Summary
- IOOF Holdings (ASX:IFL) garnered $529 million additional Funds Under Management, Advice and Administration (FUMA) during September quarter.
- Financial advice witnessed a net inflow of $110 million, excluding $450 million flow from IOOF Aligned Licensees to IOOF Alliances.
- Portfolio & Estate Administration saw $226 million of net inflows.
- Investment Management took a $62 million hit; Pensions & Investments (P&I) also witnessed $411 million net outflows.
On 29 October, IOOF Holdings Ltd (ASX:IFL) released a statement, updating its Funds Under Management, Advice and Administration (FUMA) to $202.8 billion for the quarter ended 30 September 2020, garnering additional $529 million.
IOOF Holdings has been in the business since 1846 and is one of the largest groups in the financial services industry. The company provides various financial services to its broad base of clients like financial advice, portfolio & estate administration services and investment management products to its clients.
Impact of Early Release of Super (ERS) on net flows
The payments of 77,890 requests totaling approximately $619 million have been made under the ERS scheme during the quarter, impacting Q1 2021 net flows for the company.
- IOOF (excluding P&I) has paid 20,114 requests for a total of $158 million
- The P&I business has paid 57,776 requests, amounting to $461 million
There is a greater impact on the P&I business from ERS due to its higher proportion of Employer Super and direct members in its platform business vs IOOF’s largely advised client base.
Financial Advice
IOOF Chief Executive Officer, Renato Mota, said the company is at an inflection point for the financial advice landscape in Australia. The management recognises the importance of quality financial advice and a professional business model in today’s time.
The company has three go-forward advice models available as a part of “Advice 2.0,”. These are:
- IOOF Alliances where the advisers generate revenue from the services offered.
- Aligned Licencees where advisers are licensed by IOOF
- Enterprise advice via Shadforth and Bridges
With some changes in the way advisers choose to utilise IOOF’s advice during the quarter, four aligned practices with 23 advisers and $450 million in funds under advice joined as IOOF Alliances.
Portfolio & Estate Administration and Investment management segment
Portfolio & Estate Administration garnered net inflows of $226 million (excluding ERS). The total net inflows for flagship platforms (IOOF Essential, IOOF Pursuit, eXpand, IOOF Employer Super and Shadforth Portfolio Services) were $348 million.
However, the investment management segment saw an outflow of $62 million, primarily due to seasonal timing of distributions and ERS withdrawals.
Mr Mota said, significant growth was seen in the number of accounts openings and total numbers of licensees utilising IOOF Essential, eXpand and Shadforth Portfolio Service. This clearly demonstrates the expanding reach in the open market and validates the current priorities under the Evolve21 programme of work.
Integration update & MLC preparation
A major focus was there on the P&I integration and MLC acquisition completion. Below updates are given by the company regarding this:
- Application for approval of draft APRA s29HA to own or control an RSE licensee is pending for submission in November 2020.
- Joint Transaction Implementation Committee has also been set up with representation from MLC, NAB and IOOF
- Lender consents for the transaction have been completed
Stock Performance
IOOF Holdings (ASX:IFL) shares are trading at $2.92, down by 2.34% as at 03:16 pm AEST. The shares have shown a lacklustre performance in the current year and are still trading near the March low. The YTD return stands at negative 60%.
