IOOF chair Allan Griffiths and CEO Renato Mota refuted accusations from dissenting shareholders that the group paid too much for the acquisition of MLC in late August, while also defending IOOF’s position on vertical integration and touting the “positive” reaction from MLC advisers.

Speaking during a feisty online AGM call this morning, a shareholder put to Griffiths that overpaying for takeovers was the most common way to destroy shareholder value. IOOF’s share price sat around $4.26 prior to the acquisition, reached a nadir of $2.88 in late October and had rebounded to $3.80 as of yesterday.

As to the $1.44 billion price tag for MLC, Griffiths said the group “did not overpay”.

Earlier Griffiths responded to a question around how many MLC advisers IOOF expects to bring over by saying the feedback from those advisers had thus far been positive.

“Our expectation has been all along that the vast majority of advisers will move across, and certainly we’re well on track to meet that objective,” Mota said.

“You would have noticed yesterday there was a release from one of the dealer groups, Godfrey Pembroke, stating that their intention was to transition across,” Griffiths added.

IOOF CEO Renato Mota

The chair and CEO were confronted with a number of contentious questions, including one around how IOOF planned to adapt to higher expectations around avoiding conflicts and providing “truly independent” advice.

“The obligation on advisers, including putting their clients first, is the same, irrespective of  what type of licensee you belong to,” Mota responded. “There are inherent or potential conflicts that we need to manage, and we’ve worked very very hard to eliminate those conflicts.”

Last week the group’s head of research told Professional Planner there was “not one skerrick of pressure” to promote internal products.

The CEO made a point of telling shareholders the group is heading for an advice model where the only revenue comes from client fees.

“There are no incentives for any adviser licensed through an IOOF license to use, promote or encourage IOOF product,” Mota said. “The other thing that we’re working very hard to do is remove any subsidisation of advice businesses from other parts of the value chain. We are committed to ensuring that we build an advice business where the only revenue is from clients and only for high quality advice.”