Small business is big in Canada And even bigger when you consider disability. Setting out the small business path for your business.

Transcription

1 Small business is big in Canada And even bigger when you consider disability. Setting out the small business path for your business.

2 British Columbia, Alberta, Saskatchewan, and Manitoba rank in the top provinces in terms of invested venture capital. 2 All of these areas are hotbeds for small businesses with big dreams.

3 3 Canadian small business by the numbers Between 2002 and 2012, 77.7% of jobs originated from small businesses. 12.5% 9.8% 77.7% Small (1-99) Medium ( ) Large (500+)

4 4 Canadian small business by the numbers 1.7 million Employer Businesses 1.14 million 67% Small Businesses (<100) 757, % 1-5 employees

5 17,946,600 working Canadians Source: Statistics Canada, CANSIM, table Last modified:

6 DI Market in Canada Type of product Group (104,000 group contracts) Number of insured Canadians in million Individual 970, million working Canadians remain uninsured! We still have work to do! 6

7 7 Canadian small business by the numbers 5,137, 147 Canadians work for small businesses, which is roughly 2 ½ times the population of Toronto

8 8 What is your biggest challenge in running a small business? Workleisure/ Family 18% Managing staff 10% Marketing 21% Cash flow 51%

9 9 Money Makes Everything Go Around: Small Business Finances Access to capital and resources is key for small businesses trying to grow Companies with 20 to 100 employees were borrowing an average of $680,000 While those with one to four were asking for $120,000

10 10 Don t forget why I m an irrational being

11 11 Become a student of the game How to tap into this often overlooked economic backbone

12 12 How do bankers target small businesses? Pick One Go Deep Develop your offering Accentuate your value Own the conversation (Structure) Size em up

13 13 Making the case: Mom and Pop shop (fewer than four employees)

14 14 Their business is their sole source of income: Dani makes $50,000 gross per year Jolene handles all the administrative work and earns $45,000 per year.

15 15 You work twice as hard and so does your money Your income funds two budgets PERSONAL BUSINESS

16 17 Income Replacement Income Replacement James $3,000 Income Replacement Tara $2,800 Personal Disability Insurance Personal Income $50,000 DI benefit $3,000 Personal Disability Insurance Personal Income $45,000 DI benefit $2,800

17 18 Solution With Acci-Jet Accident and Soft Tissue Injury Only 3 questions to qualify Up to $6,000 of benefit Options: Partial Disability Rider Return of Premium AD&D $500,000 Travel $5,000,000 Extended Medical

18 19 Solution with Superior Program Traditional Fully Underwritten Up to $10,000 of Income Replacement Full flexibility with Waiting and Benefit Periods Regular Occupation definition until age 65 No Income proof required with application Premium to 65 or Term 5 Premium Optional Occupational class Enhancement

19 20 How will the business do for 6-18 months? Overhead Business Overhead Expense (BOE) Disability for your business Salaried Employee salary $2,800 Rent $3,500 Fixed cost $1,500 Automobile $1,365 Total $10,115 2 Owners (50%): $5,050 Overall Picture for James Income $3,000 Overhead $5,000 Total $8,000 Tara $2,800

20 21 Business Overhead Solution Acci-Jet accident and soft tissue Up to $6,000 benefit per month 2 year benefit period, 30 days waiting period Superior Program Up to $6,000 benefit per month 2 year benefit period 30 days wait, or 1 st day accident

21 22 And what if that s not enough? Universal Loan Creditor Disability Insurance Credit Insurance (ULI) Covers Debt, Lease, Rent Disability Debt Insurance Personal Mortgage $1,500 Rent $2,500 Vehicle Lease/loan $500 Business Loan $3,000 Total $7,500 2 Associates (50%): $3,750 Overall Picture for James Income $3,000 Overhead $5,000 Loans $7,500 Total $2,800

22 23 Solution with Universal Loan Insurance Based on Debt Obligations Up to $5,000 of benefit Fully Non Integrated with any other benefits! Benefit of 2, 5 years, or to 65 Fully underwritten Optional Life coverage for Loans and mortgages Partial Disability, Return of Premium as riders

23 24 ia Excellence Acci-Jet Superior Program Universal Loan

24 Re-Introducing Assure&Go - Access Life (T15, 20, 25, L100) - Cancer Guard - Acci-Jet - Superior April 10th - Universal Loan June 2017 Accessible Simple Convenient

25 What s so great about Assure&Go? Desktop, laptop or tablet, you can now complete illustrations and applications with our new web sales platform Easy step-by-step approach ensures that applications are complete and processed within hours! Stores applications on cloud technology giving access from any device 26

26 Non Face-to-Face Sales You can make a sale by phone or on your laptop Your choice 27

27 Thank you! Andrew Prokopovych Living Benefits Specialist

28 Economy and capital markets, fund solutions March 2017 Asad Zaidi Director of Sales Individual Savings & Retirement Products

29 ia: Major Player in Seg Fund Industry $13 B in assets 11.5 % market share ia ranked 3 rd in Canada $1,680 M in gross sales ia ranked 3 rd in Canada $420 M in net sales ia ranked 1 st in Canada Every month this year Tripling next competitor 30 Source: Investor Economics, December 2015

30 IAG Savings IAG and Savings Retirement and Retirement Plan Overview Plan IAG SAVINGS AND RETIREMENT PLAN Classic 75/75 Series 75/100 Ecoflex 100/100 FORLIFE Liquidity/ Maximum Capital Growth Accumulation/ Estate Protection Security for Retirement Capital Guaranteed Income for Life

31 review : The world has changed!

32 33 U.S. economy: Back to the drawing board The election of Donald Trump to the White House is a game changer, as his plan to lower taxes on households and businesses and to invest in infrastructures should lead to slightly stronger growth and inflationary pressures. U.S. 10-year interest rates should also keep on moving higher and reach 3% before the end of 2018.

33 34 U.S. stock market: Strong reaction to the Donald Trump election

34 U.S. monetary policy: Moving into second gear Expectations regarding monetary policy were revised sharply higher since the election. The bond market currently expects the Fed to hike at least three times in 2017, and twice in U.S.: Upward revision from the market towards Fed rate hikes More than 8 rate hikes by Fed funds Market expectations "DOTS" median Market expectations (last september) 35 Source: ia Economics, data via Bloomberg

35 U.S. stock market: pros and cons After having moved massively towards bonds since the beginning of the year, liquidity is starting to move towards equities. The rally in the U.S. stock market in the second half of the year pushed valuations to the highest levels since Shiller P/E ratio Source: ia Economics, data via Bloomberg

36 Risk factors: Uncharted territory under Trump presidency 37 Source: Google

37 China: A worrying debt level 38 Source: ia Economics, data via Bloomberg

38 Canadian Economy: Headwinds More and more studies are pointing to Vancouver as one of the most overvalued real estate markets in the world. Odds of a 10 to 20% correction in prices in this market are rising with the recent imposition of governmental measures. The lack of competitiveness from Canadian exporters is evident, despite the pullback in the loonie. Mexico recently moved ahead of Canada as the second most important exporter to the U.S. 39 UBS real estate bubble index Source: UBS The U.S. now import more from Mexico than from Canada In billions of USD, 12-month moving sums Canada Mexico China Source: ia Economics, data via Bloomberg

39 Canadian Economy: Tailwinds OPEC agrees to a first output cut in 8 years, pushing oil prices above 50$ per barrel. The Trudeau infrastructure program should support growth as early as OPEC deal should support oil prices in 2017 Oil price (WTI) in USD ? /14 07/14 01/15 07/15 01/16 07/16 Source: ia Economics, data via Bloomberg

40 Performance by Asset Class December 31 st, 2016* Returns since the start of the year 45.0% 40.0% 35.0% CA $ Local $ 38.48% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 0.51% 1.66% 21.08% 11.96% 8.62% 5.34% 9.00% 4.30% 10.11% 8.27% -5.0% Money Market Bonds Canadian Equity Canadian Small Cap Equity U.S. Equity -2.01% International Equity Global Equity Emerging Markets 41 *Total returns, including dividends

41 Sector Returns: S&P/TSX 1 year to December 31 st, TSX Sector Returns since the start of the year Materials Energy 35.45% 41.20% Financials Industrials S&P/TSX Utilities Telecommunication Services Consumer Discretionary Consumer Staples Information Technology % 22.79% 21.08% 17.69% 14.69% 10.69% 7.48% 5.19% 42 Health care 1 Total returns, including dividends 2 Includes Real Estate -78% in % in 2017! -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

42 Sector Returns: S&P 500 (CAD) 1 year to December 31 st, SP500 Sector Returns since the start of the year Energy Telecommunication Services Financials Industrials Materials Utilities Information Technology S&P % 19.79% 19.12% 15.30% 13.20% 12.80% 10.44% 8.62% Consumer Discretionary Consumer Staples 2.86% 2.22% Health care -5.61% 43 1 Total returns, including dividends 2 Includes Real Estate -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30%

43 Sector Returns: MSCI World (CAD) 1 year to December 31 st, * MSCI World Sector Returns since the start of the year Energy Materials 18.85% 23.23% Industrials Information Technology Financials MSCI World Utilities Telecommunication Services Real Estate 9.55% 8.10% 7.12% 4.30% 3.15% 2.91% 0.22% Consumer Discretionary Consumer Staples -0.01% -1.26% Health care -9.59% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 44 *Total returns, including dividends

44 45 Equity Sector Weights As at December 31 st, 2016 As at December 30, 2016 Sector S&P 500 S&P / TSX MSCI World Energy 7.56% 21.43% 6.64% Materials 2.84% 11.81% 4.76% Industrials 10.27% 8.88% 10.96% Consumer Discretionary 12.03% 5.03% 12.85% Consumer Staples 9.37% 3.84% 10.70% Health Care 13.63% 0.60% 12.92% Financials 14.81% 34.99% 16.40% Information Technology 20.77% 2.74% 14.41% Telecommunications 2.66% 4.83% 3.52% Utilities 3.17% 2.83% 3.40% Real Estate 2.89% 3.03% 3.45%

45 Main conclusions Economy: Global economic growth should continue, but a more protectionist tone from the U.S. could create some uncertainty in the next few years. Monetary policy: With the recent rise in inflation expectations resulting from the OPEC agreement to curb oil production and the expansionary economic plan from the Trump Team, the Fed should accelerate the pace of normalization of its monetary policy. The Bank of Canada should remain on the sidelines in the next 18 to 24 months. 46 Bonds: The upward revision to inflation expectations and the change of tone from the major central banks should keep on pushing interest rates to higher levels.

46 47 Multiple Solutions for Optimal Diversification

47 48 Multiple Solutions for Optimal Diversification Our Funds and Partners (iag SRP, Classic Series 75/75)

48 49 Our Managed Solutions

49 50 Our Managed Solutions Multi-manager approach advantages Increases the chance of an overall positive performance Exposure to different investment styles More constant return experience Avoids emotional decision-making Allows clients to be patient with underperforming funds Allows funds to rebound

50 51 Our Managed Solutions Three types of managed solutions that provide... Optimal diversification Simplicity and security Strategic asset allocation for each investor profile Timely rebalancing Expertise of established fund managers Monitoring of underlying investments DIVERSIFIED Funds - FOCUS Portfolios - SELECTION Portfolios A packaged solution Multi-manager approach

51 52 Our Managed Solutions Comparative table Composition ia DIVERSIFIED funds FOCUS funds SELECTION funds Client profile Investors who want to benefit from the expertise of managers to modify fund composition based on market vision and risk Investors who want their portfolio to reflect their risk tolerance at all times, regardless of the economic environment Investors who believe in the added value of an experienced manager and a discretionary approach Goal To maximize returns by adjusting to market trends To maximize returns by keeping the level of risk in line with the investor profile at all times To maximize returns and minimize losses during down markets Risk profile 3 risk profiles (4 different funds) 5 risk profiles 5 risk profiles Asset allocation High flexibility to move within investment limits (+/- 20%) Stability of asset allocation and risk profile Moderate flexibility to move within investment limits (+/- 10%) Managers Internal managers only Latitude in choice of investments Mix of internal & external managers Latitude in choice of investments Mix of internal & external managers Latitude in choice of investments Rebalancing Timely rebalancing Monthly rebalancing to target asset allocation Timely rebalancing

52 Our Managed Solutions ia Diversified Funds Diversified Security Diversified Diversified Opportunity Diversified Income Actively managed 3 risk profiles (4 different funds) High flexibility to move within investment limits (± 20%) Timely rebalancing Latitude in choice of investments 53

53 26.4% Our Managed Solutions ia DIVERSIFIED Funds (as at December 31, 2016) 31.6% Diversified (FU040) 6.3% 7.9% 27.8% Money Market Canadian Fixed Income US Fixed Income Canadian Equity Foreign Equity Diversified Opportunity (FU250) 28.4% 40.7% 11.2% 16.7% 3.0% Money Market Canadian Fixed Income US Fixed Income Canadian Equity Foreign Equity 54 Diversified Security (FU240) 15.2% 7.0% Money Market Canadian Fixed Income 13.8% US Fixed Income 47.1% Canadian Equity Diversified 3.3% Income (FU501) Money Market 20.2% 30.3% Canadian Fixed Income US Fixed Income 2.9% Canadian Equity Foreign Equity 43.4%

54 55 Our Managed Solutions Returns as of December 31, 2016 IAG SRP Classic Series 75/75

55 56 ia Dividend Growth Fund IAG SRP Classic 75/75 Net Performance as at December 31, 2016 Key Reasons to Invest Dividend-focused mandate emphasizing capital appreciation and income Long-term investment focus provides low turnover and tax efficiency Can hold up to 30% of assets in US equities

56 ia U.S. Dividend Growth Fund IAG SRP Classic 75/75 Net Performance as at December 31, 2016 Key Reasons to Invest Greater diversification in sectors underrepresented in Canada Active management at the sector and stock level, based on rigorous economic analysis Enhanced yield potential and downside risk mitigation through a covered call strategy 57

57 58 ia Global True Conviction Fund IAG SRP Classic 75/75 Net Performance as at December 31, months 1 year 3 years 5 years 7.72% -1.73% 7.89% 13.91% ** Top quartile fund over last 3 years** 45 High Conviction Stocks Best Ideas Fund Portfolio of about 45 securities equally invested in Canada, USA, Europe/Asia: 15 securities from Canada 15 securities from the USA 15 securities from Europe/Asia The 3 sub-portfolios are managed by three fund managers that aim to include their highest conviction investment ideas Aims to achieve high total investment return

58 59 ia Diversified Funds Adding value while protecting the portfolio Source: Morningstar, data as of December 31, 2016 IAG SRP Classic 75/75 as at December 31, 2016 Capture ratios 3 years upside downside Diversified Peers Diversified security Peers Diversified opportunity Peers Diversified income Peers

59 60 Chasing performance is a precarious strategy Performance rebounds are common for most funds Quartile rankings as at December 31, 2016 Fund Diversified Security (iaim) Dividend Growth (iaim) Global Equity (Templeton) Quartile ranking as at December 31, 2016 is obtained from a third party segregated fund and mutual fund universe provider where net returns are grossed up to adequately compare seg funds to mutual funds.

60 IAG Savings IAG and Savings Retirement and Retirement Plan Overview Plan IAG SAVINGS AND RETIREMENT PLAN Classic 75/75 Series 75/100 Ecoflex 100/100 FORLIFE Liquidity/ Maximum Capital Growth Accumulation/ Estate Protection Security for Retirement Capital Guaranteed Income for Life

61 62 Business Development Bonus The Business Development Bonus (BDB) is paid to agents who reach a minimum level of production during a calendar year. The BDB is divided in two parts: life insurance and savings products. More Production = More Bonus Annual Production Savings Products (Seg funds) Bonus granted on ALL assets Bonus per million of assets Example: Bonus on a block of $5M assets Life Insurance Bonus on in force premiums 0 - $39, $40,000 - $59,999 $500 $2, % $60,000 - $79,999 $550 $2, % $80,000 - $99,999 $600 $3, % $100,000 - $119,999 $650 $3, % $120,000 + $700 $3, %

62 63 How is the Production calculated? Segregated Funds Production = Deposits x 2.5% (regardless of compensation type) GIAs (GICs) Production = Deposits x 1% (exclude renewals) Single Premium Annuity Production = Commission earned Conversion RRSP to RRIF: Production = Commission earned at conversion Inter-Series transfer towards FORLIFE Series Income Stage: Production = Commission earned at transfer

63 Thank You! Thank You Any views expressed in this presentation are based on current market conditions and are subject to change without notice. They are not intended to provide specific investment advice. Any forward-looking statements in