IOOF reports positive flows

Perhaps it's a sign of how little we've come to expect from our financial institutions, or maybe is simply that few people are really paying attention – most likely a combination of both – but IOOF's net inflow of $1.24 billion in the September quarter, in tough markets, suggests that the recent forore over alleged compliance failings has done little to damage its brand.

We do care and we are paying attention, but we reach the same end point, largely because the alleged failings mostly predate managing director Chris Kelaher's stewardship. It's reassuring to see, though, that for whatever reasons, customers are unruffled by the allegations.

The net flow into the Advice channel – of $509m – was particularly impressive and included a good showing from Shadforth, which also helped boost the net flows into Investment Management to $617m. The $115m net flow into Platforms was underwhelming by comparison, but pleasing nontheless given the backdrop of weak markets and the media allegations.

Market falls meant that $4.8bn was lost to lower asset prices, leaving total funds under management, advice, administration and supervision (FUMAS) at $148.8bn at 30 September, compared to $153.1bn at the end of June.

The stock is up 2% since IOOF reveals HUB24 talks on 14 Oct 15 (Buy – $8.67) putting it above our $9 Buy price, and we're downgrading to HOLD.