The banks are already doing that Index mainly due to the...

The banks are already doing that Index mainly due to the conflict of interest that is inherent in the vertcial integration that is a feature of IOOF business model.
The shares will tank if RC recommends that such a model should not exist.

@Dumbass

The worst-case scenario I can see, from IOOF’s perspective, is one where the Financial Advice business has to be separated from the “product” areas (i.e. Platforms, Investment Management and Trustees).

While such a scenario would be value destructive, for IOOF’s shareholders, it still wouldn’t represent an existential threat for the Company. Moreover, the possibility of such an outcome is a known fact, i.e. the market is already pricing it in to some extent.

Regarding the actual probability of it happening, I have no idea, but I do not see it as being the base-case scenario. As you suggested yourself, for instance, the simple removal of incentives for financial planners to “cross-sell” in-house products would go a long way toward preventing conflict of interest.

So, there is a lot that regulators can do to improve corporate conduct, before starting to enforce split-ups. Just look at what has happened in the US and European banking systems since the GFC (and the Greek debt crisis), for instance: a lot of new regulation has been introduced, but not much has really changed in terms of actual business models.

IMHO & DYOR