For those of you who don't know the
history behind IOOF and
mutual/friendly funds more generally, there is perhaps some irony in these events. Friendly or Mutual societies were a common form of savings and insurance association formed and owned by their members to benefit their common financial interests. They were the most common structure for insurance businesses until relatively recent times.
IOOF was a mutual fund formed in 1846 by the
Independent Order of Odd Fellows.
It was only in recent times in Australia that these mutual associations decided it was in the interests of their members and their future efficient market operations to transition from member owned institutions to a shareholder owned corporation. Usually members, comprising policy and account holders made a small windfall profit from being allocated shares through the corporatisation process which unlocked the intrinsic capital value of the businesses as listed corporations.
IOOF demutualised in 2002. Other examples of now demutualised and corporatised mutual societies/associations include the Australian Mutual Provident Society, formed in 1848 and NRMA Insurance, formerly owned and operated by the National Roads and Motorists Association.
The same process has happened with most of the producer cooperatives which once saw the processing, distribution and marketing of primary production such as cheese and dairy (for example, Murray Goulburn Co Ltd). These farmer cooperatives were owned by and for the benefit of the farmers. How did that work out for the farmers?
In all these cases bankers, advisors, brokers and management and the original cooperative and mutual members all made a quick short-term windfall. Whether those members or society at large have benefited in the long run, especially given the poor state of market and corporate oversight in this county, is another matter.