Kelaher leaves IOOF

The leadership uncertainty at IOOF Holdings has taken a couple of steps towards resolution. Chris Kelaher, the former managing director, will leave the company. Additionally, Allan Griffiths will remain as Chairman permanently after filling-in for George Venardos who remains sidelined.

Kelaher has been instrumental in shaping IOOF and our initial investment case partly rested on his ability to successfully integrate businesses, such as the pending acquisition of ANZ's platforms business. That may now be left to a less experienced executive and team, which is a risk.

Even so, Kelaher's position seemed untenable with APRA seeking his disqualification along with four other senior managers, whose futures remain unresolved. Kelaher's exit will be one less headache for IOOF.

Unfortunately, IOOF's risks go beyond management. The company will have to absorb the losses from ANZ's acquired dealer groups, and the business model may need to be adjusted following the Royal Commission. At the same time, the platform and investment divisions face margin pressure and more costs from regulation across the business. There is also the threat of class actions and customer remediation costs. AVOID.