How IOOF has added two years to its lookback

The full weight of the financial advice look-back regime is being made clear to financial advisers, with at least one large licensee telling advisers that it will also be looking at a further two years beyond 2019 to “provide confidence” that ongoing services have been provided to clients. 

IOOF has told advisers working under its licenses that with the scope period of the Lookback Project ending in September 2018, and the introduction of the new Fixed Term Client Service Agreements from early 2020, “there is a window of ~2 years where further testing is required to provide confidence that ongoing services were provided to clients in this top-up period”. 

It said the period in question spanned from 2 October, 2017, to 31 March, 2020, noting that there was an overlap between the end of the Lookback period and the beginning of the ‘top-up’ period “to ensure a full period is reviewed as periods beginning after 1 October, 2017, will not have been covered by the Lookback.” 

“Testing will be required for practices where issues were identified in the most recent period tested for the Lookback Project (July 2008 – September 2018),” it said. 

It said that the key activities with respect to the ‘top-up’ testing would be undertaken by major consultancy PWC and would involve: 

  • Reviewing the names and authorisation dates of the practice and all advisers that operated under the practice between 2 October 2017 to 31 March 2020 (whether current or exited); 
  • Understanding which clients paid OSF to an adviser tagged to the practice between 2 October 2017 to 31 March 2020; 
  • Selecting an appropriate sample for testing which may involve segmenting the client book (for example based on the annual fee value or the servicing adviser); 
  • Testing the sample for each client segment, including identifying and retaining evidence of the service obligation for the specific client being tested; and 
  • Evidence that this service was delivered for the annual period being tested, e.g. if the service obligation was for the offer of an annual review, we will be testing that an offer was made to conduct the annual review for that period. 

The advisers were told that where documentation was readily available on Xplan there would be no contact required. 

“Only in instances where questions arise as a result of testing, or where relevant documentation is not held in XPLAN will PwC contact you,” it said. “Further where additional documents are required, PwC will agree with you on an appropriate way to access the records and will ensure that realistic and achievable timeframes are agreed to finalise the review.” 




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Lookback or Lock In????

I'd say this is not by choice, but ASIC continues to drive the institutions out of business here. They threaten removal of license - there'd be a million little things they could draw on to remove the license - the equivalent of a life sentence for speeding - and the big dealers have no choice but to subject their AR's to the grief. The business model is broken.

Completed a "look back" program with a Bank aligned licensee last December 2020. All happened during a Corona Virus, business restructure, recruiting staff, a FASEA exam, my fathers death, and the normal course of running a business, such as Telstra & the NBN whilst servicing clients. They requested files from 2009. From 11 (ELEVAN) years ago... Certainly was a very enjoyable experience, and just what I needed at the time. I survived the GFC, a few wars and several other crashes, FoFA, FASEA, FDS with zero client complaints, but the fear of constantly having to worry about going over this type of action again.. has made me realized you can't run a financial planning business in the current hostile environment. It's the best of times to be running an advice business from attaining a new clients, but being a FP is high risk to start with, and the risk factor created by a regulator intent on killing financial advice other than by super funds, makes it very non-viable.

I think they are going after FDS breaches - at 250K per pop, this could be the final straw. And it won't just be IOOF but other dealers.. If you think the industry is decimated now, wait until they get into FDS.

IOOF Goody-two-shoes
IOOF has some serious bed-wetting problems.
Over-compliance, over-compliance.
As if to say,"Look at me, I'm a good boy/girl. I do everything you ask teacher, and more"
Trouble is, they are internalising the commands of the oppressor.
If the bar is in the wrong place, one should try to have it properly located, not see how high over it you can jump.
IOOF is a danger to the industry with this kind of behaviour

I agree. This has been the same track the FPA and AFA have taken over the last 20 years or so, and look where it has got us...

Centrepoint is doing something similar, which is refreshing and very professional. They appear to be on the right track and cleaning house thoroughly.

A client of ours received an unsolicited letter of remediation from them for doing a 'monitoring program' on one of their ethically challenged AR's, a small group in Nth Qld, (remember BIK pens? reverse that name and your on the money) as a refund for servicing fees paid for 3 years totalling over $9k which was excessively refreshing, especially as a number of other professionals knew they had a penchant for collecting fees and providing no service at all.

IOOF's preference is for employed advisers. Doing all they can to reduce their number of self-employed Practices with "innovations" such as this. IOOF are re-incarnating the Bank models. Ever hear Renato mention insurance being a part of a financial plan? He's all about Platform.

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