Why the IOOF (ASX:IFL) share price is on watch today

The IOOF Holdings (ASX: IFL) share price is on watch after a market update on the company’s latest response to the corporate regulator.

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The IOOF Holdings Limited (ASX: IFL) share price is one to watch this morning after a late afternoon update from the Aussie wealth manager.

Why is the IOOF share price on watch?

IOOF yesterday provided a response to a media release by the Australian Securities Investment Commission (ASIC). ASIC had earlier published a release titled “21-084MR IOOF advice licensees to implement changes following ASIC surveillance”.

ASIC has been reviewing IOOF advisors’ work as part of the wealth manager’s remediation efforts under the regulator’s industry surveillance program. The regulator found two IOOF subsidiaries had potentially exposed a number of clients to harm. ASIC reviewed both Bridges Financial Services Pty Ltd and RI Advice Group Pty Ltd in December 2020.

ASIC found 15% of client files at Bridges and 17% of files at RI Advice “contained indications of some potential client detriment”. The IOOF share price climbed 2.3% higher yesterday despite the regulatory note.

IOOF said that less than 5 files contained indications of some potential client detriment in relation to advice provided. Those numbers recorded are since introducing IOOF’s uplifted governance program and ASIC REP 515 compliant file review standards.

The IOOF share price is one to watch in early trade as investors weigh up the regulator’s latest findings. IOOF said it remains committed to ensuring the highest advice governance standards. According to the release, IOOF has conducted all advice reviews to the heightened ASIC REP 515 standards since 1 January 2020.

The review comes nearly three years since IOOF was hauled over the coals in the 2018 Financial Services Royal Commission. ASIC did note that IOOF has “agreed to develop and implement remedial action plans”.

Foolish takeaway

The IOOF share price is in focus this morning after the company responded to the regulator’s latest findings. Investors will be watching the Aussie wealth manager closely in early trade for signs of any movement.

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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