Between the war in Ukraine, soaring inflation, and the timing of crypto’s Black Tuesday in May, the Canadian business community is having a volatile year. Yet, amidst all this financial turmoil, IG Wealth Management is buzzing.
The Winnipeg-based wealth management firm has more than 3,200 advisors serving one million clients across Canada — and its first quarter results were impressive. At the end of March, the company had $116.3 billion in assets under advisement, down slightly from the previous December but 9% higher than the same period in 2021.
IG Wealth Management does everything from optimizing clients’ tax planning to preparing for retirement to business succession planning. He also promotes financial literacy, works with wealthy families on intergenerational wealth, and helps clients make charitable donations. Damon Murchison, president and CEO of IG Wealth Management, says the company may not be everything for everyone, but becoming a one-stop-shop for wealth management is certainly the goal.
Murchison explained to The Star how the COVID-19 pandemic is forcing Canadians to grapple with difficult financial issues, the company’s deep roots in Winnipeg, and what IG Wealth Management thinks of crypto:
In Canada right now we are facing a sixth wave of COVID, inflation is getting pretty heavy and there are more interest rate hikes coming from the Bank of Canada. What is your market outlook for the times we live in now?
Last year was a very positive year from a stock market perspective. Our view is that it will be a moderate year. We have to make sure we have inflation under control. It was to be expected that the central banks of Canada and the United States would move. It’s something we knew was coming. I think this is going to give everyone a chance to reset.
There are good things that can come out of it. Housing in this country, as you know, is not affordable for many Canadians. Some of the measures taken by the government – the rate increases – will hopefully get rid of the speculation a bit and for housing to become a bit more affordable, especially for the younger generations.
When things are going well, it’s easy for Canadians to believe it will last forever, because people tend to extrapolate. This is never the case. There has never been a time when Canadians asked more difficult questions about their financial future than today.
Many Canadians worry about not being able to afford to retire or buy a home. How do you attract clients who may not have retirement savings or who simply see wealth management as a service for the wealthy?
It starts with understanding who your customers are and who your community is. We provide financial advice, financial knowledge, financial advice and financial planning across the country in different forms. When you take a look at what we call Empower Your Tomorrow, which is a program we truly believe in, we reach out to people and provide them with the basics of financial literacy. How do you complete your taxes? What tax credits can I claim? How to complete a job application? How do I complete a university or college application?
We work in communities with those we believe are most at risk – newcomers to the country, youth, seniors and Indigenous people – to really help them learn the basics of financial literacy. Then, when you become a client, we’ll work with you on financial education, which eventually leads to financial planning. These three elements will lead to financial well-being and financial confidence. If you’ve worked with a counselor for several years and they know your situation, you can incorporate it into a comprehensive, individualized plan.
Even though people are very financially literate, they just don’t have the money to save for retirement. We no longer have pensions like we had in the 1950s and 1960s. Do your customers ever care?
Many Canadians are concerned about this. But I think back to when I was growing up and I had the exact same issues. I was living paycheck to paycheck. You have your college or university debt. You earn money and you have a job, but you don’t have enough to move on your own. So you get a roommate, or you live at home.
We are having these conversations with our customers right now. Quite frankly, a lot of it is about dealing with their parents. All the studies right now will show you that Mom and Dad’s Bank is in full force. More than ever, Canadians consider heritage as a family heritage. They look from the perspective of intergenerational wealth — how can I help my children save for their first home? How can I help my children pay off their student debt? How can I help my children with X, Y and Z? And we’re not talking small amounts of money here. I think on average, Canadians pass on between $130,000 and $140,000 to help their children buy their first property. Generally, families have more money and more wealth to pass on to their children today than 10, 15, 25 years ago.
The key here is this: can parents work with a counselor who specializes in helping with all the things I’ve talked about? Financial literacy on the other side of the scale for, let’s just call it a “high-income working family,” is knowing how and when to bring kids into a conversation about family wealth. How do they have these conversations? What don’t they talk to their children about? These are all things we help our clients with.
Would IG Wealth Management ever consider moving its head office from Winnipeg?
No. We are a Winnipeg-based organization. We have close ties with Winnipeg and Manitoba — and we’re very proud of those ties.
Many Canadians are considering investing in crypto. Does IG Wealth Management have a position on this?
Each of our sub-advisors will make their own decision. If crypto deserves a spot on their list of investments, we let them make the decisions. Some will have it, some won’t. We know Canadians are generally more interested than ever in accessing digital assets, including crypto. We want to make sure our customers have access to crypto. We have a wide range of ETFs that provide exposure to this area. And we are flexible. If a client wants a specific type of exposure and they understand that exposure, we can certainly provide it.
The key is to make sure Canadians understand what crypto does to your overall portfolio from a risk and return perspective. Crypto and these types of investments are exciting and relatively new, but with anything exciting and relatively new there is usually a lot of volatility. You just need to have the stomach to be able to invest in these things for a long time.
Given all the pessimism surrounding our country’s economic future right now, why do you think IG Wealth Management is doing so well?
There are two things I will point out. First, there was a lot of stimulus in the market because Canadians weren’t travelling. Our savings rate has increased dramatically as a country. Canadians had more money to invest because they were saving, not spending. That’s one of the reasons, but it’s something that anyone could benefit from.
Why did IG Wealth Management benefit? COVID has forced many Canadians to stop and think about their lives and their future. They had time to digest and look around them. They had time to talk to their friends, they had time to talk to their family members. And they had time to talk to their accountants and their lawyers. What we’re seeing right now is that the demand for advice on building a plan that covers all aspects of life has never been higher.
Before COVID, the demand for advice was there, but most people just wanted to talk about their investments. Admit it, investments are sexy. Now Canadians want to find answers to the tough questions they know they can’t answer on their own. They are looking for advice. At IG Wealth Management, our entire organization — our model, our culture, our people — is designed to answer these questions.
This interview has been edited for length and clarity.