IOOF profits begin to shine
By John Wilkinson
IOOF is no longer living “hand-to-mouth”, as greater earnings certainty is enabling the group to better formulate its strategic direction.
“For the first time, we are not living hand-to-mouth as previous management had to do, developing business plans without certainty of earnings,” IOOF chief executive Ron Dewhurst says.
The group’s retail inflows have exceeded outflows for the first time in several years, with inflows for the year of $2.1 billion compared to $1.4 billion of outflows.
The positive figure contributed to a jump in retail funds under management (FUM) and advice (FUA) from $8.8 billion to $10.5 billion.
Total FUM and FUA is $15.9 billion, up 35 per cent, which Dewhurst attributes to retaining much of AM Corp’s business and a strong performance by Perennial Investment Partners, which IOOF has an 86 per cent stake in.
The company outperformed its prospectus forecast of $13.8 billion FUM and FUA.
“Funds under management and advice were up 15 per cent on the prospectus forecast, which has outstripped industry growth figures,” Dewhurst says.
“The stickiness of the AM funds was something we under-estimated and Perennial has reported growth in both retail and wholesale funds under management.”
Perennial’s wholesale FUM rose 38 per cent during the year to $5.4 billion. Inflows were $2.4 billion with $600 million of outflows.
Independent advisers have played a leading role in boosting IOOF’s FUM, with 30 per cent of inflows coming from this sector, according to Dewhurst. They now account for 44 per cent of IOOF sales, with its reliance on Winchcombe Carson and other alliances reduced to about 31 per cent of sales.
The strong performance was also recorded in IOOF’s bottom line with an after-tax profit of $41.6 million — up 20 per cent on the prospectus forecast.
AUTHOR
Recommended for you
In this episode of Relative Return, host Laura Dew speaks with Andrew Mitchell, director and senior portfolio manager at Ophir Asset Management, about why he loves working in fund management and the lessons he’s learnt in a decade of running a firm.
In this episode of Relative Return, host Laura Dew speaks with Blackwattle Investment Partners managing director and chief investment officer, Michael Skinner, about setting up an asset manager and what he looks for in an investment team.
In this special episode of Relative Return, Momentum Media’s Phil Tarrant and Jordan Coleman discuss the publishing house’s expansion into greater coverage of the wealth management space.
In this episode of Relative Return, host Maja Garaca Djurdjevic speaks with Riley James, founder and chief executive of fintech SuperAPI, about creating a superannuation ecosystem and potential changes from the Quality of Advice Review.
