IOOF reports surge in demand for financial advice

IOOF’s funds under management jumped over 30pc, as it also reported a surge in demand for financial advice in the pandemic.

IOOF chief executive Renato Mota. Picture: Stuart McEvoy

IOOF surged more than 14 per cent on Thursday after the group revealed its funds under management, advice and administration jumped more than 30 per cent in the three months to March 31, with the acquisition of ANZ’s pension and investments (P&I) businesses, completed in January, giving it a $77bn boost.

In a trading update, IOOF also told shareholders it had seen a surge in demand for financial advice and information since the coronavirus crisis hit markets.

“Clients are naturally concerned, and somewhat overwhelmed with the swift changes that have taken place. Guided by financial advisers, they seem to be taking a pragmatic and long-term view of their investments,” IOOF chief executive Renato Mota said.

Its funds under management, advice and administration rose to $195.6bn through the quarter, up 34.2 per cent on the prior corresponding period, largely driven by the P&I segment, the wealth manager said.

Total net outflows hit $704m over the three months, of which $641m came from the P&I business. Excluding P&I, it saw net outflows of $63m.

IOOF’s proprietary platforms saw net inflows of $180m, while its financial advice business saw net outflows of $162m. Its investment management division suffered $81m in net outflows, it said.

IOOF’s total asset values tumbled $26bn, or 11.7 per cent, over the quarter as markets tanked in February or March on concerns over the coronavirus pandemic.

“This is substantially lower than generally observed reductions in equity markets both domestically and globally,” Mr Mota said. The ASX All Ords index fell 24.9 per cent over the same period.

Commenting on the P&I outflows, Mr Mota said it had been a “historical constant”.

“While it is early days under IOOF ownership, we continue to see opportunities to simplify the combined businesses to drive efficiencies; improving outcomes for members, clients and shareholders,” he told shareholders in the quarterly update.

Scale, economic diversity and business resilience were important contributors to the success of IOOF’s business transformation, he said, as he sought to reassure on its liquidity position.

“The high level of liquidity in both the IOOF and P&I suite of funds has meant that we can quickly meet member redemption obligations from the early release of super while retaining asset allocation integrity.

“It is really pleasing to see each of our teams working together to ensure we are looking after our clients during these times,” Mr Mota said.

As at April 27, IOOF (including P&I) had received over 28,500 requests totalling approximately $200m in early access to superannuation.

The business is well placed to support the government initiative with minimal business impact, he said.

IOOF shares closed up 14.6 per cent at $4.32 each.