IOOF posted an underlying net profit after tax (NPAT) of $198 million for FY19, up 3.4 per cent on the previous year. However, the group’s statutory NPAT was $28.6 million, down 67.7 per cent and inclusive of provision for financial advice remediation.
The ASX-listed company conducted a review of the advice given to clients that included the development of key risk indicators, a sampling of advisers and an external review of over 1,200 files. The review found incidences of fees for no service, inadequate documentation and inappropriate advice. In response, IOOF has provisioned for $182.7 million in remediation costs, inclusive of interest as well as $40.4 million in program costs. IOOF also announced that it had expensed $12.1 million in product remediation in FY19.
“We are holding ourselves to the highest standards and where there is uncertainty or ambiguity we will remediate in favour of the client,” IOOF CEO Renato Mota said.
“In one of the most challenging years for our company and for the industry, we have focused on the imperatives of stabilising the business, with a view to delivering better outcomes for our clients and our shareholders.
“The board has taken a prudent view on capital management as we stabilise the business and begin our strategy of ‘transforming with purpose’ so we are future fit and in a position to take advantage of the market opportunities we see ahead.
“As an advice-led business offering choice to clients through open architecture, we believe we are well positioned to take advantage of market opportunities as industry disruption continues, the banks exit the industry, and as client and adviser needs evolve.”
Upon his appointment as CEO and managing director in June, Mr Mota announced that he would undertake a review of the senior management team to ensure IOOF had the cultural alignment and capabilities to meet its higher organisational ambitions and expectations.
Since then, Mr Mota has announced the appointment of a new chief risk officer, Amanda Noble, with a redefined role reflecting a holistic approach to governance and risk management in support of the company’s commitment to stakeholders and the communities it serves.
The board renewal process has seen the appointment of two new independent non-executive directors to IOOF Holdings Limited and an independent non-executive director to IOOF’s APRA-regulated subsidiary boards.
“Today I am delighted to announce the appointment of Melissa Walls as our new chief people officer. Melissa’s deep industry experience and people management acumen will greatly benefit the company and the executive management team as we accelerate the cultural change process,” Mr Mota said.
Commenting on the outlook for wealth management, the CEO said exit of banks from the industry and the demand for simpler products and platforms that are more affordable and responsive to customer needs, plays to IOOF’s strengths.
“We understand the challenges of our industry and the low growth environment. However, we are placing our confidence in the power of advice and the strength of our business,” he said.
“We continue to listen to our clients, members, advisers and the communities in which we operate, in order to always look to deliver better outcomes for the benefit of all our stakeholders.”
Calling Mr Whereat a baffoon is not going to help the issue. The [b]real[/b][b][/b] issue is that Mr Whereat and his ‘mates’ [b]do not deserve[/b][b][/b] to be and [b]should not be[/b][b][/b] in a position at IOOF to make decisions on its business and the industry that it works within. We should learn from history in both good and bad but the bad should not be swept under the carpet and is not forgotten. Mr Mota should pay attention to this for the ‘review of the senior management team to ensure IOOF had the cultural alignment and capabilities’ the Whereat camp should be looked at.
[quote=Anonymous]Anonymous, who are Whereat’s mates you talk of? I think Whereat and his team are pretty decent people.[/quote][quote=Anonymous]Anonymous, who are Whereat’s mates you talk of? I think Whereat and his team are pretty decent people.[/quote]
I have dealtt with the man a number of times and he is a Baffoon
Anonymous, who are Whereat’s mates you talk of? I think Whereat and his team are pretty decent people.
All Whereat’s mates are still at IOOF, some promoted too.
When is ASIC going to investigate incompetent leaders like Whereat? Seriously how did Renato Mota promote Whereat and Whereat’s buddies to their current positions, I have no idea.
Worse than that Anonymous. Whereat/RI PAID Doyle to join them from AFS!
[quote=Anonymous ]Great response Mr Mota. Have you told shareholders that your ‘second in charge’, Mr Whereat kept John Doyle on as an AR within RI Advice licensee when he was runnings RI Advice during that period when he knew the compliance risk and issues pre Royal commission findings? I guess everyone makes mistakes even at Mr Wherat’s level. Good work, Mr Mota and great appointment having Mr Whereat as your ‘right hand man’.[/quote][quote=Anonymous ]Great response Mr Mota. Have you told shareholders that your ‘second in charge’, Mr Whereat kept John Doyle on as an AR within RI Advice licensee when he was runnings RI Advice during that period when he knew the compliance risk and issues pre Royal commission findings? I guess everyone makes mistakes even at Mr Wherat’s level. Good work, Mr Mota and great appointment having Mr Whereat as your ‘right hand man’.[/quote]
Mr Whereat is a bafoon
Great response Mr Mota. Have you told shareholders that your ‘second in charge’, Mr Whereat kept John Doyle on as an AR within RI Advice licensee when he was runnings RI Advice during that period when he knew the compliance risk and issues pre Royal commission findings? I guess everyone makes mistakes even at Mr Wherat’s level. Good work, Mr Mota and great appointment having Mr Whereat as your ‘right hand man’.
It hasn’t actually cost IOOF $223 million dollars. There is a provision for the costs baste on the extrapolation of those 1200 files across all dealer groups. It is a bit like polling; what is suggested by small samples is in reality , not the case. So, an assumptive big headline, is it not?
Code for – We are throwing every single adviser can can under the bus. This way we can be seen as punishing the advisers, and we still get to keep the business plan that started all this sheet in the first place. You would imagine that seperating product and advice would be better for clients and shareholders, let these products compete in the market for advisers business. Its all too simple isnt it.