IOOF sees $2.2b in advice outflows

IOOF’s Advice 2.0 programme has seen an outflow of $1.8 billion while the firm posted an increase of $9.4 billion in funds under management, advice and administration (FUMA) to $213.3 billion during the last quarter of the 2021 financial year.

In an announcement to the Australian Securities Exchange (ASX), IOOF said its financial advice FUMA saw an outflow of $1.8 billion after outflows of $2.2 billion from 33 advisers departing its self-employed advice businesses, and inflows of $0.4 billion from new self-employed advisers joining IOOF licensees and organic inflows.

“This was due to a variety of reasons, including practices which IOOF believe were not suited to the economic or governance requirements of a professional advice model,” it said.

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“On 1 June, 2021, 406 MLC advisers joined with IOOF advice licensees and as at the end of June, IOOF maintained active advice services relationships with almost 2,000 financial advisers.”

Source: IOOF

IOOF’s Q4 results also said its newly acquired MLC assets under management and funds under administration were $301.2 billion, up $11.4 billion. It noted that currently IOOF and MLC used different reporting methodology and that an aligned approach would be presented for their full year results.

On the investment management side, FUM increased by $1.4 billion, up 6.2% to $23.5 billion, including $90 million in organic positive flows and market movements.

“These robust organic net inflows reflect the strong support from advisers for the IOOF MultiSeries funds, which offer competitive pricing, strong investment returns, and increasing client engagement through investment central,” it said.

IOOF’s pensions and investments (P&I) FUMA posted outflows of $895 million, which the firm said was consistent with the outflow profile in previous quarters.

It said the P&I integration program had an expected annualised cost synergies of $43.6 million and an additional $8.7 million realised by 30 June, 2021.

IOOF’s portfolio and estate administration FUMA saw $606 million in net inflows, and market movements FUMA saw an uplift of $5.3 billion.

IOOF chief executive, Renato Mota, said: “Ongoing positive organic flows into portfolio and estate administration were experienced, achieving quarter-on-quarter positive flows for the last 34 quarters, as well as a positive turnaround in flows into investment management during the quarter.

“The successful completion of the MLC acquisition has transformed our business in terms of size, scale and reach. The ‘new IOOF’ has over $200 billion of funds under administration across its platforms, in excess of $200 billion of investment funds across its multi-manager and direct investment portfolios, and relationships with more than 9,000 financial advisers, supporting more than two million Australians with their retirement and investment decisions.

“This gives us a strong platform for future growth, including the enhanced ability to attract new FUMA though our extended scale and reach.”

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$66M per practice ( on average) is not exactly smallish practices, not massive, but not small as he implies.

The key criteria for retaining or ditching practices is the volume of inhouse product sales they can be used to generate. This is a function of both practice size, and "amenability" to using IOOF products. Exactly the same agenda at AMP.

Any talk of practice "viability" or "compliance" or "cultural alignment" is just a smokescreen.

Then they've seriously overestimated the funds flow they'll get from MLC advisers because their platforms are horrendously expensive compared to MLC and other platforms available.

Aren't the MLC platforms IOOF products now?

no they remain stand alone

Owned by who?

owned by IOOF, with stand alone pricing from the IOOF platforms remaining under the MLC brand.

Therefore MLC platforms and funds are inhouse IOOF products, that IOOF derives additional profit from when advisers under its control place/retain client monies in them.

Badged wraps, dealer service fees, subsidiary fund managers, licensee SMAs... are all inhouse products. It doesn't matter how they are branded or labelled.

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