IOOF to remedy poor advice after ASIC findings against licensees

IOOF will take remedial action against two of its financial advice licensees after the corporate regulator found deficiencies in their operations.

IOOF chief executive Renato Mota. Picture: Aaron Francis

IOOF will take remedial action against two of its financial advice licensees after the corporate regulator found deficiencies in their operations.

The move comes after The Australian Securities & Investments Commission in December last year completed its review of the quality of advice provided by the two licensees.

ASIC Found 15 per cent of advice provided to clients at Bridges Financial Services and 17 per cent of RI Advice Group “contained indications of some potential client detriment”.

In response IOOF has agreed to develop plans to remediate the advice provided to clients of Bridges and RI Advice, “including, where appropriate, client review and remediation programs’.

But ASIC warned it would closely scrutinise the implementation of the remedial actions and said further intervention may be required.

The financial planner will also provide copies of ASIC’s findings to the boards of directors of both Bridges and RI, in addition to IOOF.

The move from ASIC comes almost three years after the royal commission closely scrutinised the quality of advice provided by IOOF to its clients,

IOOF acquired RI Advice as part of the post-royal commission shake-out of the financial planning industry as part of a $825m deal that saw ANZ sell its wealth division in 2018. This latest finding against RI Advice comes after ASIC took action in August last year against the ­planner, relating to misconduct highlighted by the royal commission,

ASIC had alleged RI Advice had failed to put in place adequate systems and resources to block a “brute force” cyber attack in October 2018.

The cyber attack saw servers at an associated financial planner breached, exposing sensitive client information and identification documents.

IOOF has made many acquisitions in recent years, growing the business to one of the largest providers of wealth planning in the country.

The $1.4bn takeover deal of NAB’s MLC Wealth business is awaiting regulatory approval from the Australian Competition & Consumer Commission.