Ann: Investor presentation - IOOF FY 2018 results, page-108

I’d say that the main difference between IFL and CGF, from a cost structure point of view, is that 47% of IFL’s Net Operating Revenue comes from Financial Advice, which is a more people-intensive business (relative to Platforms and Investment Management, and also to the Life Annuity business) and therefore has a higher CTI ratio (55.0% [*]).

By way of further illustration, CGF reported 822m$ of Net Income for FY18, against a total headcount of 676 as of June 30th; that corresponds to 1.22m$ of Net Income per employee.

IFL, on the other hand, reported 575m$ of Net Operating Revenue for FY18, against a total headcount of 1,300, which corresponds to 0.44m$ of Net Operating Revenue per employee.

That, probably better than anything else, can give a sense of the superior scalability inherent to CGF’s business model, as opposed to IFL. So, while we can try and estimate by how much IFL’s overall CTI ratio could improve, it is perhaps more appropriate to say that IFL does not have (for structural reasons) the same room for improvement (in terms of CTI ratio) as CGF does.