Shares in wealth manager IOOF Holdings have slumped to an almost seven-week low after the company flagged a drop of up to 16 per cent in underlying profit.

Falling global equity markets have reduced IOOF’s funds and will impact the company’s underlying result in the six months to December 31, managing director Chris Kelaher told the company’s annual general meeting in Melbourne on Wednesday.

First half underlying profit after tax is forecast to be in the range of $46 million to $51 million, down from $54.6 million for the same period last year.

“As I reminded shareholders last year, IOOF’s businesses are all closely linked to the direction of global stock markets,” Mr Kelaher told the meeting.

Market volatility prevents any accurate forecasting of IOOF’s full-year result, he said.

IOOF’s funds under management fell from $106.2 billion to $100.3 billion in the three months to September 30, shareholders were told.

“Despite volatile and uncertain markets, the underlying business continues to perform strongly,” Mr Kelaher said.

Shares in IOOF slumped 62 cents, or 10.4 per cent, to close at $5.37, the lowest since October 6.

The forecast underlying profit excludes an expected one-off benefit of up to $8 million that IOOF will realise from its acquisition of the DKN Financial Group in September.

The integration of DKN into IOOF’s operations was continuing to plan, Mr Kelaher said.