Australian wealth management group IOOF has upgraded its 2006/07 profit guidance on the back of better than expected product inflows and investment market performance.

The Melbourne-based group has upgraded its underlying net profit after tax (UNPAT) guidance to between $28 million to $30 million for the year ended 30 June 2007, representing an increase in excess of 20 per cent over previous corresponding net profit after tax (NPAT) of $23.3 million.

The UNPAT in 2006/07 will differ to reported NPAT by $4.9 million. This difference between the measures relates to short-term costs arising from the acquisition of the remaining minority interest in Perennial which occurred in October 2006.

According to new IOOF chief executive Tony Robinson, factors impacting the upgraded forecast included better than expected product inflows to its IOOF Pursuit range of products, investment market performance exceeding budgets and strong cost control.

The group also released its 2007/08 earnings guide, targeting 15 per cent growth in underlying earnings per share.

The forecast assumes continued equity market growth, ongoing strong performance across the Perennial range of funds, and growth in IOOF's superannuation products and services.

"This is competitive, although it won't shoot the lights out, but there is nothing wrong with 15 per cent growth, in any investor's language. It sets a positive tone," Aspect Huntly analyst David Walker said.

"The market is waiting to see consistency in inflows and how new chief executive Tony Robinson is going to go."