IOOF Holdings Limited (ASX: IFL) has announced it is divesting its holding in Ord Minnett.
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 Ord Minnett Sale
IOOF is selling its 70% Ord Minnett stake to a consortium of private investors led by Ord Minnett management for $115 million, which will lead to a profit of $83 million. The consortium will also buy the 30% stake owned by JP Morgan.
Ord Minnett has $10.1 billion of funds under administration (FUA) at 31 May 2019 with 264 licensed financial advisers
New IOOF CEO Renato Mota said: “This is a timely opportunity for IOOF to divest its holding in Ord Minnett as we recalibrate our business and focus on our core wealth management capabilities.”
I hope this is a good move by IOOF because it lessens its earnings diversification. The post-Royal Commission financial advice environment could mean lower fees and lower profits from its core business.
That’s why I prefer the idea of investing in the reliable and proven ASX shares in the FREE REPORT below
over IOOF.
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