SYDNEY Aug 15 Australia's corporate watchdog said the wealth arm of Macquarie Group will start reaching out to the clients that it has advised since March 2004 about possible compensation for providing poor financial advice.
Macquarie Equities Ltd (MEL) will send out more than 160,000 letters to its clients, and it will also be required to identify advisors who had given bad financial advice, the Australian Securities & Investments Commission (AISC) said in a statement on Friday.
This "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," ASIC Deputy Chairman Peter Kell said.
Australia's financial advisory sector has been criticised for high fees, and the Financial Planning Association of Australia has acknowledged that low entry requirements for advisers has led to poor advice for customers.
In June, a Senate committee accused Commonwealth Bank of Australia (CBA) of covering up misconduct at its wealth arm that left thousands of its customers without their savings. CBA, Australia's biggest lender by market value, last month set up an independent review programme for customers of its financial planning division.
"Macquarie informed the market at the group's Annual General Meeting on July 24 that it was contacting all Macquarie Private Wealth clients to ensure that they have the opportunity to raise concerns," a spokeswoman at Macquarie told Reuters. (Reporting by Swati Pandey; Editing by Ryan Woo)