ASIC puts Meritum on notice

Yesterday ASIC issued a statement revealing the actions taken by 10 licensees in response to concerns raised about retail structured product advice in 2013, including a range of bank-aligned and independently-owned groups.

Among them was NAB’s Meritum licensee, which was home to a number of advisers sacked by the bank over the past five years, according to reports in the Fairfax press and subsequent confirmations from NAB.

The ASIC document reveals that at least three of the Meritum advisers whose authorisation was removed were involved in “systemic breaches”.

“ASIC's review [of Meritum] indicated potential breaches of the requirement to make enquiries of clients' relevant personal circumstances and to provide a statement of advice in the required time frame, as well as other disclosure concerns including potential misrepresentation of product features,” the report stated.

In addition to de-authorising the individuals, Meritum wrote to affected clients notifying them of the terminations and explaining that it will “assess whether client compensation is required”.

Meritum also lodged a “significant breach notification” to ASIC in relation to its failure to detect the misconduct.

“ASIC is assessing the information obtained from the licensee to determine whether further regulatory actions are required,” the statement concludes.

The statement follows NAB CEO Andrew Thorburn’s announcement of changes to the bank’s process for financial adviser misconduct.

Other licensees listed by ASIC included AMP’s Genesys Wealth Advisers, CBA-aligned Count Financial and the entire Westpac Banking Corporation, as well as non-aligned dealers Sentry, Madison Financial Group and FSS Advisory.