Yesterday IOOF announced some positive financial results for the year, with underlying net profit after tax of $169.4 million and net inflows of $4.6 billion.
In announcing its performance, the ASX-listed institution pointed to what it says is a successful “advice-led strategy” that is bucking the trend of problems being faced by the wealth management operations of some rival institutions.
The results reflect a 131 per cent year-on-year increase in advice net inflows, according to a statement from IOOF, with $3.0 billion in total advice net inflows for the 2017 year.
IOOF’s 2016 results were impacted by “divestments” in its financial advice business, including the sale of some Bridges and Lonsdale practices back to authorised representatives.
The bulk of the sharp increase was attributed to the recruitment of 33 lucrative financial advisers bringing $976 million in funds under advice with them from a rival licensee.
An IOOF spokesperson told ifa there are a total of 50 financial advisers that have committed to joining the group’s various licensees since 31 December 2016.
IOOF managing director Christopher Kelaher said the results are an endorsement of the company’s financial advice strategy.
“With our advice-led strategy, there is positive momentum in each of our businesses,” he said. “Our adviser numbers are growing, which appears to be counter to industry trend.”
The results come amid suggestions of conflicts within some of IOOF’s advice channels, with some aligned advisers criticising changes to their in-house research and APL process, which they say do not reflect the stated “open architecture” focus.
IOOF mirrors the big Banks when it comes to vertical integration. Most dealer groups within IOOF can only use IOOF platforms or external platforms where IOOF are compensated. No transaction takes place without IOOF taking a slice.
Financial product companies like IOOF are a huge beneficiary of the ridiculously impractical s923A definition of “independent”. Because s923A is so counterintuitive and unworkable in practice, consumers rely on whether the advice group uses an independent sounding name. Very few consumers would have any idea that advice groups like Shadforths and Bridges are actually controlled by product provider IOOF.