Macquarie Equities Limited (MEL) has completed the two year term of its enforceable undertaking (EU) reducing it adviser numbers in Macquarie Private Wealth (MPW) by 25 per cent.
The corporate regulator announced this morning that MEL had addressed issues around compliance with financial services laws under its AFS licence, operating under the name Macquarie Private Wealth (MPW) but had appointed KPMG to undertake further testing while client remediation and ASIC investigations into some former MEL advisers continued.
In its report on the work undertaken as part of the EU and provided to ASIC, KPMG stated that “MEL has completed all of the deliverables as outlined in the EU Implementation Plan” including changes in management and business structures, surveillance and compliance, staff training and monitoring.
ASIC also stated the compliance function for MEL’s advice business now reports to the Macquarie Group Compliance, rather than to MPW management, and the number of advisers in the MPW business had been reduced by about 25 per cent.
Macquarie had flagged this decrease in planner numbers at its annual general meeting late last year and said planner numbers had dropped from a high of about 400 two years ago to around 300 at present. According to the 2013 edition of Money Management’s Top 100 Dealer Group survey MPW had 354 advisers, with a 25 per cent reduction equalling 89 advisers having left the group, based on those numbers.
Speaking at a press conference regarding the EU, ASIC deputy chair Peter Kell said that of the advisers who had left MPW some had stepped out of the industry while others had gone to other licensees. Kell stated that ASIC was aware of these movements and would approach licensees if it had concerns over the behaviour of advisers who have left MPW.
ASIC also stated that while MEL had completed the EU it had agreed to a further 12 months of testing to be undertaken by KPMG and reporting through to ASIC as a result of a limited number of the compliance reforms not yet having been subject to operational effectiveness testing by KPMG.
ASIC also stated that KPMG’s review of a sample of client advice files indicated concerns about the quality of records of advice and that further improvements were required with KPMG to assess the quality of the advice and advice files of MEL advisers for two separate periods over the 12 months.
