CANBERRA: Listed wealth company IOOF could be a bidder for ANZ’s wealth management business, according to its chief executive Chris Kelaher. “The way it is presented, we would be a prime buyer if it plays out the way it has been stated,” Mr Kelaher said in an interview with The Australian. “We have a number of different opportunities we are looking at. Prima facie, it presents very attractively. We are the most successful purchaser in this space. Theoretically it is on all fours with what we do.”
IOOF is now one of the biggest independent wealth advisers in Australia following a series of acquisitions in recent years, including last year’s $670 million takeover of the Shadforth Financial Group. It now has some $31 billion in funds under supervision, $107bn in funds under management, administration and advice and a network of about 1000 financial advisers.
ANZ chief executive Shayne Elliott announced earlier this month that the bank was planning to sell its wealth management business to focus on its core banking operations, hoping to raise more than $4.5bn from the deal. He said the bank would consider an offer for the whole business or could look at selling off its different components, which include a life insurance arm, a superannuation business, a funds management business and a network of some 1500 advisers, including bank staff and people working for dealer groups.
This follows a move by National Australia Bank last year to sell 80 per cent of its life insurance arm to Nippon Life of Japan for $2.4bn. Mr Kelaher said IOOF was in the market for more acquisitions as it expected the wealth management market in Australia would continue to grow, particularly for independent operators. “The opportunity set for us at the moment has never been greater,” he said. “We have been very successful in acquisitions. It has been part of our strategy. It is something we are good at. You play to your strengths.”
IOOF has grown with a series of strategic mergers and acquisitions over the past few years. In 2009 it merged with Australian Wealth Management and Skandia. In 2011 it bought the DKN Financial Group and Lonsdale. It bought the Plan B Group and Avenue in 2012, before agreeing to buy Shadforth in 2014, a deal completed last year.
Mr Kelaher said there were advantages of scale in the superannuation and wealth management business. He said IOOF had an “open architecture” approach to its wealth management advice, which meant it offered its own investment products as well as those from other providers. “It is more in the fore of acting in the client’s best interests,” he said. Mr Kelaher said his company was not in talks with ANZ about buying its wealth management business, adding “it’s early days”. He said IOOF was now finding itself in a very interesting position given that the bigger banks are focusing on whether they should be in wealth management or not. “We find ourselves in a sweet spot at the moment. We are now a very substantial enterprise.”
IOOF said in October that law firm Maurice Blackburn had agreed to drop a proposed class action against it. This followed a decision in July by the Australian Securities & Investments Commission that it would not be taking action following an inquiry into allegations about insider trading and others issues by IOOF employees. Mr Kelaher, who fronted a Senate inquiry over the allegations last year, rejected the suggestions that the inquiry had been hanging over the company for the past year.
“The majority of the interest was last year,” he said. “Since then ASIC came out and said there was nothing of interest to them. There were headlines about a class action but there was no action. It was thrown out. End of story.” Mr Kelaher said that IOOF had been shifting its emphasis away from funds management and more towards superannuation advice and administration in recent years. “Clients are voracious for assistance because it is becoming so complex,” he said. “There are certainly some opportunities to improve your position if you understand the laws.”
