How IOOF passes the pub test: punters always shout

IOOF boss Chris Kelaher reckons his idea of dipping into people’s retirement nest eggs to compensate them passes the ‘pub test’.

IOOF boss Chris Kelaher leaves the royal commission yesterday. Picture: AAP

IOOF boss Chris Kelaher reckons his idea of dipping into people’s retirement nest eggs to compensate them when his company stuffs up its management of their super savings passes the “pub test”.

What pub does he drink at? And what on earth are they putting in the beer?

Kelaher’s stint in the stand yesterday was one of the most unusual seen by the royal commission — no mean feat when measured against the unfortunate collapse of Dover boss Terry McMaster a few months back.

Over three hours in the stand, an at-times flippant Kelaher brushed off the concerns of the prudential regulator over conflicts of interest, said he was not “qualified” to answer questions seven times, and called on the benefit of “hindsight” nine times.

For counsel assisting the commission, Michael Hodge QC, it was a lightning round of dentistry after four days pulling the teeth of NAB executives Nicole Smith and Paul Carter over the bank’s own misdeeds.

Over the past seven months, the commission has revealed a wealth management industry that stops at nothing to get its hands on the savings of everyday Australians. And as luck would have it, while the nation’s biggest banks are pulling up stumps as fast as they can to exit the scandal-ridden financial planning and wealth industry, IOOF is rapidly expanding.

It’s an old strategy for Kelaher, the Pac-Man of the financial services industry, who has already built IOOF into a complex spiderweb of companies, trusts, platforms and products.

All this in a $3 billion company that runs its board meetings on handwritten notes scribbled by — who?

“It looks like the handwriting of our company secretary. It looks like them,” Kelaher told the commission. “I’m not a handwriting expert.”

IOOF is part-way through a $1bn takeover of ANZ’s OnePath pensions and investments division. Industry sources have suggested a number of advisers are reluctant to join the culture of IOOF, and this week Kelaher confirmed in a roundabout way the “diminution” in the number of advisers that were transferred in the takeover as he warned against a government-led reform in the wake of the royal commission.

“It’s a time to caution the legislators,” Kelaher told analysts after unveiling a 24 per cent slide in annual net profit to $88.3 million.

Back in the stand, it was Kelaher receiving the caution, with Hodge putting to him that IOOF simply did not understand that it was legally required to act in the best interests of super fund members.

Not so, said Kelaher, who in a piece of wisdom worthy of the back bar at closing time also told the commission that even though the operating reserves held by a super fund were an asset of the fund, they didn’t belong to the fund’s members.

Perhaps it’s time to change the kegs at IOOF.