAGE BANKING OPERATIONS – IG WEALTH MANAGEMENT

INTEREST EXPENSE

Q3 2021 VS. Q2 2021

FEE INCOME

NET INVESTMENT INCOME AND OTHER

EXPENSES

INVESTMENT PLANNING COUNSEL

2021 VS. 2020

Q3 2021 VS. Q2 2021

Asset Management

IGM Financial Inc. Interim / Quarterly Report 2021