Kelaher spent a decade at IOOF, now known as Insignia Financial, from 2009 to 2019. He joined the firm as a result of the merger between IOOF and Australian Wealth Management where he had been the managing director.
Garry Crole, chief executive of Sequoia, confirmed to InvestorDaily’s sister brand Money Management that Kelaher will be “assisting the company”.
At the time of Kelaher’s appointment to IOOF, shares were trading around $2.50 and he successfully turned the share price around to more than $10 in 2017, with the company being Australia’s second-largest wealth manager.
By 2017, Kelaher had increased the firm’s funds under management, administration, advice and supervision from $94.6 billion in 2009 to $147.2 billion. Its financial advice brands included Bridges, Consultum, Lonsdale, Ord Minnett and Shadforth. Advice net inflows were $3 billion in 2017, up 131 per cent from the previous year.
“Our adviser numbers continue to grow, which appears to be counter to industry trend. Advice net inflows of $3 billion, up 131 per cent versus 2016, included $976 million from 33 new advisers joining IOOF from another licensee. Our advice-led strategy is leading to record levels of interest in our advice businesses,” he said in the 2017 annual report.
However, by the following year, shares had tumbled by around 58 per cent in the wake of the Hayne royal commission, when IOOF came under fire for failing to move superannuation members to a lower-fee product and remaining on grandfathered commission.
Kelaher stepped aside pending resolution of the APRA proceedings in 2019 regarding allegations that the firm had failed to act in the best interest of its superannuation clients. The court dismissed the allegations, and Justice Jayne Jagot ruled in his favour in September 2019.
It will be interesting to see if Kelaher can bring this turnaround experience to Sequoia Financial Group, which saw its own shares fall by 27 per cent in the last 12 months after a difficult 2024. A group of shareholders attempted to push Crole and director Kevin Pattison from the board and replace them with Peter Brook and Brent Jones. Jones has been the firm’s head of professional services since December 2017, and Brook was the former chair of licensee Diverger.
The disruption impacted operating momentum, caused unrest among employees and advisers, and resulted in additional costs to maintain businesses and staff throughout the period, it said.
An extraordinary general meeting was held on 5 June, but the shareholders were unsuccessful in their bid, although changes have since been made such as the streamlining of its existing divisional structure from four to two, and an agreement that Crole would step back from the leadership role by FY27.
Speaking at its financial results in February, Crole said: “We are bullish about our future as we undergo significant but necessary changes to our business. We expect the remainder of FY25 to be strong as we start to realise the full value of recent changes within our businesses, and as we continue to execute on our key strategic initiatives.”
In February 2025, the environment and potential for M&A took another turn when the Australian Wealth Advisors Group (AWAG), chaired by former Diverger chair Lee Iafrate, took an 18 per cent stake in Sequoia.
This was enacted on the expectation of further corporate activity in the financial advice space in light of the three recent private equity (PE) bids for Insignia. It is understood that Kelaher has a good relationship with AWAG.
Another individual on the AWAG board is non-executive director Mark Stephen, a former colleague of Kelaher, who formerly worked as chief executive of IOOF’s national advice network Lonsdale Financial Group.
When contacted by Money Management, Stephen said: “There are some interesting times ahead and significant corporate activism in the financial services sector. I worked with Chris over many years as the CEO of Lonsdale Financial Group and I rate CK highly.”
Regarding the future of M&A in the financial advice industry, Sequoia could be a key target in light of its share price difficulties and a possible match could be rival licensee Centrepoint Alliance. AWAG is understood to have a small stake in Centrepoint Alliance as well as Sequoia, and Sequoia also has its own 6 per cent in the company.
Crole declined to comment on the possibility of activity between the firms when contacted by Money Management.
