IOOF bleeds $295m after APRA strike

IOOF has suffered a $295m net outflow of funds from its advice business in the December quarter.

IOOF suffered a $295 million net outflow of funds from its advice business in the December quarter, as the embattled wealth group and former senior executives and ­directors continue their battle with the prudential regulator.

The company said in an ­announcement late on Friday that advice net flows included $657m of outflows from its BT badges.

However, IOOF replicated BT’s Open offer last October by launching its Insignia Wrap range, which built $975m in funds under advice by the end of the year. In December, net transfers to other BT badges slowed to $66m.

Acting IOOF chief executive Renato Mota welcomed the $403m quarterly inflow for the platform business, up from $308m in the same period a year ago.

“Strong platform flows in a competitive market shows that delivering value and superior service to clients will be rewarded,” Mr Mota said.

“In addition to attracting flows into our proprietary platforms, distributing a range of third-party platforms leverages the strengths of our partners while expanding our footprint.” IOOF was able to increase funds under management, administration and advice by $10.5 billion to $137.8bn for the quarter after the transition of 661 advisers and $17.3bn in funds under advice from former ANZ-aligned dealer groups.

Against that, equity market devaluations had a $7.5bn impact over the quarter.

Investment management suffered a deterioration in new outflows from $109m in the previous corresponding quarter to $186m in the December quarter.

IOOF was hammered in December when the Australian Prudential Regulation Authority unveiled legal action and imposed licence conditions.

The court action alleges chief executive Chris Kelaher, chairman George Venardos, finance boss David Coulter, company secretary Paul Vine and general counsel Gary Riordan are not fit and proper people to run a superannuation company.

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After the action became public, non-executive director Allan Griffiths was appointed acting IOOF chairman, while wealth management boss Mr Mota became acting chief executive.

Mr Kelaher and Mr Venardos are on leave while the matter is contested.

It is scheduled to be heard in July.

IOOF labelled APRA’s ­allegations “misconceived” and said they would be “vigorously defended”.

In the meantime, ANZ has not ruled out walking away from the sale of its pensions and investments business to IOOF after it delayed a key vote on the transaction but said it was engaging with the buyer.

ANZ deputy chief executive Alexis George said last month that the sale contract was amended to ensure the separation of the bank’s life insurance unit — sold to Swiss giant Zurich — could occur before any final decisions on the pensions business were made.

While sticking to the controversial deal for now, Ms George didn’t rule out ANZ shelving the sale of its pensions business to IOOF as the latter fights banning orders against its four executives and its chairman, and works to meet licence conditions.

“At this point it is too early to make a call.

“We just have to wait and give them (IOOF) time,” Ms George said.