IOOF claims PWC report found ‘no fundamental breakdowns’
IOOF will implement all recommendations made in an independent review of its breach reporting and research divisions by PWC with the group's board claiming the report found no ‘fundamental design or process breakdowns' in those two areas.
Rather, in a statement released to the ASX, IOOF stated that changes to date and those yet to be made would be "based around the further improvement of the existing operating model for the Research team control environment and the architecture of the breach and incident policies and procedures".
As a result if this IOOF stated that it had made changes to its research division with "base research outsourced to third party providers for both managed funds and equities, with appropriate controls over attribution and disclosure".
This follows earlier personnel changes in the research team which was restructured earlier this year with new of a new Group Head of Research and Portfolio Construction appointed in March.
The PWC report said these moves should be bolstered by a review of the composition of governance committees, the formalisation of research advice processes and controls, and greater team separation where heightened risks of conflict of interest may be apparent.
PWC found that IOOF had made plans to implement enhancements to its breach and incident management process with some enhancements already completed but recommended the adoption of a uniform set of standards and procedures across IOOF's various individual licensees and at the group level.
IOOF Holdings, Managing Director, Christopher Kelaher said the IOOF board had accepted all of the PWC Report recommendations without reservation, and would implement them all immediately with a further PWC review of the implementation to take place in six months.
He also stated the current and future reports would be passed on to the Australian Securities and Investments Commission and the Australian Prudential Regulatory Authority.
The news of the report's finding comes on the same day that IOOF has released its annual results reporting an underlying net profit after tax of $174 million, up 41 per cent of the 2014 financial year.
IOOF said it recorded its highest level of fund inflows of $1.7 billion to its platforms, up 19 per cent on the previous year while its acquisition of the Shadforth Financial Group had delivered $13 million in pre-tax synergies in the current financial year and was expected to deliver $20 million by the end of the next financial year.
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