1. CI Financial Conference Aria Resort & Casino Canadian Wealth Market Opportunity in the Next Decade “Change Is the New Normal” Goshka Folda

2. Presentation Agenda Canadian household financial wallet: A decade of change  Who will be your client? Evolving needs will drive product preferences Regulators stir while ranks of competitors multiply—Advisors need to be ready! Capturing wealth market opportunity in the next decade 1

3. Canadian Household Wallet: A Decade of Change— Who Will Be Your Client?

4. Household Wallet Will Grow but Pace Will Moderate In billions of dollars Source: 2013 Household Balance Sheet Report. 3 3 2013 2013-2022 CAGR Financial wealth Residential real estate Credit $3,416 $3,602 $1,824 2022 $5,460 $4,266 $2,029 Assets 5.4% 1.2% 1.9% Financial wealth Residential real estate Credit

5. Retirement Will Be the “Word of the Decade” for Customers and Financial Services Providers Alike 1.3 million transfer events (2012-2022) 1.3 million transfer events (2012-2022) Source: Household Balance Sheet Report, WealthMine. 4 4

6. It's "Risk On" for Canadians Saving for Retirement—As Employers Transfer Risk to Individuals Assets in billions of dollars 5.4%9.2%5.7%2.0%7.5%9.3% TotalCPP/QPPDBRRSPs DC RRIFs CAGR 2013-2022 5

7. Mass Affluent Segment Will Lead Household Expansion but High-end Clients Will Dominate the Asset Growth Opportunity Mass affluent HNW $100k-$250k $250k-$1 mil +811K 73% +500K Households Financial wealth 3.8 million $1.4 trillion $1 mil+ 54% +486K 88% 1.1 million $3.7 trillion Between 2012 and 2022 Source: Household Balance Sheet Report, WealthMine. 6 6

8. Evolving Customer Needs Will Drive Product Preferences

9. Money on the Sidelines: The Opportunity Cost Rises as Markets Improve and Interest Rates Remain Low Deposit balances, in billions of dollars Source: Insight Advisory Service. 8 8

10. Canadian Fund Industry Breaches $1 Trillion in Assets Long-term investment fund assets in billion of dollars Source: Insight Advisory Service, Simfund Canada. 5-yr 15% 10-yr 9% 20-yr 12% Trailing growth to June 2014 9 1-yr 22% 9

11. Fund Industry Flow Tide on the Rise Long-term investment funds net flows, in billions of dollars Source: Insight Advisory Service, Simfund Canada. 10

12. Equity Renaissance Underway…But in a Risk-conscious Fashion. Foreign Diversification Back on Track Average annual mutual fund net flows in billions of dollars Source: Insight Advisory Service, Simfund Canada. 11

13. Shift to Solutions Underway: Pre-assembled Advice Solutions Resonate with Risk Management Theme In billions of dollars Source: Household Balance Sheet Report, 2013 Edition, Section 2, Exhibit 9. 12

14. Mutual Fund Business: Three Key Trends (2) Long-term funds industry MER coming down: 2.13% 2.05% (1) Back-end load funds continue to lose share of total load fund assets:58% 39% (3) Multi-series assets on the rise, original series assets losing share: 90% 86% 20072013 2007 2013 13

15. Mutual Fund Industry Pricing Flexibility on the Rise—Unbundled Approaches Gain Ground Total assets in unbundled series*, in billions of dollars Source: Insight Advisory Service September 2014. *Includes F, F/T, F/HNW, F/T/HNW and all HNW-series which unbundle the management fee. 14

16. Regulators stir while ranks of competitors multiply— Advisors need to be ready!

17. Global Focus on Investor Protection Shaping the Regulatory Discussion in Canada—and Worldwide—Will Put Pressure on Traditional Advice-givers 81-102 Statutory best Interest standard 81-407 Change in fee structure 31-103 CRM II 81-102 Point of sale disclosure NOW: Mutual fund manufacturers fee and performance At point of sale and in plain language. Now to Mid 2016 : Dealers to report performance, all fees paid, service rendered on client statements. Discussion paper: Proposes end to embedded payments to dealers/advisors—trailers and 5% commission paid on DSC. Consultation: Proposes fiduciary-like standard on all advisors. Source: 2013 Household Balance Sheet Report. 16

18. More Competition: Direct ≠ No Advice! Will Robo-Advice Take Hold? Source: Household Balance Sheet Report, 2013 Edition, Section 2, Exhibit 13. Online brokerage Full-service brokerage Private investment counsel Branch delivery Direct sellers adviceDirect PH&N IS Do it yourselfGet help to do itGet someone to do it for you Financial advisors 17

19. Deposit-takers Formidable Competitors. Beware of Their Quest for “Customers for Life” Foster seamless passage between channels and optimal allocation of corporate resources Customer retention throughout the customer’s financial lifecycle top priority Branch direct a critical point of initial customer engagement and discovery Source: Big Six Banks Comparative Analysis—The Mass Affluent Segment: Sales and Service Models of the Big Six Banks. IIROC 18

20. Unfolding Transformation of the Financial Advisor Channel: Less Embedded Compensation, More Unbundled Fee-based Approaches Percentage of channel assets in unbundled fee-based programs 20132022 19

21. Capturing Wealth Market Opportunity in the Next Decade

22. Expand Your Retirement Planning Toolkit Payout Phase = Growing Complexity for Advisors 21 Mutual funds e.g. CI G5/20

23. Retirement Market Jumpball—A 360° View of Payout Phase Product Landscape Income product continuum in flux Source: Household Balance Sheet Report, 2013 Edition, Section 3, Exhibit 8. 22

24. Wealth Management Landscape Now Stretches Far and Wide Adapt to evolving consumer needs by executing a “Growing with Your Customers” strategy and focusing on holistic wealth management Deepen expertise in emerging areas, such as risk management, retirement and estate planning Crystallize and articulate value of advice to strengthen value proposition and combat competitive challenge Address time constraints and rising compliance and technology costs Develop practice efficiencies to allow for expansion and new revenue opportunities to strengthen economic model 23

25. goshka@iei.ca@iei.ca visit our website at www.InvestorEconomics.com