Insignia Financial Ltd. (IFL) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Annual General Meeting of IOOF Holdings Ltd. My name is Allan Griffiths, and I am the Chairman of Directors of IOOF Holdings. I will also act as Chairman of this meeting. We have a quorum, so I'm pleased to declare the meeting open. I'm delighted to extend a warm welcome to our first virtual AGM. We would, of course, have preferred to have this meeting in person, but given the impediments on travel and the government restrictions on public gatherings, we consider that this format is the best solution in the current circumstances. The minutes of the 2019 Annual General Meeting are available for inspection by any shareholder by contacting the company secretary. The notice of meeting, an explanatory statement has been made available to shareholders electronically and sets out the business and the resolutions to be considered today. I will take the notice of meeting as read. Let me outline the proceedings of today's meeting. I will start off by presenting an overview of the year and a review of our performance. Our Chief Executive Officer will then follow with his address. Following that, I will table the financial reports and invite questions or comments. We will then have the reelection of Directors, followed by a resolution to adopt the remuneration report for the year ended 30th of June 2020, and then resolutions to grant performance rights to the CEO and approve the financial assistance transaction explained in the Notice of Meeting. Today's meeting is being held online via the Lumi platform. This allows shareholders, proxyholders and guests to attend the meeting virtually. In addition, shareholders and proxyholders have the ability to ask questions and submit votes during the meeting as well as vote when I open the poll. When the time comes, I ask those putting questions to the Board or the auditor to be courteous, fair and respectful of all shareholders. There is an expectation that shareholders' questions will be concise and about the matters which are relevant to the business of the meeting. This will ensure that the meeting is conducted in the interest of all attending shareholders. I'll explain in due course about how questions will be handled. As this is a virtual meeting, technical issues beyond our control may arise. If this was to occur, we will adjourn the meeting and resume at 1:00 p.m. Australian Eastern Daylight Time. If resumption, the meeting is not possible, we will issue an ASX announcement with further information. Questions can be submitted at any time. [Operator Instructions] We encourage shareholders to submit any questions they may have on the resolutions that are on the agenda for this meeting as early as possible so that we can receive them in time to respond at the time the relevant resolution is put to the meeting. Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be amalgamated if we receive multiple questions on 1 topic. Finally, due to the time constraints, we may run out of time to answer all your questions. If this happens, we will answer them in due course if you've provided your e-mail address. Voting today will be conducted by poll on all the items of business. Polling on resolutions will commence at the conclusion of all items of business. Let me now begin by introducing you our other Directors who are here in attendance. They are Renato Mota, our Chief Executive Officer and Managing Director; John Selak; Elizabeth Flynn; Andrew Bloore and Michelle Somerville. Also attending Chris Wooden, who is representing the company's auditors, KPMG. Also from our share registry, BoardRoom Pty Limited, we have Colin Fawns and his team in attendance. Colin will act as a returning officer for the poll to be had later in the meeting. Also present today is our Chief Financial Officer, David Chalmers; our company Secretary, Adrianna Bisogni; and our Head of Investor Relations, Rachel Scully. If I may now please go into my Chairman's address and formally, once again, welcome, everyone, again. To all our shareholders joining us at our virtual AGM this year, welcome; and on behalf of the IOOF Board and our team, thank you for your ongoing support. When I last addressed you at our November 2019 AGM, I don't think any of us could have imagined what lie ahead for 2020. In IOOF's 174 year history, there would have only been a handful of other years, which would have seen such a profound change to our daily lives. With longevity comes resilience and adaptability and that is why IOOF is still here and still helping Australians achieve financial independence. I also believe a sense of purpose and community are fundamental to our success. And at IOOF, this is our guiding star. In 2020 we have seen significant volatility, change and disruption. Not only has COVID-19 impacted how people go about their daily lives, but it has also caused anxiety, stress and financial hardship. As a Board, our primary concerns have been the health and welfare of our people, the support of our clients and the continuity of our business. This year we adapted quickly to the uncommon challenges brought on by the COVID-19 pandemic. The management team mobilized with a clear focus on the three priorities I've just mentioned. As a Board we supported the CEO and the management team in their endeavors and were more involved in the day to day running of the business more so than usual. We were acutely conscious of the need to continue to execute our strategy, including the completion of the acquisition of ANZ’s Pensions & Investments Business. There was also another landmark event in August 2020, which was the announcement of our intention to acquire MLC Wealth business from National Australia Bank. Opportunities like MLC are rare and in corporate life, you cannot always pick your timing. This is a transformational opportunity to create Australia’s leading retail wealth manager with approximately $510 billion funds under management and in excess of 1,800 advisers. MLC is a natural fit with IOOF and presents a unique opportunity to create value from synergies for the benefit of clients, members and shareholders. This is a once-in-a-generation opportunity to create the leading wealth manager of the future. As the financial services industry reshapes, a much bigger and better IOOF will position itself at the forefront of the industry transformation. It is our mission to reinvent financial advice. We firmly believe financial advice can make a considerable difference to not only people’s financial wellbeing, but to their quality of life. Renato will talk about some landmark research we've recently undertaken which supports this belief. For your Board governance is front and center and a heightened level of governance has been the backdrop to our activities of the last 18 months. It has been very important work as it guides our approach to our clients, members and strengthens and sustains our business model. I believe that we are building a business that will withstand the test of time and competition from other entrants. The wealth management industry is in a state of flux and I firmly believe the purpose, governance and scale is essential to the delivery of relevant and continuing benefits for our clients, advisers and importantly – to you, our shareholders. I'm very proud of how our people, led by Renato and the executive team, have risen to the challenges of the year, particularly those of COVID-19. They have stepped up to continue to service our clients without missing a beat. The Board and I have been deeply impressed by their commitment and flexibility, and I sincerely thank them for their efforts. This also includes all our advisers who continue to guide their clients for the difficult times of the pandemic. We have provided them with the highest levels of support and service as they experienced increased workloads and intensified client interactions. As a Board and an executive team, we recognize that COVID-19 has had an impact on profitability and returns to shareholders. No discretionary bonuses were paid to the executive team this year, and I have to say this decision was led by the executive team members themselves. Also, Renato and I felt it highly appropriate to take a 20% reduction in base pay for 6 months from the 1st of August 2020, and all our other Directors and our CFO, took a 10% reduction in base pay for the same period. In the current interest rate environment, we recognize the importance of dividends to our shareholders, and we will continue to prudently manage capital to keep dividend payments to shareholders front of mind. We determined it appropriate to declare both an interim and final dividends, and total dividends for the year were $0.275 per share, fully franked at a 75% payout ratio. Our industry is at an inflection point, and therefore, it has to be critical that we remain focused on our strategy and transform the business to be fit for the future. While we dealt swiftly with the internal challenges brought by the COVID-19, we have not been diverted from executing our long-term strategy to be at the forefront of wealth management industry in the future. As part of this strategy, during the year, we have made select divestments of businesses that are no longer core to our advice-led business model. These divestments realize significant profits from the sale and allow us to focus on our core strategic advice-led offerings. The addition of MLC is a once-in-a-generation opportunity, which we believe will provide all our shareholders, retail and institutional, with long-term value creation. In determining the funding structure for this acquisition, we considered multiple options to ensure equivalency for all shareholders to participate equally. IOOF has a large retail shareholder base, and we were determined to ensure loyal retail shareholders had the opportunity to participate in the capital raise at an equivalent price to the large institutions, which I'm pleased to say occurred. While I acknowledge that the share price performance has lagged since the announcement of this transaction, I truly believe that this acquisition is, in the long-term, best interest of our shareholders. We are committed to transparency of communications to the market with regard to the progress to demonstrate how these 2 transformational acquisitions are improving the overall business. Before I make some closing remarks, I would like to touch on IOOF's environmental impact. As noted at last year's AGM, climate change is a significant challenge for companies and investors, of which IOOF is both. There is an imperative for action to reduce our environmental impact wherever possible. As a diversified financial services company, we look to minimize our impact on the environment through a range of waste, energy and emission-reduction activities. In terms of our investment approach, in 2018, IOOF's Investment division developed a Responsible Investment Statement of Principles, which were implemented during 2019. The statement defines the role that responsible investment plays in the assessment, selection and monitoring the process of externally appointed managers in our multi-manager funds. Further, it outlines the framework for identifying and managing environmental social and governance impacts, risks and opportunities across the various funds we manage. In addition, we are in support of the task force on climate-related financial disclosures, which seeks to encourage better disclosure so that investors can make informed choices. To conclude, we're on the cusp of becoming Australia's largest wealth manager. I'm immensely proud of the work that has been done to date, and I look forward to the -- continuing the hard work to embed the P&I business and complete the MLC acquisition by June 2021. The completion of the acquisition of MLC in the coming year held a new era for IOOF, providing scale, economic diversification and our business strengths to deliver better long-term outcomes for our clients, members, advisers and shareholders. We are a business with diversified income streams and the scale and financial strength to endure the present crisis and to be well positioned for the recovery. We have a clear strategy in place to transform our business, which will generate significant benefits for all stakeholders, including you, our shareholders. On behalf of the Board, once again, thank you for your ongoing support, and I'll now invite Renato up here, please, to make his address. Thank you, Renato.

Thank you, Allan, and I'd like to welcome everyone to IOOF's virtual AGM this year. 2020 will be remembered as the year of global disruption, dislocation and uncertainty, and this has been particularly true for Australia. In the early part of the year, Australia experienced serious and prolonged drought conditions, causing devastation along the eastern seaboard and since then, the global COVID-19 pandemic has caused disruption and distress to many. In these uncertain times, at IOOF it was important to prioritize the needs of our clients and our people. They represent the backbone of our organization. In facing these challenges, and in some ways because of them, IOOF has come through this period of global stress a stronger business with new opportunities and a stronger sense of our existing capabilities. We delivered on key objectives throughout the year and made significant progress on our transformation program as we reshape the company, to be Australia’s leading advice-led wealth manager. IOOF has always had a clear purpose to serve the community, particularly those who are most in need. During the year, our people have provided the community with guidance and support, helping create a sense of peace of mind and confidence during this time of uncertainty. This is living our purpose. The value and importance of quality financial advice, for all Australians, has never been more evident. We firmly believe that the value of advice extends beyond measurable financial gains, to improve physical and mental health, stronger relationships and personal happiness. Pleasingly, all this has been reflected in a landmark research recently undertaken by IOOF and CoreData which noted that an advised client felt less worry and stress and had better relationships with family and friends. In the light of the survey of advised clients ever conducted in Australia, other insights revealed that 90% of advised clients said that accessing financial advice left them in a better position financially and 84% of advised clients agree the value of advice outweighs the costs. And just as importantly the research highlighted that those receiving financial advice also noted that it afforded them improved mental health. I am extremely grateful for the hard work and dedication of our people during a difficult time for everyone. I echo our Chairman’s sincere gratitude for their dedication to our clients and, importantly, to each other over this period. At the core of our advice-led strategy is personal relationships with our clients. This is at the heart of our ClientFirst philosophy, giving IOOF a competitive advantage, as we deliver service excellence through a simpler, more cost-effective business model. The benefits of the ClientFirst were never more evident than this year. At the height of the pandemic, our core service team experienced a 250% increase in call volumes, yet call wait times peaked at just 15 minutes, before quickly returning to below just five minutes. This speed to act and the ability to give a personal touch was extremely comforting to those going through significant hardships at the height of the pandemic. Payments made under the Federal Government's early release of super scheme as of 30 September 2020 totaled $1.4 billion across in excess of 177,000 requests. Against this COVID backdrop, IOOF's business performance has demonstrated strength and resilience in the face of volatile market conditions statutory net profit after tax was $147.0 million, which included substantial profit on sales of noncore businesses. We delivered an underlying net profit after tax of $128.8 million, while achieving a significant milestone for the business, reaching $200 billion in total funds under management administration and advice or FUMA as we call it, which was $202.8 billion as of 30 September. As the Chairman said, in a low-interest rate environment, we are cognizant of the importance of dividends to our shareholder base and delivered fully franked dividends of $0.275 per share for the year. In 2020, we made significant progress on our long-term strategic initiatives to transform the business and be at the forefront of financial advice in the broader wealth management industry. Having the right team in place to execute our strategy is essential and during the year we welcomed a number of new executives across Finance, Risk and Legal having completed my senior management review. Each has brought with them a purpose-led mindset and a fresh perspective to our behaviors and practices. I believe we have the right team in place to continue on our transformation journey. The value of financial advice has never been more apparent than it is today and we welcome ASIC's announcement last week of its consultation into the affordability of advice. This is of course something we're very passionate about at IOOF as we work towards building the advice industry of the future. Equally the need to create a professional and self-sustaining advice business model has never been more apparent. That is building a business model that is sustainable in its own right, without economic support from other parts of the business and creating new opportunities through investment in technology and customization. During the year, we announced our Advice 2.0 transformation strategy, which is IOOF's long-term strategy to reshape the Australian advice landscape through the delivery of quality, goals-based advice that is accessible to all Australians. In 2019, we committed to undertaking a significant advice remediation program and commenced payments to clients during the financial year. We expect that IOOF's remediation program will be substantially complete by the end of the 2022 financial year. In support of the transformation, we acquired Wealth Central, a proprietary financial advice and client engagement technology platform. Additionally, IOOF's self-employed licensee brands have been reorganized, allowing IOOF to better and more efficiently support the needs of each proposition, and drive them to become self-sustaining by the end of 2022. We also continued to make significant progress on Project Evolve. Evolve is a program of work to deliver a proprietary and fully-flexible platform technology, capable of supporting our existing and future product suites. It's clear that proprietary technology capabilities are core to building competitive and agile solutions in the future. This strategy is key to our future growth as well as our simplification goals. The Evolve platform administered $12.9 billion as at September -- as at June of 2020 and continues to see significant inflows. This demonstrates we are delivering what advisers expect from a platform in support of their clients' needs. We expect our current platform consolidation to be complete by the end of 2021. As our Chair noted we successfully completed the acquisition of ANZ P&I business in February of this year, adding meaningful scale to IOOF. Since then, we've made significant strides to integrate the P&I business and remain on track to deliver $68 million per annum in total synergies by financial year 2022 on an annualized basis. As announced at the full year results, we expect $43 million per annum of these benefits to be realized at the end of this current financial year, also on an annualized basis. Consolidating IOOF's transformation agenda, in August of this year, we announced the acquisition of MLC from the National Australia Bank for $1.44 billion. MLC is a highly complementary wealth management business and a natural fit with IOOF. It presents a unique opportunity to create Australia’s leading wealth manager along with significant benefits through synergy realization for clients, members and shareholders. The transaction is expected to complete by the end of June next year. Current industry conditions have created a once-in-a-generation opportunity with the industry disruption. Corporate activity surrounding wealth management assets, together with a more acute recognition of our obligations as fiduciaries means that opportunities of the next decade will look very different to those of the last. Scale and simplification will be critical for success and ensuring that clients, members and shareholders benefit from the industry transformation. Combining IOOF and MLC creates a common purpose and culture of community spirit and supporting people to achieve their financial goals. This combination brings wide-ranging capabilities, technical expertise to enable improved choice, accessibility and client outcomes. Your Board and Executive team recognize the size of the task at hand to successfully integrate MLC and deliver on its potential. In recognition of the broader set of opportunities and challenge, I have made some changes to the Executive team to ensure we have the appropriate focus, capabilities and governance. I have appointed a Chief Transformation Officer who will sit on the Executive Team and direct report to myself. The Executive team and I are committed to delivering on the value realization opportunities these transformational acquisitions present in a prudent and timely manner. As mentioned, the Australian wealth management market is currently experiencing a period of industry disruption, with new industry structures forming over the next 12 to 24 months. To acquire a highly complementary business of the size and quality of MLC was a once-in-a-generation opportunity to create the leading wealth manager of the future. Opportunities like MLC must be carefully thought through. While they present significant opportunity, they also come with significant complexity. I want to recognize the impact on existing shareholders of the funding challenge of this acquisition. It's only through extensive diligence, negotiation and by leveraging prior experience that one can assess the merits of these transformational opportunities on balance. IOOF has a strong track record in relation to integration of businesses. And the acquisition of MLC will deliver future benefits for all of our stakeholders, including our shareholders. We expect to deliver in excess of 20% earnings per share accretion in future years, underpinned by $150 million of targeted pre-tax synergies by the third full year of ownership. In addition, as the financial service industry reshapes, a much bigger and better IOOF will be at the forefront of the industry transformation. In this new era, the new IOOF will have the ability to offer unmatched choice and accessibility of quality financial advice and wealth management services to all Australians and continue to adapt as the industry evolves. Finally, to our shareholders, thank you for your continued support in what has been an extremely volatile year. I know we have the right strategy, the right people, governance and operational structures to continue to deliver financially for years to come. So thank you. And with that, I'll pass back to the Chairman.

Thank you, Renato. The notice of the meeting was made available to all members within the required period and if there are any objections, I'll take the notice as read. Voting today will be conducted by way of a poll on all items of business. In order to provide you with enough time to vote, polling on the resolutions is open on all items of business. Please submit your votes at any time during the meeting. As detailed in the notice of meeting, voting is restricted to the number of shares each security holder holds and is also subject to any applicable voting exclusions. To assist with voting, Mr. Colin Fawns from BoardRoom, is acting as returning officer for this meeting. If you are eligible to vote at this meeting, a new polling icon will appear. Selecting this icon will bring up a list of resolutions and present you with your voting options. To cast your vote, simply select one of the options. There is no need to hit a submit or enter button as the vote is automatically recorded. You do, however, have the ability to change your vote up until the time I declare voting closed at the end of the meeting. As I put each resolution at today's meeting, I will address any questions that have been received in relation to that resolution. Discussion relating to the first resolution concerning the receipt of financial statements may include either questions or comments arising from either my address or Renato's presentation. At this meeting, there will be 5 items of business, including 4 resolutions. Resolutions 2, 3 and 4 will be proposed and voted on as a simple majority to be carried. Resolution 5 is a special resolution and, to be passed, requires at least 75% of total votes cast by the shareholders entitled to vote on the resolution. There have been proxies received in respect of today's resolutions, which will be disclosed when those resolutions are considered. As mentioned in the notice of the meeting, it is intended that any undirected proxies given to me as the Chairman of the meeting will be voted in favor of the relevant resolution. The poll voting will be counted by the share registry and the results of the poll will be notified to the ASX and published on the company's website following the meeting. We will now proceed to the first item on the agenda. The first item of business is the consideration of the financial statements and reports. The financial statements for the year ended 30th of June 2020, the Director's report and the auditor's report were included in the 2020 annual report. They are also available on the IOOF website. There's no share vote required on this item of business. Shareholders will have the opportunity to raise questions on these reports or any aspect of the company's operations. Shareholders may ask questions of the company's auditor. Such questions need to be relevant to the conduct of the audit, the preparation and the content of the audit report, the accounting policies adopted by the company, the independence of the auditor. No questions for the auditor were submitted prior to this meeting. I may refer questions on operational or accounting details to management. Answers to questions received in advance from shareholders will now be answered. And I'll ask our Head of Investor Relations to advise whether any questions have been received in relation to the annual report or arising from either my address or Renato's presentation. Rachel, have there been any comments or questions?

Thank you, Chair. To begin, we will address questions that were sent through directly and via BoardRoom in advance. Mr. Alan Hardcastle from the Australian Shareholders' Association asks. "With the company's share price languishing at these levels and with small retail shareholders having suffered such a significant shareholding dilution, does the Board believe that in hindsight, it should have conducted the capital raising along the preferred Australian Shareholders' Association's guidelines, that is a much fairer pro rata, accelerated, institutional with tradable retail entitlement offer and a volume-weighted average price method?

Thank you, Alan. Thank you for your question. As you'll appreciate, the acquisition of the MLC business was a very competitive process. And one of the top most concerns, as a Board, we had to make sure that we could guarantee certainty of funds to the National Australia Bank. So this required an underwritten offer, and we also took into account the fairness, size and the discount and the timetable. And based on all these factors and take into account the magnitude of the equity raising required and the composition of IOOF share register, we, as a Board, concluded, and based on, also, an advice that an underwritten accelerated non-renounceable rights offer was the optimal structure, and in particular, it provided the most certainty of success. And regarding the use of a volume-weighted average price method, if the offer was a stand-alone 25% placement relying upon the COVID-19 relief, coupled with a share purchase plan, the Board likely would have concluded a VWAP formula. However, the structure of the offer included a fully underwritten 1 for 209 entitlement offer to raise $588 million at the same price as a placement price being $3.50 per new share. Accordingly, a share purchase plan on the same time line, but a different price, was considered inappropriate to shareholders.

Thank you, Chair. Mr. Alan Hardcastle from the ASA again asks. "How is the transition of MLC wealth financial planners progressing? What numbers or percentages of MLC financial planners does IOOF expect will come across??

Thank you, again, for the question, Alan. Obviously, we've been in dialogue with the planners through the various professional development days, the various advice boards and the feedback we've been receiving so far has been positive. You would have noticed yesterday, there was a release from one of the dealer groups, Godfrey Pembroke, stating their intention was to transition across. I don't know, Renato, if you want to add any further comments to that?

Chairman, the only thing I'd add is that our expectations has been all long that the vast majority of advisers will move across. And certainly, we're well on track to meet that objective.

Thank you, Chair and Renato. Mr. Hardcastle from the ASA again asks, "Please update us on the early access to superannuation program. For FY '20, outgoings totaled some $619 million. How much has been withdrawn in FY '21?"

All up in the early release program, there's $1.4 billion paid out, and this is in excess of 177,000 requests. And I would also like to emphasize that 95% of those payments were made within the 5-day payment guidelines. So I believe this was an excellent effort by all our staff, considering the restrictions everyone has been operating under over the last 12 months.

Thank you, Chair. The final question from Mr. Hardcastle from the ASA. "Please update us on the remediation provisions and payments pertaining to IOOF advisers and ex ANZ P&I."

You would be aware from -- previously, that a provision was taken at $217 million for financial advice remediation. As of June 30 this year, we've paid out $6 million and a large part of that -- the early days is setting up the process for this. So that process is now in place. So I would expect that the remediation will start to accelerate. It's our intention to have this fully completed before full year 2022. In relation to ANZ, you would notice that we also recently increased that provision for ANZ by an extra $80 million. This was offset by a corresponding receivable from ANZ. ANZ are handling their own remediation. They are managing that themselves. As at 30th of June, they paid out $33 million.

Thank you, Chair. We have 2 questions from a shareholder under the entity name Feedback Holdings Pty Ltd. First, does IOOF makes donations to any political party, in particular, one nation, liberal or national parties. If so, why? And what advantage is there in doing so?

The answer is very simple on that one. We don't make any political donations to any political party.

Thank you, Chair. Secondly, does IOOF have any investments in the fossil fuel sector? And if so, is there an exit strategy?

Obviously, as I mentioned during my speech, we take climate change very seriously. And we're constant, going forward, that we are going to be a significant-sized organization, and we're also conscious of our social license going forward. One of the things we will be looking at to further improve our disclosures next year is a separate sustainability report. But coming down to your more specific question, we don't directly invest, as an organization, in fossil fuels. We actually are a manager of managers. We actually manage through other managers. And as I've mentioned in my speech earlier on, they are given very clear guidelines in terms of how to manage the money for us. There's no doubt that from time to time, some of those managers may transition in and out of fossil fuels, but I've no doubt that over time, with the various pressures, for want of another word, that may put on the external fund managers, they will, over time, see appropriate to adjust their portfolios.

Thank you, Chair. One comment and a question from shareholder, Mr. Stephen Koci. "I vote against all resolutions, and will continue to do that as I think the handling of the MLC purchase was a disgrace. You butchered the share price. What are you going to do for shareholders like us who took up our entitlements?"

Well, firstly, thank you for taking up your entitlement. I appreciate that. And I can understand your disappointment in the way the share price has languished in recent times. We remain committed, though, to the transaction. We firmly believe we've become more positive, as time has gone on, in relation to the benefits of what this transaction will bring to shareholders over the next few years. And of course, along what we will do for you along the way is make sure we maintain reasonable dividends to our shareholders as we extract the synergies from both the P&I business and the MLC transaction.

Now before we move to questions submitted via Lumi, there were a number of comments and questions received from shareholders on their voting forms regarding the short time frame for the share purchase plan offer. Could you please comment on why the time frame was so short for shareholders to respond? And also what IOOF's preference is when it comes to communications with shareholders?

Yes, that was disappointing, and we apologize for that. We certainly met our internal time frames. But obviously, with COVID restrictions, Australia Post were under enormous pressure, and they didn't get out on time. So we would urge, going forward, that if shareholders haven't given their e-mail correspondence to us, if they could please do that because, obviously, our preferred form of communication is electronically, which fits in with our whole sustainability policy as well, too. So going forward, to ensure that we don't have these delays, if people could -- I urge shareholders to make sure we have those details.

Now moving to the questions that we received on resolution 1 on Lumi. Two questions from Mr. Stephen Mayne. First question. IOOF shares were trading above $10 in January 2018 and fell below $3 after the MLC transaction was announced. How long do the CEO and Chair believe they should be given to restore some of the lost value, particularly after embarking on 2 large and risky acquisitions from ANZ and NAB?

Yes, that's a fair question. But I think a lot has happened since January 2018. We've had a Royal Commission. We also had to defend a well-publicized court case. We've also had to defend class actions. We've rebuilt the governance in the business. I firmly believe Renato, I and the Board and the management team has stabilized the business, stabilized it to a point we're in a position to actually successfully complete the P&I transaction back in February this year. We're also on the cusp of completing the MLC transaction early next year. And we've stated that the whole process will take about 4 years to extract the synergies. And over the next 4 years, we'll make sure that we continuously communicate to the market as certain milestones are reached and gradually rebuild the share price.

The second question from Mr. Stephen David Mayne. "The AFR reported this morning that a range of institutional and retail investors were planning a protest vote on a range of resolutions at today's AGM. Could the Chair please disclose all of the proxy votes on all resolutions early in the meeting so that shareholders can ask relevant questions about any large protest vote when we get to each item of business?"

Yes, thank you. Yes, we will disclose the votes as we go through the various resolutions, but I will stick, though, to the process of the meeting.

Thank you, Chair. Two questions from Ms. Melissa Mary Stephens. Against this -- the backdrop and recommendations of the recent Hayne Royal Commission, particularly with respect to conflicts of interest in financial advice, can you please explain how IOOF's financial advice business is adapting to meet the higher expectations around potential conflicts and the provision of truly independent advice?

Okay. Well, I'll ask Renato to deal with that simply because Renato's dealing with it every single day of the week. And over to you, Renato.

Thank you, Chair, and thank you, Melissa, for the question. I think the first comment to make would be that the obligations on advisers in putting the interest of their clients first is the same irrespective of what license or type of licensee you belong to. So -- and I think that's first and foremost. We've acknowledged, in the last couple of years, that the business structure and our business structure is different, and there are inherent conflicts, there are potential conflicts that we need to manage. And we work very, very hard to eliminate those conflicts. So for example, there are no incentives for any adviser license through an IOOF license to use, promote or encourage IOOF product. The other thing that we're working very, very hard to do is remove any subsidization of advice businesses from other parts of the value chain. So we are committed to ensuring and making sure we build an advice business, where the only revenue is from clients and only for high-quality advice. The other element I'd put is that our governance regimes around advice has significantly been improved in the last 2 years. And 2 things I'd point to would be the uplifting of audit standards in line with the ASIC Report 515 and also the implementation of fixed-term agreements. So clients under an IOOF license are required to agree to the fee structures with their adviser every year. So that's quite a new development, and we were one of the first groups to do so. So the management of conflicts are front of mind for us and ensuring that we build and support an advice industry that delivers more advice to more people is at the center of our strategy.

Thank you, Renato. A second question from Ms. Melissa Mary Stephens, "Of particular concern as an investor, can our aligned advisers be seen to truly provide real independent financial advice in their clients' best interest? Or will they always be viewed as somewhat compromised by the very nature of their being aligned with a particular wealth management firm such as IOOF?"

Again, it's a great question and something that occupies a lot of our time to ensure that everything we do puts the client at the center. And as I said, irrespective of where -- which licensee you're part of, whether it's your own license and self-licensed or part of a wealth group, your obligation is only to those clients, and we're very confident the governance regime we've built supports that. There is another important element in that in this ambition of getting more advice into the more -- hands of more Australians requires investment, requires investments to build new technologies, new systems and processes. And I think the industry is better as a whole for having larger organizations that are well resourced, who are deploying their investment and their capital, just as we have in the acquisition of Wealth Central to make sure we're building systems and processes that are able to deliver better value and actually can transform the way we deliver value to ensure, not only the quality is there, but we can deliver that value in more cost effectively and reduce the cost of advice, which is currently prohibitive for a lot of people in accessing advice.

Thank you, Renato. Three questions from Mr. Joshua John [ Louis ], "What is your outlook on the Australian stock market given the instability in the U.S.?"

Well, I must admit I'm giving you a personal opinion here. I'm actually feeling very optimistic about the Australian economy next year for a number of reasons. First of all, for our long-suffering farming community, the weather gods have been very, very kind. Over the last 6 months and right across Australia, farmers are enjoying a boom. I think across Australia, governments have handled COVID very, very well. And thirdly, the fact that we're going to have over 1 million extra Australians holidaying at home this year, spending money in our local communities, it'll certainly help our fire-ravaged communities recover. So I think most of this all bodes well. And when you consider the enviable situation Australia is in compared to the rest of the world, let's hope that has a knock-on effect to markets.

Thank you, Chair. A second question from Mr. Joshua John [ Louis ], "What is happening with the sale of AET?"

There's no comment on sale of AET.

Thank you, Chair. And third and final question from Mr. Joshua John [ Louis ], "Who is IOOF's current electricity supplier?" When the question was asked, we did research for our 3 primary offices. In Sydney, it's Red Energy; in Melbourne, it's AGL; and in Tasmania, it's Aurora. So that responds to the third question from the shareholder. Another question from Mr. Stephen David Mayne. A question for the Chair, Allan Griffiths. The Chair doesn't serve on any other ASX 300 Boards and spent most of his career working for financial services companies that weren't ASX listed. He doesn't have a very high profile in the Australian public company space. Does the Chair believe that he has the experience, credibility and contacts to lead a large and complex ASX-listed company like IOOF, particularly one that has destroyed so much shareholder value over the past 2 years? What is the performance review process being used by the Board to assess the Chair's performance and suitability to remain in the role?

I enjoy the full support of my Board. And I think you should look at my track record over many years in this industry, which speaks for itself. In terms of the assessment, we do regular Board assessments. And I should also point out that I've only been Chair for less than 18 months, and I've already pointed out the journey that we've been through out the last 18 months in terms of the implementing outcomes from the Hayne Royal Commission. I talked about the class actions. I talked about the court case. And more importantly, we've reset all our relationships with the regulators. I believe we're in a much better space with all the regulators. I have the experience and the capability going forward, and I'll demonstrate that over the next few years.