Red tape hits IOOF operating expenditure
IOOF has announced its 2013/2014 interim result, reporting an increase in labour costs and computer expenditure off the back of FOFA and MySuper regulatory compliance.
>In a statement to the ASX today, the institution announced a $48.2 million statutory net profit after tax result for the period ending 31 December 2013, despite rising operating expenditure costs.
According to an accompanying interim financial report, the company’s operating expenditure increased by $6.6 million over the period (or $3.1 million excluding the Plan B acquisition and integration process and associated costs).
“The major sources of this increase were labour costs and computer expenditure,” the report states. “These costs were in line with wage inflation generally, a rise in the number of full-time equivalent (FTE) employees, related increases in licensed IT users and systems enhancements in response to frequently changing regulatory requirements.
“The rise in FTE was largely necessitated by the increased volume and complexity of new legislation, particularly Future of Financial Advice and MySuper.”
The report also indicates that IOOF’s total funds under management, administration, advice and supervision (FUMAS) grew by $3.8 billion to $124.0 billion in the 6 months to 31 December 2013.
IOOF also reported “positive net flows” and “impressive organic growth trajectory” for its product arm, particularly the platform and investment management businesses.
“IOOF’s integrated service offering, our partnership with quality advisers and strong brand awareness are generating these strong net flows,” said IOOF managing director Christopher Kelaher.
“In fact, since the launch of our awareness campaign in September 2011, and the subsequent addition of television and radio advertisements in 2013, we have seen a marked improvement in our net flows.”