INSIGNIA FINANCIAL LTD — AGM Information 2012

Nov 26, 2012

IOOF Holdings Limited

Annual General Meeting 2012

Managing Director’s address

==> picture [137 x 203] intentionally omitted <==

Christopher Kelaher Managing Director

Good morning ladies and gentlemen, IOOF has performed positively in 2012 in light of difficult external conditions. Financially, your company has performed well, reporting a $19.4 million statutory profit and an underlying Net Profit After Tax and Pre Amortisation result of $96.4 million for the period ended 30 June 2012.

Much time and energy has been spent during the year, growing the business both organically and through acquisition. This focus has yielded pleasing results, with the execution of two strategic acquisitions, the addition of more aligned advisers and the investment in the IOOF brand through a carefully targeted advertising campaign.

Despite the challenging conditions, the amount of money we manage on behalf of others increased by $1.1 billion to $107.3 billion as at 30 June 2012.

==> picture [51 x 41] intentionally omitted <==

A key contributor to this result relates to the extra funds brought into the group as part of the DKN acquisition in late 2011. Offsetting this amount was a decrease in the market value of client’s total funds as well as some institutional outflows in IOOF’s funds management business Perennial.

One area I would also like to highlight is that for yet another year, the growth in our Flagship platforms is ahead of that of the industry. Where the industry’s annualised industry growth only increased by 1%, IOOF’s flagship platforms netflows have grown by 5%.

Pleasingly, since the end of the financial year and for the quarter ended September 2012, client monies have increased to $110.7 billion.

Investing in organic initiatives while controlling costs

While the external markets have not been in our favour, we have deliberately looked to influence the aspects of our business that we can control. To this end, we have invested prudently in marketing and technology while continuing to control expense growth in other areas to at or below inflation – something we have had a strong record on in recent years.

Technology forms a key plank to the success of IOOF as it supports the underlying products and services that are promoted by the business. During the year, investment in those systems continued to ensure they remain contemporary.

==> picture [50 x 41] intentionally omitted <==

A campaign to improve awareness of the IOOF brand outside of its traditional Victorian base began in 2012, with an IOOF branded bus and tram deployed in Sydney and Melbourne, along with advertising hoardings and billboards at the Sydney Football Stadium, various airports and key locations around Australia.

The early signs are showing us that the campaign has been successful, with awareness of IOOF by financial advisers improving noticeably since the advertising began.

Another initiative this year was the release of new products and further investment in our existing products. New low cost products have seen encouraging growth in new areas for IOOF with flows to Pursuit Focus and TPS Essentials exceeding internal expectations.

Key changes made to our existing suite of AET Superannuation products have repositioned them in the marketplace.

The large volume of regulatory change remains a challenge for the industry. Key elements of regulations that the industry is waiting for clarity on still remain uncertain, making implementation by the current deadlines increasingly difficult.

Where possible, IOOF has already responded to regulatory reform, and in some cases well ahead of others in the industry. In the areas where change is required, a group-wide internal team has been formed to address product and system modifications.

==> picture [50 x 41] intentionally omitted <==

Acquisitions made during the year are a clear strategic fit

IOOF has been particularly active on the acquisition front with the purchase of two strategically important businesses in a short space of time. These purchases are clear evidence that our goal to increase aligned advisers and grow our funds under administration is on target.

In late 2011, IOOF completed the acquisition of financial advice group, DKN Financial. This business has since been successfully integrated into IOOF and is making a positive contribution financially. The business is adding new advisers to its Lonsdale network together with Avenue Capital, a group of advisers who joined the group at the end of the financial year.

Then in August 2012, IOOF announced it was seeking to acquire wealth management firm, Plan B via an off-market takeover offer. That acquisition was finalised just over a week ago.

Plan B further boosts the number of aligned advisers IOOF has as well as increases our Funds Under Administration. Importantly, it provides IOOF access to two of Australia’s high growth states, in Western Australia and Queensland.

While the integration of Plan B into IOOF has only just begun, pleasing progress has been made to date and we are confident of our ability to successfully merge the two businesses together over time.

==> picture [50 x 41] intentionally omitted <==

Outlook for IOOF

For IOOF, influencing the aspects of its business that are within its control will remain a feature as long as the external environment remains uncertain in the short term.

Longer term, we remain positive about the prospects for IOOF and the wealth management industry in general.

I would like to take this opportunity to thank IOOF’s Leadership Group and employees. Our business has undergone much change in recent times, with the addition of new brands, products and people. Coupled with the changing regulatory framework for our industry, IOOF’s employees are to be commended on their resilience and continued dedication.

Thank you

==> picture [50 x 41] intentionally omitted <==