IOOF has responded to findings that up to 17 per cent of client files from its Bridges and RI Advice licensees were potentially detrimental to clients by noting that only a minority of the files identified came after the group rolled out tough new governance standards across its advice network.
In a release to media this morning, IOOF said the files in question – undertaken as part of ASIC’s industry surveillance program – are mostly from its old governance regime.
“Less than five files contained indications of some potential client detriment [relating] to advice provided since the introduction of IOOF’s uplifted governance program and ASIC REP 515 compliant file review standards,” the release states.
It is understood nineteen files in total across the two licensees were found to be potentially detrimental to clients, four of which (21 per cent) came after the governance uplift started in January 2019.
IOOF has committed to taking remedial action against the two licensees, which ASIC will monitor.
Bridges is an IOOF-owned and operated ‘mass market’ dealer group with 144 advisers currently registered at ASIC, while RI advice is a self-employed ‘holistic’ advice group of 195 advisers that was picked up as part of the ANZ Wealth acquisition in 2018.
New governance regime
After spending the bulk of 2019 focussing on remediating customers for transgressions brought up at the Hayne Royal Commissions, CEO Renato Mota kicked off a reset of the financial planning business called “Advice 2.0” on September 1, 2020.
As part of the advice governance uplift, which IOOF report began back in early 2019, the wealth giant ascribed all of its advisers to ASIC’s 515 assurance and governance standard.
ASIC’s 515 standard refers to a project the regulator undertook in 2017 that reviewed how large institutions oversee their advisers and made a series of recommendations. Although outside the study’s purview at the time – only the big 4 banks and AMP were studied – IOOF subsequently committed to the same standards.
Since then, IOOF report, the compliance sheet has been relatively clean.
“We’re now auditing all files to the higher 515 standard and that’s what important to us,” IOOF head of advice Darren Whereat told Professional Planner.
The wealth group notes that any remediation required as a result of ASIC’s findings will be accommodated “within IOOF’s existing advice remediation provision or within the remediation cap arrangements with ANZ”.