The Royal Commission Report recommendations have been made, is it time to buy IOOF Holdings Limited (ASX: IFL)?
IOOF Holdings is a diversified financials business that offers a variety of services to clients including financial advice, platform management & administration, investment management and trustee services. IOOF has been operating since 1846 and is now one of the largest financial services industry businesses.
Is IOOF a buy?
As AMP Limited (ASX: AMP) noted in its market announcement to the ASX, “the benefits of vertical integration remain available for customers”… and the businesses like IOOF can still benefit too.
IOOF Acting CEO Renato Mota said: “The cultural and governance changes currently being implemented by IOOF stand us in good stead to meet future regulatory requirements.”
IOOF also noted the matters in the report which have been referred to the regulators and will work to resolve them, as well as accelerating change and restoring trust.
The IOOF share price is up nearly 11.5% in response to the Royal Commission, I do agree with investors that things don’t look anywhere near as bad as they could have if more-punishing recommendations had been made.
There is a place for IOOF in the current financial advice system, particularly if the public shun big four bank & AMP advisers.
I’m not personally interested in buying IOOF shares, but its high dividend yield (which may be somewhat cut) could be a decent alternative to shares like Westpac Banking Corp (ASX: WBC) and Telstra Corporation Ltd (ASX: TLS).
3 proven ASX shares that have been more reliable than IOOF or big banks
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