Macquarie customers may not be properly compensated because the bank’s scheme for investigating alleged negligent financial planning advice is flawed, according to law firm Maurice Blackburn.
ASIC announced today that Macquarie Equities Limited (MEL) will begin writing to current and former clients about possible remediation for financial advice.
John Berrill, head of Maurice Blackburn’sfinancial disputes department said a number of questions remained about how Macquarie would make genuine offers to compensate people for their losses, given that the bank itself was in charge of the process.
“This goes back a decade and involves 160,000 clients. There is no detail around how information is to be exchanged, whether clients will be provided with copies of all the documents on their files and what systems are in place to communicate with clients whose contact details have changed,” Mr Berrill said.
“The scheme only allows for legal representation after Macquarie has made its review decision. As the Senate Committee Inquiry into ASIC found, representation was needed at the start of the process to safeguard clients’ interests. The Senate Committee found as a result, many people didn’t get adequate compensation.
“Random audits and independent oversight is another layer of quality control, but the value of this oversight will depend on its rigour. This won’t mean that all decisions of Macquarie will be reviewed. Clearly they won’t. There is no time limit on how long the review process will take either, which was another criticism from the Senate inquiry.
“Macquarie needs to have a more robust compensation scheme, similar to the one Commonwealth Bank is working on. It looks like Macquarie’s customers will be treated like second class citizens.
“The Senate Committee was scathing of Macquarie saying it had similar issues to Commonwealth Financial Planning. Lessons need to be learned from that.”
This remediation process is part of ASIC’s enforceable undertaking with MEL, which was imposed in January 2013.
Over 20 Macquarie customers have contacted Maurice Blackburn regarding alleged negligent financial advice.