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Macquarie Wealth Management hits out over media claims
05/08/2014 , News Team

Australia’s Macquarie has criticised the Sydney Morning Herald (SMH) for articles it published on 2 August 2014 regarding Macquarie Private Wealth (MPW).

The bank said it received 45 questions from the paper. In a statement Macquarie said it had replied to the relevant journalist and has published its responses on its website.

However, it added that the SMH had “omitted from the list its two central claims against MPW,” these were:

  • that MPW misclassified a former client as sophisticated or wholesale who consequently suffered losses;
  • that MPW management circulated answers to competency tests .

The bank said had these claims be added to the list it would have made the following response.

“The former client was always treated as a retail client and was provided with detailed and comprehensive statements of advice. This was notwithstanding that the client was a qualified accountant with experience in a number of senior executive roles including as chief financial officer, and despite the client providing an accountant's certificate which entitled him to be treated as a sophisticated or wholesale investor (relating to several years).

“There is no record that the client gave ‘explicit instructions that he did not want currency exposure’ in his investments. Indeed, in the comprehensive statements of advice that the client was provided with in 2005 and 2009, it was specifically noted that the portfolio had international exposure. The client acknowledged that he had read and accepted the relevant statements of advice.

“The review of the client’s files also showed a Statement of Advice that outlined that gearing increased the potential for capital losses and that MPW was not comfortable in implementing a gearing strategy on the client’s behalf as he was retired. Extensive disclosure of the potential risks of gearing was made in that Statement of Advice. However, according to the Statement of Advice signed by the client, he requested the gearing strategy, acknowledging at the time his extensive market experience and understanding of the risks.”

With regard to the unattributed claims made about circulation of answers to competency examinations by management, Macquarie said it has examined the claim and found no evidence of it.

The bank is also undergoing a review of client files and client classification and that client remediation, which follows the Financial Ombudsman Service principles, is subject to oversight by Deloitte and ASIC and open to all clients. The bank therefore argues that SMH’s claim that "some estimate the losses" by MPW clients "could be many tens of millions of dollars" is “without any factual basis.”

It also rejects the claim that MPW wrongly sent letters to clients is also “without foundation.”

Macquarie is referring SMH's articles to the Australian Press Council.

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