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Eyes on Macquarie after Senate snub

Macquarie Group's private wealth unit stands accused of having similar ''systematic problems'' to that at Commonwealth Bank of Australia, and for not co-operating with the Senate committee that delved into unethical adviser practices.

Inquiry chairman Labor senator Mark Bishop and committee member John Williams are calling on the corporate regulator to open a thorough investigation into the Macquarie unit to ensure it is complying with an enforceable undertaking it was dealt in January last year. They also want the Australian Securities and Investments Commission to extend the undertaking, which was due to end after a final assessment in January 2015, to ensure wide-ranging compliance deficiencies are fixed.

Senator Bishop likened the ''systematic problems'' that existed within CBA to those that existed with Macquarie, but noted that CBA's customers consisted of a much broader cross-section of the community. He was also critical of Macquarie's engagement with the committee.

''Arising out of confidential information provided to us, we wrote to Macquarie asking them to address the significant number of complaints we received,'' he told Fairfax Media. ''They wrote back and politely told us to mind our own business.''

Senator Williams said Macquarie still had a myriad of issues to address. ''There are a lot more questions for Macquarie Wealth to answer and they need to look pretty hard in the mirror in terms of their compliance,'' he said. ''We had individuals from Macquarie give evidence to us on camera which unfortunately we are not able to discuss. But, needless to say, there are still serious questions for them to answer.''

The Senate committee's report, which was handed down last month, recommended a royal commission into conflicted financial advice, focusing on conflicts within CBA. But the committee also recommended that ASIC undertake ''intensive surveillance'' of Macquarie Private Wealth to ensure that previous concerns were being addressed and that there were no other compliance failures. The report also called for ASIC's future probing to be ''far more intrusive and less trusting''.


The 2013 enforceable undertaking slapped on Macquarie covered a string of shortcomings within the unit, including a series of lapses in record keeping, risk management and training.

Senator Williams also took aim at Macquarie saying the inquiry found that the banking operations had also engaged in ''predatory lending''.

Macquarie has had nothing to say publicly on the report since it was unveiled. Head of the banking and financial services unit Greg Ward declined to answer any questions when contacted by Fairfax Media.

Macquarie is, however, thought to be implementing new advice documentation, training, and systems. A pilot program is also due to commence for a new advice platform.

With Sarah Thompson