Adviser exits drag IOOF flows

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.