IIROC FAS Conference 2016September 9, 2016

Kimberley.Muise@CANNEX.com416‐926‐2219

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In business since 1981

Specializes in: Data/information Point of sale support Automated order processing Quantitative analysis through the QWeMA Group (a division of CANNEX):

• Analysis and valuation of structured products • Methodologies that optimize asset allocation and product allocation• Product consulting and independent product allocation services

In Canada, CANNEX:  Gathers/compiles/distributes rates and calculation values for financial products and 

services  Facilitates term deposit/GIC order processing and settlement transactions

In the US, CANNEX: Specializes in comparative pricing, illustration, and evaluation tools for Guaranteed 

Lifetime Income products such as Income Annuities and Deferred Annuities with Income Benefits. 

CANNEX – Who we are

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Support distributor activity in the Canadian and US markets for Single Premium Immediate Annuities and Deferred Income Annuities, running surveys for advisors and the annuity desk of distributors.

Point of Sale Support in Canada and the US

2016 2015 2014Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

US 326,385 337,639 307,407 320,877 258,582 247,652 227,797 257,310 251,035 239,797

CANADA 66,376 48,595 50,015 41,018 39,894 40,569 44,287 44,358 46,853 40,339

Total/Quarter 392,761 386,234 357,422 361,895 298,476 288,221 272,084 301,668 297,888 280,136

Total Annual or YTD 778,995 1,306,014 1,151,776

Number of surveys (table of comparative results across the market) compiled and delivered by CANNEX:

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CANNEX is committed to supporting the retirement market and helping our clients improve their various processes and programs to better serve the public. 

CANNEX conducts industry research and produces whitepapers and articles on a number of retirement topics.

Point of Sale Support in Canada and the US

Guaranteed Lifetime Income Study 

Conducted by CANNEX and Greenwald & Associates Annual study in the US and Canada Retirees and pre‐retires age 55‐75 with at least $100,000 of investable assets.

Retirement concerns Income and spending in retirement Value of guaranteed income Familiarity with guaranteed life income products Impact of advisors

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Canadian Guaranteed Lifetime Income StudyConducted June 2015, Respondents: 1,015

Question: How concerned are you about the following in retirement?

Note:  Nearly 6 in 10 pre‐retirees expect to work in retirement , yet only a quarter of retirees actually do.

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Canadian Guaranteed Lifetime Income StudyQuestion: How familiar are you with the following financial products?

Note:  Canadian consumers are vastly more familiar with GICs, term deposits, GIAs and mutual funds, than they are income annuities or segregated funds.

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Canadian Guaranteed Lifetime Income StudyQuestion: Which of the following, if any, has a financial advisor ever mentioned or recommended to you?

Note:  Less than a quarter say an advisor mentioned income annuities and even fewer recall hearing about segregated funds.

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Canadian Guaranteed Lifetime Income StudyConducted June 2015

Question: How many professional financial advisors, if any, are you currently working with?

58%

18%

3%

21%

One

Two

More than two

None

Note:  Nearly 8 in 10 Canadian in this market segment are currently working with a financial advisor.

In the US 2015 survey, only 67% said they were working with an advisor.

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Canadian Guaranteed Lifetime Income StudyQuestion: When it comes to investing, what sources do you typically rely on for information when you are making an investment decision?

Note:  Not surprisingly, advisors are the most common information source when investing, although nearly 3 in 10 rely on news or online sources.

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Deposits – Canadian Landscape

Assets in billions as at December 2015

Deposits$1,212

Savings & Chequing$726

Fixed‐Term Deposits$435

Market‐LinkedGICs$50

Source: iNVESTOR ECONOMiCS

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Fixed‐term Deposits ‐ Landscape

27% 24% 27%

41% 41%39%

29% 32% 33%

3% 2% 2%$483  $482  $485 

Dec 2012 Jun 2015 Dec 2015

Greater than 5‐year

> 3‐year to 5‐year

> 1‐year to 3‐year

1‐year or less

Absolute Change in BalancesIn billions

6‐month 3‐year

Greater than 5‐year ($0.4) ($3.3)

> 3‐year to 5‐year $1.4 $16.3

> 1‐year to 3‐year ($10.7) ($10.5)

1‐year or less $12.9 $0.3

Fixed‐term Deposits by Investment Term

Source: iNVESTOR ECONOMiCS

AT CANNEX … The most popular product, based on number of purchases, was a 1‐Year term, Non‐redeemable, Non‐compounding GIC.

• 50,464 were purchased in Q2 2016• 45,126 were purchased in Q1 2016

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Fixed‐term Deposits Distributed through Intermediaries

Online/discount brokers12%

Advice‐based88%

$104.3 billion

$91.7 

$88.6 

$83.9 $83.7 $83.4 

$78.7 

18.9%18.4%17.3%17.3%17.3%16.9%

Dec 2015Jun 2015Dec 2014Dec 2013Dec 2012Dec 2011

As a share of total FTD

3.5%

3.9%

Growth  rate CAGR

Advice‐basedIncludes full‐service brokers and financial advisors

Similar to the overall market, fixed‐term deposits sold through intermediaries with short‐term maturities of 1‐year or less experienced the highest growth in the second half of 2015, increasing by 7.8%.Source: iNVESTOR ECONOMiCS

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Fixed‐term Deposit Transactions via CANNEX Financial Exchange

153.4  152.4 

187.9  188.2 177.7 

163.0 

191.7  193.9 

2010 2011 2012 2013 2014 2015 2016 Q1 2016 Q2

Average Quarterly Number of Transactions (thousands of transactions)

CANNEX Fixed‐term Deposit TransactionsIn Thousands

2016# Transactions

2015# Transactions

Change over Same Quarter Prior Year

Q2 193.9 157.6 23%

Q1 191.7 171.5 12%

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Fixed‐term Deposit Volumes via CANNEX Financial Exchange

CANNEX Fixed‐term Deposit $ Volume ProcessedIn Millions

2016$ Volume

2015$ Volume

Change over Same Quarter Prior Year

Q2 $11,603 $9,844 18%

Q1 $10,110 $10,430 (3)%

$8,416  $8,663 

$11,423 $10,462  $10,131  $9,978  $10,110 

$11,603 

2010 2011 2012 2013 2014 2015 2016 Q1 2016 Q2

Average Quarterly Dollar VolumeIn millions of dollars

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Products Supported

Average Fixed‐term Deposit Transactions Size via CANNEX Financial ExchangeIn Thousands of Dollars

$54.9 

$56.9 

$60.8 

$55.6 

$57.0 

$61.2 

$52.7 

$59.8 

2010 2011 2012 2013 2014 2015 2016 Q1 2016 Q2

For the most popular product transacted via CANNEX in 2016 (1‐Yr, Non‐redeemable, Non‐compounding) the average purchase amount was $82,097 in Q1 and $84,004 in Q2.

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Products Supported

Fixed‐term Deposits … Canadian Regional ViewDecember 2015 balances in Billions of Dollars

Source: iNVESTOR ECONOMiCS

December 2015 balances in Billions of Dollars

Region Value Share of Canada

Ontario $217 44.7%

Quebec $94 19.4%

B.C. $77 15.8%

Alberta $48 9.8%

Prairies $31 6.5%

Atlantic $15 3.1%

CANADA $485 100%

THANK YOU

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QUESTIONS?

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