Ann: ANZ Wealth Management updated financial information, page-40

Upfront fees are higher in an legally independent model (I practice it). However, it also means that your total clients are much less. Financial planning should seperate advice from product, lower net worth clients will eventually have a cheaper, useful robot-advice solution allowing the higher net worth clients with detailed strategic needs to be taken care of by the drastically fewer remaining financial planners compared to today.

That sounds plausible. Don’t you think that the increasing automation of financial advice at the low end of the net worth range will also allow for a much higher ratio of total customers per adviser, though (without having to compromise too much on the quality of service)?

Ahead of the game... From a platform perspective its Netwealth, HUB24, Praemium and BT making the rest obsolete. I didn't hold BT Panorama in that conversation until recently where they dramatically reduced their overall fees.

Thanks for the names. And, apart from price, what do you see these platform providers offer that IOOF doesn’t?

I think the companies that welcome robo-advice and automation will further stay ahead of the game. That is going to be needed to maintain margins anywhere near where they are currently.

Sure. Do you see IOOF as being below industry average in this regard? And, if so, why?

FUM will probably trend up overall, but there are some significant outflows for many participants already. A labor government will do all it can to direct all fund flow to industry funds which will be interesting to see what they put together to further allow that to happen. Index funds will also continue to win the most FUM IMO.

I am not sure about industry/index funds, and frankly have no idea what a Labor government could practically do to force a move in that direction. The key issue for me is the overall trend in FUMAS, and the preservation of market share.

IOOF definitely not the worst from what I have heard from people who have worked there. However, they have no MOAT imo. In this changing landscape where margins will continue to be squeezed across the board in financials, you need a MOAT.

Fair enough, but do you see any of the other companies you mentioned above as having such a moat? And, if you do, what does that moat consist of?

Their fight to be able to maintain grandfathered remuneration is telling as there is no reasonable justification to retain them for the consumer.

Not sure if I understand this one correctly. IOOF have re-iterated that the revenue impact from the abolition of grandfathered commissions is not going to be material; do you think they lied on that one? And, if they didn’t, why would they want to fight harder than anyone else in the industry for something that, come February, looks like the surest thing to go? Do you have any specific instances of that in mind?

Cheers