IOOF issued its third-quarter update, saying it ended March with $203.9 billion in funds under management, advice and administration (FUMA), an increase of $1.5 billion year-on-year.
The group overall copped $2.4 billion in net outflows during the three-month period, but it was buoyed by a $5.4 billion rise in funds from favourable market conditions.
In advice, IOOF had copped $1.4 billion in net outflows. The exit of 53 advisers from IOOF’s self-employed advice businesses, under its advice transformation strategy, had caused $2.1 billion to flow out of the business.
As flagged in its half-year results, the group expects around 140 advisers will depart the business, as it moves to improve the quality and sustainability of its self-employed model.
IOOF chief executive Renato Mota commented the company is continuing along on its transformative agenda.
“In financial advice, we are transforming towards a sustainable long-term advice model. Our focus is on sustainability, accessibility and affordability, with technology as the enabler of this strategy,” Mr Mota said.
“We flagged in February this year an expected reduction in adviser numbers and during the quarter, we rationalised arrangements with practices that were considered unsustainable. This, together with the one-off $0.5 billion outflows due to the AET cash product simplification, has impacted flows during the quarter.”
In investment management, IOOF saw $507 million in net outflows, including $469 million leaving the business due to AET cash product simplification.
Meanwhile the Pensions & Investments (P&I) business acquired from ANZ saw $782 million in net ouflows.
The portfolio and estate administration segment on the other hand gained $267 million in net inflows.
IOOF has said it is on track to complete the MLC acquisition by 30 June, subject to APRA approval.
More to come.
You can’t say some advisers are not part of the future without saying it to all and of course the decision on small is all about capacity to bring inflows to IOOF product. Super funds are now headed for the exit on holistic advice so in an ideal world the government would revisit vertical integration again. It is completely inconsistent with advice as a profession.
Just as many other Bridges offices have, we departed the IOOF Group in the abovementioned quarter (to our own AFSL) and find the “unsustainable” comment completely misleading to our valued clients; Such a comment from IOOF Management is unnecessary and totally inaccurate.
You know he is just covering his backside as a number of things are not falling into his plan as expected.
I suspect a world of pain with IOOF
It’s looking that way.
We rationalised arrangements with practices that we considered unsustainable This guy missed his calling. Should have been in politics. Advisers are not valuable business partners anymore.
It is tough to face you made a mistake – most of the advisers leaving the Lonsdale Brand are great quality advisers who do not buy into the new robo advice model they wish to spruik
? and has had this in play for at least 4 years.
Yep. This has nothing to do with helping consumers gaining advice & working in their best interest. It’s all about intra-fund marketing reps & funds under management games. Wakey wakey.
And don’t forgot about some ego rubbing in there. They changed the model for profit end of story.
It would seem a bit silly to continue to run a business that doesn’t turn a profit?