4.1 Background

IOOF Holdings Ltd is a publicly listed company. IOOF Investment Management Limited (IIML) and Questor Financial Services Limited (Questor) are subsidiaries of IOOF Holdings.

IIML is an RSE licensee and the trustee of various superannuation funds, including the IOOF Portfolio Service Superannuation Fund (IPS Fund).[1] Questor was an RSE licensee and was the trustee of various superannuation funds, including The Portfolio Service Retirement Fund (TPS Fund).[2]

IIML is, and Questor was, a dual-regulated entity (DRE). That is, in addition to being the trustee of one or more superannuation funds, the entity is also the responsible entity (RE) for one or more managed investment schemes. Subject to some conditions, an entity that is the RE of a managed investment scheme may itself acquire and hold an interest in the scheme.[3] And, of course, an entity that is trustee of a superannuation fund can acquire and hold an interest in the scheme. Hence, an entity that is a DRE may, and IIML and Questor did, invest the assets of superannuation funds of which it was trustee in the managed investment schemes of which it was RE. As REs, IIML and Questor also acquired and held interests in those schemes. Arrangements of this kind present a real and continuing possibility of conflict between the interests and duties that attach to each role.

The Commission looked at three aspects of conduct relating to IOOF’s superannuation business.

  • The examined Questor’s conduct in connection with the recovery of an amount that it had wrongly paid to unit holders in a managed investment scheme of which it was RE and in which, as trustee, it had invested, and in which, as RE, it held interests. This event was referred to as ‘Questor’s overdistribution’.
  • The second aspect of conduct examined related to IOOF’s dealings with APRA about questions of governance, management of conflicts of interest and culture more generally.
  • The third focused upon IIML’s decision, in 2018, to change the fees and charges (the ‘pricing’) for the IPS Fund by applying the new and lower pricing to new members but only applying the new pricing to existing members if and when the member asked for it to be applied.

Both at the times relevant to the issues examined by the Commission and when the Commission took evidence about those issues, Christopher Kelaher was Managing Director of IOOF Holdings. The Commission heard evidence from Mr Kelaher, Mark Oliver, the General Manager, Distribution, for IOOF and Stephen Glenfield, a General Manager of APRA’s Specialised Institutions Division who, at relevant times, was the general manager of APRA’s supervisory team supervising IOOF.

On 6 December 2018, after the Commission received evidence, APRA commenced proceedings in the Federal Court against IIML, Questor, Mr Kelaher and four other individuals.[4] I summarise the allegations in that proceeding below. That proceeding having commenced, I make no comment or findings about the matters referred to in the papers filed by APRA. It remains appropriate, however, to say something about a letter Questor sent to members in 2016 in connection with Questor’s over-distribution, and IIML’s conduct regarding the pricing of the IPS Fund. Both issues lie outside the subject matter of the APRA proceeding.

A related issue arose in the ANZ case study. At the time of the hearings, ANZ had two superannuation trustees, OnePath Custodians (OPC) and Oasis Fund Management Limited (Oasis). In October 2017, ANZ agreed to sell both trustees, along with some other parts of its business, to IOOF. A condition precedent of that sale was that OPC approve a successor fund transfer (SFT) in other words, the sale agreement could not proceed without OPC’s co-operation. The Commission heard evidence from the Chair of OPC and Oasis, Victoria Weekes, about the way OPC approached that decision.


[1] Exhibit 5.116, Witness statement of Christopher Kelaher, 26 July 2018, 3 [14]–[16].

[2] Exhibit 5.116, Witness statement of Christopher Kelaher, 26 July 2018, 3 [14]–[15].

[3] Corporations Act s 601FG.

[4] APRA v Christopher Francis Kelaher & Ors, Federal Court of Australia, NSD 2274/2018.

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