The IOOF (ASX: IFL) share price is up more than 2% after releasing its September 2019 quarter update.
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.
IOOF’s September 2019 Quarter FUMA Update
IOOF said that its funds under management, advice and administration (FUMA) grew by 3.1%, or $4.2 billion, to $142.7 billion over the quarter to September 2019 from June 2019. This excludes Ord Minnett as the divestment was completed on 24 September 2019.
The diversified financials business said the current environment is “extremely challenging” but it still managed to achieve good net inflows.
In terms of each division, the Portfolio & Estate Administration division had $396 million of inflows – the September 2018 quarter had $285 million of net inflows.
IOOF CEO Renato Mota said: “Our ‘Evolve Project’ remains key to our on-going investment in innovation and client outcomes.
“As part of Project Evolve, in late 2018, we launched a new administration offer exclusively for Shadforth on our new technology, representing a key milestone in IOOF’s platform transformation. We are now seeing significant flows to this new offering.”
The Financial Advice division had $33 million of net inflows compared to $134 million of net inflows in the prior corresponding period.
Regarding the Advice segment, Mr Mota said: “Having a range of best of breed platforms available, including third party platforms, ensures clients’ best interests can be met.”
But the Investment Management division had net outflows of $166 million, which was higher than the $134 million net outflows experienced in the September 2018 quarter. Seasonal distributions are yet to be reinvested and unclaimed super money transfers contributing to the net outflow.
Is The IOOF Share Price A Buy?
The Royal Commission has caused the big four ASX banks to essentially leave the financial advice sector, which means IOOF can become the clear market leader if it plays its cards right.
It’s a decent idea for dividends with a fully franked dividend yield of 5.8%, but I’m not sure about the long-term direction that fees will go in terms of margin, which is why I’d rather go for the reliable shares in the free report below.
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