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Financial planning giant under investigation

Financial planning giant under investigation

***Updated***

IOOF is under investigation by ASIC and has commissioned an external compliance audit by Pricewaterhouse Coopers, following allegations of wrongdoing, including insider trading.

The corporate regulator has confirmed to Mortgage Business sister title ifa that it is investigating allegations aired in Fairfax Media newspapers, adding that "licensees have an obligation to report significant breaches and market participants have an obligation to report information which may raise a warning signal of market misconduct".

A former friendly society, IOOF is home to one of Australia's largest financial planning networks, with prominent groups under its umbrella such as Bridges, Lonsdale Financial Group, Consultum, Plan B and SFG Australia. 

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Assistant Treasurer Josh Frydenberg has described the allegations of insider trading and failing to self-report in a timely manner as “serious”, while federal senator John Williams has reiterated calls for a royal commission into the financial planning industry.

Meanwhile, in a statement to the ASX, IOOF announced it will be appointing the big four accounting firm to conduct a review, while also downplaying the media allegations.

“Most of the matters raised in the Fairfax press are historic in nature and IOOF believes all these issues have been addressed, including where relevant, thorough internal and board review, notifying industry regulators, ongoing compliance measures and controls, employee education and independent investigations,” the statement said.

“Nonetheless, IOOF has taken the decision to appoint PwC in the interests of providing clients and other stakeholders with confidence in the integrity of the company’s controls in the research division and its group regulatory breach reporting systems.”

PwC will assess the "design and operating effectiveness" of the IOOF research division's "control environment", IOOF said.

The accounting firm will conduct "system walk throughs" to identify the effectiveness of IOOF processes and controls; it will test the operating effectiveness of the "control environment"; and it will conduct design effectiveness testing, said the statement.

PwC will also be tasked with reviewing IOOF's breach reporting policy; the effectiveness of IOOF's breach reporting systems, processes and controls; and the operating effectiveness of the breach reporting process.

IOOF said it would keep the market informed of any "material outcomes" of PwC's review. 

Financial planning giant under investigation
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