Professional Investment Services chief executive Peter Walther has outlined a plan to rid the group of the legacy compliance risk issues that dogged it under previous management.
The country's largest non-institutionally owned dealer group, whose parent company Professional Investment Holdings was incorporated by Centrepoint Alliance (CAF) in December 2010, entered into an enforceable undertaking with the Australian Securities and Investments Commission (ASIC) in December 2011.
At the time ASIC said it was concerned the group had failed to comply with its obligations as an Australian Financial Services Licensee and the group would be required to engage an independent expert to undertake an in depth compliance review.
CAF's recent full year results included more than $11 million paid out in claims settlements with almost $17 million provisioned against future claims. Yesterday ASIC announced PIS adviser Alec Khoo had been banned for three years.
Since Walther joined the group in April last year there has been a significant turnover of high level staff, including the role of the chief information officer with Salim Jahshan recruited from Q Invest. PIS has also recruited a new manager of risk and professional standards , a new head of client strategies and solutions from CUA, and a communications expert.
Last week it also announced a further restructure with a number of state managers exiting.
"We've gone through a very intentional period of consolidation in terms of both adviser count and the size of the [approved product list] and as a result have materially improved the risk profile of the firm," Walther told Money Management.
"PIS under prior management had not placed sufficient emphasis on risk governance and compliance frameworks and as a result, under new ownership and management, we have elected to investigate and quarantine the legacy issues so that we can place the greatest amount of focus on building the business of the future without the distortion that legacy issues can give rise to in the day to day management of the business," he said.
"We have interrogated and rehabilitated every single aspect of our risk and governance frameworks including new systems, new processes, new tools, and we've heavily invested in recruiting and educating new people, and we've been able to attract some of the finest talent in the industry."
Walther also flagged an intention for the group to refocus on growth but from a quality over quantity perspective, and to increase its focus on risk advice in the future.
"Previously the firm had operated a platform that was oriented around being all things for all people, and today our focus and for the future our focus is much more narrowly tuned towards independence of choice, quality of advice and quality of service," he said.
"In the past risk [advice] was an important subject for the firm but it had not been treated previously as a core competency. The technical expertise in the area of risk advice had been the mandate of a few [rather than] of many."
Walther was hopeful the group could take advantage of its "unprecedented opportunity" to leverage its position as the market's largest non-institutionally owned advice provider.
"It's going to be quite easy for us to differentiate ourselves in a market place that's largely controlled and/or dominated by the product manufacturers, so whilst we see a lot of change in rhetoric across the industry, in the favour of retail clients, we don't see as many actually backing it up in terms of behaviour and activity and true focus on strategic advice," he said.
"We genuinely believe we have a once in a lifetime opportunity to lead change in this industry and to make a genuine difference to consumers and we're fiercely determined to seize upon that."
