CIXX - Earnings call transcript Q2 2022

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Operator

Hello, all. And welcome to the CI Financial Second Quarter 2022 Earnings Call. My name is Lydia, and I'll be your operator today. [Operator Instructions]. It's my pleasure to now hand over to Kurt MacAlpine, CEO of CI Financial. you're when ahead go ready. Please

Kurt MacAlpine

and Good Quarter CI Second to Call. morning, everyone, Earnings Financials welcome

Joining is of this financial our cover the me sales morning a performance the we Muni. quarter the An following, will during Together to-date the an update of for overview review the quarter. of our highlights our CFO, on Amit in questions. third our environment. strategy Then we strategy. of our quarter, an corporate amidst corporate results update quarter our on take second the The your an execution is market of evident of select items challenging impact will extremely

cash perspective, $X.XX basis. the capital share to businesses of than peer from year coming and benefits XX% wealth from has a and a per of year-over-year EPS adjusted year. increased the earnings from quarter group the our both up illustrating doubled we've last our was of pull management X% EBITDA our of approach. more Our free share The same averaged per year the our our percentage XX% the ago, on in despite a result business. in decline capital market To And flow efforts back ago. per put EBITDA share since diversification a direct results these transforming allocated

the single of first a market from the dislocation Our exaggerated completing previously shares. focused take advantage sizeable the as client in was redemption for capital announced deployment well net on in quarter to M&A obligations quarter. buybacks as institutional A add our

earnings. were no and outflows a mandate had Importantly, low on primarily single form the our fee impact institutional

broader well given industry held Canadian the flow operating the up On environment side, flows in challenges. retail

flows retail Canada improved sequentially. $XXX more channel, million by institutional these than net Excluding

inflows inflows growth generate QX our and combined and Our consistently volatility. organic Wealth net U.S. QX despite Wealth Both businesses have in businesses had positive continue market to and generated Canadian the strength year-to-date $X first of than advisor of half billion this the year. financial like the of planning. the and more illustrate importance client volatility of sound Periods the positive relationship to of

execute management, strategic against to management We asset our also and to modernize priorities wealth three continue globalize the company. expand

previously Corient, quarter, Northwood Canada's RIAs, on acquisitions announced and U.S. leading the we Office, Galapagos. office multifamily During and closed Family the of

to progress asset expand our continue efficiency. and clients management modernization we make how and the to later for the call the scale know will to our on platform, changes discuss improve clients. U.S. services the We our strategic are our to on operational of Within better have are I business these outcomes to provide Wealth advantage taking we of we leading

for During of the to This that a of the a high us variety South Company. services Dakota quarter, applied we networked the complex provide financial establish needs meet charter and ultra-high better enables clients. to Trust

Transformation hard adopting recipient May, our include our award and clients. the team's several Award. I'll the There and Digital turn but World more we strategy. more the the now to over better about process, positioned on to validates is embedding in vision is were done The and Canada's internal work intelligence IT Finally efficient serve our to-date. call a cloud progress automation Amit company excited work a the results. digitization result to be to I'm review front and financial automating sales learning Highlights digitizing into to of efforts machine our artificial modernize functions of and the This business.

Amit Muni

you, And morning, good Thank Kurt. everyone.

XX. Slide to Turning

a as last increase U.S. combination partly Wealth the due by market wealth the driven acquisitions inorganic from offset to during quarter. in and have year which businesses was of Our million organic end quarter inflows assets in seen sentiment by AUM our as negative $XXX XX% closed from of the growth market. we the backdrop, Despite Canadian offset a by three had the and assets which well primarily partially global negative

an to on the Adjusted in comments income quarter financial our $XXX.X Turning on down focus next million results was the my a results. slide. net XX%. I'll adjusted our

less was revenues X%, our our However, I'll down only down EPS now X%.XXXX Despite to only adjusted on than from X% revenues three $X.XX segments per highlight consolidated increased expenses share. results. being

next the to slide. Turning

Asset management product. to and primarily net due revenues declined fee in low generating negative a outflows institutional markets

Our Canada our by primarily Wealth segment levels Northwood. due inflows to partly asset lower was net and of declined offset which acquisition

Other flows Wealth revenues to interest primarily due positive and were interest due rates. negative client net Our market increase primarily to segment offset balances account which from to higher in acquisitions income declines. U.S. income by partly due an increased increased

a inflationary to increases lower slide. segment. mainly on acquired declined Despite increased adjusted less Slide management Canadian $XXX offset the newly integration SG&A adjusted to our fees in XX.X% resulting X%. are starting million from to than reflect flow expenses margins. Expenses decline X% business. which a only from million. pressures, dealer $X and all were million results Despite can asset X.X% strategy expand Turning were margins segments On review the wealth Wealth margins levels total our we about first benefits by next On our businesses our from in probably expenses quarter. an driven in XX, our segment to quarter expenses asset our our $XXX and by advisor U.S. Consolidated fully in total The the was basis, EBITDA comparable the to businesses. Canadian segments. due the primarily market are challenging These the margin of initiatives affected result Wealth down the in increase through margin that of

flow business operating leverage We are the in that early the still synergies innings markets capturing of will improve. through as and in

of based part the as March how of information About revenue levels investors familiar provide our our and Canadian the beginning Wealth our additional we the generated Therefore, based by not U.S. analysts in you business at quarter. client that some be our was on on with difference XX. levels second asset revenue revenue half as was may of generated U.S. given Now is asset to Wealth the with. of the in quarter

Asset $XXX $XXX a XX levels $XXX June second to million Therefore be is in Wealth we range due which project down a to U.S. market declines. million million our at down in quarter. the from revenues to are the

due efforts, margins. a However, don’t our in we decline anticipate to ongoing integration

Turning million to dividends. We generated for the We Slide flows of a for cash of $XX quarter. and XX. million $XXX million deployed free buybacks $XX

gross debt was to $X.X due can Turning The the on quarter, or review At we debt we to of outstanding Slide, billion our increase basis. billion two factors. had debt $XXX next the on the levels and leverage. a a our net $X.X in approximately end basis of million

facility of three quarter acquisitions buybacks. the use closing of during credit and due to to fund First, an the $XX million increase our in the our

Second, FX a increase was $XX U.S. due our debt. million to or an of denominated XX% of the translation

X.Xx our EBITDA. annualized was leverage Our on second adjusted net quarter based

However, leverage of we on million credit buybacks. facility lower we $XX Of our drew on million is the well level. than facility, spent credit four covenant in our definition the times $XX

our approximate comparable to than versus save our on business debt. dividend believe at As many yield at used buy in you've times, U.S. trade We have to and companies earnings disconnect X.Xx a to our a an business that. built. is price bought value our heard us back to the after-tax We this shares Because say of of we there public free of cost X.X% higher stock back we multiple. the quarter we X.X% believe price cash stock disconnect, multiples a this

as now, these view of an we business. IPO Thank call capital you. use on our So, Kurt. And met turn efficient an of to the buybacks U.S. ahead let back

Kurt MacAlpine

maximum assess horizontal to a business, we prioritized that improve creating governance accelerate joining to enhance continuously Historically, success. with across the couple order in business operations, designed growth. management firm of operated strategy structure Since from each a all firm. that over We'd the is past CI implemented of the expand profitability, set CI, aspects the years of structure entire to the changes position and

the outperforming we of Assante business all Investment talked better than changes we combined and perspective our with Financial Etherington institutional overhauled and in decision and now has CI Canadian in investment As education, workforce a employee investments. to experience, aspects In new in of approximately we resulting systems, is diverse technology, of double us our most period. performance believe all best classes synergy products sustainable operate for governance discussed us the quarter, their Private and this analytics the management to with virtually in Services. Canadian serve continuing with CI structure our made about Wealth workforces this to XX% performance opportunities. years. asset funds variety in platform unified to organizational our platform of and more create capital this in that starting our products client solutions, identify approach are asset previous company, and improvements, A resulted to to This we I've XX% global of collaboratively we're operate Namely, one funds Chris strategy in opportunities have the themselves. On at initiated business for and installed we funds the to competing to an of changes rapid committees our of a funds increase We background, outperforming having approximately on were we by and and performance our Presidents consolidate The length performance powered women, leaves Across capacity integration a expand call diversity we our maximize discontinue governance as capture us Today, note respectively. improvement to our This spans business. and management by advisor more Today, of the we marketing important development, improvement that unifying structural the When strategic at newer platform. viewpoint these about our improve for in our investment and management a when previously, XX% roles organization investment a innovative last product only leadership investment It representation Sean compete of money peers. of committed that talked from opportunities finance, and drive the motion their under are peers of recruiting team-based Wealth of predictive XX% that a of oversee aspects speak integrated of transformation changes QX Enright, execute client to new management, team. are promotions results the employees. are diversity over key proportionate the integrate changes clients run efforts, made to businesses combined will the efficiently. the U.S., of by Having boutiques series minorities. and base as for is integrated amount three that including improvements the distribution to complete and approach new broker comprised making. our from and combination our development resulted we previous our individuals with Pivoting and XXXX, employees our Services. of dealer time our strategy over enabled with and any of strategy. peers human our and Aligned run CI flows. the Capital technology, our of to shifting and redundant partners to well-positioned we've calls

markets by $XXX During just firm-wide in month the to flows Canadian increase to assets under our Canadian rebounding while July, our net retail million. remain our flows business a the from $XXX driven positive, X.X% million of helped

our take want every put a challenging Before asset It's volatility are across highlight nearly results to today is market step given in recent where class. back headed. context CI opening the to and operating and call a been we environment and I where questions,

capital have However, our focus priorities and the growth. affective laser management produced on strategic

we of asset in to the As financial we where peers. any are of North quarter year-over-year management American second performance delivered our the today, best traditional

our compared quarter of business. ago you did capital. restructuring Management expansion effective same business, our These our wealth increased XX% space decline of we management an ended Wealth per average results to EPS our the from deployment reflect Canadian prioritization Canadian the in for as and Our X% peers. of a The Management year Asset

IPO during SEC the We for are an on-track our file with U.S. to SX QX.

open and believe profitable efficiencies I through shareholders to growth execute call our the for I'd significant us now forward, Looking and Wealth recognizes to our changes of scale, in value Wealth continues we U.S. deliver business sustained continued Canadian rapid as Management IPO. the have integration to asset and the for position expansion questions. made, organic management, like unlocking up

Operator

Instructions]. Thank you. [Operator

first question from today of Kyle KBW. Our comes Voigt

Your line please is ahead. open, go

Kyle Voigt

market to the markets. moving morning. higher significant still we in levels the really at quarter but with year-on-year good on thinking and volatilities you Maybe Hi, question Should will X.Xx and about leverage my equity the are first IPO? this on running of Wealth ratio be some high few average you with bit capital the down a bit or leverage a next we of expect over run want end being the you this guess And U.S. where as should until comfortable we level get deleveraging ahead I IPO quarters. your even here

Kurt MacAlpine

Thanks, Kyle.

So, mentioned, in declines leverage the our entirely increase spending. as effectively in you driven increases or not the by ratio markets,

at Amit less have quarter million ratio debt by this the impacted buyback about to during we X.X. announced multiple fund PE neutral turns. worth So, our as mentioned, than a X.X a of these transactions increased our zero of then $XX previously would had stock million $XX or In effectively and market, leverage

looking in with IPO we have of say comfortable when price looking we for of a the the quarter, capital look current the at no uses tradeoff upcoming for So, took the planned us I'd this, currently. share forward remainder additional intentions. the we are at

debt driven So, by as to markets. have we trend with markets proportionally down rebound that ratio totally and comfortable with uptick we're continue the and was we that our leverage the given stabilize believed

Kyle Voigt

just then, a the on IPO. U.S. Wealth And great. question Okay, second

regarding Now SX filing QX. the the additional I in color appreciate

I sites through was of case forward. business kind think want IPO really that, you indeed quarters on and open guess that we IPO call, I the other just that half for you went their track? last and this strategic are that the best this on should strategic confirm U.S. you mentioned that still I a to noted options as still the or narrowing take alternatives this of review to

Kurt MacAlpine

right us. on file. the We've forward value XXX% to our to confident separation to sticking the that path plan unlock through track businesses been a are We the of in IPO for absolutely shareholder the is

just it's and been in surface If to really inning U.S. us. what potential. of that's as the first done true business, a incredibly to We're transformative beginning earnings growth you for strategically scratch look important the It's our at for Company the us. our capturing and

that So, weeks in on. pathway getting we're look track to We're we're forward a the XXX% filed committed on coming the schedule and to everything on

Kyle Voigt

Great. Thank you.

Kurt MacAlpine

Thanks.

Operator

Tom go of question Markets. BMO next Our from comes Capital ahead. Please MacKinnon

Tom MacKinnon

morning. Good thanks. Yes,

is seems adjusted despite question operating a AUM free First It just higher better and XX% better about EPS be flow. year-over-year. and year-over-year to despite And a cash year-over-year. down EBITDA

at in unusual we a should free cash have So, And Thanks. flow quarter that then this how forward. going is there follow-up. I anything operating the and be looking

Amit Muni

Hey, of the Tom. a nothing remember there's unusual. We No had we quarter. couple in closing of transactions

flow So, any affect cash will that the of major timing movement.

I you're really seeing effect So, this the just that of in quarter. think just particular

Tom MacKinnon

going So, expect going operating if going XX% with cash I don’t attract flow be consistent comp should that will to goes or up forward know the EPS that adjusted free we growth forward? X% up

Amit Muni

correct. just consistent I would to give don’t guidance want you are I but directionally say

Tom MacKinnon

understand understand you you IPO and back why here U.S. have or it's to And Okay. think But don’t Wealth free to then, stock. buy but to buy back. Kurt. I the deleverage I to that. to question respect Management, decision and move on debt the stocks reason the want flow you're cash not for With as take when to going I any the cheap the

stub going on here its value. have not going with the just respect to IPO of U.S. might to it's some leverage and you're value up But the Wealth So, implication loading leverage. more in be regard that to for that the influence Management

back continue So, debt why your not to just to try opposed as to reduce stock? buying

Kurt MacAlpine

factors. when of at looking different it, a Tom, Well we're at look we variety

to fund that for our attractive believe opportunity capital was margin. and we As opportunity buying was of we at better us. faster and to we buyback with that incredibly X.X acquired acquisitions The set I mentioned multiple business we've announced will an that share unprecedented the previously acquire PE deployed shares the having to U.S. more addition scale, up in growth, a in

proceeds will as knowing in use felt IPO business. coming and the we the was to business months, intend So, this de-lever we the the before appropriate we indicated Canadian tradeoff

belief between very our a you be the there's other can And So, ideally will is we X.Xx we look multiple of that made at Management disconnect back corresponding if end. businesses, and significant at comps all trade on Wealth buy that PE how tradeoff. what at multiple the that's shares we the when our

look buyback our very standpoint put we million it a actually you the and have would does standalone at in for it accretion quite little broader a the If ratio or is and an tradeoff $XX decision impact that impact no made. that's leverage our from the business what but context, impact profound and on on basis

Tom MacKinnon

to does Management down that then the as is with proceeds decision the just value? IPO do debt. strictly to search anything trying a Wealth that or business, the happen is or to have to raise a you would its And of understand. Or that I trying result something value to it U.S. pay surface

Kurt MacAlpine

This is to capital absolutely XXX% do we shareholders lines. for driven to the value, it This with share has be for or to our nothing the desire those by price. in realize a the what along reflected true believe anything need

I think come cash we ask our question you if the would free that at looks I our flow the anybody interest to conclusion before it's think people obligations, business our all. at and not in had leverage,

realize by desire for So, shareholders. to value our our XXX% driven

Tom MacKinnon

could just in. if squeeze I And more one

Kurt MacAlpine

Sure.

Tom MacKinnon

what business in the think had Wealth net the I the U.S. you mentioned for quarter. sales second the in past are Management

share the business in quarter Management and in breakeven what were sure U.S. quarter, in net second not Wealth they're the us and how sales far were think July? with they I you can first so if trending the the for

Kurt MacAlpine

we sequencing forward. this But and first flow year, We're QX, billion prepared net in kind I across the strongly mentioned in the clarify, timing positive. out remarks, this well our to of in strongly we $X as just wealth So going delivered well half north of when for of flows of was disclose QX positive. is figuring businesses.

Tom MacKinnon

Thanks, that. Okay. for

Kurt MacAlpine

Sure.

Operator

Nik Markets. of Capital today question Our next CIBC comes Priebe from

is open. line Your

Nik Priebe

Yes.

thanks. in The Are particular for those or retail the demand resilient Canada. third-party context any of of strategies close that distributional Canadian or asset in momentum there that are Okay, flows funds? deteriorating the been the fund relationships sustain or have in trajectory pretty that helping classes

Kurt MacAlpine

It's hard your platform, Nik. that of so basis is driver the worked absolute the we flows Great are question, right. peers, isolated primary ability of event, one biggest performing an the investment think drive everything I combination your not we've on or start drivers of relative and to done strategically, how the to it's one on with right. you If really in

As initiated a we beating little I peers has funds mentioned number earlier, have the today that our the of restructuring to when from we doubled.

predictive you much clients That as take that drive with started you by analytics in when in powered interactions a could and more just as come to the the imagine combined position inputs in approach better way the this growth more on So, and we those is place. work is get organic models, puts smarter-and-smarter XXXX. and that us sustained which distribution your

distribution, third-party defining by us. you're necessarily way relationships platform it landscape not same for distribution is is call it's exist. new So, the the distribution relationships, it that The didn’t

which compete were one them in our carry ago of product even and pieces to we're clients year flows. there's more lineup I names. engage are the Related of a clients to approach a in our for of lot designed clients several development. our to had a product third complexity they more our We've to in targeted hard lot the of just all way looking And smarter, legacy launching forefront years a serving and of that, another. today's well. effectively, that up line of also funds forward. as cleaned us. we've is think lot as much product the at And really looked then that And our make of to boutique our relevant lot and against still we're with work now a a we done couple we've evident lot A that development that or to product A strategies ago, sure environment worked won up. clean

the decade. just more integration. then haven’t with and So, I product investment management This significantly think investment in have been to approach, led better the in sound really reaping us of and structured improvement the our in pretty puts platform, development distribution in I place we place inputs when probably that a look at much and benefits flows good a that product a performance disciplined

Nik Priebe

sizeable lower okay. And we're or could that pipeline retail little in been may exposed those that bit lately the Is come might else there Yes, a and be quarter kind overlooked the or of overshadowed institutional in chunks two? flows few have nature. redemptions margin a anything by next over out maybe

Kurt MacAlpine

the total of of from so really from believe that terms anything which we double. in a de-risked asset lumpier probably ago mentioned The space. were years happen assets large mandate around platforms insurance the flows today. with where don’t than of with where Look, directly couple those to Significantly that held we could more leaving of institutional of assets in standpoint. management $X.X in forward-looking. that and where We bank kind the And us business predominantly redemption competed it was is billion a tends be they

redemptions internal or an of been institutional, by to an all bank So, a company even in in the it mandate repositioned despite insurance lumpiness well. seen has we've the almost as

we're So, The asset when But $XXX where the $X anything total at it's small of base planned billion in obviously is off answer of don’t when but today lumpy. that of in what's a at very look pipeline? you context no we assets. think anticipate I and change billion could our

Nik Priebe

it. Yes, okay. Thank I'll that makes Right, And re-queue. you. fair enough.

Kurt MacAlpine

Nik. Thanks,

Operator

Our Capital Instructions] next of question [Operator Geoff the comes queue RBC Kwan Markets. from in

is line now open. Your

Geoff Kwan

good Hi, morning.

is to for you given the comments with about help from to of Like share M&A for where the other kind doing and are and as the standpoint you just keeping what the is are leverage as on not. between ask and at where buybacks and buybacks, how your leverage the well price Just share appetite business? wanted where to thinking

Kurt MacAlpine

Sure.

increase want driven again leverage, leverage of spending. to terms the once was decline in not in the in So, so significant uptick people re-anchoring just the keep a It's ratio markets. by I to our total

at the was how should that multiple a plans to on, relative very it that comps decision As trade felt for do mentioned, our of PE have IPO Geoff, we and the shareholders. lease that where and or to prudent X.X it and I pending we like looked

Looking forward quarter, planned of transactions for the rest the no have close to this we that we in quarter. have

today, the So, of then constraints if have our no normal many uses additional context, buyback in current maxed remaining that we bid. period. at the course And look buyback XX it out be $XXX price XX And or think broader a capital. would deploying about we couple you Current months if by shares pricing next million can the we we over as if an in outlined you terms share of months completely. how back about months of have XX.X issuer buy on

upcoming But opened So, I our We're capital. certainly X.Xx uses no to the the of where for of plan IPO. at back look PE at, capital quarter. we're buying the at stock currently pending of current uses no when remainder given intended

Geoff Kwan

Alright.

M&A it maybe more pursue lower it as seen But an up, than like of recently it. what you'll the maybe guess I RIA So, that opportunity you may frequency if there's sounds CI. comes it's out differ, we've obviously

Kurt MacAlpine

environment completely frequency because is different. the market With slower

to about talked looking the -- driven approach individuals was our about think in highest the year industry by lot firms M&A we when to of the M&A, we environment want changes get uptick last in period. potential quality as U.S. transact a to we've pending tax the in with pretending front of So, And the

lot and would post XXXX forward a heightened level In So, activity you I've stuff as which we of XXXX saw XXXX, of through year. see. a a described

but we've year. From rate acquired of this being exclusively the said, Since in highest-quality year of be M&A have again today asset-based nature mentioned firms. aggregation very anywhere. quarters you being would and this that the on timing, that with would maintain We're as active disciplined, have or advance. yes of forced so robust transactions three always we this Now discussions structured, as believe fastest We closing the very be been and the but given we none pipeline. a quarter in just we're far an have I subsequent It perspective, announce do aggregated. I

Geoff Kwan

just And respect July second with question course mentioned done. the business. was the you my to Canadian Okay, Retail

moment the if relative wondering where performance that versus the was tracking or our industry. whether case to or broader sense you have not any Just the of this having industry to at similar the is for is

Kurt MacAlpine

I will comment on Geoff. very performance our in market the we that positive. I the think is general, given have in momentum But the environment industry

retail year, last improvement EPS. in key has when back to those a delivered considerable getting our So, were even really driven business mentioned in flows very by QX of lot I a metrics

performance the stabilize. relative I So are inputs the outcomes feel And that look on floor lining the out to and And shook positioned we're and to pretty predictable. drive our once think for I to been when I started flows us like those front.\ kind at of lumpiness how If have absent some peers. up good here and there,

Geoff Kwan

Okay. Thank you.

Operator

from Securities. comes Please Graham Our next question of today go ahead. Ryding TD

Graham Ryding

and there On Hi, flag would of inflows improvement our sort that improvement that So, funds the mandates the or in driving any pull fund are good follow? particular and morning. you out? theme, to

Kurt MacAlpine

balanced. no Investment it's Management worked we across really I improvement improvement, mean, very on no a Unified platform of our it's very terms a has And historically. performance that our the and way really had to hard investment team never Board. in Yes, create it's in performance

in those intergraded take portfolio research, worked down trading had opportunity together. kind place walls I centralized we're of approach think construction, just an a benefits having and we of legacy have asset we allocation So, of lots dividers incredibly and reaping the to to smart and really professionals investment

suite two So, of not mandates. products, one just it's our to flowing through across or

Graham Ryding

departures there Okay. your you achieving do are Management was in business adjust the and need some any or And there to place backfill new its the or have Investment there turnover to you now? depth right

Kurt MacAlpine

Sure.

longer So named actually have because us, with the are about We from collectively of there of our managed perspective put our actually those associated announced impact clients when a was misconception is of context no was The That bit than into little just three to PMs changes departures. less assets. seems just April. did in it X% that to flow who zero. about happened a

We approach. platform an have been our boutiques to from investment retooling integrated

as been hiring well. along we've So, all

was this investment feel in. about the departures need the our and weighing and a CIO platform of individuals So, this to at a retooling all Marc-Andre then backfill. quality I how as been of not We've the we're great along. construct the series

And be so, bit. relates assets. But as fully past function. managers our to the I of to the investment a portfolio and seem was impact it just clarify that little wanted yes, this we're magnitude to the little sorry in in There a misunderstanding well the just staffed of

Graham Ryding

perfect. last could. question my I Okay, if then And

Just guess, installing should in so? to U.S. terms integration you focus really Wealth. -- where you then firms and I or the and governance to in that to-date you and of those and then talked the year next progress committees about can integrating points over was

Kurt MacAlpine

Sure.

past the a in business. the we is set up bit items little one So, our how talked Wealth of about U.S. I

as they millions that public is step-up the their in level company. that the also on effectively They're collectively inside opportunities partnership. people of contributing value to weigh or creates platform. on a the partnership in our past. dollars Private it's for operates own a private local lot national or a Today of of a But our of where had we have Wealth XXXs XXX CI partners So, U.S. entity

development from nine And we govern or client mentioned, nature. those effectively development, planning, operations committees that our I and of as that oversee partnership. and have and financial leadership technology, things business experience, things range So,

where take different if to collaboration. and say approach were So, looking three really we're drive areas more to there's I segmented a

the one our advisor. very marketing are Custodian our business some have progress first in how more lead knowledge revamped in network. our the to Canadian developments people where referrals efforts, and it approaches digital from business of network includes in border and and sourcing a cross other best made internal includes includes is get senior generation folks very on that we much practices do The That things good clients business door we like referrals approach. our we efforts unified from some development more creating

you're continued a do us, better So, to we are the different to variety been that clients services them. our Once flows. business with have that development which expanding started provide in a of to we've inputs seeing business success leading

running as will up and did demand Last year of mentioned season on XXXX over tax returns, that successful back number a we last I launch. our tax go we anticipate we up. We tax had So, before. function a as have increased very where of the

we have of we in mentioned trusts I year. that file be we the Dakota the Trust, approved As already up we're remarks, to for queued And XXXs hoping repapered. South earlier prepared have this

platform Service benefits Our adoption. the legal, we've bill pay CI up on we and finance, running. compensation this HR, things are unified to of are other scale and accounts we're in then starting And And itself, getting that compliance good integrated like functions, like realize benefits and platform. that actively and have marketing really functions this

Graham Ryding

Perfect. That's it you. from Thank me.

Kurt MacAlpine

Sure.

Operator

Edward question Jones. comes Our Shanahan from from James next

open. is line Your

James Shanahan

clear I see questions. over Company provided I the the just my as that has ineffective. company Thanks. concerns some morning. our or year-end procedures for and there material by address isn’t have been and them XXXX. Thanks are. it controls is please us weaknesses the but have information reporting initiatives issues these say unable year-end taking remedy issues for some what XXXX you questions Good that Can characterized financial these describe a about are implications and that and exactly remediation about what is to timeline the to the

Kurt MacAlpine

Sure.

end our at I've were so weaknesses So, these the of just year. to identified put last

one a sort put to the that way the put going SOX the documentation was stock it, there New context, to exchange compliant. and SOX controls. on year needed about during Companies in -- mean starting our fact when systems first those well I the in compliant Just have cross have are two SOX and there areas, typically first that of was some to perspective we're identified. And they become controls test company listed the last we to and to from year. of it's going York become weaknesses years. to CI, in had that that's to and light think documentation under is this proper you And to in of if remediate have issues to be didn’t many legacy going existence related have a get that was their We for we'll material be like been this

I have as plan there And showed. or a It's have the We the over any and progressing. just whether plan like, no is was they operating standard. SOX concerns documenting are errors systems of mean, matter we accordance a controls that with in

staff breath need brought speed us to we additional the for been We it. we've the We've was help more through us consultants, that. in business. the transactions have go had seen and changing second for help the on and are as navigate complex bringing resources modernizing we to the other that The markets given around on accounting

weakness those So, ordered to way financial being of was just clean you well can opinion. in the remediated. the opinion this the got lastly of are on order And year-end and as on a the the of just from see statements. both We there

So, there was no statements or anything like that.

our none an on weaknesses nothing, results. of So had financial these and effect

James Shanahan

you. Thank

Operator

a have CIBC Priebe [Operator from Markets. We Instructions] Nik follow-up of Capital

line again. open is Your

Nik Priebe

thanks. Yes,

want Just volatile margins? such in. SG&A last market BM the a or on a proportion a levels as one might with of in be it factor just market in downward can asset discretionary expenses squeeze talk correlated either be as you can of context one mitigating about as what managed environment, to

Amit Muni

Sure.

So, let me walkthrough segments. the three

markets. all So, will be obviously affected we're three the overall segments by

cost over time decline stabilize markets manage there take we it that pull is pullback was levers for that do and margins. asset a expense to we did, manage see when our as stabilize, then start that as the believe base. the I can would can't to margin. quickly help base does say But that management they side, markets On you in to time us

leverage we see rebound, operating markets to in do expect As the business.

On that the to particularly side business the we're act Management on because platform. more as Canadian as profits in bring margins we efforts expanding the model, do changing the on of integrate from advisors our to see the of the wealth expect business Wealth side to well on our -- and the mile business on U.S. the advisor business

overall base and say place margins that we AUM in stabilizing the So, we is there there. I is are that stabilize leverage tied cost from but variability yes have there would can to

Kurt MacAlpine

it's to And in in our XX it our on, with market, of years. two right, the add worst three putting And then expansion. just market margin start business experienced context to the units we

that think the Wealth as perspective stages this we're that's U.S. if expansion. one of Canadian margin a from and together the market One, putting Wealth realizing as in synergies. obviously a those strategy early So, rapidly about market you businesses has realizing in we're where declined platform

our just So, you leverage could we're imagine being downward the experience. our on like able to a operating in manage the we that creating that positive costs business market one despite

to our The in relative the be as looking relative to expense other thing similar increase we're a with with how have dealing all point and to business the market. financials. you're in expenses we've markets the the very peers our at we've would flexibility impact challenging given and the And been we on that I pleased would we're base others, our how managed responsive to

Nik Priebe

Okay. That's you. good color. Thank

Kurt MacAlpine

of our questions. appears, that's It end the

Kurt MacAlpine

thank And So, speaking to quarter. for your with we next look you you forward CI. in all interest

Operator

Thank call. joining. for today's concludes you This

disconnect You your may line. now

CI Financial (CIXXF) 13 Aug 222022 Q2 Earnings call transcript