The Australian Securities and Investments Commission (ASIC) accepted an enforceable undertaking from PIS in December 2010 following concerns about the company’s compliance with financial services laws.
The enforceable undertaking was concluded in March 2012, but ASIC yesterday revealed its “concerns that [PIS’s] compliance and audit functions required further work”.
The regulator said PricewaterhouseCoopers’ monitoring would “test compliance of PIS’s personal advice with regulatory requirements, its ability to identify poor advice and the effectiveness of its advice audit and pre-vet functions”.
ASIC noted PIS’s cooperation in the matter, and acknowledged the work done by PIS as a result of the enforceable undertaking.
Shortly after ASIC announced the appointment of an “independent expert” to monitor PIS yesterday, the parent company of PIS, Centrepoint Alliance (CAF), announced the appointment of a “new group executive team”.
The announcement referred to the “good progress” that had been made in its wealth business “in conjuction with our enforceable undertaking requirements”, but a spokesperson could not provide details about the membership of the “new group executive team” before InvestorDaily's deadline.
The company then placed an announcement on the Australian Securities Exchange (ASX) website in which it named PricewaterhouseCoopers as the ‘independent expert’ referred to in the ASIC press release.
CAF managing director John de Zwart said the appointment signified a “key milestone” in the company’s “journey” to become the leading independent advice services group in Australia.
“We have undertaken a complete redesign of our compliance processes, training, recruitment and governance along with a suite of new advice tools and a series of key appointments, which are all part of our ongoing strategy,” said Mr de Zwart.
CAF then issued a third press release, almost identical to the ASX announcement, but made no reference to PricewaterhouseCoopers. Instead, it referred to an “independent expert”.
A spokesperson for PricewaterhouseCoopers declined to comment on the matter.
CAF reported a loss before tax and non-controlling interests of $14.5 million in June 2012, largely due to the payment of claims to clients of PIS and the cost of responding to the ASIC enforceable undertaking.
More than $11 million was paid out in claims settlement during the 2012 financial year, and close to $17 million was provisioned against future claims in June 2012.
