IOOF has confirmed that it has been late to the party on financial adviser client remediation but expect to begin the process early this year, having identified 67 advisers it regards as being “in the higher-risk category”.
The company revealed its position in an answer to a question on notice received during the hearings of the House of Representatives Standing Committee on Economics as part of its review into the superannuation sector.
Despite earlier having referenced provisioning for a remediation bill in the order of $223 million, IOOF acknowledged that it had not actually commenced making remediation payments because it was still collecting and assessing the data.
“We have directed significant resources towards remediation and have engaged independent experts (one for investigations and another for remediation) to develop and implement (and therefore expedite) the remediation process,” the company’s answer said.
It said this would “help ensure we achieve the best outcome for our clients”.
“Until we complete our analysis, it would not be prudent to estimate how many clients are impacted,” it said.
IOOF’s answer said that all analysis to date had been based on adviser numbers, “where we identified 67 advisers in the higher-risk category”.
“We expect remediation payments to begin in early 2020,” it said.
Comments
It sound like IOOF is taking a much more considered approach to remediation, and making an effort to identify those clients who have been genuinely disadvantaged and those advisers who genuinely did the wrong thing.
Unlike the banks, which are paying out billions in "remediation" to clients who actually received the services they paid for, are quite happy with the service they got, and don't understand why they're getting a refund. Most of the banks "remediation" is really just a PR exercise.
not really, they are deliberately doing that to target financial planners, they identify "breaches" then make referrals to ASIC who then ban them.
if they can't have financial planning no one can. and asic gladly comply. remember they ask for the banks approval for media releases etc. and are funded by the banks.
it really is that sinister.
Come on Anon, the banks are paying because they realised that it would be cheaper than going through file by file to understand if remediation is required. IOOF remediation will be significant and well beyond 67 'high risk' advisers.
That's sort of my point re the banks. They know it will cost a lot to identify the genuine cases worthy of remediation. In many cases, the file won't even show whether the service was delivered or not. Lack of documented evidence in the file proves nothing more than a lack of documented evidence in the file. It is not proof of lack of service. "Guilty until proven innocent" might be ASIC's philosophy, but it's not the law.
The banks know that if they investigated properly, only about 20-30% of their "remediation" cases would be genuine lack of service. But they won't know which 20-30%, without a costly investigation. So they're prepared to pay out much more than they need to in order to save some investigative cost, and at the same time get a PR dividend thanks to their "contrite and caring" approach.
IOOF doesn't have a valuable brand to protect, and doesn't have lots of cash to blow on a PR stunt to protect it. Hence their more laser like approach to remediation.
Shame that IOOF can't identify their high risk "Wealth" Management Staff who are unqualified and incompetent and costing the shareholders a fortune. Shake and Bake!
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