ASIC has announced that UBS Wealth Management Australia Ltd (UBS WMA) has admitted that between January 2006 and 31 March 2010, it failed to provide Statements of Advice to 764 retail clients who invested in a category of financial products classified by UBS WMA as structured products. The failure to provide Statements of Advice also extended to retail clients who invested in additional classes of financial products.

In response to ASIC’s concerns including a poor compliance culture and framework (deficiencies in processes were not identified, escalated or remedied in an appropriate or timely manner), inadequate risk management, a breakdown in general processes, inadequate training and education, deficiencies in the production of Statements of Advice for investors and inadequate breach assessment and reporting, UBS WMA has given ASIC a binding commitment in the form of a 36 page enforceable undertaking (EU) to modify key aspects of its compliance culture and frameworks and remedy past compliance failures in the provision of financial advice to retail clients.

The EU offered by UBS WMA sets out how it intends to rectify these issues and how it will establish a claims process for clients who potentially received personal financial product advice in circumstances where a Statement of Advice was required but was not provided in accordance with the Corporations Act.

In the event that UBS WMA fails to comply with the requirements of the EU or an independent expert determines that UBS WMA has failed to complete the remediation program, and such failures are significant, ASIC will assess whether it should take action to vary the conditions of UBS WMA’s Australian financial services licence (AFS licence).

The EU relates to UBS WMA only and does not include the parent company UBS AG or other UBS group entities.