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

[Audio Gap] to come. For IOOF today, it's a fantastic opportunity for us to share some of our strategic pillars with you, our shareholders or our analyst community, so I'm very keen to do a bit of a deep dive into our 3 key priorities and key strategic initiatives. But before doing so, I did want to spend a couple of moments just setting the macro landscape. And really, that macro landscape starts with some principles that have been a feature of IOOF's narrative over the past few years. And that is that we see tremendous opportunities in an advice-led organization and an advice-led wealth management organization to capitalize on the changing world around us. And that's a world that we're seeing increase the capital wealth. We're seeing an aging population with increasing complexity of needs, and that's certainly not going away anytime soon. And at the same time, and certainly, as I've discussed in the context of the MLC transaction, we are seeing structural industry disruption, we think, which provides a tremendous opportunity for IOOF. Within that context, certainly over the past 18 to 24 months, you've heard me describe the strategic journey for IOOF across 3 key sectors, being initially to stabilize the business, and that's certainly been a key focus and priority over the preceding 18 to 24 months. Following that, we always saw a transformation phase, which is very much the phase we find ourselves in now. And executing the transformation phase efficiently and effectively will lead us to the prosperity phase. I think I want to spend a couple of moments just reflecting on what we have achieved during the stabilization phase, really since the end of 2018. So that's nearly coming up to 2 years now. We had a very deliberate focus on resetting our culture and building a purpose-led culture. And I think that served us very well during the early part of this year and certainly during COVID and continues to serve us well. We have put an tremendous amount of effort into our governance uplift capabilities across the business broadly, but also, specifically, in the Advice segment, and generally taking a really rigorous view of the kinds of capabilities and the quality of our capabilities as a business as we look to enter into what is a very deliberate growth phase for the business. In our minds, really, the 30 June of this year was really sort of the end of the transformation, when we really tipped into the end of the stabilization phase, I should say, and we really tipped into the transformation phase. And probably the key message to note here in transformation, even prior to having completed the P&I transaction prior to having announced MLC, those 3 pillars of transformation being Advice 2.0 and Evolve 21 and integration were key pillars of our business. And certainly, that was with one mind to the P&I -- completing the P&I acquisition, which we completed earlier this year, in February of this year. And the MLC transaction really gives us an opportunity to capitalize and further leverage those strategic pillars, particularly Advice 2.0 and Evolve 21, which you'll hear more about today. The reason those pillars and that strategy is very important has to be seen through the context of our industry and our communities that we serve, particularly from a client lens. And I emphasize the client lens because it's important to recognize that as an industry, as a wealth management industry, we serve and we're beneficiaries of a client journey that begins in the late teens to early 20s when people are entering the workforce. Their lives go through dramatic change over the following 30 to 40 to 50 years and see as there have been quite discrete phases of life. And as an industry, our role is to support those phases, help improve decision-making and obviously, help improve the probabilities of people leading the lives they want to live. I think it also needs to be recognized that as an industry, we're focused on the last third or maybe the last half of that journey traditionally in what I would call our traditional Advice segment. And certainly, IOOF has a leading position in this segment, be it through Shadforth, the high net worth segment, Bridges in the mass market, or our self-licensed -- sorry, self-employed businesses throughout the middle there. And you'll hear more from Darren today around how we're looking to transform that traditional Advice segment. And that really provides a very key pillar in our continued evolution of the relevance of advice to all Australians. And there continues to be significant opportunity to make advice more accessible to more people and particularly to that cohort on the left-hand side of the chart that you see there, which is those that have probably been excluded from advice traditionally. But with the evolution of technology and the scalability of insights and customization, we think there's a tremendous opportunity to continue to increase our relevance in that segment. And certainly, with the MLC transaction, IOOF will have a captive audience or an opportunity of about 1 million unadvised clients throughout our business. So there continues to be a tremendous opportunity to build a business and build relevance in a broader community. And one of the reasons we are committed and remain passionate about the role of advice has been reinforced in some research we've undertaken recently, which was completed in the last month or so, which was across approximately 13,000 both advised and unadvised clients, but really did reinforce the value of advice. Now the findings of this research has been consistent with previous research that we ourselves have done or others have done, but fundamentally reinforced the tremendous value that exists in advice and the tremendous value that as a business we can build by making advice more accessible to more people. If we focus on the left-hand side there, you will see some key statistics on, just to call out a couple. 95% of people in an advice relationship agree that receiving advice has given them greater peace of mind financially. So this is more than just having more in your bank balance. This is actually about having a greater peace of mind and being more in control of your own life. 73% say they saved more money as a result of receiving advice. So again, this is about changing behaviors. This is about changing people's behaviors through their life. And I think particularly important and topical over the past year or so has been that 94% have an understanding of the annual fees they pay for advice based on several advice documents they received. There's real clarity of what people will pay and what they receive in return. The right-hand side, I think, is really the key message to take away from this slide, which is what we call the advice dividend. So this is benchmarking those clients that receive advice against the control group of clients that do not receive advice. And I think what you can see there, in every instance, irrespective of whether it's under 50 years of age, over 50, mass market or affluent, in every circumstance, there is an advice dividend, i.e., the people who are in receipt of advice and are beneficiaries of advice have a higher well-being across a number of different metrics as a result of that advice. So we can -- we know empirically that there is value associated with advice and the value exceeds what people pay for it. And I think through increasing the reach of advice, reducing the cost of delivering that advice and making it more accessible, I think IOOF is at the forefront of actually creating value, not only for the community, but also for the owners of IOOF through an advice-led strategy. So just to really introduce the sessions that we'll follow today. You'll start by hearing from Darren Whereat, our Chief Advice Officer, this morning around how are we going to make advice more accessible and more cost-effective to deliver. That's then followed by a session on Evolve 21, which is about reinforcing our position and our transformation of building a leading proprietary platform, one platform across all client cohorts, which we believe is a unique proposition in this market, that really looks to differentiate on service excellence. And we'll wrap up today with a presentation from -- led by Chris Weldon, our Chief Transformation Officer, around how the P&I and MLC integrations will transform the growth potential for IOOF, looking to differentiate by having the lowest cost to serve in our business, and we think that is a key driver of value for the business longer-term, as well as developing trust through outcomes and service excellence. So it's about building a reputation, continuing to build a reputation and being at the forefront of our industry. So with that, I want to thank you for your time commitment this morning. And with that, I will hand over to Darren Whereat.

Hello, and thank you, Renato. Good morning, everybody. My name is Darren Whereat, and I'm the Chief Advice Officer at IOOF. And I want to thank you certainly for your time today. Over the next 30 minutes, it will be my pleasure to talk you through our strategy and our program of work, not only of what we believe the business will look like in 2 years, but more importantly, some of the milestones that we have achieved over the last 18 months as we've integrated the ANZ Wealth business and the IOOF Advice businesses together. And our vision is to make financial advice available to many more Australians in a much more affordable sense. And we can't do that by continuing to build on the past practices. We think the time is now to do something very, very different. And we're quite excited about the opportunity that lies in front of us, and we believe we've got a great team to be able to get this job done. In August this year, we commenced our transformational journey in respect to financial advice. And so we're really talking about making our network to continue to deliver that quality of advice that they have been known for, but to do it in a more profitable and more sustainable way, whilst making advice more engaging for our clients and as I mentioned, more affordable. Now each of those things are not mutually exclusive. What we are doing is we will achieve all of those things cohesively, and that's how we believe that we will make advice much more engaging and much more affordable. We know that research indicates that there is a price point for those in the Australian population that don't currently engage with us. And at the moment, 1 in 5 Australians are engaged with an adviser. Renato just shared with you some great research about those that are already in the system and how much more comfortable they are from a well-being sense and a financial sense. But what that actually means is 4 in 5 still don't engage with advice. And so there is an opportunity to augment what we're doing today and to allow others to access the great benefits that in advice do. But as I said earlier, you can't do it by continuing to do what we've done in the past. And so we need to look at new things. So the opportunity for ourselves, opportunities for the public and opportunity for shareholders, I feel, is immense. And I will take you through today how we're going to phase into that. We need to embrace new technology, new ways of working and new processes, and we will be [Audio Gap] and other areas that are under way. I'll finish up by painting that picture as to what our business will look like in 2 years, but also really take the time to walk you through the strategy on where we have been in the journey because we have been on this journey for a number of years. And we think the opportunity for IOOF is enormous, particularly as the market continues to fragment. But before I do this, I would like to take you through some of the achievements that we have done. I know some of you will be sitting there thinking, how are they going to integrate the MLC Advice business, how are they going to take advantage of what this transaction presents. And over many years, IOOF actually has a history of successfully acquiring and integrating Advice businesses. And we've done it as recently as the 31st of October 2018, when the IOOF businesses, 700 advisers, 3 AFSLs, were merged with the ANZ Wealth Advice businesses, whereby they also had 700 advisers and 3 AFSLs. So the combined businesses, 7 licenses and 1,400 advisers, and so over the last 18 months, we have been putting these 2 businesses together. We prioritized stabilizing the business, as Renato mentioned. We brought our -- we prioritized our investment in assurance and governance. And we've also streamlined the processes and invested heavily in technology. So at the time, we did make the decision to prioritize the movement to a single advice assurance and governance model. And this would lay the foundations for us to transform the business. And it's an important aspect because you cannot run 7 AFSLs 7 different ways with 7 different processes. And so we made the decision, over that 18-month period, to actually move to a single assurance and governance framework, and we've actually achieved that. So I'm sitting here today with that successful integration of those 2 businesses, both of its 700 ARs, both bigger than the opportunity that the MLC Advice transaction affords us, with 400 ARs. We've actually combined those businesses over a reasonably short period of time. More importantly, but we now have one way of doing things. So in terms of our advice standards, that are the rules, if you like, that are employed in the owner-and-operated space, in the self-employed partnerships, where we partner with self-employed planners, the way that we operate and provide advice, the way we supervise and monitor our advisers and the way that we ensure that we don't get in a repeat of any of the issues that were highlighted in the Royal Commission, we are ensuring that our risk framework is easily identifiable and within the risk tolerance that the organization is set. So we have 7 businesses, but we only run 1 advice process. Now how do we do this? We actually achieve this by bringing together the 2 shared services business from IOOF, the traditional, and the ANZ, and we brought them together to create a single way of doing things in terms of our enablement functions. So we centralized our research functions, our Xplan functions, our resources in terms of our CPD, which is our ongoing education, the way we bring advisers into the business and the way that we exit advisers out. So all that infrastructure required, that we used to have 2 ways of doing things, we now have a single way of doing a thing. And that's very important as we move into the next opportunity that the MLC transaction affords us because we've built the business to be scalable. And like we will with the 1050 community and the GPL community, we can bulk AFSLs and bulk other advisers into our system, but we still only run that single advice process. And that's the way that we're going to ensure that we don't get a repeat of the past. So we have streamlined businesses, multiple licenses, we are still committed to running multiple licenses, where they can operate at scale and operate in a different segment of the market, but we're doing this in a way that builds scales and efficiencies into the model. So we've built a strong network of training and support in terms of our CPD. We've embedded our assurance and governance program, lifted our professional standards. We now have a single model that's been independently assured by an external firm, PwC, to make sure that we are operating at the required level of the regulator in and around the market. Now we are wearing this as a bit of a badge of honor because we know that those advisers and clients that are operating under our AFSLs are safe. We know that our framework has been rigorously tested and independently assured, that it is operating at a standard that we believe is leading the market. To ensure that we don't get any repeats of the ongoing fee revenue issues that we're seeing in terms of the remediation programs, we were the first to announce a public move to fixed-term agreements. And what that is, is each and every year, our advice clients will reauthorize their fees for the advisers. So every year, there is a conversation around the services that they have received, the services that they will receive, and the client reauthorizes those fees. So the remediation programs that we've seen in and around the market, we've adjusted our processes, invested in technology and changed the way that we're engaging with clients. We believe Advice 2.0, the next evolution of advice, is about bringing the clients closer to the advice process and giving them confidence and building that trust in and around the advice processes. So we've commenced our journey on our, what we're calling, our digital ecosystem. And the reason I'm so excited about the advice opportunities in terms of the opportunities that both MLC and the new way of doing things is that we're not just building on past processes. We're investing in technology, but we're making sure that the client is the center of all the decisions we made. And we think the work that we've done in terms of streamlining the model, as I just walked through in terms of our enablement businesses, will put us in a position to continue to run a multi-Advice business, a multi-brand strategy, particularly where they operate at different segments of the market, but we're going to do this in a sustainable way. On the 31st of August, we announced changes to support the sustainability in terms of our AFSLs. And each of these 3 pillars need to act cohesively for us to be successful under the Advice 2.0. AFSL sustainability is really about moving away from the old industry model, where there was cross-subsidization and product subsidization in the Advice AFSLs. We've been very public in our decisions to move to making sure that each of our AFSLs, whether it's in the owner-operated space or in our partnership spaces, each cover their own costs at a minimum. And in the owner-operated or the employed space, we are looking for EBIT of 30%-plus. Now for us to ensure that we do that, we have to make some big decisions. And on the 31st of August, we did announce some big decisions. And now principally behind this, there was a decision to ensure that we were -- had a big presence in the owner-operated model or traditionally referred to as an employed model. We're not talking about bank-employed models, but we're talking about Shadforth, which is a high net worth business that has been operating in that space and as the preeminent brand in that space. We're talking about Bridges, great relationships in the channel that really is working with those external parties in respect to the credit unions, and we're ensuring that the ongoing services that clients have been promised are delivered. But we are talking about doing that at scale, and we're talking about doing it in a different way. In terms of our multi-brand strategy in the middle, we're talking about unique value propositions by using technology to remove costs and processes. And the support for more streamlined deliverable really will mean that we need to be sustainable in the way that we're operating our AFSLs. There is no opportunity to do client engagement and adviser efficiency if we don't have a sustainable model into the future. And we will have that model breaking even in terms of our AFSL businesses by the '21, '22 year as previously communicated. Now we did make some hard decisions that we communicated to the market back in August. And these changes reflect the need to move to a new model. The above-the-line decisions there are about the structural changes that we made, streamlining our resources, and the below-the-line decisions there reflect the decisions that we made in impacting on the AFSLs. Combined, these decisions will extract year-on-year from the '21, '22 year, as previously communicated, $10 million worth of costs out of the Advice businesses. And it's important for us -- now for me to walk you through these. You can see that when I talk about the structure, previously, we had our multi-brands, which is on the left-hand side here. With the big decisions that we've made are in terms of Bridges, we made the decision to sit it side-by-side with Shadforth, but operating in the mass market as a wholly owned-and-operated AFSL. Presently, it's combined owner-operated and operates in the self-employed. And so from the 1st of October, we've been working with those people that had self-employed businesses under the Bridges brand. We've been working with them to transition to one of our other self-employed brands, which appear below, from the 1st of September. That body of work will be finished at/or around 31st of March next year. And what that will mean is then we'll have 2 owner-operated brands: high net worth space, Shadforth, a great business that's been operating in that space for a number of years; and a mass market opportunity in terms of Bridges. What we're going to do here is ensure that we focus on delivering high-quality transformed advice in a sustainable way. We are aiming for EBIT over 30%, as indicated by Renato, and these combined entities will be generating over $90 million worth of recurring fees from -- authorized from clients. So a huge opportunity to do something different that we've been doing in the owner-operated model, but more importantly, to do it sustainably and at scale. The opportunity to bring in MLC Advice affords us another 100 authorized representatives, along with the ongoing revenue, and we will be able to plug it into that owner-operated model. And we are excited about that opportunity, if approved by the regulators, that, that transaction affords us. In terms of the self-employed market, you can see there that our -- previously, we have multiple brands. Now when we were transforming our businesses, we needed to ask ourselves, are we comfortable with a multi-brand strategy. We've got Bridges, Lonsdale, Millennium 3, Consultum, RI and FSP. We made the decision that we are absolutely committed to a multi-brand strategy. Why? Simply because it represents, particularly in the self-employed space, the community aspect of a self-employed partnership model. And each of these businesses have around about 200 authorized representatives, with the exception of Financial Services Partners, which I'll talk about in a minute. And what we're doing here is we are respecting the communities and the brands and allowing those advisers to partner with us, as I said, but behind the scenes, we are running a single advice model. And so we are committed to multi-brand, but a single approach. And that's how we're going to make our model more sustainable. When we looked at running this more sustainably, we actually asked ourselves, is there 2 natural groups that these licenses could sit together, and the answer to that was yes. So from the 1st of September, we've reorganized the front of our business in terms of that self-employed. And we've gone into 2 groups, and we've collapsed the 5 AFSLs down to 2 distinct groups. The first group is Lonsdale, Alliances and Millennium 3. Each of these have a significant third-party working in and around their business. In Lonsdale, it's accountants. They're very big in the accounting space. Millennium 3, the DNA was in and around general insurance brokers. And Alliances is where we're partnering and providing services for those businesses that have their own AFSL. And so we've grouped those businesses together and reorganized it to operate under one CEO. And on the other side, in terms of RI Advice and Consultum, more in that holistic advice space. Again, we've moved 2 separate businesses to be operating under a single CEO. We're comfortable that those businesses, we're operating at scale and has a large brand presence. And we did, at that time, critically evaluated our other licenses. And we did make the decision to close the AFSL in terms of FSP and helped those advisers transition to another of the AFSLs. And again, that work will be complete on or around the 31st of March next year. In all of those transitions out of Bridges and FSPs, they are exactly where we thought they would be, and we're having great success in working with those planners to move them to another license. So in terms of what we've actually closed, we are closing the FSP AFSL, and we've also completed previously the closure of the Elders AFSL. And so for us, this is our more streamlined business, which gives us a great opportunity in that owner-operated space, but ensures in that self-employed space that we're moving towards covering all the costs in those businesses from the '21, '22 year, specifically in respect to those businesses that came across from ANZ, which obviously came across with running at/or around about a $20 million loss. And as I said, this is our pathway to ensuring they break even. So they are the structural changes that we made, and they are the changes that we -- really now affords us the opportunity to concentrate on the other 2 pillars. We don't get that luxury of focusing on the other 2 pillars without making these structural changes. And as I said, collectively, each of the 3 pillars, it's important that we implement and actually have the strategy for each 3. So the other 2 important aspects here is about client engagement and adviser efficiency. And I'm really hoping, by the end of this presentation, you share my enthusiasm for just why we believe that we can make this work. In terms of client engagement and adviser efficiency, I think now is the opportunity where technology is really catching up to where the idea is. We believe now that the technology that underpins advice can be used in conjunction with delivering the advice by a human in terms of either our employed model or our self-employed partnership space. And it's that human element with technology that really is going to make a difference. So what we're talking about here is we still have a program of work in terms of our transform, where we critically looked at the way that advice was being prepared. Now IOOF has a history through client-first of critically evaluating the way processes sit behind and lead to a client outcome. And so we're using those philosophies to actually have a look at the way advice has been provided in the past and how we can improve the production of advice. It's fair to say, since the Royal Commission, with the compliance additions, that there's been an increase in the time it takes to prepare and document advice under our best interest duty. What we're doing under Advice 2.0 is we're looking to automate many of those processes by using technology. And we made a big play on the 31st of August when we acquired 100% of the shares in our Wealth Central, who was a partner of ours, a fintech that we've been working with for 4 years, and we acquired all their systems and it is now a proprietary system that will only be available to our advisers, be they self-employed in our partnership space, working with us with their own license or in our owned-and-operated channels. And what we've come up with is what we believe is, what we're calling, the IOOF Advice Playbook, which is a way to run your business, which is client-enhancing, much more efficient and offers EBIT of 30%, and that is irrespective of which channel you are operating in. And this is the exciting bit for mine, this is how we are going to make advice work. So let's have a look at the IOOF Advice Playbook. You can go through this slide yourself. I'm not going to walk through it. It's about goals-based advice. It's about using reengineered processes, and I think that's very important. We're not using technology over old, dated processes. We're critically looking at ways that we can improve the client experience, improve the exchange of data. The advice process is very dependent upon the relationship an adviser has with a client and the efficient exchange of data, particularly around the client's current circumstances. And I'll walk you through the process shortly on just how much time we've been able to save by using this technology and looking at the processes. So the enhanced client experience is about taking out inefficient processes, making advice more affordable, and we believe by doing that, we can grow the pie for advice. And that is a very important point. We're not talking about reengineering the way that advice is currently being provided in that 1 in 5 that engage with it. We are generally talking about growing the advice pie. The demand for advice is there. We believe that we can make it more affordable and actually more appealing to a larger segment of the Australian public. So the enhanced client experience, and you'll see in the middle there, the important bit about this is it has in-built smarts. So the guardrails required to manage risk is actually being built into the technology. And so that mitigates risks to ensure, again, no remediation programs into the future, and it's underpinned by technology. And you'll see a number of our technology partners there in terms of Iress, Wealth Central, which I'll take you through in a second, but also the IOOF Platform and the other platforms that we utilize in the advice space as well. So to strip out cost efficiencies and any of the waste, we're looking to simplify and digitize the client experience and automate processes, allowing the advisers to focus on the human element. So we are embracing the robo aspects that the technology provides, but we believe that's best served being delivered by our humans in terms of those traits, such as empathy, understanding and the traits that, that value of advice research has reinforced, that are highly regarded by the consumers of advice. So on the 31st of August, we talked about Wealth Central, and we acquired it. And we are very excited about the opportunity that this presents us. And again, in our demonstrations of the power of the software with our MLC advisers, Chris will take you through where we currently stand in respect to that. But what I can share with you is that this is a game changer. This is what's going to make us different to others. There are software out there. I will not run away from that. I believe this is the most integrated software with the most highly engaged client experience from both prospecting through to the review process. And for us, it's a game changer. So I'm actually going to talk you through some of the opportunity this affords us. So the opportunity is for our advisers in our employee channels, which will be implementing this right across the Bridges and the Shadforth owned-and-occupied space, but also in that self-employed space. And again, it will be only for those businesses that choose to partner with us given there are -- that it's a proprietary system. We've been working with the external vendor for 4 years, and we will continue our journey to evolve this. The way we build this software through our innovation lab is, in my eyes, unique. Why? We're taking input from advisers. We're observing focused groups from clients. We're making sure that we're building stuff that works, demystifying advice, bringing clients closer to the process, taking, if you like, the spooky magic out of advice. And what we're doing here is we're really recognizing that there is an opportunity for individuals that go through the advice process to understand the value advice much earlier on in the process. And so this is why we believe it's game changing, not just for the efficiencies, but for their enhanced client experience. So what we've got here is just the 3 segments. And I'll talk to you about the experience that our clients get. For those of you on the line that might want to have a play around with this software, I encourage you to go online to ioof.com and go in our Community page. This is where we provide a pro bono advice right across our networks, and we delivered over 1,000 hours of pro bono advice during COVID using this software and our networks of advisers, both employed, owner-occupied and also the self-employed. You can go in there and have a play around with the Wealth Central system and get your own wealth report. So in this prospecting and engagement phase, what this is about is removing the inefficiencies of exchanging information. When we were designing this a number of years ago, we were observing advisers -- sorry, clients and it was a cumbersome process to exchange information right upfront. It was very paper-based. It often was dated. And so what we've designed here is an online portal that the client can go in and update and provide an exchange information with their clients during the prospecting and engagement stage. It's online, cyber secured, as you would expect, but what it actually does is it actually provides information back to the clients. So as they put information into the system: their name; where they live; how many dependents they've got; their superannuation; their retirement savings goal, be it short or other goals, short, medium or long term, it actually enables them to put that in. It's digitized, and it's actually all icon-driven. And what they can actually do is generate their own wealth report. Now what this actually does is it's connected to census data. It's connected to RP Data in terms of values of houses. And it takes imagery. It also provides them with a snapshot based upon what information they've put in, under general advice, on how advice may actually help them. It might be about protecting their loved ones in the event of the -- of an event. It might be about savings. It might be about any other thing to do with cash flow management. And what this actually does and the unique thing is they can print this off. It's a bound and glossy brochure that they can take away and have as part of the process without any cost. In exchange, what we've got is a more efficient way of updating the information through the portal. But whether they proceed with us or not, IOOF has given them, or one of our adviser partners has given them, an insight to the advice process in an efficient way for free. And whether they come back to us or proceed straight away, we believe that's a much more enhanced impression. And what we're doing here is try to improve and gain on the trust deficit there is in respect to advice. We want to show them that advice has a positive impact, both in terms of their wealth and their health. And this is our way of doing that. And this advice portal enables us to do that. In the middle there, this is really what it's about. So the information automatically flows from the prospect in terms of the engagement, so the client's got a much more engaging experience. But in the middle, when they come into that meeting with their adviser, that first meeting, often it's about the exchange of information. And from an adviser's aspect, they spend the first 45 minutes of that first meeting, in many instances, making sure and validating the information so that they can go away and deliver an SoA, which, really, it covers off where advice and what strategies they are going to implement. The new way of doing it through the Wealth Central technology, in the middle, around this discovery and advice phase. What this enables us to do, based upon the information that's being put in by the client and augmented by the adviser, it will instantaneously model in front of the client strategies in respect to how they can invest their money, be it superannuation or non-superannuation, in different tax structures that we just spoke about, but also how they link it to the goals that they put into the Wealth Central software. And what we're doing in this middle, by instantaneously modeling it, the adviser is brought into the process much earlier. It's much more engaging, but more importantly, the value of advice is actually up on the screen or on a computer in front of them. And there, they can change the model. So for [Audio Gap] phase, there's generally this trade-off between longevity and income or how long will my money last versus how much money can I spend. And what you can do through the software is you can actually change the different examples on how much money you can have or whether you want to leave a legacy, and the adviser can model this and more importantly, the client can actually see the trade-offs. And so this for us is the new way to show the advisers -- for the adviser to show the clients how advice can be a benefit. And then there's the ongoing review stage. So everything we do now is through this software. And for us, it's a game changer. It's a real efficient way to delivering an enhanced client experience, more importantly, by making sure that the client is brought into the process much easier. So just to give you an example here, how much efficiency are we talking about here, Darren? How are you going to make the advice delivered? On the top, you can work through this, this is the old process on typically how an advice process worked: sit down with your clients; update the information; key the information into a system; go away and do some modeling. You can follow that yourself. Down the bottom is that process that I just spoke about, online digitized portal with giving real-time information back to the client instantaneously. The adviser doesn't need to double key the information in. The system will model into different strategies. We've actually modeled in one of our AFSLs using Shadforth. We estimate that there is 1.5 hours per review being saved by the use of these enhanced processes. So these client-first processes are taking out 1.5 hours of clunky processes and automated these. Just in Shadforth, just in one of our AFSLs, and remember, we have 7, and we're about to -- hopefully, with the approval of the regulators, add the MLC, GPL, 1050 and MLC Advice brands into this community. So just in 1 channel who do 10,000 reviews a year, we believe that we will save over 2,000 business days of efficiencies. Now that can be used in a number of ways to grow the demand for advice or to continue to improve the EBIT that we're generating right across the industry. But we're doing this, not at the expense of the client, we're doing it in a harmonized process, making sure the client experience is first rate. And so this is where I get really excited about Advice 2.0. We've spoken about the efficiencies, but now we're talking about the real client experience of making advice more affordable, more accessible, but also more engaging. Now that is a significant saving in anyone's language. But that's the tip of the iceberg. If we actually have a look at this, that's 7 -- sorry, 6 stages of the advice process. We're just talking about how the system has improved 1 phase. We've got other phases that we will go through using the client-first processes to improve everything that we've got here. And for mine, this is really the exciting part in what we'll be able to do. So just to wrap up there, in terms of what our business will look like in a couple of years' time, we see that we want to be a successful advice-led wealth management organization. That means that we will have representation in each of the 3 key segments of the market. A professional services owned-and-operated, where we'll be operating the Shadforth, the Bridges brand, and we'll be putting MLC Advice in there. This will give us the opportunity to run 300 professional services authorized representatives in that owner-and-operated space, generating EBIT above 30%. In that middle, we will have breakeven AFSLs from the '21, '22 year, covering the cost and making sure our partnerships in that space, where we currently have about 1,000 advisers, and we will grow that with the 1050 community and the GPL community, to about 1,300, we'll make sure that we cover costs. But more importantly, we're going to make sure that our technology investment is scalable right across our enablement business and our investment in technology. And that's why it's important that we partner in those self-employed spaces to make sure that we can deflect our costs over a much larger number of advisers. And scale does matter in the advice space. And in that third space, it's about self licenses. So we do have a business there called IOOF Alliances, where we are actually delivering advice services to those with their own license. And if we do move down to a scenario where the government said, everybody goes self-licensed, we would simply pivot our business out of the self-employed, and with everybody having their own license, we would become a service business. So we would have our owned-and-operated and we would have our self-licensed businesses with all those advisers in there. So we are setting our business up to manage any regulatory risk, but more importantly, that's how our business will operate over the next 2 years. So thank you for your attention today. And I hope I've given you and got you excited about the opportunity about the advice, in particular, in respect to the Wealth Central. The technology that we feel will marry up with the delivery of advice and change the way that advice will be delivered to more Australians in a more affordable way. But rather than me actually continuing with that, I just want to share with you a video from some of our advisers that have been the early adopters of this technology. [Presentation]

Thanks, Rachel.

Thank you, Darren, and thank you to everybody who has asked questions or given feedback. Now I do note that on the external stream, some slides on the video, they are appearing particularly blurry. There is a high-res PDF version available at the full presentation deck on the ASX, and that has links to high-res versions of the videos as well for you to follow along with.

So now, just some questions that have come through for Darren. So a couple from Andrei Stadnik of Morgan Stanley. Darren, are owned advice EBIT margins scalable, i.e., can EBIT margins approach 35% if more financial advisers take up the owned by the IOOF model?

Thank you for that question. Look, for us, with the technology, I wouldn't like to restrain ourselves and say 30% is the number. I don't know what the future number is, but we do know that it is scalable in terms of adding on other AFSLs like the opportunity with the MLC Advice, and we can certainly scale it right across. But into the future, we -- technology -- the way technology is going, we think there is opportunities, but I don't know what those numbers may be.

Great. Second one from Andrei Stadnik. How will the self-employed financial advisers deliver suitable returns for IOOF shareholders? What changes are required along the value chain to do this?

Yes. Another good question there. So we've been very vocal in our move to equalizing the risk, if you like, that the AFSLs have and the financial rewards. So the bottom line is the advisers in that self-employed space, there is a rerating in terms of how much they pay as the old subsidies move out, and we were one of the first ones to move away from that. So the reality is, we've already opened up conversations with our advisers. There is recognition that they will be paying more for the services they traditionally get from us. The way that we're actually doing this by -- and this comes back to some of those structural changes. A lazy way for us would have been just to say, well, x dollars, you need to pay x dollars more. But what we're actually doing is we're looking at the way that we are structured and making sure that we are an efficient partner in terms of our structure so that when we go back and ask for more money, we're not only delivering more services like the Wealth Central solution, we are absolutely crystal clear on how efficient we're running our business. And so that exchange and that partnership model is where we're going to exchange fair value. But the advisers will need and will be contributing more for those services that they had in the past.

Great. Thanks, Darren. A question from Matt Dunger at BAML. Why have some of your fast-growing competitors, for example, net wealth and hub, been so successful in winning new members? And how will IOOF advisers win new members?

So I might deflect that one there, Rachel. That is not necessarily an advice-related question. I think that might be more suited to the next session in terms of Evolve for Mark to answer. Both of those businesses don't run advice businesses. That is not necessarily an advice-related question. I think that might be more suited to the next session in terms of Evolve for Mark to answer. Both of those businesses don't run advice businesses.

Yes. Good point. A couple of questions from Nick Burgess of Baillieu. A target 30% EBIT margin for salaried advice. What EBIT margin do Shadforth currently achieve? What is the rough time line for 30% margin for salaried advice?

Yes. Look, on both of those, the combined entities, the compliant owned and operated entities are achieving that 30% EBIT. So across Bridges and across Shadforth, we currently got them running at that EBIT in terms of that target as well. So the time for that is now.

Thank you, Darren. Another one from Nick Burgess. It appears your competitors are not as focused on advice or advisers, do you see an opportunity to grow adviser numbers over time post MLC to well north of 2,000?

So I'll answer that in 2 parts. First of all, I'm glad everybody else has taken their eyes off the advice space because it gives us an opportunity to, one, reaffirm our commitment. And again, I think the advice reset that we've just done and the feedback we're getting, we will be the voice of advice because we genuinely feel it's a service that the community will benefit from, and we can balance up the shareholders' risks in terms of delivering that. In terms of upping our adviser numbers, my focus is not necessarily on adviser numbers. What I'm focusing on over the next 2 years is making sure that the businesses that we have are as efficient as possible. So for instance, I'd be more than happy to have half the number of advisers that are twice as efficient because I've then got a lower risk base to grow the growth that I'll actually get off that. So I'm not targeting 2,000. We're really targeting efficiencies. However, based upon our experiences with communicating with GPL and communicating with [ 10 50 ] and others in the market we're soon to be resonating with those external advisers, particularly around the technology and the investment in it. And so I think we'll get natural growth as the market continues to fragment. And so 2,000 would not be out of our reach, but at this stage, we are focusing on that efficient delivery.

Great. Thanks, Darren. Just in the interest of time, I'll ask him the question, but Darren, you will be back for the old presenter Q&A at the end of the third session. So we'll save some questions for you to respond to then. So the final question for this session, which comes from James Cordukes. For the self-employed model, you say you will reprice to remove cross subsidization and to recognize the risk premium as the AFSL owner. Yet, the self-employed model targets to breakeven. Do you think you need to raise the risk premium even more? Are the risks -- well I'll stop there, and we'll ask it in 2 parts.

Yes, sure. And so the answer to the question is yes, I don't think this will be our last move. So we're doing a reset. Obviously, breakeven is our first point, which we said we'd get in the '21, '22 years. That's our first chance. By then, we'll continue to evolve the technology. But ultimately, we would be looking for a return. In that segment as well. That's just in the AFSLs. The other point that is important is the reason it's so important for us to have a presence in that self-employed is that we any investments we make and the enablement business that we've got, the way that we scale out our business will go across a much larger pool of advisers. And so breakeven is the first one, ultimately. But we would -- do want to get a return. I don't know what that return will be, but I need to have a presence in that market because that's where I'm -- the larger volume of advisers are at present, and it gives me an opportunity to spread my cost and make sure I'm more scalable than others.

Sure. And following on from the other half of that question, what is the marginal cost of additional advisers, i.e. will more self-advised advisers -- sorry, self-employed advisers, I think he meant, and make you more profitable and less self-employed advisers make you loss-making?

Well, the math would indicate that, that's the case. Yes. So if the mix was different, then ultimately, the drivers, in terms of the revenue, are different, and therefore, the numbers that would come out of that are different. So the answer to the question is yes. Again, our focus over that next period of time is to really make sure that we stabilize and transform the way advices provide. We'll be real happy to have 300 authorized representatives post MLC advice coming into our employee channel, 1,000 or 1,300 when we put [ 10 50 ] and GPL in that middle space, and the growing presence in that deal at the dealer. That's our aim over the next 18 months. After that, then certainly, we'll come back and recommunicate what it might be post that.

Fantastic. Darren, thank you very much for the session. Our next session will commence to 10:45, focused on Evolve. And Darren, we'll see you back for the Q&A at the end of the third session. Thank you very much.

Thank you everybody. [Break]

Good morning, and welcome back to our session on Evolve 21. Before we kick off, I'd just like to apologize for some noise that came through during the intermission there between the sessions. I think that's -- it will prove today why we like to keep technology in-house and use proprietary technology. [Operator Instructions] So now without further ado, I'll hand it over to Mark Oliver. Mark, if you could share your screen. And welcome.

Thank you, Rachel, and good afternoon, everybody. Hopefully, you can see and hear me okay. Thanks, Rachel. My name is Mark Oliver. I'm Chief Distribution Officer, which essentially gives me leadership of our distribution and product capability for IOOF. I'm also the Executive Sponsor of Project Evolve, which we're really looking forward to sharing with you over the next hour and taking your questions. I -- from my history, I've been with IOOF for close to 6 years. And previously, with over 20 years in global wealth specialists around the world, in Australia and the U.K., integrating acquisitions and also developing new adviser and client products. Shortly, I will introduce today's speakers. But first, I wanted to take a few minutes to outline what Evolve is and some of the goals that we have set ourselves around Evolve. As the slide talks to our -- the Evolve project itself is in basic terms, an enterprise-wide program of work, which is really focused on delivering what matters to our clients. And it does that by creating a single go-forward platform for our retail and our advised and our workplace products and services. Now we believe that we are unique in the retail market, certainly, and we believe in the broader market in delivering that single environment for all employer super, direct retail and advised members and products. And if you keep in mind that those labels that I've just mentioned actually aren't recognizable to the investors themselves. They are labels that the industry puts on those cohorts. And we also acknowledge that those members or investors will actually, through their lifetime, fit in one or more of those cohorts. So for example, he may join the super fund through an employer. They then, later in life, may take on an advice relationship. And subsequently, move into retirement or, in fact, build an investment portfolio outside of their retirement savings. And so our offers allow them the flexibility to move between those products with minimal friction and, importantly, for us to be able to service their changing needs really efficiently and consistently. So our key messages today will be that Evolve is very much here today, and it's growing quickly, and ahead of our full migration of heritage products or legacy products. Evolve is much more than just an IT replatforming initiative. It's actually about enabling a number of IOOF strategic pillars or strategic drivers. And well, it delivers value and great service and outcomes for our clients. As Renato mentioned at the opening, we have an overall goal of reducing the cost to serve and making capacity for innovation through simplification of our operating environment. And ultimately, delivering on our ClientFirst, which is essentially where we eliminate waste or the things that our clients don't value to spend more time with clients on the things that they do value. In its current phase, Evolve 21 is a single platform ecosystem for all IOOF heritage products by the end of calendar year 2021. And so that will entail 2 migrations occurring in mid and late calendar year '21. And in essence, what that does is streamline our current array of 73 products down to 13. So you get a sense of the simplification and the opportunities that presents to focus our attentions on development and innovation. This then opens up clearly further opportunities for consolidation of both the P&I and the to-be-acquired MLC business. Now Evolve is already the home for our IOOF-branded workplace offers or employer super products. But today, we're also seeing strong uptake in the new Evolve product adviser products, which were launched over the last 2 years, and they include products branded Shadforth portfolio service, eXpand and IOOF Essential. And having been launched over the course of the last 2 years, they've now garnered over $4 billion and about 10,000 client accounts in that time. In fact, our new account openings, as the chart show, on the right-hand side, new account openings on Evolve now exceeds both our Pursuit and our heritage suite and they did that during the course of late 2019 as the overall number of aggregate new accounts in IOOF continues to grow. So as you'll hear this morning, we're very proud and excited about the unique ecosystem that we're building. And important to point out that it's an ecosystem that we own and control. While our clients will always determine what value looks like, we believe it's really important for us to retain the flexibility and the agility to respond to their changing demands. Essentially, we don't want to put ourselves at the mercy of an outsourced platform provider, their frailties or fragilities and their priorities for that matter. And we'll show you some very concrete examples of this in action later today. But while the system we've built under Evolve is our own, we do obviously engage with others to help us understand what matters to our clients and prospects. And in fact, in the Evolve development process, we continue to work closely with members, advisers and, in fact, the general public, to inform on new features, new functionality and the all-important user experience and help us prioritize some of those aspects. But to ensure we remain focused on the quality of our platform service overall for the key financial adviser market, we look to Wealth Insights for their detailed and unique independent research. Over the last couple of years, as we've been developing Evolve, Wealth Insights continues to regularly review the IOOF Pursuit platform, which is our outgoing heritage infrastructure and will be replaced by Evolve by the end of 2021. Now Pursuit in those surveys continue to show great progress across some key service attributes and currently sits fifth out of 15 overall amongst competing platforms on overall service. That's a number of factors that are taken into account there. In fact, 75% of advisers rated it 7 out of 10 or higher. And we think that, that can only improve with the ongoing rollout of the Evolve's suite of products. Now obviously, we would expect that Evolve products will be surveyed by Wealth Insights in their future reports. They usually take place around April or May of each year and are in market shortly after that. Now just sticking briefly with the Wealth Insight's research. One interesting aspect and the reason we continue to use them as a real bellwether of satisfaction in the market is their 2020 research, which looked at about 800 different financial advisers across the market and surveyed over 20 -- about 26 in [ flat ] service features, which Wealth Insights cluster under 10 key attributes. Now in analyzing those attributes, the power of Wealth Insights is their ability to drill into not only what advisers see as crucial to them and important, but also what actually does drive their satisfaction. So looking at some of the implicit matters that are considered. And they do this, Wealth Insights, through a complex set of regression analysis to reveal and say not only what they say, but what actually drives the overall satisfaction for advisors. And these elements tend to take prominence in the areas that we focus on in our quest to deliver what matters. And if I was to sort of summarize, it would suggest that the bells and the whistles of platforms, extensive investment menus, sophisticated trading tools and the like, are nowhere near as impactful on satisfaction compared to well integrated IT systems, prompt and efficient service from call centers and, of course, client value for money. In fact, whilst the individual IT and web attributes surveyed by Wealth Insights, of which there are half a dozen or so, individually didn't rank particularly highly, so 11th, 14th, 17th and 8th. When you collect them together, when you bunch them together, they actually -- this IT and web functionality is the single strongest bearing on whether an adviser rates a platform well or not. So to today's speakers -- sorry. I want to make sure I'm still on. Today's speakers, to underscore the enterprise-wide nature of the Evolve project, in this session, you're going to hear from several of our leaders across the business. All of these individuals contribute, along with their teams, to the success of Evolve. And in fact, they and their respective teams are also beneficiaries of Evolve in serving our clients. Now each of the speakers' functions and capabilities are complementary, but we do all have one single focus, and that is delivering what matters for our clients. That's what I call the client first way. So this morning, I'll first pass to Cable Rickard. Cable is General Manager of Product, and we'll showcase some of the features of Evolve that are in market today, focused on delivering what matters or solving problems or pain points for our advisers. Cable will pass to Sharam Hekmat. Sharam's our Chief Information Officer, and he will showcase the unique technology underpinning the Evolve suite. And finally, he'll pass to Frank Lombardo. Frank is our Chief Operating Officer, responsible for the delivery of our service and support to those 3 cohorts I mentioned: direct members, our advisers and employers. And he'll speak to how Evolve is helping bring this critical service element of IOOF to life. All 3 speakers in this segment have 5 or more years experience with IOOF. And interestingly, all 3 of them have also worked at MLC prior to joining IOOF. As Rachel mentioned, they'll have time for questions at the end. So if you can hold your questions till then. And I'll pass over now to Cable.

Thank you, Mark, and good morning, everyone. As Mark said, my name is Cable Rickard, and I'm the General Manager of Product at IOOF. I've been in the industry for over 15 years now, having previously worked at Aviva, UBS in London and MLC. I've been with the IOOF group for over 9 years now, and I've been heavily involved in all of our major platform transformations, integrations, acquisitions and product initiatives. Today, I'm going to talk to you about the Evolve platform, the journey so far and how it's enabling improved client outcomes through efficiency, sustainability and our ability to innovate. I'm also going to share a number of short videos with you that will help showcase the Evolve platform. Within our [ IOOF ] heritage business, pre-P&I, we have operated 2 core platforms. But over the last 5 years, we've been heavily investing in the Evolve platform, creating the go-forward platform to house all of our proprietary products, everything from MySuper, to Retail Advise, Super and Pension and IDPS solution. We spent considerable time, a number of years ago, building out the core foundations of a platform. We rebuilt the tax engine, the fee engine, the way the investment menus would operate. We relaunched and rebuilt the client site, the adviser site and the licensee site. We have then been [indiscernible] releasing features, as you can see from the top half of this slide. And we've done that progressively over the last few years. As I said earlier, the Evolve platform has historically been one that has housed our workplace and MySuper solution. Since 2018, we started to introduce retail advice platform and products. And those products already administered some 10,000 client and near $4.5 billion worth of funds under management. As we come into 2021, the Evolve project will see a consolidation of our 2 core registry system. Upon completion, and we expect to complete at the end of next calendar year, the Evolve platform will be administering north of 260,000 clients and near $40 billion worth of funds under management. I'm shortly going to show you a short video that will help demonstrate just some of the ways the Evolve platform is addressing pain points, creating efficiencies and adding value to advisers and their ability to add value to their clients. [Presentation]

Thanks, Mark. In a changing world of compliance, technology and business challenges, the one commodity no one gets more of is time. Considering the efficiencies managed accounts can enable, we're seeing a growing number of advisers consider managed accounts. They can offer and do offer a range of benefits, both to advisers and to clients, whether they be enabling the timely response to changing markets, reducing compliance and admin burden or improving client engagement. We've had a managed account solution on Pursuit Select for some 2 years now, but earlier this year, we extended our managed account solution on Evolve. And it's already gaining considerable momentum and positive feedback. I'm shortly going to show you a short video that will demonstrate just how easy our managed account solution is to implement. And the benefits it can have for both advisers and clients. [Presentation]

Apologies there. We don't -- apparently, we could hear the sound, but unfortunately, you couldn't see the video. Just a reminder that those videos are embedded in documents that are available on the ASX release that you could view in your own time. As you saw in the first video, with a modern functionality and a contemporary user experience, we do offer a leading proposition in the market as advice businesses continue to change and their client propositions continue to change. I'm now going to hand over to Sharam Hekmat, who's our Chief Information Officer. Sharam will shine a light on the modern technology and the thinking that has underpinned the Evolve platform. Thanks, Sharam.

Sharam, before you start, just make sure that the operator can get your slides working. I'm going to stop the share and restart it.

Sure. Good to go?

Operator, can you confirm that Sharam's slide is now showing?

Yes, it's working, sir.

Thank you. Go ahead, Sharam.

So thank you, Mark and Cable, and good morning, everyone. My name is Sharam Hekmat. I'm the Chief Information Officer at IOOF. Today, I'm going to talk briefly about the exciting technology that underpins Evolve. Next slide, please. I'd like to start by summarizing the 6 key benefits of Evolve as a contemporary platform for serving our clients. First, Evolve is an important enabler for reducing our technological complexity. By consolidating onto a single go-forward solution to satisfy all our platform needs, we are reducing the number of systems in our portfolio, and hence, the overall complexity. Second, Evolve is enabling us to reduce the cost of doing business, not only in IT terms, but also product and operations, which ultimately benefits members as well as shareholders. Third, one of our key objectives in creating Evolve is to create capacity for future growth. In other words, we are very conscious of the fact that the needs of a growing business like ours are best satisfied by a modern platform that looks beyond current capacity requirements. But more on this later. Fourth, Evolve is developed with business simplification in mind. We're moving away from a myriad of products on multiple registry systems onto a smaller and simplified set of products on a single registry system. Fifth, we've adopted the ClientFirst. We are working throughout our business, which Frank Lombardo will shortly talk about. Within operations, ClientFirst we are working is enabled by a bespoke solution that has been developed using Evolve technology. And finally, Evolve is a wholly in-house developed and owned solution. We've adopted this approach because we want to be in control of our future and not at the mercy of a vendor whose interest in the long run might not align with ours. In developing Evolve, we've adopted a state-of-the-art software architecture. If you look at the history of the evolution of software architecture, earliest applications had a monolithic architecture that consisted of a central system, typically a mainframe plus database that was accessed using [indiscernible] terminals. Such legacy systems are still in use today. The next generation of applications were client server where a client was typically a PC on a user's desktop that connected to a central server in a [indiscernible] center. This was a good step in load distribution and scalability. More recently, market services have become popular as a more scalable means of building enterprise servers. Evolve's architecture is represented by the stack on the far right of this slide. It delivers unparalleled flexibility and scalability by extending the market services concept to the front end using the concept of micro frontends. And because of this, we believe that Evolve is at the cutting edge of modern software engineering. We have intentionally avoided building a partial solution by putting a shiny front end in front of an outdated back end. Evolve is a modern end-to-end solution. So what are microservices? Put simply, rather than developing a large system such as Evolve as a monolithic piece, we've divided it into hundreds of smaller components that can exist in the room right but communicate and collaborate to deliver the required business functionality. Think of each market service as something that implements a well-defined business task such as authentication, switch, withdrawal, rebalance and so on. This architecture has significant benefits. It's not only highly scalable, but also highly fault tolerant. If a service fails, the rest of the system is unaffected and continues to work. Because market services are decoupled, the overall design is simplified and easier to maintain. A key engineering benefit is that services can be developed, tested and deployed independently. This makes the architecture highly suited to agile development, which is how we work. We have many agile teams who work largely independently on separate services. Finally, reusing third-party services to gain development speed is straightforward. All we need to do is wrap the third-party service as a market service and add it to our solution. I mentioned the scalability earlier, so allow me to explain why it's so important. There are 2 distinct methods of scaling a system. The first method is called vertical scaling, shown on the left. This is how you scale all their monolithic systems. Because the system must run on a single server, your only means of scaling it up is to increase the power of that server with more CPU and memory. The analogy for this is a skyscraper. You can create more floor space by adding more floors. In both cases, there is a hard limit that cannot be exceeded. The second method, horizontal scaling, shown on the right, gives you almost unlimited room for growth. To grow the capacity, you simply add more service. The analogy for this is a city, which can grow not only upward but also outwards to create space for tens of millions of people. Evolve is designed for horizontal scalability, and that's why we're confident about its ability to future-proof our business. In designing Evolve, we've paid close attention to the proper design of the user experience or UX for short. This is important because good UX can make a system a lot easier and more enjoyable to use, thus, lifting productivity. To achieve this, we've developed a global experience language, or GEL for short, as a shared framework to give all our digital services a consistent look and feel. As I mentioned earlier, we developed all our user interactions using micro frontends, which delivers similar benefits to what microservices do for the back end. Additionally, we support all popular end user devices, be it a desktop, laptop, tablet or smartphone. But importantly, we've adopted the progressive web app, or PWA for short, start-up development, which means that we can support all popular devices using a single code base without developing native apps for Apple and Android. Because micro services are decoupled, the overall design is simplified and easier to maintain. A key engineering benefit is that services can be developed, tested and deployed independently. This makes the architecture highly suited to agile development, which is how we work. We have many agile teams who work largely independently on separate services. Finally, reusing third-party services to gain development speed is straightforward. All we need to do is wrap the third-party service as a market service and add it to our solution. I mentioned the scalability earlier, so allow me to explain why it's so important. There are 2 distinct methods of scaling a system. The first method is called vertical scaling shown on the left. This is how you scale all the monolithic systems. Because the system must run on a single server, your only means of scaling it up is to increase the power of that server with more CPU and memory. The analogy for this is a skyscraper. You can create more floor space by adding more floors. In both cases, there is a hard limit that cannot be exceeded. The second method, horizontal scaling, shown on the right, gives you almost unlimited room for growth. To grow the capacity, you simply add more service. The analogy for this is a city which can grow, not only upward but also outwards to create space for tens of millions of people. Evolve is designed for horizontal scalability, and that's why we are confident about its ability to future-proof our business. In designing Evolve, we've paid close attention to the proper design of the user experience or UX for short. This is important because good UX can make a system a lot easier and more enjoyable to use, thus lifting productivity. To achieve this, we've developed a global experience language, or GEL for short, as a shared framework to give all our digital services a consistent look and feel. As I mentioned earlier, we developed all our user interactions using macro front ends. which delivers similar benefits to what microservices do for the back end. Additionally, we support all popular end-user devices, be that desktop, laptop, tablet or smartphone, but importantly, we've adopted the progressive web app or PWA, for short start-up development, which means that we can support all popular devices using a single code base without developing native apps for Apple and Android. One of our key design principles is not to reinvent the wheel. So to this end, Evolve has a very flexible plug-and-play capability that allows us to easily integrate best-of-breed functionality, be it third-party or in-house developed. By way of examples, we've integrated portfolio clouds, portfolio modeling functionality into EVOLVE. The MDA solution that cable attempted to demonstrate earlier is powered by portfolio cloud's engine. We recently integrated a customizable chatbot sourced from Intercom. We've partnered with Deakin University's machine learning lab who assisted us in developing automated demand classification for ClientFirst. And more recently, we've developed in-house machine learning solutions for things like automated signature comparison, form scanning and classification. All these solutions have been successfully integrated into Evolve's microservices architecture and are currently in active use. I now hand over to Frank Lombardo to present the client's first way of working.

Good morning, everybody, and thank you, Sharam, for that sort of very insightful piece on our technology, and I'll look to build on that. Frank Lombardo, the Chief Operating Officer for IOOF. In addition to working at a number of organizations, I've spent 30 years in the industry with the last 5 at IOOF. What I can say is that I've worked in -- across products, operations, projects and transformation. And in addition to working at different organizations, that's given me a real sense of what's most important when it comes to the teamwork and having a deep alignment around what's really important when it comes to strategic initiatives at any point in time and working together to deliver outcomes for our clients. At the beginning of my journey with IOOF, I felt this, and to today, feel quite privileged at the support that I was provided in being assigned the task or be it, broad to the organization to help to transform the client's experience and the service delivery from IOOF to our clients. It's been a while since I've talked to you at an Investor Day. And what I'd like to do is to do a quick refresh. What's it all about. You've heard the word, but let's just spend a little bit of time just unpacking the word, ClientFirst. I want to share with you what we've done in the last 4 years. And finally, what I want to do is share some of the results. These indicate to us that we are absolutely on the right track. Products, operations and technology working together is more than a platform. In my team -- across clients and process, I should say, and for the team members within ClientFirst, it's all about delivering a unique human experience. And unless all the pieces of the puzzle that support you are working harmoniously at that moment of truth, when the client is relying on you to deliver what matters to them in minutes, it all has to come together. I'm especially proud of our purpose, understand me, look after me, secure my future. If you recall, when I launched the ClientFirst strategy, I talked to you about the fact that we listen to and did the work for over 5,000 client demands, and the purpose was born from that work. It's a simple purpose, understanding, look after me, secure my future. It's written from a client perspective outside in thinking, if you like. But it's very powerful, and it's a very high standard. And the work we've been doing over the last 4 years has been all about bringing that to life for our clients in those moments of truth, in every interaction that we had with them. We empower our people to deliver what matters. We have redefined roles with added tools. We've increased their knowledge. Most importantly, we've created a system of work that allows decision-making rights at that point of contact, that point of contact that is closest to the client. We have built new capabilities, as Sharam has just talked to. Those capabilities not only enable us to deliver what matters to clients and to work in this new way of working, but also provide the data and the insights necessary for ongoing improvement activity. Finally, the role of our managers and leaders. We've redefined the role of the leader. It's all about being in the work. The only way that you can remain relevant to clients and to our people used to be in the world, in the trenches, if you'd like. That's led to a flat-up structure. Today, I can confidently be here and tell you that we have scaled a highly personalized experience for all clients. It's all about a cohort of one. What matters to you is individual and it's unique. That's what we mean by delivering what matters. It's about delivering that unique individual experience to you. It's client-agnostic, it's channel-agnostic, it's location-agnostic, it's product-agnostic. It's agnostic to the demand at that moment of truth for you as a client. At the center peaks is single-point accountability. End-to-end ownership for the client demand without any handoffs. This is unique. I have worked in organizations where that personalized experience is the domain of your highest, most valued clients. We have developed a system of work that enables us to deliver that to every client. So what have we done? The unique ClientFirst operating model has evolved, redefining each and every role in the team. It involved multiskilling every -- each and every single team member. We've done that through building a learning and development capability as well as introducing new tools to help us deliver and distribute knowledge to our people when they need it most. We've collapsed the front and the back office, if you like. We do not run a traditional call center and functionally specialized administration teams. That equals handoffs. We cannot deliver that client experience that I talked about with those handoffs. Equally, Mark talked about ClientFirst removing remote waste. The design of the operating model is -- has been all about removing waste in the pursuit of delivering a differentiated client experience. Sharam talked to you about new tools. One of those tools is our CRM and workflow, we call it Rocket. Rocket empowers our people to work the way that I've just described. It has been built in the Evolve ecosystem. It is embedded in that ecosystem and integrated into the underlying platform and other capabilities that we choose to introduce into that ecosystem. That's proven by the introduction of robotic automation, AI, chatbot, knowledge management and speech analytics. Sharam talked to the reduction in time and the efficiencies. Cable talked to a withdrawal request being able to be completed within 15 minutes. That is true online for advisers when the demand is received by them, but it's equally true if that demand is received by a non-advised client into ClientFirst or, in fact, is received by an adviser into ClientFirst. When we started this journey, it took over 5 days on average to complete a withdrawal. The knowledge management system is enabling us to distribute knowledge to our people at home in an easy-to-digest format, whilst they are on the phone with clients with a Google style search engine attached to it. The speech analytics is enabling us to lift unstructured data from calls and combine that with the structured data from our CRM at workflow, from the underlying platform and from any system that we integrate into the Evolve ecosystem. Primarily, it's creating the efficiencies so that we could spend more time talking to clients. What that does is drive richness and intimacy and more valuable client data. We are growing our financial education and well-being team. This year, we appointed a GM of financial education and well-being, Anthony Caneva. Anthony comes to us with an advice and digital background. This team also includes a scaled Advice team. But Anthony's main priority is to leverage those capabilities that I just talked to, to deliver a digital proactive experience for our members. The combined IOOF, P&I and MLC business will have approximately 1 million nonadvised members. Anthony and the team are focusing on building digital capabilities to engage with those members in a way that drives a deeper, more intimate relationship. We're also partnering with Darren Whereat. You've heard about Advice 2.0. The work that we're doing with Darren is leveraging the knowledge that we've built from ClientFirst and applying that to our Advice businesses. In addition to the work that Darren's outlined and the technology capability that Darren talked to, we believe further efficiencies and an improved experience can be delivered through removing waste and duplication in the advisor office in the same way as we have done through ClientFirst. Finally, growing our digital capability. We are currently doing that through what we call test-and-learn pilots. What Anthony and the team are doing is engaging with our members through pilots and double, we're doing this testing the response as we start to build -- as we start to think through and build the future of the digital experience for our members. Just to share with you, the screen on the left is the Rocket system, the CRM and workflow that both Sharam and myself have talked to you this morning. What I wanted to share with you on this slide is that this capability is ready now for the future of flexible work. In fact, we could not have moved seamlessly in a COVID environment to work from home without these capabilities. These capabilities enable our employees to choose when and how they want to work. This is a minimum standard for all organizations today. We're there today. The front end, so the Rocket system, with front-end, the platform administration system currently, front ends both the legacy, our pursuit platform that Mark and Cable spoke to and the new Evolve product suite. So if you like, it shields the client -- it shields our people from the underlying system. And through microservices, integrates seamlessly to enable our people to deliver what matters to clients. The key point that I raise is that this is a proof point that we can commence the client-first transformation for both P&I and for the MLC business, prior to and in parallel with the product transformation, product rationalization. We can front-end those legacy administration systems with that -- with Rocket, the new CRM and workflow and enable us to bring forward that ClientFirst transformation whilst the rest of the team is working on the rationalization of the underlying systems and processes. Some of the data through 2020, we had, on average, a 37% increase in demand volume. But that, in isolation, doesn't tell the true story. At some point, the demand volume was up to 100% more than the same time last year. April and July were great examples of that where early access to super demand skyrocketed. So the system of work has to be able to cater for an increase in volume, has to cater for and adapt to unexpected change and to variation in demand. What I can tell you is that through the course of the year, over 65% of all demand, every demand into our system of work was completed in one business day. Our early access withdrawals were leading from an industry perspective. At the same time, we increased the amount of time that we spend with our clients, on average, 7 to 8 minutes per call, in many cases, over 10 to 15 minutes per call. If anything we learned in 2020, the importance of human interaction, real conversations with real clients, and we're really proud that we're able to deliver that. At the same time, we managed to keep the average wait time quite low through the 2020 period. So as a whole, we feel in what was probably a one in 100-year event, that our service performance lifted and stayed true to our purpose. I touched on Anthony Caneva and the financial well-being and education team. Through the last few years, we have free capacity. We are reallocating that capacity to value work. That value work includes retention and scaled Advice. Over the last 12 months, the team has retained over 800 non-Advised members and $140 million in funds under Advice. We will continue to invest aggressively in this space. As I mentioned earlier, approximately 1 million non-Advised clients in the combined IOOF, P&I and MLC entity. MPS, a measure that I'm sure you're familiar with. And as Mark opened up with, big, big clients with the adviser, being core member is the ultimate arbiter of our performance. We measure this through NPS. Our member NPS is 46%, and our adviser NPS, 59%. I could also share with you that the adviser NPS for the Evolve product sits at 70%. So we're very confident we are on the right track as measured and assessed by our clients. On the far right-hand side, Bain & Co, who basically introduced Net Promoter Score to the world as a classification system, we consider our current performance excellent, but that's not good enough. Our aim is to be world-class. And it's only once we're world class that our clients are truly receiving the service that they expect from us. Finally, and Mark opened up with Wealth Insights, I thought I would share with you a couple of the key measures for the service parts of the organization, administration support and ease of doing business. For both of those, we set forth out of 15 platform survey. And the gap between the top 4, it's not significant. I am very confident that with the ongoing investment and the maturity of our operating model that we will continue to improve our ranking in [indiscernible]. And just to close my part of the presentation today before I hand over to Mark, I thought I'd share with you the -- some of the feedback we're receiving from our clients. And I'd have to say my 30 years that the level of positive advocacy and feedback, which clients are taking the time to write to us about, is the highest that I've ever seen. We received hundreds of these, and we proudly store them on our Internet site as inspiration for our people to keep going to deliver what matters. I will hand back to Mark now.

Great. Thank you very much, Frank, and thank you, everybody. Hopefully, you took a lot from that session. And as I outlined at the start, I'm key in our approach to developing our service and a class-leading service is the delivery and testing of new features and getting feedback from our clients. And I think the testimonials, as Frank said, certainly give us strong encouragement that we're on the right track and give us the confidence to keep going. And these are in addition to the adviser testimonials that Cable had in some of these videos if you're able to see them. So we continue to receive fantastic feedback, particularly around the Evolve suite, and it gives us great confidence for the future. So to close out before we move to questions, I think really the key points from this session have been that Evolve is very much here today. It's growing strongly amongst our advisers and our clients. And it's unique in so far as it's a single offering across a range of different offers from Workplace, MySuper, right through to advised client relationship and non-Super investments, all in one place. And in so doing, it's enabling the whole organization to focus squarely on what matters to our client. And that core ecosystem brings together the latest technology, value-add functionality and what we believe is our differentiated client for service. So Rachel, I'll pass back for questions, and I'll ask the others to join.

Great. Thank you very much, Mark. And yes, if everybody else could join back and put their videos on. So thanks, Mark. We have seen overwhelming demand for this virtual briefing from shareholders, analysts, other interested parties and from our people at IOOF, future colleagues from MLC, which has caused increased bandwidth demand when it comes to the video live streaming. But however, as Cable noted, I do encourage you to rewatch using the links on the public PDF, so you can really see the benefits and points of difference on our Evolve technology.

So Mark, first question, we might say, turn to you -- this was asked at the Advice session earlier but thought it was more appropriate for this session. Mark [indiscernible] asked, "Mark, why have some of your fast-growing competitors, for example, Netwealth and Hub, being so successful at winning new members? And how are IOOF advisers with new members?"

Yes. Well, I think the point I would make is we do continue to win new members. And if we look at the industry, I think Frank really called out well in his session that us and a few others have a large existing client base, and they remain a significant focus for us. For us, that will continue to be a tremendous area of focus, if you think, of the growth of some products have come from movement across the industry, if you like, flow between providers. We're really focused strongly, not only in continuing to grow, but also to nurturing the substantial stock of members that we have and a number of our competitors haven't had the client base to be spending that time on.

Great. Mark, another question for you. "The external platforms, for example, BT Panorama that IOOF gets revenues on, are there any further risks to these revenues in a world where cross subsidies are being reduced? Are you planning to bring more of the fun from this on to Evolve?"

Look, I think really our clients will be the key arbiter of that. In terms of those arrangements, we are confident that they are fit for purpose into the future. But ultimately, what we want to offer our clients is choice. And we have a unique perspective on how the market is operating to also focus on uplifting our proprietary capabilities. So I think it's really the best of all worlds that we can offer our clients and advisers choice across a range of market-leading offers, but also continue to inform our own proposition.

Great. Thanks, Mark. Cable, a question to you. "How much [indiscernible] admin will there be on the combined platform post integration? So I believe that means post completion of Evolve."

The completion of a Evolve 21, which will see the consolidation of our platforms from 2 to 1 and our product set from 73 to 13 who have made $40 billion worth of funds under management and about $0.25 billion customers, around 260,000.

Great. Sharam, a question for yourself. "IOOF is widely considered to have old technology and a lot of legacy technology issues. How would you respond to that?"

Well, if you go back many years, that might have been true, but over the past few years, we've built considerable capability internally to develop the Evolve platform. And I would say that the team that we currently have is actually one of the best in the country. And the fact that they've been able to develop this completely in-house, a very advanced solution which is market-leading, is evidence that, that statement is just not true. I think the view out there in the market is totally outdated and not on par with our current capability.

If I could add to Sharam's answer because I wholeheartedly agree. I'm really passionate about this one. And maybe our reflection is that we, as an organization, haven't done a good enough job talking to our capabilities, and that's what we're here to do today. But having led operations teams for a long time, I can tell you that the partnership that we've got with Sharam's IT team and the agile way that they work is delivering capabilities faster to the team than I've ever seen in my life before. The early access to Super was an incredible example where they responded almost within a weekend to deliver new capabilities to -- in the face of Huge demand, never seen before in the industry, position us to preserve what we think is industry-leading service. The proof point of the tech capability are numerous, and it's a myth that we are here to debunk today because it's simply not true.

Yes. Thank you, Frank. And final one for Mark before we wrap up, "When can we expect to see Evolve right in Wealth Insights data?"

Yes. Thanks, Rachel. I think as I tried to outline in the opening, we will expect that to be surveyed in the '21 survey, which I believe is in field of April, May, so published results usually shortly thereafter.

Great. Thank you, Mark, Frank, Sharam and Cable. The guys will be available for Q&A after the end of the third session. So thank you, guys, again. And the next session begins at 12:00 focusing on transformation in IOOF. Thanks again, guys.