ASIC announced Macquarie Equities Limited (MEL) will today begin writing to current and former clients about possible remediation for flawed financial advice.
The advice was provided by MEL’s financial adviser network, Macquarie Private Wealth (MPW).
This remediation process is part of ASIC’s enforceable undertaking with MEL, which was imposed in January 2013. The EU was the result of ASIC surveillance of MPW which identified concerns about MPW’s compliance processes and its risk framework (refer: 13-010MR).
The EU is being overseen by an independent expert, accounting group KPMG.
The EU requires MEL to identify advisers with poor compliance. Where MEL identifies a client has been affected due to an MEL adviser’s failure, MEL must remediate the client, including compensation. MEL will send out more than 160,000 letters to its clients, inviting them to raise concerns about the quality of advice. The letters will be sent to all people who have been clients at any time since MEL obtained its AFSL on 1 March 2004.
The remediation process will be subject to additional independent scrutiny by accounting firm Deloitte. It will report to MEL and ASIC.
ASIC Deputy Chairman Peter Kell said: ‘This remediation process will allow clients who believe they have been given poor advice to raise their concerns with Macquarie Equities. Clients who have suffered financial loss due to bad advice must be properly compensated.’
Update on EU
On ASIC’s broader work with Macquarie, Mr Kell said: ‘The EU has led to changes in MEL’s management team and internal standards. The undertaking has required MEL to improve induction processes for new advisers, improve adviser training, strengthen record keeping requirements, and ensure a stronger compliance presence in the business through improved review processes and consequence management.
‘ASIC also has ongoing investigations into a number of former Macquarie financial advisers.
‘We will continue to work with Macquarie and KPMG to ensure that the breadth, depth and robustness of the changes put in place by the EU deliver the appropriate outcomes for Macquarie’s clients.
‘ASIC expects to see significant change at Macquarie and we are determined to ensure that they improve their compliance to meet the standards the community expects of the financial advice sector.’
The EU is scheduled to run until 29 January 2015.
Photo credit: Alan Clever