Statement regarding ABC TV's 7.30 segment on 31 May 2018

Sydney, 31 May 2018

ABC TV’s 7.30 tonight aired a segment which featured clients of Macquarie Private Wealth.

Macquarie notes the following detailed statement provided to 7.30 prior to the broadcast, of which there was only limited use during the program: 

In 2013, Macquarie Bank’s broking and equities advice business entered into an agreed Enforceable Undertaking (EU) with the Australian Securities and Investments Commission (ASIC), which acknowledged ASIC’s concerns and focussed on the effectiveness of compliance, particularly processes. ASIC publicly stated in 2016 that the EU program of work had been satisfactorily completed and that all deliverables had been met. 

As part of the EU, Macquarie established the broadest possible client remediation program, writing to all 189,000 current and former clients going back to 2004. The program performed over 4,700 client reviews, regardless of whether clients had a specific concern, and at June 2017 had compensated 263 clients over $24.7m. Macquarie also offered $5,000 for any client to obtain independent advice about the outcome of their review and waived the time and money limits for clients who would otherwise have been prevented from taking their case to the Financial Ombudsman Service (FOS). The program, which provided multiple avenues for complaints to be resolved, was designed to identify and rectify client concerns.

Macquarie understands the ABC has chosen to highlight two cases out of the 189,000 population that were part of Macquarie’s remediation program. With respect to these cases we would say that:

  • The first is a client who had not raised any issues with Macquarie to date, but in response to Macquarie’s all client letter, simply requested a file review in 2014 through their accountant. After sending the result of their file review, Macquarie wrote to the client on two further occasions, including a request that concerns be raised with us, and no concerns were raised. Macquarie only learnt for the first time last week, via the ABC, that the client was not satisfied with that file review. In response, Macquarie has contacted the client directly and is now in discussions with them in an effort to understand and address any issues.
  • We gave the second client the opportunity for FOS to resolve their complaint, which would otherwise have fallen outside FOS’ time limit. FOS found in the client’s favour and Macquarie paid the claim in full, albeit we did not concur with all of the FOS findings on the case.

We further note in relation to other questions raised by the ABC:

  • In comparing the results of Macquarie’s own file reviews with FOS’ determinations regarding Macquarie clients, the ABC should also consider that Macquarie conducted most file reviews simply because the client made a request. Most of our clients did not raise any specific concern. In contrast, FOS cases can only begin after a specific concern has been identified. As such, they represent a subset comprising the most difficult cases. The proportion of outcomes favorable to clients from this subset cannot properly be compared to the outcomes of Macquarie’s more general file reviews.
  • In relation to client classification, Macquarie’s classification follows the test set out in the Corporations Act. Macquarie rejects the ABC’s claim that Macquarie profited by “disregarding” ASIC guidance note QFS150 on the classification of wholesale and retail clients. Not only did legal views about the guidance note differ at the time, but the note was subsequently withdrawn. Macquarie stands by its Corporations Act interpretation of client classification. In any event, at all times Macquarie sought to act in the best interests of clients, regardless of their classification. Contrary to the ABC’s assertions, there was no “reckless” classification of clients as wholesale over retail.

Finally, we note the ABC has repeated a number of claims regarding Cleveland Mining which have been raised on numerous occasions by class action lawyers Macpherson Kelley. We repeat our previous statement that we have not received any claim with respect to this matter, that the allegations lack credible evidence and we request any individual with any complaint to contact Macquarie or the regulator.