The major bank estimates approximately $87 million will be paid in compensation to customers who are former clients of Westpac’s advice businesses.
The corporate action information that may have failed to be communicated includes buy-backs, renounceable and non-renounceable rights issues, share purchase plans and takeovers.
“Westpac’s failure to notify customers of corporate actions means customers may have missed out on various opportunities,” a statement released by ASIC on Friday read.
“These include purchasing additional shares often at a discount to the market price, the creation of temporary rights or options that can be sold for a profit, and the ability to sell shares and receive a benefit that can be tax advantageous depending on the shareholder’s circumstances.
“Westpac’s remediation covers an estimated 328,000 potential missed corporate action notifications impacting approximately 32,000 customer accounts. This is a complex remediation due to the various types of corporate actions involved.”
Westpac said it aims to compensate most of the affected customers by the end of the year.
“Compensating customers affected by misconduct is a very important part of licensees’ obligations to act fairly, honestly and efficiently. We are pleased to see that Westpac has taken action to remediate affected customers regardless of how much time has passed,’ ASIC Commissioner Danielle Press said.
“We encourage affected customers to engage with the communications from Westpac to understand how they were impacted and to seek further information from Westpac if required.”
It’s amazing how all this is being looked upon with 20:20 hindsight.
If an adviser emails/forwards a corporate notification to a client it could be deemed as advice by some. Ergo, it should probably need an SoA stating, we don’t recommend this, but send FYI.
ASIC is systematically destroying the industry and the Liberals are their cheer squad.
All good according to ASIC – can only imagine if an Adviser overlooked this…..career gone!!
We don’t notify our clients of corporate actions for shares we manage for them: we decide if it is appropriate for the client to participate and if that is the case we then send them written advice advising them to do so. Is that now illegal? The rules in this industry just get sillier and sillier every week.
In what form was the advice. I assume it would need to be a full, compliant RoA with all the requisite file notes as to the meeting you had with the client to determine whether their situation had changed etc. Probably 60 minutes work for EVERY client involved. Hope your file notes and RoA’s are up to date.
Not illegal but what if it turns out they would have made money from the issue of Corp action. Unless you have file noted why it’s not appropriate then your liable for the loss
Australian Super offered lots of members Qantas Shares for joining the Fund – will Australian Super, who I presume used members retirement savings to put the Qantas shares in the personal hands of other members, now be responsible for managing these shares?
Was Qantas Frequent Flyer points – not shares. More excellent ethical behaviour by the Industry Super network, and ASIC response to this???? Crickets????
This is getting ridiculous. Wouldn’t the clients also be notified directly in any event ? Is it any wonder that the banks got out of the advice business. I’m sure this will bring in many new entrants into the profession. Risk/reward and all that.
If the shares were on a wrap platform then most likely there was no direct notification, it would have been up to the advisor to notify and if appropriate for the client recommend taking up the offers. Unless there was no ongoing fee arrangement, most likely Australian super clients held their shares directly via SRN and were not on ongoing fee arrangements