Ann: Investor presentation - IOOF FY 2018 results, page-82

"The way Hodge QC finished his questioning of the CEO says to me he thinks he has slam dunked the CEO. I suspect the RC's report is not going to be pretty for the CEO. "

@rcs1359,

What impact do you think the recommendations of the RC will have on IOOF, and the wealth management industry in general?


"As a trusts and estate lawyer, I have seen some extraordinary conduct by corporate trustees. There is often a fundamental disconnect between the duty to act in the best interests of the beneficiaries of the trust or fund, and trying to keep shareholders happy by making as much money as possible out of fees and charges for servicing the trust or fund."

From someone who generally likes to own businesses in the financial services sector, and who would therefore like to see industry standards raised, my question to you given your background is: How do you believe the authorities should go about eliminating the sort of extraordinary conduct to which you refer?


"They have had a dream run to date, but the day of reckoning may not be that far away."

When you say, "dream run", I note that IOOF, ostensibly the industry's lowest-cost operator, currently generates an ROE of 14%. AMP, one of the largest players in the industry, and therefore with significant scale advantage generates an ROE of 13%. The major banks are exiting the wealth management space because they are unable to earn their cost of capital from running wealth management businesses.

While those rates of return are satisfactory, the industry doesn't exactly look to me like a dripping roast in terms of the making of egregious financial returns for its owners.

So can you say what you mean by "dream run"?

And then - and this relates to my earlier question in terms of a potential regulatory response in the months/years ahead - what do you mean by "day of reckoning"?
(NB. This is not a facetious question; it is sincerely one that seeks to canvass some potential negative scenarios which I have failed to consider... for the sake of protecting my capital."