IOOF reports strong quarterly inflows despite royal commission fallout and APRA action

IOOF has managed to increase funds under management despite APRA’s push to ban executives.

IOOF CEO Renato Mota. Stuart McEvoy/The Australian

Any fallout from the royal commission and an prudential regulator action to rub out the top tier of board and management at IOOF is not showing up in its numbers, as funds under management and administration rose another 3.5 per cent in the June quarter.

IOOF said total FUMA was $149.5 billion at June 30, up from $144.6bn in the March quarter.

Recently confirmed chief executive Renato Mota said the inflows were the best since the June 2018 quarter. For the 12 months to June 30 inflows totalled $23.6bn, up 18.7 per cent in a period that also included the acquisition of the ANZ dealing groups from October 1 that brought $17.3bn to IOOF.

Excluding the acquisition, flows into IOOF rose 5.9 per cent, or $7.5bn.

IOOF also said $1.3bn flowed out of the ANZ business in the June quarter but that this related to a transfer of a small group of advisers to a third party.

Neither the advisers nor the buyer were named.

Former IOOF chief executive Chris Kelaher departs the Supreme Court in Sydney earlier this month. Britta Campion/The Australian

The figures appeared to defy prolonged controversy surrounding IOOF including a disastrous performance by then chief executive Chris Kelaher at the Royal Commission into misconduct in the financial services industry and subsequent moves by the Australian Prudential Regulation Authority to bar him, chairman George Venardos and three other executives from acting as superannuation trustees.

The Federal Court action started on July 1 and a verdict is expected to be months away.

Mr Mota said the inflows highlighted “the strong organic growth momentum achieved in a challenging year for the industry.

“In a year which has seen the reputation of the sector challenged, many of our competitors

have suffered significant net outflows,” Mr Mota said.

“IOOF’s emphasis on the value of financial advice, putting our clients first and resetting our organisational culture has translated into strong business performance for the quarter.”

IOOF said the inflows included $561 million into Portfolio & Estate Administration, down from $666m net inflows.

Financial advice attracted net inflows of $432m, down from $2.5bn in the previous corresponding period that included a $2bn one-off transfer.

Investment management flows were $181m net outflow for the quarter, with gains from

new advice relationships partially offset by redemptions associated with pension payments.

By 12.30pm (AEST), shares in IOOF has leapt 42 cents, or 7.65 per cent, to $5.91.