CI Financial (TSX:CIX) is an independent company offering global asset management and wealth management advisory services. CI is well diversified by region, with operations in Canada, the United States, and Australia, and by lines of business within asset and wealth management. As of December 31, 2020, CI managed and advised on approximately $231.5 billion in assets.
CI operates through two reportable business segments, namely asset management and wealth management. In November 2019, CEO Kurt MacAlpine introduced a new strategy for the company based on three strategic priorities. These include a focus to modernize CI’s asset management business, expand CI’s wealth management platform, and globalize the company. Each strategic priority builds on CI’s existing extensive capabilities to take advantage of opportunities in the marketplace.
Modernizing asset management
The industry is changing at an increasingly fast pace due to evolving demographics, shifts in investor preferences, changing client expectations for service, and regulatory change. This environment requires new services, products, and approaches to meet investors’ changing needs.
Expanding the wealth management platform
The company’s role of the financial advisor is more important today than ever before, as consumers’ lives become more complex and more digital. CI has extensive experience and capabilities in wealth management and expects to grow these capabilities in Canada and in the United States.
Globalizing the company
Scale has become increasingly important in asset and wealth management and difficult to achieve in Canada alone. Expanding beyond Canada allows CI to support investors internationally and to access global talent. The company’s key initiatives are undertaken in support of one or more of the strategic priorities.
Comprehensive product lineup
The asset management segment, which derives revenues principally from the fees earned on the management of investment funds and discretionary accounts, generates the majority of CI’s income. As a result, CI’s financial results are driven primarily by the assets under management, which are, in turn, driven by the returns earned by the company’s funds and the net sales of the funds.
As at December 31, 2020, CI had $135.1 billion in assets under management. Excluding CI’s U.S. subsidiaries, assets under management were $129.6 billion. CI offers a comprehensive product lineup diversified by portfolio manager, asset class, geographic region, investment approach, and by platform, including various classes of mutual funds, segregated funds, private pools, liquid alternatives, and exchange-traded funds.
Diverse managed funds
The diversity of the CI’s managed funds allows it to appeal to a wide variety of investors. In keeping with CI’s strategy of modernizing the company’s asset management offering, CI continues to modify the company’s product lineup, including introducing new products, to continue to meet the changing needs of advisors and investors.
The company focuses on service and assistance to dealers and agents who are selling the company’s managed funds, including providing information and analysis of the funds, information about the investment managers’ approach and views, along with general information about financial markets, the industry, practice management, and tax, retirement, and estate-planning matters.
Overall, CI appears to be a great stock to own to benefit from the boom in asset management services.
