After shoring up its acquisition of the MLC network, the largest advice network in Australia has move forward with its technological uplift and completed a transfer of 38,827 client accounts onto its proprietary ‘Evolve’ suite of platforms, with a total value of over $5 billion.

The transfer completes the first of two phases in IOOF’s plan to move accounts from its own legacy Orion suite of platforms onto the new Evolve technology suite.

According to the group’s chief distribution officer Mark Oliver, it’s a giant step forward in IOOF’s plan to leverage scale with integrated services.

“We do see value in integration [whereby] we can connect different parts of the value chain,” Oliver tells Professional Planner.

Integration gives IOOF the chance to offer better functioning, cheaper solutions to licensees, advisers and their clients, Oliver explains. Forty-two per cent of clients involved in the latest transfer received pricing discounts, he says, and larger licensees are in line to receive scaled discounts.

“Integration done well should create benefits to the consumer,” he says. “If it’s done well and well governed it’s a win-win-win for the adviser, client and the IOOF group.”

Client best interests are the team’s “guiding light”, Oliver continues, while also noting that many of the client accounts migrated are advised by AFSL holders outside the IOOF group.

“This is an open market offer utilised by advisers under a range of ownerships,’ he explains.

Out with the old

The platform transfer drags a swathe of clients from the old IPS, Lifetrack and IOOF Pursuit Focus platforms that are hosted on the Orion technology suite onto the more contemporary Evolve environment, which has been the home of the group’s new IOOF Essential and eXpand platforms for about 18 months.

“eXpand is a full-service wrap,’ Oliver explains. “IOOF Essential is what they call a baby wrap with only managed investment schemes, principally the IOOF multi-manager.”

Open architecture remains a key plank of the IOOF tech environment, which allows the group to “keep adding to it and making improvements”, Oliver says.

The investment platforms in the new suite are managed account enabled, but most clients still employ traditional portfolio construction – for now. “There is an opportunity as advisers to move more onto managed accounts,” he says, “but we’ll be led by the advisers on that front.”

The migration was essentially a “flick of the switch” over the weekend, Oliver reveals. “But of course, a lot goes into it.”

The second phase of the transfer, scheduled for the new year, will see the migration of IOOF Pursuit Select products and the eventual decommissioning of Orion.

In the background, IOOF is working on its roadmap to simplify and consolidate systems and products following the MLC acquisition. “In the interim, there are no immediate changes to the recently acquired MLC platforms,” he says.

Church and state

The relationship between distribution and advice will be crucial at IOOF. While vertical integration is accepted practice in the market, the spectre of ASIC’s 2018 Report 562, which highlighted a gross imbalance towards in-house products, still lingers.

Oliver believes IOOF is well positioned to make the practice work. As long as client best interests are front and centre, he believes, distribution and advice can learn off each other and share the benefits.

“If you think of IOOF as a product provider with an adjacent advice business, that gives my particular business a unique opportunity to have a window to where advice is going and build products towards that,” he says.

Distribution and advice will work together, Oliver says, yet they will very much remain separate units that are profitable and sustainable in their own right.

“That’s very purposeful,” he says. “As a group, advice should stand on its own two feet on the basis of the value it provides. The product business stands on its own two feet on the basis of its own products. It’s very much the separation of church and state.”

 

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at [email protected]
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