CI Financial Corp (CIXX) 2008 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the CI Financial 2008 fourth quarter results conference call. (OPERATOR INSTRUCTIONS.)

This presentation contains forward-looking statements reflecting management's current expectations regarding the future performance of CI and its products, including its business operations and strategy and financial performance and condition. Although management believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements. For further information regarding factors that could actual results to differ from expectations, please refer to management's discussion and analysis available at www.ci.com/cix.

EBITDA, adjusted EBITDA, operating margin, earnings before tax, adjusted earnings before tax and adjusted earnings are not standardized earnings measures provided by GAAP. Management believes that most of its shareholders and creditors, and other stakeholders and investment analysts prefer to include the use of these performance measures in analyzing CI's results. CI's methods of calculating these measures may not be comparable to similar measures presented by other companies.

EBITDA is a measure of operating performance and a facilitator for valuation and a proxy for cash flow. A reconciliation of EBITDA to net income is included in management's discussion and analysis available at www.ci.com/cix.

I would like to remind everyone that this conference call is being recorded on Tuesday, February 24th, 2009 at 4:00 p.m. Eastern time.

I will now turn the call over to Mr. William Holland, Chief Executive Officer of CI Financial. Please go ahead, sir.

Thank you very much, Josie.

I won't spend a lot of time or energy telling you how bad the various markets and the economies were around the world in the last six months. It's like describing a car crash for the 50th time. Other than to say this -- it was by a significant margin the most difficult period in our business ever.

While our assets under management and earnings fell substantially, I think you will agree we have performed exceptionally well on the controllable parts of our business, which I define as fund performance, sales and expense control. We took immediate and considerable action on the expense front starting in September, and have plans to continue to align expenses with asset levels if markets continue to decline.

First, I will give you a snapshot of the business as of December 31st. On a year-over-year basis, our total fee earning assets dropped from CAD105 billion to about CAD80 billion, down 24%. More importantly, our assets under management dropped from CAD64 billion to CAD51 billion, down 21%. The good news on this is our net sales of retail funds came in at about CAD1.7 billion, which was down only 18%. Our EBITDA declined by 13% to CAD2.27 per unit. Our earnings, before tax per unit, were down by 23%.

One glaring piece of good news during the year was the net sales. They were very strong in 2008. In a year where we had over CAD900 million worth of redemptions from equity-linked notes, which automatically redeem when markets decline, we still achieved long-term net sales of over CAD1.27 billion, ranking number three in Canada.

Our retail sales were very strong in the fourth quarter at over CAD250 million when equity-linked notes are excluded. We now have five consecutive years of long-term net sales in excess of CAD1.2 billion, and we are the only company in the country that has achieved that.

When you look at 2008, it's very easy to have our fund achievements overshadowed by the horrible markets. But let me just go through some of the things that happened.

Our fund performance, which is really vital to their long-term success, was very strong. CI had the most four and five-star rated funds, and has for the last seven years been either number one or number two on that front.

Gerry Coleman was Fund Manager of the Year again, and his Harbour Funds had net sales for 2008 of over CAD2 billion. Alan Radlo, who started the Cambridge Funds in January -- I couldn't think of a more difficult time -- attracted over CAD0.5 billion and had excellent performance in his first year.

Our Segregated Fund business, which has been picking up considerably over the last couple of years, hit a new high with net sales of CAD1.2 billion and still growing very rapidly.

And also, in a year where hedge funds blew up left and right, our Trident Fund had a gross return of over 40%, giving [Mandu] a 10-year record now of almost 20% above the S&P in Canadian dollars.

Before we look at the financials, I just want to bring to your attention a couple of adjustments that I think are very important. First of all, in Q4 of 2007 we had a tax recovery of CAD51.5 million because of future corporate tax reductions, while in Q4 of this year we had a tax provision of CAD21.7 million because we were converting to a corporation. Now, this is obviously a non-cash item. And I think it's important to remind you that we still have enough tax shelter to not have any cash taxes owed until at least sometime in 2010.

We had a CAD3.3 million charge that was a result of accelerating the vesting of DSUs for a great number of CI employees.

During the quarter we wrote down our investments on a mark-to-market basis of Dundee Wealth by about CAD6 million. We took a strategic position in that about a year and a half ago when we were looking at acquiring the company.

Also during the quarter we took a CAD2.5 million charge for a legacy claim against Assante. I think it was about 10 years old.

So, when you look at the quarter, the fourth quarter, and compare it to the fourth quarter of '07, our average assets dropped about 22% to just over CAD50 billion. That resulted in our EBITDA dropping by 29% from CAD0.65 per unit in 2007 to CAD0.46 in 2008. That resulted in adjusted earnings per unit down 38% from CAD0.50 in 2007 to CAD0.31 in 2008.

An important component of managing expenses, obviously, is the operating margin. And on that front, we saw a decline in operating margins from 101 basis points in the third quarter of 2008 to 99 in the fourth quarter of 2008.

Management fees stayed about the same at 192 basis points. Trailer fees were about the same. The difference was SG&A moved from 35 basis points to 37. And I would say that, given the environment of the fourth quarter, that having your SG&A only increase by 2 basis points is actually pretty darn good.

On our last conference call I said that it was an objective of ours to attempt to reduce expenses late in the third quarter and early in the fourth quarter by as much as CAD10 million. And you can see here that we've now moved our expenses from the fourth quarter of 2007 from CAD87.6 million to CAD77.3 million in the fourth quarter of 2008.

I think that, given that markets have continued to go down, we're going to have to continue to look very, very closely at our expenses. And as I said, we continue to plan to keep our costs and our asset levels aligned.

Fourth quarter and late in the third quarter we put out an action plan. Our objective was to align the costs, as I said, as best we could with the new level of assets. And we continue, as I said, to plan for more reductions as markets continue to fall. But this is some of the things that we did already.

First of all, we had probably our first hiring freeze in years. At the same time, we reduced our staff by 260 people. First of all, we never considered ourselves to be terribly heavy when it came to staff. And secondly, we have such low turnover that getting rid of 260 employees, who have been what I consider very loyal employees, was one of the most difficult decisions that we've ever made. We reduced the compensation, in many cases considerably, to almost all employees and especially at the executive level.

We reduced the grid at Assante and Blackmont. We totally restructured Blackmont so that we could break even in the fourth quarter, both in the capital markets and on the retail side. And it's our expectations that the changes that we made in the fourth quarter, we'll also at least break even in future quarters.

We made some money management changes that I think greatly improves the quality and, at the same time, reducing costs. All the changes that we made were made with an eye on improving efficiency and effectiveness, while reducing the SG&A on an annualized basis now by CAD45 million.

Finally, I will say that these changes will help us to continue to improve our position and make sure that we not only survive here, but we thrive.

As we look into the rest of 2009, first of all, the long-term sales continue to be positive here and they're actually pretty good. We should do over CAD200 million worth of sales in February.

Segregated funds actually benefit from a bear market because of the guarantees associated with them. Year-to-date, we have over CAD300 million worth of net sales.

Our fund performance, which I pointed out earlier, is very good on the short run, but it's also terrific over the long term. 76% of our assets are in either the first or second quartile over five years, and almost 80% over the last decade.

We have no cash taxes paid until at least 2010, which greatly improves our free cash for things such as paying dividends or paying down debt.

And as a final point, the changes that we have made here position us very well for any market conditions, whether they go up or down from here, as well as any acquisition opportunities that may arise in this very unusual climate.

I will stop my remarks here and be glad to take any questions people have. Operator?

Thank you. (OPERATOR INSTRUCTIONS). Your first question comes from Gabriel Dechaine from Genuity Capital Markets. Please go ahead.

Good afternoon, Bill.

Good afternoon.

The SG&A for the Investment Management operation adjusted, it looks like it's just over CAD47 million. That's a pretty big sequential decline. And is that a sustainable number?

Yes.

I guess--.

Gabriel, we went out of our way to -- I think that it's almost negligent if you don't use this opportunity to align the -- we don't think that our assets are going to go back to the levels that we saw when they peaked in May of 2008 for quite a while. So, we have completely realigned our costs. And so, we not only think that the costs are sustainable, we think that they're likely to come down from here. It's not pretty, but we think it's something we have to do.

Okay. Another item. I guess -- because you kept your fees on your funds in -- when was it, September of 2005?

Yes.

Your fixed admin fees. And I'm just wondering what -- how much your expenses may have gone over what you were charging the funds, if that was a big item this quarter?

It was pretty flat.

It was pretty flat?

Yes.

And you don't have any -- like, IGM's call last -- or two weeks ago, we heard that they have a mechanism whereby they can recoup some expenses if their assets fall by a certain amount. Do you have anything like that?

No. I mean, our ER is locked in at 18 basis points. And if you want a little bit of motivation to get your costs aligned, you lock your fees in at 18 basis points. If other fund companies have the option of just moving -- let's say they're at 35 basis points and they can just move to 45 or 50, they're not going to make the difficult choices that we've had to make. And I think it's a significant competitive advantage to continually to have lower MERs than our competitors.

Okay. And have you made any changes to the -- I believe you're stopping trailers on money market fund sales?

What we've done on the money market is that BAs as of right now are paying 75 basis points; overnight is almost zero. And so, given the restrictions in money markets and the safety that people are looking for from them, what we've done here is we've cut our management fee and we suspect we're going to have to cut it considerably from here.

I would say that, for the foreseeable future, at best we won't lose money in the money market fund. The other thing we do is we don't charge any operating costs at all. So, the flight to money market is actually pretty negative for fund companies like CI.

Okay. And then lastly just on the debt. I notice that you've added a bit more disclosure on your covenants here. And I guess the ratios seem to be fairly I guess robust, where you stand today versus the covenant. But the minimum asset level at CAD45 billion, how would that work I guess if--?

Well, we count more assets than just the mutual funds. The markets would probably have to decline from here by 15% to 20% before we'd have covenant issues on the asset test.

Okay. Alright. Thank you.

You're welcome.

Your next question comes from John Reucassel from BMO Capital Markets. Please go ahead.

Thank you. Just, Bill, could you give us an update on your flows in February?

Our net sales are about CAD160 million between United and CI. I would say that the last couple days have been remarkably slow compared to recent years, even years where the net sales have been unimpressive. I suspect that we'll do CAD225 million or so maybe in net sales. But you're certainly not seeing anything resembling the rush of a few years ago. Nothing.

So, that's CAD225 million in the best month of the year?

February should be -- it should be close between February and March, yes.

Okay. Since you had your last conference call, Bill, the Sun Life Scotia Bank deal has closed. Any more discussions with Bank of Nova Scotia? And could you talk about any changes in the Sun Life agreement, if any, that's happened as far as your relationship with them?

Well, first of all with Scotia, the -- I don't -- nothing has changed. I see it as a very positive business relationship that we're entering. I suspect that Scotia Bank has got a lot of things that are on their mind these days other than dealing with CI. And all of the interactions we've had have been incredibly positive. And I think that the relationship between CI and Bank of Nova Scotia should work out to be very beneficial for both sides.

On the Sun Life side we continue to have a very strong business relationship there. They represent about 16% of our gross sales today. As I said, the SunWise seg fund product is incredibly popular. If you asked something about the distribution agreement, the distribution agreement that we had is intact. It's broadened out to be a much longer period. I would say that, as a general comment, it's longer and stronger than it was before.

Okay. And just on Scotia Bank, I mean, should we expect to hear anything or is it just discussions at this stage about what deeper relationship there could be, if any?

I think that's -- it's a harder question. Given we have a kind of a single line of business, our business is pretty simple and straightforward compared to theirs. And I think that, really, they probably have their focus on a whole bunch of other things. And I think that -- I would expect that sometime in the next couple months, after the RSP season, certainly, that we'll sit down and try to map out a long-term strategy. It just hasn't been top of mind over the last little while. Things are going really well at CI.

Yes. Yes. Okay.

So, I don't think that -- maybe if we had a lot of problems or something like that, that would move them towards trying to want to set out a path now. But as it is, things are going really, really well.

Okay. And Bill, just on the lower cost structure, you're certainly distinguishing yourselves again on your cost structure. Is there -- have you seen any increase in turnover or has there been any kind of concern on how deep you're cutting? And I guess what -- you talked about more. Is it more cuts? Is it just more of what you've been doing or are there different areas that you could look at?

Well, it starts out more of what we're doing but we've got to look at everything. When assets dropped from their high -- they're down about 34% from their all-time high -- your businesses change. And we don't want to make these cuts. And I can't tell you that the cuts aren't without risk. They are. Every cut that you make has risk associated with it. And those that choose not to cut because they say it's risky and they have a whole bunch of obligations, that's just a different mindset than what we have.

Our belief here is that the owners of the Company expect us to manage it in the most cost effective way, and to make sure that our costs are aligned with our assets at all times and that's all we can do. And this environment is so different from any other time because of the magnitude and how quickly assets have changed. And so, we'll just keep going. We expect our Company to continually look different.

We're -- I can tell you personally that my compensation has gone down again and by a lot, and so has Peter and Steve and Joe. And we're going to continue to manage the business as if the conditions are not changing.

Okay.

If the market turns around and is positive, I would say we're going to be unusually well leveraged going up.

Okay. Okay. That's great. And just -- Bill, just on your debt to EBITDA, it looks like the annualized rate is still about 1.7. That's -- obviously debt's down but EBITDA is down. What -- when you look at your cash flow, I guess you'll have no net cash, not cash taxes next year. Is your priority debt reduction at this stage, or--?

I think that if the credit conditions don't change and they look something like what they look like today, I would say yes. I think that, again, there's no expectations that credit is going to be available. Nobody should have the expectation that credit's going to be available when it comes to renew it. So, you should always manage your business with an eye towards figuring out how to keep your debt more manageable.

I would like to, over the long term, have a debt to EBITDA of 1.7 -- even 2 doesn't bother me in a normal market. But in a market where credit feel as frozen as it feels to us today, I'd rather have less debt than more.

Thank you.

Your next question comes from Geoff Kwan from RBC Capital Markets. Please go ahead.

Good afternoon, Bill. I have two questions. The first one was the CAD45 million in lower SG&A that you alluded to in the presentation, just wanted to confirm that it's CAD45 million lower when you look at total of '08 versus '09, or whether or not it might have been run off -- gone off the run rate from Q4 or even Q3.

Well, it was off the run rate of where we were probably the -- at the start of Q3.

Okay.

So, it's CAD45 million from there.

Okay. The other two questions I had was, obviously you talked about previously about the acquisition environment. Can you talk about if it's changed at all since the last conference call? Whether or not there's been, say, more assets come for sale? If there's still maybe some stubbornness on price from respective sellers?

And then the last question I had was with respect to advisors. You talk about how you guys are managing the cost component for investors out there. How important is fees to them? What are some of the things that they're talking about?

Well, on the M&A front I would say that there's nothing happening. I think when the assets change by 3% to 5% a day, it's not likely that you're going to see much happen.

I would say that, as time goes on, there's less and less companies we're interested in. I mean, we've certainly been asked to consider a couple of ideas over the last three or four months, but very few of them make much sense to us. And I think the longer this goes and the more impaired companies become, the less likely it is that you're going to be interested in them. As I said, we're running our business today as if nothing changes, the markets continue to go down, and that we want to do a little better than surviving.

On the fee front, I think that in some cases fees are becoming an obvious issue just because the fixed income component of things are so low. If you're talking about a bond fund that's got a 2.5% gross yield, it's pretty hard to apply a 2% management fee to it.

And the other problem you're seeing, and where we've had to make cuts to is -- and we'll probably make a lot more cuts; in fact, it's inevitable you will because rates are dropping so quickly -- is the money market funds. So, just at a time when our money market fund is getting -- it's the best seller, there's no prospects of us making any money on the money market fund. That's clear. And if you can't provide something resembling a positive yield, then you're not even going to have money in it. And I don't know -- it's hard to say whether you want to have money in a money market fund or you don't today.

But certainly, if you want to provide any yield for your investors, two or three weeks out from now when all of the older rates kind of fall off, you're looking at probably being able to charge a management fee of 25 to 30 basis points, maybe a little more if you're willing to go up the risk scale a little bit. But we're not -- we don't even charge operating costs on our money market fund.

And how about on the equity funds? Has there been much in terms of--?

Well, I think that on the equity funds, I think that you continue to hear bigger complaints about performance. The S&P has now hit a 12-year low. In Canadian dollars, the S&P is down over 14 years. And so, certainly fees start to catch people's attention when they have a long-term return that is zero or negative.

And I will tell you that the single biggest obstacle that we have in the business today, the biggest hurdle, is selling the whole concept of equity investing again. When you see negative numbers for this long, it's obviously the time when the markets are the cheapest and people should invest. But they're very reluctant to do it. So, there's a full sell sale job that you have to do right now to sell equity.

And when we came out with our stimulus package in Canada a month ago, the only thing that made any sense to me was to eliminate the taxes on capital gains or dividends. I don't see -- otherwise, I don't see how you're going to get the average Canadian investor to go back into the market. And that's the problem that we're seeing today, is when you talk to financial planners and brokers they go our clients just don't want to invest.

And that's what makes seg funds so attractive. If the benchmark for an investor today is a money market fund yielding zero and you can sell them a segregated fund that guarantees you something above zero and they like the guarantee, that's why seg funds are so popular.

Great. Thanks.

Your next question comes from Doug Young from TD Newcrest. Please go ahead.

Hey, Bill. Just the first question, the mention on 21, page 21 of your MD&A, that you've entered into transactions related to the advisory and distribution of money market with Scotia Bank. Can you talk -- what is that related to? Is that just preferential access to their branch network, to their distributors?

Well, I'm not actually sure what that refers to. I will admit to not reading page 21. But we have a relationship where they act as a distributor of our funds, but I'm not sure I have any other comment than that to make.

Okay. So, there's nothing in -- okay. I'll leave it at that.

There's nothing more substantial.

Okay. And the second is on your cost savings of CAD45 million. Are you where you need to be today to hit that, I guess is the first part. And the second part, you talk about if asset levels go down further that you're going to have to cut further. I mean, where could that CAD45 million go to if assets fall another 10%, 15%?

Well, the CAD45 million we're at. We've already done that. And so -- and assets have fallen considerably since then. And so, if assets drop from here another 20%, if assets drop 20%, then I think you're looking at a substantially different industry. And then I think the chances of -- I think the small companies will just go out of business. And so, I think the chances of acquisitions become maybe a little more likely under that environment, which would help bring the asset level back up.

But then you have to change the whole nature of your business. If you're going to -- we just don't believe that you can -- if assets are really down 60% from their high, or whatever kind of number you're talking about, that that won't be such an enormous change that you have to relook at the business. And I think we would look at combining with other companies much more aggressively if assets drop much more from here.

Okay. So, that CAD45 million, I mean, if the assets reverses, I mean you say it's dropped since when you hit the CAD45 million target. I mean, does it need to go to CAD50 million, CAD60 million or is--?

Well, it definitely has to go to CAD50 million. And so, we're at CAD45 million and that number is not adequate given that the market -- our average assets already year-to-date are 9% or 10% below the average assets for Q4.

Okay.

So, I mean, it's not something that we can just say we're stopping. We sit down several times a week and go through group after group after group and say how can we do this (inaudible). And again, Doug, I want to go out of my way to say we're not saying this is not without risk. But if you don't have the revenue, you've got to start making changes.

And is all the cuts, Bill -- and this is my last question, but is all the cuts coming from body count or is there other places where, I mean, there is opportunities?

We have cut everything. Like, we have cut compensation. We have cut the grid. We have cut a number of people that we employ. We have cut programs we're involved with. We have cut sales. We have cut marketing.

Look, when your fees are locked in at 18 basis points, you don't have the flexibility. If we don't do anything we won't be in business. So, we don't feel like we even have the option of just having business as usual. And so, we'll continue. I think we're delivering fantastic service. I think that we're -- the business is running as well as I've seen it in the last 20 years. But it's just getting harder and harder and harder.

Okay, I lied. I'll just ask one more. In terms of your Dundee stake, do you still I guess own it, is one question. And have you disclosed how much of Dundee that you own?

We still own it. Actually, we don't own very much of it. So, I think we wrote off CAD6 million. And I think on the year it was off 75% from the time we bought it. So, it's not a big stake.

Okay. Great. Thank you.

Your next question comes from Stephen Boland from GMP Securities. Please go ahead.

Hi, Bill.

Hi, there.

I guess one follow-up just on the grid. Can you talk about what -- is that the grid to Blackmont and Assante executives, or is that to paying to advisors?

Advisors.

Okay. So, what -- is there not a risk -- I know you've said in the past that it's difficult to adjust the grid because you risk alienating the advisors who have invested in your products. And in this environment they're down and their clients are upset as well. So, how do you not -- how do you prevent that from occurring when you do adjust the grid?

I think that, to be fair, when you make an adjustment -- that means downward, always. That's what adjustment means, obviously.

Right.

And the choice is we either make these changes or we're not in business. And you can have companies that have a business that they just continue to run the same way all the time. As a public company and a business that's set up the way ours is, it doesn't work. And so, we made all the changes.

Look, my compensation over the last couple of years is down like 40%. And I was never on the high compensation side to begin with, as you know. I mean, we are taking hits everywhere. We just don't think you have a choice. I don't want to -- like, the last thing I'd want to do is cut the pay of a financial planner or broker. But we don't have the choice. If we can't make money in the businesses, then we can't run them. And if we can't run them then they're going to leave anyway.

And so, I look at it and say that what we offer someone today, if you work at Blackmont or Assante, is an incredibly strong company that gives you a great business card. And when your clients -- when you have a client, they don't ask whether CI will be in business.

Right.

And I'd tell you that I've talked to an awful lot of financial planners and brokers who can't tell you the same thing.

Is there -- do you think this is a trend that we're going to see across the industry? I mean, are you at the forefront of this or--?

No, no. I mean, I think that we're just honest about it. I mean, I think that if you look out there, there's been some cuts on the -- I mean, these aren't big cuts. And to be fair, I mean, we have a very high payout structure within our organization. But I mean, these things are happening almost automatically. So, they're out there and they're happening.

Okay. That's great. Thanks.

Your next question comes from Jeff Fenwick from Cormark Securities. Please go ahead.

Hi. Good afternoon. I think most of my questions have been answered so just a couple quick ones. You mentioned in your last update of your fund sales you had an institutional redemption of -- I think it was about CAD215 million. Is there an update on institutional accounts out there and whether anyone else is sort of signaling -- either looking to add or reduce--?

No. I mean, in January we lost a pretty decent sized institutional account. I'd classify it as "fired with cause." It was in our Value Trust, which is Bill Miller. And the performance was inadequate for the last couple of years and so they moved on. In terms of future mandates either in or out, I've heard of none that are substantial either way.

Okay. And then I guess maybe looking in the other direction there in terms of potential growth opportunities going forward. I know there aren't many areas where it's looking positive at the moment, but ETFs seem to be rising in popularity in their sales. Is that an area that you might contemplate getting into?

Well, I think -- I mean, we'd certainly consider it. I mean we look at everything. I mean it's hard not to today. It's not on the top of our list.

I'll tell you a place where our business is absolutely fabulous. We own 25% of a company in the US called Altrinsic. They're a global value manager in Connecticut and they continue to win mandates all the time. And so, there are parts of our business that are really doing well. And we're also doing incredibly well selling seg funds. So, I'm a lot more interested today in the seg fund environment than I am the ETF. Would I look at ETFs? For sure I would. It's just not top of mind today.

Okay. And I guess with respect to the segregated product, I mean some of the life cos are getting -- obviously having some issues with their capital ratios and things like that. And I'm just wondering whether you're getting any feeling from Sun Life, for example, that they might want to curtail the level of seg funds when the market is so volatile, or is there any indication around that at that level with respect to their ability to take on that kind of risk?

Everything that we hear from Manulife and Sun Life is that they intend to stay in the business and that -- a big component of making this business work is the dollar cost averaging component of it. If you sell a whole bunch of seg funds in a very high market and you sell -- you stop selling when the market bottoms out, it doesn't work very well. And so, I believe that the intentions are to continue to sell it through all cycles and that's what makes it work. I don't think that any of these insurance companies, like Manulife or Sun Life, have ever paid a claim on the guarantee yet.

Okay, great. That's it for me. Thank you.

(OPERATOR INSTRUCTIONS.) Your next question comes from Gabriel Dechaine from Genuity Capital Markets. Please go ahead.

Just one on your competition. On the banks it seems like a lot of them were highflyers in the bull market and a lot -- very similar to the regulated fund companies. But it seems like the drop in some cases has been more substantial as the markets have tailed off. Is that anything to do with their distribution model, where they're not able to do as much client hand-holding as the financial planners can, or is there anything to that?

Well, you know what? I think if you took any trends from this that you would not only not be right, but I think you'd be exactly wrong.

Okay.

The banks here, their sales are poor over the last year. I think that a lot of the clients that went into the bank funds late in the cycle were probably ones that probably weren't meant to be in equity and balance funds.

But if you look at the average return of a bank client, if you look at the average assets of the banks, bank assets haven't dropped as much as CI's or the other independent fund companies because most of their clients own money market, bond funds, balance funds. They don't have much in the higher-risk profile funds. So, the average bank client has done considerably better than the average non-bank client.

So, I look at this and say, yes, it looks like their sales are very bad. Love to believe that that's a trend that's developing. Not a chance. And the banks -- the people that are running the fund business in the banks are smart enough to know that the performance of their -- the average performance of their clients is considerably better. Just look at the asset decline of the banks -- the asset decline that's not related to sales, at the banks versus CI or something. It's considerably different. So, I actually think that this has helped the banks.

I guess they're pushing deposits more than--.

Yes.

Yes. Okay.

Yes.

Okay.

Alright. Well, if there are no more questions, I'd like to thank everybody very much for joining us for our fourth quarter conference call. I actually look forward to updating you again on May the 12th, I think it is, and I'm hoping that the news is considerably better. Thank you very much and good afternoon.

Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. Please disconnect your lines.