IOOF has revealed the pricing tensions which emerged to test its platform relationship with BT.
IOOF has revealed the impact on the profitability of its wealth business when BT reduced its fees last year.
BT announced in July, last year, that it was cutting its superannuation platform fees – something which coincided with the hearings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
IOOF said it had a significant third-party administration arrangement with BT and that when BT reduced its fees on an equivalent offering, it left IOOF “out of market on price, and therefore exposed to outflow to BT, temporarily”.
Elsewhere in its explanation, IOOF said that in the financial advice segment of the business, price competition from BT and the need to re-set fees in response, “was dilutive of segment margin overall”.