Thanks Transversal, the posts you have provided for IOOF have...

Thanks Transversal, the posts you have provided for IOOF have been well researched and very constructive. I would also like to add that the changing competitive landscape could potentially work in IOOF's favour, as 400 financial advisors will be left in the lurch when Dover shuts down on the 6th of July. Entities providing financial advice infrastructure will be reluctant to use capital to expand. Many advisors and subsequently their clients, will be looking for a new platform - will some of these advisors end up on IOOF's platform? It is hard to see how this will pan out, but I hope IOOF are actively recruiting reputable advisors in the wake of this announcement.

It seems the competitive dynamics in WM are almost the polar opposite of the telco industry. The telco industry is facing a massive increase in capital investment and subsequent capacity, the WM sector is reducing capacity. Now the caparison is not like with like, as most of the slack can easily be taken up with existing platforms, but in the advice side, service will be limited by qualified personnel. No doubt industry super funds* will happily take up clients, but again capacity will be limited as they can't offer individual financial advice to the same extent as a wealth manager. In closing a good financial advisor (generally fee for service) would add enormous value for most clients of above average wealth. There will be a demand for that advice going forward and the Shadforths side of IOOF's business can provide that in a way industry funds can not.

* A person with a moderate income and low asset balances would be better off in an industry fund such as Australian Super. Australian Super has outperformed the for profit WM sector by around 4% p.a. over an extended period. Around 2% of this from lower fees and 2% for VERY generous valuation increases on many of the unlisted assets that Australian Super holds - BLA also had some very generous valuations on unlisted assets too! With fees in the for profit WM falling rapidly and a logical limit on how generously infrastructure assets can be valued (though if industry funds can set valuations at 40 times earnings, I guess they could go to 100 times earnings as well), a reasonable expectation would be for the performance gap to narrow considerably.