IOOF has ticked the final regulatory box in its bid to purchase the MLC network from NAB after the prudential regulator announced its approval of IOOF’s application to hold a controlling stake in NULIS Nominees, the superannuation trustee for MLC’s superannuation business.
On Thursday APRA released a short statement confirming the approval, which was followed five minutes later by an IOOF update approved by its clearly relieved CEO, Renato Mota.
“APRA’s approval satisfies the final regulatory condition precedent necessary to complete the acquisition of MLC,” Mota stated. “Central to our engagement with APRA was demonstrating how IOOF’s strategic intent will deliver improved member outcomes.”
Mota called the deal a “transformational acquisition” that will create “one of the industry’s largest advice led wealth management organisations”.
The CEO said the acquisition will deliver a “step change” in IOOF’s scale and reach, “providing substantial benefits to our clients, members and ultimately our shareholders”.
In truth, the approval essentially gives IOOF the green light to create the largest wealth management network in the country. While both AMP and IOOF are whittling down their adviser networks in order to retain only the most profitable entities, IOOF is now likely to leapfrog AMP into the number one spot as it starts onboarding advisers from the MLC network.
The wealth giant will have a fight on its hand for adviser talent, however, as the industry continues to downsize in the face of regulatory pressure, higher education standards and other business pressures.
IOOF head of advice Darren Whereat acknowledged as much to Professional Planner in September last year, explaining that the group wasn’t “arrogant enough” to think they’d get everyone across as part of the deal.
“We want the people that ultimately join us to do it for the right reasons, not because it’s part of a transaction,” Whereat said. “We’re confident that we’ll get a good majority but we want to get them for the right reasons.”
IOOF and NAB are working towards a completion date of May 31 for the deal.