It follows similar actions taken against Australia’s biggest wealth manager AMP, investment bank UBS and CBA and warnings by ASIC that led to the Future of Financial Advice reforms. “This is an industry that has to lift its game,’’ Mr Kell said. “They need to put the customer first.
It comes just five months before the expiry of a two-year enforceable undertaking imposed on the bank after the Australian Securities and Investments Commission (ASIC) found widespread and persistent shortcomings in the bookkeeping, advice processes and classification of clients in its high-profile retail investor shop front, Macquarie Private Wealth.
The corporate regulator has warned there remain widespread shortcomings in the financial planning industry as it announced a dramatic escalation of its actions against Macquarie Group that will require the bank to offer to review advice given to every one of the firm's 160,000 clients since 2004.
The undertaking has required MEL (Macquarie Equities Ltd) 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 commissioner Peter Kell said in a statement.
ASIC also has ongoing investigations into a number of former Macquarie financial advisers. “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,” Mr Kell said.
Macquarie, Australia’s biggest homegrown investment bank, has agreed to write to every client who received advice since the firm was licenced in 2004 with an offer of remediation, including potential compensation for losses they might have suffered as a result of advice failings.
Greens senator Peter Whish-Wilson said the government should call a royal commission and consider widening the terms beyond CBA. “We have a crisis of confidence in financial advice in this country,’’ Senator Whish-Wilson said. “People should be seeking good advice on how to manage their money and they should be able to trust their advisers.
ASIC imposed the enforceable undertaking in January 2013 after the regulator and the investment firm’s own reviewers found evidence of widespread problems with record keeping and advice processes.
Read more here: Business Spectator