The Australian Securities and Investment
Commission (ASIC) has reprimanded UBS Wealth Management’s Australia
(WMA) for failing to provide sufficient advice to 764 retail
clients who invested in structured products.

The financial regulator said UBS WMA failed to
provide statements of advice to the retail clients investing in
structured products between January 2006 and 31 March 2010.

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The bank also had failed to issue Statements
of Advice to clients who invested in other financial products.

ASIC has demanded the wealth manager undertake
a strategic review of its compliance procedures and fix any
deficiencies.

 

Independent expert to review UBS
agenda

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Under the new compliance agreement, UBS will
redress the failure by writing to clients and provide them with a
claim form to compensate for the bank’s failure to provide proper
advice.

The deadline to comply with ASIC’s provisions
is in 14 months.

 During this time, UBS will be audited by
an independent expert, who will report to ASIC, on the bank’s
agenda to maintain its compliance commitment in future.

 

Clients to be
compensated

The chairman of ASIC, Tony D’Aloisio, said that the enforceable
undertaking would rectify and compensate UBS WMA’s clients who
“suffered loss because they were not provided with an adequate
Statement of Advice.”

ASIC’s enforceable undertaking sets out a
clear timetable according to which the bank will have to improve
the conduct of its advice business, D’Aloisio added.

He added that the provisions send a clear
message to the wealth management market to “have proper systems in
place to comply with the provisions of the Corporations Act
relating to Statements of Advice.”