Reflecting on Insignia’s acquisition of MLC

As Insignia Financial formally completes the separation of MLC from NAB, Money Management reflects back on how the acquisition came to be and where Insignia sees MLC going forward. 

The acquisition was first announced in 2020, completed in 2021. The firm said it has completed the formal separation between the two firms this week.

August 2020

Talks of a bid by IOOF for the financial planning business of MLC first started swirling in August 2020 when the company entered into a trading halt. The speculation came amid suggestions that some of the major private equity players examining an acquisition of MLC were less attracted to wealth management as other parts of the business.

IOOF confirmed it had entered into a transaction agreement with National Australia Bank (NAB) to acquire 100 per cent of NAB’s wealth management for $1,440 million, subject to completion adjustments.

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It said the acquisition was expected to deliver in excess of 20 per cent earnings per share accretion on a 2021 financial year pro forma basis, including $150 million of targeted pre-tax synergies, excluding transaction and integration costs.

October 2020

Following the announcement of the sale, MLC chief executive Geoff Lloyd announced he would leave at the end of October 2020, after two years, and chief corporate services officer Andrew Morgan would oversee the completion of the acquisition. Lloyd had been working at MLC since September 2018 and was formerly the chief executive of Perpetual.

February 2021

As news spread of the acquisition, advisers from both IOOF and MLC opted to exit the respective companies, with 252 advisers leaving in the six months since the August announcement, according to data from HFS Consulting. Not only this, but rival licensee Count Financial picked up three new firms which were previously under MLC/IOOF licences.

May 2021

By May, some nine months after the deal was announced, the Australian Prudential Regulation Authority (APRA) had approved IOOF’s bid to acquire MLC, including responsible superannuation entity NULIS Nominees Australia. 

Later that month, the acquisition was formally completed, with 406 MLC advisers joining IOOF and creating a combined business with $494 billion in funds under management. 

IOOF chief executive, Renato Mota, said: “Today we become a new IOOF. We have the strategic intent, the talent, and now the scale, to deliver our advice-led wealth management proposition to more Australians than ever before.”

August 2021 

With the acquisition complete, Mota said the firm’s goal was to arrive at one business model that would support self-employed MLC advisers that was sustainable and did not rely on other subsidisation from other parts of the group over the next three years.

Mota said IOOF had reached a point where the firm felt it was at critical mass in terms of scale and that the acquisition focus had turned into an organic growth focus that revolved around engaging with clients and building strength in its reputation. He also said he expected more self-employed advisers to join IOOF due to its differentiated proposition.

October 2021

In October 2021, the firm announced it would be rebranding from the historic name of IOOF to Insignia Financial as part of a strategic brand review. Developing and introducing the corporate brand would cost $2–3 million, the firm said, that was funded by existing transformation and integration budget.

June 2022

In the next stage of its asset management integration between the firms, it announced it would be developing a simplified model with two distinct investment streams. 

The first investment stream combined the management of diversified multi-asset strategies under a sole chief investment officer, Dan Farmer. The second would separate out directly managed single asset class strategies under Jason Komadina, general manager for direct capabilities and specialist investment services.

October 2023

Mota announced he would be stepping down after 20 years with the firm, and five years as chief executive. Mota joined the firm in 2003 and held a variety of roles, including general manager of distribution, group general manager for wealth management, leading the acquisition of MLC and was appointed its chief executive and managing director in 2019. 

February 2024

Replacing Mota as chief executive was Scott Hartley, who joined from AMP where he worked as chief executive of wealth management. However, he had spent an earlier portion of his career at NAB/MLC, including as the executive general manager of corporate and institutional wealth business at MLC/NAB Wealth.

November 2024

Insignia stated to the ASX that it had completed the separation of MLC Wealth from NAB at the end of November, meaning employees now operate entirely under the Insignia operating system.

Looking ahead

In the firm’s latest Investor Day, Hartley said he is seeking for MLC Asset Management to expand and grow new channels in private equity and alternatives, and accelerate market penetration of its managed account offering. There is an opportunity, it said, for net flows to reach $3–4 billion by FY30.

Strategic priorities for MLC are further commercialisation of private equity and alternatives growth, enhancing external distribution propositions, enhancing relationships with retail asset consultants, and supporting managed account growth as portfolio building blocks.

“MLC Asset Management is one of the largest and most awarded commercial multimanagers in Australia and, as part of our 2030 strategy, we plan to become the portfolio constructor of choice. Through simplifying our existing offering, extending our multimanager approach into new structures and pursuing growth in targeted areas, we will pursue further external growth.”

It also completed a large wrap migration which saw $38.6 billion and 94,000 client accounts migrated from the MLC platform over to Expand. This migration collectively saved $13 million in administration fees per annum, created an improved user experience and a simpler way of working. 

Expand doubled its menu of separately managed accounts (SMAs) to address the growing demand from advisers to access a wider range of SMAs. This brought the total number of managers on the menu to 12, with 64 SMAs across multi-asset and single sector options.

In terms of appointments, the firm hired four executives to lead strategy and innovation in its retirement solutions for the MLC brand, three of whom joined from TAL. Andrew Howard would lead the new function as executive director of strategy and innovation while Ashton Jones, Scott Manson and Jeffrey Hopson also joined the team.

At the wider Insignia executive team, Liz McCarthy was appointed as chief executive of MLC Expand, responsible for the wrap platform business.