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- IOOF (IFL) has terminated a decade-long platform relationship with Westpac’s (WBC) BT
- The two parties agreed to call it quits on December 2017 as IOOF works to simplify its own platform
- Rather than go through a lengthy and complex transition process, however, BT has agreed to instead pay IOOF a one-off settlement fee of $80 million
- IOOF CEO Renato Mota says as IOOF works to simplify its business, it needs to align with companies who fit within its architecture approach
- As such, IOOF has now struck a platform deal with ASX-listed HUB24 (HUB)
- The companies will work together on new products and solutions, which IOOF hopes to launch during the first half of 2021
- Shares in IOOF closed 2.93 per cent lower today at $3.64 each, HUB24 shares gained 3.63 per cent to $21.39, and Westpac shares lost 1.53 per cent to close at $19.90
IOOF (IFL) has terminated a decade-long platform relationship with Westpac’s (WBC) BT.
The two parties agreed to go their separate ways on December 2017 as IOOF works to simplify its own platform.
The deal between the two companies included termination rights for both parties on 12 months notice. However, the transition process laid out in the partnership would have been time-consuming and costly for both BT and IOOF.
As such, BT has agreed to rather just pay a simple one-off $80 million settlement to IOOF instead. BT will keep providing platform and related services to existing clients.
IOOF CEO Renato Mota said the two companies worked together to come to such an arrangement.
“As IOOF embarks on its own platform simplification strategy, alignment with providers who fit within our open architecture approach will be key to continuing to enable choice for our clients,” Renato said
“The decision to change the provider relationship now provides us with longterm certainty as we focus on the effective implementation of our new platform strategy and growing returns for shareholders,” he said.
HUB24 deal
IOOF has now struck deal with ASX-listed HUB24 (HUB). Under this agreement, HUB24 will act as IOOF’s platform administration and custody provider, and the two businesses will collaborate to develop a range of solutions and products.
In light of the new partnership, IOOF plans to launch its Managed Account solution, MPS, and other new products during the first half of 2021.
“The new partnership arrangement with HUB24 is a positive step forward for IOOF. We continue to focus on our proprietary Evolve platform. However, it is important that we continue to work with partners whose long-term business strategy and ability to enable choice aligns with our own,” Renato said.
Today’s news comes just days after the Australian Competition and Consumer Commission gave IOOF the green light ro merge with NAB’s wealth management arm, MLC. The merged entity will be Australia’s biggest wealth manager.
Shares in IOOF closed 2.93 per cent lower today at $3.64 each. HUB24 shares gained 3.63 per cent to $21.39, while Westpac shares lost 1.53 per cent to close at $19.90.
