Scott Haywood has quit MLC Wealth in protest of the impending sale to IOOF and anticipated that an exodus of colleagues will follow.

He said neither IOOF or MLC consulted with the network of financial advisers before inking a deal and shouldn’t count on them voluntarily joining the combined wealth manager.
“I can’t be part of an old school conglomerate like AMP,” Mr Haywood told the Financial Review. “I can’t go backwards.”
The veteran planner has a track record of activism on behalf of advisers in the midst of large corporate transactions. In 2011, he was among the advisers licensed by AXA Asia-Pacific when it merged with AMP.
A similar protest over the deal saw Mr Haywood take his business to rival MLC, which sparked an exodus of at least 80 AXA advisers who left to join independent and competitor channels rather than join AMP.
“I was interested in culture and remuneration issues back then,” he said. “And when I saw the [IOOF-MLC] announcement yesterday I thought it was back to the future. They have basically copied the AXA-AMP model. I could see it was going to be an absolute mess.”
Mr Haywood said he was in discussion with other Garvan and MLC firms and many shared his concern over IOOF’s business model and regulatory compliance track record and expected many would join him in leaving the network.
“Just under 100 advisers followed me to MLC in 2011, I expect the same sort of number of advisers will be reviewing their own and clients priorities in this time,” he said.
Were that to occur, it could put IOOF’s claim that it would become the nation’s largest wealth manager under a cloud. Rival AMP would have just 37 fewer advisers than a combined IOOF-MLC if the deal went through.
MLC’s financial advisers contribute a collective $40 billion to MLC’s $308 billion under management. IOOF declined to comment on Mr Haywood’s resignation.
Both IOOF and MLC were castigated by the Hayne royal commission for widespread misconduct including charging “fees for no service”.
While Mr Haywood, conceded his current licensee had its own regulatory problems facing two separate lawsuits brought by ASIC he said “Garvan had been left to its own devices” under NAB’s ownership and he was worried IOOF would seek to influence his advice and incentivise the sale of in-house products.
He alleged IOOF had a reputation among advisers as being “ruthless” and “interested in profits over clients”.
IOOF’s “Advice 2.0” initiative, unveiled on Monday but overshadowed by the MLC transaction, rang alarm bells for Mr Haywood due to its “multi-brand approach” and disparate focus on salaried, technology-based and self-employed advice models, which he said was akin to a “conglomerate”. His new licensee, ASX-listed Sequoia Financial Group, had a more specialised and independent model, he said.
IOOF chief executive Renato Mota was defiant about the benefits of the company’s fragmented strategy, telling the Financial Review: “It would be sad to see our industry only have one model or assume that one size fits all”.
He has also long maintained that IOOF has an “open architecture” policy where advisers operating under its licences can recommend the investment and insurance products of any third-party, including competitors, if they believe it is in their clients’ best interests.
MLC chief executive Geoff Lloyd, who will not be joining IOOF after the merger, wrote to MLC staff and advisers on Monday to persuade them the IOOF transaction meant “business as usual” and that “NAB chose this path on the basis that it delivers the best outcome for both NAB and MLC”.
Equity analysts, meanwhile, were split on the deal. Andrei Stadnik of Morgan Stanley said it was a “large deal with compelling synergies” but also some key execution risks, particularly since IOOF has not fully completed the integration of ANZ Bank’s wealth assets.
Jonathan Mott of UBS said it was a “good exit for NAB” given wealth management had become a “troublesome business”, while investment bank Jarden’s analysts said “debate continues on the merit of the acquisition.