IOOF announced that the acquisition would take effect from 11:59pm on Monday night.
The news will see the business double in size to $494 billion FUMA, with an additional 406 MLC advisers joining IOOF.
“This acquisition is truly transformational for IOOF as it positions us as the leader of a new era of wealth management in Australia, giving us a strong platform for future growth,” IOOF CEO, Renato Mota, said.
“Today we become a new IOOF. We have the strategic intent, the talent, and now the scale, to deliver our advice-led wealth management proposition to more Australians than ever before.
“While this acquisition delivers immediate value to our shareholders, we consider its potential for medium and long-term value even more compelling.
“IOOF and MLC share a common purpose to improve the financial wellbeing of all Australians. We also share a client-oriented philosophy and together, we will now be proudly serving over 2.2 million Australians.
“Together, we will deliver clients and members broader access to wide-ranging capabilities and technical expertise, enhanced infrastructure and a strong corporate governance framework.
“Importantly, this step-change in scale will over time, lower the cost of serving clients and members.”
Mr Mota added that around 84 per cent of advisers from IOOF’s ‘target set’ would be joining the new merged business.
“It has been a priority for IOOF to ensure that those advisers joining the group with this acquisition, as with the ANZ Wealth acquisition, are aligned with IOOF’s Client First philosophy and our Advice 2.0 response to the transformation of financial advice in Australia,” he said.
“We are thrilled to welcome the very talented MLC team to the IOOF family.”
As part of the transition arrangements, MLC Asset Management group executive Garry Mulcahy would also move across to become chief asset management officer at IOOF, while Sawsan Howard, most recently general manager of corporate affairs for Australian Super, would come on board as chief corporate affairs and marketing officer.
Why, if they are serious about their “client-oriented philosophy” are they still talking about the success in terms of FUM?
The 2030 royal commission into IOOF will be interesting.
Because with scale comes cost efficiencies. Surely you understand this? FUM is where they make profit, so it is OF COURSE a KEY metric they follow. The more profitable they are in this regard, the better positioned they are to reinvest in their business, which will benefit all. I am NOT affiliated with IOOF in any way but get sick of the mindless bashing that goes. Are you not trying to also run a profitable business?
I get that with scale comes cost efficiencies, but none of these will be passed on to their clients (which i don’t have an issue with btw).
Re me trying to run a profitable business, yes certainly am, but our key metric is the number of clients we help. The more we help, the better we feel and the more money we make. Simple. To be honest, I have no idea how much FUM we have because we don’t charge our clients based on this.
The big issue that I have with companies like IOOF (or Dixons, AMP, etc….) is, as you point out, FUM is where they make profit. Whether they are the best products for their clients is secondary, as they have a limited APL which only allows advisers to recommend products that are inherently conflicted. Yeah, they can say with all honesty that this was the best product they could find, but they are not allowed to look at the whole field.
This is why we constantly have issues in the industry. Whether it be AFSLs that turn a blind eye to poor conduct until after the adviser leaves; or clients being put into shitty products that they can’t get out of; or clients being sold insurance they don’t need.
If we as an industry are to move forward (without all the BS regs put on us because of the conflicts that are inbuilt into the system), advice and products needs to be completely separate. Surely you understand this?
IOOF have never passed on benefits from scale … never! … you are being dillusional to think otherwise
To be fair to Mr Mota in just this case, IFA included the FUMA reference, it didn’t come from IOOF.
What a load of rubbish …. IOOF will leak planners for the next 2 years and then when the freebies run out, there will be a mass exodus. IOOF didn’t want all those self-employed planners to leave – they chose to leave as soon as the opportunity arose
There won’t be enough duct tape to hold this one together.
Agreed, McGyver couldn’t keep this one afloat…..
Well I guess they have 2 years to show genuine value add. My gut feel is that they wont, because the big corporates never do learn from their clients, they just recycle management who make the same mistakes over and again.
406 advisers…wow the haters are going to really hate.
No dealer group fees for 406 advisers; let’s see how many are still there in 30 months
My understanding is $25k per AR + Xplan + PI. Hardly free, but lets not let the facts get in the way of your argument. Countplus & Centrepoint currently offering fee free periods though which is fact.
Absolute BS
“strategic intent”…… that’s a new one for Bulls!*t Bingo that I haven’t heard before?
Well played Sir
You know the image of a large python swallowing a whole pig? That python doesn’t move very fast for a long time.
So how many have really stayed??