The IOOF (ASX: IFL) share price has risen by 3.5% to $3.85 following its virtual investor briefing this morning.
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The IOOF Holdings Limited (ASX: IFL) share price has risen by 3.5% to $3.85, following the company’s virtual investor briefing this morning.
Although the briefing was light on financial metrics, the company emphasised its long term strategy of delivering wealth management advice to an ageing Australian population with complex needs.
What was said in the investor briefing
In the meeting, IOOF focused on its transformational strategy, which is to simplify its offerings into a single leading proprietary platform across different clients by 2021. The company says the next phase would then be to deliver the lowest cost to its customers via integrating the operations of its recent acquisitions.
The company also emphasised it is focused on continuing its growth through acquisitions, and on client coaching through its Evolve platform.
IOOF has participated in the ongoing consolidation of the Australian wealth management industry, as seen by its acquisitions in OnePath P&I and ANZ ADG.
More recently, the company has been in hot water over the handling of its MLC Wealth acquisition from National Australia Bank (ASX: NAB). IOOF faced a furious annual general meeting (AGM) last week, having been accused by shareholders of overpaying for the $1.44 billion acquisition. The shareholders claimed that the company has “butchered the share price” as a result of that purchase.
The IOOF share price has fallen by around 10% since the announcement of that deal on 31 August.
More about IOOF
IOOF is an Australian financial services and wealth management adviser. IOOF advisers recommend investments on third-party platforms due to the firm’s open architecture model.
The company has become the largest platform provider in Australia after it acquired MLC Wealth, competing with major financial institutions such as AMP Limited (ASX: AMP), and also with specialty platform providers such as HUB24 Ltd (ASX: HUB).
IOOF’s reputation was hurt after the 2018 Royal Commission revealed the firm had poor corporate governance. The commission recommended that the company focus on improving the quality and education of its advisers.
In the aftermath of the commission, IOOF says its immediate priorities were to set a higher bar for advice quality, and to enforce compliance and education requirements for its advisers. The company also said that its long-term plan was to increase the proportion of salaried advisers within its network, as this would help the company extract higher gross margins.
How has the IOOF share price performed in 2020?
The IOOF share price has lost close to 50% of its value this year. The share price started the year at $7.26 before free-falling to $2.72 at the height of the pandemic in March, its 52-week low.
The IOOF share price has since recovered from that low, and the company commands a market value of $2.45 billion on current valuations.
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Eddy Sunarto owns shares of AMP Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia has recommended Hub24 Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.