Australia’s financial regulator announced that it is investigating former financial advisors at Macquarie, while a unit of the firm will start to contact more than 160,000 clients for possible remedies on flawed financial advice.

Australia’s financial regulator announced that it is investigating former financial advisors at Macquarie, while a unit of the firm will start to contact more than 160,000 clients for possible remedies on flawed financial advice.

The Australian Securities and Investments Commission said that Macquarie Equities Limited has started writing to current and former clients about possible remediation. This advice came from MEL’s financial adviser network, Macquarie Private Wealth.

This isn’t the only case where ASIC is working with a bank to sort out poor advice. It has recently acted with Commonwealth Bank on an advisory issue, for example. See here.

The process is part of ASIC’s enforceable undertaking with MEL, which was imposed in January 2013. The EU came about after the regulator's surveillance of MPW unearthed concerns about MPW’s compliance processes and its risk framework.

The enforceable undertaking is being overseen by KPMG, the regulator said in a statement last week. The EU requires Macquarie to identify advisors with poor compliance. If a client has been hit by failures, MEL must remediate the client, including compensation, ASIC said.

On ASIC’s broader work with Macquarie, Peter Kell, deputy chairman of the regulator, 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.”